Exhibit 10.26(b)
NthCycle,Inc.
Stock Option Agreement
GrantedUnder2020StockIncentivePlan
This Stock Option Agreement (this “Agreement”) is made between Nth Cycle, Inc., a Delaware corporation(the“Company”),andtheParticipantpursuanttothe20202StockIncentivePlan(the “Plan”).
NoticeofGrant
I.
ParticipantInformation
| Participant: | |
| ParticipantAddress: |
II.
GrantInformation
| GrantDate: | |
| NumberofShares: | |
| ExercisePricePerShare: | |
| VestingCommencementDate: | |
| TypeofOption: | [IncentiveStockOption][NonstatutoryStock Option] |
III.
VestingTable
| VestingDate | SharesthatVest(1) |
| 1stanniversaryoftheVestingCommencementDate | [#ofSharesequalto¼the Shares] |
| Endofeachsuccessive1-monthperiodfollowingthe 1st anniversary of the Vesting Commencement Date until the 4th anniversary of the Vesting Commencement Date | [#ofSharesequalto1/48the Shares] |
(1) Thenumberof sharesissubjecttoadjustmentforanychangesintheCompany’s capitalizationasset forth in Section 9 of the Plan.
IV.
FinalExerciseDate
| 5:00pmEasterntimeonDate: | [DateistenyearsminusonedayfromGrant Date] |
This Agreementincludes this Notice of Grantand the following Exhibits, which are expresslyincorporated by reference in their entirety herein:
Exhibit A – General Terms and Conditions
ExhibitB–NoticeofStockOptionExercise
ExhibitC–NthCycle,Inc.2020StockIncentivePlan
INWITNESSWHEREOF,thepartiesheretohaveexecutedthisAgreement.
| # NTHCYCLE,INC. | PARTICIPANT | SPOUSALCONSENT1 |
| # | ||
| # Name: | ||
| Title: | Name: | Name: |
1. IftheParticipantresidesinacommunitypropertystate,itisdesirabletohavetheParticipant’sspousealsoaccept the option.The following are community property states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, and Washington.Although Wisconsin is not formally a community property state, it has laws governing the division of marital property similar to community property states and it may be desirable to have a Wisconsin Participant’s spouse accept the option.
- 2-
Stock Option Agreement
2020StockIncentivePlan
ExhibitA
GeneraltermsandConditions
Forvaluableconsideration,receiptofwhichisacknowledged,thepartiesheretoagreeas follows:
1.
Grant of Option.This Agreement evidences the grant by the Company, on the grant date (the“GrantDate”)setforthintheNoticeofGrantthatformspartofthisAgreement(the“Notice ofGrant”),to theParticipantofanoptiontopurchase,inwholeorin part, onthetermsprovided herein and in the Company’s 2020 Stock Incentive Plan (the “Plan”), the number of shares set forth in the Notice of Grant (the “Shares”) of common stock, $0.0001 par value per share, of the Company(“Common Stock”)atthe exercisepriceperShareset forthin theNoticeofGrant (the “Exercise Price”).Unless earlier terminated, this option shall expire at the time and on the date set forth in the Notice of Grant (the “Final Exercise Date”).
ItisintendedthattheoptionevidencedbythisAgreementshallbeanincentivestockoption asdefinedinSection422oftheInternalRevenue Codeof1986,asamended,andanyregulations promulgatedthereunder(the“Code”)solelytothe extentsetforth intheNoticeofGrant.Tothe extentnotdesignatedas anincentivestockoption,ortotheextentthattheoptiondoesnotqualify asanincentive stockoption,theoptionshallbea nonstatutorystockoption.Except asotherwise indicatedbythe context, theterm“Participant”,asusedinthisoption,shall bedeemedtoinclude any person who acquires the right to exercise this option validly under its terms.
2.
Vesting Schedule. This option will become exercisable (“vest”) in accordance with the Vesting Table set forth in the Notice of Grant.
Therightofexerciseshallbecumulativesothattotheextenttheoptionisnotexercisedin any period to the maximum extent permissible it shall continue to be exercisable, in whole or in part,withrespecttoall Sharesforwhichit isvesteduntiltheearlieroftheFinalExerciseDateor the termination of this option under Section 3 hereof or the Plan.
3.
ExerciseofOption.
(a)
FormofExercise.Each electiontoexercisethisoptionshallbeaccompaniedbya completedNoticeofStockOptionExerciseintheformattachedheretoasExhibitB,signedbythe Participant,andreceived bytheCompanyatitsprincipaloffice,accompaniedbythisAgreement, and payment in full in the manner provided in the Plan.The Participant may purchase less than the number of Shares covered hereby, provided that no partial exercise of this option may be for any fractional share or for fewer than ten whole shares (unless the number of Shares that remain subject to this option at the time of exercise is less than ten whole shares, in which case the Participant may purchase the total number of whole shares that remain subject to this option).
(b)
Continuous Relationship with the Company Required.Except as otherwise provided in this Section3, this option may not be exercised unless the Participant, at the time he orsheexercisesthisoption,is,andhasbeenatalltimessincetheGrantDate,anemployee,officer ordirectorof,orconsultantoradvisorto,theCompanyoranyparentorsubsidiaryoftheCompany
- 3-
asdefinedinSection424(e)or(f)oftheCodeoranyotherentitytheemployees,officers,directors, consultants,oradvisorsofwhichareeligibletoreceiveoptiongrantsunderthePlan(an“Eligible Participant”).
(c)
Termination of Relationship with the Company.If the Participant ceases to be an Eligible Participant for any reason, then, except as provided in paragraphs(d) and (e) below, the righttoexercisethisoptionshallterminate threemonthsaftersuchcessation(butinnoeventafter the Final Exercise Date), providedthatthis option shall be exercisable only to the extent that the Participantwasentitledtoexercisethisoptiononthedateofsuchcessation.Notwithstandingthe foregoing, if the Participant, prior to the Final Exercise Date, violates the non-competition or confidentiality provisions of any employment contract, confidentiality and nondisclosure agreementorotheragreementbetweentheParticipantandtheCompany,therighttoexercisethis option shall terminate immediately upon such violation.
(d)
Exercise Period Upon Death or Disability.If the Participant dies or becomes disabled (within the meaning of Section22(e)(3) of the Code) prior to the Final Exercise Date while he or she is an Eligible Participant and the Company has not terminated such service relationshipfor“cause”asspecifiedinparagraph(e)below,thisoptionshallbeexercisable,within theperiodofoneyearfollowingthedateofdeathordisabilityoftheParticipant,bytheParticipant (orin the case ofdeathbyanauthorizedtransferee),provided thatthisoptionshallbeexercisable onlytotheextentthatthisoptionwasexercisablebytheParticipantonthedateofhisorherdeath ordisability,andfurther providedthatthisoptionshallnotbeexercisable aftertheFinalExercise Date.
(e)
TerminationforCause.If,priortotheFinalExerciseDate,theParticipant’sservice relationship with the Company is terminated by the Company for Cause (as defined below), the right to exercise this option shall terminate immediately upon the effective date of such termination.If, prior to the Final Exercise Date, the Participant is given notice by the Company of the termination of his or her service relationship by the Company for Cause, and the effective dateofsuchterminationissubsequenttothedateofthedeliveryofsuchnotice,therighttoexercise this option shall be suspended from the time of the delivery of such notice until the earlier of (i) such time as it is determined or otherwise agreed that the Participant’s service relationship shall notbeterminatedforCauseasprovidedinsuchnoticeor(ii)theeffectivedateofsuchtermination (inwhichcasetherighttoexercisethisoptionshall,pursuanttotheprecedingsentence,terminate immediately upon the effective date of such termination).If the Participant is party to an employment,consultingorseveranceagreementwiththeCompanyorsubjecttoaseveranceplan maintainedbytheCompany,ineithercase,thatcontainsadefinitionof“cause”forterminationof service, “Cause” shall have the meaning ascribed to such term in such agreement or plan. Otherwise, “Cause” shall mean willful misconduct by the Participant or willful failure by the Participant to perform his or her responsibilities to the Company (including, without limitation, breach bytheParticipant ofanyprovisionofany employment,consulting,advisory,nondisclosure, non-competition or other similar agreement between the Participant and the Company), as determined by the Company, which determination shall be conclusive.The Participant’s service relationshipshallbeconsideredtohavebeenterminatedfor“Cause”iftheCompanydetermines, within30daysaftertheParticipant’sterminationofservice,thatterminationforCausewas warranted.
- 4-
4.
CompanyRightofFirstRefusal.
(a)
Notice of Proposed Transfer.If the Participant proposes to sell, assign, transfer, pledge, hypothecate or otherwise dispose of, by operation of law or otherwise (collectively, “transfer”) any Shares acquired upon exercise of this option, then the Participant shall first give written notice of the proposed transfer (the “Transfer Notice”) to the Company.The Transfer Notice shall name the proposed transferee and state the number of such Shares the Participant proposes to transfer (the “Offered Shares”), the price per share and all other material terms and conditions of the transfer.
(b)
Company Right to Purchase.For 30 days following its receipt of such Transfer Notice,theCompanyshallhavetheoptiontopurchaseallorpartoftheOfferedSharesattheprice and upon the terms set forth in theTransferNotice.In the event the Company elects to purchase all or part of the Offered Shares, it shall give written notice of such election to the Participant within such 30-day period.Within 10 days afterhis or her receipt of such notice, the Participant shall tender to the Company at its principal offices the certificate or certificates representing the OfferedSharestobepurchasedbytheCompany,dulyendorsedinblankbytheParticipantorwith duly endorsed stock powers attached thereto, all in a form suitable for transfer of the Offered Shares to the Company.Promptly following receipt of such certificate or certificates, the CompanyshalldeliverormailtotheParticipantacheckinpaymentofthepurchasepriceforsuch Offered Shares; providedthatif the terms of payment set forth in the Transfer Notice were other than cash against delivery, the Company may pay for the Offered Shares on the same terms and conditionsaswere setforthintheTransferNotice;andprovidedfurtherthatanydelayin making such payment shall not invalidate the Company’s exercise of its option to purchase the Offered Shares.
(c)
Shares Not Purchased By Company.If the Company does not elect to acquire all of the Offered Shares, the Participant may, within the 30-day period following the expiration of theoptiongrantedtotheCompanyundersubsection(b)above,transfertheOfferedShareswhich theCompanyhasnotelectedtoacquiretotheproposedtransferee,providedthatsuchtransfershall notbeontermsandconditionsmorefavorabletothetransfereethanthosecontainedintheTransfer Notice.Notwithstandinganyoftheabove,allOfferedSharestransferredpursuanttothisSection 4 shall remain subject to the right of first refusal set forth in this Section 4 and such transferee shall,asaconditiontosuchtransfer,delivertotheCompanyawritteninstrumentconfirmingthat such transferee shall be bound by all of the terms and conditions of this Section 4.
(d)
Consequences of Non-Delivery.After the time at which the Offered Shares are required to be delivered to the Company for transfer to the Company pursuant to subsection (b) above, the Company shall not pay any dividend to the Participant on account of such Offered Shares or permit the Participant to exercise any of the privileges or rights of a stockholder with respect to such Offered Shares, but shall, insofar as permitted by law, treat the Company as the owner of such Offered Shares.
- 5-
(e)
ExemptTransactions. Thefollowingtransactionsshallbeexemptfromthe provisions of this Section 4:
(1)
anytransferofSharestoorforthebenefitofanyspouse,childorgrandchild of the Participant, or to a trust for their benefit;
(2)
any transfer pursuant to an effective registration statement filed by the Company under the Securities Act of 1933, as amended (the “Securities Act”); and
(3)
the sale of all or substantially all of the outstanding shares of capital stock of the Company (including pursuant to a merger or consolidation); provided, however, that in the case of a transfer pursuant to clause (1) above, such Shares shallremain subject to the right of first refusal set forth in this Section 4.
(f)
Assignment of Company Right.The Company may assign its rights to purchase OfferedSharesinanyparticulartransactionunderthisSection4tooneormorepersonsorentities.
(g)
Termination.The provisions of this Section 4 shall terminate upon the earlier of the following events:
(1)
theclosingofthesaleofsharesofCommonStockinanunderwrittenpublic offeringpursuant toaneffectiveregistrationstatement filedbytheCompanyundertheSecurities Act; or
(2)
thesaleofallorsubstantiallyallofthe outstandingshares of capitalstock, assets or business of the Company, by merger, consolidation, sale of assets or otherwise (other thanamergerorconsolidationinwhichallorsubstantially all oftheindividualsandentitieswho were beneficial owners of theCompany’svoting securitiesimmediately prior to such transaction beneficially own, directly or indirectly, more than 50% (determined on an as-converted basis) of the outstanding securities entitled to vote generally in the election of directors of the resulting, surviving or acquiring corporation in such transaction).
(h)
NoObligationtoRecognizeInvalidTransfer.TheCompanyshallnotberequired (1)totransferonitsbooksanyoftheShareswhichshallhavebeensoldortransferredinviolation ofanyoftheprovisionssetforthinthisSection4,or(2)totreatasownerofsuchSharesortopay dividends to any transferee to whom any such Shares shall have been so sold or transferred.
(i)
Legends.The certificate representing Shares shall bear a legend substantially in the following form (in addition to, or in combination with, any legend required by applicable federalandstatesecuritieslawsandagreementsrelatingtothetransferoftheCompanysecurities):
“The shares represented by this certificate are subject to a right of firstrefusalinfavoroftheCompany,asprovided inacertainstock option agreement with the Company.”
5.
AgreementinConnectionwithInitialPublicOffering.
The Participant agrees, in connection with the initial underwritten public offering of the Common Stock pursuant to a registration statement under the Securities Act, (i) not to (a) offer, pledge,announcetheintentiontosell,sell,contracttosell,sellanyoptionorcontracttopurchase,
- 6-
purchaseanyoptionorcontracttosell,grantanyoption,rightorwarranttopurchase,orotherwise transfer or dispose of, directly or indirectly, any shares of Common Stock or any other securities of the Company or (b) enter into any swap or other agreement that transfers, in whole or in part, anyoftheeconomicconsequencesofownershipofsharesofCommonStockorothersecuritiesof theCompany,whetheranytransactiondescribedinclause(a)or (b)istobesettledbydeliveryof securities, in cash or otherwise, during the period beginning on the date of the filing of such registration statement with the Securities and Exchange Commission and ending 180 days after the date of the final prospectus relating to the offering (plus up to an additional 34 days to the extent requested by the managing underwriters for such offering in order to address NASD Rule 2711(f)(4) or NYSE Rule 472(f)(4) or any similar successor provision), and (ii) to execute any agreement reflecting clause (i) above as may be requested by the Company or the managing underwriters at the time of such offering.The Company may impose stop-transfer instructions withrespecttothesharesofCommonStockorothersecuritiessubjecttotheforegoingrestriction until the end of the “lock-up” period.
6.
TaxMatters.
(a)
Withholding.NoShareswillbeissuedpursuanttotheexerciseofthisoptionunless anduntiltheParticipantpaystotheCompany,ormakesprovisionsatisfactorytotheCompanyfor paymentof,anyfederal,stateorlocalwithholdingtaxesrequiredbylawtobewithheldinrespect of this option.
(b)
DisqualifyingDisposition.Ifthisoptionsatisfies therequirementstobetreatedas an incentive stock option under the Code and the Participant disposes of Shares acquired upon exercise of this option within two years from the Grant Date or one year after such Shares were acquiredpursuanttoexerciseofthisoption,theParticipantshallnotifytheCompanyinwritingof such disposition.
7.
TransferRestrictions.
(a)
This option may not be sold, assigned, transferred, pledged or otherwise encumberedbytheParticipant,eithervoluntarilyorbyoperationoflaw,exceptbywillorthelaws of descent and distribution, and, during the lifetime of the Participant, this option shall be exercisable only by the Participant.
(b)
TheParticipantagreesthatheorshewillnottransferanySharesissuedpursuantto the exercise of this option unless the transferee, as a condition to such transfer, delivers to the Company a written instrument confirming that such transferee shall be bound by all of the terms and conditions of Section 4 and Section 5; provided that such a written confirmation shall not be requiredwithrespectto(1)Section4aftersuchprovisionhasterminatedinaccordancewith Section4(g)or (2)Section5afterthecompletionofthe lock-upperiodinconnectionwiththe Company’s initial underwritten public offering.
8.
ProvisionsofthePlan.
This option is subject to the provisions of the Plan (including the provisions relating toamendments to the Plan), a copy of which is attached hereto as Exhibit C.
[RemainderofPageIntentionallyLeftBlank]
- 7-
Exhibit B
Notice of Stock Option Exercise
[DATE]1
Nth Cycle, Inc.
Attention: Treasurer
Dear Sir or Madam:
I am the holder of []2Stock Option granted to me under the Nth Cycle, Inc. (the“Company”)2020StockIncentivePlanon[]3forthepurchaseof[]4 sharesofCommonStockoftheCompanyatapurchasepriceof$[]5per share.
Iherebyexercisemyoptiontopurchase[]6shares of Common Stock (the “Shares”), for which I have enclosed []7in the amount of []8.Pleaseregister my stock certificate as follows:
| Name(s): | 9 |
| Address: |
Irepresent,warrantandcovenantasfollows:
1Enterdateofexercise.
2Entereither“anIncentive”or“aNonstatutory”orboth.
3Enterthedateofgrant.
4EnterthetotalnumberofsharesofCommonStockforwhichtheoptionwasgranted.
5EntertheoptionexercisepricepershareofCommonStock.
6EnterthenumberofsharesofCommonStocktobepurchaseduponexerciseofallorpartof theoption.
7Enter“cash”,“personalcheck”orifpermittedbytheoptionorPlan,“stockcertificatesNo.XXXXand XXXX”.
8Enterthedollaramount(pricepershareofCommonStocktimesthenumberofsharesofCommonStockto bepurchased),orthenumberofsharestendered.Fairmarketvalueofsharestendered,togetherwithcashorcheck, must cover the purchase price of the shares issued upon exercise.
9Entername(s)toappearonstockcertificateinoneofthefollowingformats:(a)yournameonly(i.e.,John Doe); (b) your name and other name (i.e., John Doe and Jane Doe, Joint Tenants with Right to Survivorship); or for Nonstatutory Stock Options only, (c) a child’s name, with you as custodian (i.e. Jane Doe, Custodian for Tommy Doe).Note: There may be income and/or gift tax consequences for registering shares in a child’s name.
- 8-
1.
Iam purchasing the Shares for my own account for investment only, and not with a view to, or for sale in connection with, any distribution of the Shares in violation of the Securities Act of 1933 (the “Securities Act”), or any rule or regulation under the Securities Act.
2.
I have had such opportunity as I have deemed adequate to obtain from representatives of theCompanysuchinformationasisnecessarytopermitmetoevaluatethemeritsandrisksofmy investment in the Company.
3.
I have sufficient experience in business, financial and investment matters to be able to evaluate the risks involved in the purchase of the Shares and to make an informed investment decision with respect to such purchase.
4.
I can afford a complete loss of the value of the Shares and am able to bear the economic risk of holding such Shares for an indefinite period.
5.
I understand that (i) the Shares have not been registered under the Securities Act and are “restricted securities” within the meaning of Rule 144 under the Securities Act, (ii) the Shares cannotbesold,transferredorotherwisedisposedofunlesstheyaresubsequentlyregisteredunder the Securities Act or an exemption from registration is then available; (iii) in any event, the exemptionfrom registrationunderRule144will notbeavailable for atleast sixmonthsandeven then will not be available unless a public market then exists for the Common Stock, adequate informationconcerningtheCompanyisthenavailabletothepublic,andothertermsandconditions of Rule 144 are complied with; and (iv) there is now no registration statement on file with the SecuritiesandExchangeCommissionwithrespecttoanystockoftheCompanyandtheCompany has no obligation or current intention to register the Shares under the Securities Act.
| Verytrulyyours, |
| [Name] |
- 9-
ExhibitC
NthCycle,Inc.2020StockIncentivePlan
- 10-