EXHIBIT 19
BIO-ENGINEERED FOODS, INC.
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NONSTATUTORY STOCK OPTION AGREEMENT
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BIO-ENGINEERED FOODS, INC., a Delaware corporation (the "Company"), has
granted to _________ (the "Optionee"), an option (the "Option") to purchase a
total of ________ shares (the "Shares") of its common stock ("Common Stock"), at
the price set forth below, and in all respects, subject to the terms and
conditions set forth in this Agreement.
1. Nature of the Option. This Option is NOT intended to qualify as, and
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under no circumstances shall be deemed to be, an Incentive Stock Option as
defined in Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code").
2. Exercise Price. The exercise price is $_____ for each share of Common
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Stock ("Exercise Price").
3. Exercise of Option. This Option shall be exercisable, cumulatively,
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__________ of the Shares subject to the Option, at any time after _________;
__________ of the Shares subject to the Option, at any time after ___________;
and __________ of the Shares subject to the Option, at any time after
__________. Subject to the foregoing, this Option may be exercised in whole or
part. This Option may not be exercised for a fraction of a Share.
3.1 Method of Exercise.
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3.1.1 This Option shall be exercisable by written notice which
shall state the election to exercise the Option, the number of shares in respect
of which the Option is being exercised, and such representations and agreements
as the Company may deem to be necessary or appropriate under any applicable law
or regulation. Such written notice shall be signed by the Optionee and shall be
delivered in person or by certified mail to the Secretary of the Company. The
written notice shall be accompanied by payment of the exercise price. This
option shall be deemed to be exercised upon receipt by the Company of such
written notice accompanied by the exercise price.
3.1.2 No Shares will be issued pursuant to the exercise of an
Option unless such issuance and such exercise shall comply with all relevant
provisions of law and the requirements of any stock exchange upon which the
Common Stock may then be listed. Assuming such compliance, for income tax
purposes the Shares shall be considered transferred to the Optionee on the date
on which the Option is exercised with respect to such Shares.
3.2 Restrictions on Exercise. The Option may not be exercised if
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the issuance of such Shares upon such exercise or the method of payment of
consideration for such Shares would constitute a violation of any applicable
federal or state securities or other
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law or regulation. The Company shall have no obligation to register or qualify
the Option or such Shares for sale under any such law or regulation.
3.3 Exercisable only by Optionee; Exceptions. The Option shall not
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be exercisable during the lifetime of the Optionee by any person other than the
Optionee. In the event of Optionee's death, disability or other termination of
employment, the exercisability of the Option is governed by Sections 5, 6 and 7
below, subject to the limitation contained in Section 3.4.
3.4 Expiration of Option. The Option may not be exercised more than
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ten (10) years from the date of grant of this Option, and may be exercised
during such term only in accordance with the terms of this Agreement. This
Option shall terminate upon any material breach of the terms hereof by Optionee
including, without limitation, any breach of the representations set forth in
Section 12.
3.5 Method of Payment. Payment of the exercise price shall be by
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cash, check, or surrender of other shares of Common Stock of the Company having
a fair market value on the date of exercise equal to the exercise price of the
shares as to which the option is being exercised.
3.6 Acceleration.
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3.6.1 A "Change in Control" for purposes of this Agreement
shall mean (i) a single entity or group of affiliated entities acquires more
than 50% of the stock of the Company issued and outstanding immediately prior to
such acquisition; or (ii) shareholders approve the consummation of any merger of
the Company or any sale or other disposition of all or substantially all of its
assets, if the shareholders of the Company immediately before such transaction
own, immediately after consummation of such transaction, equity securities
(other than options and other rights to acquire equity securities) possessing
less than 50% of the voting power of the surviving or acquiring corporation.
3.6.2 If a Change in Control has occurred or if the Board of
Directors determines in good faith that a Change in Control is about to occur,
the Board of Directors may determine that it is necessary or desirable to
accelerate the exercisability of the Option granted hereunder. Upon such
determination, the Board of Directors shall establish the date upon which all
portions of such Option not theretofore exercisable shall become exercisable,
the period of time (not in excess of 30 days) during which such Option may be
exercised and the notice period required for exercise. The Board of Directors
shall notify the Optionee of such date, exercise period and notice requirement.
3.6.3 Any portion of the Option subject to acceleration under
this Section that is not exercised during the exercise period established by the
Board of Directors pursuant to
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Section 3.6.2 above shall be treated as if no Change in Control had occurred and
shall be governed by their original terms. Nevertheless, by written notice to
the Optionee, the Board of Directors may provide that any portion of the Option
accelerated pursuant to this Section 3.6 shall expire at the end of the exercise
period established by the Board of Directors pursuant to Section 3.6.2.
4. Optionee's Representations. In the event the Shares purchasable
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pursuant to the exercise of this Option have not been registered under the
Securities Act of 1933, as amended, at the time this Option is exercised,
Optionee shall, concurrently with the exercise of all or any portion of this
Option, deliver to the Company an executed Restricted Stock Agreement in the
form attached hereto as Exhibit A.
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5. Termination of Status as an Employee. In the event of termination of
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Optionee's employment with the Company for any reason other than the disability
or death of the Optionee, Optionee may, but only within ninety (90) days after
the date of such termination (but in no event later than the date of expiration
of the term of this Option as set forth in Section 3.4), exercise this Option to
the extent that Optionee was entitled to exercise it at the date of such
termination. To the extent that Optionee was not entitled to exercise this
Option at the date of such termination, or if Optionee does not exercise this
Option within the time specified herein, the Option shall terminate. Nothing
contained in this Option shall confer upon the Optionee any right to continue in
his relationship with the Company or shall interfere in any way with the rights
of the Company, which are hereby reserved, to reduce the Optionee's compensation
from the rate in existence on the date of grant or to terminate the Optionee's
relationship with the Company for any reason.
6. Disability of Optionee. In the event of termination of Optionee's
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employment with the Company as a result of Optionee's disability (as defined in
Section 22(e)(3) of the Code), Optionee may, but only within twelve (12) months
from the date of such termination (but in no event later than the date of
expiration of the term of this Option as set forth in Section 3.4) exercise this
Option to the extent Optionee was entitled to exercise it at the date of such
termination. To the extent that Optionee was not entitled to exercise the Option
at the date of termination, or if Optionee does not exercise such Option within
the time specified herein, the Option shall terminate.
7. Death of Optionee. In the event of death of Optionee during the term
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of this Option and while an employee of the Company and having been in
continuous status as an employee since the date of grant of the Option, the
Option may be exercised at any time within twelve (12) months following the date
of death (but in no event later than the date of expiration of the term of this
Option as set forth in Section 3.4), by Optionee's estate or by a person
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who acquired the right to exercise the Option by bequest or inheritance, but
only to the extent of the right to exercise that had accrued at the date of
death.
8. Non-Transferability of Option. This Option may not be transferred in
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any manner otherwise than by will or by the laws of descent or distribution and
may be exercised during the lifetime of Optionee only by Optionee. The terms of
this Option shall be binding upon the executors, administrators, heirs and
successors of the Optionee.
9. Optionee not a Shareholder. Neither the Optionee nor any other person
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entitled to exercise the Option shall have any of the rights or privileges of a
shareholder of the Company with respect to any of the Shares until the date of
issuance of a stock certificate for such Shares. Except as set forth in Section
10 below, no adjustment shall be made for dividends (ordinary or extraordinary,
whether in cash, securities or other property) or distributions or other rights
for which the record date is prior to the date such stock certificate is issued.
10. Adjustment of Exercise Price. If any of the following events shall
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occur at any time or from time to time prior to the exercise in full or
expiration of the Option, the following adjustments shall be made in the
Exercise Price.
10.1 Recapitalization. In case the Company effects a subdivision,
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combination, reclassification or other recapitalization of its outstanding
shares of Common Stock into a greater or lesser number of shares of Common
Stock, the Exercise Price in effect immediately after such subdivision,
combination, reclassification or other recapitalization shall be proportionately
decreased or increased, as the case may be.
10.2 Stock Dividends. If the Company shall declare a dividend on its
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Common Stock payable in stock or other securities of the Company, the Optionee
shall, without additional cost, be entitled to receive upon the exercise of the
Option, in addition to the Shares to which the Optionee is otherwise entitled
upon such exercise, the number of shares of stock or other securities that the
Optionee would have been entitled to receive if the Optionee had been a holder,
on the record date of such dividend, of the number of Shares so purchased under
the Option. No adjustments shall be made for dividends in cash or other
property.
10.3 Number of Shares Adjusted. After any adjustment of the Exercise
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Price pursuant to Section 10, the number of Shares issuable at the new Exercise
Price shall be adjusted to the number obtained by (i) multiplying the number of
Shares issuable upon exercise of the Option immediately before such adjustment
by the Exercise Price in effect immediately before such adjustment, and (ii)
dividing the product so obtained by the new Exercise Price.
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10.4 Calculation of Adjustments. The foregoing adjustments to the
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Exercise Price and the number of Shares shall be made in good faith by the Board
of Directors of the Company, whose determination in that respect shall be final,
binding and conclusive.
11. Merger.
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11.1 Assumption. In the event of any merger, consolidation or
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purchase of substantially all shares of the Company where the holders of Common
Stock are to receive stock or other securities of the surviving or acquiring
company, the Option shall be assumed by, be binding upon and inure to the
benefit of such surviving or acquiring company, and shall continue to be
governed by, to the extent applicable, the terms and conditions of this
Agreement.
11.2 Adjustment. After the consummation of a consolidation or merger
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of the Company with or into any other corporation, then the Optionee shall have
the right to receive the kind and amount of shares of stock or other securities
or property receivable upon such consolidation or merger by a holder of the
number of shares of Common Stock issuable upon exercise of the Option
immediately prior to such consolidation or merger.
12. Representations of Optionee. Optionee hereby represents and warrants
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that the employment of Optionee by the Company, and the execution, receipt and
exercise of this Option by Option do not and will not conflict with, violate,
breach or constitute a default under, or result in the acceleration of any
obligation under (i) any provision of any contract, agreement, instrument, court
order, arbitration award, judgment or decree to which Optionee is a party or by
which he is bound, or (ii) any law, rule, regulation or other provision or
restriction of any kind or character to which Optionee is subject.
13. General Provisions.
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13.1 Amendments; Waivers. This Agreement may be amended only by
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agreement in writing of all parties. No waiver of any provision nor consent to
any exception to the terms of this Agreement shall be effective unless in
writing and signed by the party to be bound and then only to the specific
purpose, extent and instance so provided.
13.2 Entire Agreement. This Agreement, together with Exhibit A,
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constitutes the entire agreement between the parties pertaining to the subject
matter hereof and supersedes all prior agreements and understandings of the
parties.
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13.3 Governing Law. This Agreement and the legal relations between
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the parties shall be governed by and construed in accordance with the laws of
the State of California applicable to contracts made and performed in such
State.
13.4 Attorney's Fees. In the event of any legal action for the
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breach of this Agreement or any dispute related to or arising from this
Agreement, the prevailing party shall be entitled to reasonable attorneys' fees,
costs and expenses incurred in such action. Attorneys' fees incurred in
enforcing any judgment in respect of this Agreement are recoverable as a
separate item. The preceding sentence is intended to be severable from the other
provisions of this Agreement and to survive any judgment and, to the maximum
extent permitted by law, shall not be deemed merged into any such judgment.
13.5 Receipt of Agreement. Each of the parties hereto acknowledges
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that she or it has read this Agreement in its entirety and does hereby
acknowledge receipt of a fully executed copy. A fully executed copy shall be an
original for all purposes, and is a duplicate original.
13.6 Notices. Any written notice required or permitted to be given
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shall be deemed delivered either when personally delivered or when mailed,
registered or certified, postage prepaid with return receipt requested, if to
Optionee, addressed to Optionee at the last residence address of Optionee as
shown in the records of the Company, and if to the Company, addressed to the
Chairman of the Board of the Company at the principal office of the Company.
13.7 Severability. If any provision of this Agreement is determined
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to be invalid, illegal or unenforceable by any governmental entity, the
remaining provisions of this Agreement to the extent permitted by law shall
remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
set forth below.
Date of Grant: ________________
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BIO-ENGINEERED FOODS, INC.
a Delaware corporation
By:
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▇▇▇▇▇ ▇▇▇▇▇, President
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Employee/Director
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