CADIZ INC.
2003 MANAGEMENT EQUITY INCENTIVE PLAN
STOCK OPTION AGREEMENT
CADIZ INC.
2003 MANAGEMENT EQUITY INCENTIVE PLAN
STOCK OPTION AGREEMENT
This Stock Option Agreement ("Agreement") is made and
entered into as of the date of grant set forth below (the "Date
of Grant") by and between Cadiz Inc., a Delaware corporation (the
"Company"), and the Participant named below ("Participant").
Capitalized terms not defined herein shall have the meaning
ascribed to them in the Company's 2003 Management Equity
Incentive Plan, as amended (the "Plan").
Participant:
ADDRESS: --------------------------------------------
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TOTAL OPTION SHARES: --------------------------------------------
EXERCISE PRICE PER SHARE: $12.00
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DATE OF GRANT:
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VESTING DATES: [date]___, with respect to_____option shares
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[date]___, with respect to_____option shares
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[date]___, with respect to_____option shares
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EXPIRATION DATE:
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TYPE OF STOCK OPTION: NONQUALIFIED STOCK OPTION
1. GRANT OF OPTION.
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The Company hereby grants to Participant an Option
(the "Option") to purchase the total number of Shares of Common
Stock $0.01 par value, of the Company set forth above (the
"Shares") at the Exercise Price Per Share set forth above (the
"Exercise Price"), subject to all of the terms and conditions of
this Agreement and the Plan.
2. EXERCISE PERIOD.
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a. VESTING SCHEDULE. The Option shall become exercisable,
in whole or in part, upon the Vesting Dates and for the number of
shares specified for such Vesting Dates on the first page of this
Agreement; provided, however, that Participant must be an
employee or consultant to the Company as of the respective
Vesting Date, and provided, further that the Option shall become
exercisable immediately and in full in the event of a termination
by the Company of Participant without cause.
b. EXPIRATION. The Option shall expire on the Expiration
Date set forth above, and must be exercised, if at all, on or
before the Expiration Date.
3. TERMINATION.
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a. TERMINATION FOR ANY REASON EXCEPT DEATH OR DISABILITY.
If Participant is terminated for any reason, except death or
disability, the Option, to the extent (and only to the extent)
that it would have been exercisable by Participant on the date of
termination, may be exercised by Participant no later than three
(3) months after the date of Termination, but in any event no
later than the Expiration Date.
b. TERMINATION BECAUSE OF DEATH OR DISABILITY. If
Participant is Terminated because of death or disability of
Participant, any Option, to the extent that it is exercisable by
Participant on the date of termination, may be exercised by
Participant (or Participant's legal representative) no later than
one hundred and eighty (180) days after the date of Termination,
but in any event no later than the Expiration Date.
c. NO OBLIGATION TO EMPLOY. Nothing in the Plan or this
Agreement shall confer on Participant any right to continue in
the employ of, or other relationship with, the Company or any
subsidiary or affiliate of the Company, or limit in any way the
right of the Company or any subsidiary or affiliate of the
Company to terminate Participant's employment or other
relationship at any time, with or without cause.
4. MANNER OF EXERCISE.
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a. STOCK OPTION EXERCISE AGREEMENT. To exercise this
Option, Participant (or in the case of exercise after
Participant's death, Participant's executor, administrator, heir
or legatee, as the case may be) must deliver to the Company an
executed stock Option exercise Agreement in the form attached
hereto as Exhibit A, or in such other form as may be approved by
the Company from time to time (the "Exercise Agreement"), which
shall set forth, inter alia, Participant's election to exercise
the Option, the number of Shares being purchased, any
restrictions imposed on the Shares and any representations,
warranties and Agreements regarding Participant's investment
intent and access to information as may be required by the
Company to comply with applicable securities laws. If someone
other than Participant exercises the Option, then such person
must submit documentation reasonably acceptable to the Company
that such person has the right to exercise the Option.
b. LIMITATIONS ON EXERCISE. The Option may not be
exercised unless such exercise is in compliance with all
applicable federal and state securities laws, as they are in
effect on the date of exercise. The Option may not be exercised
as to fewer than One Hundred (100) Shares unless it is exercised
as to all Shares as to which the Option is then exercisable.
c. PAYMENT. The Exercise Agreement shall be accompanied
by full payment of the Exercise Price for the Shares being
purchased in cash (by check), or where permitted by law:
(i) by cancellation of indebtedness of the
Company to the Participant;
(ii) by surrender of shares of the
Company's Common Stock that either: (1) have
been owned by Participant for more than six
(6) months and have been paid for within the
meaning of SEC Rule 144; or (2) were obtained
by Participant in the public market; and, (3)
are clear of all liens, claims, encumbrances
or security interests;
(iii)by waiver of compensation due or accrued to
Participant for services rendered;
(iv) provided that a public market
for the Company's stock exists and subject to
the ability of the Participant to sell Shares
in compliance with applicable securities
laws:
(1) through a "same day sale" commitment from
the Participant and a broker-dealer that is
a member of the National Association of
Securities Dealers (an "NASD Dealer") whereby
the Participant irrevocably elects to exercise
the Option and to sell a portion of the Shares
so purchased in order to pay the Exercise
Price, and whereby the NASD Dealer irrevocably
commits upon receipt of such Shares to forward
the Exercise Price directly to the Company; or
(2) through a "margin" commitment from the
Participant and an NASD Dealer whereby
Participant irrevocably elects to exercise the
Option and to pledge the Shares so purchased
to the NASD Dealer in a margin account as
security for a loan from the NASD Dealer in the
amount of the Exercise Price, and whereby the NASD
Dealer irrevocably commits upon receipt
of such Shares to forward the Exercise
Price directly to the Company; or
(3) without the payment of any cash or other
property, by presentation and surrender of
this Option to the Company at its principal
office or at the office of its stock
transfer agent, if any, with the
Purchase Form duly executed and
accompanied by a written request from
the Participant instructing the Company
to issue to the Participant a number of
Shares equal to the product of (1) a
fraction, (i) the numerator of which
shall be the excess of the current
market price (as defined below) of the
Common Stock on the date preceding the
date of such exercise of the Option over
the then Exercise Price per Share and
(ii) the denominator of which shall be
the current market price (as defined
below) of the Common Stock on such date,
times (2) the number of Shares as to
which the Option is being exercised.
For the purpose of this section, the
current market price per share of Common
Stock at any date shall be deemed to be
the average of the daily closing prices
for 30 consecutive business days before
such date. The closing price for each
day shall be the last sale price regular
way or, in case no such reported sale
takes place on such day, the average of
the last reported bid and asked prices
regular way, in either case on the
principal national securities exchange
on which the Common Stock is admitted to
trading or listed, or if not listed or
admitted to trading on such exchange,
the average of the last reported bid and
asked prices as reported by Nasdaq, or
other similar organization if Nasdaq is
no longer reporting such information, of
if not so available, the fair market
price as determined in good faith by the
Board of Directors and reasonably
acceptable to the Participant; or
(iv) by any combination of the foregoing.
d. TAX WITHHOLDING. Prior to the issuance of the Shares
upon exercise of the Option, Participant must pay or provide for
any applicable federal or state withholding obligations of the
Company.
e. ISSUANCE OF SHARES. Provided that the Exercise
Agreement and payment are in form and substance satisfactory to
counsel for the Company, the Company shall issue the Shares
registered in the name of Participant, Participant's authorized
assignee, or Participant's legal representative, and shall
deliver certificates representing the Shares with the appropriate
legends, if any, affixed thereto.
5. REPRESENTATIONS AND WARRANTIES OF PARTICIPANT.
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Participant hereby represents and Options that
Participant will not sell, transfer, or make any other
disposition of this Option or the Shares to be purchased and
delivered to Participant hereunder upon the exercise of the
Option unless and until (i) the Option or Shares, as applicable,
are included in a registration statement or a post-effective
amendment under the Securities Act which has been filed by the
Company and declared effective by the Securities and Exchange
Commission (the "SEC"), or (ii) in the opinion of counsel for the
Company, no such registration statement or post-effective
amendment is required, or (iii) the SEC has first issued a "no
action" letter regarding any such proposed disposition of any
Option or the Shares.
6. FEDERAL AND STATE SECURITIES LAW REQUIREMENTS.
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The Company may require Participant, as an additional
condition of its obligation to deliver the Shares upon exercise
of the Option hereunder, to make any representations and
warranties (including without limit those set forth in Paragraph 5
hereof) with respect to the Shares as may, in the opinion of
counsel to the Company, be required to ensure compliance with the
Securities Act, the securities laws of any state, or any other
applicable law, regulation, or rule of any governmental agency.
7. COMPLIANCE WITH LAWS AND REGULATIONS.
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The exercise of the Option and the issuance and
transfer of Shares shall be subject to compliance by the Company
and Participant with all applicable requirements of federal and
state securities laws and with all applicable requirements of any
stock exchange on which the Company's Common Stock may be listed
at the time of such issuance or transfer.
8. NONTRANSFERABILITY OF OPTION.
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The Option may not be transferred in any manner other
than by will or by the laws of descent and distribution and may
be exercised during the lifetime of Participant only by
Participant. The terms of the Option shall be binding upon the
executors, administrators, successors and assigns of Participant.
9. PRIVILEGES OF STOCK OWNERSHIP.
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Participant shall not have any of the rights of a
shareholder with respect to any Shares until Participant
exercises the Option and pays the Exercise Price.
10. ENTIRE AGREEMENT.
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The Plan is incorporated herein by reference. This
Agreement and the Plan constitute the entire Agreement of the
parties and supersede all prior undertakings and Agreements with
respect to the subject matter hereof.
11. NOTICES.
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Any notice required to be given or delivered to the
Company under the terms of this Agreement shall be in writing and
addressed to the Corporate Secretary of the Company at its
principal corporate offices. Any notice required to be given or
delivered to Participant shall be in writing and addressed to
Participant at the address indicated above or to such other
address as such party may designate in writing from time to time
to the Company. All notices shall be deemed to have been given
or delivered upon: personal delivery; three (3) days after
deposit in the United States mail by certified or registered mail
(return receipt requested); one (1) business day after deposit
with any return receipt express courier (prepaid); or one (1)
business day after transmission by rapifax or telecopier.
12. SUCCESSORS AND ASSIGNS.
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The Company may assign any of its rights under this
Agreement. This Agreement shall be binding upon and inure to the
benefit of the successors and assigns of the Company. Subject to
the restrictions on transfer set forth herein, this Agreement
shall be binding upon Participant and Participant's heirs,
executors, administrators, legal representatives, successors and
assigns.
13. GOVERNING LAW.
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This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.
14. ACCEPTANCE.
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Participant hereby acknowledges receipt of a copy of
the Plan and this Agreement. Participant has read and
understands the terms and provisions thereof, and accepts the
Option subject to all the terms and conditions of the Plan and
this Agreement. Participant acknowledges that there may be
adverse tax consequences upon exercise of the Option or
disposition of the Shares and that Participant should consult a
tax adviser prior to such exercise or disposition.
IN WITNESS WHEREOF, the Company has caused this Agreement to
be executed in duplicate by its duly authorized representative
and Participant has executed this Agreement in duplicate as of
the Effective Date.
CADIZ INC. PARTICIPANT:
By:
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(Signature) (Signature)
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(Please print name) (Please print name)
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(Please print title)
EXHIBIT A
STOCK OPTION EXERCISE AGREEMENT
In such form as is deemed appropriate from time to time by
the Company and which is not inconsistent with the Plan.