exv10w3






Exhibit 10.3




CERES, INC.




STOCK PURCHASE AGREEMENT


          AGREEMENT made this ____ day of ________________ ____, by and between Ceres, Inc., a Delaware
corporation, and ________________, Optionee under the Corporation’s 2000 Stock Option/Stock
Issuance Plan, as amended and restated on August 4, 2006.


          All capitalized terms in this Agreement shall have the meaning assigned to them in this
Agreement or in the attached Appendix.



     A. EXERCISE OF OPTION


          1. Exercise. Optionee hereby purchases _____ shares of Common Stock (the “Purchased
Shares”) pursuant to that certain option (the “Option”) granted Optionee on ________________, ____
(the “Grant Date”) to purchase up to ____________ shares of Common Stock (the “Option Shares”)
under the Plan at the exercise price of $__________ per share (the “Exercise Price”).


          2. Payment. Concurrently with the delivery of this Agreement to the Corporation,
Optionee shall pay the Exercise Price for the Purchased Shares in accordance with the provisions of
the Option Agreement and shall deliver whatever additional documents may be required by the Option
Agreement as a condition for exercise, together with a duly-executed blank Assignment Separate from
Certificate (in the form attached hereto as Exhibit I) with respect to the Purchased Shares.


          3. Stockholder Rights. Until such time as the Corporation exercises the Repurchase
Right or the First Refusal Right, Optionee (or any successor in interest) shall have all the rights
of a stockholder (including voting, dividend and liquidation rights) with respect to the Purchased
Shares, subject, however, to the transfer restrictions of Articles B and C.



     B. SECURITIES LAW COMPLIANCE


          1. Restricted Securities. The Purchased Shares have not been registered under the
1933 Act and are being issued to Optionee in reliance upon the exemption from such registration
provided by SEC Rule 701 for stock issuances under compensatory benefit plans such as the Plan.
Optionee hereby confirms that Optionee has been informed that the Purchased Shares are restricted
securities under the 1933 Act and may not be resold or transferred unless the Purchased Shares are
first registered under the Federal securities laws or unless an exemption from such registration is
available. Accordingly, Optionee hereby acknowledges that Optionee is prepared to hold the
Purchased Shares for an indefinite period and that Optionee is aware that SEC Rule 144 issued under
the 1933 Act which exempts certain resales of unrestricted securities is not presently available to
exempt the resale of the Purchased Shares from the registration requirements of the 1933 Act.



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          2. Restrictions on Disposition of Purchased Shares. Optionee shall make no
disposition of the Purchased Shares (other than a Permitted Transfer) unless and until there is
compliance with all of the following requirements:




     (i) Optionee shall have provided the Corporation with a written summary of the terms
and conditions of the proposed disposition.




     (ii) Optionee shall have complied with all requirements of this Agreement applicable to
the disposition of the Purchased Shares.




     (iii) Optionee shall have provided the Corporation with written assurances, in form and
substance satisfactory to the Corporation, that (a) the proposed disposition does not
require registration of the Purchased Shares under the 1933 Act or (b) all appropriate
action necessary for compliance with the registration requirements of the 1933 Act or any
exemption from registration available under the 1933 Act (including Rule 144) has been
taken.


          The Corporation shall not be required (i) to transfer on its books any Purchased
Shares which have been sold or transferred in violation of the provisions of this Agreement
or (ii) to treat as the owner of the Purchased Shares, or otherwise to accord voting,
dividend or liquidation rights to, any transferee to whom the Purchased Shares have been
transferred in contravention of this Agreement.


          3. Restrictive Legends. The stock certificates for the Purchased Shares shall be
endorsed with one or more of the following restrictive legends:




     “The shares represented by this certificate have not been registered under the
Securities Act of 1933. The shares may not be sold or offered for sale in the
absence of (a) an effective registration statement for the shares under such Act,
(b) a “no action” letter of the Securities and Exchange Commission with respect to
such sale or offer or (c) satisfactory assurances to the Corporation that
registration under such Act is not required with respect to such sale or offer.”




     “The shares represented by this certificate are subject to certain repurchase
rights and rights of first refusal granted to the Corporation and accordingly may
not be sold, assigned, transferred, encumbered, or in any manner disposed of except
in conformity with the terms of a written agreement dated August 4, 2006 between the
Corporation and the registered holder of the shares (or the predecessor in interest
to the shares). A copy of such agreement is maintained at the Corporation’s
principal corporate offices.”



     C. TRANSFER RESTRICTIONS



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          1. Restrictions on Transfer. Except for any Permitted Transfer, Optionee shall not
transfer, assign, encumber or otherwise dispose of any of the Purchased Shares which are subject to
the Repurchase Right. In addition, Purchased Shares which are released from the Repurchase Right
shall not be transferred, assigned, encumbered or otherwise disposed of in contravention of the
First Refusal Right or the Market Stand-Off.


          2. Transferee Obligations. Each person (other than the Corporation) to whom the
Purchased Shares are transferred by means of a Permitted Transfer must, as a condition precedent to
the validity of such transfer, acknowledge in writing to the Corporation that such person is bound
by the provisions of this Agreement and that the transferred shares are subject to (i) the
Repurchase Right, (ii) the First Refusal Right and (iii) the Market Stand-Off, to the same extent
such shares would be so subject if retained by Optionee.


          3. Market Stand-Off.


          (a) In connection with any underwritten public offering by the Corporation of its equity
securities pursuant to an effective registration statement filed under the 1933 Act, including the
Corporation’s initial public offering, Owner shall not sell, make any short sale of, loan,
hypothecate, pledge, grant any option for the purchase of, or otherwise dispose of or transfer for
value or otherwise agree to engage in any of the foregoing transactions with respect to, any
Purchased Shares without the prior written consent of the Corporation or its underwriters. Such
restriction (the “Market Stand-Off”) shall be in effect for such period of time from and after the
effective date of the final prospectus for the offering as may be requested by the Corporation or
such underwriters. In no event, however, shall such period exceed one hundred eighty (180) days
and the Market Stand-Off shall in all events terminate two (2) years after the effective date of
the Corporation’s initial public offering.


          (b) Owner shall be subject to the Market Stand-Off provided and only if the officers
and directors of the Corporation are also subject to similar restrictions.


          (c) Any new, substituted or additional securities which are by reason of any Recapitalization
or Reorganization distributed with respect to the Purchased Shares shall be immediately subject to
the Market Stand-Off, to the same extent the Purchased Shares are at such time covered by such
provisions.


          (d) In order to enforce the Market Stand-Off, the Corporation may impose stop-transfer
instructions with respect to the Purchased Shares until the end of the applicable stand-off period.



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     D. REPURCHASE RIGHT


          1. Grant. The Corporation is hereby granted the right (the “Repurchase Right”),
exercisable at any time during the sixty (60)-day period following the date Optionee ceases for any
reason to remain in Service or (if later) during the sixty (60)-day period following the execution
date of this Agreement, to repurchase at the Exercise Price any or all of the Purchased Shares in
which Optionee is not, at the time of his or her cessation of Service, vested in accordance with
the Vesting Schedule applicable to those shares or the special vesting acceleration provisions of
Paragraph D.6 of this Agreement (such shares to be hereinafter referred to as the “Unvested
Shares”).


          2. Exercise of the Repurchase Right. The Repurchase Right shall be exercisable by
written notice delivered to each Owner of the Unvested Shares prior to the expiration of the sixty
(60)-day exercise period. The notice shall indicate the number of Unvested Shares to be
repurchased and the date on which the repurchase is to be effected, such date to be not more than
thirty (30) days after the date of such notice. The certificates representing the Unvested Shares
to be repurchased shall be delivered to the Corporation on or before the close of business on the
date specified for the repurchase. Concurrently with the receipt of such stock certificates, the
Corporation shall pay to Owner, in cash or cash equivalents (including the cancellation of any
purchase-money indebtedness), an amount equal to the Exercise Price previously paid for the
Unvested Shares which are to be repurchased from Owner.


          3. Termination of the Repurchase Right. The Repurchase Right shall terminate with
respect to any Unvested Shares for which it is not timely exercised under Paragraph D.2. In
addition, the Repurchase Right shall terminate and cease to be exercisable with respect to any and
all Purchased Shares in which Optionee vests in accordance with the Vesting Schedule. All
Purchased Shares as to which the Repurchase Right lapses shall, however, remain subject to (i) the
First Refusal Right and (ii) the Market Stand-Off.


          4. Aggregate Vesting Limitation. If the Option is exercised in more than one
increment so that Optionee is a party to one or more other Stock Purchase Agreements (the “Prior
Purchase Agreements”) which are executed prior to the date of this Agreement, then the total number
of Purchased Shares as to which Optionee shall be deemed to have a fully vested interest under this
Agreement and all Prior Purchase Agreements shall not exceed in the aggregate the number of
Purchased Shares in which Optionee would otherwise at the time be vested, in accordance with the
Vesting Schedule, had all the Purchased Shares (including those acquired under the Prior Purchase
Agreements) been acquired exclusively under this Agreement.


          5. Recapitalization. Any new, substituted or additional securities or other property
(including cash paid other than as a regular cash dividend) which is by reason of any
Recapitalization distributed with respect to the Purchased Shares shall be immediately subject to
the Repurchase Right and any escrow requirements hereunder, but only to the extent the Purchased
Shares are at the time covered by such right or escrow requirements. Appropriate adjustments to
reflect such distribution shall be made to the number, kind and/or class of Purchased Shares
subject to this Agreement and to the price per share to be paid upon the exercise of the Repurchase Right in order to reflect the effect of any such Recapitalization upon



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the Corporation’s capital structure; provided, however, that the aggregate purchase
price shall remain the same.



          6. Corporate Transaction


          (a) The Repurchase Right shall automatically terminate in its entirety, and all the Purchased
Shares shall vest in full, immediately prior to the consummation of any Corporate Transaction,
except to the extent the Repurchase Right is to be assigned to the successor entity in such
Corporate Transaction. Notwithstanding the foregoing, with respect to any Purchased Shares that
are subject to Section 409A of the Code and payment or settlement for such Shares is to be
accelerated in connection with the Corporate Transaction, no Corporate Transaction will be deemed
to have occurred for purposes of the Plan and any award agreement unless such event(s) also
constitutes a “change in the ownership”, “change in the effective control” or a “change in the
ownership of a substantial portion of the assets” of the Corporation as defined under Section 409A
of the Code.


          (b) To the extent the Repurchase Right remains in effect following a Corporate
Transaction, such right shall apply to any new securities or other property (including any cash
payments) received in exchange for the Purchased Shares in consummation of the Corporate
Transaction, but only to the extent the Purchased Shares are at the time covered by such right.
Appropriate adjustments shall be made to the price per share payable upon exercise of the
Repurchase Right to reflect the effect of the Corporate Transaction upon the Corporation’s capital
structure; provided, however, that the aggregate purchase price shall remain the
same. The new securities or other property (including any cash payments) issued or distributed
with respect to the Purchased Shares in consummation of the Corporate Transaction shall be
immediately deposited in escrow with the Corporation (or the successor entity) and shall not be
released from escrow until Optionee vests in such securities or other property in accordance with
the same Vesting Schedule in effect for the Purchased Shares.



     E. RIGHT OF FIRST REFUSAL


          1. Grant. The Corporation is hereby granted the right of first refusal (the “First
Refusal Right”), exercisable in connection with any proposed transfer of the Purchased Shares in
which Optionee has vested in accordance with the provisions of Article D. For purposes of this
Article E, the term “transfer” shall include any sale, assignment, pledge, encumbrance or other
disposition of the Purchased Shares intended to be made by Owner, but shall not include any
Permitted Transfer.


          2. Notice of Intended Disposition. In the event any Owner of Purchased Shares in
which Optionee has vested desires to accept a bona fide third-party offer for the transfer of any
or all of such shares (the Purchased Shares subject to such offer to be hereinafter referred to as
the “Target Shares”), Owner shall promptly (i) deliver to the Corporation written notice (the
“Disposition Notice”) of the terms of the offer, including the purchase price and the identity of
the third-party offeror, and (ii) provide satisfactory proof that the disposition of the
Target Shares to such third-party offeror would not be in contravention of the provisions set forth
in Articles B and C.



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          3. Exercise of the First Refusal Right. The Corporation shall, for a period of
twenty-five (25) days following receipt of the Disposition Notice, have the right to repurchase any
or all of the Target Shares subject to the Disposition Notice upon the same terms as those
specified therein or upon such other terms (not materially different from those specified in the
Disposition Notice) to which Owner consents. Such right shall be exercisable by delivery of
written notice (the “Exercise Notice”) to Owner prior to the expiration of the twenty-five (25)-day
exercise period. If such right is exercised with respect to all the Target Shares, then the
Corporation shall effect the repurchase of such shares, including payment of the purchase price,
not more than five (5) business days after delivery of the Exercise Notice; and at such time the
certificates representing the Target Shares shall be delivered to the Corporation.


          Should the purchase price specified in the Disposition Notice be payable in property other
than cash or evidences of indebtedness, the Corporation shall have the right to pay the purchase
price in the form of cash equal in amount to the value of such property. If Owner and the
Corporation cannot agree on such cash value within ten (10) days after the Corporation’s receipt of
the Disposition Notice, the valuation shall be made by an appraiser of recognized standing selected
by Owner and the Corporation or, if they cannot agree on an appraiser within twenty (20) days after
the Corporation’s receipt of the Disposition Notice, each shall select an appraiser of recognized
standing and the two (2) appraisers shall designate a third appraiser of recognized standing, whose
appraisal shall be determinative of such value. The cost of such appraisal shall be shared equally
by Owner and the Corporation. The closing shall then be held on the later of (i) the fifth
(5th) business day following delivery of the Exercise Notice or (ii) the fifth (5th) business day
after such valuation shall have been made.


          4. Non-Exercise of the First Refusal Right. In the event the Exercise Notice is not
given to Owner prior to the expiration of the twenty-five (25)-day exercise period, Owner shall
have period of thirty (30) days thereafter in which to sell or otherwise dispose of the Target
Shares to the third-party offeror identified in the Disposition Notice upon terms (including the
purchase price) no more favorable to such third-party offeror than those specified in the
Disposition Notice; provided, however, that any such sale or disposition must not
be effected in contravention of the provisions of Articles B and C. The third-party offeror shall
acquire the Target Shares free and clear of the First Refusal Right, but the acquired shares shall
remain subject to the provisions of Article B and Paragraph C.3. In the event Owner does not
effect such sale or disposition of the Target Shares within the specified thirty (30)-day period,
the First Refusal Right shall continue to be applicable to any subsequent disposition of the Target
Shares by Owner until such right lapses.


          5. Partial Exercise of the First Refusal Right. In the event the Corporation makes a
timely exercise of the First Refusal Right with respect to a portion, but not all, of the Target
Shares specified in the Disposition Notice, Owner shall have the option, exercisable by written
notice to the Corporation delivered within five (5) business days after Owner’s receipt of
the Exercise Notice, to effect the sale of the Target Shares pursuant to either of the following
alternatives:



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     (i) sale or other disposition of all the Target Shares to the third-party offeror
identified in the Disposition Notice, but in full compliance with the requirements of
Paragraph E.4., as if the Corporation did not exercise the First Refusal Right; or




     (ii) sale to the Corporation of the portion of the Target Shares which the Corporation
has elected to purchase, such sale to be effected in substantial conformity with the
provisions of Paragraph E.3. The First Refusal Right shall continue to be applicable to any
subsequent disposition of the remaining Target Shares until such right lapses.


          Owner’s failure to deliver timely notification to the Corporation shall be deemed to be an
election by Owner to sell the Target Shares pursuant to alternative (i) above.


          6. Recapitalization/Reorganization.


          (a) Any new, substituted or additional securities or other property which is by reason of any
Recapitalization distributed with respect to the Purchased Shares shall be immediately subject to
the First Refusal Right, but only to the extent the Purchased Shares are at the time covered by
such right.


          (b) In the event of a Reorganization, the First Refusal Right shall remain in full force and
effect and shall apply to the new capital stock or other property received in exchange for the
Purchased Shares in consummation of the Reorganization, but only to the extent the Purchased Shares
are at the time covered by such right.


          7. Lapse. The First Refusal Right shall lapse upon the earliest to occur of
(i) the first date on which shares of the Common Stock are held of record by more than five hundred
(500) persons, (ii) a determination made by the Board that a public market exists for the
outstanding shares of Common Stock or (iii) a firm commitment underwritten public offering,
pursuant to an effective registration statement under the 1933 Act, covering the offer and sale of
the Common Stock in the aggregate amount of at least ten million dollars ($10,000,000). However,
the Market Stand-Off shall continue to remain in full force and effect following the lapse of the
first Refusal Right.


          F. SPECIAL TAX ELECTION


          The acquisition of the Purchased Shares may result in adverse tax consequences which may be
avoided or mitigated by filing an election under Code Section 83(b). Such election must be filed
within thirty (30) days after the date of this Agreement. A description of the tax consequences
applicable to the acquisition of the Purchased Shares and the form for making the Code Section
83(b) election are set forth in Exhibit II. OPTIONEE SHOULD CONSULT WITH HIS OR HER TAX ADVISOR TO
DETERMINE THE TAX CONSEQUENCES OF ACQUIRING THE PURCHASED SHARES AND THE ADVANTAGES AND DISADVANTAGES OF FILING THE CODE SECTION 83(b) ELECTION. OPTIONEE ACKNOWLEDGES THAT
IT IS OPTIONEE’S SOLE RESPONSIBILITY, AND NOT THE CORPORATION’S, TO FILE A TIMELY 



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ELECTION UNDER
CODE SECTION 83(b), EVEN IF OPTIONEE REQUESTS THE CORPORATION OR ITS REPRESENTATIVES TO MAKE THIS
FILING ON HIS OR HER BEHALF.




     G. GENERAL PROVISIONS


          1. Assignment. The Corporation may assign the Repurchase Right and/or the First
Refusal Right to any person or entity selected by the Board, including (without limitation) one or
more stockholders of the Corporation.


          2. No Employment or Service Contract. Nothing in this Agreement or in the Plan shall
confer upon Optionee any right to continue in Service for any period of specific duration or
interfere with or otherwise restrict in any way the rights of the Corporation (or any Parent or
Subsidiary employing or retaining Optionee) or of Optionee, which rights are hereby expressly
reserved by each, to terminate Optionee’s Service at any time for any reason, with or without
cause.


          3. Notices. Any notice required to be given under this Agreement shall be in writing
and shall be deemed effective upon personal delivery or upon deposit in the U.S. mail, registered
or certified, postage prepaid and properly addressed to the party entitled to such notice at the
address indicated below such party’s signature line on this Agreement or at such other address as
such party may designate by ten (10) days advance written notice under this paragraph to all other
parties to this Agreement.


          4. No Waiver. The failure of the Corporation in any instance to exercise the
Repurchase Right or the First Refusal Right shall not constitute a waiver of any other repurchase
rights and/or rights of first refusal that may subsequently arise under the provisions of this
Agreement or any other agreement between the Corporation and Optionee. No waiver of any breach or
condition of this Agreement shall be deemed to be a waiver of any other or subsequent breach or
condition, whether of like or different nature.


          5. Cancellation of Shares. If the Corporation shall make available, at the time and
place and in the amount and form provided in this Agreement, the consideration for the Purchased
Shares to be repurchased in accordance with the provisions of this Agreement, then from and after
such time, the person from whom such shares are to be repurchased shall no longer have any rights
as a holder of such shares (other than the right to receive payment of such consideration in
accordance with this Agreement). Such shares shall be deemed purchased in accordance with the
applicable provisions hereof, and the Corporation shall be deemed the owner and holder of such
shares, whether or not the certificates therefor have been delivered as required by this Agreement.


     H. MISCELLANEOUS PROVISIONS




          1. Optionee Undertaking. Optionee hereby agrees to take whatever additional action
and execute whatever additional documents the Corporation may deem necessary or advisable in order
to carry out or effect one or more of the obligations or restrictions





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imposed on either Optionee or
the Purchased Shares pursuant to the provisions of this Agreement.


          2. Agreement is Entire Contract. This Agreement constitutes the entire contract
between the parties hereto with regard to the subject matter hereof. This Agreement is made
pursuant to the provisions of the Plan and shall in all respects be construed in conformity with
the terms of the Plan.


          3. Governing Law. This Agreement shall be governed by, and construed in accordance
with, the laws of the State of California without resort to that State’s conflict-of-laws rules.


          4. Counterparts. This Agreement may be executed in counterparts, each of which shall
be deemed to be an original, but all of which together shall constitute one and the same
instrument.


          5. Successors and Assigns. The provisions of this Agreement shall inure to the
benefit of, and be binding upon, the Corporation and its successors and assigns and upon Optionee,
Optionee’s permitted assigns and the legal representatives, heirs and legatees of Optionee’s
estate, whether or not any such person shall have become a party to this Agreement and have agreed
in writing to join herein and be bound by the terms hereof.


          6. Section 409A of the Code. Notwithstanding any contrary provision in the Plan or
this Agreement, if any provision of the Plan or this Agreement contravenes any regulations or
guidance promulgated under Section 409A of the Code or could cause any amounts to be subject to the
interest and penalties under Section 409A of the Code, such provision may be modified by the
Company without consent of the Optionee or Participant to maintain, to the maximum extent
practicable, the original intent of the applicable provision without violating the provisions of
Section 409A of the Code. Moreover, any discretionary authority that the Board or Committee may
have pursuant to the Plan shall not be applicable to an award that is subject to Section 409A of
the Code, to the extent such discretionary authority will contravene Section 409A of the Code or
the regulations or guidance promulgated thereunder.



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          IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year first
indicated above.



	 	 	 	 	 
	 	CERES, INC.

 	 
	 	By:  	 	 
	 
	 	Title: 	 	 
	 
	 	Address: 	 	 
	 
	 	 	 	 
	 
	 	OPTIONEE

 	 
	 	  	
 	 
	 	 	 	 
	 	 Address: 	 	 
	 
	 	 	 	 



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SPOUSAL ACKNOWLEDGMENT



          The undersigned spouse of Optionee has read and hereby approves the foregoing Stock Purchase
Agreement. In consideration of the Corporation’s granting Optionee the right to acquire the
Purchased Shares in accordance with the terms of such Agreement, the undersigned hereby agrees to
be irrevocably bound by all the terms of such Agreement, including (without limitation) the right
of the Corporation (or its assigns) to purchase any Purchased Shares in which Optionee is not
vested at the time of his or her cessation of Service.



	 	 	 	 	 
	 	  	
 	 
	 	 	OPTIONEE’S SPOUSE	 
	 
	 	 Address: 	 	 
	 
	 	 	 	 



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EXHIBIT I




ASSIGNMENT SEPARATE FROM CERTIFICATE


          FOR VALUE RECEIVED                      hereby sell(s), assign(s) and
transfer(s) unto Ceres, Inc. (the “Corporation”) ________________ (_______) shares of the Common Stock of the Corporation standing in his or her name on the books of the
Corporation represented by Certificate No. _______ herewith and do(es)
hereby irrevocably constitute and appoint _______ Attorney to transfer the
said stock on the books of the Corporation with full power of substitution in the premises.



Dated: _____________________




Signature _________________________





Instruction: Please do not fill in any blanks other than the signature line. Please sign exactly
as you would like your name to appear on the issued stock certificate. The purpose of this
assignment is to enable the Corporation to exercise the Repurchase Right without requiring
additional signatures on the part of Optionee.







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EXHIBIT II




FEDERAL INCOME TAX CONSEQUENCES AND

SECTION 83(b) TAX ELECTION



     I. Federal Income Tax Consequences and Section 83(b) Election For Exercise of
Non-Statutory Option. If the Purchased Shares are acquired pursuant to the exercise of a
Non-Statutory Option, as specified in the Grant Notice, then under Code Section 83, the excess of
the Fair Market Value of the Purchased Shares on the date any forfeiture restrictions applicable to
such shares lapse over the Exercise Price paid for such shares will be reportable as ordinary
income on the lapse date. For this purpose, the term “forfeiture restrictions” includes the right
of the Corporation to repurchase the Purchased Shares pursuant to the Repurchase Right. However,
Optionee may elect under Code Section 83(b) to be taxed at the time the Purchased Shares are
acquired, rather than when and as such Purchased Shares cease to be subject to such forfeiture
restrictions. Such election must be filed with the Internal Revenue Service within thirty (30)
days after the date of the Agreement. Even if the Fair Market Value of the Purchased Shares on the
date of the Agreement equals the Exercise Price paid (and thus no tax is payable), the election
must be made to avoid adverse tax consequences in the future. The form for making this election is
attached as part of this exhibit. FAILURE TO MAKE THIS FILING WITHIN THE APPLICABLE THIRTY
(30)-DAY PERIOD WILL RESULT IN THE RECOGNITION OF ORDINARY INCOME BY OPTIONEE AS THE FORFEITURE
RESTRICTIONS LAPSE.



     II. Federal Income Tax Consequences and Conditional Section 83(b) Election For Exercise of
Incentive Option. If the Purchased Shares are acquired pursuant to the exercise of an
Incentive Option, as specified in the Grant Notice, then the following tax principles shall be
applicable to the Purchased Shares:




     (i) For regular tax purposes, no taxable income will be recognized at the time the
Option is exercised.




     (ii) The excess of (a) the Fair Market Value of the Purchased Shares on the date the
Option is exercised or (if later) on the date any forfeiture restrictions applicable to the
Purchased Shares lapse over (b) the Exercise Price paid for the Purchased Shares will be
includible in Optionee’s taxable income for alternative minimum tax purposes.




     (iii) If Optionee makes a disqualifying disposition of the Purchased Shares, then
Optionee will recognize ordinary income in the year of such disposition equal in amount to
the excess of (a) the Fair Market Value of the Purchased Shares on the date the Option is
exercised or (if later) on the date any forfeiture restrictions applicable to the Purchased
Shares lapse over (b) the Exercise Price paid for the Purchased Shares. Any additional gain
recognized upon the disqualifying disposition will be either short-term or long-term capital
gain depending upon the period for which the Purchased Shares are held prior to the
disposition.



     (iv) For purposes of the foregoing, the term “forfeiture restrictions” will include the
right of the Corporation to repurchase the Purchased Shares pursuant to the



 









 








Repurchase
Right. The term “disqualifying disposition” means any sale or other disposition1
of the Purchased Shares within two (2) years after the Grant Date or within one (1) year
after the exercise date of the Option.




     (v) In the absence of final Treasury Regulations relating to Incentive Options, it is
not certain whether Optionee may, in connection with the exercise of the Option for any
Purchased Shares at the time subject to forfeiture restrictions, file a protective election
under Code Section 83(b) which would limit (a) Optionee’s alternative minimum taxable income
upon exercise and (b) Optionee’s ordinary income upon a disqualifying disposition to the
excess of the Fair Market Value of the Purchased Shares on the date the Option is exercised
over the Exercise Price paid for the Purchased Shares. Accordingly, such election if
properly filed will only be allowed to the extent the final Treasury Regulations permit such
a protective election. Page 2 of the attached form for making the election should be filed
with any election made in connection with the exercise of an Incentive Option.





 




			
	1 	 	Generally, a disposition of shares
purchased under an Incentive Option includes any transfer of legal title,
including a transfer by sale, exchange or gift, but does not include a transfer
to the Optionee’s spouse, a transfer into joint ownership with right of
survivorship if Optionee remains one of the joint owners, a pledge, a transfer
by bequest or inheritance or certain tax free exchanges permitted under the
Code.




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SECTION 83(b) ELECTION



          This statement is being made under Section 83(b) of the Internal Revenue Code,
pursuant to Treas. Reg. Section 1.83-2.




	(1)	 	The taxpayer who performed the services is:
	 
	 	 	Name:
	 	 	Address:
	 	 	Taxpayer Ident. No.:
	 
	(2)	 	The property with respect to which the election is being made is                      shares of the common stock of Ceres, Inc.
	 
	(3)	 	The property was issued on                                         ,                     .
	 
	(4)	 	The taxable year in which the election is being made is the calendar year                     .
	 
	(5)	 	The property is subject to a repurchase right pursuant to which the issuer has the right to
acquire the property at the original purchase price if for any reason taxpayer’s service with
the issuer terminates. The issuer’s repurchase right lapses in a series of annual and monthly
installments over a four (4)-year period ending on                     , 200           .
	 
	(6)	 	The fair market value at the time of transfer (determined without regard to any restriction
other than a restriction which by its terms will never lapse) is $                     per share.
	 
	(7)	 	The amount paid for such property is $                     per share.
	 
	(8)	 	A copy of this statement was furnished to Ceres, Inc. for whom taxpayer rendered the services
underlying the transfer of property.
	 
	(9)	 	This statement is executed on                     ,                     .





	 	 	 	 

	 

	 	 	 
	Spouse (if any)

	 	Taxpayer	 






This election must be filed with the Internal Revenue Service Center with which taxpayer files his
or her Federal income tax returns and must be made within thirty (30) days after the execution date
of the Stock Purchase Agreement. This filing should be made by registered or certified mail,
return receipt requested. Optionee must retain two (2) copies of the completed form for filing
with his or her Federal and state tax returns for the current tax year and an additional copy for
his or her records.






 









 








          The property described in the above Section 83(b) election is comprised of shares of common
stock acquired pursuant to the exercise of an incentive stock option under Section 422 of the
Internal Revenue Code (the “Code”). Accordingly, it is the intent of the taxpayer to utilize this
election to achieve the following tax results.




     1. The purpose of this election is to have the alternative minimum taxable income
attributable to the purchased shares measured by the amount by which the fair market value
of such shares at the time of their transfer to the taxpayer exceeds the purchase price
paid for the shares. In the absence of this election, such alternative minimum taxable
income would be measured by the spread between the fair market value of the purchased
shares and the purchase price which exists on the various lapse dates in effect for the
forfeiture restrictions applicable to such shares.




     2. Section 421(a)(1) of the Code expressly excludes from income any excess of the
fair market value of the purchased shares over the amount paid for such shares.
Accordingly, this election is also intended to be effective in the event there is a
“disqualifying disposition” of the shares, within the meaning of Section 421(b) of the
Code, which would otherwise render the provisions of Section 83(a) of the Code applicable
at that time. Consequently, the taxpayer hereby elects to have the amount of
disqualifying disposition income measured by the excess of the fair market value of the
purchased shares on the date of transfer to the taxpayer over the amount paid for such
shares. Since Section 421(a) presently applies to the shares which are the subject of
this Section 83(b) election, no taxable income is actually recognized for regular tax
purposes at this time, and no income taxes are payable by the taxpayer as a result of this
election. The foregoing election is to be effective to the full extent permitted under
the Code.



THIS PAGE 2 IS TO BE ATTACHED TO ANY SECTION 83(b) ELECTION FILED IN CONNECTION WITH THE EXERCISE
OF AN INCENTIVE STOCK OPTION UNDER THE FEDERAL TAX LAWS.






 









 








APPENDIX




          The following definitions shall be in effect under this Agreement:




	A.	 	Agreement shall mean this Stock Purchase Agreement.
	 
	B.	 	Board shall mean the Corporation’s Board of Directors.
	 
	C.	 	Code shall mean the Internal Revenue Code of 1986, as amended, and the rules and
regulations promulgated thereunder.
	 
	D.	 	Common Stock shall mean the Corporation’s common stock.
	 
	E.	 	Corporate Transaction shall be deemed to have occurred when:






     (i) Any Person is or becomes the “beneficial owner” (as defined in Rule 13d-3 of the
Exchange Act, whether or not the Corporation is then subject to the terms of the Exchange
Act), directly or indirectly, of securities of the Corporation representing twenty (20%)
percent or more of the combined voting power of the Corporation’s then-outstanding
securities; or




     (ii) The following individuals cease for any reason to constitute a majority of the number
of directors then serving: individuals who constitute the Board as of December 31, 1999
and any new director (other than a director whose initial assumption of office is in
connection with an actual or threatened election contest, including, but not limited to, a
consent solicitation, relating to the election of directors of the Corporation) whose
appointment or election by the Board or nomination for election by the Corporation’s
shareholders was approved or recommended by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors on the date hereof or whose
appointment, election or nomination for election was previously so approved or
recommended; or




     (iii) There is consummated a merger or consolidation of the Corporation, other
than (A) a merger or consolidation which would result in the voting securities of the
Corporation outstanding immediately prior to such merger or consolidation continuing to
represent (either by remaining outstanding or by being converted into voting securities of
the surviving entity or any parent thereof), in combination with the ownership of any
trustee or other fiduciary holding securities under an employee benefit plan of the
Corporation or any Subsidiary, at least sixty (60%) percent of the combined voting power
of the securities of the Corporation or such surviving entity or any parent thereof
outstanding immediately after such merger or consolidation, or (B) a merger or
consolidation effected to implement a recapitalization of the Corporation (or similar
transaction) in which no Person is or becomes the beneficial owner, directly or
indirectly, of securities of the Corporation (not including in the securities beneficially
owned by such Person any securities acquired directly from the



 









 






 Corporation or its affiliates other than in connection with the securities acquired directly from the
Corporation or its affiliates other than in connection with the acquisition by the
Corporation or its affiliates of a business) representing twenty (20%) percent or more of
the combined voting power of the Corporation’s then outstanding securities; or




     (iv) The shareholders of the Corporation approve a plan of complete liquidation or
dissolution of the Corporation or there is consummated an agreement for the sale or
disposition by the Corporation of all or substantially all of the Corporation’s assets,
other than a sale or disposition by the Corporation of all or substantially all of the
Corporation’s assets to an entity, at least sixty (60%) percent of the combined voting
power of the voting securities of which are owned by shareholders of the Corporation in
substantially the same proportions as their ownership of the Corporation immediately prior
to such sale.



F. Corporation shall mean Ceres, Inc., a Delaware corporation, and any successor
corporation to all or substantially all of the assets or voting stock of Ceres, Inc. which shall by
appropriate action adopt the Plan.




G. Disposition Notice shall have the meaning assigned to such term in Paragraph E.2.




H. Exercise Notice shall have the meaning assigned to such term in Paragraph E.3.




I. Exercise Price shall have the meaning assigned to such term in Paragraph A.1.




J. Fair Market Value of a share of Common Stock on any relevant date, prior to
the initial public offering of the Common Stock, shall be determined by the Plan Administrator
after taking into account such factors as it shall deem appropriate.




K. First Refusal Right shall mean the right granted to the Corporation in accordance with
Article E.




L. Grant Date shall have the meaning assigned to such term in Paragraph A.1.




M. Grant Notice shall mean the Notice of Grant of Stock Option pursuant to which Optionee
has been informed of the basic terms of the Option.




N. Incentive Option shall mean an option which satisfies the requirements of Code Section
422.




O. Involuntary Termination shall mean the termination of Optionee’s Service which occurs by
reason of:





     (i)  Optionee’s dismissal or discharge by the Corporation for
reasons other than Misconduct, or


     (ii) Optionee’s voluntary resignation following (A) a change in Optionee’s position
with the Corporation (or Parent or Subsidiary employing Optionee) which






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materially reduces
the Optionee’s level of responsibility, (B) a reduction in Optionee’s level of compensation
(including base salary, fringe benefits and target bonuses under any corporate-performance
based bonus or incentive programs) by more than fifteen percent (15%) in the aggregate or
(C) a relocation of Optionee’s place of employment by more than fifty (50) miles from
Optionee’s place of employment immediately prior to the Corporate Transaction;
provided and only if such change, reduction or relocation is effected by the
Corporation without Optionee consent;




provided, however, that in no circumstances shall an event constitute an
Involuntary Termination if it would create an inappropriate acceleration of payment that
could give rise to adverse tax consequences to an Optionee under Section 409A of the Code.



P. Market Stand-Off shall mean the market stand-off restriction specified in Paragraph C.3.




Q. Misconduct shall mean the commission of any act of fraud, embezzlement or dishonesty by
the Optionee or participant, any unauthorized use or disclosure by such person of confidential
information or trade secrets of the Corporation (or any Parent or Subsidiary), or any other
intentional misconduct by such person adversely affecting the business or affairs of the
Corporation (or any Parent or Subsidiary) in a material manner. The foregoing definition shall not
be deemed to be inclusive of all the acts or omissions which the Corporation (or any Parent or
Subsidiary) may consider as grounds for the dismissal or discharge of any Optionee, Participant or
other person in the Service of the Corporation (or any Parent or Subsidiary).




R. 1933 Act shall mean the Securities Act of 1933, as amended.




S. 1934 Act shall mean the Securities Exchange Act of 1934, as amended.




T. Non-Statutory Option shall mean an option not intended to satisfy the requirements of
Code Section 422.




U. Option shall have the meaning assigned to such term in Paragraph A.1.




V. Option Agreement shall mean all agreements and other documents evidencing the Option.




W. Optionee shall mean the person to whom the Option is granted under the Plan.




X. Owner shall mean Optionee and all subsequent holders of the Purchased Shares who derive
their chain of ownership through a Permitted Transfer from Optionee.



Y. Parent shall mean any corporation (other than the Corporation) in an unbroken chain of
corporations ending with the Corporation, provided each corporation in the unbroken chain
(other than the Corporation) owns, at the time of the determination, stock possessing fifty percent





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(50%) or more of the total combined voting power of all classes of stock in one of the other
corporations in such chain.




Z. Permitted Transfer shall mean (i) a gratuitous transfer of the Purchased Shares,
provided and only if Optionee obtains the Corporation’s prior written consent to such transfer,
(ii) a transfer of title to the Purchased Shares effected pursuant to Optionee’s will or the laws
of intestate succession following Optionee’s death or (iii) a transfer to the Corporation in pledge
as security for any purchase-money indebtedness incurred by Optionee in connection with the
acquisition of the Purchased Shares.




AA. Person shall mean any person, entity or “group” within the meaning of Section 13(d)(3)
or Section 14(d)(2) of the Exchange Act, except that such term shall not include (i) the
Corporation or any of its Subsidiaries, (ii) a trustee or other fiduciary holding securities under
an employee benefit plan of the Corporation or any of its Subsidiaries, (iii) an underwriter
temporarily holding securities pursuant to an offering of such securities, or (iv) a corporation
owned, directly or indirectly, by the shareholders of the Corporation in substantially the same
proportions as their ownership of stock of the Corporation, and as may be amended from time to
time.




AB. Plan shall mean the Corporation’s 2000 Stock Option/Stock Issuance Plan, as amended and
restated on August 4, 2006, revised August 19, 2008.




AC. Plan Administrator shall mean either the Board or a committee of the Board acting in
its capacity as administrator of the Plan.




AD. Prior Purchase Agreement shall have the meaning assigned to such term in Paragraph D.4.




AE Purchased Shares shall have the meaning assigned to such term in Paragraph A.1.




AF. Recapitalization shall mean any stock split, stock dividend, merger, recapitalization,
combination of shares, exchange of shares or other change affecting the Corporation’s outstanding
Common Stock as a class without the Corporation’s receipt of consideration.




AG. Reorganization shall mean any of the following transactions:





     (i) a merger or consolidation in which the Corporation is not the surviving entity,




     (ii) a sale, transfer or other disposition of all or substantially all of the
Corporation’s assets,



     (iii) a reverse merger in which the Corporation is the surviving entity but in which
the Corporation’s outstanding voting securities are transferred in whole or in part to a
person or persons different from the persons holding those securities immediately prior to
the merger, or



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     (iv) any transaction effected primarily to change the state in which the Corporation is
incorporated or to create a holding company structure.



AH. Repurchase Right shall mean the right granted to the Corporation in accordance with
Article D.




AI. SEC shall mean the Securities and Exchange Commission.




AJ. Service shall mean the Optionee’s performance of services for the Corporation (or any
Parent or Subsidiary) in the capacity of an employee, subject to the control and direction of the
employer entity as to both the work to be performed and the manner and method of performance, a
non-employee member of the Board of Directors or an independent consultant.




AK. Subsidiary shall mean any corporation (other than the Corporation) in an unbroken chain
of corporations beginning with the Corporation; provided each corporation (other than the
last corporation) in the unbroken chain owns, at the time of the determination, stock possessing
fifty percent (50%) or more of the total combined voting power of all classes of stock in one of
the other corporations in such chain.




AL. Target Shares shall have the meaning assigned to such term in Paragraph E.2.




AM. Vesting Schedule shall mean the vesting schedule specified in the Grant Notice pursuant
to which the Optionee is to vest in the Option Shares in a series of installments over his or her
period of Service.




AN. Unvested Shares shall have the meaning assigned to such term in Paragraph D.1.





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