EX-10.5





 Exhibit 10.5 

VITAL FARMS, INC. 

STOCK OPTION GRANT NOTICE 

(2020 EQUITY INCENTIVE PLAN) 

Vital Farms, Inc. (the “Company”), pursuant to its 2020 Equity Incentive Plan (the “Plan”), has granted to you
(“Optionholder”) an option to purchase the number of shares of the Common Stock set forth below (the “Option”). Your Option is subject to all of the terms and conditions as set forth herein and in the
Plan, and the Stock Option Agreement and the Notice of Exercise, all of which are attached hereto and incorporated herein in their entirety. Capitalized terms not explicitly defined herein but defined in the Plan or the Stock Option Agreement shall
have the meanings set forth in the Plan or the Stock Option Agreement, as applicable. 
  

			
	Optionholder:	 	  

	Date of Grant:	 	  

	Vesting Commencement Date:	 	  

	Number of Shares of Common Stock Subject to Option:	 	  

	Exercise Price (Per Share):	 	  

	Total Exercise Price:	 	  

	Expiration Date:	 	  


  

			
	Type of Grant:	  	[Incentive Stock Option]1 OR [Nonstatutory Stock Option]
		
	Exercise and	  	
	Vesting Schedule:	  	Subject to the Optionholder’s Continuous Service through each applicable vesting date, the Option will vest as follows:
		
		  	[                            ]

 Optionholder Acknowledgements: By your signature below or by electronic acceptance or authentication in a form
authorized by the Company, you understand and agree that: 
  

	 	•	 	 The Option is governed by this Stock Option Grant Notice, and the provisions of the Plan and the Stock Option
Agreement and the Notice of Exercise, all of which are made a part of this document. Unless otherwise provided in the Plan, this Grant Notice and the Stock Option Agreement (together, the “Option Agreement”) may not be
modified, amended or revised except in a writing signed by you and a duly authorized officer of the Company. 


  

	 	•	 	 [If the Option is an Incentive Stock Option, it (plus other outstanding Incentive Stock Options granted to you)
cannot be first exercisable for more than $100,000 in value (measured by exercise price) in any calendar year. Any excess over $100,000 is a Nonstatutory Stock Option.] 



 

	 	•	 	 You consent to receive this Grant Notice, the Stock Option Agreement, the Plan, the Prospectus and any other
Plan-related documents by electronic delivery and to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.



  

	 	•	 	 You have read and are familiar with the provisions of the Plan, the Stock Option Agreement, the Notice of
Exercise and the Prospectus. In the event of any conflict between the provisions in this Grant Notice, the Option Agreement, the Notice of Exercise, or the Prospectus and the terms of the Plan, the terms of the Plan shall control.



  

	1 	 If this is an Incentive Stock Option, it (plus other outstanding Incentive Stock Options) cannot be first
exercisable for more than $100,000 in value (measured by exercise price) in any calendar year. Any excess over $100,000 is a Nonstatutory Stock Option. 















	 	•	 	 The Option Agreement sets forth the entire understanding between you and the Company regarding the acquisition of
Common Stock and supersedes all prior oral and written agreements, promises and/or representations on that subject with the exception of other equity awards previously granted to you and any written employment agreement, offer letter, severance
agreement, written severance plan or policy, or other written agreement between the Company and you in each case that specifies the terms that should govern this Option. 



 

	 	•	 	 Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying
with the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act or other applicable law) or other transmission method and any counterpart so delivered will be deemed to have been duly and validly delivered and be valid and effective for
all purposes. 


  

									
	VITAL FARMS, INC.	 		 	OPTIONHOLDER:
					
	By:	 	  
	 		 		 	  

		 	Signature	 		 		 	Signature
					
	Title:	 	  
	 		 	Date:	 	  

					
	Date:	 	  
	 		 		 	

 ATTACHMENTS: Stock Option Agreement, 2020 Equity Incentive Plan, Notice of Exercise 












 ATTACHMENT I 

STOCK OPTION AGREEMENT 












 VITAL FARMS, INC. 

2020 EQUITY INCENTIVE PLAN 

STOCK OPTION AGREEMENT 

As reflected by your Stock Option Grant Notice (“Grant Notice”), Vital Farms, Inc. (the
“Company”) has granted you an option under its 2020 Equity Incentive Plan (the “Plan”) to purchase a number of shares of Common Stock at the exercise price indicated in your Grant Notice (the
“Option”). Capitalized terms not explicitly defined in this Agreement but defined in the Grant Notice or the Plan shall have the meanings set forth in the Grant Notice or Plan, as applicable. The terms of your Option as
specified in the Grant Notice and this Stock Option Agreement constitute your Option Agreement. 
 The general terms and conditions
applicable to your Option are as follows: 
 1. GOVERNING PLAN DOCUMENT. Your
Option is subject to all the provisions of the Plan, including but not limited to the provisions in: 
 (a) Section 6 regarding the
impact of a Capitalization Adjustment, dissolution, liquidation, or Transaction on your Option; 
 (b) Section 9(f) regarding the
Company’s retained rights to terminate your Continuous Service notwithstanding the grant of the Option; and 
 (c) Section 8(c)
regarding the tax consequences of your Option. 
 Your Option is further subject to all interpretations, amendments, rules and regulations, which may from
time to time be promulgated and adopted pursuant to the Plan. In the event of any conflict between the Option Agreement and the provisions of the Plan, the provisions of the Plan shall control. 

2. VESTING. Your option will vest as provided in your Grant Notice, subject to the provisions contained herein
and the terms of the Plan. Vesting will cease upon the termination of your Continuous Service. [Notwithstanding the foregoing, if a Change in Control occurs and during the period beginning immediately prior to and ending twelve (12) months
after the effective time of such Change in Control your Continuous Service terminates due to a termination by the Company (not including death or Disability) without Cause or due to your voluntary resignation for Good Reason, then, as of the date of
termination of your Continuous Service, the vesting and exercisability of your option will be accelerated in full. For the avoidance of doubt, your option is also subject to the potential vesting acceleration that may occur in connection with a
Transaction as set forth in the Plan and, for clarity, to the extent your option is assumed, continued or substituted for in a Change in Control pursuant to Section 6(c) of the Plan, the vesting acceleration described in the preceding sentence
shall apply to such assumed, continued or substituted award(s), as applicable. 












 (a) “Good Reason” means the occurrence of any of the
following events, conditions or actions taken by the Company (or successor to the Company, if applicable) without Cause and without your written consent: (i) a material reduction of your annual base salary; provided, however, that Good
Reason shall not be deemed to have occurred in the event of a reduction in your annual base salary that is pursuant to a salary reduction program affecting substantially all of the similarly situated employees of the Company and that does not
adversely affect you to a greater extent than other similarly situated employees; (ii) a material diminution in your authority, duties or responsibilities; (iii) a relocation of your principal place of employment with the Company (or
successor to the Company, if applicable) to a place that increases your one-way commute by more than fifty (50) miles as compared to your then-current principal place of employment immediately prior to
such relocation (excluding regular travel in the ordinary course of business); or (iv) a material breach by the Company of any provision of this Option Agreement or your employment agreement with the Company; provided, however, that in
each case above, in order for your resignation to be deemed to have been for Good Reason, you must first give the Board written notice of the action or omission giving rise to “Good Reason” within thirty (30) days after the first
occurrence thereof; the Company must fail to reasonably cure such action or omission within thirty (30) days after receipt of such notice (the “Cure Period”), and your resignation from all positions you hold with the
Company must be effective not later than thirty (30) days after the expiration of such Cure Period. 
 (b) If any payment or
benefit you would receive from the Company or otherwise in connection with a Change in Control or other similar transaction (a “280G Payment”) would (i) constitute a “parachute payment” within the meaning of
Section 280G of the Code, and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then any such 280G Payment (a “Payment”)
shall be equal to the Reduced Amount. The “Reduced Amount” shall be either (x) the largest portion of the Payment that would result in no portion of the Payment (after reduction) being subject to the Excise Tax or
(y) the largest portion, up to and including the total, of the Payment, whichever amount (i.e., the amount determined by clause (x) or by clause (y)), after taking into account all applicable federal, state and local employment taxes,
income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in your receipt, on an after-tax basis, of the greater economic benefit notwithstanding that all or some portion
of the Payment may be subject to the Excise Tax. If a reduction in a Payment is required pursuant to the preceding sentence and the Reduced Amount is determined pursuant to clause (x) of the preceding sentence, the reduction shall occur in the
manner (the “Reduction Method”) that results in the greatest economic benefit for you. If more than one method of reduction will result in the same economic benefit, the items so reduced will be reduced pro rata (the
“Pro Rata Reduction Method”). 
 Notwithstanding the foregoing, if the Reduction Method or the Pro Rata Reduction
Method would result in any portion of the Payment being subject to taxes pursuant to Section 409A of the Code that would not otherwise be subject to taxes pursuant to Section 409A of the Code, then the Reduction Method and/or the Pro Rata
Reduction Method, as the case may be, shall be modified so as to avoid the imposition of taxes pursuant to Section 409A of the Code as follows: (A) as a first priority, the modification shall preserve to the greatest extent possible, the
greatest economic benefit for you as determined on an after-tax basis; (B) as a second priority, Payments that are contingent on future events (e.g., being terminated without cause), shall be reduced (or
eliminated) before Payments that are not contingent on future events; and (C) as a third priority, Payments that 












 
are “deferred compensation” within the meaning of Section 409A of the Code shall be reduced (or eliminated) before Payments that are not deferred compensation within the meaning of
Section 409A of the Code. 
 Unless you and the Company agree on an alternative accounting firm, the accounting firm engaged by the
Company for general tax compliance purposes as of the day prior to the effective date of the change of control transaction triggering the Payment shall perform the foregoing calculations. If the accounting firm so engaged by the Company is serving
as accountant or auditor for the individual, entity or group effecting the change of control transaction, the Company shall appoint a nationally recognized accounting firm to make the determinations required hereunder. The Company shall bear all
expenses with respect to the determinations by such accounting firm required to be made hereunder. The Company shall use commercially reasonable efforts to cause the accounting firm engaged to make the determinations hereunder to provide its
calculations, together with detailed supporting documentation, to you and the Company within fifteen (15) calendar days after the date on which your right to a 280G Payment becomes reasonably likely to occur (if requested at that time by you or
the Company) or such other time as requested by you or the Company. 
 If you receive a Payment for which the Reduced Amount was determined
pursuant to clause (x) of the first paragraph of this Section 2(b) and the Internal Revenue Service determines thereafter that some portion of the Payment is subject to the Excise Tax, you shall promptly return to the Company a sufficient
amount of the Payment (after reduction pursuant to clause (x) of the first paragraph of this Section 2(b) so that no portion of the remaining Payment is subject to the Excise Tax. For the avoidance of doubt, if the Reduced Amount was
determined pursuant to clause (y) in the first paragraph of this Section 2(b), you shall have no obligation to return any portion of the Payment pursuant to the preceding sentence.] 

3. EXERCISE. 

(a) You may generally exercise the vested portion of your Option for whole shares of Common Stock at any time during its term by
delivery of payment of the exercise price and applicable withholding taxes and other required documentation to the Plan Administrator in accordance with the exercise procedures established by the Plan Administrator, which may include an electronic
submission. Please review Sections 4(i), 4(j) and 7(b)(v) of the Plan, which may restrict or prohibit your ability to exercise your Option during certain periods. 

(b) To the extent permitted by Applicable Law, you may pay your Option exercise price as follows: 

(i) cash, check, bank draft or money order; 

(ii) pursuant to a “cashless exercise” program as further described in Section 4(c)(ii) of the Plan if at the time of
exercise the Common Stock is publicly traded; 
 (iii) subject to Company and/or Committee consent at the time of exercise, by
delivery of previously owned shares of Common Stock as further described in Section 4(c)(iii) of the Plan; or 












 (iv) subject to Company and/or Committee consent at the time of exercise, if the
Option is a Nonstatutory Stock Option, by a “net exercise” arrangement as further described in Section 4(c)(iv) of the Plan. 

(c) By accepting your Option, you agree that you will not sell, dispose of, transfer, make any short sale of, grant any option for the
purchase of, or enter into any hedging or similar transaction with the same economic effect as a sale with respect to any shares of Common Stock or other securities of the Company held by you, for a period of one hundred eighty (180) days
following the effective date of a registration statement of the Company filed under the Securities Act or such longer period as the underwriters or the Company will request to facilitate compliance with FINRA Rule 2241 or any successor or similar
rules or regulation (the “Lock-Up Period”); provided, however, that nothing contained in this Section 3(c) will prevent the exercise of a repurchase option, if any, in favor
of the Company during the Lock-Up Period. You further agree to execute and deliver such other agreements as may be reasonably requested by the Company or the underwriters that are consistent with the
foregoing or that are necessary to give further effect thereto. In order to enforce the foregoing covenant, the Company may impose stop-transfer instructions with respect to your shares of Common Stock until the end of such period. You
also agree that any transferee of any shares of Common Stock (or other securities) of the Company held by you will be bound by this Section 3(c). The underwriters of the Company’s stock are intended third party beneficiaries of this
Section 3(c) and will have the right, power and authority to enforce the provisions hereof as though they were a party hereto. 

4. TERM. You may not exercise your Option before the commencement of its term or after its term expires. The term
of your option commences on the Date of Grant and expires upon the earliest of the following: 
 (a) immediately upon the termination
of your Continuous Service for Cause; 
 (b) three months after the termination of your Continuous Service for any reason other than
Cause, Disability or death; 
 (c) 12 months after the termination of your Continuous Service due to your Disability; 

(d) 18 months after your death if you die during your Continuous Service; 

(e) immediately upon a Transaction if the Board has determined that the Option will terminate in connection with a Transaction, 

(f) the Expiration Date indicated in your Grant Notice; or 

(g) the day before the 10th anniversary of the Date of Grant. 

Notwithstanding the foregoing, if you die during the period provided in Section 4(b) or 4(c) above, the term of your Option shall not
expire until the earlier of (i) eighteen months after your death, (ii) upon any termination of the Option in connection with a Transaction, (iii) the Expiration Date indicated in your Grant Notice, or (iv) the day before the
tenth anniversary of the Date of Grant. Additionally, the Post-Termination Exercise Period of your Option may be extended as provided in Section 4(i) of the Plan. 












 To obtain the federal income tax advantages associated with an Incentive Stock Option, the
Code requires that at all times beginning on the date of grant of your Option and ending on the day three months before the date of your Option’s exercise, you must be an employee of the Company or an Affiliate, except in the event of your
death or Disability. If the Company provides for the extended exercisability of your Option under certain circumstances for your benefit, your Option will not necessarily be treated as an Incentive Stock Option if you exercise your Option more than
three months after the date your employment terminates. 
 5. WITHHOLDING OBLIGATIONS. As
further provided in Section 8 of the Plan: (a) you may not exercise your Option unless the applicable tax withholding obligations are satisfied, and (b) at the time you exercise your Option, in whole or in part, or at any time
thereafter as requested by the Company, you hereby authorize withholding from payroll and any other amounts payable to you, and otherwise agree to make adequate provision for (including by means of a “cashless exercise” pursuant to a
program developed under Regulation T as promulgated by the Federal Reserve Board to the extent permitted by the Company), any sums required to satisfy the federal, state, local and foreign tax withholding obligations, if any, which arise in
connection with the exercise of your Option in accordance with the withholding procedures established by the Company. Accordingly, you may not be able to exercise your Option even though the Option is vested, and the Company shall have no obligation
to issue shares of Common Stock subject to your Option, unless and until such obligations are satisfied. In the event that the amount of the Company’s withholding obligation in connection with your Option was greater than the amount actually
withheld by the Company, you agree to indemnify and hold the Company harmless from any failure by the Company to withhold the proper amount. 

6. INCENTIVE STOCK OPTION DISPOSITION REQUIREMENT. If
your option is an Incentive Stock Option, you must notify the Company in writing within 15 days after the date of any disposition of any of the shares of the Common Stock issued upon exercise of your option that occurs within two years after the
date of your option grant or within one year after such shares of Common Stock are transferred upon exercise of your option. 
 7.
TRANSFERABILITY. Except as otherwise provided in Section 4(e) of the Plan, your Option is not transferable, except by will or by the applicable laws of descent and distribution, and is exercisable during your life only by
you. 
 8. TRANSACTION. Your Option is subject to the terms of any agreement governing a Transaction involving
the Company, including, without limitation, a provision for the appointment of a stockholder representative that is authorized to act on your behalf with respect to any escrow, indemnities and any contingent consideration. 

9. NO LIABILITY FOR TAXES. As a condition to
accepting the Option, you hereby (a) agree to not make any claim against the Company, or any of its Officers, Directors, Employees or Affiliates related to tax liabilities arising from the Option or other Company compensation and
(b) acknowledge that you were advised to consult with your own personal tax, financial and other legal advisors regarding the tax consequences of the Option and have either done so or knowingly and voluntarily declined to do so. Additionally,
you acknowledge that the Option is exempt from 












 
Section 409A only if the exercise price is at least equal to the “fair market value” of the Common Stock on the date of grant as determined by the Internal Revenue Service and
there is no other impermissible deferral of compensation associated with the Option. Additionally, as a condition to accepting the Option, you agree not make any claim against the Company, or any of its Officers, Directors, Employees or Affiliates
in the event that the Internal Revenue Service asserts that such exercise is less than the “fair market value” of the Common Stock on the date of grant as subsequently determined by the Internal Revenue Service. 

10. SEVERABILITY. If any part of this Option Agreement or the Plan is declared by any court or
governmental authority to be unlawful or invalid, such unlawfulness or invalidity will not invalidate any portion of this Option Agreement or the Plan not declared to be unlawful or invalid. Any Section of this Option Agreement (or part of such
a Section) so declared to be unlawful or invalid will, if possible, be construed in a manner which will give effect to the terms of such Section or part of a Section to the fullest extent possible while remaining lawful and valid 

11. OTHER DOCUMENTS. You hereby acknowledge receipt of or the right to receive a document
providing the information required by Rule 428(b)(1) promulgated under the Securities Act, which includes the Prospectus. In addition, you acknowledge receipt of the Company’s Trading Policy. 

12. QUESTIONS. If you have questions regarding these or any other terms and conditions applicable to your Option,
including a summary of the applicable federal income tax consequences please see the Prospectus. 
 *  *  *  *













 ATTACHMENT II 

2020 EQUITY INCENTIVE PLAN 












 ATTACHMENT III 

NOTICE OF EXERCISE 












 VITAL FARMS, INC. 

(2020 EQUITY INCENTIVE PLAN) 

NOTICE OF EXERCISE 
  

			
	Vital Farms, Inc.	  	
	3601 South Congress Avenue, Suite C100	  	
	Austin, Texas 78704	  	Date of Exercise:                     

 This constitutes notice to Vital Farms, Inc. (the “Company”) that I elect to purchase
the below number of shares of Common Stock of the Company (the “Shares”) by exercising my Option for the price set forth below. Capitalized terms not explicitly defined in this Notice of Exercise but defined in the Grant
Notice, Option Agreement or 2020 Equity Incentive Plan (the “Plan”) shall have the meanings set forth in the Grant Notice, Option Agreement or Plan, as applicable. Use of certain payment methods is subject to Company and/or
Committee consent and certain additional requirements set forth in the Option Agreement and the Plan. 
  

									
	Type of option (check one):	  	Incentive  ☐	 	  	Nonstatutory  ☐	 
	 Date of Grant:
	  				  			
	 Number of Shares as to which Option is exercised:
	  				  			
	 Certificates to be issued in name of:
	  				  			
	 Total exercise price:
	  	$	             	 	  			
	 Cash, check, bank draft or money order delivered herewith:
	  	$	             	 	  			
	 Value of              Shares
delivered herewith:
	  	$	             	 	  			
	 Regulation T Program (cashless exercise)
	  	$	             	 	  			
	 Value of              Shares
pursuant to net exercise:
	  	$	             	 	  			

 By this exercise, I agree (i) to provide such additional documents as you may require pursuant to the
terms of the Plan, (ii) to satisfy the tax withholding obligations, if any, relating to 












 
the exercise of this Option as set forth in the Option Agreement, and (iii) if this exercise relates to an incentive stock option, to notify you in writing within 15 days after the date of
any disposition of any of the Shares issued upon exercise of this Option that occurs within two years after the Date of Grant or within one year after such Shares are issued upon exercise of this Option. 

I further agree that I will not sell, dispose of, transfer, make any short sale of, grant any option for the purchase of, or enter into any
hedging or similar transaction with the same economic effect as a sale with respect to any shares of Common Stock or other securities of the Company that I hold, for a period of one hundred eighty (180) days following the effective date of a
registration statement of the Company filed under the Securities Act or such longer period as the underwriters or the Company will request to facilitate compliance with FINRA Rule 2241 or any successor or similar rules or regulation (the
“Lock-Up Period”); provided, however, that nothing contained in this paragraph will prevent the exercise of a repurchase option, if any, in favor of the Company during the Lock-Up Period. I further agree to execute and deliver such other agreements as may be reasonably requested by the Company or the underwriters that are consistent with the foregoing or that are necessary to
give further effect thereto. I further agree that in order to enforce the foregoing covenant, the Company may impose stop-transfer instructions with respect to shares of Common Stock that I hold until the end of such period. I also agree
that any transferee of any shares of Common Stock (or other securities) of the Company that I hold will be bound by this paragraph. The underwriters of the Company’s stock are intended third party beneficiaries of this paragraph and will
have the right, power and authority to enforce the provisions hereof as though they were a party hereto. 
  

	
	Very truly yours,