Document:

Restricted Stock Agreement

 Exhibit 10.5 
  
 EMBREX, INC. 
  
 RESTRICTED STOCK AGREEMENT 
  
 This Restricted Stock Agreement (this “Agreement”) is dated and made by and between
                                 (“Grantee”) and Embrex, Inc. (the
“Company”) as of                             , 20     .

  
 1. Grant of Stock. Subject to the terms and conditions
of this Agreement, the Company hereby grants to Grantee, and Grantee hereby accepts, shares of Common Stock (the “Shares”) of the Company pursuant to the Amended and Restated Incentive Stock Option and Nonstatutory Stock Option Plan of the
Company (as amended, the “Plan”), as follows: 
  

	 Number of Shares
	  	  

		
	Fair Market Value per Share (on the date of grant/date of this Agreement)	  	  
 $

		
	 Total Value
	  	 $

  
 2. Vesting.

  
 (a) Vesting Schedule. Subject to Grantee’s
continuing to provide services to the Company (whether as an employee, officer, director, consultant or advisor) on such dates, 25% of the Shares shall vest on each of the first four anniversaries of the date hereof, so that all of the Shares shall
be vested four years after the date hereof. 
  
 (b) Forfeiture
of Unvested Shares. If Grantee ceases to provide services to the Company for any reason prior to the date that all of the Shares are vested, Grantee shall automatically forfeit to the Company all Shares that are unvested at such time, except as
provided in Section 2(c) below. Shares that are not vested are referred to herein as “Unvested Shares.” 
  
 (c) Continued Vesting under Certain Circumstances. Notwithstanding Sections 2(a) and (b) above, in the event that Grantee’s services to the
Company are terminated by the Company for reasons other than Cause or due to Disability or death, then the Shares shall continue vesting on the vesting schedule described in Section 2(a). The terms “Cause” and “Disability” shall
have the meanings specified in the Change in Control Severance Agreement between the Company and Grantee (unless there is no such Agreement, in which event the meanings of such terms shall be determined by the Committee under the Plan). 

 
 (d) Acceleration of Vesting. Notwithstanding Sections 2(a), (b) and
(c) above, upon the occurrence of (i) any of the events described in Section 16 of the Plan which cause the vesting of stock options to accelerate or (ii) a “Change in Control,” as defined in the Change in Control Severance Agreement
between the Company and Grantee (if any) which causes the vesting of stock options to accelerate, then the vesting of the Shares shall also be accelerated and become fully vested. 
  
 3. Deposit and Release of Stock Certificates. 
  
 (a) Deposit. To ensure the availability for delivery to the Company of the Unvested Shares upon Grantee’s
ceasing to provide services to the Company, Grantee shall, upon execution of this Agreement and at any time thereafter, deliver and deposit with the Secretary of the Company any stock certificates representing any of the Unvested Shares, together
with the stock assignment duly endorsed in blank attached hereto as Exhibit A. The Secretary shall hold the Unvested Shares and stock assignment until the Unvested Shares become vested or are forfeited to the Company. Grantee hereby appoints
the 

 
Secretary as Grantee’s attorney-in-fact to assign and transfer to the Company any Unvested Shares that are forfeited to the Company. 
  
 (b) Release. As the Shares vest or are forfeited to the Company, upon
request by Grantee, the Secretary of the Company shall promptly cause a new stock certificate to be issued for the vested Shares and shall deliver any stock certificate for vested Shares to Grantee and any stock certificate for Unvested Shares to
the Secretary of the Company. As a condition to the delivery of any stock certificate for vested Shares to Grantee, all applicable requirements for income and employment tax withholding with respect to such Shares shall have been satisfied by
Grantee. 
  
 (c) No Liability. Neither the Company nor the
Secretary shall be liable for any act it may do or omit to do in good faith while holding the Unvested Shares. 
  
 4. Restriction on Transfer. Except for the provisions described in Section 3, or the transfer of the Shares to the Company or its assignees, none
of the Unvested Shares or any beneficial interest therein shall be transferred, encumbered or otherwise disposed of in any way. 
  
 5. Ownership and Voting Rights. This Agreement shall not affect in any way the ownership, voting or other rights of Grantee with respect to the
Unvested Shares, except as specifically provided herein. 
  
 6.
Restrictive Legends; Stop-Transfer Orders; Refusal to Transfer. 
  
 (a) Legends. Grantee understands and agrees that the Company shall place the following legend or its equivalent upon any stock certificates evidencing ownership of any Unvested Shares, together with any other legends that may be
required by the Company or by state or federal securities laws: 
  
 THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO VESTING AND TRANSFER RESTRICTIONS AS SET FORTH IN THE RESTRICTED STOCK AGREEMENT BETWEEN THE CORPORATION AND THE ORIGINAL HOLDER OF THESE SHARES. A COPY OF THE RESTRICTED STOCK
AGREEMENT MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE CORPORATION. 
  
 (b) Stop-Transfer Notices. Grantee agrees that, in order to ensure compliance with the restrictions referred to herein, the Company may issue appropriate “stop transfer” instructions to its stock transfer agent. 

 
 (c) Refusal to Transfer. The Company shall not be required to
transfer on its books any Shares that have been sold or otherwise transferred in violation of any of the provisions of this Agreement or to treat as owner of such Shares or to accord the right to vote or pay dividends to any purchaser or other
transferee to whom such Shares shall have been so transferred. 
  
 7. Successors and Assigns of the Company. The rights of the Company under this Agreement shall be transferable to any one or more persons or entities, and all covenants and agreements hereunder shall inure to the benefit of, and be
enforceable by, such transferees. 
  
 8. Tax Withholding.
Grantee acknowledges and agrees that the Company may require Grantee to pay, or may withhold from wages paid by the Company to Grantee, any amount that the Company, in its sole discretion, deems necessary to comply with any federal, state or local
withholding requirements for income and employment tax purposes. 
  
 9. Section 83(b) Election. Grantee hereby acknowledges that he or she may file a Section 83(b) election with the Internal Revenue Service within 30 days of the date hereof, electing thereby to be taxed on the fair market value
of the Shares as of the date hereof. Absent such an election, ordinary income will be measured and recognized by Grantee as the shares vest (that is, each year on the 

  

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anniversary of the date hereof). If Grantee makes a Section 83(b) election and later forfeits any Unvested Shares upon termination of service to the Company,
Grantee could suffer adverse tax consequences. Grantee is strongly encouraged to seek the advice of his or her own tax consultants in connection with the grant of the Shares and the advisability of filing of an election under Section 83(b) of the
Internal Revenue Code. A form of election under Section 83(b) is attached hereto as Exhibit B. 
  
 GRANTEE ACKNOWLEDGES THAT IT IS HIS OR HER SOLE RESPONSIBILITY AND NOT THE COMPANY’S RESPONSIBILITY TO FILE THE ELECTION UNDER SECTION 83(b), EVEN IF
GRANTEE REQUESTS THE COMPANY OR ITS REPRESENTATIVE TO MAKE THIS FILING ON GRANTEE’S BEHALF. 
  
 10. No Guarantee of Continued Service. Grantee acknowledges and agrees that the Shares shall vest only through continued service to the Company as
an employee, officer, director, consultant or advisor at the will of the Company, and as otherwise provided in this Agreement. Grantee further acknowledges and agrees that neither this Agreement nor the vesting schedule set forth herein constitute
an express or implied promise of continued employment or engagement by the Company and shall not interfere with the Company’s or Grantee’s right to terminate Grantee’s relationship with the Company at any time, with or without cause.

  
 11. Governing Law. This Agreement shall be governed by
and interpreted in accordance with the laws of the State of North Carolina, without regard to conflicts of law principles. 
  
 12. Entire Agreement. The Plan and the terms and conditions thereof are incorporated herein by this reference. In the event of any conflict between
the Plan and this Agreement, the Plan shall control. Any defined terms used herein shall have the meanings set forth in the Plan, except as otherwise defined herein. This Agreement and the Plan constitute the entire agreement of the parties with
respect to the subject matter hereof and may not be modified except by means of a writing signed by Grantee and the Company. 
  
 IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first set forth above. 
  

	 GRANTEE
	 	 	  	 EMBREX, INC.

				
	 Signature:
	 	  

	  	 By:
	 	  

				
	 	 	 	  	 Name:
	 	  

				
	 Print Name:
	 	  

	  	 Title:
	 	  

  
  

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 Exhibit A 
  
 ASSIGNMENT SEPARATE FROM STOCK CERTIFICATE 
  
 FOR VALUE RECEIVED I,
                                        
                    , hereby assign and transfer unto Embrex, Inc.
                     shares of the Common Stock of Embrex, Inc. standing in my name on its books and represented by Certificate No.
            . I do hereby irrevocably constitute and appoint to              transfer such shares, with full
power of substitution in the premises. 
  
 This Assignment may be
used only in conjunction with the Restricted Stock Agreement between Embrex, Inc. and the undersigned dated
                                    , 20
    . 
  
 Dated:
                                        
            , 20      
  

	 Signature:
	 	  

  
 INSTRUCTIONS: Do not
complete any blanks other than the signature line. The sole purpose of this assignment is to enable Unvested Shares to be transferred to the Company upon the termination of the Grantee’s service to the Company, as described in the Restricted
Stock Agreement, without requiring additional signatures on the part of the Grantee. 

 ELECTION UNDER SECTION 83(b) 
 OF THE INTERNAL REVENUE CODE OF 1986 
  
 The undersigned taxpayer hereby elects, pursuant to Section 83(b) of the Internal Revenue Code of 1986, as amended, to include in taxpayer’s gross
income for the current taxable year the amount of any compensation taxable to taxpayer in connection with taxpayer’s receipt of the property described below: 
  

	 	1.	 	The name, address, taxpayer identification number and taxable year of the undersigned are as follows: 

  
 TAXPAYER:
                                        
                                        
             
  
 ADDRESS:
                                        
                                        
                 
  
 SOCIAL SECURITY NO.:
                                        
                                 
  
 TAXABLE YEAR:
                                        
                                     
  

	 	2.	 	The property with respect to which the election is made is described as follows:
                         shares (the “Shares”) of the Common Stock of Embrex, Inc. (the “Company”).

  

	 	3.	 	The date on which the property was transferred is:
                                       
             , 20    . 

  

	 	4.	 	The property is subject to the following restrictions: 

  
 The Shares may not be transferred and are subject to forfeiture under the terms of an agreement between the taxpayer and the Company. These restrictions
lapse upon the satisfaction of certain conditions contained in such agreement. 
  

	 	5.	 	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, of such property is: $
            . 

  

	 	6.	 	The amount (if any) paid for such property is:
$                                        
                        . 

  
 The undersigned has submitted a copy of this statement to the person for whom the services were performed in connection with
the undersigned’s receipt of the above-described property. The transferee of such property is the person performing the services in connection with the transfer of said property. 
  
 The undersigned understands that the foregoing election may not be revoked except with the consent of the
Commissioner. 
  

	 Dated:
                    , 20    
	  	  

	 	  	TaxpayerStock Option Agreement

 Exhibit 10.6 
  
 EMBREX, INC. 
  
 AMENDED AND RESTATED INCENTIVE STOCK OPTION 
 AND NONSTATUTORY STOCK OPTION PLAN 
  
 STOCK
OPTION AGREEMENT 
  
 Unless otherwise defined herein, the
terms defined in the Amended and Restated Incentive Stock Option and Nonstatutory Stock Option Plan (the “Plan”) shall have the same defined meanings in this Option Agreement. 
  

	I.	 	NOTICE OF STOCK OPTION GRANT 

  
 «Firstname»«Lastname» 
 «Address»

 «City» «State» «Zipcode» 
  
 You have been granted an Option to purchase Common Stock of the Company, subject to the terms and conditions of the Plan and this Option Agreement, as
follows: 
  

	 Grant Number
	 	     «Grantnumber»                

		
	 Date of Grant/Vesting
Commencement Date
	 	_________
		
	 Exercise Price per Share
	 	 $                  

		
	 Total Number of Shares Granted
	 	     «sharesgranted»                

		
	 Type of Option:
	 	                  Incentive Stock
Option

		
	 	 	                  Nonstatutory Stock
Option

		
	 Term/Expiration Date:
	 	____________

  
 Vesting
Schedule: 
  
 This Option shall be
exercisable, in whole or in part, according to the following vesting schedule: 

 25% of the Shares subject to the Option shall vest on each of the first four anniversaries of the Vesting
Commencement Date, subject to you continuing to be an employee, consultant or director of the Company on such dates. 
  
 Period for Exercise Following Termination: 
  
 This Option shall be exercisable for 90 days after you cease to be an employee, consultant or director (a “Service Provider”). Upon your death
or disability, this Option may be exercised for one year after you cease to be a Service Provider. In no event shall this Option be exercised later than the Term/Expiration Date as provided above. 
  

	II.	 	AGREEMENT 

  
 3. Grant of Option. The Committee hereby grants to the optionee named in the Notice of Grant in Part I of this Agreement (the “Optionee”)
an option (the “Option”) to purchase the number of Shares set forth in the Notice of Grant above, at the exercise price per share set forth in the Notice of Grant (the “Exercise Price”), subject to the terms and conditions of
this Agreement and the Plan, which is incorporated herein by reference. Subject to Section 19 of the Plan, in the event of a conflict between the terms and conditions of the Plan and the terms and conditions of this Option Agreement, the terms and
conditions of the Plan shall prevail. 
  
 If designated in the
Notice of Grant as an Incentive Stock Option (“ISO”), this Option is intended to qualify as an Incentive Stock Option under Section 422 of the Code. However, to the extent that an option designated as an ISO exceeds the $100,000 rule of
Code Section 422(d), it shall be treated as a Nonstatutory Stock Option (“NSO”). 
  
 4. Exercise of Option. 
  
 (a) Right to Exercise. This Option shall be exercisable during its term in accordance with the Vesting Schedule set out in the Notice of Grant and with the applicable provisions of the Plan and this Option Agreement. 
  
 (b) Method of Exercise. This Option shall be exercisable by delivery
of an exercise notice in the form attached as Exhibit A (the “Exercise Notice”), which shall state the election to exercise the Option, the number of Shares with respect to which the Option is being exercised (the “Exercised
Shares”), and such other representations and agreements as may be required by the Company pursuant to the provisions of the Plan. The Exercise Notice shall be completed by the Optionee and delivered to the Stock Plan Administrator. The Exercise
Notice shall be accompanied by payment of the Exercise Price as to all Exercised Shares. This Option shall be deemed to be exercised upon receipt by the Company of such fully executed Exercise Notice accompanied by the Exercise Price. 
  
 No Shares shall be issued pursuant to the exercise of this Option unless
such issuance and exercise complies with any applicable registration requirements of the Securities Act of 1933, any applicable listing requirement of any national securities exchange on 
  

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 which stock of the same class is then listed, and any other requirements of federal, state or local law or of any
regulatory bodies having jurisdiction over such issuance and exercise. Assuming such compliance, for income tax purposes the Exercised Shares shall be considered transferred to the Optionee on the date the Option is exercised with respect to such
Shares. 
  
 (c) Method of Payment. Payment of the aggregate
Exercise Price shall be by any of the following, or a combination thereof, at the election of the Optionee: 
  
 (1) cash or cash equivalent; or 
  
 (2) consideration received by the Company under a cashless exercise program implemented by the Company in connection with the Plan; or 
  
 (3) surrender of other Shares that (i) in the case of Shares acquired upon
exercise of an option, have been owned by the Optionee for more than six (6) months on the date of surrender and (ii) have a Fair Market Value on the date of surrender equal to the aggregate Exercise Price of the Exercised Shares. 
  
 (d) Tax Withholding. The Company shall have the right to deduct from
any payment or settlement under this Agreement, including, without limitation, the exercise of this Option and the delivery of the Option Shares, any federal, state, local or other taxes that the Committee, in its sole discretion, deems necessary to
be withheld to comply with the Code or any other applicable law, rule or regulation. 
  
 5. Non-Transferability of Option. This Option may not be transferred in 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
the Optionee. The terms of the Plan and this Option Agreement shall be binding upon the executors, administrators, heirs, successors and assigns of the Optionee. 
  
 6. Term of Option. This Option may be exercised only within the term set out in the Notice of Grant, and may be
exercised during such term only in accordance with the Plan and this Option Agreement. 
  
 7. Tax Consequences. The federal tax consequences relating to this Option are set forth below. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE SHOULD
CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES. 
  
 (a) Exercising the Option. 
  
 (i) Nonstatutory Stock Option. The Optionee may incur regular federal income tax liability upon the exercise of an NSO. The Optionee will be treated as having received compensation income (taxable at ordinary income tax rates) equal
to the excess, if any, 
  

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 of the Fair Market Value of the Exercised Shares on the date of exercise over their Exercise Price. If the Optionee is an
Employee or a former Employee, the Company will be required to withhold for income and employment tax purposes, as set forth in Section 2(d) above. 
  
 (ii) Incentive Stock Option. If this Option qualifies as an ISO, the Optionee will have no regular federal income tax liability upon its exercise,
although the excess, if any, of the Fair Market Value of the Exercised Shares on the date of exercise over their Exercise Price will be treated as an adjustment to alternative minimum taxable income for federal tax purposes and may subject the
Optionee to alternative minimum tax in the year of exercise. In the event that the Optionee ceases to be an Employee but remains a Service Provider, any Incentive Stock Option of the Optionee that remains unexercised shall cease to qualify as an
Incentive Stock Option and will be treated for tax purposes as a Nonstatutory Stock Option on the date three (3) months and one (1) day following such change of status. 
  
 (b) Disposition of Shares. 
  

(i) NSO. If the Optionee holds NSO Shares for at least one year, any gain realized on disposition of the Shares will be treated as long-term
capital gain for federal income tax purposes. 
  
 (ii)
ISO. If the Optionee holds ISO Shares for at least one year after exercise and two years after the grant date, any gain realized on the disposition of the Shares will be treated as long-term capital gain for federal income tax purposes. If
the Optionee disposes of ISO Shares within one year after exercise or two years after the grant date (a “Disqualifying Disposition”), any gain realized on such disposition will be treated as compensation income (taxable at ordinary income
rates) to the extent of the excess, if any, of the lesser of (A) the difference between the Fair Market Value of the Shares acquired on the date of exercise and the Exercise Price, or (B) the difference between the sale price of such Shares and the
Exercise Price. Any additional gain will be taxed as capital gain, short-term or long-term, depending on the period that the ISO Shares are held. 
  
 (c) Notice of Disqualifying Disposition of ISO Shares. In the event of a Disqualifying Disposition, the Optionee shall immediately notify the
Company in writing of such disposition. 
  
 8. Entire
Agreement; Governing Law. The Plan and this Option Agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and
Optionee. Neither the Plan nor the Option Agreement may be modified adversely to the Optionee’s interest except by means of a writing signed by the Company and Optionee. This Agreement is governed by the internal substantive laws, but not the
choice of law rules, of North Carolina. 
  
 9. No Guarantee of
Continued Service. OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL 
  

 4 

 OF THE COMPANY (AND NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED AN OPTION OR PURCHASING SHARES HEREUNDER). OPTIONEE
FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE PROVIDER AND SHALL NOT
INTERFERE WITH THE COMPANY’S OR THE OPTIONEE’S RIGHT TO TERMINATE THE OPTIONEE’S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT CAUSE. 
  
 Optionee and the Company agree that this Option is granted under and governed by the terms and conditions of the Plan and
this Option Agreement. Optionee has reviewed the Plan and this Option Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Option Agreement and fully understands all provisions of the Plan and
Option Agreement. Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Committee upon any questions relating to the Plan and Option Agreement. 
  

	 OPTIONEE
	 	 EMBREX, INC.

			
	  

	 	 By:
	 	  

	 Signature
	 	 	 	 
	  

	 	 Title:
	 	  

	 Print Name
	 	 	 	 
	  

	 	 	 	 
	 Residence Address
	 	 	 	 
	  

	 	 	 	 
	 Date:

	 	 Date:
	 	  

  
  

 5 

 Exhibit A 
  

EXERCISE NOTICE 
  
 Embrex, Inc. 
 1040 Swabia Court 
 Durham, North Carolina 27703 
  
 Attention: Chief Financial Officer 
  
 1. Exercise of Option. Effective as of today,             ,             ,
the undersigned (“Purchaser”) hereby elects to purchase              shares (the “Shares”) of the Common Stock of Embrex, Inc. (the “Company”) under and
pursuant to the Amended and Restated Incentive Stock Option and Nonstatutory Stock Option Plan (the “Plan”) and the Stock Option Agreement dated
                    ,          (the “Option Agreement”). The purchase price for the
Shares shall be $            , per share, as set by the Option Agreement. 
  
 2. Delivery of Payment. Purchaser herewith delivers to the Company the full purchase price for the Shares. 
  
 3. Representations of Purchaser. Purchaser acknowledges that Purchaser
has received, read and understood the Plan and the Option Agreement and agrees to abide by and be bound by their terms and conditions. 
  
 4. Rights as Shareholder. Until the issuance (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company) of the Shares, no right to vote or receive dividends or any other rights as a shareholder shall exist with respect to the Optioned Stock, notwithstanding the exercise of the Option. The Shares so acquired shall be issued to the
Optionee as soon as practicable after exercise of the Option. No adjustment shall be made for a dividend or other right for which the record date is prior to the date of issuance, except as provided in Section 14 of the Plan. 
  
 5. Tax Consultation. Purchaser understands that Purchaser may suffer
adverse tax consequences as a result of Purchaser’s purchase or disposition of the Shares. Purchaser represents that he or she has consulted with any tax consultants Purchaser deems advisable in connection with the purchase or disposition of
the Shares and that he or she is not relying on the Company for any tax advice. 

 6. Entire Agreement; Governing Law. The Plan and Option Agreement are incorporated herein by
reference. This Notice, the Plan and the Option Agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and Purchaser and
may not be modified adversely to the Purchaser’s interest except by means of a writing signed by the Company and Purchaser. This Notice is governed by the internal substantive laws, but not the choice of law rules, of North Carolina.

  

	 Submitted by:
	 	 Accepted by:

		
	 PURCHASER
	 	 EMBREX, INC.

			
	  

	 	 By:
	 	  

	 Signature
	 	 	 	 
			
	  

	 	 Title:
	 	  

	 Print Name
	 	 	 	 
		
	 	 	 Date Received: 

  
  
  

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