Document:

Document

Exhibit 10.1

February 2, 2022
Michael Lohscheller
Re:    Executive Employment Arrangement
Dear Michael:
I am pleased to offer you the position of President of Nikola Motor for Nikola Corporation (the “Company”), reporting to the Company’s Chief Executive Officer.  Your responsibilities include, but are not limited to, such employment duties as are usual and customary for this position and which are commensurate with the duties, authorities and responsibilities of persons in similar capacities in similar sized companies.  At the Company’s request, you shall serve the Company and/or its subsidiaries and affiliates in other capacities in addition to the foregoing, consistent with expectations for your position.
The terms of your employment are as follows:
Employment Period.  Your anticipated start date is on or around March 1, 2022, subject to when you are able to get your affairs in order.  Your employment shall continue indefinitely until terminated in accordance with the terms of this Agreement.  Notwithstanding the foregoing, your employment is terminable at will by the Company or by you at any time (for any reason or for no reason), subject to the termination provisions of this Agreement.
Relocation and Sponsorship.  To assist you with your relocation to the greater Phoenix, Arizona area within two months of your start date, the Company will provide a one-time taxable miscellaneous bonus of $20,000 in your first paycheck; grossed-up payment for the loading, shipping and unloading of your goods from your current home to your new one after receipts for those services are obtained by the Company; assistance with back-and-forth travel to and from your current residence to the Company’s headquarters in Phoenix, Arizona for up to two (2) months from your official start date with the Company, including airfare, lodging and reasonable meal expenses; and home buying or apartment search assistance through a local realty firm.  You agree to repay in full all the assistance outlined in this Relocation and Sponsorship section if you leave the Company voluntarily (and not pursuant to an Involuntary Termination, death or disability) prior to your one-year anniversary with the Company.
Annual Salary.  You have indicated your interest in declining any salary in excess of $1 per year, without regard to Arizona’s minimum wage.  Accordingly, for purposes of this Agreement and due to your request, your annual salary will be $1, paid bi-weekly less payroll deductions and all required withholdings.  Your signature on this Agreement confirms your election.

Annual Bonus.  You have indicated your interest in declining participation in any annual cash bonus program provided by the Company, without regard to your eligibility in any such program.  Your signature on this Agreement confirms your election.
Stock Awards.  You will be eligible to receive stock awards under the Company’s equity incentive plan as in effect from time to time (the “Plan”).  Subject to approval by the Company’s Board of Directors (the “Board”), you will be granted an annual time-vested stock award (a “Time-Vested Award”) and a performance-based stock award (a “Performance Award”) as soon as administratively practicable following the start of your employment with the Company.  These awards are designed to reward you for significantly increasing the value of the Company’s stock over time.
In addition to the initial Time-Vested Award, you will also be eligible for annual grants of Time-Vested Awards subject to Board approval.  Each Time-Vested Award that you are eligible to receive will consist of restricted stock units for shares of the Company’s common stock having a value on the date of grant of not less than $3,100,000.  These Awards provide immediate and ongoing retention value over time.  For the initial Time-Vested Award, vesting restrictions on the underlying shares will lapse semi-annually over a three-year period starting on the date of grant, subject to your continued employment.  Vesting restrictions for subsequent awards will lapse on the third anniversary of their respective dates of grant, subject to your continued employment.  Time-Vested Awards would be granted annually, typically concurrent with the Company’s board of director’s meeting in the second quarter, with the number of shares determined based upon the average closing stock price over the twenty (20) consecutive trading days immediately preceding the date of grant.
The Performance Award will consist of 949,026 restricted stock units that can be earned upon the achievement of pre-established “stretch” stock price milestones described in the table below and your continued employment through June 3, 2023 (the “Performance Period”), consistent with other named executive officers of the Company.  Each stock price milestone represents an incremental increase of $6 billion in the market capitalization of the Company and unlocks a tranche of the total shares granted.  This tiered performance structure ensures shareholders receive an incremental return on their investment prior to you earning the associated incremental shares.  Any and all shares that are earned upon the achievement (defined as the Company’s stock price trading at or above the milestone for at least 20 consecutive trading days) of the three stock price milestones prior to the end of the Performance Period will be delivered, free of vesting restrictions, following certification by the Board within 30 days following the final day of the Performance Period.
The general structure of the Performance Award is illustrated below.  The specific share price milestones will be approved on the date of grant and included in the associated award document.
									
	Share Price Milestone	Market Capitalization at Price	Incremental Performance Shares Earned at Share 
Price Milestone
	Below $25.00	Below $10 billion	0
	$25.00	$10 billion	208,723

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	$40.00	$16 billion	313,085
	$55.00 or Above	$22+ billion	427,218

In the event of a Change in Control (as defined in the Plan), the achievement of share price milestones under your Performance Award will be based on the Company’s performance through the closing of such Change in Control.  The amount of the Performance Award that would have been earned based on this measurement will be converted to time-vested restricted stock units immediately prior to such Change in Control (the “Converted Awards”).  If the Converted Awards are assumed, substituted or otherwise continued by the successor corporation (or a parent or subsidiary thereof), all vesting restrictions applicable to the Converted Awards will lapse on the earlier of (i) the final day of the Performance Period subject to your continued employment with the successor corporation (or a parent or subsidiary thereof) through such date, at which time such Converted Awards will be settled, and (ii) subject to your compliance with the Severance Conditions (as defined below), the date of your Involuntary Termination of employment with the successor corporation (or a parent or subsidiary thereof).  All Time-Vested Awards and Converted Awards that are not assumed, substituted or otherwise continued by the successor corporation (or a parent or subsidiary thereof) will fully vest and will be settled immediately prior to the consummation of such Change in Control.
The terms and conditions of each Time-Vested Award and the Performance Award will be set forth in separate award agreements in forms prescribed by the Company (each, an “Award Agreement”), and all shares underlying the respective awards will contain the right to receive dividend equivalents, if any, subject to the same vesting conditions as the shares underlying the stock awards.  The stock awards shall be governed in all respects by the terms and conditions of the Plan and the applicable Award Agreement.
Benefits.  You (and your spouse and/or eligible dependents to the extent provided in the applicable plans and programs) are eligible to participate in and be covered under the health, welfare and financial benefit plans and programs maintained by the Company for the benefit of its employees, pursuant to the terms of such plans, on the same terms and conditions as those applicable to similarly situated executives.  Detailed descriptions of the Company’s benefit plans are available and will be provided to you upon request.  Your eligibility to receive such benefits will be subject in each case to the generally applicable terms and conditions for the benefits in question and to the determinations of any person or committee administering such benefits.  The Company may modify or terminate any benefits plan or program from time to time in its sole discretion.
Expenses.  You are entitled to receive prompt reimbursement for all reasonable business expenses incurred in connection with the performance of your duties in accordance with the policies, practices and procedures of the Company.
Vacation.  You are entitled to paid vacation in accordance with the policies, practices and procedures of the Company.
Indemnification/Legal Fees.  The Company agrees that you will be entitled to the same indemnification rights as the Company grants to other officers of the Company, as in effect from time to time.  The Company will maintain a directors and officers liability policy covering you
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with coverage comparable or equal to that provided to other officers of the Company.  In the event of any dispute over your entitlement to payments or benefits hereunder, the Company shall advance you an amount equal to your monthly legal fees incurred in connection with such dispute until there is a final non-appealable decision by a court that you are not entitled to such payment or benefit.
Termination of Employment.  In the event of an Involuntary Termination of your employment at any time, and subject to (i) your execution of a general release of claims in favor of the Company in substantially the form attached as Exhibit A (the “Release”), (ii) your non-revocation of the Release and it becoming effective within sixty (60) days following the date of your termination of employment (the “Termination Date”), and (iii) your faithful observance of the terms of such Release (such conditions, the “Severance Conditions”), then you shall be entitled to the following severance benefits (the “Severance Benefits”):
•Severance Payment.  The Company will pay you a cash lump sum in an amount equal to $1,050,000, less applicable withholding.
•Stock Awards.
◦Restricted Stock, Restricted Stock Units and Stock Options.  All outstanding restricted stock awards, restricted stock units (other than the Performance Award but including the Converted Awards) and stock options will immediately vest in full.  Unexercised stock options will remain exercisable for three years following your Termination Date.
◦Performance Award.  Following certification by the Board within 30 days following your Termination Date, the Performance Award will vest in an amount based upon the stock price milestones achieved prior to your Termination Date, pro-rated for the amount of time that you remained employed during the Performance Period.
•Benefits Continuation.  The Company will pay to you a cash lump sum equal in value to 18 months of COBRA benefits coverage, less applicable withholding.
The cash Severance Benefits will be paid on the first regular payroll date following the date that your Release becomes effective, subject to compliance with Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”).
For the avoidance of doubt, if you independently and unilaterally decide to end your employment at the Company without Good Reason, or if you are terminated for Cause, or if your employment is terminated due to your death or disability, you will not be entitled to receive any Severance Benefits.
You may terminate your employment with the Company at any time and for any reason whatsoever simply by notifying the Company.  Likewise, the Company may terminate your employment at any time, with or without cause or advance notice.  Your employment at-will status can only be modified in a written agreement signed by you and by an authorized officer of the Company.
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Section 409A.  Notwithstanding anything to the contrary in this Agreement, no compensation or benefits, including any Severance Benefits, stock awards, consulting payments or other benefits payable due to termination, shall be paid to you during the six-month period following termination if the Company determines that paying such amounts would be a prohibited distribution under Section 409A.  If the payment of any such amounts is so delayed, then on the first day of the seventh month following termination (or such earlier date upon which such amount can be paid under Section 409A without resulting in a prohibited distribution) the Company shall pay to you a lump- sum amount equal to the cumulative amount that would have otherwise been payable during such period.  In addition, to the extent required in order to comply with Section 409A, you shall not be considered to have terminated employment with the Company for purposes of this Agreement and no payment of such amounts due pursuant to your termination shall be due until you would be considered to have incurred a “separation from service” from the Company within the meaning of Section 409A.  Each such amount which constitutes deferred compensation subject to Section 409A shall be construed as a separate identified payment for purposes of Section 409A.  If the period during which you have discretion to execute or revoke the Release straddles two calendar years, then the Company will make the payment of amounts that are subject to Section 409A and contingent on the effectiveness of such Release starting in the second of such years regardless of which year you actually deliver the Release.  You may not, directly or indirectly, designate the calendar year of payment of any amounts subject to Section 409A.  The intent of the parties is that the payments and benefits under this Agreement comply with or be exempt from Section 409A and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be exempt from or in compliance therewith.
To the extent that any payments or reimbursements provided to you under this Agreement are deemed to constitute compensation to which Treasury Regulation Section 1.409A-3(i)(1)(iv) would apply, such amounts shall be paid or reimbursed reasonably promptly, but not later than December 31 of the year following the year in which the expense was incurred.  The amount of any such payments eligible for reimbursement in one year shall not affect the payments or expenses that are eligible for payment or reimbursement in any other taxable year, and your right to such payments or reimbursement of any such expenses shall not be subject to liquidation or exchange for any other benefit.
Work Product.  As a condition of employment, you will be expected to abide by Company rules and policies and comply with the Employee Proprietary Information and Inventions Assignment Agreement (PIIA), which prohibits unauthorized use or disclosure of Company proprietary information.
Confidentiality.  In your work for the Company, you will be expected not to use or disclose any confidential information, including trade secrets, of any former employer or other person to whom you have an obligation of confidentiality.  Rather, you will be expected to use only that information which is generally known and used by persons with training and experience comparable to your own, which is common knowledge in the industry or otherwise legally in the public domain, or which is otherwise provided or developed by the Company.
You agree that you will not bring onto Company premises any unpublished documents or property belonging to any former employer or other person to whom you have an obligation of
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confidentiality.  You represent that you have disclosed to the Company any contract you have signed that may restrict your activities on behalf of the Company.  You represent further that you have the ability to perform the essential functions of your job with or without reasonable accommodations.
This Agreement, together with its attached exhibits, forms the complete and exclusive statement of your employment agreement with the Company.  The employment terms in this Agreement supersede any other agreements or promises made to you by anyone, whether oral or written.  Changes in your employment terms, other than those changes expressly reserved to the Company’s discretion in this Agreement, require a written modification signed by an authorized officer of the Company and by you.
Successors/Assigns.  The Company shall assign this Agreement to any successor to all or substantially all of the business and assets of the Company and the Company shall require successor to expressly assume and agree to in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.
Governing Law.  The terms of this Agreement and the resolution of any dispute as to the meaning, effect, performance or validity of this Agreement or arising out of, related to, or in any way connected with, this Agreement, your employment with the Company (or termination thereof) or any other relationship between you and the Company (a “Dispute”) will be governed by the laws of the State of Arizona, without giving effect to the principles of conflict of laws.  To the extent not subject to arbitration as described below, you and the Company consent to the exclusive jurisdiction of, and venue in, the state courts in State of Arizona (or in the event of exclusive federal jurisdiction, the courts of the District of Arizona in connection with any Dispute or any claim related to any Dispute).
Except as prohibited by law, you agree that any Dispute between you and the Company (or between you and any officer, director, employee or affiliates of the Company, each of whom is hereby designated a third party beneficiary of this Agreement regarding arbitration) will be resolved through binding arbitration in Maricopa County, Arizona under the rules of the American Arbitration Association and the Arbitration Rules set forth in Arizona Rules of Civil Procedure.  Nothing in this arbitration provision is intended to limit any right you may have to file a charge with or obtain relief from the National Labor Relations Board or any other state or federal agency.  You agree that such arbitration shall be conducted on an individual basis only, not a class, collective or representative basis, and hereby waive any right to bring class-wide, collective or representative claims before any arbitrator or in any forum.  THE PARTIES UNDERSTAND THAT BY AGREEING TO ARBITRATE DISPUTES THEY ARE WAIVING ANY RIGHT THEY MIGHT OTHERWISE HAVE TO A JURY TRIAL.  This arbitration provision is not intended to modify or limit substantive rights or the remedies available to the parties, including the right to seek interim relief, such as injunction or attachment, through judicial process, which shall not be deemed a waiver of the right to demand and obtain arbitration.
Please sign and date this Agreement if you wish to commence employment at the Company under the terms described above and return it to joe.pike@nikolamotor.com.  For the purposes of this Agreement, a facsimile or electronic signature shall serve as an original.
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Certain Definitions.  Defined terms in this Agreement are as follows:
Involuntary Termination.  Involuntary Termination shall mean a termination of employment by the Company without Cause or by you with Good Reason.
Good Reason.  Good Reason shall mean a resignation by you as a result of (i) an adverse change in title, authorities or responsibilities that diminishes your position; (ii) a change in your reporting relationship such that you are no longer reporting to the Company’s Chief Executive Officer; (iii) a material reduction in your base salary; or (iv) a material breach by the Company of any of its obligations under this Agreement or any other written agreement between the Company and you.  A resignation for Good Reason will not be deemed to have occurred unless you give the Company written notice of the condition within ninety (90) days after the condition comes into existence and the Company fails to remedy the condition within thirty (30) days after receiving your written notice.
Cause.  Cause shall mean any of the following: (i) your repeated failure to follow the lawful instructions of the Company’s Chief Executive Officer consistent with your title following written notice of any alleged failure and 15 days to cure such failure; (ii) your material violation of any written Company policy that has been provided to you; (iii) your commission of any act of fraud, embezzlement or any other material misconduct that has caused or is reasonably expected to result in injury to the Company; (iv) your unauthorized use or disclosure of any proprietary information or trade secrets of the Company or any other party to whom you owe an obligation of nondisclosure as a result of your relationship with the Company; or (v) your material breach of any of your material obligations under any written agreement or covenant with the Company.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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I am delighted to confirm the terms of this Agreement to you on behalf of the Company.  We look forward to your favorable reply and to building a successful Company together.
Sincerely,
NIKOLA CORPORATION
BY:  /s/ Mark Russell    
Name: Mark Russell
Its: Chief Executive Officer
Accepted:
/s/ Michael Lohscheller    2/3/2022
Michael Lohscheller        Date
Attachments:    Exhibit A – Form Severance Agreement and Release
Employee Proprietary Information and Inventions Assignment Agreement
S-1sdgr-ex105_247.htm

Exhibit 10.5

Schrödinger, Inc.

STOCK OPTION AGREEMENT

Schrödinger, Inc. (the “Company”) hereby grants the following stock option pursuant to its 2020 Equity Incentive Plan. The terms and conditions attached hereto are also a part hereof.

Notice of Grant

 

	
 
	
 
	
 

	
Name of optionee (the “Participant”):
	
  
	
 

	
Grant Date:
	
  
	
 

	
Incentive Stock Option or Nonstatutory Stock Option:
	
  
	
 

	
Number of shares of the Company’s Common Stock subject to this option (“Shares”):
	
  
	
 

	
Option exercise price per Share:1
	
  
	
 

	
Number, if any, of Shares that vest immediately on the grant date:
	
  
	
 

	
Shares that are subject to vesting schedule:
	
  
	
 

	
Vesting Start Date:
	
  
	
 

	
Final Exercise Date: 2
	
  
	
 

Vesting Schedule:

 

	
 
	
 
	
 

	
Vesting Date:
	
  
	
Number of Options that Vest:

	
 
	
  
	
 

	
 
	
  
	
 

	
 

	
All vesting is dependent on the Participant remaining an Eligible Participant, as provided herein.

This option satisfies in full all commitments that the Company has to the Participant with respect to the issuance of stock, stock options or other equity securities.

 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
            
	
 
	
Schrödinger, Inc.

	
Signature of Participant
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
By:
	
 
	
 

	
Street Address

 
	
 
	
 
	
 
	
 
	
 
	
Name of Officer

Title:

	
City/State/Zip Code
	
 
	
 
	
 
	
 

 

	
1 
	
This must be at least 100% of the Grant Date Fair Market Value (as defined in the Plan) of the Common Stock on the date of grant (110% in the case of a Participant that owns more than 10% of the total combined voting power of all classes of stock of the Company or its parent or subsidiary (a “10% Shareholder”)) for the option to qualify as an incentive stock option (an “ISO”) under Section 422 of the Code.

 

	
2 
	
The Final Exercise Date must be no more than 10 years (5 years in the case of a 10% Shareholder) from the date of grant for the option to qualify as an ISO. The correct approach to calculate the final exercise date is to use the day immediately prior to the date ten years out from the date of the stock option award grant (5 years in the case of a 10% stockholder).

 

 

 

 

Schrödinger, Inc.

Stock Option Agreement

Incorporated Terms and Conditions

 

	
1.
	
Grant of Option.

This agreement evidences the grant by the Company, on the grant date (the “Grant Date”) set forth in the Notice of Grant that forms part of this agreement (the “Notice of Grant”), to the Participant of an option to purchase, in whole or in part, on the terms provided herein and in the Company’s 2020 Equity Incentive Plan (the “Plan”), the number of Shares set forth in the Notice of Grant of common stock, $0.01 par value per share, of the Company (“Common Stock”), at the exercise price per Share set forth in the Notice of Grant. Unless earlier terminated, this option shall expire at 5:00 p.m., Eastern time, on the Final Exercise Date set forth in the Notice of Grant (the “Final Exercise Date”).

The option evidenced by this agreement is intended to be an incentive stock option as defined in Section 422 of the Internal Revenue Code of 1986, as amended, and any regulations promulgated thereunder (the “Code”) to the maximum extent permitted by law, solely to the extent designated as an incentive stock option in the Notice of Grant. Except as otherwise indicated by the context, the term “Participant”, as used in this option, shall be deemed to include any person who acquires the right to exercise this option validly under its terms.

 

	
2.
	
Vesting Schedule.

This option will become exercisable (“vest”) in accordance with the vesting schedule set forth in the Notice of Grant.

The right of exercise shall be cumulative so that to the extent the option is not exercised in any period to the maximum extent permissible it shall continue to be exercisable, in whole or in part, with respect to all Shares for which it is vested until the earlier of the Final Exercise Date or the termination of this option under Section 3 hereof or the Plan.

 

	
3.
	
Exercise of Option.

(a) Form of Exercise. Each election to exercise this option shall be in writing, in the form of the Stock Option Exercise Notice attached as Annex A, signed by the Participant, and received by the Company at its principal office, accompanied by this agreement, or in such other form (which may be electronic or through a third party equity plan administrator) as is approved by the Company, together with payment in full in the manner provided in the Plan. The Participant may purchase less than the number of shares covered hereby, provided that no partial exercise of this option may be for any fractional share.

(b) Continuous Relationship with the Company Required. Except as otherwise provided in this Section 3, this option may not be exercised unless the Participant, at the time he or she exercises this option, is, and has been at all times since the Grant Date, an employee, director or officer of, or consultant or advisor to, the Company or any other entity the employees, officers, directors, consultants, or advisors of which are eligible to receive option grants under the Plan (an “Eligible Participant”).

 

(c) Termination of Relationship with the Company. If the Participant ceases to be an Eligible Participant for any reason, then, except as provided in paragraphs (d) and (e) below, the right to exercise this option shall terminate three months after such cessation (but in no event after the Final Exercise Date), provided that this option shall be exercisable only to the extent that the Participant was entitled to exercise this option on the date of such cessation. Notwithstanding the foregoing, if the Participant, prior to the Final Exercise Date, violates the restrictive covenants (including, without limitation, the non-competition, non-solicitation, or confidentiality provisions) of any employment contract, any non-competition, non-solicitation, confidentiality or assignment agreement to which the Participant is a party, or any other agreement between the Participant and the Company, the right to exercise this option shall terminate immediately upon such violation.

(d) Exercise Period Upon Death or Disability. If the Participant dies or becomes disabled (within the meaning of Section 22(e)(3) of the Code) prior to the Final Exercise Date while he or she is an Eligible Participant and the Company has not terminated such relationship for “cause” as specified in paragraph (e) below, this option shall be exercisable, within the period of one year following the date of death or disability of the Participant, by the Participant (or in the case of death by an authorized transferee), provided that this option shall be exercisable only to the extent that this option was exercisable by the Participant on the date of his or her death or disability, and further provided that this option shall not be exercisable after the Final Exercise Date.

(e) Termination for Cause. If, prior to the Final Exercise Date, the Participant’s employment or other relationship with the Company is terminated by the Company for Cause (as defined in below), the right to exercise this option shall terminate immediately upon the effective date of such termination of employment or other relationship. If, prior to the Final Exercise Date, the Participant is given notice by the Company of the termination of his or her employment or other relationship by the Company for Cause, and the effective date of such employment or other relationship termination is subsequent to the date of delivery of such notice, the right to exercise this option shall be suspended from the time of the delivery of such notice until the earlier of (i) such time as it is determined or otherwise agreed that the Participant’s employment or other relationship shall not be terminated for Cause as provided in such notice or (ii) the effective date of such termination of employment or other relationship (in which case the right to exercise this option shall, pursuant to the preceding sentence, terminate upon the effective date of such termination of employment or other relationship). If the Participant is party to an employment, consulting or severance agreement with the Company which agreement, plan or arrangement contains a definition of “cause” for termination of employment, “Cause” shall have the meaning ascribed to such term in such agreement, plan or arrangement. Otherwise, “Cause” shall mean willful misconduct by the Participant or willful failure by the Participant to perform his or her responsibilities to the Company (including, without limitation, breach by the Participant of any provision of any employment, consulting, advisory, nondisclosure, non-competition or other similar agreement between the Participant and the Company), as determined by the Company, which determination shall be conclusive. The Participant’s employment shall be considered to have been terminated for Cause if the Company determines, within 30 days after the Participant’s resignation, that termination for Cause was warranted.

 

 

	
4.
	
Tax Matters.

(a) Withholding. No Shares will be issued pursuant to the exercise of this option unless and until the Participant pays to the Company, or makes provision satisfactory to the Company for payment of, any federal, state or local withholding taxes required by law to be withheld in respect of this option.

(b) Disqualifying Disposition. If this option is an incentive stock option and the Participant disposes of Shares acquired upon exercise of this option within two years from the Grant Date or one year after such Shares were acquired pursuant to exercise of this option, the Participant shall notify the Company in writing of such disposition.

 

	
5.
	
Transfer Restrictions; Clawback.

(a) This option may not be sold, assigned, transferred, pledged or otherwise encumbered by the Participant, either voluntarily or by operation of law, except by will or the laws of descent and distribution, and, during the lifetime of the Participant, this option shall be exercisable only by the Participant.

(b) In accepting this option, the Participant agrees to be bound by any clawback policy that the Company has in place or may adopt in the future.

 

	
6.
	
Provisions of the Plan.

This option is subject to the provisions of the Plan (including the provisions relating to amendments to the Plan), a copy of which is furnished to the Participant with this option.

[Remainder of Page Intentionally Left Blank]

 

 

 

ANNEX A

Schrödinger, Inc.

Stock Option Exercise Notice

Schrödinger, Inc.

120 West 45th Street

17th Floor

New York, NY 10036-4041

Dear Sir or Madam:

I,                 (the “Participant”), hereby irrevocably exercise the right to purchase shares of the Common Stock, $0.01 par value per share (the “Shares”), of Schrödinger, Inc. (the “Company”) at $                 per share pursuant to the Company’s 2020 Equity Incentive Plan and a stock option agreement with the Company dated (the “Option Agreement”). Enclosed herewith is a payment of $                , the aggregate purchase price for the Shares. The certificate for the Shares should be registered in my name as it appears below or, if so indicated below, jointly in my name and the name of the person designated below, with right of survivorship.

 

	
 
	
 
	
 
	
 
	
 

	
Dated:                                                                      
	
 
	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
Signature
	
 
	
 
	
 
	
 

	
Print Name:
	
 
	
 
	
 
	
 

	
 
	
 
	
 

	
Address:
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 

	
Name and address of persons in whose name the Shares are to be jointly registered (if applicable):
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

 

 

 

Schrödinger, Inc.

 

Restricted Stock Unit Agreement

Schrödinger, Inc. (the “Company”) hereby grants the following restricted stock units pursuant to its 2020 Equity Incentive Plan.  The terms and conditions attached hereto are also a part hereof.

 

Notice of Grant

		
	
Name of recipient (the “Participant”):
	
 

	
Grant Date:
	
 

	
Number of restricted stock units (“RSUs”) granted:
	
 

	
Number, if any, of RSUs that vest immediately on the grant date:
	
 

	
RSUs that are subject to vesting schedule:
	
 

	
Vesting Start Date:
	
 

 

Vesting Schedule:

		
	
Vesting Date:
	
Number of RSUs that Vest:

	
 
	
 

	
 
	
 

	
All vesting is dependent on the Participant remaining an Eligible Participant, as provided herein.

 

This grant of RSUs satisfies in full all commitments that the Company has to the Participant with respect to the issuance of stock, stock options or other equity securities.

		
	
 
	
Schrödinger, Inc.

	

Signature of Participant
	
 

	

Street Address
	
By:

Name of Officer

Title:

	

City/State/Zip Code

 

Schrödinger, Inc.

 

Restricted Stock Unit Agreement 

Incorporated Terms and Conditions

 

1.Award of Restricted Stock Units. In consideration of services rendered and to be rendered to the Company, by the Participant, the Company has granted to the Participant, subject to the terms and conditions set forth in this Restricted Stock Unit Agreement (this “Agreement”) and in the Company’s 2020 Equity Incentive Plan (the “Plan”), an award with respect to the number of restricted stock units (the “RSUs”) set forth in the Notice of Grant that forms part of this Agreement (the “Notice of Grant”).  Each RSU represents the right to receive one share of common stock, $0.01 par value per share, of the Company (the “Common Stock”) upon vesting of the RSU, subject to the terms and conditions set forth herein.  

2.Vesting.  The RSUs shall vest in accordance with the Vesting Schedule set forth in the Notice of Grant (the “Vesting Schedule”).  Any fractional shares resulting from the application of any percentages used in the Vesting Schedule shall be rounded down to the nearest whole number of RSUs.  As soon as practicable after the vesting of the RSU, the Company will deliver to the Participant, for each RSU that becomes vested, one share of Common Stock, subject to the payment of any taxes pursuant to Section 7.  The Common Stock will be delivered to the Participant as soon as practicable following each vesting date, but in any event within 30 days of such date.  

3.Forfeiture of Unvested RSUs Upon Cessation of Service.  In the event that the Participant ceases to be an Eligible Participant (as defined below) for any reason or no reason, with or without cause, all of the RSUs that are unvested as of the time of such cessation shall be forfeited immediately and automatically to the Company, without the payment of any consideration to the Participant, effective as of such cessation.  The Participant shall have no further rights with respect to the unvested RSUs or any Common Stock that may have been issuable with respect thereto.  The Participant shall be an “Eligible Participant” if he or she is an employee, director or officer of, or consultant or advisor to, the Company or any other entity the employees, officers, directors, consultants or advisors of which are eligible to receive awards of RSUs under the Plan.

4.Restrictions on Transfer.  The Participant shall not sell, assign, transfer, pledge, hypothecate, encumber or otherwise dispose of, by operation of law or otherwise (collectively “transfer”) any RSUs, or any interest therein. The Company shall not be required to treat as the owner of any RSUs or issue any Common Stock to any transferee to whom such RSUs have been transferred in violation of any of the provisions of this Agreement.

5.Rights as a Stockholder.  The Participant shall have no rights as a stockholder of the Company with respect to any shares of Common Stock that may be issuable with respect to the RSUs until the issuance of the shares of Common Stock to the Participant following the vesting of the RSUs.  

6.Provisions of the Plan.  This Agreement is subject to the provisions of the Plan, a copy of which is furnished to the Participant with this Agreement.  

7.Tax Matters.   

(a)Acknowledgments; No Section 83(b) Election.  The Participant acknowledges that he or she is responsible for obtaining the advice of the Participant’s own tax advisors with respect to the award of RSUs and the Participant is relying solely on such advisors and not on any statements or representations of the Company or any of its agents with respect to the tax consequences relating to the RSUs.  The Participant understands that the Participant (and not the Company) shall be responsible for the Participant’s tax liability that may arise in connection with the acquisition, vesting and/or disposition of the RSUs.  The Participant acknowledges that no election under Section 83(b) of the Internal Revenue Code of 1986, as amended, (the “Code”) is available with respect to RSUs.   

(b)Withholding.  The Participant acknowledges that, regardless of any action taken by the Company, the ultimate liability for all income tax, social insurance, payroll tax, fringe benefits tax, payment on account or other tax-related items related to the Participant’s participation in the Plan and legally applicable or 

deemed applicable to the Participant (“Tax-Related Items”), is and remains the Participant’s responsibility and may exceed the amount actually withheld by the Company.  The Participant acknowledges and agrees that prior to the relevant taxable or tax withholding event and at such time as the Participant is not aware of any material nonpublic information about the Company or the Common Stock and the Participant is not subject to any restriction on trading activities with respect to the Common Stock pursuant to any Company insider trading or other policy, the Participant shall execute the instructions set forth in Schedule A attached hereto (the “Automatic Sale Instructions”) as the means of satisfying the withholding obligations for Tax-Related Items (the “Sell-to-Cover Withholding”).  Further, the Participant agrees to pay to the Company, including through withholding from the Participant’s wages or other cash compensation paid to the Participant by the Company, any amount of Tax-Related Items that the Company may be required to withhold or account for as a result of the Participant’s participation in the Plan that cannot be satisfied by the Sell-to-Cover Withholding.  If the Participant fails to comply with his or her obligations in connection with the Tax-Related Items, the Company may refuse to issue or deliver the shares or the proceeds of the sale of shares of Common Stock.  

8.Miscellaneous.

(a)Section 409A.  The RSUs awarded pursuant to this Agreement are intended to be exempt from or comply with the requirements of Section 409A of the Code and the Treasury Regulations issued thereunder (“Section 409A”).  The delivery of shares of Common Stock on the vesting of the RSUs may not be accelerated or deferred unless permitted or required by Section 409A.

(b)Participant’s Acknowledgements.  The Participant acknowledges that he or she:  (i) has read this Agreement; (ii) has been represented in the preparation, negotiation and execution of this Agreement by legal counsel of the Participant’s own choice or has voluntarily declined to seek such counsel; (iii) understands the terms and consequences of this Agreement; (iv) is fully aware of the legal and binding effect of this Agreement; and (v) agrees that in accepting this award, he or she will be bound by any clawback policy that the Company may adopt in the future.

 

 

 

 

 

 

Schedule A

Automatic Sale Instructions

 

The undersigned hereby consents and agrees that any taxes due on a vesting date as a result of the vesting of RSUs on such date shall be paid through an automatic sale of shares as follows:

(a)Upon any vesting of RSUs pursuant to Section 2 hereof, the Company shall arrange for the sale of such number of shares of Common Stock issuable with respect to the RSUs that vest pursuant to Section 2 as is sufficient to generate net proceeds sufficient to satisfy the Company’s minimum statutory withholding obligations with respect to the income recognized by the Participant upon the vesting of the RSUs (based on minimum statutory withholding rates for all tax purposes, including payroll and social security taxes, that are applicable to such income), and the net proceeds of such sale shall be delivered to the Company in satisfaction of such tax withholding obligations.

(b)The Participant hereby appoints the Chief Executive Officer, the Chief Financial Officer and the Chief Legal Officer (or a person holding a similar title), and any of them acting alone and with full power of substitution, to serve as his or her attorneys in fact to arrange for the sale of the Participant’s Common Stock in accordance with this Schedule A.  The Participant agrees to execute and deliver such documents, instruments and certificates as may reasonably be required in connection with the sale of the shares pursuant to this Schedule A.

(c)The Participant represents to the Company that, as of the date hereof, he or she is not aware of any material nonpublic information about the Company or the Common Stock and is not subject to any restriction on trading activities with respect to the Common Stock pursuant to any Company insider trading policy or other policy.  The Participant and the Company have structured this Agreement, including this Schedule A, to constitute a “binding contract” relating to the sale of Common Stock, consistent with the affirmative defense to liability under Section 10(b) of the Securities Exchange Act of 1934 under Rule 10b5-1(c) promulgated under such Act.

The Company shall not deliver any shares of Common Stock to the Participant until it is satisfied that all required withholdings have been made. 

 

 

 

_______________________________

 

Participant Name:  ________________

 

Date:  __________________________

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