Document:

Exhibit

Exhibit 10.3

DYADIC INTERNATIONAL, INC.

RESTRICTED STOCK AGREEMENT

RESTRICTED STOCK AGREEMENT made this ___________ day of ___________ by and between DYADIC INTERNATIONAL, INC., a Delaware corporation (the “Company”), ___________ (“Stockholder”).

Recitals:

A.    The Company’s 2011 Equity Incentive Award Plan (the “Plan”) is designed to promote and increase the personal interest of Company employees in the success of the Company by providing incentives and rewards to such employees.

B.    The Company has agreed to issue ___________(___________) shares of common stock (the “Restricted Shares”) to Stockholder, an executive employee of the Company, in consideration for services rendered and to be rendered by Stockholder pursuant to the provisions of that certain Employment Agreement dated ___________ (the “Employment Agreement”), a copy of which is attached hereto.

C.    Stockholder wishes to acquire the Restricted Shares for such consideration and under such terms.

NOW THEREFORE, in consideration of the premises, and the mutual covenants and agreements set forth below, the parties hereby agree as follows:

1.    Issuance. The Company hereby issues the Restricted Shares to Stockholder in consideration for services rendered and to be rendered by Stockholder as an executive employee pursuant to the Employment Agreement.  In addition to restrictions on transfers of such securities imposed thereon by the federal securities laws and regulations, the Company hereby imposes, pursuant to the Plan certain additional burdens on the Restricted Shares as set forth hereinbelow, including, without limitation, a risk of forfeiture in certain circumstances arising from Stockholder’s ongoing employment status.

2.    Transfer of Stock; Investment Intent. Stockholder represents and warrants that all of the Restricted Shares are being acquired for investment and not with a view to, or with any present intention of, selling or otherwise distributing the Restricted Shares. Stockholder further represents that Stockholder is capable of evaluating the merits and risks of an investment in the Restricted Shares, has made such an evaluation and is able to bear the economic risk of an investment in the Restricted Shares indefinitely.  Except as otherwise provided in this Agreement, Stockholder shall not sell, transfer, assign, convey, pledge, encumber or in any manner dispose of the Restricted Shares, either voluntarily or involuntarily.  All stock certificates evidencing the Restricted Shares shall be imprinted with a legend n substantially the following form:

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	THE TRANSFER OR ENCUMBRANCE OF THE SHARES OF STOCK REPRESENTED BY THE WITHIN CERTIFICATE IS RESTRICTED UNDER THE TERMS OF A RESTRICTED STOCK AGREEMENT  DATED  SEPTEMBER ___________,  2013,  A  COPY  OF WHICH IS ON FILE IN THE PRINCIPAL OFFICE OF THE COMPANY.

	 

	 
	THE  SHARES  REPRESENTED  BY  THIS  CERTIFICATE  HAVE NOT  BEEN  REGISTERED  UNDER  THE  SECURITIES  ACT  OF 1933, AS AMENDED (THE “ACT”).  THESE SHARES HAVE BEEN ACQUIRED FOR  INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT BE MORTGAGED, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SHARES UNDER THE ACT OR AN OPINION OF COUNSEL FOR THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER THE ACT.

	 

3.    Risk of Forfeiture.

a.    Upon termination of Stockholder’s employment with the Company at any time before ___________the Company shall have an immediate and automatic option, without any action having to be taken on the part of Stockholder to activate the option, to repurchase from Stockholder at the par value per share (the “Purchase Price”) that number of the Restricted Shares as is set forth opposite the following applicable periods:

	
			
	Date on Which Termination Occurs
	Vested Amount
	Shares Subject to Option

Termination of employment shall mean cessation of the employment relation between the Company and Stockholder as a result of Stockholder’s death, disability, Resignation Without Good Reason (as defined in the Employment Agreement), retirement or Termination by the Company for Cause (as defined in the Employment Agreement).  (For purposes of this Agreement, all references to “Stockholder” shall be deemed to include Stockholder’s estate wherever applicable.)

In the event of Termination by the Company Without Cause or Resignation for Good Reason (as defined in the Employment Agreement), none of the Restricted Shares shall be subject to the above option, provided, however, that Stockholder’s continuous status as an employee has not terminated prior to such Termination by the Company Without Cause or Resignation for Good Reason.

b.    Following a Change of Control, none of the Restricted Shares shall be subject to the above option.  A “Change of Control” means either (i) the acquisition of the Company by another entity by means of any transaction or series of related transactions (including, without limitation any reorganization, merger or consolidation or stock transfer, but excluding any such transaction effected primarily for the purpose of changing the domicile of the Company), unless the Company’s stockholders of record immediately prior to such transaction or series of related transactions hold, immediately after 

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such transaction or series of related transactions, at least thirty-five percent (35%) of the voting power of the surviving or acquiring entity, or (ii)  a sale of all or substantially all of the assets of the Company.

c.    Upon the occurrences of the following events, the Company shall have an immediate and automatic option, without any action having to be taken on the part of Stockholder to activate the option, to purchase from Stockholder or his transferee, at the price set forth in Section 4, all of the Restricted Shares subject to the option applicable to the timetable in subsection a above:

(i)    An Event of Bankruptcy with respect to Stockholder defined as follows: (A) an adjudication or order for relief by a state or federal court that such person is bankrupt or insolvent or is subject to Chapter 11 or any reorganization proceeding; or (B) filing by such person of a voluntary petition in any state or federal court to be adjudicated a bankrupt or to subject such person to Chapter 11 or any reorganization proceeding; or (C) the filing by a third party of an involuntary petition in any state or federal court to have such person adjudicated bankrupt or insolvent, or for an order for relief, or to subject such  person to the provisions of Chapter 11 or any reorganization proceeding or to obtain the appointment of a receiver which is not dismissed within one hundred-twenty (120) days of the date of the filing; or (D) the making by such person of a general assignment for the benefit of creditors;

(ii)    An order or adjudication by any court that the spouse of Stockholder has acquired any right in the Restricted Shares as a result of equitable distribution rights under any applicable law or statute; or

(iii)    Any other event which adversely and involuntarily affects Stockholder’s rights in the Restricted Shares so that Stockholder would be required to transfer the Restricted Shares to a third party, and which is not otherwise provided for in this Agreement.

4.    Purchase Price.  If the Company exercises its purchase rights under Section 3, the price per share shall be the fair market value of the Restricted Shares on the date of the event giving rise to the transfer. The Company’s Board of Directors (the “Board”) shall establish the fair market value, and shall not take into account the impact on the valuation of any restrictions on the Restricted Shares other than restrictions which by their terms will never lapse.

5.    Exercise of Company’s Options. The Company may exercise its options pursuant to Section 3 by giving Stockholder notice of its election within sixty (60) days of the later of the date on which Stockholder’s employment under the Employment Agreement is terminated or another triggering event described in Section 3 occurs. The notice shall include a closing date, which date shall be within thirty (30) days of the date the notice is given.  The closing shall be at the principal office of the Company. Voting rights on the Restricted Shares subject to the option shall be vested in the Company as of the date the Company gives notice of its election to exercise the option.  At its election, the Company shall pay the full amount for the Restricted Shares by check at the closing.

At the closing, Stockholder’s legal representative (as the case may be) shall deliver to the Company the stock certificate evidencing the Restricted Shares to be redeemed, properly endorsed in blank with all transfer and excise taxes paid and, in the event of death, Stockholder’s legal representative shall also deliver copies of letters testamentary or authority to act on behalf of the estate and a release or tax letter from appropriate tax authorities stating that the Restricted Shares transferred are not subject to taxes. Stockholder, or Stockholder’s representative if Stockholder is deceased, shall warrant that the Restricted Shares transferred are free and clear of all liens, encumbrances and claims.

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6.    Payment of Taxes and Section 83(b) Election.  Stockholder agrees that concurrently with the execution of this Agreement Stockholder will execute an election under Section 83(b) of the Internal Revenue Code to be taxed currently on Stockholder’s compensation related to receipt of the Restricted Shares, which compensation is calculated to be the difference between the price Stockholder paid for the Restricted Shares and the amount which the Company has determined to be the fair market value of the Restricted Shares. The Company shall determine the amount of federal and state withholding due with respect to Stockholder’s compensation in the form of the Restricted Shares, and such amount shall be withheld from Stockholder’s next paycheck.  Stockholder agrees to pay the Company the amount of withholding due with respect to the Restricted Shares within five (5) days of the date the Company gives Stockholder notice of the amount due, time being of the essence.  No stock certificates shall be delivered on behalf of Stockholder until the payment of the withholding due is made.  If the payment is not made within five (5) days of the date that the Company gives notice to Stockholder of the amount due, time being of the essence, the Company may arrange for withholding of all amounts due from Stockholder’s pay until Stockholder’s obligation is satisfied.

7.    Specific Performance.  Because of the unique character of the Restricted Shares, the parties to this Agreement agree that the Company and its stockholders will be irreparably damaged in the event that this Agreement is not specifically enforced.  Should any dispute arise concerning the sale or transfer of the Restricted Shares, an injunction may be issued restraining any sale or transfer pending the determination of such controversy.  In the event of any controversy concerning the right of the Company to purchase or of Stockholder to sell any of the Shares, such right or obligation shall be enforceable in a court of equity by a decree of specific performance.  Such remedy shall, however, be in addition to any other remedies which the parties may have.

Stockholder agrees that in the event of any violation of this Agreement, an action may be commenced by the Company for any such preliminary and permanent injunctive relief and other equitable relief in any court of competent jurisdiction in the State of Florida or in any other court of competent jurisdiction. Stockholder hereby waives any objections on the grounds of improper jurisdiction or venue to the commencement of an action in the State of Florida and agrees that effective service of process may be made upon Stockholder by mail under the notice provisions contained in Section 9.2.

8.    No Contract of Employment.  Nothing contained in this Agreement shall be deemed to require the Company to continue Stockholder’s employment with the Company.  From time to time, the Company may distribute employee manuals or handbooks, and officers or the Board may make written or
oral statements relating to the Company’s policies and procedures.  Such manuals, handbooks and statements are intended only for the general guidance of employees.  No policies, procedures or statements of any nature by or on behalf of the Company (whether written or oral, and whether or not contained in any formal employee manual or handbook) shall be construed to modify this Agreement.

9.    Miscellaneous.

9.1    Binding Effect. This Agreement shall be binding, not only upon the parties to this Agreement, but also on their heirs, executors, administrators, personal representatives, successors, assigns (including any transferee of a party to this Agreement), and the parties agree, for themselves and their successors, assigns and representatives to execute any instrument which may be necessary legally to give effect to the terms and conditions of this Agreement.

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9.2    Notices.  All notices, requests and amendments under this Agreement, shall be in writing, and notices shall be deemed to have been given when personally delivered or the next business day after being sent by overnight courier service addressed as follows (i) if to the Company:  140 Intracoastal Pointe Dr. #404, Jupiter, FL 33477, Attention President, or at such other address as the Company shall designate by notice; or (ii) if to Stockholder: to Stockholder’s address appearing below, or at such other address as Stockholder shall designate by notice.

9.3    Severability.  The invalidity or unenforeceability of any particular provision of this Agreement shall not affect the other provisions hereof, and this Agreement shall be construed in all respects as if such invalid or unenforceable provisions were omitted.

9.4    Governing Law; Jurisdiction.  This Agreement shall be governed by the internal laws of Florida. The parties hereby consent to the exclusive jurisdiction of the courts of Palm Beach County, Florida for purposes of adjudicating any issue hereunder.

9.5    Amendment.  Neither this Agreement nor any of the terms and conditions set forth in this Agreement may be altered or amended verbally, and any such alteration or amendment shall only be effective when reduced to writing and signed by each of the parties.

9.6    Stock Splits, etc.  In the event that, as the result of a stock split or stock dividend or combination of shares or any other change, or exchange for other securities, by reclassification, reorganization, merger, consolidation, recapitalization or otherwise, Stockholder shall, as the owner of the Restricted Shares subject to restrictions hereunder, be entitled to new or additional or different shares of stock or securities, the certificate or certificates for, or other evidences of, such new or additional or different shares or securities, shall also be imprinted with a legend as provided in Section 1, and all provisions of this Agreement relating to restrictions and lapse of restrictions shall be applicable to such new or additional or different shares or securities to the extent applicable to the shares with respect to which they were distributed, and such new or additional or different shares or securities shall be deemed to be “Restricted Shares” for all purposes hereof; provided, however that if Stockholder shall receive rights, warrants or fractional interests in respect of any such Restricted Shares, such rights or warrants may be held, exercised, sold or otherwise disposed of, and such fractional interests may be settled, by Stockholder free and clear of the restrictions set forth in this Agreement.

9.7    Entire Agreement; Rights and Interest. This Agreement constitutes the entire agreement of the parties with respect to the matters covered hereby, and supersedes any previous agreements, whether written or oral.  Each party hereby stipulates and acknowledges that there are no other understandings, expectations or agreements, either written or oral, respecting Stockholder’s rights and entitlements as a stockholder of the Company, including, without limitation, any understandings, expectations, or agreements regarding any employment, compensation or other benefits, governance of the Company or the payment of dividends, except as expressly set forth in the Employment Agreement.  Further, no such understandings, expectations or agreements which may hereafter arise shall be enforceable unless the same shall be reduced to a writing signed by the parties to be changed.

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IN WITNESS WHEREOF, the parties to this Agreement have executed this Agreement effective the date and year first above written.

	
		
	DYADIC INTERNATIONAL, INC.

	By:
	 

	 
	 

	
		
	 
	 

	Address:
	 

	 
	 

	 
	 

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Exhibit 10.4

DYADIC INTERNATIONAL, INC.
2011 EQUITY INCENTIVE AWARD PLAN
STOCK OPTION GRANT NOTICE
Dyadic International, Inc., a Delaware corporation, (the “Company”), pursuant to its 2011 Equity Incentive Award Plan, as amended from time to time (the “Plan”), hereby grants to the Holder listed below (“Participant”), an option to purchase the number of shares of the Company’s common stock, par value $0.001 (“Stock”), set forth below (the “Option”). This Option is subject to all of the terms and conditions set forth herein and in the Stock Option Agreement attached hereto as Exhibit A (the “Stock Option Agreement”) and the Plan, each of which are incorporated herein by reference. Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this Grant Notice and the Stock Option Agreement.
 
Participant Name:         
Participant ID:              
Plan Name:         
Award Number:        
Shares Granted:         
Award Type:        
Award Date:         
Award Price:         
Vesting Schedule:      
Expiration Date:        
By signing the Stock Option Grant Notice below and the Stock Option Agreement attached hereto as Exhibit A, Participant agrees to be bound by the terms and conditions of the Plan, the Stock Option Agreement and this Grant Notice. Participant has reviewed the Stock Option Agreement, the Plan and this Grant Notice in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Grant Notice and the Stock Option Agreement and fully understands all provisions of this Grant Notice, the Stock Option Agreement and the Plan. Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising under the Plan, this Grant Notice or the Stock Option Agreement. 
 
	
		
	DYADIC INTERNATIONAL, INC.:

	By:
	 

	Print Name:
	 

	Title:
	 

	Participant:
	 

	Print Name:
	 

EXHIBIT A
DYADIC INTERNATIONAL, INC.
STOCK OPTION AGREEMENT
Pursuant to the Stock Option Grant Notice (the “Grant Notice”) to which this Stock Option Agreement (this “Agreement”) is attached, Dyadic International, Inc., a Delaware corporation (the “Company”), has granted to Participant an Option under the Company’s 2011 Equity Incentive Award Plan, as amended from time to time (the “Plan”), to purchase the number of shares of Stock indicated in the Grant Notice. 
ARTICLE 1. 
GENERAL 
1.1 Defined Terms. Wherever the following terms are used in this Agreement they shall have the meanings specified below, unless the context clearly indicates otherwise. Capitalized terms not specifically defined herein shall have the meanings specified in the Plan and the Grant Notice. 
1.2 Incorporation of Terms of Plan. The Option is subject to the terms and conditions of the Plan which are incorporated herein by reference. In the event of any inconsistency between the Plan and this Agreement, the terms of the Plan shall control. 
ARTICLE 2. 
GRANT OF OPTION 
2.1 Grant of Option. In consideration of Participant’s past and/or continued employment with or service to the Company or a Subsidiary and for other good and valuable consideration, effective as of the Grant Date set forth in the Grant Notice (the “Grant Date”), the Company grants to Participant the Option to purchase any part or all of an aggregate of the number of shares of Stock set forth in the Grant Notice, upon the terms and conditions set forth in the Plan and this Agreement, subject to adjustments as provided in Section 14.2 of the Plan. Unless designated as a Nonstatutory Stock Option in the Grant Notice, the Option shall be an Incentive Stock Option to the maximum extent permitted by law. 
2.2 Exercise Price. The exercise price of the shares of Stock subject to the Option shall be as set forth in the Grant Notice, without commission or other charge; provided, however, that the price per share of the shares of Stock subject to the Option shall not be less than 100% of the Fair Market Value of a share of Stock on the Grant Date. Notwithstanding the foregoing, if this Option is designated as an Incentive Stock Option and Participant owns (within the meaning of Section 424(d) of the Code) more than 10% of the total combined voting power of all classes of stock of the Company or any “subsidiary corporation” of the Company or any “parent corporation” of the Company (each within the meaning of Section 424 of the Code), the price per share of the shares of Stock subject to the Option shall not be less than 110% of the Fair Market Value of a share of Stock on the Grant Date. 
2.3 Consideration to the Company. In consideration of the grant of the Option by the Company, Participant agrees to render faithful and efficient services to the Company or any Subsidiary. Nothing in the Plan or this Agreement shall confer upon Participant any right to continue in the employ or service of the Company or any Subsidiary or shall interfere with or restrict in any way the rights of the Company and its Subsidiaries, which rights are hereby expressly reserved, to discharge or terminate the services of Participant at any time for any reason whatsoever, with or without cause, except to the extent expressly provided otherwise in a written agreement between the Company or a Subsidiary and Participant. 

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ARTICLE 3. 
PERIOD OF EXERCISABILITY 
3.1 Commencement of Exercisability. 
(a) Subject to Sections 3.2, 3.3, 5.10 and 5.16 hereof, the Option shall become vested and exercisable in such amounts and at such times as are set forth in the Grant Notice. 
(b) No portion of the Option which has not become vested and exercisable at the date of Participant’s Termination of Service shall thereafter become vested and exercisable, except as may be otherwise provided by the Administrator or as set forth in a written agreement between the Company and Participant. 
(c) Notwithstanding Sections 3.1(a) hereof and the Grant Notice, but subject to Section 3.1(b) hereof, pursuant to Section 14.2 of the Plan, the Option shall become fully vested and exercisable with respect to all shares of Stock covered thereby in the event of a Change in Control, in connection with which the successor corporation does not assume the Option or substitute an equivalent right for the Option. Should the successor corporation assume the Option or substitute an equivalent right, then no such acceleration shall apply. 
3.2 Duration of Exercisability. The installments provided for in the vesting schedule set forth in the Grant Notice are cumulative. Each such installment which becomes vested and exercisable pursuant to the vesting schedule set forth in the Grant Notice shall remain vested and exercisable until it becomes unexercisable under Section 3.3 hereof. 
3.3 Expiration of Option. The Option may not be exercised to any extent by anyone after the first to occur of the following events: 
(a) The Expiration Date set forth in the Grant Notice, which shall in no event be more than ten (10) years from the Grant Date; 
(b) If this Option is designated as an Incentive Stock Option and Participant owned (within the meaning of Section 424(d) of the Code), at the time the Option was granted, more than 10% of the total combined voting power of all classes of stock of the Company or any “subsidiary corporation” of the Company or any “parent corporation” of the Company (each within the meaning of Section 424 of the Code), the expiration of five (5) years from the Grant Date; 
(c) The expiration of three (3) months from the date of Participant’s Termination of Service, unless such termination occurs by reason of Participant’s death or disability; or 
(d) The expiration of one (1) year from the date of Participant’s Termination of Service by reason of Participant’s death or disability. 
3.4 Special Tax Consequences. Participant acknowledges that, to the extent that the aggregate Fair Market Value (determined as of the time the Option is granted) of all shares of Stock with respect to which Incentive Stock Options, including the Option (if applicable), are exercisable for the first time by Participant in any calendar year exceeds $100,000, the Option and such other options shall be Nonstatutory Stock Options to the extent necessary to comply with the limitations imposed by Section 422(d) of the Code. Participant further acknowledges that the rule set forth in the preceding sentence shall be applied by taking the Option and other “incentive stock options” into account in the order in which they were granted, as determined under Section 422(d) of the Code and the Treasury Regulations thereunder. Participant also acknowledges that an Incentive Stock Option exercised more than three (3) months after Participant’s Termination of Employment, other than by reason of death or disability, will be taxed as a Nonstatutory Stock Option. 
3.5 Tax Indemnity. 
(a) The Participant agrees to indemnify and keep indemnified the Company, any Subsidiary and his/her employing company, if different, from and against any liability for or obligation to pay any Tax Liability (a “Tax Liability” being any liability for income tax, withholding tax and any other employment related taxes or social security contributions in any jurisdiction) that is attributable to (1) the grant or exercise of, or any benefit derived by the Participant 

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from, the Option, (2) the acquisition by the Participant of the Stock on exercise of the Option, or (3) the disposal of any Stock. 
(b) The Option cannot be exercised until the Participant has made such arrangements as the Company may require for the satisfaction of any Tax Liability that may arise in connection with the exercise of the Option and/or the acquisition of the Stock by the Participant. The Company shall not be required to issue, allot or transfer Stock until the Employee has satisfied this obligation. 
ARTICLE 4. 
EXERCISE OF OPTION
4.1 Person Eligible to Exercise. During the lifetime of Participant, only Participant may exercise the Option or any portion thereof. After the death of Participant, any exercisable portion of the Option may, prior to the time when the Option becomes unexercisable under Section 3.3 hereof, be exercised by Participant’s personal representative or by any person empowered to do so under the deceased Participant’s will or under the then applicable laws of descent and distribution. 
4.2 Partial Exercise. Any exercisable portion of the Option or the entire Option, if then wholly exercisable, may be exercised in whole or in part at any time prior to the time when the Option or portion thereof becomes unexercisable under Section 3.3 hereof. 
4.3 Manner of Exercise. The Option, or any exercisable portion thereof, may be exercised solely by delivery to the Secretary of the Company (or any third party administrator or other person or entity designated by the Company), during regular business hours, of all of the following prior to the time when the Option or such portion thereof becomes unexercisable under Section 3.3 hereof: 
(a) An exercise notice in a form specified by the Administrator, stating that the Option or portion thereof is thereby exercised, such notice complying with all applicable rules established by the Administrator; 
(b) The receipt by the Company of full payment for the shares of Stock with respect to which the Option or portion thereof is exercised, including payment of any applicable withholding tax, which shall be made by deduction from other compensation payable to Participant or in such other form of consideration permitted under Section 4.4 hereof that is acceptable to the Company; 
(c) Any other written representations as may be required in the Administrator’s reasonable discretion to evidence compliance with the Securities Act or any other applicable law, rule or regulation; and 
(d) In the event the Option or portion thereof shall be exercised pursuant to Section 4.1 hereof by any person or persons other than Participant, appropriate proof of the right of such person or persons to exercise the Option. 
Notwithstanding any of the foregoing, the Company shall have the right to specify all conditions of the manner of exercise, which conditions may vary by country and which may be subject to change from time to time. 
4.4 Method of Payment. Payment of the exercise price shall be by any of the following, or a combination thereof, at the election of Participant: 
(a) Cash or check; 
(b) With the consent of the Administrator, surrender of shares of Stock (including, without limitation, shares of Stock otherwise issuable upon exercise of the Option) held for such period of time as may be required by the Administrator in order to avoid adverse accounting consequences and having a Fair Market Value on the date of delivery equal to the aggregate exercise price of the Option or exercised portion thereof; or 
(c) Other property acceptable to the Administrator (including, without limitation, through the delivery of a notice that Participant has placed a market sell order with a broker with respect to shares of Stock then issuable upon exercise of the Option, and that the broker has been directed to pay a sufficient portion of the net proceeds of the sale to the Company in satisfaction of the Option exercise price; provided that payment of such proceeds is then made to 

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the Company at such time as may be required by the Company, but in any event not later than the settlement of such sale). 
4.5 Conditions to Issuance of Stock. The shares of Stock deliverable upon the exercise of the Option, or any portion thereof, may be either previously authorized but unissued shares of Stock or issued shares of Stock which have then been reacquired by the Company. Such shares of Stock shall be fully paid and nonassessable. The Company shall not be required to issue or deliver any shares of Stock purchased upon the exercise of the Option or portion thereof prior to fulfillment of all of the following conditions: 
(a) The admission of such shares of Stock to listing on all stock exchanges on which such Stock is then listed; 
(b) The completion of any registration or other qualification of such shares of Stock under any state or federal law or under rulings or regulations of the Securities and Exchange Commission or of any other governmental regulatory body, which the Administrator shall, in its absolute discretion, deem necessary or advisable; 
(c) The obtaining of any approval or other clearance from any state or federal governmental agency which the Administrator shall, in its absolute discretion, determine to be necessary or advisable; 
(d) The receipt by the Company of full payment for such shares of Stock, including payment of any applicable withholding tax, which may be in one or more of the forms of consideration permitted under Section 4.4 hereof; and 
(e) The lapse of such reasonable period of time following the exercise of the Option as the Administrator may from time to time establish for reasons of administrative convenience. 
4.6 Rights as Stockholder. The holder of the Option shall not be, nor have any of the rights or privileges of, a stockholder of the Company, including, without limitation, voting rights and rights to dividends, in respect of any shares of Stock purchasable upon the exercise of any part of the Option unless and until such shares of Stock shall have been issued by the Company and held of record by such holder (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company). No adjustment will be made for a dividend or other right for which the record date is prior to the date the shares of Stock are issued, except as provided in Section 14.2 of the Plan. 
ARTICLE 5. 
OTHER PROVISIONS 
5.1 Administration. The Administrator shall have the power to interpret the Plan and this Agreement and to adopt such rules for the administration, interpretation and application of the Plan as are consistent therewith and to interpret, amend or revoke any such rules. All actions taken and all interpretations and determinations made by the Administrator in good faith shall be final and binding upon Participant, the Company and all other interested persons. No member of the Committee or the Board shall be personally liable for any action, determination or interpretation made in good faith with respect to the Plan, this Agreement or the Option. 
5.2 Whole Shares. The Option may only be exercised for whole shares of Stock. 
5.3 Option Not Transferable. Subject to Section 4.1 hereof, the Option may not be sold, pledged, assigned or transferred in any manner other than by will or the laws of descent and distribution, unless and until the shares of Stock underlying the Option have been issued, and all restrictions applicable to such shares of Stock have lapsed. Neither the Option nor any interest or right therein shall be liable for the debts, contracts or engagements of Participant or his or her successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted disposition thereof shall be null and void and of no effect, except to the extent that such disposition is permitted by the preceding sentence. 

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5.4 Binding Agreement. Subject to the limitation on the transferability of the Option contained herein, this Agreement will be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto. 
5.5 Adjustments Upon Specified Events. The Administrator may accelerate the vesting of the Option in such circumstances as it, in its sole discretion, may determine. In addition, upon the occurrence of certain events relating to the Stock contemplated by Section 14.2 of the Plan (including, without limitation, an extraordinary cash dividend on such Stock), the Administrator shall make such adjustments the Administrator deems appropriate in the number of shares of Stock subject to the Option, the exercise price of the Option and the kind of securities that may be issued upon exercise of the Option. Participant acknowledges that the Option is subject to adjustment, modification and termination in certain events as provided in this Agreement and Section 14.2 of the Plan. 

5.6 Notices. Any notice to be given under the terms of this Agreement to the Company shall be addressed to the Company in care of the Secretary of the Company at the Company’s principal office, and any notice to be given to Participant shall be addressed to Participant at Participant’s last address reflected on the Company’s records. By a notice given pursuant to this Section 5.6, either party may hereafter designate a different address for notices to be given to that party. Any notice which is required to be given to Participant shall, if Participant is then deceased, be given to the person entitled to exercise his or her Option pursuant to Section 4.1 hereof by written notice under this Section 5.6. Any notice shall be deemed duly given when sent via email or when sent by certified mail (return receipt requested) and deposited (with postage prepaid) in a post office or branch post office regularly maintained by the United States Postal Service. 
5.7 Titles. Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement. 
5.8 Governing Law. The laws of the State of Delaware shall govern the interpretation, validity, administration, enforcement and performance of the terms of this Agreement regardless of the law that might be applied under principles of conflicts of laws. 
5.9 Conformity to Securities Laws. Participant acknowledges that the Plan and this Agreement are intended to conform to the extent necessary with all provisions of the Securities Act and the Exchange Act and any and all regulations and rules promulgated by the Securities and Exchange Commission thereunder, and state securities laws and regulations. Notwithstanding anything herein to the contrary, the Plan shall be administered, and the Option is granted and may be exercised, only in such a manner as to conform to such laws, rules and regulations. To the extent permitted by applicable law, the Plan and this Agreement shall be deemed amended to the extent necessary to conform to such laws, rules and regulations. 
5.10 Amendments, Suspension and Termination. To the extent permitted by the Plan, this Agreement may be wholly or partially amended or otherwise modified, suspended or terminated at any time or from time to time by the Committee or the Board; provided that, except as may otherwise be provided by the Plan, no amendment, modification, suspension or termination of this Agreement shall adversely affect the Option in any material way without the prior written consent of Participant. 
5.11 Successors and Assigns. The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement shall inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer herein set forth in Section 5.3 hereof, this Agreement shall be binding upon Participant and his or her heirs, executors, administrators, successors and assigns. 
5.12 Notification of Disposition. If this Option is designated as an Incentive Stock Option, Participant shall give prompt notice to the Company of any disposition or other transfer of any shares of Stock acquired under this Agreement if such disposition or transfer is made (a) within two (2) years from the Grant Date with respect to such shares of Stock or (b) within one (1) year after the transfer of such shares of Stock to Participant. Such notice shall specify the date of such disposition or other transfer and the amount realized, in cash, other property, assumption of indebtedness or other consideration, by Participant in such disposition or other transfer. 

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5.13 Limitations Applicable to Section 16 Persons. Notwithstanding any other provision of the Plan or this Agreement, if Participant is subject to Section 16 of the Exchange Act, the Plan, the Option and this Agreement shall be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3 of the Exchange Act) that are requirements for the application of such exemptive rule. To the extent permitted by applicable law, this Agreement shall be deemed amended to the extent necessary to conform to such applicable exemptive rule. 
5.14 Not a Contract of Employment. Nothing in this Agreement or in the Plan shall confer upon the Participant any right to continue to serve as an employee or other service provider of the Company or any of its Subsidiaries. 
5.15 Entire Agreement. The Plan, the Grant Notice and this Agreement (including all Exhibits thereto) constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and Participant with respect to the subject matter hereof. 
5.16 Section 409A. This Option is not intended to constitute “nonqualified deferred compensation” within the meaning of Section 409A of the Code (together with any Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the date hereof, “Section 409A”). However, notwithstanding any other provision of the Plan, the Grant Notice or this Agreement, if at any time the Administrator determines that the Option (or any portion thereof) may be subject to Section 409A, the Administrator shall have the right in its sole discretion (without any obligation to do so or to indemnify Participant or any other person for failure to do so) to adopt such amendments to the Plan, the Grant Notice or this Agreement, or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, as the Administrator determines are necessary or appropriate either for the Option to be exempt from the application of Section 409A or to comply with the requirements of Section 409A. 
5.17 Limitation on Participant’s Rights. Participation in the Plan confers no rights or interests other than as herein provided. This Agreement creates only a contractual obligation on the part of the Company as to amounts payable and shall not be construed as creating a trust. Neither the Plan nor any underlying program, in and of itself, has any assets. Participant shall have only the rights of a general unsecured creditor of the Company with respect to amounts credited and benefits payable, if any, with respect to the Option, and rights no greater than the right to receive the Stock as a general unsecured creditor with respect to options, as and when exercised pursuant to the terms hereof.

IN WITNESS WHEREOF, the Company has caused a duly authorized officer to execute this Agreement, and Participant has executed this Agreement, effective as of the Grant Date.

THE COMPANY:
	
		
	DYADIC INTERNATIONAL, INC.:

	By:
	 

	Print Name:
	 

	Title:
	 

	Participant:
	 

	Print Name:
	 

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