ITEM 11. EXECUTIVE COMPENSATION

We refer to our Chief Executive Officer and our two other most highly compensated executive officers discussed below as our “named executive officers.” Our named executive officers for fiscal year 2021 were as follows:

(1) Mr. Boyd retired as President and Chief Financial Officer effective February 17, 2021, Ms. Cheung resigned as Chief Financial Officer effective March 9, 2022.

Our executives agreed to the receipt of RSUs in lieu of cash salary in order to conserve our resources in light of the effects of the COVID-19 pandemic. The number of RSUs awarded paid in lieu of cash was calculated at a rate of $0.71 per share, the closing price of our common stock on the Nasdaq Capital Market on May 1, 2020, the date of grant. The RSUs vested in three equal installments on June 30, September 30, and December 31, 2020, with settlement and delivery of vested shares upon termination of service with the Company.

Compensation Committee Interlocks and Insider Participation

None of our executive officers currently serves, or in the past year have served, as a member of the board of directors or Compensation Committee of any other entity that has one or more executive officers serving on our board of directors.

Employment Agreements

We have entered into an employment offer letter with each of Mr. Helash, Dr. Cheung, and Ms. Moore as described below. We have also entered into employee proprietary information and inventions assignment agreements with each of these officers, under which each of them has agreed not to disclose our confidential information or induce us to use proprietary information or trade secrets of others at any time.

Kevin Helash.

Effective as of July 3, 2020, we entered into an offer letter with Kevin Helash, our Chief Executive Officer (“CEO”). Under the offer letter, Mr. Helash is entitled to receive an annual base salary of $385,000, which has since been increased to $455,000 by our board of directors, and a target annual award opportunity under our discretionary bonus plan of up to 45% of his annual base salary (payable on a pro rata basis for fiscal year 2020), unless adjusted by the board of directors for any year.

Pursuant to the offer letter, Mr. Helash was granted an option to purchase 2,450,000 shares of the Company’s common stock (the “Helash Option”), pursuant to the Company’s 2013 Stock Incentive Plan. The Helash Option is structured as follows:

The offer letter provides that either party may terminate the employment arrangement for any reason or no reason, but four weeks’ notice is requested if the agreement is terminated by Mr. Helash. In addition, the offer letter provides that if we actively or constructively terminate Mr. Helash’s employment without cause (whether or not in connection with a change of control), Mr. Helash will be eligible to receive:

Suping (Sue) Liu Cheung, Ph.D., C.P.A.

Effective as of January 25, 2021, we entered into an offer letter with our former Chief Financial Officer, Suping (Sue) Liu Cheung, Ph.D., C.P.A. Under the offer letter, Dr. Cheung was entitled to receive an annual base salary of $275,000 and a target annual award opportunity under our discretionary bonus plan of up to 40% of her annual base salary, unless adjusted by the board of directors for any year. In accordance with the offer letter, Dr. Cheung was granted an option to purchase 400,000 shares of our common stock (the “Cheung Option”), pursuant to the Company’s 2013 Stock Incentive Plan. The Cheung Option was subject to time-based vesting over a period of four years as measured from Dr. Cheung’s first date of employment (the “Cheung Vesting Commencement Date”). 25% of the Cheung Option vested on the first anniversary of the Cheung Vesting Commencement Date, and the remaining 75% of the shares would have vested over the next following 3 years on a pro-rata basis equally each month if Dr. Cheung were to have continued providing services to the Company.

The offer letter provided that either party may terminate the employment arrangement for any reason or no reason, but four weeks’ notice was requested if the agreement were terminated by Dr. Cheung. In addition, the offer letter provided that if we actively or constructively terminated Dr. Cheung’s employment without cause (whether or not in connection with a change of control), Dr. Cheung would have been eligible to receive:

Linda V. Moore

Effective as of March 17, 2014, we entered into an offer letter with Linda V. Moore, our Chief Legal Officer, as supplemented by additional letter agreements on February 9, 2015 and again on November 6, 2017. Under the letter agreements, Ms. Moore is entitled to an annual base salary of $260,000, which has since been increased to $320,000, and is eligible for our benefit programs, vacation benefits, medical benefits and 401(k) plan participation. In addition, in satisfaction of obligations to Ms. Moore in the original offer letter with respect to option awards, our board of directors granted Ms. Moore an option to purchase 100,000 shares of our common stock on March 17, 2014, which vested with respect to one-quarter of the total shares subject to the option on the first anniversary of the option’s vesting commencement date of March 17, 2014 and with respect to 1/48th of the total shares subject to the option monthly thereafter for 36 months, such that all shares subject to the option were fully vested on the fourth anniversary of such option’s vesting commencement date. In addition, in satisfaction of obligations to Ms. Moore in the most recent letter agreement, Ms. Moore was granted 150,000 RSUs with respect to our common stock on November 6, 2017, which vested in equal monthly increments over a period of three years from the grant date. In addition, Ms. Moore will continue to be eligible for our bonus plan, under which Ms. Moore’s bonus can be up to 35% of her salary.

The original offer letter also provided for relocation expenses of $10,000 and one month temporary housing. The letter agreement provides that either party may terminate the employment arrangement for any reason or no reason, but four weeks’ notice is requested if Ms. Moore terminates her employment. In addition, the agreements provides that if we actively or constructively terminate Ms. Moore’s employment without cause (whether or not in connection with a change of control), Ms. Moore will be eligible to receive:

Her letter agreements also provide for certain payments in the event of a termination in connection with a change in control, but such provisions were superseded by the change in control agreement discussed below.

Separation and Consulting Agreements

James B. Boyd.

On September 21, 2020, Mr. Boyd announced his intention to retire from his position as our Chief Financial Officer and President, and in connection with his retirement, entered into a separation agreement (the “Boyd Separation Agreement”). The Boyd Separation Agreement provides that Mr. Boyd’s retirement is effective immediately prior to the date on which a new Chief Financial Officer commences service, subject to the parties right to extend the termination date for a transition period and subject to the right to terminate Mr. Boyd’s employment earlier in the discretion of our CEO or for “cause” or due to Mr. Boyd’s “disability,” as those terms are defined in Mr. Boyd’s change in control agreement. In accordance with the Boyd Separation Agreement, Mr. Boyd’s retirement became effective February 17, 2021, the day before Dr. Cheung commenced as our Chief Financial Officer.

Mr. Boyd also entered into a consulting agreement with us on September 21, 2020 (the “Boyd Consulting Agreement”). Pursuant to the Boyd Consulting Agreement, Mr. Boyd agreed to serve as a consultant to the Company for a period of one year following the date of his retirement, unless terminated earlier as discussed below or extended by mutual agreement, to help us create and develop an entity dedicated to the eradication of invasive species with the terms of such services and related deliverables detailed in the Boyd Consulting Agreement. As consideration for his service as a consultant, Mr. Boyd received a one-time award of 200,000 RSUs, which will vest in equal installments over twelve months, subject to his continuous service as a consultant through the applicable vesting dates, under our 2013 Plan. Under the terms of the Boyd Consulting Agreement, we may terminate Mr. Boyd’s service as a consultant by giving five (5) days prior written notice, in which case any unvested RSUs granted under the Boyd Consulting Agreement will vest immediately. We may also terminate the Boyd Consulting Agreement upon Mr. Boyd’s breach or default or for certain other grounds, in which case Mr. Boyd’s unvested RSUs will be forfeited.

Change in Control Agreements

Kevin Helash.

Effective as of July 3, 2020, we entered into a change in control agreement with Mr. Helash (the “Helash CIC Agreement”), which provides Mr. Helash with the right to receive certain benefits if, in connection with a Change in Control (as defined in the Helash CIC Agreement), Mr. Helash terminates his employment with the Company for good reason or the Company terminates his employment without cause. The Helash CIC Agreement provides that in such an event: (i) Mr. Helash will receive a single lump sum severance payment equal to twelve months of his annual salary; (ii) if Mr. Helash has been employed by the Company for one year or longer at the time of such termination, all outstanding and unvested equity compensation awards held by Mr. Helash will vest, but if Mr. Helash has been employed by the Company for less than one year at the time of such termination, (a) 100 percent of the Time-Based Tranche and the Enhanced Time-Based Tranche (as defined in Mr. Helash’s offer letter, described above) will become vested as of the date of termination and (b) the Performance Tranche (as defined in Mr. Helash’s offer letter, described above) will vest and will be permanently and irrevocably forfeited; (iii) Mr. Helash will receive a lump sum bonus payment in an amount equal to 20% of his then-current base salary, prorated based on the percentage of the current year completed prior to termination; and (iv) the Company will pay for health continuation coverage premiums for the executive and his family members for twelve months following the date of termination.

The benefits provided for in the Helash CIC Agreement is subject to Mr. Helash’s delivery of a release of claims reasonably acceptable to the Company. Under the Helash CIC Agreement, Mr. Helash is also subject to non-solicitation and non-disparagement obligations during employment with the Company and for one year following termination.

Suping (Sue) Liu Cheung, Ph.D., C.P.A.

On January 26, 2021, we also entered into a change in control agreement with Dr. Cheung (the “Cheung CIC Agreement”), which provided Dr. Cheung with the right to receive certain benefits if, in connection with a Change in Control (as defined in the Cheung CIC Agreement), Dr. Cheung terminated her employment with us for good reason or we terminated her employment without cause. The Cheung CIC Agreement provided that in such an event: (i) Dr. Cheung would receive a single lump sum severance payment equal to twelve months of her annual salary; (ii) all outstanding and unvested equity compensation awards held by Dr. Cheung would vest; (iii) Dr. Cheung would receive a lump sum bonus payment in an amount equal to 20% of her then-current base salary, prorated based on the percentage of the current year completed prior to termination; and (iv) we would pay for health continuation coverage premiums for the executive and her family members for twelve months following the date of termination.

The benefits provided for in the Cheung CIC Agreement were subject to Dr. Cheung’s delivery of a release of claims reasonably acceptable to us. Under the Cheung CIC Agreement, Dr. Cheung was also subject to non-solicitation and non-disparagement obligations during employment with us and for one year following termination.

Linda V. Moore

On June 17, 2016, we also entered into a change in control agreement with Ms. Moore (the “Moore CIC Agreement”), which provides Ms. Moore with the right to receive certain benefits if, in connection with a Change in Control (as defined in the Moore CIC Agreement), Ms. Moore terminates her employment with us for good reason or we terminate her employment without cause. The Moore CIC Agreement provides that in such an event: (i) Ms. Moore will receive a single lump sum severance payment equal to twelve months of her annual salary; (ii) all outstanding and unvested equity compensation awards held by Ms. Moore will vest; (iii) Ms. Moore will receive a lump sum bonus payment in an amount equal to 16.7% of her then-current base salary, prorated based on the percentage of the current year completed prior to termination; and (iv) we will pay for health continuation coverage premiums for the executive and her family members for twelve months following the date of termination.

The benefits provided for in the Moore CIC Agreement are subject to Ms. Moore’s delivery of a release of claims reasonably acceptable to us. Under the Moore CIC Agreement, Ms. Moore is also subject to non-solicitation and non-disparagement obligations during employment with us and for one year following termination.

Compensation Risk Management

We have considered the risks associated with our compensation policies and practices for all employees, and we believe we have designed our compensation policies and practices in a manner that does not create incentives that could lead to excessive risk taking that would have a material adverse effect on our Company.

Employee Benefit and Stock Plans

Marrone Bio Innovations, Inc. Stock Option Plan

We established the Marrone Bio Innovations, Inc. Stock Option Plan, which we refer to as the 2006 Plan, effective as of July 26, 2006. We ceased granting options under our 2006 Plan after, and the 2006 Plan terminated upon, the adoption of our 2011 Plan on July 19, 2011. Our 2006 Plan provided for the grant of incentive stock options, within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended, or the Code, to our employees and any parent and subsidiary corporations’ employees, and for the grant of non-qualified stock options to our employees, outside directors and consultants and our parent and subsidiary corporations’ employees and consultants.

Administration: Our board of directors administered our 2006 Plan. The administrator’s powers include the power to: determine the fair market value of our common stock; select the individuals to whom options may be granted; determine the number of shares of stock covered by each option; approve forms of award agreement; determine the terms and conditions of options granted to employees and consultants (e.g., the exercise price, the times when options may be exercised (which may be based on performance criteria), any vesting acceleration or waiver of forfeiture restrictions, and any restriction or limitation regarding any option or the underlying shares of stock); reduce the exercise price of any option granted to employees and consultants to the then current fair market value of our common stock if such fair market value has declined since the date of grant; prescribe, amend and rescind rules and regulations relating to our 2006 Plan; modify or amend each option; institute an option exchange program; and make all other determinations deemed necessary or advisable for administering our 2006 Plan.

Transferability of Options: Our 2006 Plan allows for the transfer of options only (i) by will; and (ii) by the laws of descent and distribution. Only the recipient of an option may exercise such option during his or her lifetime.

Certain Adjustments: In the event of certain changes in our capitalization, our board of directors will make adjustments to one or more of (i) the number of shares that are covered by outstanding options; (ii) the exercise price of outstanding options, and (iii) the numerical share limits contained in our 2006 Plan. In the event of our complete liquidation or dissolution, recipients must be notified at least ten (10) days prior to the proposed transaction and may exercise all vested and unvested options until ten (10) days prior to such transaction; all outstanding options will terminate immediately prior to the consummation of such transaction.

Corporate Transactions: Our 2006 Plan provides that in the event of a corporate transaction, as defined in our 2006 Plan, each outstanding option will become immediately vested. In the event of a corporate transaction involving a merger or sale of assets, options will be exercisable for a period of fifteen (15) days from the date that notice of the transaction is provided; the option will then terminate upon the expiration of that period.

2011 Stock Plan

We established our 2011 Stock Plan, which we refer to as the 2011 Plan, effective as of July 19, 2011. Our 2011 Plan provided for the grant of incentive stock options, within the meaning of Section 422 of the Code, to our employees and any parent and subsidiary corporations’ employees, and for the grant of non-qualified stock options and stock purchase rights to our employees, directors and consultants and any parent and subsidiary corporations’ employees, directors and consultants. We ceased granting options under our 2011 Plan after, and the 2011 Plan terminated upon, the adoption of our 2013 Plan on August 1, 2013.

Administration: Our board of directors administered our 2011 Plan. The administrator’s powers include the power to: determine the persons to whom, and the times at which, awards shall be granted and the number of shares of our common stock subject to each award; determine the fair market value of our common stock; determine the terms, conditions and restrictions applicable to each award (e.g. the exercise price, the method of payment, the method for satisfaction of any tax withholding obligation, the timing, terms and conditions of the exercisability and vesting of the award, the time of the expiration of the award, and the effect of the recipient’s termination of service); approve forms of award agreement; amend, modify, extend, cancel or renew any award or waive any restrictions or conditions applicable to any award; accelerate, continue, extend or defer the exercisability of any award; prescribe, amend or rescind rules guidelines and policies relating to the 2011 Plan; and make all other determinations and take such other actions with respect to the 2011 Plan or any award as it deems advisable and that is consistent with applicable law, regulations and rules.

Stock Options: Our 2011 Plan allowed for the grant of incentive stock options that qualify under Section 422 of the Code only to our employees and employees of any parent or subsidiary of ours. Non-qualified stock options could be granted to our employees, directors, and consultants and those of any parent or subsidiary of ours. The exercise price of all options granted under our 2011 Plan was required to be at least equal to the fair market value of our common stock on the date of grant. The term of an option may not exceed ten (10) years, except that with respect to any employee who owns more than ten percent (10%) of the voting power of all classes of our outstanding stock or the outstanding stock of any parent or subsidiary corporation as of the grant date (i) the term of an incentive stock option must not exceed five (5) years; and (ii) the exercise price of an incentive stock option must equal at least one hundred ten percent (110%) of the fair market value of our common stock on the grant date.

After the continuous service of an employee, director or consultant terminates, he or she may exercise his or her option, to the extent vested, for the period of time specified in the award agreement. If his or her continuous service terminates for cause, however, the option shall immediately terminate. An option may not be exercised later than the expiration of its term.

Stock Purchase Rights: Our 2011 Plan allowed for the grant of stock purchase rights. Stock purchase rights are rights to purchase our common stock for at least one hundred percent (100%) of the fair market value of our common stock and which are exercisable for thirty (30) days from the date of grant. The purchase price of a stock purchase right may be paid in cash or in the form of services rendered. The board of directors may subject a stock purchase right to vesting conditions.

Transferability of Awards: Our 2011 Plan allowed for the transfer of awards only (i) by will; (ii) by the laws of descent and distribution and (iii) for non-qualified stock options, to the extent authorized by the board of directors. Only the recipient of an award may exercise such award during his or her lifetime except that non-qualified stock options may be transferred to certain trusts and certain family members.

Certain Adjustments: In the event of certain changes in our capitalization, to prevent diminution or enlargement of the benefits or potential benefits available under the 2011 Plan, the board of directors will make adjustments to one or more of (i) the number and class of shares subject to the 2011 Plan and that are covered by outstanding awards; (ii) the exercise price of outstanding awards and (iii) the incentive stock option share limit contained in the 2011 Plan.

Changes in Control: Our 2011 Plan provides that in the event of a change in control, as defined in the 2011 Plan, the board of directors, in its discretion may provide that (i) the vesting and exercisability of any outstanding awards shall accelerate; or (ii) that each outstanding award (including, at the board of directors’ discretion, unvested awards) shall be cashed out; payment due with respect to unvested awards would then be payable in accordance with the existing vesting schedule. Further, the successor corporation may assume or substitute an equivalent award for each outstanding award; if the successor corporation does not do so, awards held by recipients who have not terminated employment with us will vest in full as of the change in control.

2013 Stock Incentive Plan

In August 2013, our board of directors adopted the 2013 Stock Incentive Plan (which we refer to, as amended, as our 2013 Plan). The 2013 Plan serves as the successor to our 2011 Plan. Our 2013 Plan provides for the grant of incentive stock options, within the meaning of Section 422 of the Code, to our employees and any parent and subsidiary corporations’ employees, and for the grant of non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units and dividend equivalent rights to our employees, directors and consultants and our parent and subsidiary corporations’ employees, directors and consultants.

Shares: Upon the ratification of its amendment by our shareholders in May 2018, the 2013 Plan authorized a total of 14,452,472 shares of our common stock for issuance. In addition, the number of shares authorized for issuance pursuant to the 2013 Plan will be increased by any additional shares that would otherwise return to the 2011 Plan after the date of adoption of the 2013 Plan as a result of the forfeiture, termination or expiration of awards previously granted under the 2011 Plan. Further, our 2013 Plan provides for annual increases in the number of shares available for issuance thereunder equal to the least of (i) 3.5% of the number of shares of the Company’s common stock outstanding on the last day of the immediately preceding fiscal year or (ii) a lesser number of shares determined by the administrator. Based on and subject to the foregoing, as of January 1, 2022, including such annual increase, 23,035,601 shares of our common stock, plus any additional shares which are subject to options granted under our 2011 Plan but are forfeited or otherwise terminate or expire subsequent to January 1, 2021, were authorized for issuance pursuant to the 2013 Plan. In addition, as of January 1, 2022, under the 2013 Plan, 16,657,738 shares of common stock were issuable upon the exercise of outstanding options and settlement of RSUs granted and 6,377,863 additional shares of common stock were reserved for issuance pursuant to future grants, subject to certain limits on the number of shares subject to awards that may be made to any individual in any fiscal year.

Administration: Our board of directors or a committee of our board of directors administers our 2013 Plan. The administrator has the power to determine and interpret the terms and conditions of the awards, including the employees, directors and consultants who will receive awards, the exercise price, the number of shares subject to each such award, the vesting schedule and exercisability of the awards, the restrictions on transferability of awards and the form of consideration payable upon exercise. The administrator also has the authority to institute an exchange program whereby the exercise prices of outstanding awards may be reduced or outstanding awards may be surrendered or cancelled in exchange for other awards of the same type (which may have higher or lower exercise prices) or awards of a different type.

Stock Options: Our 2013 Plan allows for the grant of incentive stock options that qualify under Section 422 of the Code only to our employees and employees of any parent or subsidiary of ours. Non-qualified stock options may be granted to our employees, directors and consultants and those of any parent or subsidiary of ours.

The exercise price of all options granted under our 2013 Plan must at least be equal to the fair market value of our common stock on the date of grant. The term of an incentive stock option may not exceed ten (10) years, except that with respect to any employee who owns more than ten percent (10%) of the voting power of all classes of our outstanding stock or any parent or subsidiary corporation as of the grant date, the term must not exceed five (5) years and the exercise price must equal at least one hundred ten percent (110%) of the fair market value on the grant date.

After the continuous service of an employee, director or consultant terminates, he or she may exercise his or her option, to the extent vested, for the period of time specified in the option agreement. However, an option may not be exercised later than the expiration of its term.

Stock Appreciation Rights: Our 2013 Plan allows for the grant of stock appreciation rights. Stock appreciation rights allow the recipient to receive the appreciation in the fair market value of our common stock between the date of grant and the exercise date. The administrator will determine the terms of stock appreciation rights, including when such rights become exercisable and whether to pay the increased appreciation in cash or with shares of our common stock, or a combination thereof, except that the base appreciation amount for the cash or shares to be issued pursuant to the exercise of a stock appreciation right will be no less than one hundred percent (100%) of the fair market value per share on the date of grant. After the continuous service of an employee, director or consultant terminates, he or she may exercise his or her stock appreciation right, to the extent vested, only to the extent provided in the stock appreciation right agreement.

Restricted Stock Awards: Our 2013 Plan allows for the grant of restricted stock. Restricted stock awards are shares of our common stock that vest in accordance with terms and conditions established by the administrator. The administrator will determine the number of shares of restricted stock granted to any employee, director or consultant. The administrator may impose whatever conditions on vesting it determines to be appropriate. For example, the administrator may set restrictions based on the achievement of specific performance goals. Shares of restricted stock that do not vest are subject to our right of repurchase or forfeiture.

Restricted Stock Units: Our 2013 Plan allows for the grant of restricted stock units. Restricted stock units are awards that will result in payment to a recipient at the end of a specified period only if the vesting criteria established by the administrator are achieved or the award otherwise vests. The administrator may impose whatever conditions to vesting, restrictions and conditions to payment it determines to be appropriate. The administrator may set restrictions based on the achievement of specific performance goals or on the continuation of service or employment. Payments of earned restricted stock units may be made, in the administrator’s discretion, in cash, with shares of our common stock or other securities, or a combination thereof.

Dividend Equivalent Rights: Our 2013 Plan allows for the grant of dividend equivalent rights. Dividend equivalent rights are awards that entitle the recipients to compensation measured by the dividends we pay with respect to our common stock.

Transferability of Awards: Our 2013 Plan allows for the transfer of awards under the 2013 Plan only (i) by will; (ii) by the laws of descent and distribution and (iii) for awards other than incentive stock options, to the extent authorized by the administrator. Only the recipient of an incentive stock option may exercise such award during his or her lifetime.

Certain Adjustments: In the event of certain changes in our capitalization, to prevent diminution or enlargement of the benefits or potential benefits available under the 2013 Plan, the administrator will make adjustments to one or more of the number or class of shares that are covered by outstanding awards, the exercise or purchase price of outstanding awards, the numerical share limits contained in the 2013 Plan and any other terms that the administrator determines require adjustment. In the event of our complete liquidation or dissolution, all outstanding awards will terminate immediately upon the consummation of such transaction.

Corporate Transactions and Changes in Control: Our 2013 Plan provides that in the event of a corporate transaction, as defined in the 2013 Plan, each outstanding award will terminate upon the consummation of the corporate transaction to the extent that such awards are not assumed by the acquiring or succeeding corporation. Prior to or upon the consummation of a corporate transaction or a change in control, as defined in the 2013 Plan, an outstanding award may vest, in whole or in part, to the extent provided in the award agreement or as determined by the administrator in its discretion. The administrator may condition the vesting of an award upon the subsequent termination of the recipient’s service or employment within a specified period of time following the consummation of a corporate transaction or change in control. The administrator will not be required to treat all awards similarly in the event of a corporate transaction or change in control.

Plan Amendments and Termination: Our 2013 Plan will automatically terminate ten (10) years following the date it became effective (in 2023) unless we terminate it sooner. In addition, our board of directors has the authority to amend, suspend or terminate the 2013 Plan provided such action does not impair the rights under any outstanding award unless mutually agreed to in writing by the recipient and us. Our board of directors, with approval of our shareholders, subsequently amended the 2013 Plan in May 2018, and in August 2020 exercised its authority to amend the 2013 Plan by resolution without shareholder approval to provide that certain limitations on the size of individual awards would not apply to grants made to Mr. Helash with respect to his hire as the Company’s new Chief Executive Officer.

2019 Employee Stock Purchase Plan

The 2019 Employee Stock Purchase Plan (“ESPP”) was adopted by the board of directors, and approved by stockholders at the 2019 annual meeting of stockholders. The purpose of the ESPP is to allow us to provide eligible employees of the Company and its participating parents and subsidiaries with the opportunity to purchase common stock of the Company at a discount from the then current market price through accumulated payroll deductions. The ESPP, and the right of participants to make purchases thereunder, is intended to qualify under the provisions of Sections 421 and 423 of the Internal Revenue Code.

Under the ESPP, eligible employees may authorize payroll deductions of up to 15% of eligible compensation for the purchase of our common stock on specified purchase dates established by the plan administrator. Initially, we intend to have six-month offering periods, commencing January 1 and July 1 of each year, with the first offering period beginning July 1, 2019. The purchase price for shares in an offering period may be equal to either (1) 85% of the fair market value of a share of our common stock on the date of purchase or (2) 85% of the fair market value of a share of our common stock on the first day of the offering period or the purchase date, whichever is lower. Unless determined otherwise by the plan administrator, the purchase price will be equal to 85% of the fair market value of a share of our common stock on the first day of the offering period or the purchase date, whichever is lower.

Administration: The ESPP may be administered by the board of directors or a committee of the board of directors designated from time to time by resolution of the board of directors, which we refer to herein as the “plan administrator.” The plan administrator has full authority to adopt such rules and procedures as it may deem necessary for the proper plan administration and to interpret the provisions of the ESPP, including the authority to determine whether the purchase price for any purchase period will be equal to the lower of: (1) 85% of the fair market value of a share of our common stock on the date of purchase or (2) 85% of the fair market value of a share of our common stock on the first day of the offering period or the purchase date. To the extent permitted by applicable law, the Compensation Committee may delegate its authority under the ESPP.

Shares Available Under the ESPP: A total of one million (1,000,000) shares of common stock are authorized for under the ESPP, subject to adjustment in the event of a stock split, reverse stock split, stock dividend, combination or reclassification or similar event. The ESPP’s share limit will be increased effective January 1 of each year commencing January 1, 2020 by an amount equal to the least of: (i) one percent (1%) of the outstanding shares of common stock on the last day of the immediately preceding calendar year; and (ii) a lesser number of shares determined by the plan administrator.

Offering Periods: The ESPP will initially provide only one offering period during each six-month period beginning each January 1 and July 1. The plan administrator may alter the duration of future offering periods in advance without stockholder approval. Each participant is granted a separate purchase right to purchase shares of common stock for each offering period in which he or she participates. Purchase rights under the ESPP are granted on the start date of each offering period and are automatically exercised on the last day of the offering period. Each purchase right entitles the participant to purchase the whole number of shares of common stock obtained by dividing the participant’s payroll deductions for the offering period by the purchase price in effect for such period.

Eligibility: Except as described in this paragraph with respect to certain foreign employees, all employees of the Company and any designated parent or subsidiary who are regularly expected to work for more than 20 hours per week for more than five months per calendar year and who have been employed for such continuous period as the plan administrator may require (which period must be less than two years) are eligible to participate in the ESPP. An eligible employee may only join an offering period in advance of the start date of that period. Designated parents and subsidiaries include any parent or subsidiary corporations of the Company, whether now existing or hereafter organized, which elect, with the approval of the plan administrator, to extend the benefits of the ESPP to their eligible employees. Employees who are citizens or residents of a non-U.S. jurisdiction (without regard to whether he or she is also a citizen of the United States or a resident alien (within the meaning of Section 7701(b)(1)(A) of the Internal Revenue Code)) are ineligible to participate in the ESPP if his or her participation is prohibited under the laws on the applicable non-U.S. jurisdiction or if complying with the laws of the applicable non-U.S. jurisdiction would cause the ESPP or an offering to violate Section 423 of the Internal Revenue Code.

Purchase Provisions: Each participant in the ESPP may authorize periodic payroll deductions that may not exceed 15% of his or her compensation, which is defined in the ESPP to include the regular U.S. payroll base salary, unless the plan administrator determines otherwise. Unless otherwise determined by the plan administrator, compensation will not include overtime, bonuses, annual awards, other incentive payments, reimbursements or other expense allowances, loan forgiveness, fringe benefits, moving expenses, deferred compensation, or contributions (other than contributions under a 401(k) or cafeteria plan). A participant may reduce his or her rate of payroll deductions during an offering period, subject to the rules set by the plan administrator. On the last day of each offering period, the accumulated payroll deductions of each participant are automatically applied to the purchase shares of common stock at the purchase price in effect for that period.

Purchase Price: The purchase price per share at which common stock is purchased on the participant’s behalf for each offering period may be equal to either (1) 85% of the fair market value of a share of our common stock on the date of purchase or (2) 85% of the fair market value of a share of our common stock on the first day of the offering period or the purchase date, whichever is lower. Unless determined otherwise by the plan administrator, the purchase price will be equal to 85% of the fair market value of a share of our common stock on the first day of the offering period or the purchase date, whichever is lower.

Valuation: The fair market value of the common stock on a given date is the closing sales price of the common stock on one or more established stock exchanges or national market systems, including without limitation The Nasdaq Global Select Market, The Nasdaq Global Market or The Nasdaq Capital Market of The Nasdaq Stock Market LLC as of such date. As of April 15, 2022, the fair market value of a share of the Company’s common stock based on the most recent closing sales price of the common stock as reported on Nasdaq was $0.9802.

Special Limitations: The ESPP imposes certain limitations upon a participant’s right to acquire common stock, including the following limitations:

Termination of Purchase Rights: A participant’s purchase right immediately terminates upon such participant’s loss of eligible employee status, and his or her accumulated payroll deductions for the offering period in which the purchase right terminates are refunded. A participant may withdraw from an offering period by giving advance notice prior to the end of that period and his or her accumulated payroll for the offering period in which withdrawal occurs may be refunded.

Assignability: No purchase right will be assignable or transferable (other than by will or the laws of descent and distribution) and will be exercisable only by the participant.

Corporate Transaction: In the event of a proposed sale of all or substantially all of the assets of the Company or certain mergers, (each, a “Corporate Transaction”) during an offering period, all outstanding purchase rights shall be assumed by the successor corporation (or a parent or subsidiary thereof), unless the plan administrator determines, in its sole discretion, to shorten the offering period then in-effect to a new purchase date. If the plan administrator shortens the offering period then in progress to a new purchase date, the plan administrator will provide notice to each participant that (i) his or her purchase right will be automatically exercised on the new purchase date or (ii) the Company will pay to him or her, on the new purchase date, cash, cash equivalents, or property as determined by the plan administrator that is equal to the difference in the fair market value of the shares of common stock covered by his or her purchase right and the purchase price due had the purchase right been automatically exercised on the new purchase date.

Changes in Capitalization: In the event any change is made to the outstanding shares of common stock by reason of any stock split, stock dividend, recapitalization, combination of shares, exchange of shares, other increases or decreases in the number of shares of common stock outstanding effected without the Company’s receipt of consideration or similar transactions, the plan administrator may make appropriate adjustments to (i) the maximum number of securities issuable under the ESPP and (ii) the number of securities subject to each outstanding purchase right and the purchase price payable per share thereunder.

Amendment and Termination: The ESPP will terminate ten years after it becomes effective, unless terminated earlier by the plan administrator. The plan administrator may at any time terminate or amend the ESPP. To the extent required by Section 423 of the Internal Revenue Code (or any successor rule or provision or any other applicable law), the Company will seek stockholder approval of amendments in such a manner and to such a degree as so required.

401(k) Plan

We maintain a 401(k) retirement savings plan. Each participant who is a U.S. employee may contribute to the 401(k) plan, through payroll deductions, up to a statutorily prescribed annual limit imposed by the Internal Revenue Service (which limit was $19,500 in 2021). All amounts contributed by employee participants and earnings on these contributions are fully vested at all times and are not taxable to participants until withdrawn. Employee participants may elect to invest their contributions in various established funds. We may make contributions to the accounts of plan participants.

Dr. Marrone and the Company entered into a consulting services agreement on December 1, 2019 (the “Marrone Consulting Agreement”). Pursuant to the Marrone Consulting Agreement, Dr. Marrone is serving as our consultant for a period of three years following the date of her retirement, or until August 2, 2023, to advocate for the Company and its mission as our founder, and to provide transition services and other support, with the terms of such services and related deliverables to be mutually agreed between Dr. Marrone and our new CEO, Mr. Helash. As consideration for her service as a consultant, Dr. Marrone is entitled to receive a consulting fee of $19,583.33 per month (“Monthly Consulting Fee”), and has also received a one-time award of 1,250,000 RSUs (“Consulting RSUs”) under our 2013 Plan. The Consulting RSUs will vest in equal installments on each of the first three anniversaries of Dr. Marrone’s retirement date, subject to her continuous service as a consultant through the applicable vesting dates. Under the terms of the Marrone Consulting Agreement, we may terminate Dr. Marrone’s service as a consultant in connection with a change in control, and Dr. Marrone may terminate the Marrone Consulting Agreement due to our breach or default, in which case Dr. Marrone will be entitled to full acceleration of the Consulting RSUs and receive a lump sum payment equal to the sum of the then remaining Monthly Consulting Fees payable under the Marrone Consulting Agreement. We may also terminate the Marrone Consulting Agreement due to Dr. Marrone’s breach or default or for certain other grounds, in which case we shall not be obligated to make further payments under the Marrone Consulting Agreement and Dr. Marrone’s compensatory equity awards will cease to vest or terminate, as applicable.

Discussion of Director Compensation

Our non-employee director compensation policy is as follows:

Annual retainer RSUs for service as a member or chair of (with chair RSUs inclusive of RSUs for service as a member), paid on a quarterly basis:

In 2022, the board of directors determined to postpone the standard timing of our annual stockholders’ meeting during the second fiscal quarter due to the announcement of the Company’s entry into a definitive merger agreement with Bioceres Crop Solutions Corp. After consideration of the circumstances of the postponement of our annual stockholders’ meeting, on April 6, 2022, the board of directors determined to award each of our non-employee directors a grant of 25,000 RSUs valued at $25,000 based on the closing price of our common stock as quoted on Nasdaq on April 6, 2022. These RSU grants will fully vest on April 6, 2023, with pro rata vesting based on days elapsed from grant in event of a change in control event prior to that date.

In addition to its standard policies, our board of directors from time to time may consider additional payments to our directors in respect of extraordinary service by such director. During the year ended December 31, 2021, no discretionary performance awards were granted.