Exhibit 10.3
Option Agreement under the Company's Fiscal Year 1994 Incentive Plan
This OPTION AGREEMENT is made this _____ day of ___________ between Bion
Environmental Technologies, Inc., a Colorado Corporation ("Company"), 000 00xx
Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx 00000, and
_______________ ("Optionee").
In consideration of the mutual covenants hereinafter set forth and for other
good and valuable consideration, the parties hereto agree as follows:
1. Grant of Option. Pursuant to the provisions of the Company's Fiscal Year
1994 Incentive Plan ("Plan"), the Company hereby grants to the Optionee, subject
to the terms and conditions of the Plan (as it presently exists and as it may
hereafter be amended), and subject to the further terms and conditions
hereinafter set forth, the right and option to purchase from the Company all or
any part of an aggregate of ________ shares of the Company's no par value common
stock ("Common Stock") at the purchase price of $2.50 per share ("Shares"), such
option to be exercised only as hereinafter provided. The option ("Option") is
not intended to be, and will not be treated as, an Incentive Stock Option within
the meaning of Section 422A of the Internal Revenue Code of 1986, as amended.
The number of Shares with respect to which the Option is exercisable, and the
purchase price with respect to each Share to be acquired pursuant to the
exercise of the Option herein granted, each are subject to adjustment under
certain circumstances as more fully set forth in the Plan. The term "Common
Stock" as used herein shall include any other class of stock or other securities
resulting from any such adjustment.
2. Exercise of Option. The Option herein granted shall be exercisable
commencing on January 1, 2000 and to the extent that it has not theretofore been
exercised, shall expire at 11:59 P.M. on December 31, 2001.
3. Option Exercise. Subject to the terms and conditions of Section 2 above,
the Option granted hereunder may be exercised in whole or in any part, and may
be exercised in part from time to time, all subject to the limitations on
exercise set forth herein and in the Plan, provided that no partial exercise of
the Option shall be for an aggregate exercise price of less than $1,000 unless
such partial exercise is for the last remaining unexercised portion of the
Option. The partial exercise of the Option shall not cause the expiration,
termination or cancellation of the remaining portion thereof. The Option may be
exercised by delivering written notice, in the form attached hereto, to the
principal office of the Company, to the attention of its Secretary, no less than
three business days in advance of the effective date of the proposed exercise.
Such notice shall be accompanied by this Option Agreement and shall specify the
number of Shares of Common Stock with respect to which the Option is being
exercised and the effective date of the proposed exercise, and shall be signed
by the Optionee. The Optionee may withdraw such notice at any time prior to the
close of business on the business day immediately preceding the effective date
of the proposed exercise, in which case this Option Agreement shall be returned
to the Optionee.
4. Payment of the Purchase Price. Payment for Shares of Common Stock to be
purchased upon the exercise of the Option shall be made on the effective date of
such exercise either (i) in cash, by certified check, bank cashier's check or
wire transfer, or (ii) subject to the approval of the Incentive Plan Committee,
in Shares of Common Stock owned by the Optionee and valued at their fair market
value on the effective date of such exercise (determined in accordance with the
method for establishing fair market value as set forth in the Plan), or partly
in Shares of Common Stock with the balance in cash, by certified check, bank
cashier's check or wire transfer. Any payment in Shares of Common Stock shall be
effected by the delivery of such Shares to the Secretary of the Company, duly
endorsed in blank or accompanied by stock powers duly executed in blank,
together with any other documents and evidences as the Secretary of the Company
shall require from time to time.
The Option may be exercised by a broker-dealer acting on behalf of the
Optionee if (i) the broker-dealer has received from the Optionee or the Company
a fully-and-duly-endorsed agreement evidencing the Option and instructions
signed by the Optionee requesting that the Company deliver the Shares of Common
Stock subject to the Option to the broker-dealer on behalf of the Optionee and
specifying the account into which such Shares should be deposited, (ii) adequate
provision has been made with respect to the payment of any withholding taxes due
upon such exercise and (iii) the broker-dealer and the Optionee have otherwise
complied with Section 220.3(e)(4) of Regulation T, 12 CFR Part 220.
Certificates for Shares of Common Stock purchased upon the exercise of the
Option shall be issued in the name of the Optionee and delivered to the Optionee
as soon as practicable following the effective date on which the Option is
exercised.
5. Effect of Termination of Employment. If Optionee was an employee of the
Company at the time the Option was granted, this Option shall be subject to
termination in accordance with the Plan in the event that the employment of the
Optionee with the Company shall terminate.
6. Acceleration of Exercise Date Upon Change in Control. Upon the occurrence
of a "change in control" (as defined in the Plan) the Option shall become fully
and immediately exercisable and shall remain exercisable until its expiration,
termination or cancellation pursuant to the terms of the Plan and this Option
Agreement.
7. Investment Representations. The Optionee hereby represents and warrants
that:
(a) Any Shares purchased upon exercise of the Option shall be acquired
for the Optionee's account for investment only, and not with a view to, or for
sale in connection with, any distribution of the Shares in violation of the
Securities Act of 1933, as amended ("Securities Act"), any rule or regulation
under the Securities Act, or any applicable state securities law.
(b) The Optionee has had such opportunity as the Optionee has deemed
adequate to obtain from representatives of the Company such information as is
necessary to permit the Optionee to evaluate the merits and risks of his
investment in the Company.
(c) The Optionee is able to bear the economic risk of holding any
Shares acquired pursuant to the exercise of the Option for an indefinite period.
Upon exercise of the Option, the Optionee shall be deemed to have
reaffirmed, as of the date of exercise, the representations made in this Section
7.
8. Securities Law Matters. The Company shall be under no obligation to
effect the registration pursuant to the Securities Act of any Shares to be
issued pursuant the Option or to effect similar compliance under any state
securities laws. Notwithstanding anything to the contrary, the Company shall not
be obligated to cause to be issued or delivered any certificates evidencing the
Shares pursuant to the Option unless and until the Company is advised by its
counsel that the issuance and delivery of such certificates is in compliance
with all applicable laws, regulations of governmental authority and the
requirements of any securities exchange on which the Shares of Common Stock are
traded. The Company may, in its sole discretion, defer the effectiveness of any
exercise of the Option in order to allow the issuance of Shares of Common Stock
pursuant to the Option to be made pursuant to registration or an exemption from
the registration or other methods for compliance available under federal or
state securities laws. The Company shall inform the Optionee in writing of its
decision to defer the effectiveness of the exercise of the Option. During the
period that the effectiveness of the exercise of the Option has been deferred,
the Optionee may, by written notice, withdraw such exercise and obtain the
refund of any amount paid with respect thereto.
9. Withholding Taxes. The Company's obligation to deliver Shares upon
exercise of the Option shall be subject to the Optionee's satisfaction of all
applicable federal, state and local tax withholding requirements, in accordance
with the provisions of the Plan.
10. Legend on Stock Certificate. If appropriate, all stock certificates
representing Shares of Common Stock issued to the Optionee upon exercise of the
Option shall have affixed thereto two legends substantially in the following
forms, in addition to any other legend required by applicable law, unless such
shares have been acquired by Optionee pursuant to an effective registration
statement under the Securities Act of 1933:
"The shares of stock represented by this certificate have not been
registered under the Securities Act of 1933, as amended, and may not be
transferred, sold or otherwise disposed of in the absence of an effective
registration statement with respect to the shares evidenced by this certificate,
or an opinion of counsel satisfactory to the Company to the effect that
registration under such Act is not required."
"In addition, these shares may not be sold or transferred pursuant to
Regulation S under the Securities Act of 1933, or pursuant to any other rule or
regulation pertaining to the sale or transfer of securities to a non-U.S. person
or entity, which may have the effect of reducing Rule 144's holding period to
less than one year."
11. Non-Transferability. The Option shall not be assignable or transferable
otherwise than by will or by the laws of descent and distribution. During the
lifetime of the Optionee, the Option shall be exercisable only by him.
12. Rights of Stockholder. The Optionee shall have no rights as a
stockholder with respect to any Shares subject to the Option until the date of
the issuance of a stock certificate with respect to such Shares. Except as
otherwise expressly provided in the Plan, no adjustment to the Option shall be
made for dividends or other rights for which the record date occurs prior to the
date such stock certificate is issued.
13. No Special Employment Rights Created. Nothing contained in the Option or
the Plan shall confer upon the Optionee any right with respect to the
continuation of his employment, if any, by the Company or interfere in any way
with the right of the Company, subject to the terms of any separate employment
agreement to the contrary, at any time to terminate such employment or to
increase or decrease the compensation of the Optionee from the rate in existence
at the time of the grant of the Option.
14. Failure to Comply. The failure by the Optionee to comply with any of the
terms and conditions of the Option or of the Plan, unless such failure is
remedied by the Optionee within ten days after having been notified of such
failure by the Incentive Plan Committee, shall be grounds for the cancellation
and forfeiture of the Option, in whole or in part, as the Committee, in its
absolute discretion, may determine.
15. Binding Effect. The Optionee hereby acknowledges receipt of a copy of
the Plan and agrees to be bound by all the terms and provisions thereof. The
terms of the Plan as it presently exists, and as it may hereafter be amended,
are deemed incorporated herein by reference, and any conflict between the terms
of this Option Agreement and the provisions of the Plan shall be resolved by the
Committee, whose determination shall be final and binding on all parties.
16. Notices. Any notice required or permitted hereunder shall be given in
writing and shall be deemed effectively given upon personal delivery or by
registered or certified mail, or facsimile, addressed to a party at the address
set forth herein or at such other address as such party may designate by notice
in accordance with this paragraph.
IN WITNESS WHEREOF, the Company has caused this Option Agreement to be
executed by its duly authorized officer and the Optionee has executed this
Agreement as of the day and year first above written.
BION ENVIRONMENTAL TECHNOLOGIES, INC.
By:
Authorized Officer
Optionee, _________________, hereby acknowledges receipt of this Option
Agreement for ____________ (BION) shares @$2.50 per share exercisable commencing
on January 1, 2000 and expiring on December 31, 2001.
__________________________________
__________________________________
(Optionee Signature) Date
OPTION EXERCISE FORM
TO: BION ENVIRONMENTAL TECHNOLOGIES, INC.
Attn: Secretary
000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
RE: Notice of Intention to Exercise Option
(___________ shares @ $2.50/share, exercise period 1/01/00
through 12/31/01)
I, ______________, am the Optionee under the Non Qualified Stock Option
Agreement ("Agreement") entered into with Bion Environmental Technologies, Inc.
("Company") on _____________. Pursuant to such Agreement, I hereby provide you
with official notice that I elect to partially/fully (circle one) exercise my
Option to purchase Shares of
the Company's Common Stock as follows:
Number of Shares: ______________________
Effective Date of Exercise:________________
I understand that payment for the Shares of Common Stock to be purchased by me
pursuant to the exercise of the Option must be made on the effective date of
exercise in accordance with the Plan. I further understand and agree that the
Company shall have the right to require me to remit to the Company in cash an
amount sufficient to satisfy federal, state and local withholding tax
requirements, if any, attributable to my exercise of the Option prior to the
delivery of any certificate or certificates for such Shares.
I understand that this election to exercise the Option is irrevocable once it is
effective in accordance with the terms and conditions of the Plan.
The certificate for the Shares should be delivered to me at the address listed
below:
NAME OF OPTIONEE:
Please typewrite or print
ADDRESS: _________________________________________________
_________________________________________________
_________________________________________________
SOCIAL SECURITY NUMBER: _____________________________
DATED: ________________, ______
Signature of Optionee
