6
BION ENVIRONMENTAL TECHNOLOGIES, INC.
1994 INCENTIVE PLAN
NON QUALIFIED STOCK OPTION AGREEMENT
This OPTION AGREEMENT is made this 31st day of December, 1996,
between Bion Environmental Technologies, Inc., a Colorado corporation
("Company"), 000 00xx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx 00000, and
Xxxxx X. Xxxxx, 0000 Xxxx Xxx. X., Xxxxxx Xxxx, XX 00000 ("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
50,000 shares of the Company's no par value common stock ("Common
Stock") at the purchase price of $6.25 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 December 31, 1996, and, to the extent that
it has not theretofore been exercised, shall expire at 11:59 P.M. on
May 30, 1997.
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 a
legend substantially in the following form, 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."
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.
OPTIONEE: BION ENVIRONMENTAL TECHNOLOGIES, INC.
/s/ Xxxxx X. Xxxxx By: /s/ Xxx Xxxxxxxx
Xxxxx X. Xxxxx Xxx Xxxxxxxx, Chief Executive Officer
OPTION EXERCISE FORM
TO: BION ENVIRONMENTAL TECHNOLOGIES, INC.
000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attention: Secretary
RE: Notice of Intention to Exercise Option
I am the Optionee under the Non Qualified Stock Option Agreement
("Agreement") entered into with Bion Environmental Technologies, Inc.
("Company") on December 31, 1996. Pursuant to such Agreement, I
hereby provide you with official notice that I elect to 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: ______________, 19___ ______________________________
Signature of Optionee