STOCK OPTION AGREEMENT
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(Incentive Stock Option)
THIS STOCK OPTION AGREEMENT is made as of __________ between ORGANIC FOOD
PRODUCTS, INC. a California corporation ("Company"), and __________________
("Optionee"), under the following circumstances:
A. Optionee is a key employee of Company whose knowledge of the operations
of Company and expertise is instrumental for Company.
B. Company has established its 1995 Stock Option Plan (the "Plan"), a copy
of which is attached hereto. The Board of Directors of Company, sitting as the
Stock Option Committee under the Plan, has approved the issuance of the stock
option described herein to Optionee.
C. In accordance with Article III, Section 9 of the Plan, the parties
hereto intend that to the maximum extent permissible, the option described
herein shall be an incentive stock option (an "lncentive Stock Option") as
described in Section 422 of the Internal Revenue Code (the "Code").
NOW, THEREFORE, the parties hereto agree as follows:
1. Grant of Option. In consideration of Optionee's continuing to
render services to Company, Company hereby grants Optionee an option to purchase
_________________ shares of Company's Common Stock (the "Shares"). This option
is granted upon the following terms and conditions:
a. Vesting. This option vests according to the following
schedule:
Number of Shares Vesting Date
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Notwithstanding the foregoing, the option shall become immediately
exercisable as to all of the Shares during the ten (10) day period immediately
preceding a change in control (as defined below). Company shall give Optionee
written notice of a proposed change in control at least ten (10) days prior to a
scheduled change in control, during which time Optionee may exercise the option
as to all of the Shares.
For purposes of this paragraph, change in control shall mean (i)
consolidation or merger of Company in which Company is not the surviving entity,
or (ii) the sale of substantially all of the assets of Company.
b. Option Price. The option price shall be $_______ per share.
c. Restriction on Transfer. This option is not transferable by
Optionee otherwise than by will or the laws of descent and distribution
applicable upon Optionee's death and is exercisable, during Optionee's lifetime,
only by Optionee. This option may not be transferred, assigned, pledged, or
hypothecated by Optionee during Optionee's lifetime, whether by operation of law
or otherwise, and is not subject to execution, attachment or similar process. If
an attempted transfer, assignment, pledge, or hypothecation is made in violation
of this provision, then Optionee's rights under this Stock Option Agreement
shall automatically terminate without notice.
d. Term. Unless earlier terminated as herein provided, this
option shall expire and terminate ten (10) years from the date hereof.
e. Exercise After Termination of Employment. Except as otherwise
provided herein, all rights of Optionee under this option, to the extent that it
has not been exercised, shall terminate upon the termination of Optionee' 5
employment for any reason (including without limitation death or disability). If
Optionee's employment is terminated by Optionee or Company, then except as
hereinafter provided, for a period of ninety (90) days following the date of
such employment termination, Optionee shall retain the right to exercise all or
a portion of the rights accrued under subparagraph 1.a above as of the date of
employment termination.
f. Exercise After Death or Disability. If Optionee's employment
is terminated by reason of Optionee's death or Optionee's permanent disability,
as defined in Section 22(e) of the Code or in any successor statute or
regulation, or if Optionee dies within three (3) months after any other
termination of his employment, then for a period of one (1) year after Optionee
dies or becomes permanently disabled this option may be exercised as to all or a
portion of the rights accrued under subparagraph 1.a above as of the date of
employment termination.
g. Manner of Exercise. This option shall be exercised by
delivering to the Company at its principal office a written notice stating the
number of shares as to which the option is exercised. The written notice must be
accompanied by payment of the full option price for such shares in cash.
h. Additional Documents. Optionee shall make such representations
and execute such additional documents as Company, in its absolute discretion,
deems necessary or advisable to effect compliance with all applicable provisions
of the Securities Act of 1933, as amended, and any other federal or state
securities laws or regulations. Such representations may include the
representation of Optionee that the purchase of Common Stock, under this Option,
shall be for investment purposes only and not with a view to resale or for sale
in connection with any distribution.
i. Stock Option Plan. This option is granted pursuant to the Plan
and is subject to the terms, conditions and limitations in the Plan. The terms
"an Optionee" and "such Optionee" and similar references in the Plan shall mean
the Optionee under this Agreement. The terms "an Option," "any Option," "such
Optionee's Options," "such Options" and "each Option" and similar references in
the Plan shall mean the option granted pursuant to this Agreement.
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j. Representations of Optionee. Optionee acknowledges and
represents to Company that Optionee, as a key employee of Company, (i) has had
full access to the books and records of Company concerning the operations and
financial condition of Company, (ii) is fully aware of Company's operations and
financial condition, and (iii) is satisfied that he has obtained any and all
information about Company that he desires in connection with the issuance of
this option.
2. No Stockholder Rights. Optionee shall have no rights as a
stockholder with respect to the shares covered by this option until the date of
the issuance to him or her of a stock certificate or certificates therefor, and
no adjustment will be made for dividends or other rights for which the record
date is prior to the date such certificate is issued.
3. No Employment Agreement. The granting of this option shall not
constitute or be evidence of any agreement or understanding, express or implied,
that Company will employ Optionee for any period of time or in any position, or
at any particular rate of compensation.
4. Adjustment of Number of Shares. In the event of any reorganization,
recapitalization, stock dividend, stock split, or a merger or consolidation of
Company with another corporation in which Company is the surviving corporation,
or other change in the corporate structure or capitalization affecting Company's
present capital stock (each, a "Capital Event"), appropriate adjustment shall be
made by the Board of Directors in the number and kind of shares, and the option
price of shares which are or may become subject to options granted or to be
granted hereunder so that Optionee may receive, on exercise of this option, the
number of shares of Company to which Optionee would have been entitled on such
Capital Event if this option had been exercised immediately before such Capital
Event. Any determination or interpretation made by the Board of Directors in
connection with this provision shall be final and binding upon Company and
Optionee.
5. Notice. Any notice required or permitted under this Agreement shall
be given in writing by personal delivery or upon deposit in the United States
mall, by registered or certified mall, addressed to Optionee at the address
shown on Company's employment records and to Company at the address of its
principal corporate offices (attention: President) or at such other address as
such party may designate by written notice to the other party hereto.
6. Governing Law. This Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the State of California.
7. Entire Agreement. This Agreement (including the Plan, which is
attached hereto) constitutes the full and entire understanding and agreement
between the parties and supersedes all prior agreements with respect to the
subject matter hereof. No amendment or modification of this Agreement shall be
binding unless set forth in writing and signed by each party hereto.
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IN WITNESS WHEREOF, the parties hereto have executed this Stock Option
Agreement as of the day and year first hereinabove written.
ORGANIC FOOD PRODUCTS, INC.,
a California corporation
By:
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Its:
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"Company"
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"Optionee"
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