EXHIBIT 10.3
INCENTIVE STOCK OPTION AGREEMENT
THIS AGREEMENT is made as of the _____________ between HORIZON ORGANIC
HOLDING CORPORATION, a Delaware corporation (the "CORPORATION"), and ____ (the
"EMPLOYEE").
1. STOCK OPTION. Pursuant to the Incentive Stock Option Plan dated
October 25, 1995 of Horizon Organic Dairy, Inc., a Colorado corporation and
wholly-owned subsidiary of the Corporation, which plan as assumed by the
Corporation on May 29, 1997 (the "PLAN"), the Corporation hereby grants to the
Employee an option to purchase ________ shares of the authorized and unissued
common stock of the Corporation at a price of $6.50 per share (the "OPTION").
2. TIME AND METHOD OF EXERCISE OF THE OPTION.
(A) NOTICE. The Option may be exercised in whole or in part by delivery to
the Corporation of written notice in the form of the Notice of
Exercise of Stock Option attached as Attachment III specifying the
number of shares with respect to which the Option is exercised and by
making full payment in cash or certified check of the purchase price
for such shares.
(B) TIME OF EXERCISE. Commencing on January 10, 1999 the Option may be
exercised only to the extent of twenty-five percent of the total
number of shares covered by this Option. An additional twenty-five
percent of the total number of shares covered by this Option may be
exercised on each successive anniversary thereof. The provisions of
this subparagraph (b) are limited as otherwise provided in paragraph
6.
(C) ACCELERATED VESTING. Notwithstanding the restrictions on exercise set
forth in paragraph 2(b) above, Employee may exercise this Option for
all the shares covered by this Option in the event: (i) Employee's
employment with the Corporation terminates because of Employee's death
or disability; or (ii) the Corporation participates in a merger, share
exchange or consolidation with another corporation in which the
Corporation is not the survivor, the Corporation sells all or
substantially all its assets, or any person or party acquires control
of a majority of the issued and outstanding shares of the
Corporation's common stock.
3. ADJUSTMENT OF THE OPTION. In the event of any change in the capital
structure of the Corporation through consolidation, stock dividend, split-up or
other change, appropriate proportionate adjustment shall be made in the number
and purchase price of the shares which may be purchased by the exercise of the
option.
4. EXPIRATION OF OPTION. The Option shall expire (i) December 17, 2002;
(ii) three months following the termination, for any reason other than death or
disability, of the employment of the Employee by the Corporation; (iii) one year
following the termination, on account of death or disability, of the employment
of the Employee by the Corporation; or (iv) upon the completion of the merger or
sale of substantially all of the stock or assets of the
1.
Corporation, with or to another corporation unless the other corporation elects
to continue the Plan.
5. INVESTMENT REQUIREMENT. The Employee hereby agrees to purchase any
shares by exercise of the Option for investment purposes only and not to resell
any such shares in any manner violating the Securities Act of 1933 (the "Act"),
as amended, any rules promulgated thereunder, or any applicable state statute.
Employee hereby confirms that he has been advised of and understands the
restrictions on resale of stock by virtue of Rule 144 promulgated under the Act.
This restriction or notice thereof shall be placed upon the certificate
representing any shares purchased.
6. TRANSFERABILITY. The Option may not be transferred other than by will
or the laws of descent and distribution and may be exercised during the lifetime
of the Employee only by him.
7. NOTICE TO THE CORPORATION ON SALE OF OPTION SHARES. If Employee sells
any Option Shares (i) within two years of the date of this Agreement, or (ii)
within one year of the date the Option Shares are transferred to him pursuant to
this Agreement, Employee shall notify the Corporation of the date and terms of
such sale. Employee agrees to permit the Corporation to withhold any required
income and payroll taxes from his compensation to the extent required under
Treasury Regulation Section 1.83-6 to permit the Corporation to obtain a
deduction for the amount of compensation income realized by the Employee as a
result of such sale. This notice requirement shall be indicated by a
restrictive legend on any share certificates issued to Employee pursuant to the
terms of this Agreement.
8. BENEFIT. Except as otherwise provided herein, this Agreement shall be
binding upon and shall inure to the benefit of the parties and their respective
heirs, personal representatives, successors and assigns.
9. NO RIGHTS; NO OTHER OPTIONS. Employee hereby acknowledges that the
adoption of the Plan and the grant of the Option pursuant to this Agreement
shall not be construed as giving Employee any legal or equitable right against
the Corporation or any other person except as specifically provided in this
Agreement, nor shall this Agreement be construed as giving Employee the right to
be retained in the employment of the Corporation. Employee hereby acknowledges
that he has no right to acquire any shares of the stock of the Corporation by
the exercise of an option except as expressly set forth in this Agreement or in
another written agreement executed by Employee and the Corporation.
10. EMPLOYEE SHAREHOLDERS AGREEMENT. Employee agrees and acknowledges
that Employee shall be required to enter into an Employee Shareholders
Agreement, as a condition to the exercise of the Option, which shall restrict
the Employee's ability to pledge, transfer or sell the Corporation's stock
acquired upon exercise of the Option, shall grant the Corporation a right of
first refusal on such stock, and shall grant the Corporation certain redemption
rights on such stock. The Employee Shareholders Agreement shall be in such form
as adopted by the board of directors of the Corporation from time to time.
2.
11. NOTICE. Except as otherwise specifically provided, any notices to be
given hereunder shall be deemed given upon personal delivery or upon mailing
thereof, if mailed by certified mail, return receipt requested, to the following
addresses (or to such other address or addresses as shall be specified in any
notice given):
In the case of the Corporation:
Horizon Organic Holding Corporation
0000 Xxxxxxx Xxxx
Xxxxxxxx, XX 00000
In the case of Employee:
Name
----
______________________________
______________________________
______________________________
12. ENTIRE AGREEMENT. This Agreement, together with the documents and
exhibits referred to herein, embodies the entire understanding among the parties
and merges all prior discussions or communications among them, and no party
shall be bound by any definitions, conditions, warranties, or representations
other than as expressly stated in this Agreement or as subsequently set forth in
a writing signed by the duly authorized representatives of all of the parties
hereto.
13. INTERPRETATION. This Agreement shall be construed as a whole and in
accordance with its fair meaning. Captions are for convenience only and shall
not be used in construing meaning. This Agreement and all the schedules or
exhibits incorporated herein by reference shall be interpreted in accordance
with the laws of the State of Delaware.
14. GENDER, TENSE, ETC. Whenever the masculine, feminine or neuter
genders are used herein, as required by the context or particular circumstance,
they shall include each of the other genders as appropriate. Whenever the
singular or plural numbers are used, they shall be deemed to be the other as
required. Wherever the present or past tense is used in this Agreement and the
context or circumstances require another interpretation, the present shall
include the past and future, the future shall include the present, and the past
shall include the present.
15. SEVERABILITY. Notwithstanding paragraph 16 below, if any provision or
any part of any provision of this Agreement shall be void or unenforceable for
any reason whatsoever, then that provision shall be stricken and of no force and
effect. The remaining provisions of this Agreement, however, shall continue in
full force and effect, and to the extent required, shall be modified to preserve
their validity.
16. ALL TERMS MATERIAL. The parties hereby expressly acknowledge and
agree that each and every term and condition of this Agreement is of the essence
of this Agreement, constitutes a material part of the bargained-for
consideration without which this Agreement would not have been executed, and is
a material part of the Agreement.
3.
17. NO ORAL CHANGE; AMENDMENT. This Agreement may only be changed or
modified and any provisions hereof may only be waived in or by a writing signed
by the party against whom enforcement of any waiver, change or modification is
sought. This Agreement may be amended only in writing by mutual consent of the
parties.
IN WITNESS WHEREOF, the parties have executed this Agreement on the above
date.
ATTEST: HORIZON ORGANIC HOLDING CORPORATION
By:_________________________ By:______________________________
Its:________________________ Its:_____________________________
EMPLOYEE:
___________________ Employee's Social
___________________ Security Number:_______________________
4.
ATTACHMENT III
NOTICE OF EXERCISE OF STOCK OPTION
Horizon Organic Holding Corporation
0000 Xxxxxxx Xxxx
Xxxxxxxx, XX 00000
Ladies and Gentlemen:
The undersigned has been granted options to purchase shares of the common
stock (the "STOCK") of Horizon Organic Holding Corporation, a Delaware
corporation (the "CORPORATION") pursuant to the terms of the Incentive Stock
Option Plan (the "PLAN"), Stock Option Grant Notice ("GRANT NOTICE") and
Incentive Stock Option Agreement (the "OPTION"); and, by executing this Notice,
the undersigned hereby exercises his option to purchase an aggregate of
_________________________ shares of Stock at a price of $6.50 per share. The
exercise of the option effected hereby is subject to and pursuant to the terms
of the Plan and the Option.
The undersigned hereby exercises the Option for _________________________
shares of Stock of the shares granted to me under the Option. Cash or certified
funds in the amount of $__________ representing the exercise price for the above
shares of Stock, accompany this Notice. Please register my shares of Stock as
indicated below and mail the certificate representing the shares of Stock to me
at the following address:
_______________________________________
_______________________________________
Register shares in the following manner:
_______________________________________
_______________________________________
Mail certificate to the following address:
_______________________________________
_______________________________________
Date:___________________ ___________________________________________
[Signature]
