HMZ METALS, INC.
2000 STOCK OPTION PLAN
INCENTIVE STOCK OPTION AGREEMENT
This Incentive Stock Option Agreement (this "Agreement") is made and
entered into by and between HMZ Metals, Inc., a Delaware corporation formerly
known as Biogan International, Inc. (the "Company"), and ______________ (the
"Optionee"), as of ____________ ("Date of Grant"). If the Optionee is presently
or subsequently becomes employed by a subsidiary of the Company, the term
"Company" shall be deemed to refer collectively to HMZ Metals, Inc. and the
subsidiary or subsidiaries that employs the Optionee.
R E C I T A L S
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A. The Board of Directors of the Company has adopted the HMZ Metals,
Inc. 2000 Stock Option Plan ("Plan") as an employee incentive to retain key
employees, directors, and consultants of the Company and to enhance the ability
of the Company to attract new employees, directors and consultants whose
services are considered unusually valuable by providing an opportunity to have a
proprietary interest in the success of the Company.
B. The Committee established to administer the Plan ("Committee") has
approved the granting of options to the Optionee pursuant to the Plan to provide
an incentive to the Optionee to focus on the long-term growth of the Company.
AGREEMENT
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In consideration of the mutual covenants and conditions hereinafter set
forth and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Company and the Optionee agree as follows:
1. GRANT OF OPTION. The Company hereby grants to the Optionee
the right and option ("Option") to purchase an aggregate of ___________ shares
(such number being subject to adjustment as provided in paragraph 10 below and
Section 13 of the Plan) of the Common Stock of HMZ Metals, Inc. ("Stock") on the
terms and conditions herein set forth. This Option may be exercised in whole or
in part and from time to time as hereinafter provided. The Option granted under
this Agreement is intended to be an "incentive stock option" as set forth in
Section 422 of the Internal Revenue Code of 1986, as amended ("Code").
2. VESTING OF OPTION. The Option shall vest and become
exercisable in accordance with the schedule below:
For each of ___________ months, beginning on _______________,
and ending on _________________, ________ shares subject to
the Option shall become vested and exercisable. On
____________, _________ shares subject to the Option shall be
vested and exercisable, at which time 100% of the Stock
subject to the Option shall be vested and exercisable.
3. PURCHASE PRICE. The price at which the Optionee shall be
entitled to purchase the Stock covered by the Option shall be $______ per share,
which price is 100% of the Fair Market Value (as defined in the Plan) of the
Stock on the Date of Grant.
4. TERM OF OPTION. The Option granted under this Agreement
shall expire, unless otherwise exercised, ten years from the Date of Grant,
through and including the normal close of business of the Company on
______________ ("Expiration Date"), subject to earlier termination as provided
in paragraph 8 below.
5. EXERCISE OF OPTION. The Option may be exercised by the
Optionee as to all or any part of the Stock then vested by delivery to the
Company of written notice of exercise and payment of the purchase price as
provided in paragraphs 6 and 7 below.
6. METHOD OF EXERCISING OPTION. Subject to the terms and
conditions of this Agreement, the Option may be exercised by timely delivery to
the Company of written notice, which notice shall be effective on the date
received by the Company ("Effective Date"). The notice shall state the
Optionee's election to exercise the Option, the number of shares in respect of
which an election to exercise has been made, the method of payment elected (see
paragraph 7 below), the exact name or names in which the shares will be
registered and the taxpayer identification number of the Optionee. The notice
shall be signed by the Optionee and shall be accompanied by payment of the
purchase price of such shares. If the Option is exercised by a person or persons
other than Optionee pursuant to paragraph 8 below, the notice shall be signed by
the other person or persons and shall be accompanied by proof acceptable to the
Company of the legal right of the person or persons to exercise the Option. All
shares delivered by the Company upon exercise of the Option shall be fully paid
and nonassessable upon delivery.
7. METHOD OF PAYMENT FOR OPTIONS. Payment for shares purchased
upon the exercise of the Option shall be made by the Optionee in cash or such
other method permitted by the Committee and communicated to the Optionee in
writing prior to the date the Optionee exercises all or any portion of the
Option.
8. TERMINATION OF EMPLOYMENT.
8.1 GENERAL. If the Optionee terminates employment
for any other reason than for Cause (as that term is defined in the Plan) or
voluntary resignation of any agreement to remain in the employ of the Company,
then the Optionee may at any time within three months after the effective date
of termination of employment exercise the Option to the extent that the Optionee
was entitled to exercise the Option at the date of termination, provided that in
no event shall the Option be exercisable after the Expiration Date. If the
Optionee terminates employment for Cause or voluntary resignation of any
agreement to remain in the employ of the Company, the Optionee may at any time
within 30 days after the effective date of such termination of employment
exercise the Option to the extent that the Optionee was entitled to exercise the
Option at the date of termination, provided that in no event shall the Option,
or any part thereof, be exercisable after the Expiration Date.
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8.2 DEATH OR DISABILITY OF OPTIONEE. In the event of
the death or Disability (as that term is defined in the Plan) of the Optionee
within a period during which the Option, or any part thereof, could have been
exercised by the Optionee, including three months after termination of
employment other than for Cause or voluntary resignation of any agreement to
remain in the employ of the Company ("Option Period"), the Option shall lapse
unless it is exercised within the Option Period and in no event later than 12
months after the date of the Optionee's death or Disability by the Optionee or
the Optionee's legal representative or representatives in the case of a
Disability or, in the case of death, by the person or persons entitled to do so
under the Optionee's last will and testament or if the Optionee fails to make a
testamentary disposition of the Option or shall die intestate, by the person or
persons entitled to receive the Option under the applicable laws of descent and
distribution. An Option may be exercised following the death or Disability of
the Optionee only if the Option was exercisable by the Optionee immediately
prior to his death or Disability. In no event shall the Option be exercisable
after the Expiration Date. The Committee shall have the right to require
evidence satisfactory to it of the rights of any person or persons seeking to
exercise the Option under this paragraph 8 to exercise the Option.
9. NONTRANSFERABILITY. The Option granted by this Agreement
shall be exercisable only during the term of the Option provided in paragraph 4
above and, except as provided in paragraph 8 above, only by the Optionee during
his lifetime and while an Optionee of the Company. This Option shall not be
transferable by the Optionee or any other person claiming through the Optionee,
either voluntarily or involuntarily, except by will or the laws of descent and
distribution or such other events as are set forth in the Plan.
10. ADJUSTMENTS IN NUMBER OF SHARES AND OPTION PRICE. In the
event of a stock dividend or if the Stock is changed into or exchanged for a
different number or class of shares of stock of the Company or of another
corporation, whether through reorganization, recapitalization, stock split-up,
combination of shares, merger or consolidation, there shall be substituted for
each remaining share of Stock then subject to this Option the number and class
of shares of stock into which each outstanding share of Stock is to be so
exchanged, all without any change in the aggregate purchase price for the shares
then subject to the Option, all as set forth in Section 13 of the Plan.
11. DELIVERY OF SHARES. No shares of Stock shall be delivered
upon exercise of the Option until (i) the purchase price has been paid in full
in the manner herein provided; (ii) applicable taxes required to be withheld
have been paid or withheld in full; (iii) approval of any governmental authority
required in connection with the Option, or the issuance of shares thereunder,
has been received by the Company; and (iv) if required by the Committee, the
Optionee has delivered to the Committee an Investment Letter in form and content
satisfactory to the Company as provided in paragraph 12 below.
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12. SECURITIES ACT. The Company shall not be required to
deliver any shares of Stock pursuant to the exercise of all or any part of the
Option if, in the opinion of counsel for the Company, the issuance would violate
the Securities Act of 1933, as amended (the "Securities Act") or any other
applicable federal or state securities laws or regulations. The Committee may
require that the Optionee, prior to the issuance of any shares pursuant to
exercise of the Option, sign and deliver to the Company a written statement
("Investment Letter") stating (i) that the Optionee is purchasing the shares for
investment and not with a view to the sale or distribution thereof; (ii) that
the Optionee will not sell any shares received upon exercise of the Option or
any other shares of the Company that the Optionee may then own or thereafter
acquire except either (a) through a broker on a national securities exchange or
(b) with the prior written approval of the Company; and (iii) containing such
other terms and conditions as counsel for the Company may reasonably require to
assure compliance with the Securities Act or other applicable federal or state
securities laws and regulations. The Investment Letter shall be in form and
content acceptable to the Committee in its sole discretion.
13. FEDERAL AND STATE TAXES. Upon exercise of the Option, or
any part thereof, the Optionee may incur certain liabilities for federal, state
or local taxes and the Company may be required by law to withhold taxes for
payment to taxing authorities. Upon determination by the Company of the amount
of taxes required to be withheld, if any, with respect to the shares to be
issued pursuant to the exercise of the Option, the Optionee shall pay all
federal state and local tax withholding requirements to the Company.
14. DEFINITIONS; COPY OF PLAN. To the extent not specifically
provided herein, all capitalized terms used in this Agreement have the same
meanings ascribed to them in the Plan. By the execution of this Agreement, the
Optionee acknowledges receipt of a copy of the Plan.
15. ADMINISTRATION. This Agreement shall at all times be
subject to the terms and conditions of the Plan and the Plan shall in all
respects be administered by the Committee in accordance with the terms of and as
provided in the Plan. The Committee shall have the sole and complete discretion
with respect to all matters reserved to it by the Plan and decisions of the
majority of the Committee with respect thereto and to this Agreement shall be
final and binding upon the Optionee and the Company. In the event of any
conflict between the terms and conditions of this Agreement and the Plan, the
provisions of the Plan shall control.
16. CONTINUATION OF EMPLOYMENT. This Agreement shall not be
construed to confer upon the Optionee any right to continue in the employ of the
Company and shall not limit the right of the Company, in its sole discretion, to
terminate the employment of the Optionee at any time.
17. OBLIGATION TO EXERCISE. The Optionee shall have no
obligation to exercise any option granted by this Agreement.
18. GOVERNING LAW. This Agreement shall be interpreted and
administered under the laws of the State of California.
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19. AMENDMENTS. This Agreement may be amended only by a
written agreement executed by the Company and the Optionee. The Company and the
Optionee acknowledge that changes in federal tax laws enacted subsequent to the
Date of Grant, and applicable to stock options, may provide for tax benefits to
the Company or the Optionee. In any such event, the Company and the Optionee
agree that this Agreement may be amended as necessary to secure for the Company
and the Optionee any benefits that may result from such legislation. Any
amendment shall be made only upon the mutual consent of the parties, which
consent (of either party) may be withheld for any reason.
20. TAX INFORMATION AND NOTICE OF DISQUALIFYING DISPOSITION.
This Option is intended to be eligible for treatment as an Incentive Stock
Option under Section 422 of the Code. Whether this Option will receive that tax
treatment will depend, in part, on the actions by the Optionee after exercise of
this Option. For example, if the Optionee disposes of any of the Stock acquired
under this Option within two years after the Date of Grant or within one year of
the date of exercise of this Option, the Optionee may lose the benefits of Code
Section 422. Accordingly, the Company makes no representations by way of the
Plan, this Agreement, or otherwise, with respect to the actual tax consequences
of the grant or exercise of this Option or the subsequent disposition of the
Stock acquired under this Option.
If the Optionee sells or makes a disposition (within the
meaning of Section 422 of the Code) of any of the Stock acquired under this
Option prior to the later of (i) one year from the date of exercise of this
Option, or (ii) two years from the Date of Grant, the Optionee agrees to give
written notice to the Company of the disposition. The notice shall include the
Optionee's name, the number, exercise price and exercise date of the shares of
Stock disposed of, and the date of disposition.
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed by its officer thereunto duly authorized and the Optionee has hereunto
set his or her hand as of the date first written above.
HMZ METALS, INC.
By: _______________________________ _______________________________
Xxxxxx XxXxxxxxxx, President Optionee
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