PLAYA MINERALS & ENERGY. INC.
INCENTIVE STOCK OPTION AGREEMENT
PLAYA MINERALS & ENERGY, INC., a Texas corporation (the "COMPANY")
hereby grants to _______________ (the "OPTIONEE") an incentive stock option (the
"INCENTIVE OPTION") to purchase a total of __________ shares (the "SHARES") of
the Company's common stock, par value $.01 per share, (the "COMMON STOCK") at
the price determined as provided herein, and in all respects subject to the
terms and conditions of the Company s 1997 Stock Option Plan (the "PLAN"), which
Plan is incorporated herein in its entirety by reference. Capitalized terms not
otherwise defined in this agreement (the "INCENTIVE OPTION AGREEMENT") shall
have the meaning given to such terms in the Plan.
1. NATURE OF OPTION. This Incentive Option is intended to qualify as an
Incentive Stock Option as defined in Section 422 of the Internal Revenue Code of
1986, as amended (the "Code").
2. EXERCISE PRICE. The exercise price of this Incentive Option is $1.98
per share of Common Stock acquired on exercise, which price is not less than
100% of the Fair Market Value, as determined in accordance with the Plan, of a
share of Common Stock on the date of grant of this Incentive Option.
3. TERM OF OPTION. This Incentive Option may not be exercised prior to
6 months from the date of grant of this Incentive Option as set forth herein nor
after the expiration of 5 years from such date of grant; provided, that this
Incentive Option may be exercised during such term only in accordance with the
terms and conditions of the Plan and this Incentive Option Agreement, subject
specifically to Section 6 of the Plan and Section 4 of this Incentive Option
Agreement. However, if the Optionee is not an employee of the Company at the
time of grant, such Incentive Option shall expire, unless exercised, at the end
of 5 years.
4. EXERCISE OF OPTION. This Incentive Option shall be exercisable
during its term, subject to the provisions of Section 3 hereof. and Section 6 of
the Plan, as follows:
(i) Vesting. For as long as the Optionee remains an Employee,
this Incentive grant shall vest cumulatively as follows: 33 1/3% of the Shares
shall vest one year from the date of grant as provided herein, and 33 1/3% of
the Shares shall vest on such date each year thereafter until all such Shares
are vested and exercisable under the terms and conditions of this Incentive
Option Agreement.
(ii) Right of Exercise. This Incentive Option is exercisable
at any time after six months from the date of grant and during the term of this
Incentive Option Agreement, in whole or in part, to acquire those Shares that
have vested in accordance with this Incentive Option Agreement; provided,
however, that this Incentive Option may only be exercisable to acquire whole
shares of Common Stock.
(iii) Method of Exercise: This Incentive Option is exercisable
by delivery of this Incentive Option. Agreement and a written notice to the
attention of the Secretary of the Company, no fewer than five business days
prior to the proposed effective date of exercise, signed by the Optionee,
specifying the number of Shares to be acquired on, and the effective date of,
such exercise. The Optionee may withdraw notice of exercise of this Incentive
Option at any time prior to close of business on the business day preceding the
proposed exercise date, and in this instance, the Company will return this
Incentive Option Agreement to the Optionee.
(iv) Method of Payment. Payment of the exercise price for the
Shares purchased under this Incentive Option shall be delivered, by certified
mail to the attention of the Secretary of the Company, on the effective date of
exercise either (i) in cash, or by certified check, bank cashier's check, or
wire transfer, or (ii) subject to the approval of the committee, in whole or in
part in shares of Common Stock owned by the Optionee and valued at their Fair
Market Value on the effective date of exercise. Such shares must be delivered to
the Secretary, duly endorsed in blank or accompanied by stock powers duly
executed in blank, and any other documents that the Secretary may require.
5. RESTRICTIONS ON EXERCISE. This Incentive Option may not be exercised
if the issuance of such Shares or the method of payment of the consideration for
such shares would constitute a violation of any applicable federal or state
securities or other laws or regulations, including any rule under Part 207 of
Title 2 of the Code of Federal Regulations ("Regulation G") as promulgated by
the Federal Reserve Board, or any rules or regulations of any stock exchange on
which the Common Stock may be listed.
This Incentive Option may only be exercised in accordance with the
terms and conditions of the Plan and this Incentive Option Agreement. If a
conflict exists between any term or provision of this Incentive Option Agreement
and a term or provision of the Plan, the applicable terms and provisions of the
Plan shall govern and prevail.
6. NON-TRANSFERABILITY OF OPTION. During the lifetime of the Optionee,
this Incentive Option may only be exercised by the Optionee. This Incentive
Option is not assignable or transferable otherwise than by will .or by the laws
of descent and distribution. The terms of this Incentive Option Agreement shall
be binding on the Optionee's heirs and successors and on the administrators and
executors of the Optionee's estate.
7. QUALIFICATION AS AN INCENTIVE STOCK OPTION. The Optionee understands
that this Incentive Option is intended to quality as an "incentive stock option"
within the meaning of Section 422 of the Code. The Optionee must meet certain
holding periods under Section 422(a) of the Code to obtain the federal income
tax treatment applicable to the exercise of Incentive Stock Options and the
disposition of shares acquired thereby. The Optionee further understands that
the Exercise Price of the Shares subject to this Incentive Option has been set
by the Option Committee of the Board of Directors at a prices that such
committee determined to be not less than 100% of the Fair Market Value, as
determined in accordance with the Plan, of a share of Common Stock on the date
of grant. The Optionee further understands and agrees, however, that the company
shall not be liable or responsible for any additional tax liability incurred by
the Optionee in the event that the Internal Revenue Service for any reason
determines that this Incentive Option does not qualify as an Incentive Stock
Option within the meaning of the Code.
8. INDEPENDENT LEGAL AND TAX ADVICE. The Optionee has and will obtain
independent legal and tax advice regarding the grant and exercise of this
Incentive Option and the disposition of any Shares acquired thereby.
9. AMENDMENT. This Incentive Option Agreement may not be amended,
modified or waived except by a written instrument signed by the party against
whom enforcement of any such modification, amendment or waiver is sought.
10. GOVERNING LAW. This Incentive Option Agreement shall be governed by
and shall be construed and enforced in accordance with the laws of the State of
Texas.
11. SUPERSEDES PRIOR AGREEMENTS. This Incentive Option Agreement
shall supersede and replace all prior agreements and
understandings, oral or written between the Company and the
Optionee regarding the grant of this Incentive Option under
the Plan.
IN WITNESS WHEREOF, the Company has, as. of July 15,.1997, caused this
Incentive Option Agreement to be executed on its behalf by its President or any
Vice President and Optionee has hereunto set his hand as of .the same date,
which date is the date of grant of this. Incentive Option.
PLAYA MINERALS & ENERGY, INC. OPTIONEE
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John N. Ehrman
President