INCENTIVE STOCK OPTION
FOR
1. Grant of Option. As of the Date of Grant the Company
hereby grants to Optionee this Incentive Stock Option to acquire
( ) Shares pursuant to this Option,
WHICH OPTION SHALL BE SUBJECT TO, AND HEREBY INCORPORATES BY
REFERENCE, ALL OF THE PROVISIONS OF THE PLAN; provided, however,
that where the actual written provisions of this Option differ
from the provisions of the Plan, such provisions of this Option
shall control.
2. Definitions. As used herein, the following terms shall
have the meaning indicated:
(a) "Board" shall mean the Board of Directors of the
Company.
(b) "Cause" shall mean the Optionee's willful misconduct or
gross negligence, as reasonably determined by the Committee in
its sole discretion.
(c) "Code" shall mean the Internal Revenue Code of 1986, as
now or hereafter amended.
(d) "Committee" shall mean the committee, if any, appointed
by the Board pursuant to Section 20 of the Plan.
(e) "Company" shall mean Hitox Corporation of America.
(f) "Date of Grant" shall mean .
(g) "Disability" shall mean an Optionee's present
incapacity resulting from an injury or illness (either mental or
physical) which, in the reasonable opinion of the Committee based
on such medical evidence as it deems necessary, will result in
death or can be expected to continue for a period of at least
twelve (12) months and will prevent the Optionee from performing
the normal services required of the Optionee by the Company,
provided, however, that such disability did not result, in whole
or in part: (i) from chronic alcoholism; (ii) from addiction to
narcotics; (ii) from a felonious undertaking; or (iv) from an
intentional self-inflicted wound.
(h) "Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended (the "Exchange Act").
(i) "Fair Market Value" of a Share on a particular date
shall be the closing price of Stock on such date (or, if the date
is not a business day, then on the next preceding business day),
which shall be (i) if the Stock is listed or admitted for trading
on any United States national securities exchange, the last
reported sale price of Stock on such exchange as reported in any
newspaper of general circulation, (ii) if the Stock is quoted on
NASDAQ or any similar system of automated dissemination of
quotations of securities prices in common use, the mean between
the closing high bid and low asked quotations for such day of the
Stock on such system or (iii) if neither clause (i) nor (ii) is
applicable, a value determined by any fair and reasonable means
prescribed by the Board.
(k) "Option" (when capitalized) shall mean this Option.
(l) "Optionee" shall mean
, and any person who succeeds to the rights of such person
by reason of the death of such person.
(m) "Option Price" shall mean ($
) per Share.
(n) "Plan" shall mean the 1990 Incentive Plan For Hitox
Corporation of America.
(o) "Share(s)" shall mean a share or shares of the common
stock, par value twenty-five cents ($0.25) per share, of the
Company, and the Shares subject to this Option shall be adjusted
as provided in Section 16 of the Plan where applicable.
3. Conditions for Grant of Options. (a) The grant of
this Option does not confer upon Optionee any right to remain in
the employ of the Company.
(b) The Committee in its sole discretion shall determine in
each case whether periods of military or government service shall
constitute a continuation of employment for the purposes of this
Option.
4. Description of Option. This Option is an Incentive
Stock Option.
5. Vesting Schedule. [Alternate: This Option is vested
and nonforfeitable prior to its termination date.]The Shares
which may be acquired through the exercise of this Option are
limited to those discribed in the vesting schedule below opposite
the number of full which have elapsed between the Date
of Grant and the date of referance, and all referances herein to
the exercisability of the Option, unless the context requires a
different interpetation, shall refer to the portion of the Option
which is exercisable at the time of referance in accordance with
the vesting schedule below:
Subsequent to Date of Grant Percentage of Original Total
Shares
Which May Be Acquired
* %
* %
* %
* %
6. Exercise of Options. (a) This Option may be exercised
at any time and from time to time during the term of such Option,
in whole or in part.
(b) This Option may be exercised (i) during the Optionee's
lifetime, solely by the Optionee, or (ii) after Optionee's death,
by the personal representative of the Optionee's estate or the
person or persons entitled thereto under his will or under the
laws of descent and distribution.
(c) This Option shall be deemed exercised when (i) the
Company has received written notice of such exercise delivered to
the Company, (ii) full payment of the aggregate Option Price of
the Shares as to which the Option is exercised has been tendered
to the Company, and (iii) arrangements that are satisfactory to
the Board in its sole discretion have been made for the
Optionee's payment to the Company of the amount, if any, that the
Company determines to be necessary for the Company to withhold in
accordance with the applicable federal or state income tax
withholding requirements.
(d) The Option Price of any Shares purchased shall be paid
solely in cash, by certified or cashier's check, by money order,
by personal check (if approved by the Board), [Alternate - or, at
the option of the Optionee, in Shares owned by such Optionee,] or
by a combination of the above. [Alternate :For purposes of
determining the amount, if any, of the Option Price satisfied by
payment in Shares, such Shares shall be valued at its Fair Market
Value, as established by the Committee in its sole discretion, on
the date of exercise. Any Shares tendered in satisfaction of all
or a portion of the Option Price shall be appropriately endorsed
for transfer and assignment to the Company.
(e) The Optionee shall not be, nor have any of the rights
or privileges of, a shareholder of the Company with respect to
any Shares purchasable upon the exercise of any part of this
Option unless and until certificates representing such Shares
shall have been issued by the Company to the Optionee.
7. Termination of Option Period. (a) The unexercised
portion of an Option shall automatically and without notice
terminate and become null and void at the time of the earliest to
occur of the following:
(i) [Alternate - thirty (30)] days after the date that
Optionee ceases to be employed by the Company regardless of
the reason therefor, other than a cessation by reason of
death, Disability or for Cause;
(ii) one (1) year after the date on which the Optionee
ceases to be employed by the Company by reason of
Disability;
(iii) (y) one (1) year after the date that Optionee
ceases to be employed by the Company by reason of death, or
(z) the later of (I) the date provided in whichever of
Subsection 7(a)(i) or 7(a)(ii), if any, apply on the date of
death, and (II) six (6) months after the date on which such
person shall die if that shall occur during whichever of the
periods described in Subsection 7(a)(i) or 7(a)(ii), if any,
apply on the date of death;
(iv) the date that Optionee ceases to be employed by
the Company, if such cessation is for Cause; and
(v) the ( th) anniversary of the Date
of Grant;
(b) The Committee may, by giving written notice
("Cancellation Notice"), cancel, effective upon the date of the
consummation of any of the transactions described in Subsection
15(a) of the Plan, all or any portion of such Option which
remains unexercised on such date. Such Cancellation Notice shall
be given a reasonable period of time (but not less than 15 days)
prior to the proposed date of such cancellation, and may be given
either before or after shareholder approval of such corporate
transaction.
8. Transferability of Options. This Option is not
transferable by the Optionee otherwise than by will or the laws
of descent and distribution and that so long as a Optionee lives,
only such Optionee or his guardian or legal representative shall
have the rights set forth in such Option.
9. Issuance of Shares. Optionee shall not be the owner of
Shares subject to this Option unless and until certificates
representing such Shares shall have been issued and delivered to
Optionee. As a condition of any issuance of Shares, the
Committee may obtain such agreements or undertakings, if any, as
the Committee may deem necessary or advisable to assure
compliance with any such law or regulation including, but not
limited to, the following:
(i) a representation, warranty or agreement by
Optionee that he is acquiring the Shares to be issued to
him for investment and not with a view to, or for sale in
connection with, the distribution of any such Shares; and
(ii) a representation, warranty or agreement to be
bound by any legends that are, in the opinion of the
Committee, necessary or appropriate to comply with the
provisions of any securities law deemed by the Committee to
be applicable to the issuance of the Shares and are endorsed
upon the Share certificates.
Notwithstanding any provision hereof to the contrary, no Shares
shall be required to be issued with respect to this Option unless
counsel for the Company shall be reasonably satisfied that such
issuance will be in compliance with applicable Federal or state
securities and other applicable laws.
10. Notice of Disqualifying Disposition. In order to
enable the Company to avail itself of any income tax deduction to
which it may be entitled, the Optionee shall notify the Company
of his intent to dispose of any of the Shares purchased pursuant
to this Incentive Stock Option within two (2) years from the Date
of Grant of the Incentive Stock Option and one (1) year from the
date of exercise of the Incentive Stock Option, and promptly
after such disposition the Optionee shall notify the Company of
the number of Shares disposed of, the dates of acquisition and
disposition of such Shares, and the consideration, if any,
received on such disposition. Nothing in this Paragraph *,
however, shall give the Optionee any right to dispose of Shares
that is inconsistent with any provision of the Plan or any
Paragraph of this Agreement. If in connection with any such
disposition the Company becomes liable for withholding taxes and
has no amounts owing the Optionee with which to discharge its
withholding obligation, the Optionee shall provide the Company
with the amount needed to discharge the Company's withholding
obligation and shall indemnify the Company against any penalties
it may incur through its inability to apply amounts owing the
Optionee in discharge of its withholding obligation. Nothing in
this Paragraph shall give the Optionee any right to dispose of
Shares in a manner that is inconsistent with any provision of
this Agreement, the Plan, or any stock transfer restriction
agreement entered into by the Optionee.
11. Tax Withholding. Upon the exercise of an Option, and
before the transfer of Shares, the Optionee must pay to the
Company, in cash or in Shares (including, but not limited to, the
reservation to the Company of the requisite number of Shares
otherwise payable to such person with respect to such Option) the
amount which the Company reasonably determines to be necessary in
order for the Company to comply with applicable federal or state
tax withholding requirements, including applicable employment
taxes; provided, further, that the Committee may require that
such payment be made in cash.
12. Notice. Whenever any notice is required or permitted
hereunder, such notice must be in writing and personally
delivered or sent by mail. Any notice required or permitted to
be delivered hereunder shall be deemed to be delivered on the
date which it is personally delivered, or, whether actually
received or not, on the third business day after it is deposited
in the United States mail, certified or registered, postage
prepaid, addressed to the person who is to receive it at the
address which such person has theretofore specified by written
notice delivered in accordance herewith. The Company or Optionee
may change, at any time and from time to time, by written notice
to the other, the address previously specified for receiving
notices. Until changed in accordance herewith, the Company and
the Optionee specify their respective addresses as set forth
below:
Company: Hitox Corporation of America
Attention: President
418 Peoples Street
Corpus Christi, Tx. 78403-2544
Optionee: _________________________
_________________________
_________________________
13. Interpretation. (a) If any provision of the Option is
held invalid for any reason, such holding shall not affect the
remaining provisions hereof, but instead the Option shall be con-
strued and enforced as if such provision had never been included
in the Option.
(b) THIS OPTION SHALL BE GOVERNED BY THE LAWS OF THE STATE
OF TEXAS.
(c) Headings contained in this Option are for convenience
only and shall in no manner be construed as part of this Option.
(d) Any reference to the masculine, feminine, or neuter
gender shall be a reference to such other gender as is
appropriate.
14. Amendment. The Board, or the Committee (subject to the
prior written authorization of the Board), may from time to time
amend this Option in any regard, except as such amendment is
expressly limited under the Plan.
HITOX CORPORATION OF
AMERICA