EX-10.13 5 file005.htm STOCK OPTION AND INCENTIVE PLAN


                                                                   Exhibit 10.13

   AMENDED AND RESTATED 1994 STOCK OPTION AND INCENTIVE PLAN FOR EMPLOYEES OF

                                ORTHOMETRIX, INC.

         1. DEFINITIONS.

         "Board of Directors" shall mean the Board of Directors of the
Corporation as constituted from time to time or a committee of the Board of
Directors to which responsibility for the administration of the Plan has been
delegated.

         "Cancellation Notice" shall mean the notice given by the Corporation to
an Optionee pursuant to Section 14(b) hereof notifying him of the cancellation
of his Option.

         "Cash Payment Election" shall mean the right described in Section 6
hereof of an Optionee to elect to receive cash upon exercise of an Option.

         "Code" shall mean the Internal Revenue Code of 1986, as amended.

         "Common Stock" shall mean shares of common stock of the Corporation,
         par value $0.0005 per share.

         "Corporation" shall mean ORTHOMETRIX, INC., a Delaware corporation.

         "Exchange Act" shall mean the Securities Exchange Act of 1934.

         "Exercise Price per Share" with respect to an Option shall mean the
price, as set forth in the Optionee's Option Agreement and as determined by the
Board of Directors, at which the Optionee may exercise such Option; provided,
however, that in the case of an Incentive Stock Option, the Exercise Price per
share shall not be less than 100% of the Fair Market Value per Share at the time
such Option is granted (110% of Fair Market Value per Share in the case of an
Incentive Stock Option described in Section 15(b) hereof).

         "Fair Market Value per Share" at any particular Date shall mean the
fair value of a share of Common Stock as determined in good faith by the Board
of Directors. In the case of an Incentive Stock Option, such determination shall
be made consistent with Section 422(c)(8) of the Code.

         "Incentive Stock Option" shall mean a stock option granted to an
Optionee hereunder which qualifies as an "incentive stock option" within the
meaning of Section 422 of the code.

         "Non-qualified Stock Option" shall mean a stock option granted to an
Optionee hereunder which does not qualify as an "incentive stock option" under
Section 422 of the Code.

         "Option" shall mean either an Incentive Stock Option or a Non-qualified
Stock Option.

         "Option Agreement" shall mean the agreement between the Corporation and
an Optionee evidencing the grant of an Option pursuant to the Plan and setting
forth the terms and conditions of the Option.

         "Optionee" shall mean a person to whom an Option has been granted
pursuant to the Plan.

         "Plan" shall mean this Amended and Restated 1994 Stock Option and
Incentive Plan for Employees of the Corporation, as amended and restated from
time to time.

         "Shares" shall mean the shares of Common Stock which may be issued
pursuant to the Plan.

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                                                                   Exhibit 10.13

         2. PURPOSE OF THE PLAN.

         The purpose of the Plan is to secure for the Corporation and its
shareholders the benefits arising from capital stock ownership by key employees
of the Corporation who are expected to contribute to the Corporations' future
growth and success.

         3. ADMINISTRATION.

         The Plan shall be administered by the Board of Directors. Subject to
the express provisions of the Plan, the Board of Directors shall have plenary
authority, in its discretion, to determine the individuals to whom, and the time
or times at which, Options and Cash Payment Elections shall be granted and the
number of shares to be subject to each Option and Cash Payment Election. In
making such determinations the Board of Directors may take into account the
nature of the services rendered by the respective individuals, their present and
potential contributions to the Corporation's success and such other factors as
the Board of Directors, in its discretion, shall deem relevant. Subject to the
express provisions of the Plan, the Board of Directors shall also have plenary
authority to interpret the Plan, to prescribe, amend and rescind rules and
regulations relating to it, to determine the terms and provisions of the
respective Option Agreements (which need not be identical) and to make all other
determinations necessary or advisable for the administration of the Plan. To the
extent necessary to comply with Rule 16b-3 under the Exchange Act,
determinations concerning Options granted to any director or officer shall be
made by a committee of the Board, all of whose members are "disinterested
persons" within the meaning of Rule 16b-3 under the Exchange Act.

         4. NUMBER OF SHARES.

         The aggregate number of Shares for which Options may be granted under
the Plan is 5,000,000 Shares, subject to adjustment in accordance with Section
11 hereof. Shares covered by the unexercised portions of any terminated or
canceled Options shall be available to become subject to Options granted
thereafter. Shares subject to the portions of Options which are surrendered in
connection with the exercise by Optionees of Cash Payment Elections shall not be
available to become subject to Options granted thereafter. Upon the exercise of
an Option, the number of shares with respect to which the Option may thereafter
be exercised by the Optionee shall no longer include the sum of the Shares
purchased upon exercise plus the Shares, if any, covered by a Cash Payment
Election upon such exercise.

         5. GRANT OF OPTIONS.

         The Board of Directors may, at any time, grant Options to such officers
and other key employees and consultants of the Corporation as the Board of
Directors may select. Such Options shall cover such number of Shares as the
Board of Directors shall designate, subject to the other provisions of the Plan.

         Each grant of an Option shall be evidenced by an Option Agreement
between the Optionee and the Corporation. Each Option Agreement shall specify
the number of Shares covered by such Option and the Exercise Price per Share.
The Option Agreement shall also contain such terms and conditions not
inconsistent with the Plan as the Board of Directors in sole discretion shall
deem appropriate (which terms and conditions need not be the same in each Option
Agreement and may be changed from time to time). Each Option Agreement may
require as conditions of exercise that the Optionee provide such investment
representations with respect to, and enter into such agreements concerning the
sale and transfer of, the Shares

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                                                                   Exhibit 10.13

received by the Optionee upon exercise, as the Board of Directors shall deem
appropriate. Each Option Agreement for a Non-qualified Option shall provide for
the withholding of income taxes and employment taxes that the Corporation
determined it is required to withhold upon the exercise of an Option.

         6. CASH PAYMENT ELECTION.

         (a) In connection with any Non-qualified Option, the Board of Directors
may grant cash Payment Elections to such Optionee as the Board of Directors may
select, either at the time such Non-qualified Option is granted or thereafter at
any time prior to the exercise of termination of such Non-qualified Option. The
terms and conditions regarding each Cash Payment Election shall be evidenced in
the Option Agreement, or an amendment thereto if granted subsequent to issuance
of a Non-qualified Option.

         (b) A Cash Payment Election shall entitle the Optionee, simultaneously
with a purchase of Shares upon exercise of a portion of a Non-qualified Option,
to surrender for cash an additional unexercised (but then exercisable) portion
of the Non-qualified Option covering, at the Optionee's election, a number of
Shares no greater than the number of Shares being purchased upon such exercise.
Subject to any applicable tax withholding, in exchange for the unexercised
portion of the Non-qualified Option so surrendered, the Corporation shall pay to
the Optionee a cash amount equal to the product of (i) the excess of (A) the
Fair Market Value per Share on the Date the Non-qualified Option is exercised
over (B) the Exercise Price per Share, times (ii) the number of Shares with
respect to which the Cash Payment Election is made.

         7. TERM OF OPTION.

         Each Option Agreement shall specify the Date or Dates on which the
Option granted thereunder may be exercised. Each Option Agreement may provide
for exercise of the Option in installments on such terms and conditions as the
Board of Directors may determine. The period of each Option shall be fixed by
the Board of Directors but in no case shall exceed ten (10) years (five (5)
years if the Optionee is an owner described in Section 15(b)) after the Date an
Incentive Stock Option is granted or ten (10) years and one (1) month after the
Date a Non-qualified Option is granted.

         8. NON-TRANSFERABILITY OF OPTION RIGHTS.

         Options and Cash Payment Elections shall not be transferable except by
will or the laws of descent and distribution. During the lifetime of a Optionee,
each Optionee's Options and Cash Payment Elections shall be exercisable only by
the Optionee.

         9. EFFECT OF TERMINATION OF EMPLOYMENT OR DEATH.

         (a) Except as otherwise determined by the Board of Directors, upon the
termination of employment of any Optionee (for any reason other than death), all
rights under any Option held by such Optionee shall cease; provided, however,
that the Option Agreement may provide that the rights which were immediately
exercisable by the Optionee at the Date of such termination of employment may be
exercised by the Optionee subject to such conditions, provisions or limitations
as may be set forth in the Option agreement, during a period not exceeding three
(3) months after the Date of such termination, but in on case after the Date on
which the Option otherwise would have expired but for the Optionee's termination
of employment.

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                                                                   Exhibit 10.13

         (b) Except as otherwise determined by the Board of Directors, upon the
termination of employment of any Optionee by reason of his death, or on the
death of any Optionee within three (3) months following the termination of his
employment, if during such period the Optionee was entitled pursuant to the
express terms of an Option Agreement to exercise his rights under such Option
Agreement, all rights under any Option held by such Optionee shall cease;
provided, however, that the Option Agreement may provide that the rights which
were immediately exercisable by the Optionee at the Date of his death may be
exercised by legal representatives or beneficiaries of the Optionee during the
period specified in the Option Agreement, non exceeding one (1) year after the
Date of the Optionee's death, but in no case after the Date on which the Option
otherwise would have expired but for the Optionee's termination of employment.

         10. EXERCISE AND WITHHOLDING.

         (a) The purchase price of the Shares as to which an Option shall be
exercised plus any required Federal income tax or other withholding amount shall
be paid in cash or by certified check, provided that, the Board of Directors
shall have discretion in connection with any exercise of an Option to allow the
Optionees to pay all or a portion of the aggregate exercise price of all Options
being exercised plus applicable withholding amounts by transferring to the
Corporation previously acquired Shares having an aggregate fair market value
equal to such amount, or portion thereof. The Corporation shall not be required
to deliver certificates for such Shares until such payment has been made.

         (b) The Corporation shall have the right to deduct from all amounts
paid in cash any taxes required by law to be withheld therefrom.

         (c) Subject to the prior approval of the Board of Directors, the
Optionee may satisfy all or a portion of the withholding tax obligation
hereunder by having the Corporation withhold Shares having a Fair Market Value
on the Date the amount to be withheld is to be determined (the "Tax Date") equal
to the amount required by law to be withheld from such distribution. In lieu
thereof, the Corporation shall have the right to retain or sell without notice a
sufficient number of Shares to cover the amount required to be withheld.

         11. STOCK DIVIDEND, MERGER, CONSOLIDATION, ETC.

         Each Option Agreement may contain such provisions concerning
adjustments in the number or kind of Shares or other securities allocated to
unexercised Options granted prior to an in the event of one (1) or more stock
dividends, stock splits, reorganizations, recapitalizations, combinations of
shares, mergers, consolidations, or other changes in the corporate structure of
stock of the Corporation, or any transaction involving the Corporation as the
Board of Directors may deem appropriate. Such adjustment shall be binding and
conclusive for all purposes.

         12. RIGHTS AS A SHAREHOLDER.

         An Optionee shall have no rights as a shareholder with respect to any
Shares covered by an Option until such Optionee shall have become the holder or
record of any such Share.

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                                                                   Exhibit 10.13

         13. DETERMINATIONS.

         Each determination, interpretation or other action made or taken
pursuant to the provisions of the Plan by the Board of Directors, and each
determination of Fair Market Value per Share shall be final and conclusive for
all purposes and shall be binding upon all persons, including, without
limitation, the Corporation and all Optionees, and their respective successors
and assigns.

         14. AMENDMENT, TERMINATION AND MODIFICATION OF THE PLAN AND AGREEMENTS.

         (a) The Board of Directors may alter, amend, suspend, discontinue or
terminate the Plan at any time; provided, however, that no such action shall
adversely affect the rights of Optionees to Options previously granted hereunder
and, provided further, however, that any stockholder approval necessary or
desirable in order to comply with Rule 16b-3 under the Exchange Act, Section 422
of the Code (or other applicable law or regulation) shall be obtained in the
manner required therein.

         (b) Notwithstanding the foregoing provisions of this Section 14, each
Option Agreement may provide that the Corporation shall have the right to
terminate the rights of any Optionee to exercise any options, effective not less
than thirty (30) days after receipt by the Optionee of a Cancellation Notice
from the Corporation. The Corporation may issue a Cancellation Notice only in
connection with (i) the sale of substantially all of the Corporation's assets,
or (ii) a merger, consolidation or other corporate transaction in which the
Corporation would not be the surviving entity. The Cancellation Notice shall
afford the Optionee the right to exercise all Options held by such Optionee with
respect to all Shares covered thereby (even if they would not otherwise have
become exercisable with respect to all such Shares at that time) during the
period prior to the Date of termination.

         (c) Notwithstanding the foregoing provisions of this Section 14, each
Option Agreement may contain the consent of the Optionee to any amendment to the
Plan and Option Agreement which the Board of Directors, in its sole discretion
and upon advice of legal counsel, may deem necessary or advisable to enable the
exercise of Options to comply with any applicable rules and regulations of the
Securities and Exchange Commission, including, without intending any limitation,
any amendment which would exempt such exercise from the operation of Section 16
of the Securities Exchange Act of 1934.

         15. INCENTIVE STOCK OPTIONS.

         Incentive Stock Options shall be specifically designated as Incentive
Stock Options and shall be subject to the following additional terms and
conditions:

         (a) DOLLAR LIMITATION. The aggregate fair market value (determined as
of the respective Date or Dates of grant and consistent with Section 422(c)(8)
of the Code) of the Common Stock for which Incentive Stock Options (together
with incentive stock options under any other stock option plans of the
Corporation) which are first exercisable in any one (1) calendar year shall not
exceed the sum of $100,000. For purposes of the $100,000 limitation, if an
Option Agreement provides that the Option granted thereunder shall not be
treated as an Incentive Stock Option, such Option shall be disregarded. The
event that Section 422(b)(7) of the Code is amended to alter the limitation set
forth therein so that following such amendment such limitation shall differ from
the limitation set forth in this paragraph (a), the limitation of this paragraph
(a) shall be automatically adjusted accordingly.

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                                                                   Exhibit 10.13

         (b) 10% SHAREHOLDER. If any Optionee to whom an Incentive Stock Option
is to be granted under the Plan is at the time of the grant of such Option the
owner of stock possessing more than 10% of the total combined voting power of
all classes of stock of the Corporation, then the following special provisions
shall be applicable to the Incentive Stock Option granted to such Optionee;

         (i) The Exercise Price per Share of the Common Stock subject to such
Incentive Stock Option shall not be less than 110% of the Fair Market Value per
Share at the time of grant; and

         (ii) The Option exercise period shall not exceed five (5) years from
the Date of grant. Except as modified by the preceding provisions of this
Section 15, all the provisions of the Plan shall be applicable to Incentive
Stock Options granted hereunder.

         16. NO SPECIAL EMPLOYMENT RIGHTS.

         Nothing contained in the Plan or in any Option granted under the Plan
shall confer upon any Optionee any right with respect to the continuation of
such Optionee's employment by the corporation or interfere in any way with the
right of the Corporation, subject to the terms of any separate employment
agreement to the contrary, at any time to terminate such employment or to
increase or decrease the compensation of the Optionee from the rate in existence
at the time of the grant of such Option.

         17. EFFECTIVE DATE.

         The Plan shall become effective when adopted by the Board of Directors,
but no Incentive Stock Option granted under the Plan shall become exercisable
unless and until the Plan shall have been approved by the Corporations'
shareholders. If such shareholder approval is not obtained within twelve (12)
months after the Date of the Board's adoption of the Plan, any Incentive Stock
Options previously granted under the Plan shall terminate, and no further
Incentive Stock Options shall be granted. Subject to this limitation, options
may be granted under the Plan at any time after the effective Date and before
the Date fixed for termination of the Plan.

         18. COMPLIANCE.

         No share of Common Stock shall be issued hereunder unless counsel for
the Corporation shall be satisfied that such issuance will be in compliance with
applicable federal and state securities laws. The Board of Directors may, in its
discretion, require as a condition to the exercise of any Option that the Shares
reserved or issuance upon the exercise of the Option has have been duly listed,
upon official notice of issuance, by any securities exchange upon which such
share are then listed, if any, and either that (a) a Registration Statement
under the Securities Act of 1933, as amended, or any succeeding act, with
respect to such shares is effective at the time of such exercise or (b) there is
an exemption from registration under such Act for the issuance of shares upon
such exercise.

         19. GOVERNING LAW.

         The Plan and all determinations made and actions taken pursuant thereto
shall be governed by the internal laws of the State of Delaware, the state where
the Corporation maintains its principal office and operations and constructed in
accordance therewith without giving effect to the principles of conflict of laws
thereof.

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