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EXHIBIT 4.2
NONEMPLOYEE DIRECTOR'S STOCK OPTION AGREEMENT
AGREEMENT made as of the ____ day of _________________, 19___, between
HUGOTON ENERGY CORPORATION, a Kansas corporation (the "Company"), and
_________________________ ("Director").
To carry out the purposes of the HUGOTON ENERGY CORPORATION 1993
AMENDED AND RESTATED NONEMPLOYEE DIRECTORS' STOCK OPTION PLAN (the "Plan"), a
copy of which is attached hereto as Exhibit A, by affording Director the
opportunity to purchase shares of common stock of the Company ("Stock"), and in
consideration of the mutual agreements and other matters set forth herein and
in the Plan, the Company and Director hereby agree as follows:
1. GRANT OF OPTION. The Company hereby irrevocably grants to
Director the right and option ("Option") to purchase all or any part of an
aggregate of ___________ shares of Stock, on the terms and conditions set forth
herein and in the Plan, which Plan is incorporated herein by reference as a
part of this Agreement. This Option shall not be treated as an incentive stock
option within the meaning of section 422(b) of the Internal Revenue Code of
1986, as amended.
2. PURCHASE PRICE. The purchase price of Stock purchased pursuant to
the exercise of this Option shall be $______________ per share, which has been
determined to be the fair market value of the Stock at the date of grant of
this Option. For all purposes of this Agreement, fair market value of Stock
shall be determined in accordance with the provisions of the Plan.
3. VESTING AND EXERCISE OF OPTION. The Option granted hereunder
shall vest immediately upon the date of this Agreement. This Option may be
exercised, by written notice to the Company at its principal executive office
addressed to the attention of its Chief Executive Officer, at any time and from
time to time after the date of grant hereof.
This Option is not transferable by Director otherwise than by will or
the laws of descent and distribution, and may be exercised only by Director
during Director's lifetime. This Option may be exercised only while Director
remains a member of the Board of Directors of the Company (the"Board") and will
terminate and cease to be exercisable upon Director's termination of membership
on the Board, except that:
(a) If Director's membership on the Board terminates by
reason of disability, this Option may be exercised in full by Director
(or Director's estate or the person who acquires this Option by will
or the laws of descent and distribution or otherwise by reason of the
death of Director) at any time during the period of one year following
such termination.
(b) If Director dies while a member of the Board, Directors
estate, or the person who acquires this Option by will or the laws of
descent and distribution or otherwise by reason of the death of
Director, may exercise this Option in full at any time during the
period of one (1) year following the date of Director's death.
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(c) If Director's membership on the Board terminates for any
reason other than as described in (a) or (b) above, this Option may
be exercised in full by Director at any time during the period of
three months following such termination, or by Director's estate (or
the person who acquires this Option by will or the laws of descent and
distribution or otherwise by reason of the death of Director) during a
period of one (1) year following Director's death if Director dies
during such three-month period.
The Option granted hereunder must in any event be exercised within
five (5) years hereof and it will cease to be exercisable after the expiration
of such period. The purchase price of shares as to which this Option is
exercised shall be paid in full at the time of exercise (A) in cash (including
check, bank draft or money order payable to the order of the Company), (B) by
delivering to the Company shares of Stock having a fair market value equal to
the purchase price, or (C) any combination of cash or Stock. No fraction of a
share of Stock shall be issued by the Company upon exercise of an Option or
accepted by the Company in payment of purchase price thereof; rather, Director
shall provide a cash payment for such amount as is necessary to effect the
issuance and acceptance of only whole shares of Stock. Unless and until a
certificate or certificates representing such shares shall have been issued by
the Company to Director, Director (or the person permitted to exercise this
Option in the event of Director's death) shall not be or have any of the rights
or privileges of a stockholder of the Company with respect to shares acquirable
upon an exercise of this Option.
4. WITHHOLDING OF TAX. To the extent that the exercise of this Option
or the disposition of shares of Stock acquired by exercise of this Option
results in compensation income to Director for federal or state income tax
purposes, Director shall deliver to the Company at the time of such exercise or
disposition such amount of money or shares of Stock as the Company may require
to meet its obligation under applicable tax laws or regulations, and, if
Director fails to do so, the Company is authorized to withhold from any cash or
Stock remuneration then or thereafter payable to Director any tax required to
be withheld by reason of such resulting compensation income. Upon an exercise
of this Option, the Company is further authorized in its discretion to satisfy
any such withholding requirement out of any cash or shares of Stock
distributable to Director upon such exercise.
5. STATUS OF STOCK. The Company intends to register for issuance
under the Securities Act of 1933, as amended (the "Act"), the shares of Stock
acquirable upon exercise of this Option, and to keep such registration
effective throughout the period this Option is exercisable. In the absence of
such effective registration or an available exemption from registration under
the Act, issuance of shares of Stock acquirable upon exercise of this Option
will be delayed until registration of such shares is effective or an exemption
from registration under the Act is available. The Company intends to use its
best efforts to ensure that no such delay will occur. In the event exemption
from registration under the Act is available upon an exercise of this Option,
Director (or the person permitted to exercise this Option in the event of
Director's death or incapacity), if requested by the Company to do so, will
execute and deliver to the Company in writing an agreement containing such
provisions as the Company may require to assure compliance with applicable
securities laws.
Director agrees that the shares of Stock which Director may acquire by
exercising this Option will not be sold or otherwise disposed of in any manner
which would constitute a violation of any applicable federal or state
securities laws. Director also agrees (i) that the certificates representing
the shares of Stock purchased under this Option may bear such legend or legends
as the Company deems appropriate in order to assure compliance with applicable
securities laws, (ii)
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that the Company may refuse to register the transfer of the shares of Stock
purchased under this Option on the stock transfer records of the Company if
such proposed transfer would in the opinion of counsel satisfactory to the
Company constitute a violation of any applicable securities law and (ii) that
the Company may give related instructions to its transfer agent, if any, to
stop registration of the transfer of the shares of Stock purchased under this
Option.
6. BINDING EFFECT. This Agreement shall be binding upon and inure
to the benefit of any successors to the Company and all persons lawfully
claiming under Director.
7. GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Kansas.
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed by its officer thereunto duly authorized, and Director has executed
this Agreement, all as of the day and year first above written.
HUGOTON ENERGY CORPORATION
By:
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Name:
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Title:
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, Director
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