EXHIBIT 10.9
NON-QUALIFIED STOCK OPTION AGREEMENT
MARINER ENERGY, INC.
STOCK INCENTIVE PLAN
Optionee:
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Date of Xxxxx: March 11, 2005
NQO Number
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1. Grant of Options. Mariner Energy, Inc. (the "Company") hereby grants to
you the right and option ("Options") to purchase all or any part of an
aggregate of [______] Common Shares ("Shares") of Mariner Energy, Inc. on
the terms and conditions set forth herein and in the Mariner Energy, Inc.
Stock Incentive Plan (the "Plan"), which is incorporated herein by
reference as a part of this Agreement. This grant of Options is not
intended to qualify as incentive stock options. In the event of any
conflict between the terms of this Agreement and the Plan, the Plan shall
control. Capitalized terms used but not defined in this Agreement shall
have the meaning attributed to such terms under the Plan, unless the
context requires otherwise.
2. Exercise Price. The exercise price per Share purchased pursuant to the
exercise of the Options shall be $14.00, subject to adjustment as provided
in the Plan.
3. Vesting and Exercise of Option. Subject to the further provisions of this
Agreement, the Options shall become vested and may be exercised in
accordance with the following schedule, by written notice to the Company
at its principal executive office addressed to the attention of its
Secretary (or such other officer or employee of the Company as the Company
may designate from time to time):
Anniversary of Cumulative
Date of Grant Vested Percentage
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Less than 1 year 0%
1 year 33 1/3%
2 years 66 2/3%
3 years or more 100%
Notwithstanding the above schedule, but subject to the further provisions
hereof, upon the occurrence of the following events the Options shall vest
and become exercisable as provided below:
(a) Disability. If you are entitled to benefits under Section 7(d) of
your Employment Agreement entered into with the Company, dated
February 7, 2005 ("Employment Agreement") or, if the Employment
Agreement has terminated, your employment with the Company terminates
by reason of a disability that entitles you to benefits under the
Company's or a Subsidiary's long-term disability plan, the Options
shall become fully vested and, subject to the further provisions of
this Agreement, may be exercised at any time during the one-year
period following such termination by you or by your guardian or legal
representative (or, if you die during such one-year period, by your
estate or the person who acquires the Options by will or the laws of
descent and distribution).
(b) Death. If you die while in the employ of the Company, the Options
shall become fully vested and, subject to the further provisions of
this Agreement, your estate (or the person who acquires the Options by
will or the laws of descent and distribution) may exercise the Options
at any time during the one-year period following the date of your
death.
(c) Termination by the Company other than for Cause. If your employment
with the Company is terminated by the Company for any reason other
than for Cause (as defined below), the Options shall become 50% vested
(to the extent less than 50% vested) and, subject to the further
provisions of this Agreement, may be exercised at any time during the
three-month period following such termination by you or by your
guardian or legal representative (or by your estate or the person who
acquires the Options by will or the laws of descent and distribution
or otherwise by reason of your death if you die during such period),
but only as to the vested number of Shares (including the Shares, if
any, that became vested under this Section 3(c)) that you were
entitled to purchase hereunder as of the date your employment so
terminates. For purposes of this Section 3, the term "Cause" shall
have the have the meaning ascribed to such term in your Employment
Agreement, or if the Employment Agreement has terminated, shall mean
(i) a material failure to perform your duties, (ii) your conviction of
or plea of nolo contendere for any felony or any misdemeanor involving
moral turpitude, dishonesty, fraud or breach of trust, (iii) your
willful engagement in gross misconduct in the performance of your
duties, (iv) your substance abuse, (v) your misappropriation of funds,
or (vi) your disparagement of the Company or any Subsidiary or any of
their respective managements or employees.
(d) Termination For Cause or other than for Good Reason. Except as
otherwise provided in Section 3(f) below, if your employment with the
Company is terminated by the Company for Cause or by you other than
for a Good Reason (as defined below) the Options, whether or not then
vested, shall immediately cease to be exercisable upon such
termination and shall be cancelled automatically without payment. For
purposes of this Section 3, the term "Good Reason" shall have the
meaning ascribed to such term in your Employment Agreement, or if the
Employment Agreement has terminated, shall mean (i) a material adverse
change in the nature or scope of your authorities, powers, duties and
functions performed; (ii) a material reduction in your base salary or
in the cash bonus opportunities
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made available to you, excluding opportunities under (A) any plan,
program, arrangement or agreement providing for compensation in the
form of overriding royalty interests or income from overriding royalty
interests, (B) any equity-based compensation plans, programs,
arrangements or agreements, including, but not limited to, stock
options, and (C) 401(k) and profit-sharing plans; or (iii) your
permanent place of employment with the Company is changed to a
location that is more than 50 miles from your location prior to such
change.
(e) For Good Reason. Except as otherwise provided in Section 3(f) below,
if your employment with the Company is terminated by the Company for
Good Reason, the Options shall become 50% vested (to the extent less
than 50% vested) and, subject to the further provisions of this
Agreement, may be exercised at any time during the three-month period
following such termination by you or by your guardian or legal
representative (or by your estate or the person who acquires the
Options by will or the laws of descent and distribution or otherwise
by reason of your death if you die during such period), but only as to
the vested number of Shares (including the Shares, if any, that became
vested under this Section 3(e)) that you were entitled to purchase
hereunder as of the date your employment so terminates.
(f) Change of Control. Upon the occurrence of a Change of Control (as
defined in your Employment Agreement entered into with the Company,
dated February 7, 2005 ("Employment Agreement")) that occurs while you
are employed by the Company or within nine months following a
termination of your employment with the Company that entitles you to
severance under Section 7(c) of your Employment Agreement, the Options
shall become fully vested to the extent not already vested.
For purposes of this Agreement, "employment with the Company" shall include
being an employee or a director of the Company or a Subsidiary.
There is no minimum or maximum number of Shares that must be purchased upon
exercise of the Options. Instead, the Option may be exercised, at any time
and from time to time, to purchase any number of Shares that are then
vested and exercisable according to the provisions of this Agreement.
All Options that are not vested on your termination of employment as
provided above shall be automatically cancelled without payment upon your
termination, except that if your employment with the Company terminated and
you were entitled to severance benefits under Section 7(c) of your
Employment Agreement, then the non-vested portion of this Option, if any,
shall remain outstanding (but not exercisable) until the date that is nine
months after your termination from the Company. If a Change of Control
occurs during such nine month period, the non-vested portion of this Option
that becomes vested as a result of such Change of Control may be exercised
subject to the further provisions of this Agreement, at any time during the
three month period following such Change of Control by you or by your
guardian or legal representative (or by your estate or the
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person who acquires the Options by will or the laws of descent and
distribution or otherwise by reason of your death if you die during such
period).
4. Term. Notwithstanding any of the foregoing, the Options shall not be
exercisable in any event after the expiration of 10 years from the Date of
Grant.
5. Payment of Exercise Price. The purchase price of the Shares as to which
the Options are exercised shall be paid in full at the time of exercise
(a) in cash (including by check acceptable to the Company), (b) if the
Shares are readily tradable on a national securities market or exchange,
through a "cashless broker exercise" program approved in advance by the
Company, (c) any other method approved by the Company, including, with the
consent of the Committee, by withholding a number of Shares that would
otherwise be delivered on exercise of the Option that have an aggregate
Fair Market Value that does not exceed the aggregate exercise price for the
Options being then exercised, or (d) any combination of the foregoing. No
fraction of a Share shall be transferred upon exercise of the Options.
Unless and until a certificate or certificates representing such Shares
shall have been transferred by the Company to you, you (or the person
permitted to exercise the Options in the event of your death) shall not be
or have any of the rights or privileges of a shareholder of the Company
with respect to Shares acquirable upon an exercise of the Options.
6. Withholding of Tax. To the extent that the exercise of an Option results
in the receipt of compensation by you with respect to which the Company or
a Subsidiary has a tax withholding obligation pursuant to applicable law,
unless other arrangements have been made by you that are acceptable to the
Company or such Subsidiary, you shall either deliver to the Company or the
Subsidiary such amount of money as the Company or the Subsidiary may
require to meet its withholding obligations under such applicable law or
have the Company withhold a number of Shares that would otherwise be
delivered on exercise or vesting that have an aggregate Fair Market Value
that does not exceed the amount of taxes to be withheld; provided, however,
that if you fail to satisfy the Company's or the Subsidiary's tax
withholding obligations, the Company, in its sole discretion, may withhold
a number of Shares that would otherwise be delivered on exercise or vesting
that have an aggregate Fair Market Value equal to the amount of taxes
required to be withheld. No delivery of Shares shall be made pursuant to
the exercise of an Option under this Agreement until you have paid or made
arrangements approved by the Company or the Subsidiary to satisfy in full
the applicable tax withholding requirements of the Company or Subsidiary.
Restrictions. By accepting this grant, you agree that the Shares which you
may acquire by exercising the Options will not be sold or otherwise
disposed of in any manner which would constitute a violation of any
applicable federal or state securities laws. You also agree that (i) the
book entry made (or the certificates, if any are issued) representing the
Shares purchased under the Options may bear such restriction, restrictions,
legend or legends as the Committee deems appropriate in order to assure
compliance with applicable securities laws, (ii) the Company may refuse to
register the transfer of the Shares purchased under the Options on the
transfer records of the Company if such proposed transfer would in the
opinion of counsel satisfactory to the Company constitute
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a violation of any applicable securities law, and (iii) the Company may
give related instructions to its transfer agent, if any, to stop
registration of the transfer of the Shares purchased under the Options.
8. Limitations Upon Transfer. All rights under this Agreement shall belong to
you alone and may not be transferred, assigned, pledged, or hypothecated by
you in any way (whether by operation of law or otherwise), other than by
will or the laws of descent and distribution and shall not be subject to
execution, attachment, or similar process. Upon any attempt by you to
transfer, assign, pledge, hypothecate, or otherwise dispose of such rights
contrary to the provisions in this Agreement or the Plan, or upon the levy
of any attachment or similar process upon such rights, such rights shall
immediately become null and void.
9. 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 you.
10. Entire Agreement. This Agreement, the Plan, and the Employment Agreement
constitute the entire agreement of the parties with regard to the subject
matter hereof and thereof, and contain all the covenants, promises,
representations, warranties and agreements between the parties with respect
to the Option granted hereby. Without limiting the scope of the preceding
sentence, all prior understanding and agreements, if any, among the parties
hereto relating to the subject matter hereof and thereof are hereby null
and void and of no further force and effect.
11. Modifications. Except as provided below, any modification of this Agreement
shall be effective only if it is in writing and signed by both you and an
authorized officer of the Company. Notwithstanding anything in the Plan or
this Agreement to the contrary, if the Committee determines that the terms
of this grant do not, in whole or in part, satisfy the requirements of new
Section 409A of the Internal Revenue Code, the Committee, in its sole
discretion, may unilaterally modify this Agreement in such manner as it
deems appropriate to comply with such section and any regulations or
guidance issued thereunder.
12. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of
Texas, without regard to
conflicts of laws principles thereof.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
by its duly authorized officer all effective as of the day and year first above
written.
MARINER ENERGY, INC.
By:
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Xxxxx X. Xxxxx
Chief Executive Officer and President
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