MAGNUM HUNTER RESOURCES, INC.
STOCK OPTION AGREEMENT
THIS EMPLOYEE STOCK OPTION AGREEMENT (the "Agreement") is made as of the
8th day of December 2000, between Magnum Hunter Resources, Inc., a Nevada
corporation (hereinafter referred to as the "Company"), and ________________
(hereinafter referred to as "Optionee").
R E C I T A L S
(a) The Company grants a stock option to key employees and directors to
encourage such persons to continue to work for the Company and obtain a larger
ownership interest in the Company.
(b) The Optionee is an employee and/or a director of the Company, and the
Company and the Optionee desire that Optionee be granted a stock option.
Now, Therefore, for and in consideration of the foregoing premises, the
mutual covenants herein contained, and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the Company and the
Optionee agree as follows:
1. Grant of Option. The Company hereby grants to Optionee an option to
purchase up to ______ shares (the "Shares") of the Company's Common Stock,
$0.002 par value ("Common Stock"), at a purchase price of $7.9375 per share (the
"Option").
2. Exercise of Option.
(a) Subject to Section 3 below, Optionee shall have the right to purchase
any or all of the Shares at any time prior to December 8, 2011, unless this
Option is sooner terminated or expires as provided in this Agreement.
(b) Subject to any required action by the stockholders of the Company, if
the Company shall be the surviving corporation in any merger, consolidation or
reorganization, the Option granted hereunder shall pertain to and apply to the
securities to which a holder of the number of shares of stock subject to the
Option would have been entitled.
(c) Except as provided in paragraph (e) below, this Option shall terminate
with respect to any unexercised portion of the Option and may no longer be
exercised on the date that is three (3) months after the Optionee ceases to be
an employee or director of the Company or any subsidiary or affiliate of the
Company.
(d) If the Optionee retires, dies or becomes totally and permanently
disabled prior to the expiration of this Option, the Optionee or his
representative, as applicable, may exercise the Option with respect to any
shares which Optionee could have purchased on his date of retirement, death or
total and permanent disability. The exercise of this Option under this paragraph
(d) must occur prior to the earlier of twelve (12) months after the Optionee's
retirement, death or disability or, the expiration of the term of this Option
under paragraph (a). For purposes of this Agreement,
"retirement" shall mean that the employee has voluntarily left the
employment of the Company or its affiliates and such employee is at least 65
years of age and has been employed by the Company or its affiliates for at least
ten (10) years prior to the date of his retirement.
(e) If there is a Change in Control, all outstanding Options shall
immediately become fully vested and exercisable unless the Change in Control, or
the transaction, event of occurrence causing the Change in Control, was duly and
effectively approved in advance by the affirmative vote of a majority of the
Board. In addition, in the event of the commencement of a tender or exchange
offer which would, if successful, result in a Change of Control or any similar
event that the Board determines in its absolute discretion would, if
consummated, materially alter the structure or business of the Company, the
Board upon written notice to Optionees, may in its absolute discretion do one or
more of the following: (i) accelerate outstanding Options by shortening the
period during which Options are exercisable, provided that they remain
exercisable for at least ten (10) business days after the date of notice; (ii)
accelerate any vesting schedule to which an Option is subject; (iii) enter into
an agreement to have the surviving, resulting or offering corporation grant to
the Optionees replacement Options, with appropriate adjustment as to number and
kind of securities and exercise prices; or (iv) cancel outstanding Options upon
payment to the Optionee in cash with respect to each Option which is then
exercisable (including Options which have been accelerated by the Board) of an
amount which, in the absolute determination and discretion of the Board, is
determined to be equivalent to the difference between (x) the Fair Market Value
at the effective time of such dissolution, liquidation, merger, reorganization,
sale or other event of the consideration that would be received by the Optionee
if the Option had been exercised before such effective time, and (y) the
exercise price of each such Option. The actions described in this paragraph may
be taken without consideration of any income tax consequences to the Company or
to the Optionee.
Change in Control means any of the following:
(i) Any person who, as of the effective date of this Agreement is
unaffiliated with any current shareholder of the Corporation, becomes the
beneficial owner of equity securities of the Company comprising 20% or more of
the total number of votes that may be cast for the election of directors of the
Company; or
(ii) As the result of, or in connection with, any tender or exchange offer,
merger or other business combination, sale of assets, sale of securities,
contested election, or any combination of the foregoing, the persons who were
directors of the Company immediately before such transaction shall cease to
constitute a majority of the Board of Directors of the Company or any successor
to the Company or its assets; provided, however, that any individual becoming a
director subsequent to the effective date of this Agreement whose election, or
nomination for election by the Company's shareholders, was approved by a vote of
at least a majority of the directors then comprising the Board shall be
considered as though such individual were a member of the Board, but excluding,
for this purpose, any such individual whose initial assumption of office occurs
as a result of either an actual or threatened election contest (as such terms
are used in Rule 14a-11 of Regulation 14A of the Exchange Act) or other actual
or threatened solicitation of proxies or consents by or on behalf of a person
other than the Board.
Notwithstanding the foregoing, a Change of Control shall not include any
acquisition, merger, or reorganization by the Company in which the shareholders
of the Company immediately prior to such acquisition, merger, or reorganization
will have substantially the same proportionate ownership of common stock of the
surviving corporation immediately thereafter or which would be considered a
Change in Control only due to the acquisition of stock of the Company by any
employee benefit plan (or related trust) sponsored or maintained by the Company
or any parent or subsidiary.
3. Vesting of Options. The Option granted hereunder shall be fully vested
and exercisable in installments as provided below:
Beginning Number of Shares
------------------- -------------------
December 8, 2000
December 8, 2001
December 8, 2002
December 8, 2003
December 8, 2004
To the extent not exercised, installments shall accumulate and be
exercisable, in whole or in part, in any subsequent period. No part of the
Option may be exercised after the date set forth in Section 2(a).
4. Manner of Exercise and Payment for Stock Upon Exercise of Option. Each
exercise of this Option or a part of this Option shall be made by notice in
writing to the Company, specifying the number of shares to be purchased and
accompanied by (i) cash, (ii) a certified or cashier's check or (iii) any other
type of cleared funds in payment in full for the shares then being purchased. In
addition, any portion of the purchase price of the shares to be issued may be
paid by delivering to the Company a properly executed exercise notice together
with a copy of irrevocable instructions to a stockbroker to sell immediately
some or all of the shares acquired by exercise of the Option and to deliver
promptly to the Company an amount of sales proceeds (or, in lieu of or pending a
sale, loan proceeds) sufficient to pay the purchase price, including any taxes
applicable thereto. The Company shall cause certificates representing the shares
so purchased to be issued to the Optionee as soon as practicable thereafter,
subject to compliance with all laws which affect such issuance.
5. Nontransferability of Option. This Option may not be transferred either
voluntarily or involuntarily and may be exercised only by Optionee during his
lifetime except as provided in Section 2(d).
6. No Rights Prior to Exercise of Option. The Optionee shall not be deemed
to be a holder of any shares pursuant to the exercise of this Option until
payment of the option price by him in cash, certified or cashier's check or
other type of cleared funds has been received by the General Counsel for the
Company. No adjustment shall be made for dividends or other rights for which the
record date is prior to the date such cleared funds is delivered.
7. Restriction of Issuance of Shares. This Option shall be subject to the
requirement that if any time the Board of Directors of the Company shall
determine, in its sole discretion, that the listing, registration or
qualification of the Common Stock under any federal or state law, or the consent
or approval of any regulatory agency, is necessary or desirable as a condition
of, or in connection with, the purchase or issuance of Common Stock hereunder,
this Option may not be exercised in whole or in part unless such listing,
registration, qualification, consent or approval shall have been effected or
obtained free of any conditions not acceptable to the Board of Directors.
8. Registration. The Company shall endeavor, but shall not be obligated, to
register the Common Stock to be issued upon exercise of the Option under the
Securities Act of 1933, as amended, as well as any applicable state statutes. In
the event that the Common Stock to be issued upon exercise of the Option is not
so registered, the Company may, as a condition precedent to the exercise of the
Option, require from the Optionee (or, in the event of his death, his legal
heirs, legatees or distributees) such written representations as, in the opinion
of counsel for the Company, may be necessary to ensure that such exercise and
subsequent disposition will not involve a violation of the Securities Act of
1933, as amended, as well as any applicable state statutes.
9. Amendment. This Agreement may be amended only in a writing executed by
both parties hereto. If additional options are granted to Optionee, such
additional options may be made subject to the terms of this Agreement by an
addendum hereto. Any restrictions on shares purchased pursuant to such
additional options shall be effective beginning on the date of execution of such
addendum unless otherwise provided therein.
10. Governing Law; Venue. This Agreement shall be governed by and construed
in accordance with the laws of the State of Texas. In the event that any
judicial proceedings are instituted concerning the interpretation or enforcement
of this Agreement, exclusive venue over such proceedings shall be vested in the
Federal and State Courts located in Dallas County, Texas.
11. Binding Effect. The provisions of this Agreement shall be binding upon
the Optionee and upon his heirs, executors, administrators, successors and
assigns. The Board of Directors' interpretation or resolution of any conflicts
or inconsistencies, application of provisions and determination in the event of
omission, shall be binding and conclusive upon the Optionee.
12. Notice. Any notices required or permitted to be given under this Option
by the Company or the Board of Directors shall be deemed delivered when placed
in the United States mails, postage prepaid, in an envelope addressed to the
last address of the Optionee which was communicated in writing to the person
giving the notice.
13. Severability. In the event that any provisions of this Option shall for
any reason be held to be invalid, such holding shall not affect any other
provision hereof, and the remaining provisions of this option shall be construed
as if such invalid provision had not been contained in the Option.
14. Gender and Number. As used in this Agreement, the masculine gender
shall include the feminine gender and the singular number shall include the
plural number and vice versa.
IN WITNESS WHEREOF, the Company and the Optionee have caused this Agreement
to be executed as of the date first above written.
MAGNUM HUNTER RESOURCES, INC.
By: /s/Xxxx X. Xxxxx
---------------------------------
Xxxx X. Xxxxx, President and CEO
OPTIONEE:
-----------------------------------
Xxxxxxx Xxxxxxxx 12/08/00 12/08/10 7.9375 4,500
Xxxx Xxxxx 12/08/00 12/08/10 7.9375 1,500
Xxx Xxxx 12/08/00 12/08/10 7.9375 4,500
Xxxxx Xxxx 12/08/00 12/08/10 7.9375 4,500
Xxx Xxxxxxx 12/08/00 12/08/10 7.9375 10,000
Xxxxxxx Xxxxx 12/08/00 12/08/10 7.9375 10,000
Xxxxx Xxxx 12/08/00 12/08/10 7.9375 4,000
Xxxx Xxxxx 12/08/00 12/08/10 7.9375 4,000
Xxxxx Xxxxxx 12/08/00 12/08/10 7.9375 3,000
Xxxxx Xxxx 12/08/00 12/08/10 7.9375 40,000
Xxxxx Xxxxxxx 12/08/00 12/08/10 7.9375 4,000
Xxxxx Xxxxx 12/08/00 12/08/10 7.9375 100,000
Xxxxxxx Xxxxxxx 12/08/00 12/08/10 7.9375 3,000
Xxxxx Xxxxxx 12/08/00 12/08/10 7.9375 27,500
Xxxxx Xxxxxxx 12/08/00 12/08/10 7.9375 3,000
Xxxx Xxxxx 12/08/00 12/08/10 7.9375 3,000
Xxx Xxxxxx 12/08/00 12/08/10 7.9375 3,000
Xxxxx Xxxxxxx 12/08/00 12/08/10 7.9375 3,000
Xxxxx Xxxxxxx 12/08/00 12/08/10 7.9375 3,000
Xxxxx Xxxxxxxxx 12/08/00 12/08/10 7.9375 27,500
Xxxxx Xxxxxxx 12/08/00 12/08/10 7.9375 35,000
Xxxxx Xxxx 12/08/00 12/08/10 7.9375 15,000
Xxxxxx Xxxxxxxx 12/08/00 12/08/10 7.9375 10,000
Xxxx Xxxxxxx 12/08/00 12/08/10 7.9375 100,000
Xxx Xxxxx 12/08/00 12/08/10 7.9375 3,000
Xxxx Xxxxx 12/08/00 12/08/10 7.9375 50,000
Xxxxxxx Xxxxx 12/08/00 12/08/10 7.9375 5,000
Xxxxxxx Xxxxxx 12/08/00 12/08/10 7.9375 3,000
Xxxx Xxxxx 12/08/00 12/08/10 7.9375 27,500
Xxxxxxx X. Xxxxx 12/08/00 12/08/10 7.9375 25,000
Xxxx Xxxxx 12/08/00 12/08/10 7.9375 300,000
Xxxx Xxxxxxx 12/08/00 12/08/10 7.9375 3,000
Xxxxx Xxxxxx 12/08/00 12/08/10 7.9375 8,000
Xxxxxx Xxxx 12/08/00 12/08/10 7.9375 3,000
Xxxxxx Xxxxxxx 12/08/00 12/08/10 7.9375 15,000
Xxxx Xxxxxxxx 12/08/00 12/08/10 7.9375 3,000
Xxxx Xxxxxx 12/08/00 12/08/10 7.9375 30,000
X.X. Xxx 12/08/00 12/08/10 7.9375 40,000
Xxxxxx Xxxxxx 12/08/00 12/08/10 7.9375 10,000
Xxxx Xxxxxxx 12/08/00 12/08/10 7.9375 15,000
Xxxxx Xxxxxxxx 12/08/00 12/08/10 7.9375 4,500
Xxxxx Xxxxx 12/08/00 12/08/10 7.9375 2,000
Xxx Xxxxxxxxx 12/08/00 12/08/10 7.9375 20,000
Xxxxx Xxxxxx 12/08/00 12/08/10 7.9375 2,000
Xxxxx Box 12/08/00 12/08/10 7.9375 15,000
Xxxxx Xxxxxxxx 12/08/00 12/08/10 7.9375 3,000
Xxxxx XxXxxxx 12/08/00 12/08/10 7.9375 10,000
Xxxxxxx Xxxxxx 12/08/00 12/08/10 7.9375 3,000
Xxx Xxxxxx 12/08/00 12/08/10 7.9375 3,000
Xxx Xxxxxx 12/08/00 12/08/10 7.9375 20,000
Xxx Xxxxxx 12/08/00 12/08/10 7.9375 15,000
Xxx Upfield 12/08/00 12/08/10 7.9375 15,000
Xxxxx Xxxxxx 12/08/00 12/08/10 7.9375 3,000
Xxxx Xxxx 12/08/00 12/08/10 7.9375 10,000
Xxxxxxx Xxxxx 12/08/00 12/08/10 7.9375 3,000
Xxxxx Xxxxx 12/08/00 12/08/10 7.9375 4,000
Xxxxx Xxxxxx 12/08/00 12/08/10 7.9375 3,000
Xxxxx Xxxxxxx 12/08/00 12/08/10 7.9375 3,000
Xxxxx Xxxxxxxx 12/08/00 12/08/10 7.9375 5,000
Xxxxx Xxxx 12/08/00 12/08/10 7.9375 3,000
Xxxxx XxXxxxx 12/08/00 12/08/10 7.9375 5,500
Xxxxx Xxxxxxxx 12/08/00 12/08/10 7.9375 3,500
Xxxx Xxxxxxxx 12/08/00 12/08/10 7.9375 3,000
Xxxx Xxxx 12/08/00 12/08/10 7.9375 200,000
Xxxxxxx X. XxXxxxxxx 12/08/00 12/08/10 7.9375 35,000
Xxxxxx Xxxxxxxx 12/08/00 12/08/10 7.9375 35,000
Xxxxxx Xxxx 12/08/00 12/08/10 7.9375 3,000
Xxxxx Xxxxxxxxx 12/08/00 12/08/10 7.9375 15,000
Xxxx Xxxxxxx 12/08/00 12/08/10 7.9375 3,000
Xxx Xxxxxx 12/08/00 12/08/10 7.9375 5,000
Xxxxx Xxxxxxx 12/08/00 12/08/10 7.9375 5,000
Xxxxxx Xxxx 12/08/00 12/08/10 7.9375 3,000
Xxx Xxxxxx 12/08/00 12/08/10 7.9375 3,000
Xxxxxxx Xxxxxxxxxx 12/08/00 12/08/10 7.9375 3,000
Xxxxxx Xxxxxx 12/08/00 12/08/10 7.9375 10,000
Xxx Xxxx 12/08/00 12/08/10 7.9375 3,000
Xxxxxx Xxxxxxx 12/08/00 12/08/10 7.9375 3,000
Xxxxxxx Xxxxx 12/08/00 12/08/10 7.9375 5,000
Xxxx Xxxxxxx 12/08/00 12/08/10 7.9375 3,000
Xxxx Xxxxxx 12/08/00 12/08/10 7.9375 3,000
Xxxx Xxxxxxxx 12/08/00 12/08/10 7.9375 25,000
Xxxxx Xxxxxxxxx 12/08/00 12/08/10 7.9375 3,000
Xxxxx Xxxxxx 12/08/00 12/08/10 7.9375 4,000
Xxx Xxxxxxx 12/08/00 12/08/10 7.9375 3,000
Xxxxxx Xxxx 12/08/00 12/08/10 7.9375 3,000
Xxxx Xxxx 12/08/00 12/08/10 7.9375 3,000
Xxxxx Xxxxxxxx 12/08/00 12/08/10 7.9375 2,000
Xxxxxx Xxxxxxxx 12/08/00 12/08/10 7.9375 3,500
Serene Prat 12/08/00 12/08/10 7.9375 1,500
Xxxxx Xxxxxxx 12/08/00 12/08/10 7.9375 3,000
Xxxxxxx Xxxxxxx 12/08/00 12/08/10 7.9375 3,000
Xxxxx Xxxxx 12/08/00 12/08/10 7.9375 3,000
Xxxxx Xxxxx 12/08/00 12/08/10 7.9375 1,500
Xxxx Xxxxxxxx 12/08/00 12/08/10 7.9375 5,000
Xxxx Xxxxxxx 12/08/00 12/08/10 7.9375 2,000
Xxxxxx Xxxxx 12/08/00 12/08/10 7.9375 5,000
Xxxxxxx Xxxxxxx 12/08/00 12/08/10 7.9375 3,000
Xxxxxx Xxxxxxx 12/08/00 12/08/10 7.9375 10,000
Xxxx Xxxxxx 12/08/00 12/08/10 7.9375 5,000
Xxxxxx XxXxxxxx 01/17/01 01/17/06 12.00 5,000
Xxxx Xxxxx 12/08/00 12/08/10 9.3125 20,000
Xxxxxx Xxxxx 12/08/00 12/08/10 11.08 20,000
