EXHIBIT 10.24
HARVEST NATURAL RESOURCES, INC.
2001 LONG TERM STOCK INCENTIVE PLAN
EMPLOYEE OPTION AGREEMENT
Agreement made at Houston, Texas, USA, as of September 15, 2005, by and
between HARVEST NATURAL RESOURCES, INC. (the "Company") and XXXXX X. XXXXXXXX
III (the "Employee").
It is hereby agreed as follows:
1. Grant of Option; Consideration. The Company hereby confirms the
grant, pursuant to Section 5 of the Company's 2001 Stock Option Plan (the
"Plan"), to the Employee on September 15, 2005, of a nonqualified stock option
to purchase up to 85,000 shares of the Company's Common Stock, par value $0.01
per share (the "Shares"), at an exercise price of $10.80 per share (the
"Option"). The Option granted hereunder is not intended to constitute an
incentive stock option within the meaning of Section 422 of the Internal Revenue
Code of 1986, as amended. The terms of the Option are subject to adjustment in
certain circumstances, as provided in the Plan.
The Employee shall be required to pay no consideration for the grant of
the Option, except for his agreement to serve as an employee of the Company or
any subsidiary and other agreements set forth herein.
2. Incorporation of Plan by Reference. The Option has been granted to
the Employee under the Plan, a copy of which is attached hereto. All of the
terms, conditions, and other provisions of the Plan are hereby incorporated by
reference into this Employee Stock Option Agreement (the "Agreement").
Capitalized terms used in this Agreement but not defined herein shall have the
same meanings as in the Plan. If there is any conflict between the provisions of
this Agreement and the provisions of the Plan, the provisions of the Plan shall
govern.
3. Vesting. Subject to all of the terms and conditions of the Plan and
this Agreement, including acceleration of vesting in the event of a Change of
Control or Total Disability, the Employee may purchase up to:
(i) one-third of the Shares subject to the Option upon exercise of
the Option after the later of September 14, 2006, and the
Stock Value Date;
(ii) an additional one-third of the Shares subject to the Option
upon exercise of the Option after the later of September 14,
2007, and the Stock Value Date; and
(iii) the remaining one-third of the Shares subject to the Option
upon exercise of the Option after the later of September 14,
2008, and the Stock Value Date.
The "Stock Value Date" is the first day after September 15, 2005, on
which the average of the Closing Price of the Stock for ten (10) consecutive
trading days equals or exceeds $20.00 per share. The "Closing Price of the
Stock" means the final trading price per share of the Stock as reported in The
Wall Street Journal listing of consolidation trading for New York Stock Exchange
issues.
4. Term and Termination of Service. This Option, to the extent it has
not been previously exercised, shall expire at 5:00 p.m. (Central Time) on
September 14, 2015 or, if earlier, at 5:00 p.m. (Central Time):
(i) on the date 3 months after the Employee ceases to be a
Non-Employee Director, Employee or Consultant of the Company
or any Subsidiary for any reason other than a Change of
Control, Total Disability or death;
(ii) on the date 12 months after the Employee ceases to be a
Non-Employee Director, Employee or Consultant of the Company
or any Subsidiary by reason of Total Disability;
(iii) on the date 12 months after the date of the Employee's death
who dies while in the service or employ of the Company or a
Subsidiary or within 3 months after the termination of such
employment or service; or
(iv) on the date 12 months after the Employee's termination of
employment or service if such employment or service is
terminated within 730 days after the effective date of a
Change of Control.
Except in the case of a termination subject to (ii) above, the Option
shall be exercisable after the date of such termination of Employee's
service or employment only to the extent the Option was exercisable at
the date of such termination. In the case of termination subject to
(ii) above, any Options that are not exercisable shall become
exercisable effective as of the termination date.
The term and vesting schedule of the Option is also subject to Sections
4(a)(2), (3) and (4) of an Employment Agreement dated September 15,
2005 between the Company and the Employee.
5. Option Exercise. The Option may be exercised in whole or in part (to
the extent then exercisable) by contacting the Company's designated agent for
processing Option exercises. An Option exercise must be accompanied by payment
in full of the exercise price (i) in cash, (ii) by means of a broker-assisted
cashless exercise to the extent then permitted under rules and regulations
adopted by the Committee, or (iii) in such other manner as may then be permitted
under rules and regulations adopted by the Committee. As soon as practicable
after the valid exercise of the Option, the Company shall deliver to the
Employee one or more stock certificates representing the Shares so purchased,
with any requisite legend affixed.
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6. Non-Transferability. No right or interest of the Employee in the
Option shall be pledged, encumbered, or hypothecated to or in favor of any third
party or shall be subject to any lien, obligation, or liability of the Employee
to any third party. The Option shall not be transferable to any third party by
the Employee otherwise than (i) by will or the laws of descent and distribution,
(ii) pursuant to a qualified domestic relations order as defined under the Code
or Title I of the Employee Retirement Income Security Act of 1974 to an
immediate family member, or (iii) to the extent authorized by the Committee, to
an immediate family member of the Employee who acquires the options from the
Employee through a gift.
7. Compliance with Laws and Regulations. The obligation of the Company
to deliver Shares upon the exercise of this Option is conditioned upon
compliance by the Employee and by the Company with all applicable laws and
regulations, including regulations of federal and state agencies. If requested
by the Company, the Employee shall provide to the Company, as a condition to the
valid exercise of this Option and the delivery of any certificates representing
Shares, appropriate evidence, satisfactory in form and substance to the Company,
that he is acquiring the Shares for investment and not with a view to the
distribution of the Shares or any interest in the Shares, and a representation
to the effect that the Employee shall make no sale or other disposition of the
Shares unless (i) the Company shall have received an opinion of counsel
satisfactory to it in form and substance that such sale or other disposition may
be made without compliance with registration or other applicable requirements of
federal and state laws and regulations, and (ii) all steps required to comply
with such laws and regulations in connection with the sale or other disposition
of the Shares have been taken and all necessary approvals have been received.
The certificates representing the Shares may bear an appropriate legend giving
notice of the foregoing restrictions on transfer of the Shares, and any other
restrictive legend deemed necessary or appropriate by the Committee.
8. Tax Withholding. Whenever Shares are to be delivered upon exercise
of the Option, the Company shall be entitled to require as a condition of
delivery or payment that the Employee remit or, in appropriate cases, agree to
remit when due an amount sufficient to satisfy all federal, state, and local
withholding tax requirements relating thereto. The Employee will be entitled to
elect to have the Company withhold from the Shares to be delivered upon the
exercise of the Option, a sufficient number of such shares to satisfy the
Employee's minimum statutory federal, state, and local withholding tax
obligations relating to the Option exercise to the extent then permitted under
rules and regulations adopted by the Committee and in effect at the time of the
exercise of the Option. In such case, the Shares withheld or the shares
surrendered will be valued at the Fair Market Value at the time of the exercise
of the Option.
9. Employee Bound by Plan. The Employee hereby acknowledges receipt of
the attached copy of the Plan and agrees to be bound by all the terms and
provisions thereof (as presently in effect or hereafter amended), and by all
decisions and determinations of the Committee.
10. Binding Effect: Integration: No Other Rights Created. This
Agreement shall be binding upon the heirs, executors, administrators and
successors of the parties. This Agreement constitutes the entire agreement
between the parties with respect to the Option, and supersedes any prior
agreements or documents with respect to the Option. No amendment, alteration,
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suspension, discontinuation or termination of this Agreement which may impose
any additional obligation upon the Company or impair the rights of the Employee
with respect to the Option shall be valid unless in each instance such
amendment, alteration, suspension, discontinuation or termination is expressed
in a written instrument duly executed in the name and on behalf of the Company
and by the Employee. Neither this Agreement nor the grant of the Option shall
constitute an employment agreement, nor shall either confer upon the Employee
any right with respect to his continued status with the Company.
HARVEST NATURAL RESOURCES, INC.
BY:
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XXXXXXX X. XXXXXXXX'
CHAIRMAN OF THE BOARD
EMPLOYEE:
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Xxxxx X. Xxxxxxxx III
DATE:
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Attachment (copy of the Plan)
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