XXXXX PETROLEUM COMPANY
OPTION AGREEMENT
This Option Agreement ("Agreement") is made effective as of
November 23, 2004 ("Grant Date"), by and between XXXXX PETROLEUM
COMPANY, a Delaware corporation (the "Company"), and Xxxxx X.
Xxxxxxx ("Grantee").
STATEMENT OF BACKGROUND FACTS
The Board of Directors (the "Board") of the Company has
established the Xxxxx Petroleum Company Amended and Restated 1994
Stock Option Plan (the "Plan").
Pursuant to the provision of the Plan, the Committee
designated by the Board in accordance with the Plan, by action
taken on November 23, 2004, granted to the Grantee an option
("Option") to purchase shares of the Class A Common Stock of the
Company ("Common Stock"), subject to the terms and conditions set
forth herein.
In consideration of the foregoing and of the mutual
covenants set forth herein and other good and valuable
consideration, the parties hereto agree as set forth below.
Unless otherwise defined herein, capitalized terms shall have the
same meanings as defined in the Plan.
1. The Option. The Grantee may, at the Grantee's option
and on the terms and conditions set forth herein, purchase all or
any part of an aggregate of 20,000 shares of Common Stock under
the Plan at the price per share set forth in Section 2 below.
2. Option Price and Exercise Dates.
a. The Option shall be exercisable at the option
price per share ("Option Price") as to the specified
number of shares ("Optioned Shares") on and after the
"Start" dates and on or before the "Termination" dates
set forth below:
Exercise Dates
Number of Shares Option Price Start
Termination
5,000 $43.16 11/23/2005
11/23/2014
5,000 $43.16 11/23/2006
11/23/2014
5,000 $43.16 11/23/2007
11/23/2014
5,000 $43.16 11/23/2008
11/23/2014
b. The Option may be exercised when installments
accrue as indicated by the Start dates in Section 2a
above, but only during an Exercise Period (as defined
below) occurring on or after the applicable Start date
and on or before the applicable Termination date, with
respect to all or part of the Optioned Shares covered
by such accrued installments, subject, however, to the
further restrictions contained in this Agreement. In
the event that during any applicable Exercise Period
the Grantee shall exercise the Option for less than the
full number of Optioned Shares included within the
accrued installment, the Grantee shall, during any
balance of such Exercise Period or future Exercise
Period (but on or before the applicable Termination
date), be entitled to exercise the Option (in one or
more subsequent increments) for the balance of the
Optioned Shares included in said accrued installment.
In no event shall the Grantee be entitled to exercise
the Option for fractional shares of Common Stock or for
a number of shares exceeding the maximum number of
Optioned Shares.
c. As used in this Agreement, the phrase
"Exercise Period" shall mean such period as the Board
may establish or consent to upon the advice of legal
counsel.
d. The Option shall be exercised by giving to
the Company written notice thereof during any
applicable Exercise Period, and specifying in such
notice the number of Optioned Shares with respect to
which such Option is being exercised.
e. Grantee acknowledges that Grantee has no
right whatsoever to exercise the Option granted
hereunder with respect to any Optioned Shares covered
by any installment unless and until such installment
accrues as provided above. Grantee further understands
that the Option granted hereunder shall expire and
become unexercisable as provided in the Plan.
3. Delivery of Certificates. As soon as practicable after
any proper exercise of an Option in accordance with the
provisions of this Agreement and the Plan, the Company shall
deliver to the Grantee at the main office of the Company, or such
other place as shall be mutually acceptable, a certificate or
certificates representing the shares of Common Stock (if any) to
which the Grantee is entitled upon exercise of such Option.
4. No Rights in Shares Before Issuance and Delivery.
Neither the Grantee, his estate nor his transferees by will or
the laws of descent and distribution shall be, or have any rights
or privileges of, a shareholder of the Company with respect to
any shares issuable upon exercise of an Option unless and until
certificates representing such shares shall have been issued and
delivered. No adjustment will be made for a dividend or other
rights where the record date is prior to the date such
certificates are issued.
5. Nontransferability of Options. Any Options granted
hereunder are not transferable otherwise than by will or the laws
of descent and distribution. Options shall not be otherwise
transferred, assigned, pledged, hypothecated or disposed of in
any way, whether by operation of law or otherwise, and shall not
be subject to execution, attachment or similar process. Upon any
attempt to transfer an Option otherwise than by will or the laws
of descent and distribution, or to assign, pledge, hypothecate or
otherwise dispose of such Option, or upon the levy of any
execution, attachment or similar process thereon, such Option
shall become null and void and any subsequent attempted exercise
of the Option shall be ineffective against the Company.
6. Governing Plans. A copy of the document evidencing the
Plan has been delivered to the Grantee on or before the date of
execution of this Agreement and receipt of such copy is hereby
expressly acknowledged by Grantee. This Agreement hereby
incorporates by reference said Plan and all of the terms and
conditions of the Plan as the same may be amended from time to
time hereafter in accordance with the terms thereof. The terms
of this Agreement shall in no manner limit or modify the
controlling provisions of the Plan, and in the case of any
conflict between the provisions of the Plan and this Agreement,
the provisions of the Plan shall be controlling and binding upon
the parties hereto.
7. Termination of Employment Due to Change in Control.
Upon the occurrence of a Terminating Transaction (as defined in
the Plan), as of the effective date of such Terminating
Transaction, the then outstanding unvested Options shall
immediately become fully vested and exercisable without regard to
the vesting provisions of Section 2a hereof. Should a
Terminating Transaction occur, the Termination date set forth in
Section 2a hereof shall be extended for thirty (30) days.
8. Certain Representations and Warranties. Grantee
expressly acknowledges, represents and agrees:
a. That Grantee has read and understands the
terms and provisions of the Plan, and hereby accepts
this Agreement subject to all the terms and provisions
of the Plan;
b. That Grantee shall accept as binding,
conclusive and final all decisions or interpretations
of the Committee upon any questions arising under the
Plan;
c. That if use of Common Stock of the Company to
pay the exercise price of the Option is authorized by
the Committee pursuant to the discretion granted to the
Committee under the Plan, Grantee has been advised to
consult with a competent tax advisor regarding the
applicable tax consequences prior to utilizing such
Common Stock to exercise an Option; and
d. That if Grantee is a person subject to the provisions
of Section 16 of the Securities Exchange Act of 1934, Grantee has
been advised to consult with a competent federal securities law
advisor as to the reporting obligations and potential liability
for profits under said Section 16 with respect to the granting
and exercise of Options.
9. No Employment Rights or Obligations.
a. Nothing in the Plan or in this Agreement
shall be construed to create or imply any contract of
employment between the Company, or any direct or
indirect parent or subsidiary corporation of the
Company (the "Participating Companies"), and the
Grantee. Nothing in the Plan or in this Agreement
shall confer upon the Grantee any right to continue in
the employ of any of the Participating Companies or
confer upon any Participating Company any right to
require continued employment by the Grantee. Grantee
acknowledges and agrees that the employment of Grantee
by such Participating Company is expressly at the will
of the Participating Company, and the Participating
Company may terminate Grantee's employment by such
Participating Company at any time for any reason or for
no reason. Similarly, Grantee may terminate his or her
employment with a Participating Company at any time for
any reason or for no reason.
b. Any question(s) as to whether and when there
has been a termination of Grantee's employment, the
reason (if any) for such termination, and/or the
consequences thereof under the terms of the Plan, shall
be determined by the Board in its sole discretion, and
the Board's determination thereof shall be final,
binding and conclusive.
10. Governing Law. This Agreement shall be governed by,
interpreted under, construed and enforced in accordance with the
internal laws, and not the laws pertaining to conflicts or choice
of laws, of the State of California applicable to agreements made
and to be performed wholly within the State of California.
11. Agreement Binding on Successors. The terms of this
Agreement shall be binding upon the executors, administrators,
heirs, successors, transferees and assignees of the Grantee.
12. Costs of Litigation. In any action at law or in equity
to enforce any of the provisions or rights under this Agreement
or the Plan, the unsuccessful party to such litigation, as
determined by the court in a final judgment or decree, shall pay
the successful party or parties all costs, expenses and
reasonable attorneys' fees and disbursements incurred by the
successful party or parties (including, without limitation,
costs, expenses, fees and disbursements on any appeals), and if
the successful party recovers judgment in any such action or
proceeding such costs, expenses and attorneys' fees and
disbursements shall be included as part of the judgment.
13. Necessary Acts. The Grantee agrees to perform all acts
and execute and deliver any documents that may be reasonably
necessary to carry out the provisions of this Agreement,
including, but not limited to, all acts and documents related to
compliance with federal and/or state securities and/or tax laws.
14. Counterparts. For convenience, this Agreement may be
executed in any number of identical counterparts, each of which
shall be deemed a complete original in itself and may be
introduced in evidence or used for any other purpose without the
production of any other counterparts.
15. Invalid Provisions. In the event that any provision of
this Agreement is found to be invalid or otherwise unenforceable
under any applicable law, such invalidity or unenforceability
shall not be construed as rendering any other provisions
contained herein invalid or unenforceable, and all such other
provisions shall be given full force and effect to the same
extent as though the invalid and unenforceable provision was not
contained herein.
IN WITNESS WHEREOF, the Company and the Grantee have
executed this Agreement effective as of the date first written
above.
XXXXX PETROLEUM COMPANY GRANTEE
By: ___________________ _______________________
Signature Signature
Xxxxxx X. Xxxxxxxxx Xxxxx X. Xxxxxxx
----------------------- -----------------------
Printed Name Printed Name
Title: President & CEO
---------------
________________________
Street Address
________________________
City and State
________________________
Social Security No.
By his or her signature below, the spouse of the Grantee, if
such Grantee is legally married as of the date of execution of
this Agreement, acknowledges that he or she has read this
Agreement and the Plan and is familiar with the terms and
provisions thereof, and agrees to be bound by all the terms and
conditions of said Agreement and said Plan.
____________________________
Spouse's Signature
____________________________
Printed Name
Dated: ____________________
By his or her signature below, the Grantee represents that
he or she is not legally married as of the date of execution of
this Agreement.
____________________________
Grantee's Signature
Dated: ____________________
