CONTANGO OIL & GAS COMPANY RESTRICTED STOCK AWARD AGREEMENT
Exhibit 10.3
CONTANGO OIL & GAS COMPANY
RESTRICTED STOCK AWARD AGREEMENT
This Stock Award Agreement (this “Agreement”) is made as of [[GRANTDATE]] (the “Effective Date”), by and between Contango Oil & Gas Company, a Delaware corporation (the “Company” or “MCF”), and [[FIRSTNAME]] [[LASTNAME]] (the “Participant”). Unless otherwise defined herein, capitalized terms used in this Agreement shall have the same meaning ascribed to them in the Second Amended and Restated 2009 Incentive Compensation Plan, as adopted (as the same may be further amended, restated or otherwise modified from time to time, (the “Plan”)).
WHEREAS, the Participant is an Employee, and the Participant’s continued participation is considered by the Company to be important for the Company’s continued growth; and
WHEREAS, the Board has determined that the Company shall make certain Grants to the Participant under the Plan, in furtherance of the purposes of the Plan of strengthening the desire of Employees to continue their employment with the Company and by securing other benefits for the Company;
WHEREAS, this Agreement shall represent the Grant of a Stock Award (referred to herein as “Restricted Stock” or “Award”);
WHEREAS, the Company desires to confirm the Grants and to set forth the terms and conditions of such Grants, and the Participant desires to accept such Grants and agree to the terms and conditions thereof, as set forth in this Agreement;
NOW THEREFORE, in consideration of the mutual covenants contained herein, the parties hereto agree as follows:
Part I: Grant of Time-Based Restricted Stock Award
| 2) | Vesting:Except as set forth in Section 5 below, provided Participant continues to provide continuous service as an employee of the Company, the Restricted Stock will vest as follows: |
First anniversary of the date of grant33%
Second anniversary of the date of grant33%
Third anniversary of the date of grant34%
| 4) | Restrictions; Forfeiture. The Restricted Stock are restricted in that they may not be sold, transferred or otherwise alienated or hypothecated until these restrictions are removed or expire as contemplated within this Agreement. The Restricted Stock are also restricted in the sense that they may be forfeited to the Company. Participant hereby agrees that if the Restricted Stock are forfeited pursuant to this Agreement the Company shall have the right to deliver the Restricted Stock to the Company’s transfer agent for, at the Company’s election, cancellation or transfer to the Company. |
| 5) | Separation from Service. |
| a) | For Cause or Voluntary Termination. In the event Participant’s employment is terminated by the Company for Cause or by the Participant’s voluntary resignation for any reason, the Participant shall forfeit any or all of the shares of the Restricted Stock which have not vested, and the Participant shall have no further rights with respect to the Award. For purposes hereof, “Cause” means (i) if Participant is a party to an employment or service agreement or employment policy manual with the Company or its affiliates and such agreement or policy manual provides for a definition of Cause, the definition of Cause as set forth therein, and (ii) if Participant is not party to an agreement or policy described in clause (i), (A) the commission of, or plea of guilty or no contest to, a felony or a crime involving moral turpitude or the commission of any other act involving willful malfeasance or material fiduciary breach with respect to the Company or an affiliate, (B) conduct tending to bring the Company or an affiliate into substantial public disgrace, or disrepute, or (C) gross negligence or willful misconduct with respect to the Company or an affiliate. The Plan administrator, in its absolute discretion, shall determine the effect of all matters and questions relating to whether a Participant has been discharged for Cause. |
| b) | Without Cause. In the event Participant’s employment is terminated by the Company without Cause and not within the Protection Period (defined below), for purposes of determining vesting under this Section 5(b), vesting of Participant’s Restricted Stock shall be pro-rata accelerated and a portion of the shares of Restricted Stock subject to this agreement shall become immediately vested, with pro-rata acceleration calculated by multiplying the number of outstanding shares of Restricted Stock by a fraction, the numerator of which will be the number of full calendar months during the applicable vesting period that Participant was actively employed by the Company, plus one, and the denominator of which is the number of full calendar months within the applicable vesting period. Upon a termination of employment by the Company without Cause and not within the Protection Period, the Participant shall forfeit any or all of the shares of the Restricted Stock which have not vested after taking into account the vesting acceleration described in this paragraph, and the Participant shall have no further rights with respect to the Award. |
In the event Participant’s employment is terminated by the Company without Cause during the Protection Period (defined below), vesting shall be accelerated and the shares of Restricted Stock subject to this agreement shall become immediately vested in full.
The “Protection Period” is defined as the period of time that begins on the date that a Change of Control transaction is consummated, and ends on the last day of the twelfth month immediately following the consummation of the Change of Control transaction.
| c) | Death and Disability. In the event Participant’s employment is terminated on account of Participant’s death or Disability (defined below), for purposes of determining vesting under this Section 5(c), Participant shall be deemed to continue employment through the date that is the anniversary of the date of grant of the Restricted Stock awarded under this Agreement coincident with or next following the date of such termination and vesting of the shares of Restricted Stock that would have vested on such anniversary shall be accelerated and shall become immediately vested at termination. As used herein, “Disability” means that the Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment. The determination of whether an individual has a Disability shall be determined under procedures established by the Plan administrator. The Plan administrator may rely on any determination that a Participant is disabled for purposes of benefits under any long-term disability plan maintained by the Company or any affiliate in which a Participant participates. Upon a termination of employment on account of Participant’s death or Disability, the Participant shall forfeit any or all of the shares of the Restricted Stock which have not vested after taking into account the vesting acceleration described in this paragraph, and the Participant shall have no further rights with respect to the Award. |
Part II: Provisions Applicable to the Award
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS UPON TRANSFER AND FORFEITURE PROVISIONS AS SET FORTH IN THAT CERTAIN RESTRICTED STOCK AWARD AGREEMENT BETWEEN THE COMPANY AND THE PARTICIPANT, AS THE SAME MAY BE AMENDED FROM TIME TO TIME, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY, AND, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, NO SALE, ASSIGNMENT, TRANSFER OR OTHER DISPOSITION OF THESE SHARES SHALL BE VALID OR EFFECTIVE UNLESS MADE IN COMPLIANCE WITH ALL OF THE TERMS AND CONDITIONS OF SUCH AGREEMENT.
| 13) | Cash in Lieu. At the sole discretion of the Compensation Committee of the Company’s Board of Directors, upon the vesting of any portion of the Restricted Stock, the Compensation Committee of the Company’s Board of Directors may make a cash payment to the Participant in an amount equal to the fair market value of the number of shares that would have otherwise been issued upon such vesting, net of any applicable taxes. |
| 17) | General Provisions. |
| a) | This Agreement shall be governed by the internal substantive laws, but not the choice of law rules, of Delaware. |
| i) | Any notice to the Escrow Agent shall be sent to the Company’s address with a copy to the other party hereto. |
| f) | The Participant agrees upon request to execute any further documents or instruments necessary or desirable to carry out the purposes or intent of this Agreement. |
IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the Company by its duly authorized officer, as of the day and year first written above.
PARTICIPANT | |
| |
[[SIGNATURE]] CONTANGO OIL & GAS COMPANY | |
By: /s/ E. XXXXXX XXXXX | |
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EXHIBIT A
FORM OF ELECTION UNDER SECTION 83(B)
OF THE INTERNAL REVENUE TAX CODE
The undersigned hereby elects to include value of restricted property in gross income in the year of transfer pursuant to Section 83(b) of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations promulgated thereunder, with respect to the property described below and supplies the following information in accordance with the regulations promulgated thereunder:
1.The name, address and taxpayer identification number of the undersigned are:
City, State, Zip:
Taxpayer I.D. No.:
2. Description of property with respect to which the election is being made: ________________ shares of common stock of Contango Oil & Gas Company, a Delaware corporation (the “Company”) (EIN ______________) (the “Common Stock”).
3. The date on which property was transferred - __________________.
The taxable year to which this election relates is calendar year ______
4. The nature of the restriction(s) to which the property is subject is: If the taxpayer terminates employment with the Company for certain situations prior to vesting in one or more of the shares of Common Stock, then those unvested shares will be forfeited. The shares of Common Stock will vest and cease to be subject to forfeiture in a series of three (3) successive equal annual installments upon the taxpayer’s completion of each year of employment with the Company over the three (3)-year period measured from _____________________.
The Common Stock is subject to transfer restrictions in the taxpayer’s hands by virtue of language to that effect stamped on the stock certificate.
5. Fair market value: The fair market value at time of transfer (determined without regard to any restrictions other than restrictions which by their terms will never lapse) of the Common Stock with respect to which this election is being made is $______ per share.
6. Amount paid for property: The taxpayer paid $0 per share of Common Stock.
7. Furnishing statement to employer: A copy of this statement has been furnished to the Company.
Signature: ______________________________Date: __________________
