Exhibit 10.2
EDGE PETROLEUM CORPORATION
1997 INCENTIVE PLAN
STANDARD
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT ("Agreement") is made as of the 21st day of
May, 1999 (the "Grant Date"), by and between Edge Petroleum Corporation, a
Delaware corporation (the "Company"), and _____________________ (the "Grantee").
The Company has adopted the Edge Petroleum Corporation 1997
Incentive Plan (the "Plan"), a copy of which is appended to this Agreement as
Exhibit A and by this reference made a part hereof, for the benefit of eligible
employees, directors and independent contractors of the Company and its
Subsidiaries. Capitalized terms used and not otherwise defined herein shall have
the meaning ascribed thereto in the Plan.
Pursuant to the Plan, the Committee, which has generally been
assigned responsibility for administering the Plan, has determined that it would
be in the interest of the Company and its stockholders to grant the options
provided herein in order to provide Grantee with additional remuneration for
services rendered, to encourage Grantee to remain in the employ of the Company
or its Subsidiaries and to increase Grantee's personal interest in the continued
success and progress of the Company.
The Committee has further determined that it would be in the
best interests of the Company and the Grantee to recall, surrender and terminate
those certain options heretofore granted to Grantee covering __________ shares
of Company common stock ("Common Stock") as described in a Standard
Non-Qualified Stock Option Agreement between the Company and Grantee dated
____________________ 199___ and __________ shares of Common Stock as described
in a standard Non-Qualified Stock Option Agreement between the Company and
Grantee dated ____________________ 199___ (collectively the "Prior Stock
Options").
The Company and Grantee therefore agree as follows:
1. Surrender and Termination of Prior Options. Subject to the
conditions herein, Grantee hereby surrenders, relinquishes and re-assigns to the
Company the Prior Stock Options, and the Company and Grantee declare such Prior
Stock Options to be terminated.
2. Grant of Option. Subject to the terms and conditions
herein, the Company grants to the Grantee an option to purchase __________
shares of Common Stock of the Company ("Common Stock") at a price equal to
$7.0625 per share (the "Option Price") exercisable during the period commencing
on May 21, 1999 and expiring at 5 p.m. Houston, Texas time ("Close of Business")
on May 21, 2009 (the "Option Term"), subject to earlier termination pursuant to
paragraph 7 below, (the "Option Shares"). The Option Price and Option Shares are
subject to adjustment pursuant to paragraph 10 below. This Option is a
"Nonqualified Stock Option" and is hereinafter referred to as the "Option." The
Option shall be deemed to be issued in replacement of the Prior Stock Options.
3. Conditions of Exercise. The Option is exercisable only in
accordance with the conditions stated in this paragraph.
(a) Except as otherwise provided in this subparagraph (a), the
Option may only be exercised to the extent the Option Shares have
become available for purchase in accordance with the following
schedule:
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Percentage of Option
Date Shares Available for Purchase
---- -----------------------------
May 21, 1999 50%
May 21, 2000 50%
[Options vest 50% on grant date and 50% on first anniversary
of grant date.]
Notwithstanding the foregoing, subject to the provisions of any
applicable written employment agreement between the Grantee and the
Company or any Subsidiary, no additional Option Shares shall become
available for purchase if Grantee has not remained in the continuous
employment of the Company and its Subsidiaries through the applicable
date; provided, however, that any Option Shares that would otherwise
become available for purchase pursuant to the foregoing schedule during
the 12-month period ending on the first anniversary of the date of
Grantee's termination of employment shall become available for purchase
on the specified date during such period if the Grantee's employment
was terminated for any reason other than (i) by the Company or any
Subsidiary for Cause (as defined in Section 7 below) or (ii)
voluntarily by the Grantee without Good Reason (as defined in Section 7
below). A change of employment is continuous employment within the
meaning of this paragraph 3 provided that, after giving effect to such
change, the Grantee continues to be an employee of the Company or any
Subsidiary.
(b) To the extent the Option becomes exercisable, such Option
may be exercised in whole or in part (at any time or from time to time,
except as otherwise provided herein) until expiration of the Option
Term or earlier termination thereof.
4. Manner of Exercise. The Option shall be considered exercised (as to
the number of Option Shares specified in the notice referred to in subparagraph
(a) below) on the latest of (i) the date of exercise designated in the written
notice referred to in subparagraph (a) below, (ii) if the date so designated is
not a business day, the first business day following such date or (iii) the
earliest business day by which the Company has received all of the following:
(a) Written notice, in such form as the Committee may require,
designating, among other things, the date of exercise and the number of
Option Shares to be purchased;
(b) If the Option is to be exercised, payment of the Option
Price for each Option Share to be purchased in cash, Common Stock or in
such other form (or combination of forms) of payment contemplated by
Section 11 of the Plan as the Committee or the provisions of Section 11
of the Plan may permit; provided, however, that any shares of Common
Stock delivered in payment of the Option Price that are or were the
subject of an Employee Award must be shares that the Grantee has owned
for a period of at least six months prior to the date of exercise; and
(c) Any other documentation that the Committee may reasonably
require.
5. Mandatory Withholding for Taxes. Grantee acknowledges and agrees
that the Company shall deduct from the cash and/or shares of Common Stock
otherwise payable or deliverable upon exercise of the Option an amount of cash
and/or number of shares of Common Stock (valued at their Fair Market Value on
the date of exercise) that is equal to the amount of all federal, state and
local taxes required to be withheld by the Company upon such exercise, as
determined by the Committee.
6. Delivery by the Company. As soon as practicable after receipt of all
items referred to in paragraph 4, and subject to the withholding referred to in
paragraph 5, the Company shall deliver to the Grantee certificates issued in
Grantee's name for the number of Option Shares purchased by exercise of the
Option. If delivery is by mail, delivery of shares of Common Stock shall be
deemed effected for all purposes when a stock transfer agent of the Company
shall have deposited the certificates in the United States mail, addressed to
the Grantee, and any cash payment shall be deemed effected when a Company check,
payable to Grantee and in an
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amount equal to the amount of the cash payment, shall have been deposited in the
United States mail, addressed to the Grantee.
7. Termination of Employment. Unless otherwise determined by the
Committee in its sole discretion, the Option shall terminate, prior to the
expiration of the Option Term, at the time specified below:
(a) If Grantee terminates employment with the Company and its
Subsidiaries voluntarily without Good Reason (as defined below), then
the Option shall terminate at the Close of Business on the first
business day following the expiration of the 90-day period which began
on the date of termination of Grantee's employment; or
(b) If Grantee's employment with the Company and its
Subsidiaries is terminated by the Company or a Subsidiary for Cause (as
defined below), then the Option shall terminate immediately upon such
termination of Grantee's employment.
In any event in which the Option remains exercisable for a
period of time following the date of termination of Grantee's employment, the
Option may be exercised during such period of time only to the extent it is or
becomes exercisable as provided in paragraph 3. Notwithstanding any period of
time referenced in this paragraph 7 or any other provision of this paragraph
that may be construed to the contrary, the Option shall in any event terminate
upon the expiration of the Option Term.
"Cause" for purposes of the Agreement shall mean cause as
defined in any written employment agreement between the Grantee and the Company
or a Subsidiary in effect at the time of the Grantee's termination of employment
or, in the absence of any such employment agreement, any of the following: (a)
conviction of the Grantee by a court of competent jurisdiction of any felony or
a crime involving moral turpitude; (b) the Grantee=s knowing failure or refusal
to follow reasonable instructions of the Board or reasonable policies, standards
and regulations of the Company or its Subsidiaries; (c) the Grantee=s continued
failure or refusal to faithfully and diligently perform the usual, customary
duties of his employment with the Company or a Subsidiary; (d) the Grantee
continuously conducting himself in an unprofessional, unethical, immoral or
fraudulent manner; or (e) the Grantee=s conduct discredits the Company or a
Subsidiary or is detrimental to the reputation, character and standing of the
Company or a Subsidiary.
"Good Reason" for purposes of the Agreement shall mean good
reason as defined in any written employment agreement between the Grantee and
the Company or a Subsidiary in effect at the time of the Grantee=s termination
of employment or, in the absence of any such employment agreement, shall be
deemed to have occurred upon the happening of any of the following:
(i) any reduction in Grantee's annual rate of salary;
(ii) either (x) a failure of the Company to continue in effect
any employee benefit plan in which Grantee was participating or (y) the
taking of any action by the Company that would adversely affect
Grantee's participation in, or materially reduce Grantee's benefits
under, any such employee benefit plan, unless such failure or such
taking of any action adversely affects the senior members of the
corporate management of the Company generally;
(iii) the assignment to Grantee of duties and responsibilities
that are materially more oppressive or onerous than those attendant to
Grantee's position immediately after the date hereof;
(iv) the relocation of the office location as assigned to
Grantee by the Company to a location more than 20 miles from Grantee's
current location without Grantee's consent; or
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(v) the failure of the Company to obtain, prior to the time of
any reorganization, merger, consolidation, disposition of all or
substantially all of the assets of the Company or similar transaction
effective after the date hereof, in which the Company is not the
surviving person, the unconditional assumption in writing or by
operation of law of the Company's obligations to Grantee under this
Agreement by each direct successor to the Company in any such
transaction.
8. Nontransferability of Option. During Grantee's lifetime, the Option
is not transferable (voluntarily or involuntarily) other than pursuant to a
domestic relations order and, except as otherwise required pursuant to a
domestic relations order, is exercisable only by the Grantee or Grantee's court
appointed legal representative. The Grantee may designate a beneficiary or
beneficiaries to whom the Option shall pass upon Grantee's death and may change
such designation from time to time by filing a written designation of
beneficiary or beneficiaries with the Committee on the form annexed hereto as
Exhibit B or such other form as may be prescribed by the Committee, provided
that no such designation shall be effective unless so filed prior to the death
of Grantee. If no such designation is made or if the designated beneficiary does
not survive the Grantee's death, the Option shall pass by will or the laws of
descent and distribution. Following Grantee's death, the Option, if otherwise
exercisable, may be exercised by the person to whom such option passes
accordingly to the foregoing and such person shall be deemed the Grantee for
purposes of any applicable provisions of this Agreement.
9. No Stockholder Rights. The Grantee shall not be deemed for any
purpose to be, or to have any of the rights of, a stockholder of the Company
with respect to any shares of Common Stock as to which this Agreement relates
until such shares shall have been issued to Grantee by the Company. Furthermore,
the existence of this Agreement shall not affect in any way the right or power
of the Company or its stockholders to accomplish any corporate act, including,
without limitation, the acts referred to in Section 15 of the Plan.
10. Adjustments. As provided in Section 15 of the Plan, certain
adjustments may be made to the Option upon the occurrence of events or
circumstances described in Section 15 of the Plan.
11. Restrictions Imposed by Law. Without limiting the generality of
Section 16 of the Plan, the Grantee agrees that Grantee will not exercise the
Option and that the Company will not be obligated to deliver any shares of
Common Stock, if counsel to the Company determines that such exercise, or
delivery would violate any applicable law or any rule or regulation of any
governmental authority or any rule or regulation of, or agreement of the Company
with, any securities exchange or association upon which the Common Stock is
listed or quoted. The Company shall in no event be obligated to take any
affirmative action in order to cause the exercise of the Option or the resulting
delivery of shares of Common Stock to comply with any such law, rule, regulation
or agreement.
12. Notice. Unless the Company notifies the Grantee in writing of a
different procedure, any notice or other communication to the Company with
respect to this Agreement shall be in writing and shall be (a) delivered
personally to the following address:
Edge Petroleum Corporation
Texaco Heritage Plaza
1111 Bagby, Suite 2100
Xxxxxxx, Xxxxx 00000
or (b) sent by first class mail, postage prepaid and addressed as follows:
Edge Petroleum Corporation c/o Corporate
Secretary Texaco Heritage Plaza 0000 Xxxxx,
Xxxxx 0000 Xxxxxxx, Xxxxx 00000.
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Any notice or other communication to the Grantee with respect to this Agreement
shall be in writing and shall be delivered personally, or shall be sent by first
class mail, postage prepaid, to Grantee's address as listed in the records of
the Company on the Grant Date, unless the Company has received written
notification from the Grantee of a change of address.
13. Amendment. Notwithstanding any other provisions hereof, this
Agreement may be supplemented or amended from time to time as approved by the
Committee as contemplated by Section 6 of the Plan. Without limiting the
generality of the foregoing, without the consent of the Grantee,
(a) this Agreement may be amended or supplemented (i) to cure
any ambiguity or to correct or supplement any provision herein which
may be defective or inconsistent with any other provision herein, or
(ii) to add to the covenants and agreements of the Company for the
benefit of Grantee or surrender any right or power reserved to or
conferred upon the Company in this Agreement, subject, however, to any
required approval of the Company's stockholders and, provided, in each
case, that such changes or corrections shall not adversely affect the
rights of Grantee with respect to the Award evidenced hereby without
the Grantee=s consent, or (iii) to make such other changes as the
Company, upon advice of counsel, determines are necessary or advisable
because of the adoption or promulgation of, or change in or of the
interpretation of, any law or governmental rule or regulation,
including any applicable federal or state securities laws; and
(b) subject to Section 6 of the Plan and any required approval
of the Company's stockholders, the Award evidenced by this Agreement
may be canceled by the Committee and a new Award made in substitution
therefor, provided that the Award so substituted shall satisfy all of
the requirements of the Plan as of the date such new Award is made and
no such action shall adversely affect the Option to the extent then
exercisable without the Grantee=s consent.
14. Grantee Employment. Nothing contained in this Agreement, and no
action of the Company or the Committee with respect hereto, shall confer or be
construed to confer on the Grantee any right to continue in the employ of the
Company or any of its Subsidiaries or interfere in any way with the right of the
Company or any employing Subsidiary to terminate the Grantee's employment at any
time, with or without cause; subject, however, to the provisions of any
employment agreement between the Grantee and the Company or any Subsidiary.
15. Governing Law. This Agreement shall be governed by, and construed
in accordance with, the internal laws of the State of Delaware.
16. Construction. References in this Agreement to "this Agreement" and
the words "herein," "hereof," "hereunder" and similar terms include all Exhibits
and Schedules appended hereto, including the Plan. This Agreement is entered
into, and the Award evidenced hereby is granted, pursuant to the Plan and shall
be governed by and construed in accordance with the Plan and the administrative
interpretations adopted by the Committee thereunder. All decisions of the
Committee upon questions regarding the Plan or this Agreement shall be
conclusive. Unless otherwise expressly stated herein, in the event of any
inconsistency between the terms of the Plan and this Agreement, the terms of the
Plan shall control. The headings of the paragraphs of this Agreement have been
included for convenience of reference only, are not to be considered a part
hereof and shall in no way modify or restrict any of the terms or provisions
hereof.
17. Duplicate Originals. The Company and the Grantee may sign any
number of copies of this Agreement. Each signed copy shall be an original, but
all of them together represent the same agreement.
18. Rules by Committee. The rights of the Grantee and obligations of
the Company hereunder shall be subject to such reasonable rules and regulations
as the Committee may adopt from time to time hereafter.
19. Entire Agreement. Subject to the provisions of any applicable
written employment agreement between the Grantee and the Company or any
Subsidiary, Grantee and the Company hereby declare and represent that no promise
or agreement not herein expressed has been made and that this Agreement contains
the entire
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agreement between the parties hereto with respect to the Option and replaces and
makes null and void any prior agreements, oral or written, between Grantee and
the Company regarding the Option.
20. Grantee Acceptance. Grantee shall signify acceptance of the terms
and conditions of this Agreement by signing in the space provided at the end
hereof and returning a signed copy to the Company.
ATTEST: EDGE PETROLEUM CORPORATION
By:________________________
Secretary_____________________ Name: Xxxx X. Xxxxx
Title: Chairman & CEO
ACCEPTED:
___________________________
Name:
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Agreements identical to the forgoing were entered into by and between Edge
Petroleum Corporation and Officers of the Company and differences are listed
within the following schedule:
Schedule
--------
Surrendered Reissued New
Name Options Options Options
---- ----------- -------- -------
Xxxxx X. Xxxxxxx 116,940 70,200 14,800
Xxxxxxx X. Xxxx 35,507 21,300 8,700
Xxxxx X. Xxxxxxx 7,500 4,000 2,500
