EXHIBIT 10 (ii) (A) (2)
PUMA ENERGY, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
Optionee: Xxxxxx X. Xxxxxxxx
Number of Shares: 590,000
Option Exercise Price: $1.00
Effective Date of Grant: February 7, 2001
1. Grant of Options. Puma Energy, Inc. ("Company") hereby grants to the
above- named optionee ("Optionee"), Non-Qualified Stock Options (collectively,
"Options") to purchase at the Option Exercise Price (set forth above) per share
and on the terms and conditions set forth in this agreement ("Agreement") that
number of shares, as adjusted as herein provided (as so adjusted, "Option
Shares"), of its common stock ("Common Stock") as is set forth above. The
exercise price exceeds the fair market value per share of the Common Stock as
reflected by the closing price of the Common Stock on the date hereof, pursuant
to a grant that was approved by the Board of Directors.
2. Term of Options and Limitations on Right to Exercise. The Options
shall become exercisable in full on the date hereof and shall expire at 5:00
p.m., Dallas, Texas time, on February 6, 2011, unless sooner terminated pursuant
hereto.
3. Exercise of Options. Other terms, times and conditions of exercise of
the Options are as follows:
a. Prior to the Expiration Date, the Options shall be fully
exercisable in whole or in part for a number of shares up to the aggregate
number of all of the Option Shares.
b. Upon the death or Disability of the Optionee, the Optionee or the
personal representative of the Optionee, as applicable, may exercise the
Options to the extent not previously exercised (and, in the case of death,
to the extent the Options could have been exercised by the Optionee on the
date of death) subject to the terms set forth in this Agreement, until
their termination as provided by Section 2 hereof.
c. The Options shall be exercised by written notice directed to the
Secretary of the Company. Such written notice shall be accompanied by full
payment in cash for the number of Option Shares specified in such written
notice.
d. If the Optionee is subject to restrictions regarding the
Optionee's right to sell shares of Common Stock under applicable securities
laws and as a consequence exercise of the Options would not be taxable
under the provisions of Section 83(c) of the Code, the Optionee, upon
exercise of the Options, shall be authorized to make an election to be
taxed upon exercise of the Options under Section 83(b) of the Code. To
effect such election, the Optionee may file an appropriate election with
the Internal Revenue Service within thirty (30) days after exercise of the
Options and otherwise in accordance with applicable Treasury Regulations.
e. The Optionee recognizes that the Committee may make such
provisions and take such steps as it may deem necessary or appropriate for
the withholding of any taxes that the Company or any subsidiary of the
Company is required by any law or regulation or any governmental authority,
whether federal, state or local, domestic or foreign, to make in connection
with the Optionee's exercise of the Options.
f. Subject to the terms of this Agreement, the Options may be
exercised at any time and without regard to any other option to purchase
stock of the Company held by the Optionee.
g. In the event the outstanding shares of Common Stock are increased
or decreased or changed into or exchanged for a different number or kind of
shares or other securities of the Company or of any other corporation by
reason of any merger, sale of stock, consolidation, liquidation,
recapitalization, reclassification, stock split up, combination of shares,
stock dividend, or transaction having similar effect, the total number of
shares subject to this Option shall be proportionately and appropriately
adjusted. Following a transaction described above, if the Company continues
in existence, the number and kind of shares that are subject to any Option
and the option price per share shall be proportionately and appropriately
adjusted without any change in the aggregate price to be paid therefor upon
exercise of the Option. If the Company will not remain in existence or
substantially all of its voting Common Stock and Common Stock will be
purchased by a single purchaser or group of purchasers acting together,
then the Company may (i) declare that all Options shall terminate 30 days
after the Committee gives written notice to all Optionee's of their
immediate right to exercise all Options then outstanding (without regard to
limitations on exercise otherwise contained in the Options), or (ii) notify
the Optionee that the Options shall apply with appropriate adjustments as
determined by the Company to the securities of the successor corporation to
the Optionee would have been entitled, or (iii) take action that is some
combination of aspects of (i) and (ii). The determination by the Company as
to the terms of any of the foregoing adjustments shall be conclusive and
binding. Any fractional shares resulting from any of the foregoing
adjustments under this section shall be disregarded and eliminated.
4. Nontransferability. The Options are not transferable except by
will or by the laws of descent and distribution and are subject to the
provisions of Section 7 hereof. The Options may be exercised during the
lifetime of the Optionee only by the Optionee.
5. Limitation of Rights. The Optionee shall have no rights as a
stockholder with respect to the Option Shares until the Optionee shall
become the holder of record of such Option Shares. Neither the Plan, the
granting of the Options nor this Agreement shall impose any obligation on
the Company or any subsidiary of the Company to continue the employment of
the Optionee.
6. Optionee's Best Efforts Covenant. The Optionee hereby agrees to
use the Optionee's best efforts to provide services to the Company in a
workmanlike manner and to promote the Company's interests.
7. Restrictions on Transfer and Pledge. Except as otherwise provided
herein, the Options and all rights and privileges granted hereunder shall
not be transferred, assigned, pledged or hypothecated in any way, whether
by operation of law or otherwise, and shall not be subject to execution,
attachment or similar process.
8. Restrictions on Issuance of Option Shares. If at any time the
Board of Directors or the Committee determines, in its discretion, that
listing, registration or qualification of the Option Shares covered by the
Options upon any securities exchange or under any state or federal law, or
the consent or approval of any governmental regulatory body, is necessary
or desirable as a condition to the exercise of the Options, the Options may
not be exercised in whole or in part unless and until such listing,
registration, qualification, consent or approval has been effected or
obtained free of any conditions not acceptable to the Board of Directors or
the Committee. The Board or Committee, as the case may be, shall make such
a determination, and notify the Optionee of its determination, within two
(2) days after receiving the Optionee's written notice of exercise of his
Options. In the event of any such determination by the Board or the
Committee, the Company shall use its best efforts to effect or obtain such
listing, registration, qualification, consent or approval.
9. Successors. This Agreement shall be binding upon any successor of
the Company, in accordance with the terms of this Agreement and the Plan.
10. Stock Reserve. The Company shall at all times during the term of
this Agreement reserve and keep available such number of shares of Common
Stock as shall be sufficient to satisfy the requirements of this Agreement.
The Company shall pay all original issue taxes (if any) on the exercise of
the Options, and all other fees and expenses necessarily incurred by the
Company in connection therewith.
11. Investment Intent. The Optionee hereby represents and warrants as
follows:
a. The Shares will be acquired for the Optionee's own account
without the participation of any other person, with the intent of
holding the Shares for investment and without the intent of
participating, directly or indirectly, in a distribution of the Shares
and not with a view to, or for resale in connection with, any
distribution of the Shares or any portion thereof.
b. The Optionee, through the Optionee's position with the
Company, has access to all material information with regard to the
Company.
c. The Optionee will not acquire the Shares based upon any
representation, oral or written, by any person with respect to the
future value of or income from the Shares but rather upon an
independent examination and judgment as to the prospects of the
Company.
d. The Shares were not offered to the Optionee by means of
publicly disseminated advertisements or sales literature, nor is the
Optionee aware of any offers made to other persons by such means.
e. The Optionee acknowledges that the Optionee must continue to
bear the economic risk of the investment in the Shares for an
indefinite period and recognizes that the Shares will be: (i)
transferred without registration under any state or federal law
relating to the registration of securities for sale; and (ii) issued
and transferred in reliance on the exemption from registration
provided by Section 4(2) of the United States Securities Act of 1933,
as amended (the "1933 Act").
IN WITNESS WHEREOF, the Company, acting by and through its duly authorized
officers, has caused this Agreement to be executed, and the Optionee has
executed this Agreement, effective this 7th day of February, 2001.
PUMA ENERGY, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: President
/s/ Xxxxxx X. Xxxxxxxx
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OPTIONEE - Xxxxxx X. Xxxxxxxx
