EXHIBIT 10.35
INCENTIVE STOCK OPTION AGREEMENT
AGREEMENT made this day of , 1997, between CLIFFWOOD OIL & GAS CORP. a
Texas corporation (the "Company"), and _____________.
("Employee").
To carry out the purposes of the CLIFFWOOD OIL & GAS CORP. 1997 STOCK
OPTION PLAN (the "Plan"), by affording Employee the opportunity to purchase
shares of the common stock of the Company ("Stock"), and in consideration of the
mutual agreements and other matters set forth herein and in the Plan, the
Company and Employee hereby agree as follows:
1. GRANT OF OPTION. The Company hereby grants to Employee the right and
option ("Option") to purchase all or any part of an aggregate of shares of
Stock, on the terms and conditions set forth herein and in the Plan, which Plan
is incorporated herein by reference as a part of this Agreement. This Option is
intended to constitute an incentive stock option, within the meaning of Section
422(b) of the Internal Revenue Code of 1986, as amended (the "Code").
2. PURCHASE PRICE. The purchase price of Stock purchased pursuant to the
exercise of this Option shall be per share, which has been determined to be not
less than the Fair Market Value of the Stock at the date of grant of this
Option. For all purposes of this Agreement, Fair Market Value of Stock shall be
determined in accordance with the provisions of the Plan.
3. EXERCISE OF OPTION. Subject to the earlier expiration of this Option as
herein provided, this Option may be exercised, by written notice to the Company
at its principal executive office addressed to the attention of its Secretary,
at any time and from time to time after the date of grant hereof, but, except as
otherwise provided below, this Option shall not be exercisable for more than a
percentage of the aggregate number of shares offered by this Option determined
by the number of full years from the date of grant hereof to the date of such
exercise, in accordance with the following schedule:
PERCENTAGE OF SHARES
NUMBER OF FULL YEARS THAT MAV BE PURCHASED
Less than - 1 years 0%
1 years 33.33%
2 years 66.66%
3 years or more 100.00%
This Option may be exercised only while Employee remains an employee
of the Company and will terminate and cease to be exercisable upon Employee's
termination of employment with the Company, except that:
(a) If Employee's employment with the Company terminates by reason
of disability (within the meaning of Section 22(e)(3) of the Code), this Option
may be exercised in full by Employee (or Employee's estate or the person who
acquires this Option by will or the laws of descent and distribution or
otherwise by reason of the death of Employee) at any time during the period of
one year following such termination.
(b) If Employee dies while in the employ of the Company, Employee's
estate, or the person who acquires this Option by will or the laws of descent
and distribution or otherwise by reason of the death of Employee, may exercise
this Option in full at any time during the period of one year following the date
of Employee's death.
(c) If Employee's employment with the Company terminates for any
reason other than as described in (a) or (b) above, unless Employee voluntarily
terminates such employment or such employment is terminated for cause, this
Option may be exercised by Employee at any time during the period of three
months following such termination, or by Employee's estate (or the person who
acquires this Option by will or the laws of descent and distribution or
otherwise by reason of the death of Employee) during a period of one year
following Employee's death if Employee dies during such three-month period, but
in each case only as to the number of shares Employee was entitled to purchase
hereunder upon exercise of this Option as of the date Employee's employment so
terminates. The Committee appointed by the Board of Directors of the Company to
administer the Plan (the "Committee") may, in it sole discretion, advise
Employee in writing, prior to a voluntary termination of Employee's employment,
that such termination will be treated for purposes of this paragraph as an
involuntary termination for a reason other than cause. As used in this
paragraph, the term "cause" shall mean Employee's gross negligence or willful
misconduct in performance of the duties of his employment, or Employee's final
conviction of a felony or of a misdemeanor involving moral turpitude.
This Option shall not be exercisable in any event after the expiration of ten
years from the date of grant hereof. The purchase price of shares as to which
this Option is exercised shall be paid in full at the time of exercise (a) in
cash (including check, bank draft or money order payable to the order of the
Company), or (b) by delivering to the Company shares of Stock having a fair
market value equal to the purchase price, or (c) a combination of cash and
Stock. No fraction of a share of Stock shall be issued by the Company upon
exercise of an Option or accepted by the Company in payment of the exercise
price thereof; rather, Employee shall provide a cash payment for such amount as
is necessary to effect the issuance and acceptance of only whole share of Stock.
Unless and until a certificate or certificates representing such shares shall
have
been issued by the Company to Employee, Employee (or the person permitted to
exercise this Option in the event of Employee's death) shall not be or have any
of the rights or privileges of a shareholder of the Company with respect to
shares acquirable upon an exercise of this Option.
4. WITHHOLDING OF TAX. To the extent that the exercise of this Option or
the disposition of shares of Stock acquired by exercise of this Option results
in compensation income to Employee for federal or state income tax purposes,
Employee shall deliver to the Company at the time of such exercise or
disposition such amount of money or shares of Stock as the Company may required
to meet its obligation under applicable tax laws or regulations, and, if
Employee fails to do so, the Company is authorized to withhold from any cash or
Stock remuneration then or thereafter payable to Employee any tax required to be
withheld by reason of such resulting compensation income. Upon an exercise of
this Option, the Company is further authorized in its discretion to satisfy any
such withholding requirement out of any cash or shares of Stock distributable to
Employee upon such exercise.
5. STATUS OF STOCK. The Company may, but shall not be obligated to,
register for issuance under the Securities Act of 1933, as amended (the "Act")
the shares of Stock acquirable upon exercise of this Option. In the absence of
such effective registration or an available exemption from registration under
the Act, issuance of shares of Stock acquirable upon exercise of this Option
will be delayed until registration of such shares is effective or an exemption
from registration under the Act is available. In the event exemption under the
Act is available upon an exercise of this Option, Employee (or the person
permitted to exercise this Option in the event of Employee's death or
incapacity), if requested by the Company to do so, will execute and deliver to
the Company in writing an agreement containing such provisions as the Company in
writing an agreement containing such provisions as the Company may require to
assure compliance with applicable securities laws.
Employee agrees that the shares of Stock which Employee may acquire
by exercising this Option will not be sold or otherwise disposed of in any
manner which would constitute a violation of any applicable securities laws,
whether federal or state. Employee also agrees (i) that the certificates
representing the shares of Stock purchased under this Option may bear such
legend or legends as the Committee deems appropriate in order to assure
compliance with applicable securities laws, and (ii) that the Company may refuse
to register the transfer of the shares of Stock purchase under this Option on
the stock transfer records of the Company in such proposed transfer would in the
opinion of counsel satisfactory to the Company constitute a violation of an
applicable securities laws and (iii) that the Company may give related
instructions to its transfer agent, if any, to stop registration of the transfer
of the shares of Stock purchased under this Option.
6. EMPLOYMENT RELATIONSHIP. For purposes of this Agreement, Employee shall
be considered to be in the employment of the Company as long as Employee remains
an employee of either the Company, a parent or subsidiary corporation (as
defined in Section 424 of the Code) of the Company, or a corporation or a parent
or subsidiary of such corporation assuming or substituting a new option for this
Option. Any question as to whether and when there has been a termination of such
employment, and the cause of such termination, shall be determined by the
Committee and its determination shall be final.
7. BINDING EFFECT. This Agreement shall be binding upon and inure
to the benefit of any successors to the Company and all persons lawfully
claiming under Employees.
8. GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Texas.
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed by its officer thereunto duly authorized, and Employee has executed
this Agreement, all as of the day and year first above written.
CLIFFWOOD OIL & GAS CORP.
BY: ____________________________________
Xxxxx X. Xxxxxxxxx, President
BY: ______________________________________
_______________, Employee
