Exhibit 10.3
EDGE PETROLEUM CORPORATION
1997 INCENTIVE PLAN
DIRECTOR
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.
The Company hereby documents the automatic grant, pursuant to
the Plan, of the option described herein in order to provide Grantee with
additional remuneration for services rendered, to encourage Grantee to remain a
director of the Company or its Subsidiaries and to increase Grantee's personal
interest in the continued success and progress of the Company.
The Company 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 March 3, 1997, and
________ shares of Company Common Stock as described in a Standard Non-Qualified
Stock Option Agreement between the Company and Grantee dated June 1, 1998
(collectively, the "Prior Stock Options").
The Company and Grantee therefore agree as follows:
1. Termination of Prior Stock Options and Grant of New Option. 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. Subject to the terms and conditions herein, the Company grants to
the Grantee 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"),
an option to purchase from the Company, at a price equal to $7.0625 per share
(the "Option Price"), _______ shares of Common Stock (the "Option Shares"). The
Option Price and Option Shares are subject to adjustment pursuant to paragraph 7
below. This option is as a "Nonqualified Stock Option" and is hereinafter
referred to as the "Option."
2. 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:
Fraction of Option
Date Shares Available for Purchase
---- -----------------------------
May 21, 1999 50%
May 21, 2000 50%
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Notwithstanding the foregoing, no additional Option Shares shall become
available for purchase if Grantee has previously resigned from the
Board without the consent of a majority of the other directors;
provided, however that the Grantee's Option may be exercised during the
remaining Option Term to the extent it was exercisable on the
resignation date.
(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.
3. 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 Company, 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 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 a Director
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 Company may reasonably
require.
4. Delivery by the Company. As soon as practicable after receipt of all
items referred to in paragraph 3, 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 amount equal to the amount of the
cash payment, shall have been deposited in the United States mail, addressed to
the Grantee.
5. 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.
6. 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.
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7. 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.
8. 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.
9. 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 Xxxxx, 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 1111 Xxxxx,
Suite 2100 Xxxxxxx, Xxxxx 00000.
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.
10. Governing Law. This Agreement shall be governed by, and construed
in accordance with, the internal laws of the State of Delaware.
11. 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. 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.
12. 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.
13. Entire Agreement. 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 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.
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14. 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_____________________ Xxxx X. Xxxxx
Chairman & CEO
ACCEPTED:
_______________________________
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Exhibit B to Non-Qualified Stock Option Agreement dated as of May 21, 1999
Edge Petroleum Corporation 1997 Incentive Plan
Designation of Beneficiary
I,____________________________(the "Grantee"), hereby declare that upon
my death_________________________________________________ (the "Beneficiary") of
Name
-------------------------------------------------------------------------------,
Xxxxxx Xxxxxxx Xxxx Xxxxx Zip Code
who is my____________________________________________ , shall be entitled to the
Relationship to Grantee
Option and all other rights accorded the Grantee by the above-referenced
agreement (the "Agreement").
It is understood that this Designation of Beneficiary is made pursuant
to the Agreement and is subject to the conditions stated herein, including the
Beneficiary's survival of the Grantee's death. If any such condition is not
satisfied, such rights shall devolve according to the Grantee's will or the laws
of descent and distribution.
It is further understood that all prior designations of beneficiary
under the Agreement are hereby revoked and that this Designation of Beneficiary
may only be revoked in writing, signed by the Grantee, and filed with the
Company prior to the Grantee's death.
---------------------------- ------------------------------
Date Grantee
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Agreements identical to the forgoing were entered into by and between Edge
Petroleum Corporation and Directors of the Company and differences are listed
within the following schedule:
Schedule
--------
Surrendered Reissued New
Name Options Options Options
---- ----------- -------- -------
Xxxxxxx X. Xxxxxxx 8,000 6,300 3,000
Xxxxx X. Xxxxxxxx 2,000 2,700 3,000
Xxxx X. Xxxxxxxx 2,000 2,700 3,000
Xxxxxxx X. Xxxxxxx 8,000 6,300 3,000
Xxxxxx X. Shower 5,000 4,500 3,000
Xxxx Xxxxxxxxx 8,000 6,300 3,000
Xxxxxxx X. Xxxxx 5,000 2,500 3,000
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