EXHIBIT 10.2
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS NON-QUALIFIED STOCK OPTION AGREEMENT (the "Agreement"), is made by
and between Texoil, Inc., a Nevada corporation, with its principal place of
business in Houston, Texas (the "Company"), and Xxxx X. Xxxxxx ("Optionee").
NOW, THEREFORE, in consideration of the mutual benefit to be derived
herefrom, the Company and Optionee agree as follows:
1. GRANT OF OPTION. The Company hereby grants to Optionee the right,
privilege and option (the "Option") to purchase 783,722 shares of its common
stock (the "Shares") at $0.2277 per share, in the manner and subject to the
conditions provided hereinafter.
2. TIME OF EXERCISE OF OPTION. The Option shall vest immediately in
Optionee and may be exercised by Optionee at any time prior to December 31,
1999, subject to the terms of this Agreement. Any exercise may be with respect
to any part or all of the Shares then exercisable pursuant to such Option,
subject to a minimum exercise amount of 10,000 shares. Such Option must be
exercised prior to the earlier of (i) December 31, 1999; or (ii) termination of
the Option as set forth in Section 6 below. In no event shall the Company be
required to transfer fractional shares to Optionee or those entitled hereunder
to Optionee's rights herein.
3. METHOD OF EXERCISE. The Optionee or Optionee's representative must
exercise this Option by giving written notice to the Secretary of the Company in
the form attached hereto as Exhibit A, including therewith a certified or bank
cashier's check in the appropriate amount payable to the Company. The notice
shall specify the election to exercise the Option and the number of Shares for
which it is being exercised. The notice shall be signed by the person or persons
exercising this Option. In the event that this Option is being exercised by the
representative of Optionee, the notice shall be accompanied by proof
satisfactory to the Company of the representative's right to exercise the
Option. Optionee or Optionee's representative shall deliver to the Secretary of
the Company, at the time of giving notice, payment in full in cash.
The Company shall thereafter cause to be issued a certificate or
certificates for the Shares as to which this Option has been exercised,
registered in the name of the person exercising the Option (or in the names of
such person and his or her spouse as community property or as joint tenants with
rights of survivorship). Except as otherwise provided in this Agreement, the
Company shall cause such certificate or certificates to be delivered to or upon
the order of the person exercising this Option.
4. RESTRICTIONS ON EXERCISE AND DELIVERY. The exercise of each Option
shall be subject to the conditions that, if at any time the Company shall
determine, in its sole and absolute discretion,
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(i) the satisfaction of any withholding tax or other withholding
liabilities, is necessary or desirable as a condition of, or
in connection with, such exercise or the delivery or purchase
of shares pursuant thereto,
(ii) the listing, registration, or qualification of any shares
deliverable upon such exercise is desirable or necessary,
under any state or federal law, as a condition of, or in
connection with, such exercise or the delivery or purchase of
shares pursuant thereto, or
(iii) the consent or approval of any regulatory body is necessary or
desirable as a condition of, or in connection with, such
exercise or the delivery or purchase of shares pursuant
thereto,
then in any such event, such exercise shall not be effective unless such
withholding, listing, registration, qualification, consent or approval shall
have been effected or obtained free of any conditions not acceptable to the
Company. Optionee shall execute such documents and take such other actions as
are satisfactory to the Company to enable it to effect or obtain such
withholding, listing, registration, qualification, consent or approval. Neither
the Company nor any officer or director shall have any liability with respect to
the non-issuance or failure to sell shares as the result of any suspension of
exercisability imposed pursuant to this Section.
5. SHARES AND ADJUSTMENTS. The Company agrees that it will at all times
during the term of this Option reserve and keep available sufficient authorized
but unissued or reacquired common stock to satisfy the requirements of this
Agreement.
Subject to any required action by the shareholders of the Company, the
number of Shares subject to this Option and the exercise price shall be adjusted
proportionately for any increase or decrease in the number of issued shares of
common stock resulting from a subdivision or consolidation of shares or the
payment of a stock dividend or any other increase or decrease in the number of
issued shares effected without receipt of consideration by the Company.
Subject to any required actions by the shareholders of the Company, upon a
sale or exchange of all or substantially all of the assets of the Corporation, a
merger or consolidation in which the Corporation is not the surviving
corporation, a merger, reorganization or consolidation in which the Corporation
is the surviving corporation and shareholders of the Corporation exchange their
stock for securities or property, a liquidation of the Corporation, or similar
transaction ("Capital Transaction"), this Option shall terminate, unless such
Option is assumed by a successor corporation in a merger or consolidation.
To the extent the foregoing adjustments relate to securities of the
Company, such adjustments shall be made by the Board of Directors of the
Company, whose determination shall be conclusive and binding on the persons.
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The grant of this Option shall not affect in any way the right or power of
the Company to make adjustments, reclassifications, reorganizations or changes
in its capital or business structure or to merge or to consolidate or to
dissolve, liquidate or sell, or transfer all or any part of its business or
assets.
Whenever the Company shall take any action resulting in adjustment as
provided herein, the Company shall forthwith deliver notice of such action to
Optionee, which notice shall set forth the number of shares subject to this
Option and the exercise price resulting therefrom.
6. TERMINATION OF OPTION. Except as otherwise provided in this Agreement,
the Option granted under this Agreement, to the extent not previously exercised,
shall terminate forthwith upon the first to occur of any of the following
events:
(a) the dissolution or liquidation of the Company; or
(b) the breach by Optionee of this Agreement.
7. NONTRANSFERABILITY OF OPTION. The Option granted under this Agreement
shall not be transferable and may be exercised only by Optionee; provided,
however, that in the case of the death of Optionee, the Option granted under
this Agreement may be transferred to and exercised by the executor or
administrator of the estate of Optionee or the person or persons to whom the
Option granted under this Agreement shall have been validly transferred by the
executor or administrator pursuant to Optionee's will or the laws of descent and
distribution.
8. RESTRICTIONS ON TRANSFER OF SHARES ACQUIRED; REPRESENTATIONS AND
WARRANTIES. Optionee represents and warrants to the Company that he understands
that, as of the date of this Agreement, the Option and the Shares of the Company
issuable upon exercise of the Option have not been registered under the
Securities Act of 1933 as amended ("Act") or qualified under any applicable
state securities laws and they must be held indefinitely unless they are
subsequently registered and qualified thereunder or an exemption from
registration is available. Optionee further represents and warrants to the
Company that he will not transfer any of the Shares acquired hereunder in
violation of the provisions of any applicable securities statute or regulation.
Optionee acknowledges that the Company has made no agreements, covenants or
undertakings whatsoever (a) to register any of the Shares issuable upon this
Option under the Act or any applicable securities laws or (b) about the
availability of any exemption under the Act (including the availability of Rule
144) or applicable state securities laws. Optionee also acknowledges that
currently there is no public market for the Shares and that such a market may
never develop. Optionee further represents and warrants (i) that the issuance of
the Option has not been accompanied by any advertisement, (ii) Optionee has a
pre-existing personal and business relationship with certain of the officers and
directors of the Issuer, and has access to any information regarding the Issuer
necessary to evaluate the risks of investing in it, and (iii) Optionee is
experienced in investments such as that represented by the Option, and can
afford to lose such an investment.
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9. RESTRICTIVE LEGENDS. Each certificate evidencing the Shares acquired
hereunder shall be imprinted with legends indicating that certain restrictions
exist as to any transfer of the Shares including but not limited to restrictions
imposed by federal and state securities laws and this Agreement.
10. REPRESENTATION. Upon any exercise of the Option, Optionee will deliver
to the Company a letter in the form attached hereto as Exhibit "A," in which
Optionee shall represent and agree that the Shares to be acquired pursuant to
the exercise of the Option are being acquired for investment, and not with a
view to the sale or distribution thereof. Optionee also agrees to make such
other representations as are deemed necessary or appropriate by the Company and
its counsel.
11. RIGHTS AS SHAREHOLDER. Neither Optionee nor his executor,
administrator, heirs, or legatees, shall be, or have any rights or privileges
of, a shareholder of the Company in respect of the Shares issuable upon exercise
of the Option granted under this Agreement, unless and until certificates
representing such shares shall have been issued in his name.
12. EMPLOYMENT RIGHTS. Nothing in this Agreement shall be construed as
giving Optionee the right to be retained as an employee of the Company or as
impairing the right of the Company to terminate his services at any time, with
or without cause.
13. EXPENSES. The Company shall pay all original issue and transfer taxes
with respect to the issuance and transfer of the Shares and all other fees and
expenses necessarily incurred by the Company in the payment of all federal,
state and other personal income taxes payable by Optionee in connection with the
grant or exercise of the Option, the issuance of the Shares and any subsequent
disposition of such Shares.
14. ARBITRATION. Any controversy arising under this Agreement shall be
settled by arbitration in Houston, Texas before a single arbitrator appointed in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association. Judgment upon the award rendered by the arbitrator may be entered
in any court having jurisdiction over this Agreement. Each party shall be
entitled to prehearing discovery to the maximum extent permitted by law.
15. NOTICES. Any notice to be given to the Company under the terms of this
Agreement shall be addressed to the Company in care of its Secretary at its
principal office, and any notice to be given to Optionee shall be addressed to
him at the address given below, or at such address as either party may hereafter
designate in writing to the other.
16. BINDING EFFECT. This Agreement shall be binding upon and inure to the
benefit of Optionee, his heirs and successors, and of the Company, its
successors and assigns.
17. GOVERNING LAW. This Agreement shall be governed by the laws of the
State of Texas.
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18. TERMINATION OF PRIOR OPTION AGREEMENT. This Agreement replaces and
supersedes that certain Non-Qualified Stock Option Agreement between Optionee
and Texoil Company, a Tennessee corporation ("Texoil Company"), which agreement
was assumed by the Company pursuant to the terms of the merger between Texoil
Company and the Company's wholly owned subsidiary.
IN WITNESS WHEREOF, this Agreement is effective as of April 16, 1993.
Texoil, Inc., a Nevada corporation
By:
Its.
OPTIONEE
/S/ XXXX X. XXXXXX
Xxxx X. Xxxxxx
Address: 0000 Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
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XXXX X. XXXXXX
(Name)
(Address)
(Date)
Texoil, Inc.
0000 Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Ladies and Gentlemen:
I ("Optionee") hereby exercise Optionee's right to purchase _______ shares
of Common Stock ("Shares") of Texoil, Inc., a Nevada corporation ("Issuer"),
pursuant to, and in accordance with, a Non-Qualified Stock Option Agreement
("Agreement") between the Issuer and Optionee. As provided in the Agreement, the
Optionee delivers herewith a certified or bank cashier's check in the amount of
the aggregate option exercise price. Please deliver to the Optionee at the
address set forth above stock certificates representing the subject shares
registered in the Optionee's name [and ______________________ (SPOUSE), as
______________________ (STYLE OF VESTING - JOINT TENANCY, ETC.) ].
Optionee makes the following representations and warranties with the
understanding that the Issuer will rely upon them in the Issuer's determination
of whether the exercise of Optionee's right to purchase Common Stock of the
Issuer meets the requirements of exemptions provided under the Securities Act of
1933, as amended, and applicable state securities laws.
1. The Shares are being purchased by Optionee for investment only, for
Optionee's own account, and not with a view to or for sale in connection with
any distribution of the Shares. Optionee will not take, or cause to be taken,
any action which would cause Optionee, or any entity or person affiliated with
Optionee, to be deemed an underwriter with respect to the Shares.
2. Optionee:
(a) has a preexisting personal or business relationship with the
Issuer or any of its officers, directors or controlling persons of a nature and
duration as would allow Optionee to be aware of the character, business acumen,
general business and financial circumstances of the Issuer or of the person with
whom such relationship exists; or
Exhibit A to Non-Qualified Stock Option Agreement
Page 1
(b) by reason of Optionee's business or financial experience, or the
business or financial experience of Optionee's professional advisor who is
unaffiliated with and is not compensated by the Issuer or any affiliate or
selling agent of the Issuer, directly or indirectly, Optionee has the capacity
to protect Optionee's interests in connection with the purchase of the Shares.
3. Optionee acknowledges that an investment in the Issuer represents a
speculative investment and a high degree of risk. Optionee acknowledges that
Optionee has had the opportunity to obtain and review all information from the
Issuer necessary to make a reasonably informed investment decision and that
Optionee has had all questions asked of the Issuer answered to the reasonable
satisfaction of Optionee. Optionee is able to bear the economic risk of an
investment in the Shares.
4. The purchase of the Shares has not been accompanied by the publication
of any advertisement.
5. Optionee understands and acknowledges that the Shares have not, and
will not, be registered under the Securities Act of 1933, as amended, or under
any applicable state securities laws. Optionee understands and acknowledges that
the Shares may not be sold without compliance with the registration requirements
of federal and applicable state securities laws unless an exemption from such
laws is available.
6. Optionee understands that the certificate(s) evidencing the Shares will
bear a legend in the form set forth on Exhibit A.
7. Optionee will notify the Issuer immediately of any change in the above
information.
The foregoing representations and warranties are given on ___________,
199__ at .
Xxxx X. Xxxxxx
Exhibit A to Non-Qualified Stock Option Agreement
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EXHIBIT A
THIS SECURITY HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF
1933 ("ACT") OR THE SECURITIES OR BLUE SKY LAWS OF CALIFORNIA OR ANY OTHER STATE
AND MAY NOT BE OFFERED AND SOLD UNLESS REGISTERED AND/OR QUALIFIED PURSUANT TO
THE RELEVANT PROVISIONS OF FEDERAL AND STATE SECURITIES OR BLUE SKY LAWS OR AN
EXEMPTION FROM SUCH REGISTRATION OR QUALIFICATION IS APPLICABLE. THEREFORE, NO
SALE OR TRANSFER OF THIS SECURITY SHALL BE MADE, NO ATTEMPTED SALE OR TRANSFER
SHALL BE VALID, AND THE ISSUER SHALL NOT BE REQUIRED TO GIVE ANY EFFECT TO ANY
SUCH TRANSACTION UNLESS (A) SUCH TRANSACTION SHALL HAVE BEEN DULY REGISTERED
UNDER THE ACT AND QUALIFIED OR APPROVED UNDER APPROPRIATE STATE OR BLUE SKY
LAWS, OR (B) THE ISSUER SHALL HAVE FIRST RECEIVED ANY OPINION OF COUNSEL
SATISFACTORY TO IT THAT SUCH REGISTRATION QUALIFICATION OR APPROVAL IS NOT
REQUIRED.
Exhibit A to Non-Qualified Stock Option Agreement
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