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EXHIBIT 10.9.1
OPTION AGREEMENT
1997 Incentive Plan of Xxxxxxx Exploration Company
(Non-Qualified Stock Option)
This Option Agreement ("Agreement"), made and entered into as of March
4, 1997, is by and between Xxxxxxx Exploration Company, a Delaware corporation
(the "Company"), and [See Schedule I attached hereto] (the "Optionee").
WITNESSETH:
WHEREAS, the 1997 Incentive Plan of Xxxxxxx Exploration Company
("Plan") was adopted by the Company, effective as of February 27, 1997 ("Plan
Date"), for certain employees of the Company and its Subsidiaries;
WHEREAS, the Optionee is eligible to participate in the Plan and the
Committee has approved the grant to Optionee of an option to purchase shares of
Common Stock, par value $.01 per share, of the Company ("Shares") pursuant to
the Plan and upon the terms set forth herein;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements hereinafter set forth, the Company and Optionee hereby
agree as follows:
1. Certain Definitions. Terms used in this Agreement and not
otherwise defined shall have the respective meanings assigned to such terms in
the Plan; and the following terms shall have the following meanings:
"Companies" means the Company and any of its Subsidiaries.
"Expiration Date" means 6:00 P.M., Austin, Texas time, on
March 4, 2004.
2. Grant of Option. Subject to the terms, conditions and
provisions of the Plan and those hereinafter set forth, the Company hereby
irrevocably grants to the Optionee a Nonqualified Stock Option (the "Option")
to purchase [See Schedule I attached hereto] Shares, subject to adjustment in
accordance with the provisions of Section 7 of this Agreement.
3. Option Price. The price to be paid by Optionee to the Company
for each Share purchased pursuant to the exercise of this Option ("Option
Price") shall be $5.00 per share; provided, however, that the Option Price
shall be subject to adjustment in accordance with the provisions of Section 7
of this Agreement.
4. Vesting of Right to Exercise Option.
(a) Except as otherwise provided in this Agreement, the right to
exercise this Option shall vest as to 30% of the total Shares which may be
purchased hereunder (rounded to the nearest whole share) on March 4, 1998,
shall vest with respect to an additional 20% of the total
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Shares which may be purchased hereunder (rounded to the nearest whole share) on
March 4, 1999, shall vest with respect to an additional 16.66% of the total
Shares which may be purchased hereunder (rounded to the nearest whole share) on
March 4, 2000, shall vest with respect to an additional 16.67% of the total
Shares which may be purchased hereunder (rounded to the nearest whole share) on
March 4, 2001, and shall be fully vested on March 4, 2002. From and after each
date of vesting, Optionee may exercise this Option, subject to the terms and
conditions set forth herein, to purchase all or any portion of the Shares for
which Optionee's rights have vested.
(b) To the extent Optionee does not purchase all or any part of
the Shares at the times this Option becomes exercisable, the Optionee has the
right cumulatively thereafter to purchase any Shares not so purchased and such
right shall continue until this Option terminates or expires.
(c) If Optionee's employment by the Companies is terminated on
account of fraud or dishonesty or other acts which the Board has determined are
materially detrimental to the interests of the Company, the Option shall
automatically terminate as of the date of such termination and this Option,
including any portion which has vested, shall be forfeited.
(d) If Optionee's employment by the Companies terminates
voluntarily by Optionee or by action of the Companies for reasons other than as
specified in subsection (c), this Option may be exercised, but only (i) within
90 days after such termination (if otherwise prior to the date of expiration of
this Option), and not thereafter, and (ii) to purchase the number of Shares, if
any, that could be purchased upon exercise of this Option at the date of
termination of Optionee's employment.
(e) In the event of Optionee's death or disability, this Option
shall remain outstanding and may be exercised by the person who acquires this
Option by will or the laws of descent and distribution, or by Optionee, as the
case may be, but only (i) within the one-year period following the date of
death or disability (if otherwise prior to the date of expiration of this
Option), and not thereafter, and (ii) to purchase the number of Shares that
could be purchased upon exercise of this Option at the time of such death or
disability.
(f) For purposes of subsection (d) and (e), if this Option shall
not have fully vested as of the date of termination of Optionee's employment by
the Company (but not in the case of a voluntary termination by Optionee) or as
of the date of the Optionee's death or disability, then a ratable portion of
the number of Shares which would have become purchasable upon the next vesting
date shall be deemed to have vested as of the date of such termination (or
death or disability), determined by multiplying the number of Shares that vest
on the next vesting date by a fraction with a numerator equal to the number of
full months which have then elapsed since the last vesting date and a
denominator of 12, and rounding to the closest whole number.
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5. Restrictions on Exercise. The right to exercise the Option
shall be subject to the following restrictions:
(a) Vesting. Optionee shall have no right to exercise this Option
to purchase any Shares for which Optionee's rights have not yet vested in
accordance with Section 4.
(b) No Fractional Shares. The Option may be exercised only with
respect to full Shares.
(c) Compliance with Law. The Option may not be exercised in whole
or in part, and no Shares shall be issued nor certificates representing such
Shares (if any) delivered pursuant to any exercise of the Option, if any
requisite approval or consent of any governmental authority of any kind having
jurisdiction over the exercise of options or the issuance and sale of Shares
shall not have been obtained or if such exercise or issuance would violate any
applicable law.
(d) Exercise by Optionee. The Option shall only be exercisable by
the Optionee and by any transferee who has received such Option pursuant to
Section 4(e).
6. Exercise of Option.
(a) Subject to the other terms and provisions of this Agreement,
the Option shall be exercisable by written notice timely given to the Company
by the Optionee (the "Exercise Notice"), which notice (i) shall state the
number of Shares that the Optionee then desires to purchase, and (ii) shall be
accompanied by payment in full of the Option Price for each of such Shares.
Unless the Company and Optionee shall have made mutually acceptable alternative
arrangements, payment of the Option Price shall be made in cash or by surrender
of Shares owned by the Optionee (the "Payment Shares"), the aggregate Fair
Market Value of which shall be credited against the Option Price.
(b) The Company's obligation to issue and transfer Shares upon the
exercise of this Option shall be conditioned on Optionee's payment to the
Company of an amount in cash equal to applicable withholding taxes, if any, due
in connection with the exercise of this Option; provided, however, that with
the consent of the Company, Optionee may satisfy any tax withholding obligation
in connection with the exercise of this Option by (i) surrendering Shares owned
by the Optionee to the Company or (ii) having the Company withhold from Shares
otherwise deliverable to Optionee upon exercise of this Option. Any Shares
surrendered or withheld to satisfy Optionee's tax withholding obligation shall
be valued at Fair Market Value as of the date of surrender or withholding of
such Shares.
7. Recapitalization or Reorganization; Adjustments.
(a) The existence of this Option shall not affect in any way the
right or power of the Company to make or authorize any adjustment,
recapitalization, reorganization or other change in the Company's capital
structure or its business, any merger or consolidation of the Company, any
issuance of additional securities by the Company with priority over Shares or
otherwise affecting Shares or the rights thereof, the dissolution or
liquidation of the Company or any sale, lease, exchange or other disposition of
all or any part of its assets or business or any other corporate act or
proceeding.
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(b) If as a result of any merger or acquisition transaction
involving the Company or any transaction involving the issuance or redemption
of equity interests in the Company, more than fifty percent (50%) of such
equity interests is owned by parties other than those listed on Exhibit A
attached hereto (such event is referred to herein as a "Fundamental Change"),
then immediately before the consummation of the Fundamental Change, any portion
of the Option which has not then vested shall become vested, so that the
Optionee shall have an opportunity to exercise the Option prior to the
consummation of the Fundamental Change. The Company shall provide to Optionee
at least 30 days' notice of any pending Fundamental Change during which period
Optionee may elect to exercise the Option effective immediately before
consummation of such Fundamental Change.
(c) If the Company subdivides its outstanding Shares into a
greater number of Shares, the Option Price in effect immediately prior to such
subdivision shall be proportionately reduced, and the number of Shares then
subject to the Option shall be proportionately increased. Conversely, if the
outstanding number of Shares of the Company are combined into a smaller number
of Shares, the Option Price in effect immediately prior to such combination
shall be proportionately increased, and the number of Shares then subject to
the Option shall be proportionately reduced.
8. Termination of Option. Unless terminated earlier pursuant to
Section 4 hereof, this Option shall terminate upon the first to occur of the
(i) the Expiration Date, or (ii) the date on which Optionee purchases, or in
writing surrenders his right to purchase, all Shares or other securities then
subject to the Option.
9. Restriction on Transfer of Option. The Option may not be
sold, assigned, hypothecated or transferred, except by will or by the laws of
descent and distribution. Any attempted transfer of the Option in violation of
this provision shall be void and of no effect whatsoever.
10. Rights as a Shareholder. Optionee shall have no rights as a
shareholder of the Company with respect to any Shares covered by the Option
until the exercise of the Option.
11. Additional Documents. The Company and the Optionee will, upon
request of the other party, promptly execute and deliver all additional
documents, and take all such further action, reasonably deemed by such party to
be necessary, appropriate or desirable to complete and evidence the sale,
assignment and transfer of the Shares pursuant to this Agreement.
12. Representations, Warranties and Covenants of Optionee.
(a) The Optionee acknowledges that the Option has not been
registered under the Securities Act of 1933 or applicable state securities laws
on the grounds that the issuance of the Option is exempt from registration
under one or more provisions of each of such acts. The Optionee further
understands that in determining the availability and applicability of such
exemptions and in executing and delivering this Agreement and issuing and
delivering any Shares upon exercise of the Option, the Company has relied and
will rely upon the representations, warranties and covenants made by the
Optionee herein and in any other documents which he may hereafter deliver to
the Company. Accordingly, the Optionee represents and warrants to and
covenants and agrees with the Company that the Optionee is
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acquiring and will hold the Option for his own account for investment and not
with a view to any sale or distribution of all or any part thereof.
(b) The Optionee agrees (i) that the certificates representing the
Shares or other securities purchased under this Option may bear such legend or
legends as the Company deems appropriate in order to assure compliance with
applicable securities laws, (ii) that the Company may refuse to register the
transfer of the Shares or other securities purchased under this Option on the
transfer records of the Company unless the Company is provided with an opinion
of counsel in form and substance satisfactory to the Company confirming that
such proposed transfer would not constitute a violation of any 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
or other securities purchased under this Option.
(c) Optionee acknowledges that the value of the Option over its
life will be speculative and uncertain, that there is no market for the Option
and it is unlikely that any market will develop, and consequently, the Optionee
may ultimately realize no value from the Option.
13. Notices. All notices required or permitted to be given
hereunder shall be in writing and shall be deemed to have been given on the
earlier of the date of receipt by the party to whom the notice is given or five
(5) days after being mailed by certified or registered United States mail,
postage prepaid, addressed to the appropriate party at the address shown beside
such party's signature below or at such other address as such party shall have
theretofore designated by written notice given to the other party.
14. Entirety and Modification. This Agreement contains the entire
agreement between the parties hereto with respect to the subject matter hereof
and supersedes any and all prior agreements, whether written or oral, between
such parties relating to such subject matter. No modification, alteration,
amendment or supplement to this Agreement shall be valid or effective unless
the same is in writing and signed by the party against whom it is sought to be
enforced.
15. Severability. If any provision of this Agreement is held to
be unenforceable, this Agreement shall be considered divisible, and such
provision shall be deemed inoperative to the extent it is unenforceable, and in
all other respects this Agreement shall remain in full force and effect;
provided, however, that if any such provision may be made enforceable by
limitation thereof, then such provision shall be deemed to be so limited and
shall be enforceable to the maximum extent permitted by applicable law.
16. Gender. Words used in this Agreement which refer to Optionee
and denote the male gender shall also be deemed to include the female gender or
the neuter gender when appropriate.
17. Headings. The headings of the various sections and
subsections of this Agreement have been inserted for convenient reference only
and shall not be construed to enlarge, diminish or otherwise change the express
provisions hereof.
18. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
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DELAWARE (REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE
DELAWARE PRINCIPLES OF CONFLICTS OF LAW).
19. Counterparts. This Agreement may be signed in counterparts,
each of which shall be deemed an original and all of which shall constitute one
and the same agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first set forth above.
XXXXXXX EXPLORATION COMPANY
0000 Xxxxxx Xxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000 By
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Xxxx X. Xxxxxxx, Executive Vice President
OPTIONEE
0000 Xxxxxx Xxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
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[See Schedule I attached hereto]
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EXHIBIT A
XXXXXXX EXPLORATION COMPANY, A Delaware corporation
XXXXXXX OIL & GAS, L.P., A Delaware limited partnership
XXXXXXX, INC. (f/k/a Xxxxxxx Exploration Company), a Texas corporation
GENERAL ATLANTIC PARTNERS III, L.P., a Delaware limited partnership
GAP-XXXXXXX PARTNERS, L.P., a Delaware limited partnership
XXX X. XXXXXXX
XXXX X. XXXXXXX
XXXXXX X. XXXXXX
RIMCO PARTNERS, X.X. XX
RIMCO PARTNERS, L.P. III
RIMCO PARTNERS, X.X. XX
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SCHEDULE I
Number of Shares
Name Subject to Option
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Xxxxx X. Xxxxxxx 69,445
Xxxxx X. Xxxxxxx 69,445
Xxx X. Xxxxx 69,445
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