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EXHIBIT 10.4
INCENTIVE STOCK OPTION AGREEMENT
THIS INCENTIVE STOCK OPTION AGREEMENT made this 21st day of December,
1994 between ENERGY CORPORATION OF AMERICA, a Colorado corporation,
(hereinafter called the "Company"), and XXXXXX X. XXXXXX (hereinafter called
"Supcoe").
WHEREAS, the Company is the parent company of Eastern American Energy
Corporation, a West Virginia corporation, ("Eastern"), and
WHEREAS, Supcoe is the Vice President - General Counsel of Eastern and a
valuable employee of Eastern and the Company considers it desirable and in its
best interest that Supcoe be given an added incentive to advance the interests
of Eastern and the Company and remain employed by Eastern;
NOW THEREFORE, in consideration of the mutual promises herein contained,
the parties agree as follows:
1. Grant of Option. The Company hereby grants to Supcoe the right,
privilege, and option to purchase 3200 shares of its common stock at $40.00 per
share. Supcoe may elect to exercise the option at the times and for the number
of shares indicated as follows:
a. On and after January 1, 1994, to and including December
31, 1994, 800 shares;
b. On and after January 1, 1995, to and including December
31, 1995, 800 shares;
c. On and after January 1, 1996, to and including December
31, 1996, 800 shares.
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d. On and after January 1, 1997, to and including December
31, 1997, 800 shares.
In order to be entitled to exercise the options granted hereunder,
Supcoe must remain in the continuous employ of Eastern during the option
period. If Supcoe's employment with Eastern is terminated for any reason
during the option period, all unexercised options shall become null and void on
the date his employment is terminated.
Failure to exercise the options by December 31 of each year specified
above shall result in the termination of the options granted during that time
period and such options shall become null and void.
2. Method of Exercise. The option shall be exercised by written
notice directed to the Company at its principal place of business accompanied
by check and payment of the option price for the number of shares specified.
3. Limitation Upon Transfer. All rights granted in this Agreement
shall be exercisable only by Supcoe. The option rights granted under this
contract 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. Upon any attempt to transfer,
assign, pledge, hypothecate or otherwise dispose of such option rights contrary
to the provisions in this Agreement, or upon the levy of any attachment or
similar process upon such option rights, such option rights shall immediately
become null and void.
4. Restriction. All shares acquired by Supcoe shall be subject to
the following restrictions.
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a. If Supcoe's employment with Eastern is terminated for any
reason whatsoever within four years from the date of purchase of the
shares, Supcoe agrees to immediately resell to the Company all shares
which are acquired by exercise of the options granted by this Agreement
at the price of $40.00 per share; provided, however, that in the event
Supcoe should die within four years from the date of purchase of the
shares and while still employed by Eastern, his heirs or devisees shall
resell all shares to the Company at the price established in paragraph 5
below.
b. If Supcoe's employment with Eastern is terminated for any
reason whatsoever from and after four years from the date of purchase of
the shares, Supcoe agrees to immediately resell to the Company all
shares which are acquired by exercise of the options granted by this
Agreement at the value of such shares as determined in paragraph 5
below.
c. All share certificates representing shares acquired by the
exercise of the options provided herein shall have endorsed thereon the
following legend:
The shares represented by this certificate are subject to the
requirement that they be resold to Energy Corporation of America
at the value determined pursuant to that certain Incentive Stock
Option Agreement dated December 21, 1994 by and between Energy
Corporation of America and Xxxxxx X. Xxxxxx.
5. Value. For purposes of resale to the Company, from and after
four years from the date of acquisition of the shares, the value of the shares
shall be equal to six (6) times the average per share earnings for the most
recent three (3) fiscal years of the Company. In the absence of financial
statements for the Company, the financial statements of Eastern will be
substituted thereof.
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"Earnings" shall mean the Company's earnings and in the absence thereof
Eastern's earning (net of extraordinary items, Windfall Profits Taxes, and
other similar and/or substituted taxes, and state and local taxes, but before
provisions for federal income taxes) as determined in accordance with generally
accepted accounting principles consistently applied by the Company's regularly
engaged accountants, which determination shall be final and binding upon Supcoe
and the Company.
6. Rights as Shareholder. Supcoe shall not have any rights or
privileges as a shareholder of the Company in the option shares until payment
of the option price and delivery to him of such shares.
7. Binding Effect. This Agreement shall be binding upon and inure
to the benefit of any successor or successors of the Company.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the day and year first above written.
ENERGY CORPORATION OF AMERICA
By: /s/ XXXX XXXX
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Its: CEO
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/s/ XXXXXX X. XXXXXX
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XXXXXX X. XXXXXX
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