EXHIBIT 10.37
NONEMPLOYEE DIRECTOR STOCK OPTION AGREEMENT
AGREEMENT made as of the _____ day of ______________, 19___, between
CLIFFWOOD OIL & GAS CORP., a Texas corporation (the "Company") and ___________
_________________________ ("Director").
To carry out the purposes of the CLIFFWOOD OIL & GAS CORP. 1997
NONEMPLOYEE DIRECTOR STOCK OPTION PLAN (the "Plan"), a copy of which is attached
hereto as Exhibit A, by affording Director the opportunity to purchase shares of
the Class A 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 Director hereby agree as follows:
1. 952421076GRANT OF OPTION. The Company hereby irrevocably grants to
Director 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 shall not be treated as an incentive stock option within
the meaning of section 422(b) of the Internal Revenue Code of 1986, as amended.
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
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. (FOR INITIAL GRANTS TO DIRECTORS AS OF THE
EFFECTIVE DATE OF THE PLAN: Subject to the earlier expiration of this Option as
herein provided, this Option may be exercised, by written notice to the Company
at its principle executive office addressed to the attention of its Chairman,
President and Chief Executive Officer, 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 MAY BE PURCHASED
-------------------- ---------------------
LESS THAN 1 YEAR 0%
1 YEAR 33.33%
2 YEARS 66.66%
3 YEARS OR MORE 100.00%
(SUBSEQUENT GRANTS TO DIRECTORS AS OF ANNUAL MEETINGS OF THE STOCKHOLDERS OF THE
COMPANY:) 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 Chairman, President and Chief
Executive Officer, at any time from time to time following six months after the
date of grant hereof.
This Option is not transferable by Director otherwise than by will or the
laws of descent and distribution, and may be exercised only by Director (or
Director's guardian or legal representative) during Director's lifetime. If a
Director's membership on the Board of Directors of the Company (the "Board")
terminates, this Option may be exercised as follows:
(a) If Director's membership on the Board terminates for cause or
voluntarily by Director (other than by reason of mandatory retirement pursuant
to the policy of the Board) not at the request of the Board, this Option may be
exercised by Director at any time during the period of three months following
such termination, or by Director'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 Director) during a period of one year following Director's death if
Director dies during such three-month period, but in each case only as to the
number of shares Director was entitled to purchase hereunder upon exercise of
this Option as of the date Director's membership of the Board so terminates. For
purposes of this Agreement, "cause" shall mean Director's gross negligence or
willful misconduct in performance of his duties as a director, or Director's
final conviction of a felony or of a misdemeanor involving moral turpitude.
(b) If Director's membership on the Board terminates by reason of
disability, this option may be exercised in full by Director (or Director's
guardian or legal representative or Director'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 Director) at any time during the period of one year
following such termination.
(c) If Director dies while a member of the Board, Director'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 Director, may exercise this
Option in full at any time during the period of one year following the date of
Director's death.
(d) If Director's membership on the Board terminates for any reason other
than as described in (a), (b), or (c) above, this Option may be exercised in
full by Director at any time during the period of three months following such
termination, or by Director'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 Director) during a period of one year following Director's death if Director
dies during such three-month period.
No Option shall not be exercisable in any event after the expiration of
ten years from the date thereof. The purchase price of shares as to which this
Option is exercised shall be paid at the time of exercise (A) in cash (including
check, bank draft or money order payable by order of the Company), (B) by
delivering to the Company shares of Stock having a fair market value equal to
the purchase price, or (C) any combination of cash or Stock. No fractional share
of Stock shall be issued by the Company upon exercise of an Option or accepted
by Company in payment of the purchase price thereof; rather, Director shall
provide a cash payment for such amount as is necessary to effect the issuance
and acceptance of only whole shares of Stock. Unless and until a certificate or
certificates representing such shares shall have been issued by the Company to
Director, Director (or the person permitted to exercise this Option in the event
of Director's death) shall not be or have any rights or privileges of
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 Director for federal or state income tax purposes,
Director shall deliver to the Company at the time of each exercise or
disposition such amount of money or shares of Stock as the Company may required
to meet its obligation under applicable tax laws ore regulations, and, if
Director fails to do so, the Company is authorized to withhold from any cash or
Stock remuneration then or thereafter payable to Director 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 of shares of Stock distributable to
Director upon such exercise.
5. STATUS OF STOCK. The Company may, but shall not be required to,
register for issuance under 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 from
registration under the Act is available upon an exercise of this Option,
Director (or the person permitted to exercise this Option in the event of
Director'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 may required to assure compliance with applicable
securities laws.
Director agrees that the shares of stock which Director 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 federal or state securities
laws. Director also agrees (i) that the certificates representing the shares of
Stock purchased under this Option may bear such legend as the Company deems
appropriate in order to assure compliance with applicable laws, (ii) that the
Company may refuse to register the transfer of the shares of Stock under this
Option on the stock transfer records of the Company if such proposed transfer
would in the opinion of counsel satisfactory to the Company constitute a
violation of applicable securities law 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 option.
6. BINDING EFFECT. This Agreement shall be binding upon and inure to the
benefit of successors to the Company and all persons lawfully claiming under
Director.
7. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
COMPLIANCE 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 Director has executed
this Agreement, all as of the day and year first above written.
CLIFFWOOD OIL & GAS CORP.
By: _____________________________________
Xxxxx X. Xxxxxxxxx, President
________________, DIRECTOR
