DUNE ENERGY, INC.
STOCK OPTION AGREEMENT
This Stock Option Agreement (this "Agreement") is executed and delivered
as of _____________ (the "Option Grant Date ") by and between Dune Energy, Inc.,
a Delaware corporation (the "Company") and _____________, with an address at
__________________ (the "Optionee"). The Optionee and the Company hereby agree
as follows:
1. Grant. The Company hereby grants to the Optionee an option (the
"Option") to purchase up to an aggregate of ________ shares of the Company's
common stock (the "Optioned Shares ") at an exercise price of $____ per Optioned
Share (the "Exercise Price ").
2. Term. The Option granted hereby shall terminate no later than at the
close of business on _______________ (the "Termination Date ").
3. Exercisability. This Option may be exercised in whole or in part, at
any time from and after _____________ until the Termination Date.
4. Procedure for Exercise.
(a) Notice. The Optionee may exercise the Option at any time with
respect to all or any part of the number of Optioned Shares by giving the
Secretary of the Company written notice of intent to exercise. The notice
of exercise shall specify the number of Optioned Shares as to which the
Option is to be exercised and the date of exercise thereof, which date
shall be at least five days after the giving of such notice unless an
earlier time shall have been mutually agreed upon.
(b) Payment of Exercise Price. Full payment (in U.S. Dollars) by the
Optionee of the Exercise Price for the Optioned Shares purchased shall be
made on or before the exercise date specified in the notice of exercise in
cash, or, with the prior written consent of the Board, in whole or in part
through the surrender of previously acquired shares of common stock
(valued at their fair market value on the exercise date). If the Optionee
fails to pay for any of the Optioned Shares specified in such notice or
fails to accept delivery thereof, the Optionee's right to purchase such
Optioned Shares may be terminated by the Company. The date specified in
the Optionee's notice as the date of exercise shall be deemed the date of
exercise of the Option, provided that payment in full for the Optioned
Shares to be purchased upon such exercise shall have been received by such
date.
In addition to the method of payment set forth above, provided that
the Company's common stock is either registered on a national securities
exchange or quoted by the NASDAQ at the time of exercise, Optionee shall
have the right to exercise this Option in full or in part by delivering
written notice to the Company, and Optionee shall receive the number of
Optioned Shares equal to the product of (x) the number of Optioned Shares
as to which this Option is being exercised, multiplied by (y) a fraction,
the numerator of which is the Market Price (defined below) of the
Company's common stock minus the Exercise Price of the Optioned Shares and
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the denominator of which is the Market Price of the Company's common
stock. As used in this Agreement, the phrase "Market Price" at any date
shall be deemed to be the last reported sale price, or, in case no such
reported sale takes place on such day, the average of the last reported
sale prices for the last three (3) trading days, in either case as
officially reported by the principal securities exchange on which the
Company's common stock is listed or admitted to trading, or, if the common
stock is not listed or admitted to trading on any exchange, the average
closing sale price as furnished by the NASD through The NASDAQ Stock
Market, Inc. ("NASDAQ").
(c) Other Limitations on Exercise. The obligation of the Company to
deliver shares of common stock upon the exercise hereof shall be subject
to the condition that if at any time the Company's Board of Directors
shall determine in its sole discretion that the listing, registration or
qualification of the Option or the Optioned Shares upon any securities
exchange or under any state or federal law, or the consent or approval of
any governmental regulatory body, is necessary or desirable as a condition
of, or in connection with, the grant of this Option or the issuance or
purchase of stock hereunder, then this Option may not be exercised in
whole or in part unless such listing, registration, qualification, consent
or approval shall have been effected or obtained free of any conditions
not acceptable to the Board of Directors.
5. Adjustment of and Changes in Stock of Company. In the event of a
reorganization, recapitalization, change of shares, stock split, spin-off, stock
dividend, reclassification, subdivision or combination of shares, merger,
consolidation, rights offering, or any other change in the corporate structure
or shares of capital stock of the Company, the Board of Directors shall make
such adjustment as it deems appropriate in the number and kind of shares of
stock subject to this Option or in the Exercise Price; provided, however, that
no such adjustment shall give the Optionee any additional benefits under this
Option.
6. Non-Transferability of Option. During the Optionee's lifetime, this
Option shall be exercisable only by the Optionee or any guardian or legal
representative of the Optionee, and the Option shall not be transferable except,
in case of the death of the Optionee, by will or the laws of descent and
distribution, nor shall the Option be subject to attachment, execution or other
similar process. In the event of (a) any attempt by the Optionee to alienate,
assign, pledge, hypothecate or otherwise dispose of this Option, except as
provided for herein, or (b) the levy of any attachment, execution or similar
process upon the rights or interest hereby conferred, the Company may terminate
the Option by notice to the Optionee and it shall thereupon become null and
void.
7. Restrictions on Underlying Stock. The shares of common stock issuable
upon exercise of this Option may not be sold, pledged, hypothecated, transferred
or assigned in the absence of an effective registration statement for the
securities under the applicable federal and state securities laws or an opinion
of counsel satisfactory to the Company to the effect that such registration is
not required thereunder.
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8. "Piggy-Back" Registration Rights. If at any time commencing on the
first anniversary of the date hereof and expiring five (5) years thereafter, the
Company proposes to register any of its securities under the Securities Act of
1933 (other than in connection with an initial public offering or in connection
with a Form S-8), then the Company shall afford the Optionee the opportunity to
include for sale in such registration statement, shares of common stock acquired
by the Optionee upon the exercise of this Option, provided however, that if the
Company's underwriter shall advise the Company in writing that in its opinion
the number of shares to be included in such registration is too large, then the
Company will include only such number of Optioned Shares as such underwriter
shall so advise.
9. Nonqualified Option. The Option granted hereby shall be treated as a
nonqualified stock option and not as an "incentive stock option " under the
Internal Revenue Code.
10. No Rights as Stockholder. Neither the Optionee nor any personal
representatives shall be, or shall have any of the rights and privileges of, a
stockholder of the Company with respect to any shares of common stock
purchasable or issuable upon the exercise of this Option, in whole or in part,
prior to the date of exercise of this Option in accordance with the provisions
hereof.
11. Miscellaneous. This Option and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought. This certificate is deemed to have been delivered in the State of New
York and shall be construed and enforced in accordance with and governed by the
laws of such State. The headings in this Stock Option Agreement are for purposes
of reference only, and shall not limit or otherwise affect any of the terms
hereof.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by a duly authorized representative and the Optionee has hereunto set
his hand as of the Option Grant Date.
DUNE ENERGY, INC.
By:
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Xxxx Xxxxxx, Chairman
OPTIONEE
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