WHITING PETROLEUM CORPORATION STOCK OPTION AGREEMENT
Exhibit
10.14
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PETROLEUM CORPORATION
THIS
STOCK OPTION AGREEMENT (this “Agreement”) is made and
entered into as of the date set forth on the signature page hereof (the “Grant Date”) by and between
▇▇▇▇▇▇▇ Petroleum Corporation, a Delaware corporation with its principal offices
at Denver, Colorado (the “Company”), and the key
employee of the Company or one of its Affiliates whose signature is set forth on
the signature page hereof (the “Participant”).
W
I T N E S S E T H :
WHEREAS,
the Company has adopted the ▇▇▇▇▇▇▇ Petroleum Corporation 2003 Equity Incentive
Plan (as amended, the “Plan”) to permit options to
purchase shares of the Company’s common stock (the “Stock”) to be awarded to
certain key employees of the Company and any Affiliate of the Company;
and
WHEREAS,
the Participant is a key employee of the Company, and the Company desires such
person to remain in such capacity and to further an opportunity for his or her
stock ownership in the Company in order to increase his or her proprietary
interest in the success of the Company;
NOW,
THEREFORE, in consideration of the premises and of the covenants and agreements
herein set forth, the parties hereby mutually covenant and agree as
follows:
1. Grant. Subject
to the terms and conditions of the Plan, a copy of which is made a part hereof,
and this Agreement, the Company hereby grants to the Participant an option to
purchase from the Company all or any part of the aggregate number of shares of
Stock set forth on the signature page hereof (hereinafter such shares of Stock
are referred to as the “Optioned Shares,” and the
option to purchase the Optioned Shares is referred to as the “Option”). The
Option is not intended to qualify as an incentive stock option within the
meaning of Section 422 of the Internal Revenue Code of 1986, as
amended.
2. Vesting. One-third
of the Optioned Shares shall vest and become exercisable on each of the first
three anniversaries of the Grant Date, provided the Participant has remained in
the continuous employment of the Company and its Affiliates from the Grant Date
through and including the applicable vesting date. Any Optioned
Shares not vested as of the date of the Participant’s termination of employment
from the Company and its Affiliates shall be forfeited.
3. Price. The
price to be paid for each Optioned Share shall be the price set forth on the
signature page hereof (the “Option Price”).
4. Term;
Exercise. The Participant may exercise the Option, to the
extent vested, in whole or in part until the close of business at the Company’s
headquarters on the earliest of:
(a) The
tenth anniversary of the Grant Date;
(b) The
first anniversary of the Participant’s termination of employment from the
Company and its Affiliates for any reason other than cause; and
(c) The
date of the Participant’s termination of employment from the Company and its
Affiliates for cause, as determined by the Compensation Committee of the Board
of Directors of the Company (the “Committee”) in its sole
discretion. The exercise of the Option may be suspended pending the
Committee’s determination of whether the Participant’s employment is terminated
for cause, and in the event the Committee determines that termination is for
cause, such exercise shall be rescinded.
5. Method of
Exercise. The Option may be exercised only by written notice,
provided to the Company in the manner set forth in Paragraph 10(d), specifying
the number of vested Optioned Shares being purchased. Such notice
shall be accompanied by payment of the entire Option Price of the Optioned
Shares being purchased plus related federal, state, local or foreign withholding
taxes due as a result of exercise, which may be paid:
(a) in
cash, or by check or money order;
(b) by
delivery (including by attestation) of shares of Stock (which will be valued at
Fair Market Value at the date of delivery);
(c) through
a cashless exercise procedure established by the Committee, if any;
or
(d) by
any combination of the foregoing.
Shares of
Stock tendered under subparagraph (b) above shall be duly endorsed in blank or
accompanied by stock powers duly endorsed in blank. Upon receipt of
the payment of the entire purchase price of the Optioned Shares being purchased
and the related federal, state, local or foreign withholding taxes, certificates
for such Optioned Shares shall be issued to the Participant. The
Optioned Shares so purchased shall be fully paid and nonassessable.
6. Securities Law
Restrictions. Notwithstanding the foregoing or anything to the
contrary herein, the Participant agrees and acknowledges with respect to any
Stock received under this Option that has not been registered under the
Securities Act of 1933, as amended (the “Act”) (a) he or she will not
sell or otherwise dispose of such Stock except pursuant to an effective
registration statement under the Act and any applicable state securities laws,
or in a transaction which, in the opinion of counsel for the Company, is exempt
from such registration, and (b) a legend will be placed on the certificates for
the Stock to such effect.
7. No Rights as a
Stockholder. The Participant shall not be deemed for any
purposes to be a stockholder of the Company with respect to any shares that may
be acquired hereunder except to the extent that the Option shall have been
exercised with respect thereto and a stock certificate issued
therefor.
8. Powers of Company Not
Affected. The existence of the Option shall not affect in any
way the right or power of the Company or its stockholders to make or authorize
any combination, subdivision or reclassification of the Stock or any
reorganization, merger, consolidation, business combination, exchange of shares,
or other change in the Company’s capital structure or its business, or any issue
of bonds, debentures or stock having rights or preferences equal, superior or
affecting the Stock or the rights thereof, or dissolution or liquidation of the
Company, or any sale or transfer of all or any part of its assets or business,
or any other corporate act or proceeding, whether of a similar character or
otherwise. Nothing in this Agreement shall confer upon the
Participant any right to continue in the employment of the Company or any
Affiliate, or interfere with or limit in any way the right of the Company or an
Affiliate to terminate the Participant’s employment at any time.
9. Interpretation by
Committee. The Participant agrees that any dispute or
disagreement which may arise in connection with this Agreement shall be resolved
by the Committee, in its sole discretion, and that any interpretation by the
Committee of the terms of this Agreement or the Plan and any determination made
by the Committee under this Agreement or the Plan may be made in the sole
discretion of the Committee and shall be final, binding, and
conclusive. Any such determination need not be uniform and may be
made differently among Participants awarded options under the Plan.
10. Miscellaneous. (a) This
Agreement shall be governed and construed in accordance with the internal laws
of the State of Delaware applicable to contracts made and to be performed
therein between residents thereof.
(b) This
Agreement may not be amended or modified except by the written consent of the
parties hereto.
(c) The
captions of this Agreement are inserted for convenience of reference only and
shall not be taken into account in construing this Agreement.
(d) Any
notice, filing or delivery hereunder or with respect to the Option shall be
given to the Participant at either his or her usual work location or his or her
home address as indicated in the records of the Company, and shall be given to
the Committee or the Company at ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇, Attention: Corporate Secretary. All such
notices shall be given by first class mail, postage prepaid, or by personal
delivery.
(e) This
Agreement shall be binding upon and inure to the benefit of the Company and its
successors and assigns and shall be binding upon and inure to the benefit of the
Participant and his successor and assigns, except that the Participant may not
transfer any interest in any Option other than pursuant to will or the laws of
descent and distribution. Any individual claiming entitlement to
exercise the Option following the Participant’s death shall provide such
information and evidence of his or her right to do so in such form as is
satisfactory to the Company.
(f) This
Agreement is subject in all respects to the terms and conditions of the
Plan. Any capitalized terms used in this Agreement but not defined
herein shall have the meanings given in the Plan.
11. Change of
Control.
(a) Notwithstanding
any other provision to the contrary contained in this Agreement, effective upon
a Change in Control of the Company (as defined below), the Optioned Shares shall
become 100% vested if the Participant is employed by the Company or an Affiliate
immediately prior to the date of such Change in Control of the
Company.
(b) The
following terms shall have the following meanings when used in this Paragraph
11:
(i) “Act” means the Securities
Exchange Act of 1934, as amended.
(ii) “Affiliate” and “Associate” shall have the
respective meanings ascribed to such terms in Rule l2b-2 of the General
Rules and Regulations under the Act.
(iii) A
Person shall be deemed to be the “Beneficial Owner” of any
securities:
(A) which
such Person or any of such Person’s Affiliates or Associates has the right to
acquire (whether such right is exercisable immediately or only after the passage
of time) pursuant to any agreement, arrangement or understanding, or upon the
exercise of conversion rights, exchange rights, rights, warrants or options, or
otherwise; provided, however, that a Person shall not be deemed the Beneficial
Owner of, or to beneficially own, (i) securities tendered pursuant to a
tender or exchange offer made by or on behalf of such Person or any of such
Person’s Affiliates or Associates until such tendered securities are accepted
for purchase, or (ii) securities issuable upon exercise of rights issued
pursuant to the terms of any Rights Agreement of the Company, at any time before
the issuance of such securities;
(B) which
such Person or any of such Person’s Affiliates or Associates, directly or
indirectly, has the right to vote or dispose of or has “beneficial ownership” of (as
determined pursuant to Rule l3d-3 of the General Rules and Regulations
under the Act), including pursuant to any agreement, arrangement or
understanding; provided, however, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, any security under this clause
(B) as a result of an agreement, arrangement or understanding to vote such
security if the agreement, arrangement or understanding: (i) arises solely
from a revocable proxy or consent given to such Person in response to a public
proxy or consent solicitation made pursuant to, and in accordance with, the
applicable rules and regulations under the Act and (ii) is not also then
reportable on a Schedule l3D under the Act (or any comparable or successor
report); or
(C) which
are beneficially owned, directly or indirectly, by any other Person with which
such Person or any of such Person’s Affiliates or Associates has any agreement,
arrangement or understanding for the purpose of acquiring, holding, voting
(except pursuant to a revocable proxy as described in clause (B) above) or
disposing of any voting securities of the Company.
(iv) “Board” means the Board of
Directors of the Company.
(v) “Change in Control” means
the occurrence of any of the following:
(A) any
Person (other than (i) the Company or any of its subsidiaries, (ii) a trustee or
other fiduciary holding securities under any employee benefit plan of the
Company or any of its subsidiaries, (iii) an underwriter temporarily holding
securities pursuant to an offering of such securities or (iv) a corporation
owned, directly or indirectly, by the shareholders of the Company in
substantially the same proportions as their ownership of stock in the Company
(“Excluded Persons”))
is or becomes the Beneficial Owner, directly or indirectly, of securities of the
Company (not including in the securities beneficially owned by such Person any
securities acquired directly from the Company or its Affiliates after the date
of this Agreement, pursuant to express authorization by the Board that refers to
this exception) representing 20% or more of either the then outstanding shares
of common stock of the Company or the combined Voting Power of the Company’s
then outstanding voting securities; or
(B) the
following individuals cease for any reason to constitute a majority of the
number of directors of the Company then serving: (i) individuals who,
on the date of this Agreement constituted the Board and (ii) any new director
(other than a director whose initial assumption of office is in connection with
an actual or threatened election contest, including but not limited to a consent
solicitation, relating to the election of directors of the Company) whose
appointment or election by the Board or nomination for election by the Company’s
shareholders was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors on the date of this
Agreement, or whose appointment, election or nomination for election was
previously so approved (collectively the “Continuing Directors”);
provided, however, that individuals who are appointed to the Board pursuant to
or in accordance with the terms of an agreement relating to a merger,
consolidation, or share exchange involving the Company (or any direct or
indirect subsidiary of the Company) shall not be Continuing Directors for
purposes of this definition until after such individuals are first nominated for
election by a vote of at least two-thirds (2/3) of the then Continuing Directors
and are thereafter elected as directors by the shareholders of the Company at a
meeting of shareholders held following consummation of such merger,
consolidation, or share exchange; and, provided further, that in the event the
failure of any such persons appointed to the Board to be Continuing Directors
results in a Change in Control of the Company, the subsequent qualification of
such persons as Continuing Directors shall not alter the fact that a Change in
Control of the Company occurred; or
(C) the
shareholders of the Company approve a merger, consolidation or share exchange of
the Company with any other corporation or approve the issuance of voting
securities of the Company in connection with a merger, consolidation or share
exchange of the Company (or any direct or indirect subsidiary of the Company)
pursuant to applicable stock exchange requirements, other than (i) a merger,
consolidation or share exchange which would result in the voting securities of
the Company outstanding immediately prior to such merger, consolidation or share
exchange continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity or any parent thereof)
at least 50% of the combined Voting Power of the voting securities of the
Company or such surviving entity or any parent thereof outstanding immediately
after such merger, consolidation or share exchange, or (ii) a merger,
consolidation or share exchange effected to implement a recapitalization of the
Company (or similar transaction) in which no Person (other than an Excluded
Person) is or becomes the Beneficial Owner, directly or indirectly, of
securities of the Company (not including in the securities beneficially owned by
such Person any securities acquired directly from the Company or its Affiliates
after the date of this Agreement, pursuant to express authorization by the Board
that refers to this exception) representing 20% or more of either the then
outstanding shares of common stock of the Company or the combined Voting Power
of the Company’s then outstanding voting securities; or
(D) the
shareholders of the Company approve a plan of complete liquidation or
dissolution of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company’s assets (in one transaction
or a series of related transactions within any period of 24 consecutive months),
other than a sale or disposition by the Company of all or substantially all of
the Company’s assets to an entity at least 75% of the combined Voting Power of
the voting securities of which are owned by Persons in substantially the same
proportions as their ownership of the Company immediately prior to such
sale.
Notwithstanding
the foregoing, no “Change in
Control” shall be deemed to have occurred if there is consummated any
transaction or series of integrated transactions immediately following which the
record holders of the common stock of the Company immediately prior to such
transaction or series of transactions continue to own, directly or indirectly,
in the same proportions as their ownership in the Company, an entity that owns
all or substantially all of the assets or voting securities of the Company
immediately following such transaction or series of transactions.
(vi) “Person” means any
individual, firm, partnership, corporation or other entity, including any
successor (by merger or otherwise) of such entity, or a group of any of the
foregoing acting in concert.
(vii) “Voting Power” means the
voting power of the outstanding securities of the Company having the right under
ordinary circumstances to vote at an election of the Board.
IN
WITNESS WHEREOF, the Company has caused this instrument to be executed by its
duly authorized officer and the Participant has hereunto affixed his or her
signature, all as of the day and year set forth below.
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PETROLEUM CORPORATION
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PARTICIPANT
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By:
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Name:
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No.
of Optioned Shares:
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Title:
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Option
Price per Share:
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Grant
Date:
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