EXHIBIT 10.21
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (this "AGREEMENT") is made and entered into as
of this 20th day of June 1996 by and between Texoil, Inc., a Nevada corporation
(the "COMPANY"), and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ("GRANTEE").
W I T N E S S E T H:
WHEREAS, Grantee is a director of the Company and has been appointed by
the Company's Board of Directors to serve on a special committee thereof charged
with seeking out and considering significant transactions to maximize
shareholder value;
WHEREAS, in consideration for Grantee's service on such special committee,
the Company's Board of Directors authorized the Company to grant to Grantee an
option exercisable for 50,000 shares of the Company's common stock, par value
$.01 per share (the "COMMON STOCK"), at an exercise price of $1.5625, being the
last sales price for the Common Stock as reported in the consolidated reporting
system for NASDAQ Small Cap Issues on January 30, 1996, the date the Board of
Directors authorized the granting of such option pursuant to a written option
agreement; and
WHEREAS, Grantee desires to have the opportunity to purchase shares of the
Company's Common Stock subject to the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises, mutual covenants and
agreements contained herein, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
hereby agree as follows:
ARTICLE 1
OPTION GRANT
1.1 GRANT OF NONQUALIFIED OPTION. Subject to the terms and conditions set
forth herein, the Company grants to Grantee the right and option to purchase all
or any part of an aggregate of 50,000 shares of Common Stock (this "OPTION").
This Option is a nonqualified stock option and not an "incentive stock option"
as that term is defined in Section 422 of the Internal Revenue Code of 1986, as
amended.
1.2 PURCHASE PRICE. The purchase price of the shares of Common Stock
covered by this Option shall be $1.5625 per share, subject to adjustment as
herein provided.
1.3 NON-TRANSFERABILITY. This Option and the rights and privileges
conferred by this Agreement unto Grantee (i) shall not be sold, transferred,
assigned, pledged or otherwise hypothecated (whether or not by operation of law)
except that this Option shall be transferable by Grantee by will or the laws of
descent and distribution, and (ii) shall not be subject to sale under execution,
attachment or similar process. Upon any attempt to sell, transfer, assign,
pledge or otherwise hypothecate this Option or any right or privilege conferred
unto Grantee by this Agreement, in breach of the provisions hereof, or upon any
attempted sale under any execution, attachment or similar process upon the
rights and privileges conferred hereby, this Option and the rights and
privileges conferred unto Grantee hereby shall immediately terminate and become
null and void. This Option may be exercised (i) only by Grantee during his
lifetime, and (ii) during the one year period following Grantee's death, only by
the person(s) who acquires this Option by will or the laws of descent and
distribution.
ARTICLE 2
OPTION EXERCISE AND ADJUSTMENT
2.1 EXERCISE OF OPTION.
(a) EXERCISE. This Option may be exercised in whole or in part
for a whole number of shares of Common Stock at any time and from time to time
before June 21, 2006 when this Option shall expire unless sooner terminated as
hereinafter provided.
(b) MANNER OF EXERCISE. This Option may be exercised in whole
or in part only by delivery to the Company of written notice specifying the
number of shares of Common Stock to be purchased and accompanied by payment of
the full purchase price thereof in cash. Upon an exercise of this Option, the
Company may be required to withhold federal and local tax with respect to the
realization of compensation upon such exercise. The Company is hereby authorized
to satisfy any such withholding requirement out of (i) any cash distribution
upon such exercise and (ii) any other cash compensation then or thereafter
payable to Grantee. To the extent that the Company in its sole discretion
determines that such sources are or may be insufficient to satisfy fully such
withholding requirements, Grantee as a condition to the exercise of this Option
shall deliver to the Company cash in an amount determined by the Company to be
sufficient to satisfy fully such withholding requirements.
(c) INVESTMENT INTENT. Grantee does hereby acknowledge,
represent and agree, on his behalf and on behalf of any holder who may acquire
this Option upon Grantee's death that:
(i) the shares of Common Stock subject to this Option have not been
registered under the Securities Act of 1933, as amended (the "1933 Act"),
or under any applicable state securities laws,
(ii) the Company legally cannot and shall not accept any consideration
for, or issue any shares of, Common Stock otherwise issuable upon exercise
of this Option unless the sale of such Common Stock is registered under
the 1933 Act and applicable state securities laws, or is exempt from such
registration requirements,
(iii) the Company shall be under no obligation to register the Common
Stock under the 1933 Act or any applicable state securities laws or comply
with an appropriate exemption therefrom in connection with Grantee's
exercise of this Option, or transfer or sale of Common Stock which he
acquires thereupon,
(iv) Grantee's acquisition of Common Stock upon any exercise of this
Option shall be solely for his own account for investment, and will not be
acquired for the account of any other person or with a view toward resale,
assignment, fractionalization, or distribution thereof,
(v) Grantee shall not offer for sale, sell, transfer, pledge or otherwise
hypothecate any shares of Common Stock which he acquires upon any exercise
of this Option except in accordance with the registration requirements of
the 1933 Act and applicable state securities laws or upon delivery to the
Company of an opinion of legal counsel satisfactory to the Company that an
exemption from registration is available,
(vi) since the shares of Common Stock subject to this Option have not been
registered under the 1933 Act or applicable state securities laws, Grantee
must bear the economic risk of his investment in such Common Stock for an
indefinite period of time,
(vii) each certificate evidencing shares of Common Stock issuable pursuant
to any exercise of this Option will bear conspicuous restrictive legends
worded substantially as follows, in addition to any other legends required
by law or any agreement by which the Company is bound:
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED ("ACT"), OR UNDER ANY APPLICABLE STATE
SECURITIES LAWS, AND THEY CANNOT BE OFFERED FOR SALE, SOLD, TRANSFERRED,
PLEDGED OR OTHERWISE HYPOTHECATED EXCEPT IN ACCORDANCE WITH THE
REGISTRATION REQUIREMENTS OF THE ACT AND SUCH STATE LAWS OR UPON DELIVERY
TO THIS CORPORATION OF AN OPINION OF LEGAL COUNSEL SATISFACTORY TO THE
CORPORATION THAT AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
THE SECURITIES EVIDENCED HEREBY MAY BE DEEMED HELD BY AN AFFILIATE OF THE
ISSUER WITHIN THE MEANING OF RULE 144 UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND THEREFORE SUBJECT TO CERTAIN RESALE LIMITATIONS IMPOSED BY
RULE 144.
Grantee and any holder who may acquire this Option upon Grantee's death shall,
upon each exercise of this Option and as a condition precedent to the issuance
of any shares of Common Stock hereunder, make the foregoing acknowledgements,
representations and agreements to the Company, and/or execute and deliver to the
Company any other acknowledgements, representations, agreements, documents or
instruments necessary to comply with the 1933 Act and applicable state
securities laws, or in lieu thereof, deliver to the Company an opinion of
counsel satisfactory to the Company that no violation of the 1933 Act and such
state laws will occur in the absence of such acknowledgements, representations,
agreements, documents and instruments.
2.2 EFFECT OF OPTION. Unless and until a certificate or certificates
representing shares of Common Stock shall have been issued by the Company to
Grantee, Grantee (or the person permitted to exercise this Option in the event
of Grantee's death) shall not be, or have any of the rights or privileges of, a
stockholder of the Company with respect to shares of Common Stock subject to
this Option. The existence of the Option granted hereunder shall not affect in
any way the right or power of the Board of Directors or the stockholders 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 issue of bonds, debentures, preferred, or
prior preference stock ahead of or affecting the Common Stock or the rights
thereof, the 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.
2.3 ADJUSTMENT.
(a) INCREASE OR DECREASE IN ISSUED SHARES WITHOUT CONSIDERATION. Subject
to any required action by the stockholders of the Company, in the event of any
increase or decrease in the number of issued shares of Common Stock resulting
from a subdivision or consolidation of shares of Common Stock or the payment of
a stock dividend (but only on the shares of Common Stock), or any other increase
or decrease in the number of such shares effected without receipt of
consideration by the Company, the Company's Board of Directors or committee
thereof shall adjust the number of shares and the exercise price per share of
Common Stock subject to this Option. Conversion of any of the Company's
convertible securities shall not be deemed to have been "effected without
receipt of consideration by the Company."
(b) CERTAIN MERGERS. Subject to any required action by the stockholders of
the Company, if the Company shall be the surviving corporation in any merger or
consolidation (except a merger or consolidation as a result of which the holders
of shares of Common Stock receive securities of another corporation), this
Option, to the extent outstanding on the date of such merger or consolidation,
shall entitle the holder hereof to acquire upon exercise the securities which a
holder of the number of shares of Common Stock then subject to this Option would
have received in such merger or consolidation.
(c) CERTAIN OTHER TRANSACTIONS. In the event of a dissolution or
liquidation of the Company, a sale of all or substantially all of the Company's
assets, a merger or consolidation involving the Company in which the Company is
not the surviving corporation or a merger or consolidation involving the Company
in which the Company is the surviving corporation but the holders of shares of
Common Stock receive securities of another corporation and/or other property,
including cash, the Company's Board of Directors or a committee thereof shall,
in its absolute discretion, have the power to:
(1) cancel, effective immediately prior to the occurrence of such
event, this Option, to the extent outstanding immediately prior to such
event, and, in full consideration of such cancellation, pay to Grantee an
amount in cash, for each share of Common Stock then subject to this Option
equal to the excess of (A) the value, as determined by the Board of
Directors or committee thereof in its absolute discretion, of the property
(including cash) received by the holder of a share of Common Stock as a
result of such event over (B) the exercise price of this Option; or
(2) provide for the exchange of this Option, to the extent
outstanding immediately prior to such event, for an option on some or all
of the property for which this Option is exchanged and, incident thereto,
make an equitable adjustment, as determined by the Board of Directors or
committee thereof its absolute discretion, in the exercise price of this
Option, or the number of shares or amount of property subject to this
Option or, if appropriate, provide for a cash payment to Grantee in
partial consideration for the exchange of this Option.
(d) OTHER CHANGES. In the event of any change in the capitalization of the
Company or corporate change other than those specifically referred to in
subsections (a), (b) or (c) of this Section 2.3, the Board of Directors or
committee thereof may, in its absolute discretion, make such adjustments in the
number and class of shares subject to this Option, to the extent outstanding on
the date on which such change occurs, and in the per share exercise price of
this Option as the Board of Directors or committee thereof may consider
appropriate to prevent dilution or enlargement of rights.
(e) NO OTHER RIGHTS. Except as expressly provided in this Agreement,
Grantee shall have no any rights by reason of any subdivision or consolidation
of shares of stock of any class, the payment of any dividend, any increase or
decrease in the number of shares of stock of any class, or any dissolution,
liquidation, merger or consolidation of the Company or any other corporation.
Except as expressly provided in this Agreement, no issuance by the Company of
any securities (including, without limitation, shares of stock of any class or
securities convertible into, or exercisable for, shares of any such stock) shall
affect, and no adjustment by reason thereof shall be made with respect to, the
number of shares of Common Stock subject to this Option or the exercise price
hereof.
ARTICLE 3
MISCELLANEOUS
3.1 NOTICES. Any notice, instruction, authorization, request or demand
required hereunder shall be in writing, and shall be delivered either by
personal delivery, by telegram, telex, telecopy or similar facsimile means, by
certified or registered mail, return receipt requested, or by courier or
delivery service,
addressed to the parties hereto at the principal offices of the Company at the
address indicated beneath its signature on the execution page of this Agreement,
and also to Grantee at his address indicated beneath his signature on the
execution page of this Agreement, or at such other address and number as a party
shall have previously designated by written notice given to the other party in
the manner hereinabove set forth. Notices shall be deemed given when received,
if sent by facsimile means (confirmation of such receipt by confirmed facsimile
transmission being deemed receipt of communications sent by facsimile means);
and when delivered and receipted for (or upon the date of attempted delivery
where delivery is refused), if hand-delivered, sent by express courier or
delivery service, or sent by certified or registered mail, return receipt
requested.
3.2 AMENDMENT AND WAIVER. This Agreement may be amended, modified or
superseded only by written instrument executed by all parties hereto. Any waiver
of the terms, provisions, covenants, representations, warranties, or conditions
hereof shall be made only by a written instrument executed and delivered by the
party waiving compliance. Any waiver granted by the Company shall be effective
only if executed and delivered by a duly authorized executive officer of the
Company other than Grantee. The failure of any party at any time or times to
require performance of any provisions hereof, shall in no manner effect the
right to enforce the same. No waiver by any party of any condition or provision,
or the breach of any term, provision, representation, or warranty contained in
this Agreement in one or more instances shall be deemed to be or construed as a
further or continuing waiver of any such condition or breach or a waiver of any
other condition or the breach of any other term, provision, covenant,
representation, or warranty.
3.3 SUCCESSORS AND ASSIGNS. Subject to the limitations which this
Agreement imposes upon transferability of this Option and shares of Common Stock
held by Grantee, this Agreement shall be bind, be enforceable by and inure to
the benefit of the Company and its successors and assigns, and Grantee, the
beneficiaries of this estate by will or the laws of descent and distribution,
and by his permitted assigns.
3.4 DEFINITIONS, GENDER AND CERTAIN REFERENCES. As used in this Agreement,
each parenthetically or quoted capitalized term in the introduction, recitals
and other Sections of this Agreement shall have the meaning so ascribed to it.
Whenever the context requires, the gender of all words used herein shall include
the masculine, feminine and neuter, and the number of all words shall include
the singular and plural. References to Articles or Sections shall be to Articles
or Sections of this Agreement unless otherwise specified. The headings and
captions used in this Agreement are solely for convenient reference and shall
not affect the meaning or interpretation of any article, section or paragraph
herein, or this Agreement. The terms "hereof," "herein" or "hereunder" shall
refer to this Agreement as a whole and not to any particular Section.
3.5 GOVERNING LAW AND SEVERABILITY. THIS AGREEMENT SHALL BE GOVERNED BY
THE INTERNAL LAW, AND NOT THE LAW OF CONFLICTS, OF THE STATE OF TEXAS. The
invalidity of any provision of this Agreement shall not affect any other
provision of this Agreement, which shall remain in full force and effect, nor
shall the invalidity of a portion of any provision of this Agreement affect the
balance of such provision.
3.6 DISPUTE RESOLUTION. The parties expressly intend, desire and agree
that any dispute arising out of, or in connection with any term or provision of
this Agreement shall be resolved by binding arbitration in Houston, Texas in
accordance with the Commercial Rules of the American Arbitration Association
then in effect; that judgment on the award rendered by the arbitrator(s) may be
entered in any court of competent jurisdiction; and that if any such dispute is
pending in any court, the parties agree to move that the court refer the matter
to such arbitration. The location of such arbitration in Houston, Texas shall be
selected by the Company in its sole and absolute discretion. All costs and
expenses, including attorneys' fees, relating to the resolution of any such
dispute shall be borne by the party incurring such costs and expenses.
3.7 ENTIRE AGREEMENT. No agreements or representations, oral or otherwise,
express or implied, have been made by any party hereto with respect to the
subject matter hereof that are not set forth expressly in this Agreement. This
Agreement supersedes and cancels any prior agreement, arrangement or
understanding entered into between the Company and Grantee relating to the
subject matter hereof.
3.8 COUNTERPARTS. The parties may execute this Agreement in any number of
counterparts, each of which is an original, but all of which together constitute
one and the same instrument.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the date first above written.
COMPANY:
TEXOIL, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, President
Address: ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: President
GRANTEE:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Address: P. O. BOX 1932
CASHIERS, N. C. 28717
or: ▇▇▇▇ ▇▇▇▇▇▇▇ Golf Club-
Telecopy No.: CASHIERS, N. C. 28717