Exhibit 10.1

 

Stock Option No.:

 

INTREPID POTASH, INC.
2008 EQUITY INCENTIVE PLAN

 

FORM OF STOCK OPTION AGREEMENT

 

Intrepid Potash, Inc., a Delaware corporation (the “Company”), has granted an
option to purchase shares of the Company’s Common Stock to the Optionee named
below under the Intrepid Potash, Inc. 2008 Equity Incentive Plan (the “Plan”). 
This Stock Option Agreement (the “Agreement”) evidences the terms of that Option
grant.

 

I.  NOTICE OF GRANT

 

Name of Optionee:

 

Number of Shares of Common Stock Covered by the Option:

 

Exercise Price per Share: $           

 

Grant Date:

 

Expiration Date:

 

Type of Option:           Non-Qualified Stock Option

 

Vesting Schedule: Except as provided otherwise in this Agreement or the Plan,
this Option shall vest and become exercisable in accordance with the following
schedule, provided Grantee remains in the continuous Service of the Company from
the Grant Date through the Service Vesting Dates set forth below:

 

Service Vesting Date

 

Fraction of Total Shares
that Vest

 

Number of Shares that
Vest

 

 

 

 

 

 

 

[                     ]

 

[    ]

 

[    ]

 

[                     ]

 

[    ]

 

[    ]

 

[                     ]

 

[    ]

 

[    ]

 

 

II.  STOCK OPTION AGREEMENT

 

1.             Grant of Option.  Subject to the terms and conditions of this
Agreement and the Plan (which is incorporated herein by reference), the Company
has granted to Optionee an Option to purchase the number of shares of Stock set
forth above in the Notice of Grant, at the Exercise Price set forth in the
Notice of Grant.  In the event of a conflict between the terms and conditions of
the Plan and this Agreement, the terms and conditions of the Plan shall govern. 
All

 

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capitalized terms in this Agreement shall have the meaning assigned to them in
this Agreement or in the Plan.

 

2.             Vesting.  Unless otherwise provided in this Agreement or in the
Plan, this Option shall become exercisable in one or more installments in
accordance with the Vesting Schedule set forth in the Notice of Grant.  As the
Option becomes exercisable for one or more installments, the installments shall
accumulate and the Option shall remain exercisable for the accumulated
installments until the Option expires or terminates in accordance with the terms
of this Agreement or the Plan.

 

3.             Option Term; Expiration Date.  This Option shall expire at
5:00 P.M. Mountain Time on the Expiration Date set forth in the Notice of Grant,
unless sooner terminated in accordance with Section 4 of this Agreement or the
terms of the Plan.

 

4.             Termination of Service; Accelerated Vesting; Expiration of
Option.  If Optionee terminates Service with the Company and its Affiliates
prior to the Expiration Date, the following shall apply:

 

(a)           Termination of Service.  If Optionee’s Service is terminated for
any reason other than as set forth in subsection (b) or (c) of this Section,
then the vested portion of the Option will remain outstanding until 5:00 P.M.
Mountain Time on the soonest to occur of (i) the date that is twelve (12) months
after the date Optionee terminates Service, or (ii) the Expiration Date.  The
unvested portion of the Option shall automatically expire on the date of
termination of Service.

 

(b)           Disability.  If Optionee’s Service is terminated as a result of
Disability, any portion of the Option that would have vested in accordance with
Section 2 hereof and the Notice of Grant had Grantee remained in Service through
the next Service Vesting Date shall become vested on the date of such
termination of Service.  The remaining unvested portion of the Option (if any)
shall automatically expire on the date of termination of Service.  The vested
and outstanding portion of the Option shall remain outstanding and may be
exercised by Optionee or Optionee’s guardian or legal representative until
5:00 P.M. Mountain Time on the soonest to occur of (i) the date that is twelve
(12) months after the date Optionee terminates Service because of Optionee’s
Disability, or (ii) the Expiration Date.

 

(c)           Death.

 

(i)            Death Causing Termination of Service.  If Optionee’s Service is
terminated as a result of death, any portion of the Option that would have
vested in accordance with Section 2 hereof and the Notice of Grant had Grantee
remained in Service through the next Service Vesting Date shall become vested on
the date of such termination of Service.  The remaining unvested portion of the
Option (if any) shall automatically expire on the date of termination of
Service.  The vested and outstanding portion of the Option shall remain
outstanding and may be exercised by those entitled to do so under Optionee’s
will or under the laws of descent and distribution until 5:00 P.M. Mountain Time
on the soonest to occur of (i) the date that is twelve (12) months after the
date of death, or (ii) the Expiration Date.

 

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(ii)           Death Following Termination of Service.  If Optionee dies during
the twelve month period described in Section 4(a), then the vested and
outstanding portion of the Option at such time, if any, will remain outstanding
and may be exercised by those entitled to do so under Optionee’s will or under
the laws of descent and distribution until 5:00 P.M. Mountain Time on the
soonest to occur of (i) the date that is twelve (12) months after the date of
death, or (ii) the Expiration Date.

 

5.             Leave of Absence.  For purposes of the Option, Service does not
terminate when Optionee goes on a bona fide employee leave of absence that was
approved by the Company or an Affiliate in writing, if the terms of the leave
provide for continued Service crediting, or when continued Service crediting is
required by applicable law.  However, Service will be treated as terminating 90
days after Optionee went on the approved leave, unless Optionee’s right to
return to active work is guaranteed by law or by a contract.  Service terminates
in any event when the approved leave ends unless Optionee immediately returns to
active Service.  The Committee determines, in its sole discretion, which leaves
of absence count for this purpose, and when Service terminates for all purposes
under the Plan.

 

6.             Option Exercise.

 

(a)           Notice of Exercise.  The Option shall be exercised on a business
day on which the Company is generally open for business by delivery of written
or electronic notice to an officer, employee, or agent of the Company designated
by the Committee, on a written or electronic form specified by the Committee or
its designated agent.  The written or electronic notice shall specify the number
of shares of Stock to be purchased, and shall be accompanied by full payment of
the Exercise Price for the shares being purchased.  The notice shall also
specify the manner in which the shares should be registered and the manner in
which Optionee is satisfying applicable tax withholding requirements.  The
notice of exercise will be effective when it is received.  Anyone exercising the
Option after the death of Optionee must provide appropriate documentation to the
satisfaction of the Company that the individual is entitled to exercise the
Option.

 

(b)           Payment of Exercise Price.  Payment of the Exercise Price for the
number of shares of Stock being purchased shall be made in one (or a
combination) of the following forms:

 

(i)            Cash or cash equivalents acceptable to the Company.

 

(ii)           By tendering to the Company (either by actual delivery of by
attestation) unrestricted shares of Stock owned by Optionee that were purchased
on the open market or owned for at least six months or such other period
designated by the Company in order to comply with applicable law and to avoid
adverse accounting consequences.  The Fair Market Value of the Stock, determined
as of the effective date of the Option exercise, will be applied to the payment
of the Exercise Price.

 

(iii)          To the extent a public market for the shares of Stock exists as
determined by the Company, by delivery to the Company of irrevocable
instructions issued to a licensed securities broker acceptable to the Company to
sell shares of Stock and to deliver all or

 

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part of the sale proceeds to the Company in payment of the aggregate Exercise
Price and any withholding taxes.

 

7.             Tax Withholding.  Optionee shall make appropriate arrangements
with the Company to provide for payment of all federal, state, local or foreign
taxes of any kind required by law to be withheld upon the issuance of any shares
of Stock or payment of any kind upon the exercise of this Option.  Such
arrangements may include, but are not limited to, the payment of cash directly
to the Company, withholding by the Company from other cash payments of any kind
otherwise due to Optionee, or share withholding as described below.  Subject to
the prior approval of the Committee, which may be withheld by the Committee, in
its sole discretion, Optionee may elect to satisfy the minimum statutory
withholding obligations, in whole or in part, (i) by having the Company withhold
shares of Stock otherwise issuable to Optionee or (ii) by delivering to the
Company shares of Stock already owned by Optionee.  The shares delivered or
withheld shall have an aggregate Fair Market Value not in excess of the minimum
statutory total tax withholding obligations.  The Fair Market Value of the
shares used to satisfy the withholding obligation shall be determined by the
Company as of the date that the amount of tax to be withheld is to be
determined.  Shares used to satisfy any tax withholding obligation must be
vested and cannot be subject to any repurchase, forfeiture, or other similar
requirements.  Any election to withhold shares shall be irrevocable, made in
writing, signed by Optionee, and shall be subject to any restrictions or
limitations that the Committee, in its sole discretion, deems appropriate.

 

8.             Transfer of Option.

 

(a)           General Rule.   During Optionee’s lifetime, Optionee shall not
transfer or assign the Option and the Option may be exercised solely by Optionee
(or, in the event of Optionee’s legal incapacity or incompetency, Optionee’s
guardian or legal representative).  Upon death, the Option may be transferred in
accordance with Optionee’s  will or under the applicable laws of descent and
distribution and may be exercised in accordance with Section 4(c), above.

 

(b)           Domestic Relations Order.  Notwithstanding the foregoing
Section 8(a), to the extent that this Option is a Non-Qualified Stock Option,
the Option, in whole or in part, may be transferred to a Family Member pursuant
to a domestic relations order in settlement of marital property rights. 
Following any such transfer, the Option shall continue to be subject to the same
terms and conditions as were applicable immediately prior to the transfer, and
shall be exercisable by the transferee only to the extent, and for the periods
specified in, this Agreement.

 

9.             Investment Representations.  The Committee may require Optionee
(or Optionee’s estate or heirs) to represent and warrant in writing that the
individual is acquiring the shares of Stock for investment and without any
present intention to distribute such shares and to make such other
representations as are deemed necessary or appropriate by the Company and its
counsel.

 

10.           Continued Service.  Neither the grant of the Option nor this
Agreement gives Optionee the right to continue Service with the Company or its
Affiliates in any capacity.  The Company and its Affiliates reserve the right to
terminate Optionee’s Service at any time and for any reason not prohibited by
law.

 

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11.           Stockholder Rights.  Optionee and Optionee’s estate or heirs shall
not have any rights as a stockholder of the Company until Optionee becomes the
holder of record of such shares of Stock, and no adjustments shall be made for
dividends or other distributions or other rights as to which there is a record
date prior to the date Optionee becomes the holder of record of such shares,
except as provided in Section 14 of the Plan.

 

12.           Additional Requirements.  Optionee acknowledges that shares of
Stock acquired upon exercise of the Option may bear such legends as the Company
deems appropriate to comply with applicable federal, state or foreign securities
laws.  In connection therewith and prior to the issuance of the shares, Optionee
may be required to deliver to the Company such other documents as may be
reasonably necessary to ensure compliance with applicable laws.

 

13.           Governing Law.  The validity and construction of this Agreement
and the Plan shall be determined in accordance with and governed by the laws of
the State of Delaware other than any conflicts or choice of law rule or
principle that might otherwise refer construction or interpretation of the Plan
and this Agreement to the substantive laws of any other jurisdiction.

 

14.           Binding Effect.  This Agreement shall be binding upon and inure to
the benefit of the Company and Optionee and their respective heirs, executors,
administrators, legal representatives, successors and assigns.

 

15.           Special Rules for Incentive Stock Options.  In the event this
Option is designated as an Incentive Stock Option in the Notice of Grant, the
Option shall be treated as an Incentive Stock Option to the maximum extent
permissible under applicable law.  In the event this Option, or any portion
thereof, cannot be treated as an Incentive Stock Option under applicable law,
whether because the value of the Common Stock covered under the Option exceeds
the limits of Code Section 422(d), the Option remains outstanding following
termination of employment beyond the holding periods of Code Section 422(a)(2),
or otherwise, then this Option, or the relevant portion thereof, shall be
classified as a Non-Qualified Stock Option.

 

16.           Tax Treatment; Section 409A.  Optionee may incur tax liability as
a result of the exercise of the Option or the disposition of shares of Stock. 
Optionee should consult his or her own tax adviser before exercising the Option
or disposing of the shares.

 

Optionee acknowledges that the Committee, in the exercise of its sole discretion
and without Optionee’s consent, may amend or modify the Option and this
Agreement in any manner and delay the payment of any amounts payable pursuant to
this Agreement to the minimum extent necessary to satisfy the requirements of
Section 409A of the Code.  The Company will provide Optionee with notice of any
such amendment or modification.  This Section does not, and shall not be
construed so as to, create any obligation on the part of the Company to adopt
any such amendments or to take any other actions or to indemnify Grantee for any
failure to do so.

 

17.           Amendment.  The terms and conditions set forth in this Agreement
may only be amended by the written consent of the Company and Optionee, except
to the extent set forth in Section 16 hereof regarding Section 409A of the Code
and any other provision set forth in the Plan.

 

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18.           2008 Equity Incentive Plan.  The Option and shares of Stock
acquired upon exercise of the Option granted hereunder shall be subject to such
additional terms and conditions as may be imposed under the terms of the Plan, a
copy of which has been provided to Optionee.

 

[Company Signature Page Follows]

 

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This Stock Option Agreement is executed on behalf of the Company by its
authorized officer on the date set forth below.

 

 

INTREPID POTASH, INC.

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

Date:

 

 

 

[Optionee Signature Page Follows]

 

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ACKNOWLEDGMENT AND AGREEMENT

 

Optionee acknowledges receipt of this Agreement and agrees to all of the terms
and conditions described in this Agreement and in the Plan, a copy of which is
attached.  Optionee acknowledges that Optionee has carefully reviewed the Plan,
and agrees that the Plan will control in the event any provision in this
Agreement is in conflict with the Plan.  To accept this Agreement and the Option
evidenced thereunder, Optionee must sign and date this signature page and return
it to the Company no later than [                     ].

 

 

Optionee

 

 

 

 

 

Signature

 

 

 

 

 

Print Name:

 

 

 

 

 

Date:

 

 

Attachments:

2008 Equity Incentive Plan

Form S-8 Prospectus

 

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