CIMAREX ENERGY CO.

2002 STOCK INCENTIVE PLAN

 

RESTRICTED STOCK AGREEMENT

 

THIS RESTRICTED STOCK AGREEMENT made as of this 17th day of May, 2006, between
CIMAREX ENERGY CO., a Delaware corporation (together with its Affiliated
Corporations, except where the context requires otherwise, the “Company”), and
               (the “Grantee”).

 

1.             Grant of Restricted Stock. Pursuant to the Cimarex Energy Co.
2002 Stock Incentive Plan (the “Plan”) and subject to the terms and conditions
of this Agreement, the Company hereby grants to the Grantee 2,477 shares of the
common stock of the Company (the “Restricted Stock”), effective as of May 17,
2006 (the “Transfer Date”), with a Fair Market Value of $40.365 as of the
Transfer Date.

 

2.             Restrictions. The Grantee shall not sell, assign, transfer by
gift or otherwise, pledge, hypothecate, or otherwise dispose of, by operation of
law or otherwise, any of the Shares for the period commencing on the Transfer
Date and ending on the date that the shares become fully vested as provided in
Section 3(a) or as otherwise permitted by this Agreement or the terms of the
Plan.

 

3.             Vesting; Lapse of Restrictions; Transferability.

 

(a)           General. Except as provided otherwise in this Agreement, the
Restricted Stock shall vest in installments of 33-1/3% one year from the date
hereof and in additional installments of 33-1/3% each subsequent anniversary
thereafter, provided that, with respect to each such installment, the Grantee
has remained in continuous service on the Company’s Board of Directors from the
date hereof through the date such installment is designated to vest.

 

(b)           Transfer Upon Lapse of Restrictions. After the restrictions
described in Section 2 and subsection 3(a) have lapsed, the Grantee may sell,
assign by gift or otherwise, hypothecate, or otherwise dispose of, by operation
of law or otherwise, any of the formerly Restricted Stock at the Grantee’s
discretion, except that the Grantee agrees that he shall not make any sale or
transfer of the formerly Restricted Stock that would conflict with or violate
any of the provisions of the Securities Act of 1933 or any applicable state
securities laws.

 

(c)           Vesting and Transferability Upon Change in Control. Upon the
occurrence of a Change in Control Event, as defined in the Plan, the
restrictions set forth in Section 2 and subsection 3(a) shall lapse in their
entirety, and the Restricted Stock shall become fully vested and freely
transferable as described in subsection 3(b) above, except that the Grantee
agrees that he shall not make any sale or transfer of the formerly Restricted
Stock that would conflict with or violate any of the provisions of the
Securities Act of 1933 or any applicable state securities laws.

 

4.             Termination of Service on the Board.

 

(a)           Death or Disability. If the Grantee terminates service on the
Company’s Board of Directors on account of death or Disability (as defined in
the Plan) prior to the third anniversary of the Transfer date, the Restricted
Stock shall become fully vested and shall be freely transferable as described in
subsection 3(b) above.

 

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(b)           Other Terminations. If the Grantee ceases performing services for
the Company for any reason other than death or Disability prior to the third
(3rd) anniversary of the Transfer Date, the Grantee shall immediately transfer
and assign to the Company, without the requirement for any consideration from
the Company, all remaining unvested shares of Restricted Stock.

 

5.             Delivery of Unvested Shares. If the Grantee is required to
transfer some or all of the shares of Restricted Stock to the Company pursuant
to Section 4 hereof, the shares shall be tendered promptly to the Company by the
delivery of certificates for such shares, duly endorsed in blank by the Grantee
or with stock powers attached thereto duly endorsed, at the Company’s principal
offices, all in form suitable for the transfer of such shares to the Company
without the payment of any consideration by the Company. After the time at which
any such shares are required to be delivered to the Company for transfer to the
Company, the Company shall not pay any dividend to the Grantee on account of
such shares or permit the Grantee to exercise any of the privileges or rights of
a stockholder with respect to such shares but shall, in so far as permitted by
law, treat the Company as owner of such shares.

 

6.             Effect of Prohibited Transfer. If any transfer of Shares is made
or attempted to be made contrary to the terms of this Agreement, the Company
shall have the right to acquire for its own account, without the payment of any
consideration, such shares from the owner thereof or his transferee, at any time
before or after such prohibited transfer. In addition to any other legal or
equitable remedies it may have, the Company may enforce its rights to specific
performance to the extent permitted by law and may exercise such other equitable
remedies then available to it. The Company may refuse for any purpose to
recognize any transferee who receives shares contrary to the provisions of this
Agreement as a stockholder of the Company and may retain and/or recover all
dividends on such shares that were paid or payable subsequent to the date on
which the prohibited transfer was made or attempted.

 

7.             Enforcement of Restrictions.

 

(a)           Legend. All certificates representing Restricted Stock shall have
affixed thereto the following legend:

 

“The shares of Stock represented by this certificate are subject to all of the
terms of a Restricted Stock Agreement between Cimarex Energy Co. (the “Company”)
and the registered owner (“Owner”) of this Certificate (the “Agreement”) and to
the terms of the Cimarex Energy Co. 2002 Stock Incentive Plan (the “Plan”).
Copies of the Agreement and the Plan are on file at the office of the Company.
The Agreement, among other things, limits the right of the Owner to transfer the
shares represented by this Certificate and provide in certain circumstances that
all or a portion of the shares must be returned to the Company.”

 

(b)           Custody of Certificates. The Company may, in its sole discretion,
require the Grantee to keep the certificate the shares of Restricted Stock, duly
endorsed, in the custody of the Company while the shares are subject to the
restrictions contained in Sections 2 and 3. The Company may, in its sole
discretion, require the Grantee to keep the certificate the shares of Restricted
Stock, duly endorsed, in the custody of a third party while the shares are
subject to the restrictions contained in Sections 2 and 3.

 

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8.             Adjustments to the Stock.

 

(a)           Adjustment by Merger, Stock Split, Stock Dividend, Etc. If the
shares of stock, as presently constituted, shall be changed into or exchanged
for a different number or kind of shares of stock or other securities of the
Company or of another corporation (whether by reason of merger, consolidation,
recapitalization, reclassification, stock split, spinoff, combination of shares
or otherwise), or if the number of such shares of Stock shall be increased
through the payment of a stock dividend, or a dividend on the shares of Stock or
rights or warrants to purchase securities of the Company shall be issued to
holders of all outstanding Stock, then there shall be substituted for or added
to each share of Restricted Stock, the number and kind of shares of stock or
other securities into which each outstanding share of Restricted Stock shall be
so changed or for which each such share shall be exchanged or to which each such
share shall be entitled.

 

(b)           Other Distributions and Changes in the Stock. In the event there
shall be any other change in the number or kind of the outstanding shares of
stock, or any stock or other securities into which the stock shall have been
changed or for which it shall have been exchanged, then if the Committee shall,
in its sole discretion, determine that such change equitably requires an
adjustment in the shares of Restricted Stock, such adjustment shall be made in
accordance with such determination, except that no adjustment of the number of
shares of Restricted Stock that would otherwise be required shall be made unless
and until such adjustment either by itself or with other adjustments not
previously made would require an increase or decrease of at least 1% in the
number of shares of stock available under the Plan or to which any Award granted
under the Plan relates immediately prior to the making of such adjustment (the
“Minimum Adjustment”). Any adjustment representing a change of less than such
minimum amount shall be carried forward and made as soon as such adjustment
together with other adjustments required by Article VIII of the Plan and not
previously made would result in a Minimum Adjustment. Notwithstanding the
foregoing, any adjustment required by Article VIII of the Plan which otherwise
would not result in a Minimum Adjustment shall be made with respect to shares of
Restricted Stock immediately prior to vesting or transferability of such
Restricted Stock.

 

9.             Reorganization and Change in Control.

 

(a)           Full Vesting; Termination; Assumption or Substitution. Upon the
occurrence of a Change in Control Event (as defined in subsection 9(c)), the
Restricted Stock shall become fully vested and transferable regardless of
whether all conditions for vesting and transferability relating to length of
service have been satisfied. The Committee may also provide for the assumption
or substitution of the Restricted Stock by the surviving entity as described in
subsection 9(b) and make any other provision for the Restricted Stock as the
Committee deems appropriate in its sole discretion. The Committee may, in its
sole discretion, provide that any number of shares of the Restricted Stock that
are not vested and that are outstanding at the time the Change in Control Event
occurs shall be forfeited at such time so long as the Grantee is provided with
at least 45 days advance notice of such expiration.

 

(b)           Assumption or Substitution. The Company, or the successor or
purchaser, as the case may be, may make adequate provision for the assumption of
the Restricted Stock or the substitution of new shares of Restricted Stock for
the outstanding Restricted Stock on terms comparable to the terms of this
Agreement.

 

(c)           Change in Control Event. The term “Change in Control Event” shall
have the meaning provided in the Plan.

 

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11.           Miscellaneous.

 

(a)           Notices. Any notice required or permitted to be given under this
Agreement shall be in writing and shall be given by first class registered or
certified mail, postage prepaid, or by personal delivery to the appropriate
party, addressed:

 

(i)            If to the Company, to Cimarex Energy Co., Attention: Corporate
Secretary, 707 Seventeenth Street, Suite 3300, Denver, Colorado 80202-3404, or
at such other address as may have been furnished to the Grantee in writing by
the Company; or

 

(ii)           If to the Grantee, to the Grantee                               ,
or at other address as may have been furnished to the Company by the Grantee.

 

Any such notice shall be deemed to have been given as of the second day after
deposit in the United States mails, postage prepaid, properly addressed as set
forth above, in the case of mailed notice, or as of the date delivered in the
case of personal delivery.

 

(b)           Amendment. Except as provided herein, this Agreement may not be
amended or otherwise modified unless evidenced in writing and signed by the
Company and the Grantee.

 

(c)           Defined Terms. Capitalized terms shall have the meaning set forth
in the Plan or herein, as the case may be.

 

(d)           Construction; Severability. The section headings contained herein
are for reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, and each other provision of this
Agreement shall be severable and enforceable to the extent permitted by law.

 

(e)           Waiver. Any provision contained in this Agreement may be waived,
either generally or in any particular instance, by the Committee appointed under
the Plan, but only to the extent permitted under the Plan.

 

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

 

(g)           Rights to Employment. Nothing contained in this Agreement shall be
construed as giving the Grantee any right to be retained in the employ of the
Company and this Agreement is limited solely to governing the rights and
obligations of the Grantee with respect to the Restricted Stock.

 

(h)           Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware.

 

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[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first above written.

 

 

 

CIMAREX ENERGY CO.

 

 

 

 

 

By

 

 

 

 

F. H. Merelli, Chief Executive Officer

 

 

and President

 

 

 

 

 

GRANTEE

 

 

 

 

 

 

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