Filed by Bowne Pure Compliance



 




AMENDED AND RESTATED STOCK OPTION PLAN

OF

GMX RESOURCES INC.

(As amended effective May 22, 2007 to increase number of shares to 850,000)




1. Purpose of the Plan




This Amended and Restated Stock Option Plan (the “Plan”) is intended as an incentive to
managerial and other key employees of GMX RESOURCES INC. (the “Company”), and its subsidiaries.
Its purposes are to retain employees with a high degree of training, experience, and ability, to
attract new employees whose services are considered unusually valuable, to encourage the sense of
proprietorship of such persons, and to stimulate the active interest of such persons in the
development and financial success of the Company. Options granted under the Plan may be either
“incentive stock options” as provided by Section 422 of the Internal Revenue Code of 1986, as
amended, and as may be further amended from time to time ( the “Internal Revenue Code” or “Code”)
or options which do not qualify as incentive stock options.



2. Administration of the Plan




(a) Administration. The Plan shall be administered by the Board of Directors of the
Company, or if the Board so authorizes, by a committee (the “Committee”) of the Board of Directors
consisting of not less than two (2) members of the Board of Directors. Unless the context
otherwise requires, references herein to the Committee shall be references to the Board of
Directors or the Committee. Members of the Committee shall serve at the pleasure of the Board, and
the Board may from time to time remove members from, or add members to, the Committee. A majority
of the members of the Committee shall constitute a quorum for the transaction of business. Action
approved in writing by a majority of the members of the Committee then serving shall be fully
effective as if the action had been taken by unanimous vote at a meeting duly called and held.



(b) Authority. The Committee is authorized to construe and interpret the Plan, to
promulgate, amend and rescind rules and regulations relating to the implementation of the Plan and
to make all other determinations necessary or advisable for the administration of the Plan. The
Committee may designate persons other than members of the Committee to carry out its
responsibilities under such conditions and limitations as it may prescribe, except that the
Committee may not delegate its authority with regard to selection for participation of, and the
granting of options to, persons subject to Sections 16(a) and 16(b) of the Exchange Act. Any
determination, decision or action of the Committee in connection with the construction,
interpretation, administration, or application of the Plan shall be final, conclusive and binding
upon all persons participating in the Plan and any person validly claiming under or through persons
participating in the Plan. The Company shall effect the granting of options under the Plan in
accordance with the determinations made by the Committee, by execution of instruments in writing in
such form as approved by the Committee.


 


 









 





3. Designation of Participants




Persons eligible for options under the Plan shall consist of managerial and other key
employees of the Company and/or its subsidiaries who hold positions of significant responsibilities
or whose performance or potential contribution, in the sole judgment of the Committee, will benefit
the future success of the Company. In addition, all Non-employee Directors of the Company shall be
eligible for options under the plan in accordance solely with the provisions of Section 7 hereof.



4. Shares Subject to the Plan




Subject to adjustment as provided in Section 9 hereof, there shall be subject to the Plan
eight hundred fifty thousand (850,000) shares of common stock subject of the Company, par value
$0.001 per share. The shares subject to the Plan shall consist of authorized but unissued shares or
treasury shares held by the Company. Any of such shares that may remain unsold and that are not
subject to outstanding options at the termination of the Plan shall cease to be subject to the
Plan, but until termination of the Plan, the Company shall at all times make available a sufficient
number of shares to meet the requirements of the Plan. Should any option expire or be canceled
prior to its exercise in full, or a portion of an option is surrendered in payment for the exercise
of an option or satisfaction of any tax withholding obligations, the shares theretofore subject to
such options may again be subjected to an option under the Plan. Any shares not subject to
outstanding options at the expiration of the Plan or at any time during the life of the Plan may be
dedicated to other plans that the Company may adopt and to the extent so dedicated, such shares
shall not be subject to this Plan.



5. Option Price




(a) Price. The purchase price for each share placed under option pursuant to the Plan
shall be determined by the Committee, but shall in no event be less than 100% of the Fair Market
Value (as defined below) of such share on the date the option is granted.



(b) Fair Market Value. “Fair Market Value” means the average of the high and low
sales prices of the shares of Common Stock on any national securities exchange on which the shares
are listed on the day on which such value is to be determined or, if no shares were traded on such
day, on the next preceding day on which shares were traded, as reported by such exchange, by
National Quotation Bureau, Inc. or other national quotation service. If the Common Stock is not
listed on a national securities exchange, Fair Market Value means the average of the closing “bid”
and “asked” prices of the shares of Common Stock in the over-the-counter market on the date on
which such value is to be determined or, if such prices are not available, the last sales price on
such day or, if no shares were traded on such day, on the next preceding day on which the shares
were traded, as reported by the National Association of Securities Dealers Automatic Quotation
System (NASDAQ) or other national quotation service. If at any time shares of Common Stock are not
traded on an exchange or in the over-the-counter market, Fair Market Value shall be the value
determined by the Committee, taking into consideration those factors affecting or reflecting
value that they deem appropriate. For purposes of determining the purchase price of an
incentive stock option, Fair Market Value shall in any event be determined in accordance with
Section 422 of the Code.


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6. Terms and Exercise of Options




(a) General. The Committee, in granting options hereunder, shall have discretion to
determine the times when, and the terms upon which, options shall be exercisable, including such
provisions as deemed advisable to permit qualification as “incentive stock options” within the
meaning of Section 422 of the Internal Revenue Code, as the same may from time to time be amended
for options intended to qualify as such, and incentive stock options outstanding under the Plan may
be amended, if necessary, to permit such qualification. The Committee shall designate at the time
of granting of any option whether such option or any portion thereof shall be an “incentive stock
option.” Each option shall be evidenced by an agreement between the Company and the optionee
containing provisions consistent with this Plan and such other provisions as the Committee may
determine as provided herein. Unless otherwise determined by the Committee at the time of grant,
all options shall become exercisable at the rate of 25% of the total shares subject to the option
on each of the first four (4) anniversary dates of the date of grant. The Committee shall also be
entitled to accelerate the date any outstanding option becomes exercisable at any time.



(b) Term. In the event of the death of an optionee while in the employ of the
Company, any unvested portion of the option as of the date of death shall be vested as of the date
of death and the option shall be exercisable in full by the heirs or other legal representatives of
the optionee within twelve (12) months following the date of death. In the event of termination of
employment for any reason other than death or termination for cause (and except as otherwise
provided in subsection (e) below) such option shall be exercisable by the employee or his legal
representative within three (3) months of the date of termination as to all then vested portions.
In addition, the Committee may in its sole discretion, approve acceleration of the vesting of any
unvested portions of the option. If an optionee’s employment with the Company is terminated for
cause, the option shall terminate as of the date of such termination of employment and the optionee
shall have no further rights to exercise any portion of the option. “Termination for cause” means
any discharge for violation of the policies and procedures of the Company or for other job
performance or conduct that is detrimental to the best interests of the Company, as determined by
the Committee in its sole discretion. Notwithstanding any of the foregoing, in no event may an
option be exercised more than ten (10) years after the date of its grant.



(c) Method of Exercise. Options may be exercised, whether in whole or in part, by
written notification to the Company accompanied by cash or a certified check for the aggregate
purchase price of the number of shares being purchased, or upon exercise of an option, the optionee
shall be entitled (unless otherwise provided in the agreement evidencing the option), without the
requirement of
further approval or other action by the Committee, to pay for the shares (i) by tendering
stock of the Company that has been owned by the optionee for at least six (6) months with such
stock to be valued at the Fair Market Value (as determined under Section 5) on the date immediately
preceding the date of exercise or (ii) with a combination of cash and stock that has been owned by
the optionee for at least six (6) months as provided above.


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In addition, upon exercise of an option, the optionee may, with the prior approval of the
Committee, pay for the shares (a) by tendering stock of the Company already owned by the optionee
but that has not been held by the optionee for at least six (6) months with such stock to be valued
at the Fair Market Value (as determined under Section 5) on the date immediately preceding the date
of exercise, (b) surrendering a portion of the option with such surrendered option to be valued
based on the difference between the Fair Market Value (as determined under Section 5) of the shares
surrendered on the date immediately preceding the date of exercise and the aggregate option
purchase price of the shares surrendered (“Surrender Value”), or (c) with a combination of cash,
stock of the Company that has not been held by the optionee for at least six (6) months or
surrender of options.



The Committee may also permit optionees, either on a selective or aggregate basis, to
simultaneously exercise options and sell the shares of common stock thereby acquired, pursuant to a
brokerage or similar arrangement, approved in advanced by the Committee, and use the proceeds from
such sale as payment of the purchase price of the shares being acquired upon exercise of any
option.



(d) Limitations Applicable To Incentive Options. To the extent the aggregate Fair
Market Value of stock (determined as of the date of grant) with respect to which incentive stock
options are exercisable for the first time by any individual during any calendar year (under all
Company plans) exceeds one hundred thousand dollars ($100,000), such options shall be treated as
options that are not incentive stock options. Options intended to be incentive options shall have
such additional terms and provisions as required by the Internal Revenue Code.



(e) Continued Service as a Director. Any provisions of the Plan to the contrary
notwithstanding, for purposes of Section 6(b) above, in the event an optionee who is also a
director of the Company ceases to be employed by the Company but continues to serve as a director
of the Company, the Committee, in its sole discretion, may determine that all or a portion of such
optionee’s options shall not expire three (3) months following the date of termination of
employment with the Company as is provided in Section 6(b) above, but instead shall continue in
full force and effect until the such optionee ceases to be a director of the Company, but in no
event beyond the stated expiration date of the options as set forth in the applicable option
agreement. Termination of any such option in connection with the optionee’s termination of service
as a director shall be in accordance with the provisions of Section 6(b) above; provided, however,
that (i) the terms “employ” and “employment” as used therein shall be replaced with the terms
“service” and “service on the Board of Directors,” respectively, and (ii) the phrase “termination
for cause” shall
mean any removal from the Board of Directors for cause in accordance with applicable law and
the Certificate of Incorporation and Bylaws of the Company.



(f) Individual Limitation. Subject to adjustment from time to time, as provided in
Section 9, not more than 200,000 shares of common stock of the Company may be made subject to
Options under the Plan to any individual in the aggregate in any one (1) calendar year, such
limitations to be applied in a manner consistent with the requirements of, and only to the extent
required for compliance with, the exclusion from the limitation or deductibility of compensation
under Section 162(m) of the Code.



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7. Non-employee Director Options




Notwithstanding anything elsewhere in the Plan to the contrary, each person who is a member of
the Board of Directors of the Company but who is not an employee of the Company (a “Non-employee
Director”) shall be eligible for grants of stock options under the Plan solely in accordance with
the provisions of this Section 7. The following provisions of this Section 7 shall apply to the
granting of stock options to Non-employee Directors:



(a) Exercise Price. The purchase price for each share placed under an option for a
Non-employee Director shall be equal to 100% of the Fair Market Value of such share on the date the
option is granted.



(b) Vesting and Term. Unless otherwise determined by the Committee at the time of
grant, all options shall become exercisable at the rate of 25% of the total shares subject to the
option on each of the first four (4) anniversary dates of the date of grant. The Committee shall
also be entitled to accelerate the date any outstanding option becomes exercisable at any time.
The period during which a Non-employee Director option may be exercised shall be ten (10) years
from the date of grant, subject to earlier termination in accordance with the provisions of Section
6(b) hereof; provided, however that (i) the terms “employ” and “employment” as used therein shall
be replaced with the terms “service” and “service on the Board of Directors,” respectively, and
(ii) the phrase “termination for cause” shall mean any removal from the Board of Directors for
cause in accordance with applicable law and the Certificate of Incorporation and Bylaws of the
Company.



(c) Method of Exercise. Options granted to Non-employee Directors may be exercised in
the manner provided in Section 6(c) hereof.



(d) Other Provisions. All options granted to Non-employee Directors shall be subject
to the other provisions of general applicability to options granted under the Plan, including
without limitation, the
provisions of Section 8 (“Assignability”), Section 9 (“Changes in Capitalization”) and Section
10 (“Change in Control”) hereof.



8. Assignability




During an optionee’s lifetime, an option may be exercisable only by the optionee and options
granted under the Plan and the rights and privileges conferred thereby shall not be subject to
execution, attachment or similar process and may not be transferred, assigned, pledged or
hypothecated in any manner (whether by operation of law or otherwise) other than by will or by the
applicable laws of descent and distribution. Notwithstanding the foregoing or any other provisions
of the Plan, to the extent permitted by applicable law, the Committee may, in its sole discretion,
permit recipients of options that do not qualify as incentive stock options under Section 422 of
the Internal Revenue Code to transfer such non-incentive options by gift or other means pursuant to
which no consideration is given for such transfer. The Committee shall impose in connection with
any non-incentive options transferred pursuant to the foregoing sentence such limitations and
restrictions as it deems appropriate. Any other attempt to transfer, assign, pledge, hypothecate
or otherwise dispose of any option under the Plan or of any right or privilege conferred thereby,
contrary to the provisions of the Plan, or the sale or levy or any attachment or similar process
upon the rights and privileges conferred thereby, shall be null and void ab initio.


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9. Changes in Capitalization




(a) No Effect on Company Rights. Subject to the other provisions of this Plan, the
existence of the Plan and the options granted hereunder shall not affect or restrict in any way the
right or power of the Board or the shareholders 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 stocks ahead of or affecting the Company’s capital stock or the rights thereof,
any issue of shares of Common Stock or shares of any other class of capital stock or warrants or
rights to acquire such shares, 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.



(b) Changes in Capitalization; Reorganizations. In the event of any change in
capitalization affecting the common stock of the Company, such as a stock dividend, stock split,
recapitalization, merger, consolidation, split-up, combination or exchange of shares or other form
of reorganization, liquidation, or any other change affecting the common stock (including a merger
or reorganization in which the Company is not the surviving entity or survives only as a subsidiary
of another entity) (“Change in Capitalization”), such proportionate adjustments, shall be made with
respect to the aggregate number and type of securities for which options may be granted under the
Plan, the number and type of securities (including securities of a surviving or acquiring entity or
cash, property or other consideration) covered by each outstanding option, and the exercise price
of outstanding options, in each case to the end that optionees shall be entitled upon exercise of
options to
receive the same number and kind of stock, securities, cash, property or other consideration
that the optionee would have receive in connection with the Change in Capitalization if such option
had been exercised immediately preceding such Change in Capitalization.



(c) Other Distributions. The Committee may also make such adjustments in the number
of shares covered by, and the price or other value of any outstanding options in the event of a
spin-off or other distribution (other than normal cash dividends) of Company assets to
shareholders.



10. Change in Control




(a) Effect on Options. In the event of a Change in Control (as defined below) of the
Company, in addition to any adjustments required by Section 9(b):




(i) all options outstanding on the date of such Change in Control shall become
immediately and fully exercisable, and




(ii) an optionee will be permitted to surrender for cancellation within sixty (60) days
after such Change in Control, any option or portion of such option to the extent not yet
exercised and the optionee will be entitled to receive a cash payment in an amount equal to
the excess, if any, of (A) the Fair Market Value on the date preceding the date of
surrender, of the shares subject to the option or portion thereof surrendered, over (B) the
aggregate exercise price for the shares under the option or portion thereof surrendered.


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(b) Change in Control. A “Change in Control” of the Company shall mean the occurrence
after the effective date of the Plan of:




(i) An acquisition (other than directly from the Company) of any voting securities of
the Company (the “Voting Securities”) by any “Person” (as the term person is used for
purposes of Section 13(d) or 14(d) of the Exchange Act) immediately after which such Person
has “Beneficial Ownership” (within the meaning of Rule 13d-3 promulgated under the Exchange
Act) of fifty percent (50%) or more of the combined voting power of the Company’s then
outstanding Voting Securities;




(ii) The individuals who, as of the date of adoption of the Plan by the Board, are
members of the Board (the “Incumbent Board”), cease for any reason to constitute at least
two-thirds of the members of the Board; provided, however, that if the election, or
nomination for election by the Company’s common shareholders, of any new director was
approved by a vote of at least two-thirds of the Incumbent Board, such new director shall,
for purposes of this Plan, be considered as a member of the Incumbent Board; provided
further, however, that no individual shall be considered a member of the Incumbent Board if
such individual initially assumed office as a result of either an actual or threatened
‘election contest’ (as described in Rule 14A-11 promulgated under the
Exchange Act) or other actual or threatened solicitation of proxies or consents by or
on behalf of a Person other than the Board (a “Proxy Contest”) including by reason of any
agreement intended to avoid or settle any Election Contest or Proxy Contest; or




(iii) The consummation of:




(A) A merger, consolidation or reorganization involving the Company, unless




(1) the shareholders of the Company, immediately before such merger,
consolidation or reorganization, own, directly or indirectly immediately
following such merger, consolidation or reorganization, at least sixty
percent (60%) of the combined voting power of the outstanding voting
securities of the corporation resulting from such merger or consolidation or
reorganization (the “Surviving Corporation”) in substantially the same
proportion as their ownership of the Voting Securities immediately before
such merger, consolidation or reorganization,




(2) the individuals who were members of the Incumbent Board immediately
prior to the execution of the agreement providing for such merger,
consolidation or reorganization constitute at least two-thirds of the
members of the board of directors of the Surviving Corporation, and




(3) no Person, other than the Company, any Subsidiary, any employee
benefit plan (or any trust forming a part thereof) maintained by the
Company, the Surviving Corporation, or any Subsidiary or any Person who,
immediately prior to such merger, consolidation or reorganization had
Beneficial Ownership of fifty percent (50%) or more of the then outstanding
Voting Securities, has Beneficial Ownership of fifty percent (50%) or more
of the combined voting power of the Surviving Corporation’s then outstanding
voting securities;


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(B) A complete liquidation or dissolution of the Company; or




(C) An agreement for the sale or other disposition of all or substantially all
of the assets of the Company to any Person (other than a transfer to a Subsidiary).



Notwithstanding the foregoing, a Change in Control shall not be deemed to occur solely because
any Person (the “Subject Person”) acquired Beneficial Ownership of more than the permitted amount
of the outstanding Voting Securities as a result of the acquisition of Voting Securities by the
Company that, by reducing the number of Voting Securities outstanding, increases the proportional
number of shares Beneficially Owned by the Subject Person, provided that if a Change in Control
would occur (but for the operation of this sentence) as a result of the acquisition of Voting
Securities by the Company, and after such share acquisition by the Company, the Subject Person
becomes the Beneficial Owner of any additional Voting Securities
which increases the percentage of the then outstanding Voting Securities Beneficially Owned by
the Subject Person, then a Change in Control shall occur.



11. Registration and Listing




The Company from time to time shall take such steps as may be necessary to cause the issuance
of shares upon the exercise of options granted under the Plan to be registered under the Securities
Act of 1933, as amended, and such other federal or state securities laws as may be applicable. The
Company shall also from time to time take such steps as may be necessary to list the shares
issuable upon exercise of options granted under the Plan for trading on such stock exchanges on
which the Company’s then outstanding shares are admitted to listed trading.



12. Effective and Expiration Dates of Plan




This Plan became effective as of October 30, 2000, the date of its original approval by the
Board of Directors and the Shareholders of the Company. No options shall be granted pursuant to
this Plan after October 30, 2010, except with respect to awards then outstanding.



13. Amendments or Termination




The Committee may at any time amend, alter or discontinue the Plan in such manner as it may
deem advisable. Any such amendment or alteration may be effected without the approval of the
shareholders of the Company, except to the extent such approval may be required by applicable laws
or by the rules of any securities exchange upon which the Company’s outstanding shares are admitted
to listed trading.



No amendment, alteration or discontinuation of the Plan shall adversely affect any stock
option grants made prior to the time of such amendment, alteration or discontinuation, except with
the consent of the holder of the affected options.


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14. Governmental Regulations




Notwithstanding any provision hereof, or any option granted hereunder, the obligation of the
Company to sell and deliver shares under any such option shall be subject to all applicable laws,
rules and regulations and to such approvals by any governmental agencies or national securities
exchange as may be required, and the optionee shall agree that he will not exercise any option
granted hereunder, and that the Company will not be obligated to issue any shares under any such
option, if the exercise thereof or if the issuance of such shares shall constitute a violation by
the optionee or the Company of any applicable law or regulation. The Company shall be entitled to
require as a condition to the issuance of any shares of Common Stock upon exercise of an option
that the optionee remit an amount sufficient, in the Company’s opinion, to satisfy all FICA,
federal, state or other withholding tax requirements related thereto. Unless otherwise provided in
the Agreement evidencing the option, an optionee shall be entitled, without the requirement of
further approval or other action by the Committee, to satisfy such obligation in whole or in part
(i) by tendering stock of the Company already owned by the optionee with such stock to be valued at
the Fair Market Value (as determined under Section 5) on the date immediately preceding the date of
exercise of the options, (ii) by surrendering a portion of his or her option with such surrendered
option to be valued at the Surrender Value (as
determined under Section 6(c)), or (iii) by a combination of cash, stock of the Company and
surrender of options.



15. Governing Law




The Plan and all actions taken thereunder shall be governed by and construed in accordance
with the laws of the state of Oklahoma and applicable federal law.



16. Severability




If any provision of this Plan is determined to be invalid or unenforceable for any reason, the
remaining provisions of the Plan shall remain in effect and be interpreted to reasonably effect the
intent of the Plan.




 


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