Exhibit 10.32


 


WESTERN GAS RESOURCES, INC.



1999 STOCK OPTION PLAN


 


This Plan is established by Western Gas Resources, Inc., a Delaware
corporation, for certain employees of the Corporation who qualify as
participants, and shall be known as the Western Gas Resources, Inc. 1999 Stock
Option Plan. The Plan provides stock options for employees of the Corporation.
It is intended that options granted under the Plan constitute “incentive stock
options” within the meaning of § 422 of the Code and the Plan and any options
granted hereunder shall be construed accordingly.


 


1.                                        Purpose. The purpose of the Plan is to enable certain of the Corporation’s
employees to participate in the growth and profitability of the Corporation by
providing a method whereby such employees may be encouraged to invest in the
Corporation’s common stock on reasonable terms, to increase incentives to
contribute to the Corporation’s future success and prosperity, and to allow
them to acquire a proprietary interest in the Corporation’s business. Further,
the availability and offering of stock options under the Plan supports and
encourages employees to remain in the employ of the Corporation.


 


2.                                       Definitions. The terms used herein shall have the following meanings:


 


(a)                                  “Board” shall mean the Board of Directors of
the Corporation.


 


(b)                                  “Code” shall mean the Internal Revenue Code
of 1986, as amended.


 


(c)                                   “Common Stock” shall mean the $0.10 par value
common stock of the Corporation which shall be authorized and unissued stock or
treasury stock.


 


(d)                                  “Corporation” shall mean Western Gas
Resources, Inc., a Delaware corporation, and any subsidiary thereof.


(e)                                   “Disabled” shall mean an employee of the
Corporation found to be unable to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment which can be
expected to result in death, or which has lasted, or can be expected to last,
for a continuous period of not less than twelve (12) months.


 


(f)                                     “Disqualified Employee” shall mean an
employee of the Corporation who, either directly or indirectly at the time an
option is granted, owns more than ten percent (10%) of the total combined
voting power of all classes of stock of the Corporation or any subsidiary or
parent of the Corporation. For purposes of this determination, the employee
shall be considered as owning the stock owned, directly or indirectly, by or
for his spouse, brothers and sisters (whether by whole or half-blood),
ancestors, and lineal descendants; and stock owned, directly or indirectly, by
or for a corporation, partnership, estate, or trust shall be considered as
being owned proportionally by or for a shareholder.


 


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(g)                                  “Fair Market Value” of stock shall mean the
New York Stock Exchange Composite Transactions average closing price for the
Common Stock reflected in The Wall Street
Journal or another publication selected by the Board for the ten
(10) days preceding the day the Option is granted to each eligible employee. If
Shares of Common Stock have not been traded on the New York Stock Exchange for
more than 10 days immediately preceding the granting of an Option, or if deemed
appropriate by the Board for any other reason, the fair market value of shares
of Common Stock shall be as determined by the Board in such other manner as it
may deem appropriate.


 


(h)                                  “Incentive Stock Option” shall mean any
option which is intended to meet and comply with the term “incentive stock
option” as set forth in § 422 of the Code.


 


(i)                                      “Option” shall mean an incentive stock option
granted by the Corporation under this Plan.


 


(j)                                      “Optionee” shall mean an eligible employee of
the Corporation who has been granted an Option under this Plan.


 


(k)                                   “Plan” shall mean the 1999 Stock Option Plan
set forth in and by this document and all subsequent amendments thereto.


 


(l)                                      “Regulations” or “Regs.” shall mean the
Treasury Regulations promulgated under the Code.


 


(m)                                “Stock Option Agreement” shall mean an
agreement between an Optionee and the Corporation which evidences the
Optionee’s right to acquire Common Stock under the Plan and which contains
terms and conditions consistent with this Plan as approved by the Board.


 


3.                                        Eligibility.  Employees of the Corporation
who have been employed by the Corporation for at least one (1) year shall be
eligible for selection to participate in the Plan as determined from time to
time by the Board. No Option shall be granted to a Disqualified Employee.


 


4.                                        Administration of Plan.


 


(a)                                   The Board of Directors of the Corporation
shall administer the Plan. The Board shall have the authority to: (i) construe
and interpret the Plan; (ii) define the terms used herein; (iii) determine the
duration and purpose of leaves of absence which may be granted to Optionees
without constituting a termination of their employment for the purposes of the
Plan; (iv) make all other determinations necessary or advisable for the
administration of the Plan; and (v) appoint a Committee to administer the Plan
and to delegate to that Committee all of the authority to administer the Plan
in accordance with the provisions of this Agreement. The determination of the
Board in the matters referred to in this paragraph shall be conclusive.


 


(b)                                  The Board shall have power, subject to the
limitations contained herein, to fix the price, terms, and conditions for the
grant or exercise of any Option under the Plan.


 


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(c)                                   The Board may at any
time cancel any unexercised stock options awarded under the Plan, whether or
not vested, if an Optionee engages in conduct which the Board determines to be
detrimental to the best interests of the Corporation.


 


(d)                                  The Board may at any
time and from time to time amend, suspend, or terminate the Plan and may amend
the form of the Stock Option Agreement, in such respects as it shall deem
advisable; provided that such modification shall not change: (1) the maximum
number of shares for which Options may be granted; (2) the Option price; (3)
the period during which Options may be granted or exercised; (4) the provisions
relating to the class of persons eligible to receive Options granted under the
Plan; or (5) the provisions relating to adjustments to be made upon changes in
capitalization of the Corporation. Such modification in the Plan shall not, without
the consent of an Optionee, affect such Optionee’s rights under an Option
previously granted to him.


 


(e)                                   If the provisions of
the Code or Regulations relating to Incentive Stock Options are changed during
the term of the Plan, the Board shall have the power to alter the Plan to
conform to such changes. The Board shall have such authority without the
necessity of obtaining further stockholder approval unless such changes in the
Code or Regulations require such approval.


 


5.                                        Participants
and Allotments. The Board may, from time to time, select Optionees from the
eligible class of employees and determine the terms and provisions of the
respective Stock Option Agreements (which need not be identical), the times at
which such Options shall be granted, and the number of shares subject to each
Option.


 


6.                                        Shares
Subject to Plan. The maximum number of shares from which Options may be
granted under the Plan are Seven Hundred Fifty Thousand (750,000) shares of the
Corporation’s authorized and unissued Common Stock. If any Option granted under
the Plan shall terminate or expire prior to exercise, in whole or in part, the
shares so released from the Option may be made the subject of additional
options granted under the Plan.  The
Corporation shall reserve and keep available such number of shares of stock as
will satisfy the requirements of all outstanding options and grants under this
Plan.


 


7.                                        Option Price.
The purchase price of the stock under each Option shall be the Fair Market
Value of the stock subject to the Option at the time the Option is granted.


 


8.                                        Conditions
for Exercise of Option.


 


(a)                                   Notwithstanding
anything to the contrary, no Option or portion thereof granted under this Plan
may be exercised after the earlier of (1) five (5) years from the date the Optionee
has the right to exercise such Option or portion thereof as provided in
Paragraph 8(b), below; or (2) ten (10) years from the date the Option is
granted.


 


(b)                                  Except as expressly
provided in Section 8(e) below, an Optionee shall become entitled to exercise
that portion of the Option to purchase the percentage of the Common


 


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Stock subject to the Option in accordance with one of the following
vesting schedules which will be set forth in the Optionee’s Stock Option
Agreement:


 


Five-Year Vesting Schedule:


 


(1)                                  Commencing one year
from the date of the grant, the Optionee shall have the right to exercise
twenty percent (20%) of the Option and to purchase twenty percent (20%) of the
Common Stock subject to the Option.


 


(2)                                  Commencing two years
from  the date of the grant, the
Optionee shall have the right to exercise an additional twenty percent (20%) of
the Option and to purchase an additional twenty percent (20%) of the Common
Stock subject to the Option.


 


(3)                                  Commencing three
years from the date of the grant, the Optionee shall have the right to exercise
an additional twenty percent (20%) of the Option and to purchase an additional
twenty percent (20%) of the Common Stock subject to the Option.


 


(4)                                  Commencing four years
from the date of the grant, the Optionee shall have the right to exercise an
additional twenty percent (20%) of the Option and to purchase an additional
twenty percent (20%) of the Common Stock subject to the Option.


 


(5)                                  Commencing five years
from the date of the grant, the Optionee shall have the right to exercise an
additional twenty percent (20%) of the Option and to purchase an additional
twenty percent (20%) of the Common Stock subject to the Option.


 


Four-Year Vesting Schedule:


 


(1)                                  Commencing one year
from the date of the grant, the Optionee shall have the right to exercise
twenty-five percent (25%) of the Option and to purchase twenty-five percent
(25%) of the Common Stock subject to the Option.


 


(2)                                  Commencing two years
from the date of the grant, the Optionee shall have the right to exercise an
additional twenty-five percent (25%) of the Option and to purchase an
additional twenty-five percent (25%) of the Common Stock subject to the Option.


 


(3)                                  Commencing three
years from the date of the grant, the Optionee shall have the right to exercise
an additional twenty-five percent (25%) of the Option and to purchase an
additional twenty-five percent (25%) of the Common Stock subject to the Option.


 


(4)                                  Commencing four years
from the date of the grant, the Optionee shall have the right to exercise an
additional twenty-five percent (25%) of the Option and to purchase an
additional twenty-five percent (25%) of the Common Stock subject to the Option.


 


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Three-Year Vesting Schedule:


 


(1)                                  Commencing one year from the date of the
grant, the Optionee shall have the right to exercise thirty-three and one-third
percent (331/3%) of the Option and to purchase
thirty-three and one-third percent (331/3%) of the Common
Stock subject to the Option.


 


(2)                                  Commencing two years from the date of the
grant, the Optionee shall have the right to exercise an additional thirty-three
and one-third percent (331/3%) of the Option and to
purchase an additional thirty-three and one-third percent (331/3%)
of the Common Stock subject to the Option.


 


(3)                                  Commencing three years from the date of the
grant, the Optionee shall have the right to exercise an additional thirty-three
and one-third percent (331/3%) of the Option and to purchase
an additional thirty-three and one-third percent (331/3%)
of the Common Stock subject to the Option.


 


The Optionee’s right to purchase the Common Stock subject to the
Option, shall be cumulative, so that as of the end of the vesting period, the
Optionee shall be entitled to exercise one hundred percent (100%) of the Option
and to purchase all of the Common Stock covered by the Option, subject to all
of the provisions of this Plan.


 


(c)                                   Except as provided in Sections 8(d) and (e),
an Optionee may exercise an Option only if, at the time such Option is
exercised, such Optionee is an employee of and has continuously since the grant
of the Option been an employee of the Corporation.


 


(d)                                  If an Optionee’s employment with the
Corporation is terminated for any reason other than (i) his or her death or
disability or (ii) his or her discharge for dishonesty or commission of a
crime, the Optionee may, within sixty (60) days thereafter and subject to the
provisions of Sections 8(a), (b) and (c), exercise the Option or portion
thereof to the extent it was exercisable as of the date of termination of his
or her employment. All unexercised Options, or portions thereof, shall
terminate, be forfeited, and shall lapse upon expiration of said sixty (60) day
period, or immediately if the Optionee’s employment is terminated for any of
the reasons set forth in (ii) above.


 


(e)                                   If an Optionee dies or becomes Disabled while
employed by the Corporation, all of the Options granted to such employee shall
become one hundred percent (100%) exercisable, without regard to the provisions
of Section 8(b), above. In such event, the Options may be exercised by the
Disabled employee, or the person or persons to whom the deceased employee’s
rights under the Option shall pass by will, or by the applicable laws of
descent and distribution; provided, however, that no such Option may be
exercised after one hundred eighty days (180) days from such employee’s date of
death, or termination of employment as a result of Disability, whichever is applicable.  Upon expiration of said period, all
unexercised Options, or portions thereof, shall terminate, be forfeited, and
shall lapse.


 


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9.                                       Method of Exercise.


 


(a)                                   To exercise an Option, the Optionee, or his
or her successors, shall give written notice to the Corporation’s Treasurer at
the Corporation’s principal office accompanied by full payment of the Common
Stock being purchased and a written statement that the shares are purchased for
investment and not with a view to distribution. However, this statement shall
not be required in the event the Common Stock subject to the Option is
registered with the Securities and Exchange Commission. If the Option is
exercised by the successor of the Optionee, following his or her death, proof
shall be submitted, satisfactory to the Board, of the right of the successor to
exercise the Option.


 


(b)                                  Common Stock issued pursuant to this Plan
which has not been registered with the Securities and Exchange Commission shall
bear the following legend:


 


“The
securities represented by this Stock Certificate have not been registered under
the Securities act of 1933 (the “Act”) or applicable state securities laws (the
“State Acts”), and shall not be sold, pledged, hypothecated, donated or
otherwise transferred (whether or not for consideration) by the holder, except
upon the issuance to the Corporation of a favorable opinion of its counsel and
submission to the Corporation of such other evidence as may be satisfactory to
the Corporation to the effect that any such transfer shall not be in violation
of the Act and the State Acts.”


 


(c)                                   The Corporation shall not be required to
transfer and deliver any stock certificate or certificates for shares purchased
upon exercise of said Options until after compliance with all then applicable
requirements of law. In no event shall the Corporation be required to issue
fractional shares to the Optionee.


 


(d)                                  If the Corporation shall be advised by
counsel that shares of stock deliverable upon exercise of an Option are
required to be registered under the Securities Act of 1933, or that the consent
of any other authority is required for the issuance of same, the Corporation
may effect registration or obtain consent, and delivery of shares by the Corporation
may be deferred until registration is effected or consent obtained.


 


10.            The following is a brief summary of the
principal United States federal income tax consequences under current federal
income tax laws relating to the Options. This summary is not intended to be
exhaustive and does not describe, among other things, state, local or foreign
income and other tax consequences. As indicated above, it is suggested that you
consult your tax and/or financial advisor before deciding to exercise any
Option.


 


Options granted pursuant to the 1999 Plan are entitled to special tax
treatment under Section 421 of the Internal Revenue Code of 1986 as
amended. In general, you will not recognize income for federal income tax
purposes upon the grant or the exercise of an Option. In certain circumstances,
however, the exercise of an Option may constitute taxable income to you for
purposes of the alternative minimum tax. In addition, to the extent that the
fair market value of the shares of Common Stock underlying the Option exceeds
$100,000 in the calendar year in


 


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which that portion of the Option first becomes exercisable, you shall
not be able to treat such excess as an incentive stock option.


 


If you hold the Common Stock you receive upon exercise of you Option
for least one year after the exercise and two years after the grant of the
Option, you will recognize, upon the sale of such shares, a capital gain or
loss equal to the difference between the amount realized on such sale and the
exercise price.


 


If the shares are not held for the required
periods, you will recognize upon your sale of Common Stock: (i) compensation in
an amount equal to the difference between the fair market value of the shares
on the date of exercise and the exercise price; and (ii) capital gains to the
extent that the proceeds you receive in the sale exceed your basis in such
shares; provided  however that in the event that the sale price
does not exceed the fair market value of the shares on the date of exercise,
then you will recognize compensation upon your sale of Common Stock in an
amount equal to the difference between the sale proceeds and the exercise
price. The Corporation is obligated to report such income on your Form W-2 as
“other compensation” (or if you are no longer an employee and the amount of the
gain exceeds Six hundred Dollars, on a Form 1099).


 


11.                             Rights
To Terminate Employment. Nothing in this Plan or in any Stock Option
Agreement shall confer upon any participant the right to continue in the
employment of the Corporation or affect any right which the Corporation may
have to terminate the employment of such participant.


 


12.                             Amendments
and Termination.  The Board of
Directors may amend, suspend, discontinue or terminate the Plan, but no such
action may, without the consent of the Optionee, alter or impair his or her
Option, except as provided in Paragraph 8.


 


13.                             Rights
As Stockholders. No stock shall be issued until full payment for such stock
has been made. The Optionee shall have no rights as a stockholder with respect
to optioned shares until the date of the issuance of the stock certificate to
him or her for such shares. No adjustments shall be made for dividends
(ordinary or extraordinary, whether in cash, securities, or other properties)
or distributions or other rights for which the record date is prior to the date
such certificate is issued.


 


14.                             Adjustments
of and Change In Stock. No adjustment shall be made to the number of shares
of Common Stock for which options are granted by the Plan or the exercise price
thereof as a result of any change in the number of issued and outstanding
shares of Common Stock. Provided, however, the number of shares of Common Stock
covered by outstanding Options, as well as the exercise price, shall be
adjusted proportionately for any increase or decrease in the number of
outstanding shares of Common Stock resulting from a stock split, the payment of
a stock dividend with respect to the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without
receipt of consideration by the Company. In addition, in the event of a
dissolution or liquidation of the Corporation, a merger of the Corporation, or
sale of all


 


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or substantially all of the assets of the Corporation, the Corporation
shall take such action as may be necessary to enable the Optionee to receive,
in lieu of shares of Common Stock, securities or other assets that were issued
or payable upon such event in receipt of or in exchange for such shares of
Common Stock.


 


15.                              Stock
Option Agreement. The granting of an Option under this Agreement occurs
only by a written Stock Option Agreement, effective on the date set forth
therein, substantially in the form attached hereto and marked Exhibit I,
executed by and on behalf of the Corporation and the employee to whom the
Option is granted, and such executed Agreement is delivered to the Corporation.


 


16.                              Nonassignability.  No Option granted under this Plan shall be
assignable or transferable in any manner voluntarily, involuntarily, or by
operation of law, except by will or by the laws of descent and distribution.
During the life of such recipient, an Option shall be exercisable only by such
person or by such person’s guardian or legal representative.


 


17.                              Period
of Plan. No Options shall be granted on or after May 21, 2009. The Plan
shall terminate on the later of (1) May 21, 2009;
(2) the date on which all Options granted under the Plan have expired; or (3)
the date on which all Options granted under the Plan have been exercised in
full.


 


 


	
   

  	
  ADOPTED BY THE BOARD OF DIRECTORS

  OF WESTERN GAS RESOURCES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
  May 21, 1999

  	
   

  	
  By:

  	
   

  	
   

  
	
  Date

  	
   

  	
  Brion G. Wise

  
	
   

  	
   

  	
  Chairman of the Board of Directors

  
	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
							



 


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