Exhibit 10.233


 


RESACA EXPLOITATION, INC.


 


NONQUALIFIED STOCK OPTION AGREEMENT


 


 


Optionee:               


 


1.             Grant of Stock Option.  As of the Grant
Date (identified in Section 19 below), Resaca
Exploitation, Inc., a Texas corporation (the “Company”) hereby grants a Nonqualified Stock Option (the “Option”) to the Optionee (identified above), an Employee of the Company, to purchase the number of shares of
the Company’s common stock,
[$            ] par
value per share (the “Common Stock”),
identified in Section 19 below (the “Shares”), subject to the terms and conditions of this
agreement (the “Agreement”) and
the Resaca Exploitation, Inc. 2008 Stock Incentive Plan (the “Plan”). 
The Plan is hereby incorporated herein in its entirety by
reference.  The Shares, when issued to
the Optionee upon the exercise of the Option, shall be fully paid and
nonassessable.  The Option is not an “incentive
stock option” as defined in Section 422 of the Internal Revenue Code of
1986, as amended (the “Code”).


 


2.             Substitution.  This
Agreement is in substitution for the nonqualified stock option granted to the
Optionee by Cano Petroleum, Inc., a Delaware corporation (“Cano”), under the Nonqualified Stock Option Agreement (the “Original Agreement”) dated
                      
(the “Original Grant Date”).  This substitution is by reason of the
corporate transaction consummated pursuant to that certain Agreement and Plan
of Merger, dated September 29, 2009 (the “Merger
Agreement”), by and among the Company, Resaca Acquisition Sub, Inc.,
a Delaware corporation and wholly-owned subsidiary of the Company (the “Merger Sub”), and Cano, under which Cano will merge with and
into the Merger Sub and Cano will be the surviving corporation and subsidiary
of the Company, effective as of the Closing Date (as defined in the Merger
Agreement).  All rights under the
Original Agreement are hereby cancelled upon execution of this Agreement.


 


3.             Definitions.           All capitalized terms used
herein shall have the meanings set forth in the Plan unless otherwise provided
herein. Section 19 sets forth meanings for certain of the
capitalized terms used in this Agreement.


 


4.             Option Term.  The Option shall commence on
the Grant Date and terminate on the tenth (10th) anniversary of the Original
Grant Date. The period during which the Option is in effect and may be
exercised is referred to herein as the “Option
Period”.


 


5.             Option Price.  The Option Price per Share
is identified in Section 19.


 


6.             Vesting. 
In accordance with the terms of the Original
Agreement, the Option is 100% vested and exercisable as of the Grant Date.  The Shares may be purchased
at any time, in whole or in part, during the Option Period; provided, however,
the Option may only be exercisable to acquire whole Shares.  The right of exercise provided herein shall
be cumulative so that if the Option is not exercised to the maximum extent
permissible after vesting, the vested portion of the Option shall be
exercisable, in whole or in part, at any time during the Option Period.


 

















 


7.             Method of Exercise.  The Option is exercisable by delivery of a
written notice to the Secretary of the Company, signed by the Optionee,
specifying the number of Shares to be acquired on, and the effective date of,
such exercise.  The Optionee may withdraw
notice of exercise of this Option, in writing, at any time prior to the close
of business on the business day that immediately precedes the proposed exercise
date.


 


8.             Method of Payment.  Subject to applicable provisions of the Plan,
the Option Price upon exercise of the Option shall be payable to the Company in
full either: (i) in cash or its equivalent; (ii) subject to prior
approval by the Committee in its discretion, by tendering previously acquired
Shares having an aggregate Fair Market Value (as defined in the Plan) at the
time of exercise equal to the total Option Price; (iii) subject to prior
approval by the Committee in its discretion, by withholding Shares which
otherwise would be acquired on exercise having an aggregate Fair Market Value
at the time of exercise equal to the total Option Price; or (iv) any other
permitted method pursuant to the applicable terms and conditions of the Plan.


 


As soon as practicable after receipt of a
written notification of exercise and full payment, the Company shall deliver to
or on behalf of the Optionee, in the name of the Optionee or other appropriate
recipient, Share certificates or other evidence of ownership for the number of
Shares purchased under the Option.


 


9.             Restrictions on Exercise.  The Option may not be
exercised if the issuance of such Shares or the method of payment of the
consideration for such Shares would constitute a violation of any applicable
federal or state securities or other laws or regulations, or any rules or
regulations of any stock exchange on which the Common Stock is listed.  In addition, the Optionee understands and
agrees that the Option cannot be exercised if the Company determines that such
exercise, at the time of such exercise, will be in violation of the Company’s
insider trading policy.


 


10.          Termination
of Employment. 
Voluntary or involuntary termination of Employment shall affect the
Optionee’s rights under the Option as follows:


 


(a)           Termination for Cause.  If the Optionee’s Employment is terminated
for Cause, then the Option shall expire at 5 p.m. CST on the date of
termination of Employment to the extent not previously exercised by the
Optionee.  For purposes of this
Agreement, “Cause” shall mean (i) the Optionee’s gross negligence in the
performance or intentional nonperformance of any of his duties and
responsibilities (which remains uncured and continues for thirty (30) days
after delivery of written notice); (ii) the Optionee’s dishonesty or fraud
with respect to the business, reputation or affairs of the Company; (iii) the
Optionee’s conviction of a felony or crime involving moral turpitude; (iv) the
Optionee’s debilitating drug or alcohol abuse as determined by a qualified
physician; (v) the Optionee’s material breach of any provisions of an
employment, consulting or service agreement between the Company and the
Optionee; or (vi) the Optionee’s material violation of any written Company
policy (which remains uncured or continues thirty (30) days after delivery of
written notice).


 


(b)           Death or Disability.  If the Optionee’s Employment is terminated
due to death or Disability, then the Option shall expire at 5 p.m. CST on
the one (1) year 


 


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anniversary date of the
termination of Employment date to the extent not previously exercised by the Optionee
or, in the case of death, by the personal representative of his estate, the
person who acquired the right to exercise the Option by bequest or inheritance,
or the beneficiary named pursuant to a valid beneficiary designation, or, in
the case of Disability, by the Optionee or the Optionee’s legal
representative.  In no event may the
Option be exercised by anyone on or after the earlier of (i) the
expiration of the Option Period or (ii) one (1) year after the date
of termination of Employment due to the Optionee’s death or Disability.  For purposes of this Agreement, “Disability”
shall mean the Optionee is qualified for long-term disability benefits under
the Company’s or a subsidiary’s disability plan or insurance policy; or, if no
such plan or policy is then in existence or if the Optionee is not eligible to
participate in such plan or policy, that the Optionee, because of a physical or
mental condition resulting from bodily injury, disease, or mental disorder
which prevents the Optionee from performing his or her duties of employment for
a period of six (6) continuous months, as determined in good faith by the
Company, based upon medical reports or other evidence satisfactory to the
Committee; provided that, in the event this Agreement is subject to Section 409A
of the Code, then, in lieu of the foregoing definition and to the extent
necessary to comply with the requirements of Section 409A of the Code,
then the definition of “Disability” for purposes of this Agreement shall be the
definition of “disability” provided for under Section 409A of the Code and
the regulations or other guidance issued thereunder.


 


(c)           Other Involuntary
Termination.  If the
Optionee’s Employment is terminated for any reason other than for Cause, death
or Disability, then the Option shall expire to the extent not previously
exercised at 5 p.m. CST on the date which is ninety (90) days  after such termination date.  In no event may the Option be exercised by
anyone after the earlier of (i) the expiration of the Option Period or (ii) ninety
(90) days after the termination of Employment date even if the Optionee becomes
deceased during such period.


 


11.          Independent
Legal and Tax Advice.  The Optionee acknowledges that the Company
has advised the Optionee to obtain independent legal and tax advice regarding
the grant and exercise of the Option and the disposition of any Shares acquired
thereby.


 


12.          Reorganization
of Company.  The existence of the Option shall not
affect  in any way the right or power of
the Company or its shareholders to make or authorize any or all adjustments,
recapitalizations, reorganizations or other changes in the Company’s capital
structure or its business, or any merger or consolidation of the Company, or
any issue of bonds, debentures, preferred or prior preference stock ahead of or
affecting the Shares or the rights thereof, or 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, whether of a similar character
or otherwise.


 


13.          Adjustment
of Shares. 
In the event of stock dividends, spin-offs of assets or other
extraordinary dividends, stock splits, combinations of shares,
recapitalizations, mergers, consolidations, reorganizations, liquidations,
issuances of rights or warrants and similar transactions or events involving
the Company, appropriate adjustments shall be made to the terms and provisions
of the Option as provided in the Plan.


 


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14.          No Rights
in Shares. 
The Optionee shall have no
rights as a shareholder in respect of the Shares until the Optionee becomes the
record holder of such Shares.


 


15.          Investment
Representation.  The  Optionee will enter into
such written representations, warranties and agreements as the Company may
reasonably request in order to comply with any federal or state securities
law.  Moreover, any stock certificate for
any Shares issued to the Optionee hereunder may contain a legend restricting
their transferability as determined by the Company in its discretion.  The Optionee agrees that the Company shall
not be obligated to take any affirmative action in order to cause the issuance
or transfer of Shares hereunder to comply with any law, rule or regulation
that applies to the Shares subject to the Option.


 


16.          No
Guarantee of Employment.  The Option shall not confer upon the Optionee
any right to continued employment with the Company or any affiliate thereof.


 


17.          Withholding
of Taxes.  The Company shall have the right to (a) make
deductions from the number of Shares otherwise deliverable upon exercise of the
Option in an amount sufficient to satisfy withholding of any federal, state or
local taxes required by law, or (b) take such other action as may be
necessary or appropriate to satisfy any such tax withholding obligations.


 


18.          General.


 


(a)           Notices.  All notices under this Agreement shall be
mailed or delivered by hand to the parties at their respective addresses set
forth beneath their signatures below or at such other address as may be
designated in writing by either of the parties to one another, or to their
permitted transferees if applicable. 
Notices shall be effective upon receipt.


 


(b)           Shares Reserved.  The Company shall at all times during the
Option Period reserve and keep available under the Plan such number of Shares
as shall be sufficient to satisfy the requirements of this Option.


 


(c)           Transferability of Option.  The Option is transferable only to the extent
permitted under the Plan at the time of transfer by will or by the laws of
descent and distribution.


 


(d)           Amendment and Termination.  No amendment, modification or termination of
this Agreement shall be made at any time without the written consent of the
Optionee and the Company.


 


(e)           No Guarantee of Tax Consequences.  The Company makes no commitment or guarantee
that any tax treatment will apply or be available to the Optionee or any other
person.  The Optionee has been advised,
and provided with the opportunity, to obtain independent legal and tax advice
regarding the grant and exercise of the Option and the disposition of any
Shares acquired thereby.


 


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(f)            Severability.  In the event that any provision of this
Agreement shall be held illegal, invalid, or unenforceable for any reason, such
provision shall be fully severable, but shall not affect the remaining
provisions of the Agreement, and the Agreement shall be construed and enforced
as if the illegal, invalid, or unenforceable provision had not been included herein.


 


(g)           Supersedes Prior Agreements.  This Agreement shall supersede and replace
all prior agreements and understandings, oral or written, between the Company
and the Optionee regarding the grant of the Options covered hereby, including
without limitation, the Original Agreement.


 


(h)           Governing Law.  This Agreement shall be construed in
accordance with the laws of the State of Texas, without regard to its conflict
of law provisions, to the extent federal law does not supersede and preempt
Texas law.


 


19.          Definitions
and Other Terms.  The following capitalized
terms shall have those meanings set forth opposite them:


 


	
  (a)

  	
  Optionee:

  	
   

  
	
   

  	
   

  	
   

  
	
  (b)

  	
  Grant Date:

  	
   

  
	
   

  	
   

  	
   

  
	
  (c)

  	
  Shares:

  	
                            (          )
  Shares of the Company’s Common Stock.

  
	
   

  	
   

  	
   

  
	
  (d)

  	
  Option Price:

  	
                               ($                  )
  per Share.

  
	
   

  	
   

  	
   

  
	
  (e)

  	
  Option
  Period:

  	
                             through
                              
  (until 5:00 p.m. CST).

  



 


[Signature page follows.]


 


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IN WITNESS
WHEREOF, the Company, as of the Grant Date, has caused this Agreement to be
executed on its behalf by its duly authorized officer and the Optionee has
hereunto executed this Agreement as of the same date.


 


	
   

  	
  RESACA EXPLOITATION, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address for Notices:

  
	
   

  	
   

  
	
   

  	
  Resaca Exploitation, Inc.

  
	
   

  	
  1331 Lamar Street, Suite 1450

  
	
   

  	
  Houston, TX 77010

  
	
   

  	
  Attn:    General Counsel

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  OPTIONEE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Signature

  
	
   

  	
   

  
	
   

  	
  Address for Notices:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  



 


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