exv10w14



 





EXHIBIT 10.14




APPROACH RESOURCES INC. 2007 STOCK INCENTIVE PLAN




SUMMARY OF STOCK OPTION GRANT




     You, the Optionee named below, have been granted the following option (the “Option”) to
purchase shares of the common stock, $0.01 par value per share (the “Common Stock”), of Approach
Resources Inc., a Delaware corporation (“Approach”), on the terms and conditions set forth below
and in accordance with the Stock Option Award Agreement (the “Agreement”) to which this Summary of
Stock Option Grant is attached and the Approach Resources Inc. 2007 Stock Incentive Plan (the
“Plan”):



	 	 	 	 	 
	 

	 	Optionee Name:
	 	                                                              
                  
	 
	 	 	 	 
	 

	 	Number of Option Shares Granted:
	 	                                                            
	 
	 

	 	Type of Option (check one):
	 	o Incentive Stock Option
	 
	 	 	 	 
	 

	 	 	 	o Nonqualified Stock Option
	 
	 	 	 	 
	 

	 	Grant Date:
	 	                                        , 20___
	 
	 	 	 	 
	 

	 	Exercise Price Per Share:
	 	$                    






	 	 	 
	     Vesting Schedule:

	 	Subject to earlier vesting pursuant to the Plan, the Option shall vest
over a period of time and shares of Common Stock subject to the Option shall become
purchasable in installments in accordance with the following schedule: (i) one third
of such shares (if a fractional number, then the next lower whole number) shall become
purchasable, in whole at any time or in part from time to time, on the first
anniversary of the Grant Date; (ii) an additional one third of such shares (if a
fractional number, then the next lower whole number) shall become purchasable, in whole
at any time or in part from time to time, on the second anniversary of the Grant Date,
if Optionee is in the continuous service of Approach or an Affiliate until such vesting
date; and (iii) the remaining shares shall become purchasable, in whole at any time or
in part from time to time, on the third anniversary of the Grant Date, if the Optionee
is in the continuous service of Approach or an Affiliate until such vesting date.





You, by your signature as Optionee below, acknowledge that you (i) have reviewed the Agreement and
the Plan in their entirety and have had the opportunity to obtain the advice of counsel prior to
executing this Summary of Stock Option Grant, (ii) understand that the Option is granted under and
governed by the terms and provisions of the Agreement and the Plan, and (iii) agree to accept as
binding all of the determinations and interpretations made by the Committee with respect to matters
arising under or relating to the Option, the Agreement and the Plan.




	 	 	 	 	 	 	 	 	 	 	 
	OPTIONEE:	 	 	 	APPROACH RESOURCES INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	(Signature of Optionee)

	 	 	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 	 
	 

	 	 	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 	 






 









 






APPROACH RESOURCES INC. 2007 STOCK INCENTIVE PLAN




STOCK OPTION AWARD AGREEMENT




     THIS AGREEMENT is made as of the Grant Date (as set forth on the Summary of Stock Option
Grant) between Approach Resources Inc., a Delaware corporation (“Approach”), and Optionee pursuant
to the Approach Resources Inc. 2007 Stock Incentive Plan (the “Plan”).



     WHEREAS, the Board of Directors of Approach or the Compensation and Nominating Committee of
Approach’s Board of Directors or such other committee designated by the Board of Directors of
Approach (the “Committee”), acting under the Plan, has the authority to grant Options to employees,
directors and other individuals performing services for Approach and its Affiliates; and



     WHEREAS, pursuant to the Plan, the Committee has determined to grant an Option to Participant
on the terms and conditions set forth in the Plan and this Agreement, and Participant desires to
accept such Option;



     NOW, THERFORE, in consideration of the premises and mutual covenants and agreements contained
herein, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:



     1. Effect of Plan and Authority of Committee. This Agreement and the Option granted
hereunder are subject to the Plan, which is incorporated herein by reference. The Committee is
authorized to make all determinations and interpretations with respect to matters arising under or
relating to the Plan, this Agreement and the Option granted hereunder. Capitalized terms used and
not otherwise defined herein have the respective meanings given them in the Plan or in the Summary
of Stock Option Grant, which are attached hereto and incorporated herein by this reference for all
purposes.



     2. Grant of Option. On the terms and conditions set forth in this Agreement, the
Summary of Stock Option Grant and the Plan, as of the Grant Date, Approach hereby grants to
Optionee the option to purchase the number of shares of Common Stock set forth on the Summary of
Stock Option Grant at the Exercise Price per share set forth on the Summary of Stock Option Grant
(the “Option”). The Option is intended to be an Incentive Stock Option or a Nonqualified Stock
Option, as provided in the Summary of Stock Option Grant. If the Option is intended to be an
Incentive Stock Option, it is agreed that the exercise price is at least 100% of the Fair Market
Value of a share of Common Stock on the Grant Date (110% of the Fair Market Value if Optionee owns
stock possessing more than 10% of the total combined voting power of all classes of stock of
Approach or any Affiliate, within the meaning of Section 422(b)(6) of the Code). If this Option is
intended to be an Incentive Stock Option, but the aggregate Fair Market Value of Common Stock with
respect to which Incentive Stock Options granted to Optionee (including all options qualifying as
incentive stock options pursuant to Section 422 of the Code granted to Optionee under any other
plan of Approach or any Affiliate) are exercisable for the first time by Optionee during any
calendar year exceeds $100,000 (determined as of the date the Incentive Stock Option is granted),
this Option shall not be void but shall be deemed to be an Incentive Stock Option to the extent it
does not exceed the $100,000 limit and shall be deemed a Nonqualified Stock Option to the extent it
exceeds that limit.



     3. Vesting. This Option may be exercised only to the extent it is vested on the
vesting dates in accordance with the Vesting Schedule set forth in the Summary of Stock Option
Grant. The vested percentage indicated in such Vesting Schedule shall be exercisable, as to all or
part of the vested shares, at any time or times after the respective vesting date and until the
expiration or termination of the Option. The



 









 







vesting of this Option may be accelerated in certain events which are set forth in the Plan.
The unvested portion of this Option shall terminate and be forfeited immediately on the date of
Optionee’s termination of employment or service. Notwithstanding any provision of this Agreement
or the Summary of Stock Option Grant to the contrary, (a) the Change of Control provisions in
Article XIII of the Plan shall apply with respect to this Option and (b) this Option shall
terminate and be forfeited in the event that the initial public offering of Approach’s Common Stock
does not close on or before March 15, 2008.



     4. Term.




     (a) Term of Option. This Option may not be exercised after the expiration of
ten years from the Grant Date (five years from the Grant Date if the Option is an Incentive
Stock Option and Optionee owns stock possessing more than 10% of the total combined voting
power of all classes of stock of Approach or any Affiliate, within the meaning of Section
422(b)(6) of the Code, as of the Grant Date). If the expiration date of this Option or any
termination date provided for in this Agreement shall fall on a Saturday, Sunday or a day on
which the executive offices of the Company are not open for business, then such expiration
or termination date shall be deemed to be the last normal business day of the Company at its
executive offices preceding such Saturday, Sunday or day on which such offices are closed.




     (b) Early Termination. Except as provided below, this Option may not be
exercised unless Optionee shall have been in the continuous employ or service of Approach or
any Affiliate from the Grant Date to the date of exercise of the Option. This Option may be
exercised after the date of Optionee’s termination of employment or service with Approach
and its Affiliates only in accordance with Section 7.5 of the Plan.



     5. Manner of Exercise and Payment. The Optionee (or his or her representative,
guardian, devisee or heir, as applicable) may exercise any portion of this Option that has become
exercisable in accordance with the terms hereof as to all or any of the shares of Common Stock then
available for purchase by delivering to Approach written notice, in a form satisfactory to the
Committee, specifying:




     (a) the number of whole shares of Common Stock to be purchased together with payment in
full of the purchase price of such shares;




     (b) the address to which dividends, notices, reports and other information are to be
sent; and




     (c) Optionee’s social security number or social insurance number.


Payment of the purchase price of the shares of Common Stock shall be made (i) in cash, or by
certified or cashier’s check payable to the order of Approach, free from all collection charges,
(ii) in the sole discretion of the Committee and in accordance with any applicable administrative
guidelines established by the Committee, (A) by tendering one or more previously acquired
nonforfeitable, unrestricted shares of Common Stock having an aggregate Fair Market Value at the
time of exercise equal to the total exercise price or (B) by surrendering a sufficient portion of
the shares with respect to which the Option is exercised having an aggregate Fair Market Value at
the time of exercise equal to the total exercise price, or (iii) by a combination of cash (or
certified or cashier’s check) and such already-owned shares of Common Stock. Optionee also may
elect to pay all or a portion of the purchase price of such shares of Common Stock through a
special sale and remittance procedure pursuant to which Optionee shall concurrently provide (1)
irrevocable instructions to a broker-dealer to effect the immediate sale or margin of a sufficient
portion of the purchased shares and remit directly to Approach, out of the sale proceeds available
on the settlement



 









 






date, sufficient funds to cover the purchase price payable for the purchased
shares plus all applicable taxes required to be withheld by reason of such
exercise and (2) an executed irrevocable option exercise form to Approach along with instructions
to Approach to deliver the certificates for the purchased shares directly to such broker-dealer to
complete the sale. This Option shall be deemed to have been exercised on the first date upon which
Approach receives written notice of exercise as described above, payment of the purchase price and
all other documents, information and amounts required with respect to such exercise under this
Agreement and the Plan. Notwithstanding the foregoing provisions of this Section 5, the Committee
may, in its discretion, reject payment of the purchase price of the shares of Common Stock subject
to this Option in the form of already-owned shares, through surrender of Option shares, or through
a sale and remittance procedure with a broker-dealer in the event that the Committee determines
that such payment forms violate the provisions of applicable law or result in negative accounting
treatment to Approach.




     6. Withholding Tax. Promptly after demand by Approach, and at its direction, Optionee
shall pay to Approach or the appropriate Affiliate an amount equal to the applicable withholding
taxes due in connection with the exercise of the Option. Pursuant to Section 15.5 of the Plan,
such withholding taxes may be paid in cash or, subject to the further provisions of this Section 6
of this Agreement, in whole or in part, by having Approach withhold from the shares of Common Stock
otherwise issuable upon exercise of the Option a number of shares of Common Stock having a value
equal to the amount of such withholding taxes or by delivering to Approach or the appropriate
Affiliate a number of previously acquired issued and outstanding shares of Common Stock (excluding
restricted shares still subject to a risk of forfeiture) having a value equal to the amount of such
withholding taxes. The value of any shares of Common Stock so withheld by or delivered to Approach
or the appropriate Affiliate shall be based on the Fair Market Value (as defined in the Plan) of
such shares on the date on which the tax withholding is to be made. Optionee shall pay to Approach
or the appropriate Affiliate in cash the amount, if any, by which the amount of such withholding
taxes exceeds the value of the shares of Common Stock so withheld or delivered. An election by
Optionee to have shares withheld or to deliver shares to pay withholding taxes shall be made in
accordance with administrative guidelines established by the Committee.



     7. Delivery of Shares. Delivery of the certificates representing the shares of Common
Stock purchased, upon exercise of this Option shall be made as soon as reasonably practicable after
receipt of notice of exercise and full payment of the Exercise Price and any required withholding
taxes. If Approach so elects, its obligation to deliver shares of Common Stock upon the exercise
of this Option shall be conditioned upon its receipt from the person exercising this Option of an
executed investment letter, in a form and content satisfactory to Approach and its legal counsel,
evidencing the investment intent of such person and such other matters as Approach may reasonably
require. If Approach so elects, the certificate or certificates representing the shares of Common
Stock issued upon exercise of this Option shall bear a legend to reflect any restrictions on
transferability.



     8. Optional Issuance in Book-Entry Form. Notwithstanding the provisions of Section 7,
at the option of Approach, any shares of Common Stock that under the terms of this Agreement are
issuable in the form of a stock certificate may instead be issued in book-entry form.



     9. Transferability.




     (a) This Option is personal to Optionee and during Optionee’s lifetime may be exercised
only by Optionee or his or her guardian or legal representative upon the events and in
accordance with the terms and conditions set forth in the Plan, and shall not be transferred
except by will or by the laws of descent and distribution, nor may it be otherwise sold,
transferred, pledged, exchanged, hypothecated or otherwise disposed of in any way (by
operation of law or otherwise) and it shall not



 









 







be subject to execution, attachment or similar process. Any attempted sale, transfer,
pledge, exchange, hypothecation or other disposition of this Option not specifically
permitted by the Plan or this Agreement shall be null and void and without effect.




     (b) No shares of Common Stock or other form of payment shall be issued with respect to
any Option unless Approach shall be satisfied based on the advice of its counsel that such
issuance will be in compliance with applicable federal and state securities laws.
Certificates evidencing shares of Common Stock delivered pursuant to exercise of this Option
may be subject to such stop transfer orders and other restrictions as the Committee may deem
advisable under the rules, regulations and other requirements of the Securities and Exchange
Commission, any securities exchange or transaction reporting system upon which the Common
Stock is then listed or to which it is admitted for quotation and any federal or state
securities law. The Committee may cause a legend or legends to be placed upon such
certificates (if any) to make appropriate reference to such restrictions.



     10. Notices. All notices between the parties hereto shall be in writing and given in
the manner provided in Section 15.7 of the Plan. Notices to Optionee shall be given to Optionee’s
address as contained in Approach’s records. Notices to Approach shall be addressed to its
Corporate Secretary at the principal executive offices of Approach as set forth in Section 15.7 of
the Plan.



     11. Relationship With Contract of Employment or Services.




     (a) The grant of an Option does not form part of Optionee’s entitlement to remuneration
or benefits pursuant to his or her contract of employment or services, if any, and, except
as otherwise provided in a written contract of employment or for services, the existence of
such a contract between any person and Approach or any Affiliate does not give such person
any right or entitlement to have an Option granted to him or any expectation that an Option
might be granted to him whether subject to any conditions or at all.




     (b) The rights and obligations of Optionee under the terms of his or her contract of
employment or other contract or agreement for services with Approach or any Affiliate, if
any, shall not be affected by the grant of an Option.




     (c) The rights granted to Optionee upon the grant of an Option shall not afford
Optionee any rights or additional rights to compensation or damages in consequence of the
loss or termination of his or her office, employment or service with Approach or any
Affiliate for any reason whatsoever.




     (d) Optionee shall not be entitled to any compensation or damages for any loss or
potential loss which he or she may suffer by reason of being or becoming unable to exercise
an Option as a consequence of the loss or termination of his or her office, employment or
service with Approach or any Affiliate for any reason (including, without limitation, any
breach of contract by Approach or any Affiliate) or in any other circumstances whatsoever.



     12. Market Standoff Agreement. Optionee agrees in connection with any public offering
of Approach’s securities that, upon request of Approach or the managing underwriter(s) of such
offering, Optionee will not sell or otherwise dispose of any Common Stock acquired pursuant to this
Agreement without the prior written consent of Approach or such managing underwriter(s), as the
case may be, for a period of time (not to exceed 180 days) after the effective date of the
registration requested by such



 









 




managing
underwriter(s) and subject to all restrictions as Approach or the managing underwriter(s) may
specify for employee or other service provider stockholders generally.




     13. Governing Law; Exclusive Forum; Consent to Jurisdiction. This Agreement shall be
governed by and construed in accordance with the internal laws (and not the principles relating to
conflicts of laws) of the State of Delaware, except as superseded by applicable federal law. The
exclusive forum for any action concerning this Agreement or the transactions contemplated hereby
shall be in a court of competent jurisdiction in Tarrant County, Texas, with respect to a state
court, or the United States District Court for the Northern District of Texas, with respect to a
federal court. OPTIONEE HEREBY CONSENTS TO THE EXERCISE OF JURISDICTION OF A COURT IN THE
EXCLUSIVE FORUM AND WAIVES ANY RIGHT HE OR SHE MAY HAVE TO CHALLENGE OR CONTEST THE REMOVAL AT ANY
TIME BY APPROACH OR ANY OF ITS AFFILIATES TO FEDERAL COURT OF ANY SUCH ACTION HE OR SHE MAY BRING
AGAINST IT IN STATE COURT.