Document:

Exhibit
10.4

 

WESTERN GAS RESOURCES,
INC.

2002 NON-EMPLOYEE
DIRECTORS’ STOCK OPTION AGREEMENT

 

 

THIS AGREEMENT, made as of May 6, 2005, by and between
Western Gas Resources, Inc. (hereinafter called the “Corporation”), a Delaware
corporation, and Brion Wise, a non-employee director of the Corporation
(hereinafter called the “Optionee”).

 

RECITALS:

 

A.            The Optionee is
eligible as a non-employee director of the Corporation to participate in the
Western Gas Resources, Inc. 2002 Non-Employee Director’s Stock Option Plan (the
“Plan”).

 

B.            The Board of
Directors of the Corporation considers it desirable and in the Corporation’s
best interests that the Optionee be given an opportunity to purchase shares of
its Common Stock in furtherance of the Plan to provide incentive for the
Optionee to remain as a director of the Company and to promote the success of
the Corporation.

 

NOW THEREFORE, in consideration of the premises, it is
agreed as follows:

 

1.  Grant of
Option.  The Corporation hereby
grants as of May 6, 2005 (the “Grant Date”) to the Optionee the right,
privilege and option to purchase 4,000 shares of the Common Stock par value
$0.10 (the “Common Stock”) of the Corporation, at a purchase price of Thirty
Four Dollars and no 100ths ($34.00) per share in the manner and subject to the
conditions hereafter provided.  Said
purchase price is not less than the Fair Market Value (as that term is defined
in the Plan) of the shares of Common Stock of the Corporation at the time this
option was granted.

 

2.  Period of
Exercise of Option.  This Option may
be exercised in whole or in part, or in installments, from time to time, with
respect to the shares covered hereby, in the amounts and at the times specified
below.  The Option or any portion
thereof, once it becomes exercisable as specified below, shall remain
exercisable until it shall expire in accordance with the provisions of this
Agreement.

 

(a) 
Notwithstanding anything herein to the contrary, no Option or portion
thereof granted under this Agreement may be exercised after the earlier of (i)
five (5) years after the date the Optionee has the right to exercise such
Option or portion thereof, in accordance with paragraph 2(b) below; or (ii) ten
(10) years after the Option is granted.

 

(b)  Except as
expressly provided in Section 2(e), below, an Optionee shall become entitled to
exercise that portion of the Option and to purchase the percentage of the
Common stock subject to the Option in accordance with the following schedule:

 

(1)           Commencing
one (1) year from the Grant Date, the Optionee shall have the right to exercise
thirty-three and one-third percent (33-1.3%) of the Option and to purchase an
additional thirty-three and one-third percent (33-1/3%) subject to the Option.

 

 

 

(2)           Commencing
two (2) years from the Grant Date, the Optionee shall have the right to
exercise thirty-three and one-third percent (33-1.3%) of the Option and to
purchase an additional thirty-three and one-third percent (33-1/3%) subject to
the Option.

 

(3)           Commencing
three (3) years from the Grant Date, the Optionee shall have the right to
exercise thirty-three and one-third percent (33-1.3%) of the Option and to
purchase an additional thirty-three and one-third percent (33-1/3%) subject to
the Option.

 

The Optionee’s right to purchase Shares subject to the
Option shall be cumulative, so that three (3) years from the Grant Date, the
Optionee shall be entitled to exercise one hundred percent (100%) of the Option
and to purchase all of the Common Stock subject to the Option, subject to all
of the provisions of this Agreements.

 

(c)           Except
as provided in Sections 2(d) and 2(e), an Optionee may exercise an Option only
if, at the time such Option is exercised, such Optionee is a director of, and
has continuously since the grant of the Option, been a director of the
Corporation or any subsidiary, parent, or predecessor of the Corporation.

 

(d)           If
an Optionee ceases to be a director 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 three (3) months thereafter, and subject
to provisions of Sections 2(a), (b) and (c), exercise the Option to the extent
that the Option was exercisable as of the date of the Optionee ceased to be a
director. All unexercised Options, or portions thereof, shall terminate, be
forfeited, and shall lapse upon expiration of said three (3) month period, or
immediately if the Optionee ceases to be a director of the Corporation for any
of the reasons set forth in (ii), above.

 

(e)           If
an Optionee dies or becomes disabled while he is a director of the Corporation or
ceases to be a director as a result of disability, all of the Options granted
to such employee shall become one hundred percent (100%) exercisable, without
regard to the provisions of Section 2(b), above. In such event, the Options may
be exercised by the disabled director, or the person or persons to whom his or
her 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 180 days from such directors’ s date of death, or the date
Optionee ceases to be a director 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.

 

(a)           (f) Notwithstanding the provision of
Section (b), above, in the event (1) there is a “Change of Control” of the
Corporation; and (2) the Optionee is removed as a director of the Corporation
without cause, then all of the options granted to such Optionee under this
Agreement shall become one hundred percent (100%) exercisable, subject to the
other provisions of this Section 2.  For
these purposes, a Change of Control of the Corporation shall mean (i) the
acquisition by any person or persons acting in concert (including corporations,
partnerships, associations or unincorporated organizations), of legal ownership
or beneficial ownership (within the meaning of Rule 13d-3, promulgated by the
Securities and Exchange 

 

 

 

Commission and now in effect under
the Securities Exchange Act of 1934 (as amended), of a number of voting shares
of capital stock of the Corporation greater than either 30% or the number of
voting shares of capital stock of the Corporation that are then owned,
beneficially (as defined above), by Brion G. Wise, Bill M. Sanderson, Walter L.
Stonehocker, Dean Phillips, Ward Sauvage, their immediate families and the
companies through which they and their immediate families hold ownership in the
Corporation (“the Founders”), whichever is higher; (ii) a merger or
consolidation of the Corporation or any of its subsidiaries other than a merger
or consolidation immediately following which the directors of the Corporation
prior thereto constitute a majority of the of the board of the surviving
company or parent thereof; (iii) a change in the majority of the Board pursuant
to an actual or threatened proxy contest; or (iv) a sale of substantially all
of the Corporation’s assets.

 

3.  Method of
Exercise.  To exercise an Option, the
Optionee, or his or her successors, shall give written notice to the Treasurer
of the Corporation, at the Corporation’s principal office, accompanied by full
payment of the Common Stock being purchased. 
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. 
The Corporation shall not be required to transfer or deliver any
certificate or certificates for shares purchased upon any such exercise of said
option: (a) until after compliance with all then applicable requirements of
law; and (b) prior to admission of such shares to listing on any stock exchange
on which the stock may then be listed. 
In no event shall the Corporation be required to issue fractional shares
to the Optionee.

 

4.  Limitation
Upon Exercise.  The option is not
transferable by the Optionee otherwise than by will or the laws of descent and
distribution and is exercisable, during the lifetime of Optionee, only by the
Optionee.

 

5.  Limitation
Upon Transfer.  Except as otherwise
provided hereto, the option and all rights granted hereunder shall not be
transferred by the Optionee, and may not be assigned, pledged, or hypothecated
in any way and shall not be subject to execution, attachment or similar
process. Upon any attempt to transfer the option, or to assign, pledge,
hypothecate or otherwise dispose of such Option or of any rights granted
hereunder, contrary to the provisions hereof, or upon the levy of any
attachment or similar process upon such option or such rights, such option and
such rights shall immediately become null and void.

 

6.  Stock
Adjustment.  In the event of any
change in Common Stock of the Corporation, by reason of a stock split, stock
dividend, recapitalization, exchange of shares, or other transaction, the
number of shares remaining subject to the option and the option price per share
shall be appropriately adjusted by the Board of Directors.

 

7.  Corporate
Reorganization.  If there shall be
any capital reorganization or consolidation or merger of the Corporation with
another corporation or corporations, or any sale of all or substantially all of
the Corporation’s properties and assets to any other corporation, the
Corporation shall take such action as may be necessary to enable the Optionee
to receive upon any subsequent exercise of such option, in whole or in part, in
lieu of shares of Common Stock, 

 

 

 

securities or other assets as were issuable or payable upon such
reorganization, consolidation, merger or sale in respect of, or in exchange for
such shares of Common Stock.

 

8.  Rights of
Stockholders.  Neither the Optionee,
his or her legal representative, nor other persons entitled to exercise the
option shall be or have any rights of a stockholder in the Company in respect
of the shares issuable upon exercise of the option granted hereunder, unless
and until certificates representing such shares shall have been delivered
pursuant to the terms hereof.

 

9.  Rights of
Director.  Nothing contained in this
Agreement shall confer upon Optionee any right to continue to remain as a
director of the Corporation.

 

10.  Stock
Reserved.  The Company shall at all
times during the term of this Agreement reserve and keep available such number
of shares of its Common Stock as will be sufficient to satisfy the terms of
this Agreement.

 

11.  Binding
Effect.  This Agreement shall be
binding upon and inure to the benefit of any successor or successors of the
Company.

 

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

 

WESTERN GAS RESOURCES, INC.

 

 

 

	
  By:

  	
   /s/ Peter A.
  Dea

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Brion G. Wise

  	
   

  
	
  OptioneeExhibit 10.5

 

WESTERN GAS RESOURCES, INC.

2005 STOCK INCENTIVE PLAN

RESTRICTED STOCK AGREEMENT

 

	
  PARTICIPANT:

  	
   

  	
  Brion Wise

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  DATE OF GRANT:

  	
   

  	
  May 5, 2006

  	
   

  

 

THIS AGREEMENT is entered by and between Western Gas
Resources, Inc. (the “Company”), and the above named Participant (“Participant”),
an Director of the Company.

 

The Company and Participant agree as follows:

 

1.                                       PRECEDENCE OF PLAN.  This
Agreement is subject to and shall be construed in accordance with the terms and
conditions of the Western Gas Resources, Inc. 
2005 Stock Incentive Plan (the “Plan”), as now or hereinafter in effect.  Any capitalized terms that are used in this
Agreement without being defined and that are defined in the Plan shall have the
meaning specified in the Plan.

 

2.                                       GRANT OF RESTRICTED STOCK.  Participant
is hereby granted shares of Common Stock of the Company (the “Restricted Stock”)
pursuant to the Plan.  The Restricted
Stock and this Agreement are subject to and shall be construed in accordance
with the terms and conditions of the Plan, as now or hereinafter in effect.

 

a.                                       Number of Shares.  The
number of shares of Restricted Stock that are granted is the number set forth
in Schedule 2A to this Agreement.

 

b.                                      Price of Shares.  The
purchase price per share, if any, is the amount set forth in Schedule 2B to
this Agreement.  This Agreement shall
expire and shall be null and void to the extent Participant fails to pay the
purchase price, if any, for the Restricted Stock in the manner specified by the
Plan by the 30th day following the date of grant.

 

c.                                       Vesting of Restricted Stock.  The
Restricted Stock shall become vested in equal annual one-third increments,
commencing on the first anniversary of the date of grant; provided, however,
that Participant must have been in Continuous Service from the date of grant of
the Restricted Stock until the later of the vesting date.  The period during which the Restricted Stock
is not vested and is subject to transfer restrictions is referred to herein as
the “Restriction Period.”

 

In the event that
Participant terminates Continuous Service for any reason, or otherwise fails to
meet any conditions to the vesting of the Restricted Stock within the allotted
time period, any Restricted Stock held by Participant as of the date of such
termination of Continuous Service, and any Restricted Stock subject to such
conditions, shall be forfeited and ownership shall be transferred to the
Company and the Restricted Stock shall become authorized but unissued shares.  The Company shall, within ten days of such
forfeiture, pay to Participant the purchase price, if any, paid by Participant
for the shares of Restricted Stock so forfeited.

 

3.                                       CONDITIONS OF AWARD.  This
Agreement is conditional upon and subject to Participant delivering to the
Company:

 

a.               No later than the date on which Participant returns an
executed copy of this Agreement, three undated Stock Assignments, each in the
form attached hereto as Attachment A, endorsed by the Participant in
blank; and

 

 

 

b.              If applicable, no later than five (5) days after
making, an executed copy of any written election made by Participant under
Section 83(b) of the Internal Revenue Code with respect to such Restricted
Stock.

 

This Agreement shall expire and shall be null and void to the extent
Participant fails to comply with the foregoing with respect to the Restricted
Stock.

 

4.                                       ISSUANCE OF CERTIFICATES.  The
Company may provide for the transfer of the Restricted Stock by the
registration of stock certificates in Participant’s name, by the credit of
shares to Participant’s account with a designated transfer agent (as confirmed
in a letter to Participant), or such other appropriate method as the Company
may elect.  Certificates, if issued, may,
at the Company’s option, either be held by the Company in escrow until the
Restriction Period expires or until the restrictions thereon otherwise lapse
and/or be issued to the Participant and registered in the name of the
Participant, bearing an appropriate restrictive legend that refers to this
Agreement and remaining subject to appropriate stop-transfer orders.  The credit of shares to Participant’s account
with a designated transfer agent, shall be made to a restricted book entry
until the Restriction Period expires or until the restrictions thereon
otherwise lapse. If and when the Restricted Stock vests and is no longer
subject to forfeiture or transfer restrictions, either (i) certificates for
such Restricted Stock shall be delivered to the Participant, or (ii) such
Restricted Stock will be transferred by the designated transfer agent from
restricted book entry to an unrestricted book entry status, (subject to Section
6 pertaining to the withholding of taxes and Section 14 pertaining to the
Securities Act of 1933, as amended (the “Securities Act”)); provided, however,
that the Plan Administrator may cause such legend or legends to be placed on
any such certificates or book entry as it may deem advisable under applicable
law.

 

5.                                       ADJUSTMENTS TO STOCK.  If
there is any change, increase or decrease, in the outstanding shares of the
Company’s Common Stock which is effected without receipt of additional
consideration by the Company, by reason of a stock dividend, stock split,
recapitalization, merger, consolidation, combination or exchange of stock, or
other similar circumstances, or if there is a spin-off or other distribution of
assets to the Company’s stockholders, the Company shall make an appropriate
adjustment in the aggregate number of shares of Stock which then constitute
Restricted Stock and the vesting schedule set forth above.  Such adjustment shall be identical to the
adjustment made generally with respect to outstanding shares of the Company’s
Common Stock.  Any additional securities
or other property issued to Participant or a Stockholder as a result of any of
the foregoing events shall continue to be subject to the terms of this
Agreement to the same extent as the Stock giving rise to the right to receive
such additional securities or other property.

 

6.                                       SECURITIES ACT.

 

a.                                       The issuance and delivery of the
Restricted Stock to the Participant have been registered under the Securities
Act by a Registration Statement on Form S-8 that has been filed with the
Securities and Exchange Commission (“SEC”) and has become effective.  The Participant acknowledges receipt from the
Company of its Prospectus dated May 31, 2005, relating to the Restricted Stock

 

b.                                      If the Participant is an “affiliate” of
the Company, which generally means a director, executive officer or holder of
10% or more of its outstanding shares (notwithstanding the provisions of
Section 5.2 of the Plan), at the time certificates representing Restricted
Stock are delivered to the Participant, such certificates shall bear the
following legend, or other similar legend then being generally used by the
Company for certificates held by its affiliates:

 

“THESE SHARES MUST NOT BE OFFERED FOR SALE, SOLD,
ASSIGNED OR TRANSFERRED EXCEPT IN A TRANSACTION WHICH, IN THE OPINION OF
COUNSEL FOR THE ISSUER, IS EXEMPT FROM REGISTRATION THROUGH

 

 

2

 

COMPLIANCE WITH RULE 144 OR WITH ANOTHER EXEMPTION
FROM REGISTRATION.”

 

The Company shall remove such legend upon request by
the Participant if, at the time of such request, the shares are eligible for
sale under SEC Rule 144(k), or any provision that has replaced it, in the
opinion of the Company’s counsel.

 

7.                                       GENERAL PROVISIONS.

 

a.                                       Withholding for Taxes.  Participant
shall reimburse the Company, in cash or by certified or bank cashier’s check,
for any federal, state or local taxes required by law to be withheld with
respect to the grant or vesting of the Restricted Stock, as applicable.  The Company shall have the right to deduct
from any salary or other payments to be made to Participant any federal, state
or local taxes required by law to be so withheld.  The Company’s obligation to deliver a
certificate representing the vested Restricted Stock, transfer such Restricted
Stock to Participant’s name, or otherwise credit of the Restricted Stock to
Participant’s unrestricted book entry account with a designated transfer agent
upon vesting is subject to the payment by Participant of any applicable
federal, state and local withholding tax.

 

b.                                      Rights as a Stockholder.  Except
as otherwise provided in this Agreement or the Plan, during the Restriction
Period the Participant shall have, with respect to the Restricted Stock, all of
the rights of a stockholder of the Company, including the right to vote the
Restricted Stock and the right to receive any dividends or other distributions
with respect thereto.

 

c.                                       Validity of Share Issuance.  The
shares of Restricted Stock have been duly authorized by all necessary corporate
action of the Company and are validly issued, fully paid and non-assessable.

 

d.                                      Receipt of Plan.  By
entering into this Agreement, Participant acknowledges (i) that he or she has
received and read a copy of the Plan and (ii) that this Agreement is subject to
and shall be construed in accordance with the terms and conditions of the Plan,
as now or hereinafter in effect.

 

e.                                       Transfer Restrictions.  Common
Stock acquired pursuant to this Agreement shall be subject to such transfer
restrictions as the Company shall deem reasonably necessary or desirable,
including, without limitation, restrictions on the transfer of the Common Stock
until there has been compliance with federal and state securities laws and
until Participant has paid the Company such amounts as may be necessary in
order to satisfy any withholding tax liability of the Company.  In the event the Common Stock is
certificated, the certificate(s) may contain legends restricting such
transfers.

 

f.                                         Not an Employment Contract.  This
Agreement is not an employment contract and nothing in this Agreement shall be
deemed to create in any way whatsoever any obligation on the part of Participant
to remain in the Continuous Service of the Company, or of the Company to
continue Participant in the Continuous Service of the Company.

 

g.                                      Effect on Employee Benefits.  Participant
agrees that the Award will constitute special incentive compensation that will
not be taken into account as “salary” or “compensation” or “bonus” in
determining the amount of any payment under any pension, retirement, profit
sharing or other remuneration plan of the Company unless so provided in such
plan, if applicable.

 

h.                                      Further Action.  The
parties agree to execute such further instruments and to take such further
action as reasonably may be necessary to carry out the intent of this
Agreement.

 

 

3

 

i.                                          Interpretation.  The
interpretations and constructions of any provision of and determinations on any
question arising under the Plan or this Agreement shall be made by the Plan
Administrator, and all such interpretations, constructions and determinations
shall be final and conclusive as to all parties.  This Agreement, as issued pursuant to the
Plan, constitutes the entire agreement between the parties pertaining to the
subject matter hereof and supersedes all prior and contemporaneous agreements,
representations and understandings.  The
invalidity or unenforceability of any provision hereof shall in no way affect
the validity or enforceability of any other provision hereof.  This Agreement may be executed in
counterparts, all of which shall be deemed to be one and the same instrument,
and it shall be sufficient for each party to have executed at least one, but
not necessarily the same, counterpart.  The
headings contained in this Agreement are for reference purposes only and shall
not affect the meaning or interpretation of this Agreement in any way.

 

j.                                          Assignment.  This
Agreement shall be binding upon the parties and their respective legal
representatives, beneficiaries, successors and assigns.

 

k.                                       Notices.  All notices
or other communications that are required to be given or may be given to either
party pursuant to the terms of this Agreement shall be in writing and shall be
delivered personally or by registered or certified mail, postage prepaid, to
the address of the parties as set forth following the signature of such party.  Notice shall be deemed given on the date of
delivery in the case of personal delivery or on the delivery or refusal date as
specified on the return receipt in the case of registered or certified mail.  Either party may change its address for such
communications by giving notice thereof to the other party in conformity with
this section.

 

l.                                          Amendment.  The Plan
Administrator may, at any time, without consent of or receiving further
consideration from the Participant, amend this Agreement and the related
Restricted Stock Award in response to, or to comply with changes in, Applicable
law.  To the extent not inconsistent with
the terms of the Plan, the Plan Administrator may, at any time, amend this
Agreement in a manner that is not unfavorable to the Participant without the
consent of the Participant.  The Plan
Administrator may amend this Agreement and the terms of the related Restricted
Stock otherwise with the written consent of the Participant.

 

m.                                    Governing Law and Venue.  This
Agreement and the rights and obligations of the parties hereto shall be
governed by and construed and enforced in accordance with the laws of the State
of Colorado without regard to conflicts of laws principles.  Resolution of any disputes under this
Agreement shall only be held in courts in Denver County, Colorado, and the
parties expressly consent to personal jurisdiction in courts in Denver County,
Colorado and waive any objections to such jurisdiction.

 

IN WITNESS WHEREOF, the Company by a duly authorized
officer of the Company and Participant have executed this Agreement on 6/21,
2006, effective as of the date of grant.

 

	
  PARTICIPANT

  	
   

  	
  WESTERN GAS RESOURCES, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   /s/ Brion G. Wise

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Peter A. Dea

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  President & Chief Executive
  Officer

  
						

 

 

4

 

SCHEDULES

TO

RESTRICTED STOCK AGREEMENT

 

	
  Schedule

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2A

  	
   

  	
  Number of shares of stock:

  	
   

  	
  1000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2B

  	
   

  	
  Purchase
  price per share:

  	
   

  	
  N/A

  	
   

  

 

 

 

 

Brion
Wise

 

 

5

 

Attachment A

WESTERN GAS RESOURCES, INC.

2005 STOCK INCENTIVE PLAN

 

STOCK ASSIGNMENT SEPARATE FROM
CERTIFICATE

 

FOR VALUE RECEIVED and pursuant to that certain Restricted Stock
Agreement (the “Agreement”) dated as of                                         ,
20       , the undersigned hereby sells,
assigns and transfers unto                              ,
                         
(         ) shares of common stock
of Western Gas Resources, Inc., standing in the undersigned’s name on the books
of said corporation (if certificated, represented by Certificate No.                    
herewith), and does hereby irrevocably constitute and appoint                                                       
attorney to transfer the said stock on the books of the said corporation with
full power of substitution in the premises. 
This Assignment may be used only in accordance with and subject to the
terms and conditions of the Agreement, in connection with the repurchase of
shares of common stock issued to the undersigned pursuant to the Agreement, and
only to the extent that any unvested shares remain subject to the Company’s
purchase option under the Agreement.

 

 

 

 

	
  Dated:

  	
  6/21/6

  	
   

  	
   /s/ Brion G. Wise

  
	
   

  	
   

  	
  Signature

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Brion Wise

  
	
   

  	
   

  	
  Print Name

  
	
   

  	
   

  	
   

  

 

 

6

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