Document:

EXHIBIT 10.1

 

AMENDMENT NO. 4 TO

CIMAREX ENERGY CO.

2002 STOCK INCENTIVE PLAN

 

Cimarex Energy
Co., a Delaware corporation (the “Company”), established the Cimarex Energy Co.
2002 Stock Incentive Plan (the “Plan”), effective as of October 1, 2002,
and amended the Plan, effective as of March 3, 2003, March 10, 2005
and June 6, 2005. The Company wishes to amend the Plan as provided below.

 

1.                                       Section 6.2(ii) shall
be amended to add a net share exercise as a form of permitted payment and to
revise the broker-assisted requirements, to read in its entirety as follows:

 

(ii)                                  Form of Payment.  The exercise price of an Option may be paid (1) in
cash or by check, bank draft or money order payable to the order of the
Company; (2) by delivering shares of Common Stock having a Fair Market
Value on the date of payment equal to the amount of the exercise price, but
only to the extent such exercise of an Option would not result in an accounting
compensation charge with respect to the shares used to pay the exercise price unless
otherwise determined by the Committee; (3) payment through a transaction
involving a licensed broker or dealer (acceptable to the Company) acting on
behalf of the Option Holder to sell shares and deliver all or a part of the
sales proceeds to the Company in payment of the Option Price and required tax
withholding, subject to such additional requirements determined by the
Committee (or its designee); (4) payment of the exercise price and
required tax withholding with shares of Common Stock acquired pursuant to the
exercise (the Common Stock being valued at fair market value on the date of
exercise); (5) a combination of the foregoing; or (6) any other
method adopted by the Company and approved by the Committee.

 

2.                                       Section 6.2(iii) shall
be amended to delete specific procedures for broker-assisted transactions by deleting
the following sentence in its entirety:

 

“If the Option
Price is paid by means of a broker’s transaction described in subsection
6.2(ii), in whole or in part, the closing of the purchase of the Common Stock
under the Option shall take place (and the Option shall be treated as
exercised) on the date on which, and only if, the sale of Common Stock upon
which the broker’s transaction was based has been closed and settled, unless
the Participant makes an irrevocable written election, at the time of exercise
of the Option, to have the exercise treated as fully effective for all purposes
upon receipt of the exercise price by the Company regardless of whether or not
the sale of the Common Stock by the broker is closed and settled.”

 

This Amendment is dated July 11, 2008
and applies to all option awards granted under the Plan.

 

	
   

  	
  CIMAREX ENERGY CO.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ F. H. Merelli

  
	
   

  	
   

  	
  F. H. Merelli

  
	
   

  	
   

  	
  Chief Executive Officer and PresidentEXHIBIT 10.2

 

CIMAREX
ENERGY CO.

2002 STOCK INCENTIVE PLAN

NONQUALIFIED STOCK OPTION AGREEMENT

 

Cimarex Energy Co., a Delaware
corporation (the “Company”) granted an Option under the Cimarex Energy
Co. 2002 Stock Incentive Plan, as amended and restated, effective March 3,
2003 and as further amended from time to time (the “Plan”) to purchase
shares of Common Stock of the Company to the Option Holder named below.  Unless otherwise defined herein, all defined
terms in this Notice of Grant (the “Notice of Grant”) and the Terms and
Conditions of Stock Option Grant following this Notice of Grant (together, the “Agreement”)
shall have the meaning set forth in the Plan.

 

A.  NOTICE
OF GRANT

 

	
  Option Holder:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date of Grant:

  	
   

  	
   

  	
  Award number:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Number of shares:

  	
   

  	
   

  	
  Option Price per share:

  	
   $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Type of option

  	
  Nonqualified
  stock option

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Expiration Date:

  	
   

  	
   

  	
   

  	
   

  

 

Vesting
schedule: 
Subject to the provisions of this Agreement, the Plan and Option Holder’s
continuous employment (or other service) with the Company, the Option vests and
becomes exercisable to purchase shares of Common Stock as set forth below:

 

	
  Employment

  Vesting Date

  	
   

  	
  Percentage of

  Shares That Vest

  	
   

  	
  Number of

  Shares That Vest

  	
   

  
	
           ,
  2009

  	
   

  	
  33 1/3 

  	
  %

  	
   

  	
   

  
	
           ,
  2010

  	
   

  	
  33 1/3 

  	
  %

  	
   

  	
   

  
	
           ,
  2011

  	
   

  	
  33 1/3 

  	
  %

  	
   

  	
   

  

 

By signature below, the Option
Holder and the Company agree that this Option is granted under and governed by
the terms and conditions of the Plan and this Agreement.  The Option Holder has reviewed the Plan, a
copy of which is attached, and agrees that the Plan will control in the event
any provision in this Agreement is in conflict with the Plan.  The Option Holder hereby agrees to accept as
binding, conclusive and final all decisions or interpretations of the Committee
(or its designee) upon any questions relating to the Plan or Agreement.

 

	
  Option Holder

  	
   

  	
  Cimarex Energy Co.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  F. H.
  Merelli, Chief Executive Officer

  
	
   

  	
   

  	
   

  	
   

  	
  and
  President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
  Date:

  	
   

  
							

 

1

 

B.  TERMS
AND CONDITIONS OF STOCK OPTION GRANT

 

1.                                       Grant of Option.  The Company grants to the Option Holder named
in the Notice of Grant (the “Option Holder”) a Nonqualified stock option
(the “Option”) to purchase the number of shares of Common Stock, at the exercise
price per share set forth in the Notice of Grant (the “Option Price”),
subject to all of the terms and conditions in this Agreement and the Plan,
which is incorporated by reference.  In
the event of a conflict between the terms and conditions of the Plan and the
terms and conditions of this Agreement, the terms and conditions of the Plan
will prevail.

 

The Option is
not intended to qualify as an incentive stock option under Section 422 of
the Internal Revenue Code of 1986, as amended (the “Code”).

 

2.                                       Option Term; Expiration Date.  The term of the Option is ten (10) years
measured from the Date of Grant, unless sooner terminated under this Agreement
or the Plan (the “Expiration Date”).

 

3.                                       Vesting.  The Option is only exercisable, in whole or in
part, on or before the Expiration Date and then only with respect to the vested
portion of the Option.

 

(a)                                  Except
as otherwise provided in this Agreement and the Plan, the Option vests and
becomes exercisable to purchase shares of Common Stock as set forth in the
Notice of Grant.  Shares scheduled to
vest on a certain date or upon the occurrence of a certain condition will not
vest in the Option Holder in accordance with any of the provisions of this
Agreement, unless the Option Holder will have been an employee (or other
service provider) of the Company, a Subsidiary or an Affiliated Entity continuously
from the Date of Grant until the date such vesting occurs.

 

(b)                                 Upon
the occurrence of one of the following events, the Option will become immediately
and automatically vested:

 

(i)                                     A
Change of Control Event under the conditions described in the Plan; or

 

(ii)                                  The
death or Disability (as defined in the Plan) of the Option Holder.

 

4.                                       Termination of Employment – Option Exercise.
 Except as otherwise set forth in
this Agreement, the Option may be exercised upon termination of employment (or
other service) on or before the Expiration Date as follows:

 

(a)                                  Upon
the death or Disability of the Option Holder, the vested portion of the Option
may be exercised by the Option Holder (or his or her personal representative in
the case of death) during the remaining term of the Option, but in no event
after the Expiration Date.

 

(b)                                 Upon
termination of employment (or other service) of the Option Holder for any other
reason other than Cause, the vested portion of the Option may be exercised by
the Option Holder within three (3) months following the date of such
termination, but in no event after the Expiration Date.

 

If the Option Holder’s employment (or other service) with the Company
is terminated for Cause prior to the Expiration Date, the entire Option,
whether or not vested, shall become void, shall be forfeited and shall
terminate immediately upon the termination of employment (or other service) of
the Option Holder.  For this purpose, Cause
shall mean a conviction (or pleading nolo
contendere) of a felony or termination of employment (or other
service) due to a violation of the Company’s Code of Business Conduct and
Ethics, as determined by the Committee (or its designee) in good faith (“Cause”).

 

2

 

5.                                       Exercising the Option.  The Option may be exercised on or before the
Expiration Date in accordance with the Plan and the terms of this Agreement.  The Option may be exercised by delivery of a Notice
of Exercise to the Company’s Corporate Secretary (or his or her designee) and
full payment of the Option Price and satisfaction of applicable tax withholding
(the “Date of Exercise”).  The Notice
of Exercise must identify the Option being exercised, the number of shares of Common
Stock to be purchased and include any other information, and be in the form
required by the Committee (or its designee) from time to time (the “Notice
of Exercise”).

 

6.                                       Method of Payment.  The Option Price for shares of Common Stock
purchased upon the exercise of the Option shall be paid as follows:

 

(a)                                  in
cash or by check, bank draft or money order payable to the order of the Company;

 

(b)                                 by
delivering shares of Common Stock with a Fair Market Value on the date of
payment equal to the amount of the Option Price, subject to such additional
requirements determined by the Committee (or its designee);

 

(c)                                  payment
through a transaction involving a licensed broker or dealer (acceptable to the
Company) acting on behalf of the Option Holder to sell shares and deliver all
or part of the sales proceeds to the Company in payment of the Option Price and
applicable tax withholding, subject to such additional requirements determined
by the Committee (or its designee);

 

(d)                                 payment of the
exercise price and required tax withholding with shares of Common Stock
acquired pursuant to the exercise (the Common Stock being valued at Fair Market
Value on the date of exercise);

 

(e)                                  a
combination of the foregoing; or

 

(f)                                    any
other method of payment adopted by the Company in connection with the Plan and
approved by the Committee prior to the time of exercise.

 

7.                                       Tax Withholding.  The issuance of Common Stock pursuant to
the exercise of the Option is subject to the requirement that the Option Holder
make appropriate arrangements with the Company to provide for the amount of
additional income and other tax withholding applicable to the exercise of the
Option.  Subject to any election
procedures and other requirements determined by the Company, the Option Holder
may pay the amount of taxes required by law to be withheld by directing the
Company to withhold a number of shares of Common Stock having a Fair Market
Value on the date of payment equal to the amount of the required tax withholding.

 

8.                                       Transferability.  The Option may not be transferred by the
Option Holder except by will or pursuant to the laws of descent and
distribution, nor may the Option be pledged, hypothecated or otherwise disposed
of, by operation of law or otherwise.  The Option shall be exercised during
the Option Holder’s life only by him or her, or in the event of Disability or
incapacity, by his or her guardian or legal representative and after the Option
Holder’s death, only by those entitled to do so under his or her will or the
applicable laws of descent and distribution.

 

3

 

9.                                       Rights as Stockholder.  The Option Holder or his or her successor
shall have no rights as a stockholder with respect to the shares of Common
Stock covered by this Option until the Option Holder or his or her successors
become the holder of record of such shares.

 

10.                                 Miscellaneous.Adjustments.  Article IX of
the Plan provides for certain adjustments to the number of shares of Common Stock
covered by the Option, the Option Price and other changes in connection with a
reorganization or other changes to the Common Stock.

 

(b)                                 Change of Control.  Section 10.4  of the Plan describes the actions that may be taken by the Committee with
respect to the Option upon the occurrence of a Change of Control Event.

 

(c)                                  Restrictions
on Common Stock.  Any shares of Common Stock
acquired under the Option or otherwise by the Option Holder are subject to the
Company’s Insider Trading Policy and may be subject to other restrictions on
resale.  Any sale or other disposition of
shares by the Option Holder must be made in compliance with the Company’s
Insider Trading Policy, in effect from time to time, securities law and other
applicable legal requirements.

 

(d)                                 Electronic Delivery.  The Company may, in its sole
discretion, decide to deliver any documents related to Options awarded under
the Plan or future Options that may be awarded under the Plan by electronic
means or request Option Holder’s consent to participate in the Plan by
electronic means.  The Option Holder
hereby consents to receive such documents by electronic delivery and agrees to
participate in the Plan through any on-line or electronic system established
and maintained by the Company or another third party designated by the Company.

 

(e)                                  Amendment or Modifications to the Agreement.  This Agreement constitutes the entire
understanding of the parties on the subjects covered.  The Option Holder expressly warrants that he
or she is not accepting this Agreement in reliance on any promises,
representations, or inducements other than those contained herein.  Modifications to this Agreement or the Plan
can only be made in writing and signed by a duly authorized officer of the
Company.  Notwithstanding anything to the
contrary in the Plan or this Agreement, the Company reserves the right to
revise this Agreement as it deems necessary or advisable, in its sole
discretion and without the consent of the Option Holder, to comply with Section 409A
of the Code or to otherwise avoid imposition of any additional tax or income
recognition under Section 409A of the Code in connection with this Option.

 

(f)                                    Amendment or Termination of the Plan.  By accepting this Option, the Option
Holder expressly warrants that he or she has received an Option under the Plan,
and has received, read and is familiar with the terms of the Plan.  The Option Holder understands that the Plan
is discretionary in nature and that it may be amended, suspended or terminated
by the Company at any time.

 

(g)                                 Defined Terms.  Capitalized terms have the meaning set
forth in the Plan or herein, as the case may be.

 

(h)                                 Compliance with Securities Laws.  This Agreement shall be subject to the
requirement that if at any time counsel to the Company determines that the
listing, registration or qualification of the shares of Common Stock subject to
the Option upon any securities exchange or under any state or federal law, or
the consent or approval of any governmental or regulatory body, is necessary as
a condition of, or in connection with, the issuance or purchase of such shares
thereunder, the Option may not be exercised in whole or in part unless such
listing, registration, qualification, consent or approval shall have been
effected or obtained on conditions acceptable to the Committee.  Nothing herein shall be deemed to require the
Company to apply for, obtain, or keep current, any such listing, registration
or qualification.

 

4

 

(i)                                     Construction; Severability.  The section headings contained herein are
for reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.  The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement,
and each other provision of this Agreement shall be severable and enforceable
to the extent permitted by law.

 

(j)                                     Waiver. 
Any provision contained in this Agreement may be waived, either
generally or in any particular instance, by the Committee appointed under the
Plan, but only to the extent permitted under the Plan.

 

(k)                                  Binding Effect.  Subject to the limits on the
transferability of the Option, this Agreement shall be binding upon and inure
to the benefit of the Company and the Option Holder and their respective heirs,
executors, administrators, legal representatives, successors and assigns.

 

(l)                                     No Right to Continued Employment.  Nothing contained in this Agreement or
the Plan shall be construed as giving the Option Holder any right to remain
employed by (or provide other service to) the Company, any Subsidiary or any
Affiliated Entity.  The Company reserves
the right to terminate the employment (or other service) of the Option Holder
at any time.

 

(m)                               Governing Law.  This Agreement and the Plan shall be governed
by and construed in accordance with the laws of the State of Colorado except as
superseded by applicable Federal law.

 

Attachments:

 

2002 Stock
Incentive Plan

Plan Prospectus

Insider Trading Policy

 

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