Document:

exv10w9

 

Exhibit 10.9

THE HOUSTON EXPLORATION COMPANY

AMENDED AND RESTATED 2004 LONG TERM INCENTIVE PLAN

NONQUALIFIED OPTION AGREEMENT

     This Stock Option Agreement (the “Agreement”) is made between The Houston Exploration Company,
a Delaware corporation (the “Company”), and
«Name»(the “Employee”). The Company considers that its
interests will be served by granting Employee an option to purchase shares of common stock of the
Company as an inducement for his or her continued and effective performance of services to the
Company. The Board of Directors has adopted, and the stockholders have approved, The Houston
Exploration Company Amended and Restated 2004 Long Term Incentive Plan (the “Plan”). The Employee
has been designated as a participant in the Plan.

     IT IS AGREED:

     § 1
Grant. On «Grant_Date»  (the “Grant Date”), the Company hereby grants to the Employee a
Nonqualified Stock Option (the “Option”) to purchase «Option_Granted» 
 shares of the common stock of the Company,
$.01 par value per share, at a price of «Grant_Price»  per share, subject to adjustment as provided in the Plan
(the “Option Price”). This Option is not an incentive stock option under § 422 of the Internal
Revenue Code.

TERMS AND CONDITIONS

     § 2 Exercise Rights.

	 	(a)	 	General Rule. Employee automatically shall have the right
under this Agreement to exercise this Option in accordance with the following
schedule, if Employee continuously remains an employee of the Company or any
Affiliate from the Grant Date through the date specified in the schedule:
	 
	 	 	 	The Option is exercisable according to the following schedule:

	 	(1)	 	On the day after the first anniversary of the Grant
Date, the Option may be exercised with respect to up to 1/3 of the shares
subject to the Option;
	 
	 	(2)	 	after each succeeding anniversary of the Grant
Date, the Option may be exercised with respect to up to an additional 1/3
of the shares subject to the Option, so that after the expiration of the
third anniversary of the Grant Date the Option shall be vested and
exercisable in full; and
	 
	 	(3)	 	to the extent not exercised, installments shall be
cumulative and may be exercised in whole or in part.

	 	(b)	 	Special Rules.

 

 

	 	(1)	 	Employment Termination. If Employee’s
employment with the Company terminates for any reason, the portion, if
any, of this Option that is exercisable as of the date of such
termination (after taking into account § 2(b)(2), and (3)) shall remain
exercisable for one year following the termination and shall expire on
the first anniversary of the date of termination. However, to the extent
this Option is not exercisable as of the date of such termination of
employment, this Option shall expire immediately and automatically upon
such termination.
	 
	 	(2)	 	Death. If Employee’s employment with the
Company terminates because Employee dies, the Option shall vest and
become exercisable with respect to all of the shares of Stock underlying
the grant of the Option that have not previously vested and shall remain
exercisable for one year following the termination and shall expire on
the first anniversary of the date of termination.
	 
	 	(3)	 	Change of Control. The Option shall vest
and become exercisable with respect to all of the shares of Stock that
have not previously vested immediately prior to a Change of Control if
Employee has continued to be employed by the Company or an Affiliate
until such time.

	 	(c)	 	Definitions.

	 	(1)	 	Cause. For purposes of this Agreement,
“Cause” shall have the same meaning as defined in Employee’s employment
agreement in effect when Employee’s employment terminates or, if Employee
does not then have an employment agreement in effect at such time that
defines “cause,” then “Cause” shall mean:

	 	(A)	 	any material failure of Employee to
perform Employee’s duties (other than any such failure resulting
from Employee’s incapacity due to illness or other disability) after
notice of such failure has been given to Employee and such failure
shall have continued for 30 days after receipt of such notice,
	 
	 	(B)	 	gross or willful negligence or
intentional wrongdoing or misconduct,
	 
	 	(C)	 	a material breach by Employee of
Employee’s duties as an employee of the Company or of Employee’s
employment agreement with the Company, or
	 
	 	(D)	 	conviction of Employee of a felony
offense involving moral turpitude.

	 	(2)	 	Disability. For purposes of this Agreement,
“Disability” shall have the same meaning as defined in Employee’s
employment agreement in effect when Employee’s employment terminates or,
if Employee does not then have an employment agreement in effect at such
time that defines “disability,” then “Disability” shall have the meaning
of such terms as defined in the Plan.

	 	(d)	 	Employment Status. A transfer between the Company and an
Affiliate or between Affiliates shall not be treated as a termination of
employment with the Company under the Plan or this Agreement.

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     § 3 Life of Option. This Option, to the extent then still in effect, shall expire and
shall not be exercisable for any reason on or after the tenth anniversary of the Grant Date.

     § 4 Method of Exercise of Option. By giving notice to the Compensation and Management
Development Committee (the “Committee”) or its delegate (which may be telephonic or any other means
approved by the Committee), Employee may exercise this Option in whole or in part (to the extent
this Option otherwise is exercisable under § 2), for not less than 100 shares of Stock (or all of
the shares of Stock for which this Option is then exercisable if less than 100), on any normal
business day of the Company by any method of exercise permitted under the Plan.

     § 5 Stock Issuance. The Company shall register on the Company’s books and issue in
the name of Employee any Stock purchased pursuant to the exercise of this Option as soon as
practicable after such exercise, and such registration and issuance shall discharge the Company of
all of its duties and responsibilities with respect to this Option.

     § 6 Nontransferable. No rights granted under this Option shall be transferable by
Employee other than by will or by the laws of descent and distribution, and the rights granted
under this Option shall be exercisable during Employee’s lifetime only by Employee. Any attempt to
sell, pledge, assign, hypothecate, transfer or otherwise dispose of this Option in contravention of
this Agreement and the Plan shall be null and void and shall have no effect. Employee’s legal
representative and the person or persons, if any, to whom this Option is transferred by will or by
the laws of descent and distribution shall be treated after Employee’s death the same as Employee
under this Agreement.

     § 7 No Right to Continue Service. Neither the Plan, this Option, nor any related
material shall give Employee the right to continue in employment by the Company or any Affiliate or
shall adversely affect the right of the Company or any Affiliate to terminate Employee’s employment
with or without Cause at any time, subject to the terms of any written employment agreement to
which Employee is a party.

     § 8 Stockholder Status. Employee shall have no rights as a stockholder with respect
to any shares of Stock under this Option until such shares have been registered on the Company’s
books and duly issued in the name of Employee and, except as expressly set forth in the Plan, no
adjustment shall be made for dividends of any kind or description whatsoever or for distributions
of other rights of any kind or description whatsoever respecting such Stock.

     § 9 Securities Registration; Legend. The Option shall not be exercisable until (a)
the effective registration of the shares to be received pursuant to this Agreement under the
Securities Act of 1933, as amended, (the “Securities Act”) unless in the opinion of counsel for the
Company such offering is exempt from registration under the Securities Act, and (b) all other
applicable laws are complied with. If Employee is an officer or “affiliate” of the Company (as
such term is defined under the Securities Act, Employee consents to the placing on the certificate
for any shares covered by the Option of an appropriate legend restricting resale or other transfer
of such shares except in accordance with the Securities Act and all applicable rules thereunder.

     § 10 Resolution of Disputes. In the event of any difference of opinion between
Employee and the Company concerning the meaning or effect of the Plan, an employment agreement, or
this Agreement, such difference shall be resolved by the Compensation and Management Development
Committee.

     § 11 Withholding. Employee shall have the right to satisfy the minimum statutory
federal and state tax withholding requirements arising out of the exercise of this Option by
electing to have the Company withhold shares of Stock that otherwise would be transferred to
Employee as a result of the exercise of this Option. In addition, the Company or an Affiliate
shall have the right to take such action,

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if any, as the Company or Affiliate deems necessary or appropriate to satisfy the minimum
statutory federal and state tax withholding requirements arising out of the exercise of this Option
including (but not limited to) requiring Employee to make a cash payment to the Company or an
Affiliate to satisfy the minimum statutory withholding requirements, and the exercise of this
Option shall be conditioned upon Employee’s satisfaction of any such withholding requirements.

     § 12 Amendment. Except as provided by the Plan, this Agreement may not be changed or
terminated orally but only by an agreement in writing signed by the party against whom enforcement
of any such change or termination is sought.

     § 13 Notices. All offers, notices, demands, requests, acceptances or other
communications hereunder shall be in writing and shall be deemed to have been duly made or given if
mailed by registered or certified mail, return receipt requested. Any such notice mailed to the
Company shall be addressed to its principal office, and any notice mailed to Employee shall be
addressed to Employee’s residence address as it appears on the books and records of the Company or
to such other address as either party may hereafter designate in writing to the other.

     § 14 Governing Law. The Plan and this Option shall be governed by the laws of the
State of Texas.

     § 15 Binding Effect. This Option shall be binding upon the Company and Employee and
their respective heirs, executors, legal representatives, administrators, successors and assigns.

     § 16 Headings and Sections. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or interpretation of this
Option. Any references to sections (§) in this Agreement shall be to sections (§) of this
Agreement unless otherwise expressly stated as part of such reference.

     § 17 Plan. This Option is subject to all of the terms and conditions set forth in the
Plan. Employee in accepting this Option accepts and agrees to be bound by all of the terms and
conditions of the Plan, as it may be amended from time to time. All capitalized terms not
otherwise defined in this Agreement are defined in the Plan. If a determination is made that there
is conflict between the terms of Employee’s employment agreement (if any), the Plan and this
Agreement, the employment agreement shall control, and if the Plan and this Agreement conflict, the
terms of the Plan shall control. A copy of the Plan is provided with this agreement and available
to Employee at the Company’s principal executive offices upon request to the Secretary of the
Company.

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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered effective as of the Grant
Date.

	 	 	 
	 

	 	THE HOUSTON EXPLORATION COMPANY
	 
	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	 
	 	 
	 

	 	Company Officer
	 

	 	 
	 

	 	«Name»
	 

	 	Employee

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Exhibit 10.10

THE HOUSTON EXPLORATION COMPANY

AMENDED AND RESTATED 2004 LONG TERM INCENTIVE PLAN

DIRECTOR RESTRICTED STOCK AGREEMENT

     This Restricted Stock Agreement (the “Agreement”) is made between The Houston Exploration
Company, a Delaware corporation (the “Company”), and «Director_Name» (the “Director”). The Company
considers that its interests will be served by granting Director shares of restricted common stock
of the Company as an inducement for his or her continued and effective performance of services as a
member of the Board of Directors of the Company (the “Board” or “Board of Directors”). The Board
of Directors has adopted, and the stockholders have approved, The Houston Exploration Company
Amended and Restated 2004 Long Term Incentive Plan (the “Plan”). The Director is a participant in
the Plan.

     IT IS AGREED:

     § 1 Grant. On «Date_of_Grant» (the “Grant Date”), the Company hereby grants to the
Director a Restricted Stock Award (the “Award”) for « ___» shares of the common
stock of the Company, $.01 par value per share, subject to adjustment as provided in the Plan.
This grant is being made pursuant to Section 8.5 of the Plan.

     § 2 Vesting and Forfeitures. Director will vest in the Restricted Stock if Director
continuously remains a director of the Company or an Affiliate through the earlier of (i) three
years from the date of grant or (ii) such date as Director’s continuous service as a director with
the Company or an Affiliate terminates by reason of death, disability or retirement.

     Director also will vest in all of the shares of Restricted Stock immediately prior to a Change
of Control if Director has continued to serve as a director of the Company or an Affiliate until
such time.

     If Director voluntarily resigns, declines to stand for re-election or is removed from the
Board, Director will forfeit all unvested shares, unless the Board, in its discretion, accelerates
vesting upon such termination. A transfer from the Board to the board of directors of an
Affiliate, however, will not be treated as a termination of service on the Board under this § 2.

     The shares forfeited under this § 2 (together with any distributions made with respect to the
shares that have been held by the Company) automatically will revert back to the Company.

     § 3 Stockholder Rights. Director will have the right to vote the shares of Restricted
Stock while the shares remain subject to forfeiture under § 2. Any cash or stock dividends or
other distributions of property made with respect to shares that remain subject to forfeiture under
§ 2 will be held by the Company, and Director’s rights to receive such dividends or other property
will vest under § 2 at the same time as the shares with respect to which the dividends or other
property are attributable and will be payable in the form of Stock as provided in the Plan.

 

 

If Director forfeits shares under § 2, Director will at the same time forfeit Director’s right
to vote the shares and to receive dividends paid with respect to the shares.

     § 4 Stock Certificates. The Company will issue a stock certificate for the shares of
Restricted Stock in the name of Director upon Director’s execution of the irrevocable stock power
in favor of the Company attached hereto as Exhibit A. The Company will hold the stock
certificate representing such shares and any distributions made with respect to such shares until
such time as the shares have vested or have been forfeited. As soon as practicable after each
vesting date, the Company will transfer to Director or Director’s delegate physical custody of a
stock certificate reflecting the shares that have vested and become nonforfeitable on such date
(and also reflecting any distributions made with respect to such shares that have been held by the
Company).

     § 5 No Transfer. Director shall have no right to transfer or otherwise alienate or
assign Director’s interest in any shares of Restricted Stock before Director vests in the shares
under § 2.

     § 6 Rule 16b-3. The Company shall have the right to amend this Restricted Stock grant
to withhold or otherwise restrict the transfer of the shares of Restricted Stock to Director as the
Company deems appropriate in order to satisfy any condition or requirement under Rule 16b-3 to the
extent Section 16 of the Securities Exchange Act of 1934, as amended, might be applicable to the
grant or transfer.

     § 7 Other Laws. The Company may refuse to transfer shares of Restricted Stock to
Director if the Compensation and Management Development Committee receives the written opinion of a
nationally recognized law firm to the effect that the transfer of such shares would violate any
applicable law or regulation, in which event the Company shall use all commercially reasonable
efforts to take such action as the Compensation and Management Development Committee, upon
consultation with legal counsel, shall deem necessary in its sole discretion, to facilitate the
legal transfer of the shares as soon as practicable.

     § 8 Governing Law. The Plan and this Agreement are governed by the laws of the State
of Texas.

     § 9 Binding Effect. This Agreement is binding upon the Company, its Affiliates and
Director and their respective heirs, executors, administrators and successors.

     § 10 Headings and Sections. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or interpretation of this
Agreement. Any references to sections (§) in this Agreement shall be to sections (§) of this
Agreement unless otherwise expressly stated as part of such reference.

     § 11 Resolution of Disputes. In the event of any difference of opinion between
Director and the Company concerning the meaning or effect of the Plan or this Agreement, such
difference shall be resolved by the Compensation and Management Development Committee.

     § 12 Plan and Award Agreement. This Award is subject to all of the terms and
conditions in this Agreement and in the Plan. If a determination is made that any term or

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condition in this Agreement is inconsistent with the Plan, the Plan will control. All of the
capitalized terms not otherwise defined in this Agreement will have the same meaning in this
Agreement as in the Plan. A copy of the Plan is provided with this Agreement and will be available
to Director upon request to the Secretary of the Company.

     § 13 Code Section 83(b) Election. Director shall be permitted to make an election under Code
Section 83(b), to include an amount in income in respect of this Award of Restricted Stock in
accordance with the requirements of Code Section 83(b).

Signature Page Follows

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     IN WITNESS WHEREOF, this Agreement has been duly executed and delivered effective as of
the Grant Date.

	 	 	 
	 

	 	THE HOUSTON EXPLORATION COMPANY
	 
	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	 
	 	 
	 

	 	Company Officer
	 
	 	 
	 

	 	 
	 

	 	«Director_Name»
	 

	 	Director

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Exhibit A

IRREVOCABLE STOCK POWER

     For value received, as a condition to the issuance to the undersigned of the «
___» shares of restricted common stock (the “Restricted Stock”) of The Houston
Exploration Company (the “Company”) subject to that certain Restricted Stock Award Agreement dated
as of «Date_of_Grant» (the “Agreement”), the undersigned hereby assigns and transfers to the
Company, effective upon the occurrence of any forfeiture event described in the Agreement, any
then-unvested shares of Restricted Stock for purposes of effecting any forfeiture called for under
§ 2 of the Agreement, and does hereby irrevocably give the Company the power (without any further
action on the part of the undersigned) to transfer such shares of stock on the books of the Company
to effect any such forfeiture. This irrevocable stock power shall expire automatically with
respect to the shares of stock subject to such Restricted Stock grant on the date such shares of
stock are no longer subject to forfeiture under § 2 of the Agreement or, if earlier, immediately
after such a forfeiture has been effected with respect to such shares of stock.

	 	 	 
	 

	 	 
	 

	 	Signature
	 
	 	 
	 
	 	 
	 

	 	 
	 

	 	«Director_Name»
	 
	 	 
	 
	 	 
	 

	 	 
	 

	 	Date

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