Document:

exv10w1

 

Exhibit 10.1

STOCK APPRECIATION RIGHTS AGREEMENT

     This STOCK APPRECIATION RIGHTS AGREEMENT (“Agreement”) is entered into effective as of the ___
day of ___, 20___(the “Date of Grant”), between TARRAGON CORPORATION, a Nevada corporation (the
“Company”), and ___, an individual (the “Grantee”).

     WHEREAS, the Company has adopted, with the approval of its stockholders, the Tarragon
Corporation Omnibus Plan (such Plan, as same may hereinafter be amended, is referred to as the
“Plan”), a copy of which will be provided to Grantee upon request; and

     WHEREAS, in order to achieve the objectives of the Plan, and to secure the continuing services
of Grantee, the Company wishes to grant to Grantee Stock Appreciation Rights (or an “SAR” as that
term is defined in the Plan) which confer on Grantee the right to receive, upon exercise, the
difference between the grant price of the shares of Tarragon common stock, $.01 par value (the
“Shares”) covered by the SAR, and the market value of the Shares on the date of exercise, not to
exceed $15.00 per Share (the “Appreciation”), payable in Shares and cash, upon the terms
hereinafter set out.

     ACCORDINGLY, in consideration of the foregoing premises, the mutual promises hereinafter set
forth, and other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Company and Grantee agree as follows:

1. Grant of SAR. Subject to the terms of this Agreement and the Plan, which is
incorporated herein by reference, the Company hereby grants to Grantee an SAR covering ?? Shares of
the Company, at a grant price of $______ per Share.

2. Term of Agreement; Vesting and Exercise. Except as otherwise provided herein, the
Grantee shall have the right to exercise the SAR and acquire Shares under this Agreement beginning
one full year and one day after the Date of Grant, but only to the extent of the number of Shares
covered by the SAR, multiplied by thirty three and one third percent (33.33%) and by the number of
full years which have elapsed since the Date of Grant, until the third anniversary of the Date of
Grant, and thereafter to the extent of the full SAR covered by this Agreement. The date a written
notice of exercise is received by the Secretary or Treasurer of the Company shall be the exercise
date. Upon exercise, the Grantee is entitled to the Appreciation in the number of whole Shares
covered by the SAR being exercised, after deducting therefrom an amount sufficient to satisfy all
federal, state and local withholding tax requirements. Payment will be made in the form of whole
Shares equal in market value to the Appreciation less an amount sufficient to satisfy all federal,
state and local withholding tax requirements, plus cash in lieu of any partial or fractional
Shares. No fractional Shares will be issued. Notwithstanding any other provision of this
Agreement or the Plan, the total amount of Appreciation that Grantee may receive under this
Agreement is limited to $15.00 per Share, multiplied by the number of Shares covered by this SAR.

3. Condition Precedent. As a condition precedent to the right to exercise the SAR, Grantee
agrees to use or continue to use his or her best lawful efforts for the benefit of the Company and
its subsidiaries during the term of this Agreement. However, the grant of the SAR pursuant to this
Agreement shall not be deemed to be an obligation of the Company to continue Grantee’s employment
with the Company for any period or time.

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4. Limitation on Transferability. The SAR granted hereunder is personal to Grantee, and
may not be sold, transferred, assigned, pledged, hypothecated or otherwise disposed of in any way
(whether by operation of law or otherwise) except as otherwise provided by the laws of descent and
distribution. Any attempt to sell, transfer, assign, pledge or hypothecate or otherwise dispose of
the SAR contrary to the provisions of this Agreement and the Plan, or upon levy or any attachment
or similar process upon this Agreement or Grantee’s rights hereunder, this Agreement and such
rights shall immediately become null, void and of no further force or effect.

5. Termination Date. This Agreement and all rights granted hereunder, to the extent those
rights have not been exercised, will terminate and become null and void at 5:00 p.m., local central
time, on the date ten (10) calendar years following the Date of Grant (the “Termination Date”) or
sooner if the relationship of Grantee to the Company ceases for any reason (including discharge by
the Company). In the event of termination of Grantee’s relationship to the Company for any reason
other than Grantee’s death, Grantee may exercise the SAR at any time within ninety (90) calendar
days following the date of such termination, to the same extent the SAR was exercisable by Grantee
on the date of termination, but not otherwise. If Grantee dies while employed by the Company or
one of its subsidiaries or within the ninety (90) calendar day period following termination of such
relationship, the person or persons to whom his or her rights under this Agreement shall pass,
whether by will or by the applicable laws of descent and distribution, may exercise such rights, to
the extent Grantee was entitled to exercise them on the date of his death, for a period of one
hundred eighty (180) calendar days following Grantee’s date of death. Notwithstanding anything in
this Agreement to the contrary, this Agreement and all rights granted hereunder shall in all events
terminate and become null and void on the Termination Date.

6. Securities Laws. By executing this Agreement, Grantee acknowledges that (a) upon
exercise of the SAR, Grantee may receive “restricted” securities of the Company; (b) that the
Company may register shares of common stock under the Plan, but is under no obligation to do so;
and (c) that at the time of exercise of the SAR, in whole or in part, Grantee may be required to
execute an Investment Representation Letter or such other written representations concerning his or
her intentions for the retention or disposition of the Shares of the Company being acquired by the
exercise, as, in the opinion of counsel to the Company, shall be necessary or advisable to insure
that any disposition of the Shares acquired through the exercise will not involve the violation of
the Securities Act of 1933, as amended, any applicable state securities or blue sky laws, any
similar or superseding statute or statutes, or any applicable federal or state statute or
regulation, as then in effect.

7. Adjustment of Number of Shares. The number of Shares subject hereto and the Exercise
Price per Share shall be proportionately adjusted for any increase or decrease in the number of
issued Shares of the Company resulting from the subdivision or consolidation of Shares, or the
payment of stock dividends after the Date of Grant, or other increases or decreases in the number
of Shares outstanding effected without receipt of consideration by the Company; provided, however,
that any adjustment resulting in fractional Shares shall be rounded down to the next whole Share.
The issuance by the Company of any Shares of any class, or any securities convertible into Shares
of any class, for cash or property, or for labor or services, either upon direct sale or upon the
exercise of rights or warrants subscribed therefor, or upon conversion of Shares or obligations of
the Company convertible into such Shares or other securities, shall not affect, and no adjustment
by reason thereof shall be made with respect to, the number of Shares of the Company subject to
this Agreement.

8. Merger and Consolidation. Upon any merger or consolidation where the Company is the
surviving entity, this Agreement shall continue in accordance with its terms except that, upon any
exercise of the SAR (or any substitute rights), Grantee shall be entitled to receive, in lieu of
payment in Shares of the Company, the amount of securities or other consideration received in the
merger or consolidation by holders of the same number and class of Shares of the Company as Grantee
would have been entitled to under this Agreement.

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9. Change of Control. In the event of a Change in Control, as hereinafter defined, of the
Company, this Agreement shall become immediately exercisable as of the date of such Change in
Control, and shall remain exercisable through the Termination Date. For purposes of this
Agreement, a “Change in Control” shall be deemed to occur: (i) upon the approval by the Board of
Directors of the Company (or if approval of the Board is not required as a matter of law, the
stockholders of the Company) of (A) any consolidation or merger of the Company in which the Company
is not the continuing or surviving entity or pursuant to which the Shares would be converted into
cash, securities or other property other than a merger in which the holders of the Shares
immediately prior to the merger will have the same proportionate ownership of the shares of the
surviving entity immediately after the merger, (B) any sale, lease, exchange, or other transfer (in
one transaction or a series of related transactions) of all or substantially all the assets of the
Company, or (C) adoption of any plan or proposal for the liquidation or dissolution of the Company;
or (ii) when any “person” (as defined in Section 13(d) of the Exchange Act), other than the
Company or any Subsidiary or employee benefit plan or trust maintained by the Company, shall become
the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly,
of more than 40% of the Shares outstanding at the time, without the prior approval of the Board; or
(iii) at any time during a period of two consecutive years, individuals who at the beginning of
such period constituted the Board shall cease for any reason to constitute at least a majority
thereof, unless the election or the nomination for election by the stockholders of each new
director during such two-year period was approved by a vote of at least two-thirds of the directors
then still in office who were directors at the beginning of such two-year period.

10. Rights of Grantee. The Grantee shall not be deemed for any purpose to be a stockholder
of the Company with respect to any of the Shares available to be acquired through the exercise of
any SAR, except to the extent that the SAR shall have been exercised with respect thereto. Except
as provided in paragraph 7 above, no adjustment shall be made for dividends or other rights for
which the record date is prior to the date a Share certificate is issued to Grantee pursuant to an
exercise of the SAR. The existence of this Agreement shall not affect in any way the right or power
of the Company or its stockholders 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
securities ahead of or affecting the Shares of the Company 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 other act or proceeding, whether of a similar character or otherwise.

11. Determination of Board of Directors. This Agreement is subject to all the terms and
conditions of the Plan, and specifically to the power of the Executive Compensation Committee (the
“Committee”) appointed by the Board of Director’s of the Company to administer and interpret the
Plan and all rights granted thereunder. In the event of any conflict between the Plan and this
Agreement, the provisions of the Plan shall control. Grantee agrees that any dispute or
disagreement which shall arise under or as a result of or pursuant to this Agreement or the Plan
shall be determined by the Committee in its reasonable discretion, and that any good faith
determination, interpretation or other action by the Committee, or in its absence, by the Board of
Directors of the Company, relating to this Agreement or the Plan shall be final, binding and
conclusive for all purposes and upon all parties, including Grantee.

12. Defined Terms. Terms utilized in this Agreement that are not otherwise defined herein
have the same meaning as set forth in the Plan.

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13. Notices. Any notices required or permitted to be given pursuant to this Agreement must
be given in writing and mailed by first class mail or be hand delivered. All notices to the Company
shall be effective only upon receipt by an officer of the Company and any notices given by the
Company shall be deemed to be received by Grantee on the third day after the date of such notice.

14. Parties Bound. This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns, and all references herein to either the
Company or the Grantee shall be deemed to include any successor or successors, whether immediate or
remote.

15. Governing Law and Enforcement. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the United States of America and the State of Texas.

16. Captions. The headings or captions of this Agreement and the Plan have been included
for ease of reference only and are not to be considered in the construction or interpretation of
this Agreement or the Plan or any section or clause contained herein or therein.

17. Separate Agreement. Any and all SAR or other rights granted to Grantee hereunder shall
be deemed to be in addition to and separate and apart from any SAR or other rights granted to
Grantee under any separately existing or other like agreement.

     IN WITNESS WHEREOF, this Agreement has been executed and delivered as of the date and year
first above written.

	 	 	 	 	 
	TARRAGON CORPORATION,	 	 
	a Nevada corporation	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	GRANTEE:	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	 

4exv10w2

 

Exhibit 10.2

INCENTIVE STOCK OPTION AGREEMENT

     This INCENTIVE STOCK OPTION AGREEMENT (“Agreement”) is entered into effective as of the ___
day of ___, 20___(the “Date of Grant”), between TARRAGON CORPORATION, a Nevada corporation (the
“Company”), and ___, an individual (the “Optionee”).

     WHEREAS, the Company has adopted, with the approval of its stockholders, the Tarragon
Corporation Omnibus Plan (such Plan, as same may hereinafter be amended, is referred to as the
“Plan”), a copy of which will be provided to Optionee at any time upon request; and

     WHEREAS, in order to achieve the objectives of the Plan, and to secure the continuing services
of Optionee, the Company wishes to grant to Optionee an “Incentive Stock Option” (as that term is
defined in the Plan and Section 422 of the Internal Revenue Code of 1986, as amended, to purchase
certain shares of the common stock of the Company, $.01 par value (the “Shares”), exercisable for
the period and upon the terms hereinafter set out.

     ACCORDINGLY, in consideration of the foregoing premises, the mutual promises hereinafter set
forth, and other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Company and Optionee agree as follows:

     1. Grant of Option. Subject to the terms and conditions of this Agreement and the
Plan, the Company hereby grants to Optionee the Option to purchase ___Shares of the Company, at
a price of $______ per share (the “Exercise Price”).

     2. Term of Option; Vesting. Except as otherwise provided herein, Optionee shall have
the right to acquire Shares under this Agreement beginning one calendar year and one day after the
Date of Grant and continuing through the “Termination Date” (as that term is defined in paragraph
6), to the extent of the number of Shares covered by this Option multiplied by twenty percent (20%)
and by the number of full calendar years which have elapsed since the Date of Grant, until the
fifth anniversary of the Date of Grant, and thereafter to the extent of the full number of Shares
covered by this Option. Optionee may exercise this Option from time to time, in whole or in parts
of no fewer than one hundred (100) shares (or the total remaining shares covered by this Option if
less than 100), at the election of the Optionee, but only with respect to those Shares for which
the appropriate time has elapsed as set forth herein.

     3. Condition Precedent. As a condition precedent to the right to acquire Shares of
the Company pursuant to this Option, Optionee agrees to use or continue to use his or her best
lawful efforts for the benefit of the Company and its subsidiaries during the term of this Option.

     4. Method of Exercise; Payment. This Option may be exercised from time to time, as
provided above, by delivering, to the Secretary or Treasurer of the Company, written notice of
intention to exercise and full payment of the amount of the Exercise Price for the number of Shares
of the Company with respect to which the Option is being exercised. Payment may be made (i) by
cash, certified check or the equivalent thereof acceptable to the Company, or (ii) by delivery of
Shares of the Company owned by Optionee at least six (6) months or longer on the date of exercise
(which Shares shall be valued for purposes of payment at the “Fair Market Value” thereof, as
defined in the Plan), or (iii) by a combination of such methods of payment.

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     5. Limitation on Transferability. This Option is personal to Optionee, and may not be
sold, transferred, assigned, pledged, hypothecated or otherwise disposed of in any way (whether by
operation of law or otherwise) except as otherwise provided by the laws of descent and
distribution. Any attempt to sell, transfer, assign, pledge or hypothecate or otherwise dispose of
this Option contrary to the provisions of this Agreement and the Plan, or upon levy or any
attachment or similar process upon this Option or Optionee’s rights hereunder, this Option and such
rights shall immediately become null, void and of no further force or effect.

     6. Termination Date. This Option and all rights granted under this Agreement, to the
extent those rights have not been exercised, will terminate and become null and void at 5:00 p.m.,
Central Standard Time, on the date ten (10) calendar years following the Date of Grant (the
“Termination Date”) or sooner if the relationship of Optionee to the Company ceases for any reason
(including discharge by the Company or its Advisor). In the event of termination of Optionee’s
relationship to the Company for any reason other than Optionee’s death, Optionee may exercise the
Option at any time within ninety (90) calendar days following the date of such termination, to the
same extent the Option was exercisable by Optionee on the date of termination, but not otherwise.
If Optionee dies while employed by the Company or one of its subsidiaries or within the ninety (90)
calendar day period following termination of such relationship, the person or persons to whom his
or her rights under the Option shall pass, whether by will or by the applicable laws of descent and
distribution, may exercise such Option, to the extent Optionee was entitled to exercise it on the
date of his death, for a period of one hundred eighty (180) calendar days following Optionee’s date
of death. Notwithstanding anything in this Agreement to the contrary, this Option and all rights
granted by this Agreement shall in all events terminate and become null and void on the Termination
Date.

     7. Securities Laws. By accepting this Option and executing this Agreement, Optionee
acknowledges (a) that this Option is a “restricted” security within the meaning of the Securities
Act of 1933, as amended, and may not be transferred except as provided herein; (b) that upon
exercise of this Option, Optionee may receive “restricted” securities of the Company; (c) that the
Company may register shares of common stock under the Plan, but is under no obligation to register
the Shares of the Company which are the subject of this Option; and (d) that at the time of
exercise of this Option, in whole or in part, Optionee may be required to execute an Investment
Representation Letter or such other written representations concerning his or her intentions for
the retention or disposition of the Shares of the Company being acquired by the exercise, as, in
the opinion of counsel to the Company, shall be necessary or advisable to insure that any
disposition of the Shares acquired through the exercise will not involve the violation of the
Securities Act of 1933, as amended, any applicable state securities or blue sky laws, any similar
or superseding statute or statutes, or any applicable federal or state statute or regulation, as
then in effect.

     8. Adjustment of Number of Shares. The number of Shares subject hereto and the
Exercise Price per Share shall be proportionately adjusted for any increase or decrease in the
number of issued Shares of the Company resulting from the subdivision or consolidation of Shares,
or the payment of stock dividends after the Date of Grant, or other increases or decreases in the
number of Shares outstanding effected without receipt of consideration by the Company; provided,
however, that any Option to purchase fractional shares resulting from such adjustments shall be
eliminated. The issuance by the Company of any Shares of any class, or any securities convertible
into Shares of any class, for cash or property, or for labor or services, either upon direct sale
or upon the exercise of rights or warrants subscribed therefor, or upon conversion of Shares or
obligations of the Company convertible into such Shares or other securities, shall not affect, and
no adjustment by reason thereof shall be made with respect to, the number of Shares of the Company
subject to this Option.

2

 

     9. Merger and Consolidation. Upon any merger or consolidation where the Company is the
surviving entity, this Option shall continue in accordance with its terms except that, upon any
exercise of this Option (or any substitute Option), Optionee shall be entitled to receive, in lieu
of Shares of the Company, the amount of securities or other consideration received in the merger or
consolidation by holders of the same number and class of Shares of the Company as may be exercised
by Optionee under this Option.

     10. Change of Control. In the event of a Change in Control, as hereinafter
defined, of the Company, this Option shall become immediately exercisable as of the date of such
Change in Control, to the extent of the total Shares covered by this Option, and shall remain
exercisable through the Termination Date. For purposes of this Agreement, a “Change in Control”
shall be deemed to occur: (i) upon the approval by the Board of Directors of the Company (or if
approval of the Board is not required as a matter of law, the shareholders of the Company) of (A)
any consolidation or merger of the Company in which the Company is not the continuing or surviving
entity or pursuant to which the Shares would be converted into cash, securities or other property
other than a merger in which the holders of the Shares immediately prior to the merger will have
the same proportionate ownership of the shares of the surviving entity immediately after the
merger, (B) any sale, lease, exchange, or other transfer (in one transaction or a series of related
transactions) of all or substantially all the assets of the Company, or (C) adoption of any plan or
proposal for the liquidation or dissolution of the Company; or (ii) when any “person” (as defined
in Section 13(d) of the Exchange Act), other than the Company or any Subsidiary or employee benefit
plan or trust maintained by the Company, shall become the “beneficial owner” (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of more than 40% of the Shares outstanding
at the time, without the prior approval of the Board; or (iii) at any time during a period of two
consecutive years, individuals who at the beginning of such period constituted the Board shall
cease for any reason to constitute at least a majority thereof, unless the election or the
nomination for election by the shareholders of each new director during such two-year period was
approved by a vote of at least two-thirds of the directors then still in office who were directors
at the beginning of such two-year period.

     11. Rights of Optionee. The Optionee shall not be deemed for any purpose to be a
stockholder of the Company with respect to any of the Shares covered by this Option, except to the
extent that this Option shall have been exercised with respect thereto. Except as provided in
paragraph 8, no adjustment shall be made for dividends or other rights for which the record date is
prior to the date a stock certificate is issued to Optionee. The existence of this Option shall
not affect in any way the right or power of the Company or its stockholders 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 securities ahead of or affecting the Shares of the
Company 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 act or proceeding, whether of a
similar character or otherwise.

     12. Determination of Board of Directors. This Option is subject to all the terms and
conditions of the Plan, and specifically to the power of the Committee appointed by the Board of
Director’s of the Company to administer and interpret the Plan and Options granted thereunder. In
the event of any conflict between the Plan and this Agreement, the provisions of the Plan shall
control. Optionee agrees that any dispute or disagreement which shall arise under or as a result
of or pursuant to this Option, Agreement or the Plan shall be determined by the Committee in its
reasonable discretion, and that any good faith determination, interpretation or other action by the
Committee, or in its absence, by the Board of Directors of the Company, relating to this Option,
Agreement or the Plan shall be final, binding and conclusive for all purposes and upon all parties,
including Optionee.

3

 

     13. Defined Terms. Terms utilized in this Agreement which are not otherwise defined
herein have the same meaning as set forth in the Plan.

     14. Notices. Any notices required or permitted to be given pursuant to this Agreement
must be given in writing and mailed by first class mail or be hand delivered. All notices to the
Company shall be effective only upon receipt by an officer of the Company and any notices given by
the Company shall be deemed to be received by Optionee on the third day after the date of such
notice.

     15. Parties Bound. This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns, and all references herein to either
the Company or the Optionee shall be deemed to include any successor or successors, whether
immediate or remote.

     16. Governing Law and Enforcement. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the United States of America and the State of Texas.

     17. Captions. The headings or captions of this Agreement and the Plan have been
included for ease of reference only and are not to be considered in the construction or
interpretation of this Agreement or the Plan or any section or clause contained herein or therein.

     18. Separate Agreement. Any and all Option rights granted to Optionee hereunder
shall be deemed to be in addition to and separate and apart from any Option rights granted to
Optionee under any separately existing Incentive Stock Option or other like agreement.

     IN WITNESS WHEREOF, this Agreement has been executed and delivered as of the date and year
first above written.

	 	 	 	 	 
	TARRAGON CORPORATION,	 	 
	a Nevada corporation	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	OPTIONEE:	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	 

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