Document:

exv10w3

 

Exhibit 10.3

THE SECURITIES REPRESENTED BY THIS DOCUMENT HAVE NOT BEEN REGISTERED WITH THE UNITED STATES
SECURITIES AND EXCHANGE COMMISSION UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “1933
ACT”), AND ARE “RESTRICTED SECURITIES” AS THAT TERM IS DEFINED IN RULE 144 UNDER THE 1933 ACT. THE
SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER THE 1933 ACT.

DOUBLE EAGLE PETROLEUM AND MINING CO.

STOCK OPTION AGREEMENT

(Directors’)

     THIS STOCK OPTION AGREEMENT (the “Agreement”) is made and entered into as of the
24th day of January, 2002 by and between Double Eagle Petroleum Co., a Maryland
corporation (the “Company”), and Beth McBride (the “Optionee”).

WITNESSETH:

     WHEREAS, the Company agreed to issue to Optionee an option to purchase shares of the $.10 par
value common stock of the Company (“Common Stock”), said option to be for the number of shares, at
the price per share and on the terms set forth in this Agreement; and

     WHEREAS, the Optionee desires to receive an option on the terms and conditions set forth in
this Agreement.

     NOW, THEREFORE, the parties agree as follows:

     1. Grant Of Option. The Company hereby grants to the Optionee the right and option
(the “Option”) to purchase all or any part of an aggregate of 5,000 shares of the authorized and
unissued $.10 par value common stock of the Company (the “Option Shares”) pursuant to the terms and
conditions set forth in this Agreement.

     2. Option Price. At any time when shares are to be purchased pursuant to the Option,
the purchase price for each Option Share shall be $3.80 (the “Option Price”), subject to adjustment
as provided in this Agreement.

     3. Exercise Period. The period for the exercise of the Option shall commence on the
date of this Agreement and shall terminate at 5:00 p.m., Denver, Colorado time on January 24, 2005
unless terminated earlier as provided in this Agreement. Notwithstanding the foregoing, to the
extent not earlier terminated, the Option shall terminate three months after the date the Optionee
no longer serves on the Board of Directors of the Company.

     4. Exercise Of Option.

          (a) The Option may be exercised in whole or in part by delivering to the Treasurer of the
Company (i) a Notice And Agreement Of Exercise Of Option, substantially in the form attached hereto
as Exhibit A, specifying the number of Option Shares with respect to which the Option is exercised,
and (ii) full payment of the Option Price for such shares. Payment shall be made by certified
check or cleared

 

 

funds. The Option may not be exercised in part unless the purchase price for the Option
Shares purchased is at least $1,000 or unless the entire remaining portion of the Option is being
exercised.

          (b) Promptly upon receipt of the Notice And Agreement Of Exercise Of Option together with the
full payment of the Option Price, the Company shall deliver to the Optionee a properly executed
certificate or certificates representing the Option Shares being purchased.

     5. Withholding Taxes. The Company may take such steps as it deems necessary or
appropriate for the withholding of any taxes which the Company is required by any law or regulation
or any governmental authority, whether federal, state or local, domestic or foreign, to withhold in
connection with the Option including, but not limited to, the withholding of all or any portion of
any payment owed by the Company to the Optionee or the withholding of issuance of Option Shares to
be issued upon the exercise of the Option.

     6. Securities Laws Requirements. No Option Shares shall be issued unless and until,
in the opinion of the Company, there has been full compliance with, or an exemption from, any
applicable registration requirements of the Securities Act of 1933, as amended (the “1933 Act”),
any applicable listing requirements of any securities exchange on which stock of the same class has
been listed, and any other requirements of law or any regulatory bodies having jurisdiction over
such issuance and delivery, or applicable exemptions are available and have been complied with.
Pursuant to the terms of the Notice And Agreement Of Exercise Of Option (Exhibit A) that shall be
delivered to the Company upon each exercise of the Option, the Optionee shall acknowledge,
represent, warrant and agree as follows:

          (a) Optionee is acquiring the Option Shares for investment purposes only and the Option Shares
that Optionee is acquiring will be held by Optionee without sale, transfer or other disposition for
an indefinite period unless the transfer of those securities is subsequently registered under the
federal securities laws or unless exemptions from registration are available;

          (b) Optionee’s overall commitment to investments that are not readily marketable is not
disproportionate to Optionee’s net worth and Optionee’s investment in the Option Shares will not
cause such overall commitments to become excessive;

          (c) Optionee’s financial condition is such that Optionee is under no present or contemplated
future need to dispose of any portion of the Option Shares to satisfy any existing or contemplated
undertaking, need or indebtedness;

          (d) Optionee has sufficient knowledge and experience in business and financial matters to
evaluate, and Optionee has evaluated, the merits and risks of an investment in the Option Shares;

          (e) The address set forth on the signature page to this Agreement is Optionee’s true and
correct residence, and Optionee has no present intention of becoming a resident of any other state
or jurisdiction;

          (f) Optionee confirms that all documents, records and books pertaining to an investment in the
Option and the Option Shares that have been requested by Optionee have been made available or
delivered to Optionee. Without limiting the foregoing, Optionee has received and reviewed the
Company’s periodic reports as filed with the Securities And Exchange Commission, and Optionee has
had the opportunity to discuss the acquisition of the Option and the Option Shares with the
Company, and Optionee has obtained or been given access to all information concerning the Company
that Optionee has requested;

 

 

          (g) Optionee has had the opportunity to ask questions of, and receive the answers from, the
Company concerning the terms of the investment in the Option Shares and to receive additional
information necessary to verify the accuracy of the information delivered to Optionee, to the
extent that the Company possesses such information or can acquire it without unreasonable effort or
expense;

          (h) Optionee understands that the Options have not, and the Option Shares issuable upon
exercise of the Options will not be, registered under the 1933 Act or any state securities laws in
reliance on an exemption for private offerings, and no federal or state agency has made any finding
or determination as to the fairness of this investment or any recommendation or endorsement of the
sale of the Option Shares;

          (i) The Option Shares that Optionee is acquiring will be solely for Optionee’s own account,
for investment, and are not being purchased with a view to or for the resale, distribution,
subdivision or fractionalization thereof. Optionee has no agreement or arrangement for any such
resale, distribution, subdivision or fractionalization thereof;

          (j) Optionee acknowledges and is aware of the following:

               (i) The Company has a history of losses. The Option Shares constitute a
speculative investment and involve a high degree of risk of loss by Optionee of
Optionee’s total investment in the Option Shares.

               (ii) There are substantial restrictions on the transferability of the Option
Shares. The Option is not transferable except by will or the laws of descent and
distribution, and any attempt to do so shall void the Option. The Option Shares
cannot be transferred, pledged, hypothecated, sold or otherwise disposed of unless
they are registered under the 1933 Act or an exemption from such registration is
available and established to the satisfaction of the Company; investors in the
Company have no rights to require that the Option Shares be registered; there is no
right of presentment of the Option Shares and there is no obligation by the Company
to repurchase any of the Option Shares; and, accordingly, Optionee may have to hold
the Option Shares indefinitely and it may not be possible for Optionee to liquidate
Optionee’s investment in the Company.

               (iii) Unless the issuance of the Option Shares is registered, each certificate
issued representing the Option Shares shall be imprinted with a legend that sets
forth a description of the restrictions on transferability of those securities,
which legend will read substantially as follows:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION
UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”),
AND ARE ‘RESTRICTED SECURITIES’ AS THAT TERM IS DEFINED IN RULE 144
UNDER THE 1933 ACT. THE SECURITIES MAY NOT BE OFFERED FOR SALE,
SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE 1933 ACT, OR PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE 1933 ACT.”

              The restrictions described in this Section 6 or notice thereof may be placed on the
certificates representing the Option Shares purchased pursuant to the Option, and the Company may
refuse

 

 

to issue the certificates or to transfer the shares on its books unless it is satisfied that
no violation of such restrictions will occur.

     7. Adjustment By Stock Split, Stock Dividend, Etc. If at any time the Company
increases or decreases the number of its outstanding shares of common stock, or changes in any way
the rights and privileges of such shares, by means of the payment of a stock dividend or the making
of any other distribution on such shares payable in its common stock, or through a stock split or
subdivision of shares, or a consolidation or combination of shares, or through a reclassification
or recapitalization involving its common stock, the numbers, rights and privileges of the shares of
common stock included in the Option shall be increased, decreased or changed in like manner as if
such shares had been issued and outstanding, fully paid and nonassessable at the time of such
occurrence and the Option Price shall be correspondingly decreased, increased or otherwise changed.
Whenever the number or kind of shares comprising the Option Shares or the Option Price is
adjusted, the Company shall promptly give written notice and a certificate of the Chief Financial
Officer or President of the Company to each holder of record of the outstanding Options, stating
that such an adjustment has been effected and setting forth the number and kind of shares
purchasable and the amount of the then-current Option Price, and stating in reasonable detail the
facts requiring such adjustment and the calculation of such adjustment.

     8. Reorganization And Reclassification. In case of any capital reorganization or any
reclassification of the capital stock of the Company while the Options remain outstanding, the
holder of the Options shall thereafter be entitled to purchase pursuant to the Options (in lieu of
the kind and number of shares of Common Stock comprising Option Shares that such holder would have
been entitled to purchase or acquire immediately before such reorganization or reclassification)
the kind and number of shares of stock of any class or classes or other securities or property for
or into which such shares of Common Stock would have been exchanged, converted, or reclassified if
the Option Shares had been purchased immediately before such reorganization or reclassification.
In case of any such reorganization or reclassification, appropriate provision (as determined by
resolutions of the Board of Directors of the Company) shall be made with respect to the rights and
interest thereafter of the holder of the Options, to the end that all the provisions of this Option
Agreement (including adjustment provisions) shall thereafter be applicable, as nearly as reasonably
practicable, in relation to such stock or other securities or property.

     9. Registration Rights. Optionee shall have no registration rights unless otherwise
agreed by the Company.

     10. Common Stock To Be Received Upon Exercise. Optionee understands that (a) the
Company is under no obligation to register the issuance of the Option Shares, and (b) in the
absence of any such registration, the Option Shares cannot be sold unless they are sold pursuant to
an exemption from registration under the 1933 Act. Optionee also understands that with respect to
Rule 144, routine sales of securities made in reliance upon such Rule can be made only in limited
amounts in accordance with the terms and conditions of the Rule, and that in cases in which the
Rule is inapplicable, compliance with either Regulation A or another disclosure exemption under the
1933 Act will be required. Thus, the Option Shares will have to be held indefinitely in the
absence of registration under the 1933 Act or an exemption from registration.

          Furthermore, the Optionee fully understands that issuance of the Option Shares will not be
registered under the 1933 Act and that, because the issuance of the Option Shares will not be
registered, the Option Shares will be issued in reliance upon an exemption which is available only
if Optionee acquires such shares for investment and not with a view to distribution. Optionee is
familiar with the phrase “acquired for investment and not with a view to distribution” as it
relates to the 1933 Act and the special meaning given to such term in various releases of the
Securities And Exchange Commission.

 

 

     11. Privilege Of Ownership. Optionee shall not have any of the rights of a
stockholder with respect to the shares covered by the Option except to the extent that one or more
certificates for such shares shall be delivered to him upon exercise of the Option.

     12. Relationship To Employment. Nothing contained in this Agreement (i) shall confer
upon the Optionee any right with respect to continuance of Optionee’s employment by, or affiliation
with, or relationship to, the Company, or (ii) shall interfere in any way with the right of the
Company at any time to terminate the Optionee’s employment by, position or affiliation with, or
relationship to, the Company.

     13. Notices. All notices, requests, demands, directions and other communications
(“Notices”) concerning this Agreement shall be in writing and shall be mailed or delivered
personally or sent by telecopier or facsimile to the applicable party at the address of such party
set forth below in this Section 13. When mailed, each such Notice shall be sent by first class,
certified mail, return receipt requested, enclosed in a postage prepaid wrapper, and shall be
effective on the fifth business day after it has been deposited in the mail. When delivered
personally, each such Notice shall be effective when delivered to the address for the respective
party set forth in this Section 13, provided that it is delivered on a business day and further
provided that it is delivered prior to 5:00 p.m., local time of the party to whom the notice is
being delivered, on that business day; otherwise, each such Notice shall be effective on the first
business day occurring after the Notice is delivered. When sent by telecopier or facsimile, each
such Notice shall be effective on the day on which it is sent provided that it is sent on a
business day and further provided that it is sent prior to 5:00 p.m., local time of the party to
whom the Notice is being sent, on that business day; otherwise, each such Notice shall be effective
on the first business day occurring after the Notice is sent. Each such Notice shall be addressed
to the party to be notified as shown below:

	 	 	 	 	 
	(a)

	 	if to the Company:
	 	Double Eagle Petroleum And Mining Co.
	

	 	 	 	777 Overland Trail
	

	 	 	 	Casper, Wyoming 82602
	

	 	 	 	Facsimile No. (307) 266-1823
	

	 	 	 	Attention: President
	 
	 	 	 	 
	(b)

	 	if to the Optionee:
	 	Beth McBride
	

	 	 	 	At the address set forth on the signature page of
this Agreement

          Either party may change its respective address for purposes of this Section 13 by giving the
other party Notice of the new address in the manner set forth above.

     14. General Provisions. This instrument (a) contains the entire agreement between the
parties, (b) may not be amended nor may any rights hereunder be waived except by an instrument in
writing signed by the party sought to be charged with such amendment or waiver, (c) shall be
construed in accordance with, and governed by the laws of Wyoming, and (d) shall be binding upon
and shall inure to the benefit of the parties and their respective personal representatives and
assigns, except as above set forth. All pronouns contained herein and any variations thereof shall
be deemed to refer to the masculine, feminine or neuter, singular or plural as the identity of the
parties hereto may require.

 

 

     IN WITNESS WHEREOF, the parties have executed this Agreement on the dates set forth below.

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	DOUBLE EAGLE PETROLEUM CO.
	 
	 	 	 	 	 	 	 	 
	Date:

	 	 	 	 	 	By:
	 	/s/ Stephen H. Hollis
	 	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	 	 	     Stephen H. Hollis, President
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	OPTIONEE:
	 
	 	 	 	 	 	 	 	 
	Date:

	 	 	 	 	 	By:
	 	/s/ Beth McBride<PAGE>

                                                                   EXHIBIT 10.12

                   DESCRIPTION OF DIRECTOR COMPENSATION POLICY

CASH COMPENSATION

      Each director of Liberty Media International, Inc. (LMI) who is not an
employee of LMI (a Nonemployee Director) is entitled to a fee of $1,000 for each
board meeting he attends. In addition, the chairman and each other member of the
audit committee of LMI's board of directors is entitled to a fee of $5,000 and
$2,000, respectively, for each audit committee meeting he attends. Each member
of the compensation committee is entitled to a fee of $1,000 for each committee
meeting he attends, and each member of the nominating and corporate governance
committee is entitled to a fee of $1,000 for each committee meeting he attends.
These fees are payable in cash. LMI also reimburses members of its board for
travel expenses incurred to attend any meetings of its board or any committee
thereof.

OPTIONS AWARDS

      Following each annual meeting of LMI stockholders, each director who
qualifies as a Nonemployee Director will be granted options to acquire 3,000
shares of LMI Series A common stock. All of these options will be granted
pursuant to the Liberty Media International, Inc. 2004 Nonemployee Director
Incentive Plan, will vest on the first anniversary of the applicable grant date
and will be granted at an exercise price equal to the fair market value of LMI
Series A common stock. The date on which such grants are made is referred to as
the Annual Grant Date. During 2004, the Annual Grant Date was deemed to be June
22, 2004.

      If a director who qualifies as a Nonemployee Director joins the LMI board
following the Annual Grant Date applicable to the year in which he joins the LMI
board, the Nonemployee Director will be granted options to acquire 3,000 shares
of LMI Series A common stock effective on the date on which he joins the LMI
board. All of these options will be granted pursuant to the Liberty Media
International, Inc. 2004 Nonemployee Director Incentive Plan, will vest on the
first anniversary of the grant date applicable to his award and will be granted
at a per share exercise price equal to the fair market value of LMI Series A
common stock.

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