EXHIBIT NO. 4.8
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NONSTATUTORY STOCK OPTION AGREEMENT
AGREEMENT dated as of the 15th day of May, 1996, between COMSTOCK
RESOURCES, INC., a Nevada corporation (the "Company"), and Herbert C. Pell, III
("Optionee").
WHEREAS, Optionee has served as a member of the Board of Directors of the
Company for eight years and is retiring as a director; and
WHEREAS, the Company desires to grant Optionee certain stock options in
consideration of Optionee's service to the Company.
NOW, THEREFORE, in consideration of the mutual agreements and other matters
set forth herein, the Company and the Optionee hereby agree as follows:
1. Grant of Option. The Company hereby irrevocably grants to Optionee the
right and option ("Option") to purchase all or any part of an aggregate of
20,000 shares of common stock, $.50 par value, of the Company (the "Stock"), on
the terms and conditions set forth herein. This Option shall not be treated as
an incentive stock option within the meaning of Section 422(b) of the Internal
Revenue Code of 1986, as amended (the "Code").
2. Purchase Price. The purchase price of Stock purchased pursuant to the
exercise of this Option shall be $6.5625 per share (the "Purchase Price").
3. Exercise of Option. During the period commencing on the date that is six
months following the date hereof and ending on the Termination Date (as defined
in Paragraph 5 below), this Option may be exercised by Optionee, in full or in
part from time to time, by surrender of this Option, with the form of
subscription at the end hereof duly executed by Optionee, to the Company at its
principal executive office, accompanied by payment in the amount obtained by
multiplying (a) the number of shares of Stock designated by Optionee by (b) the
Purchase Price; and Optionee shall thereupon be entitled to receive the number
of shares so designated. Upon any partial exercise of this Option, the Company
at its expense will forthwith issue and deliver to Optionee a new Option of like
tenor, in the name of Optionee, calling in the aggregate on the face or faces
thereof for the number of shares of Stock equal to the number of such shares
called for on the face of this Option minus the number of such shares which have
previously been designated by Optionee in the form of subscription at the end
hereof in connection with previous exercises by Optionee. The Purchase Price of
shares as to which this Option is exercised shall be paid in full at the time of
exercise in cash or by bank cashier's check, bank draft or money order payable
to the order of the Company. No fraction of a share of Stock shall be issued by
the Company upon exercise of this Option or accepted by the Company in payment
of the Purchase Price thereof; rather, Optionee shall provide a cash payment for
such amount as is necessary to effect the issuance and acceptance of only whole
shares of Stock. Unless and until a certificate or certificates representing
such shares shall have been issued by the Company to Optionee, Optionee shall
not be or have any of the rights or privileges of a shareholder of the Company
with respect to shares acquirable upon an exercise of this Option.
4. Nontransferable. This Option is not transferable by Optionee without the
prior written consent of the Company. Notwithstanding the foregoing, Optionee
may transfer all or any part of Optionee's interest in this Option by gift of
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inheritance to no more than three family members of the Optionee; trusts,
corporations, partnerships or other entities in which a family member of the
Optionee owns a majority of the beneficial interest provided that the transferee
agrees in a writing delivered to the Company to assume all of the obligations of
the transferring Optionee under this Option and agrees to accept the terms and
conditions of this Agreement by a written agreement to that effect. A "family
member" for purposes of this Paragraph 4 shall include only the Optionee's
spouse, parents, siblings, children and descendants. Paragraph 4 shall include
naturally born children, children who are legally adopted prior to attaining
eighteen (18) years of age, and stepchildren. "Descendants" for purposes of this
Paragraph 4 shall include descendants through all generations and shall include
blood descendants, descendants of stepchildren and persons adopted by their
parent prior to attaining eighteen (18) years of age.
5. Termination of Option. This option will terminate and cease to be
exercisable five years following the date of this Agreement (the "Termination
Date").
6. Withholding of Tax. To the extent that the exercise of this Option or
the disposition of shares of Stock acquired by exercise of this Option results
in income subject to federal or state income tax withholding, Optionee shall
deliver to the Company at the time of such exercise or disposition such amount
of money or shares of Stock as the Company may require to meet its obligations
under applicable tax laws or regulations, and, if Optionee fails to do so, the
Company is authorized to withhold from any cash or Stock remuneration then or
thereafter payable to Optionee any tax required to be withheld by reason of such
resulting income. Upon an exercise of this Option, the Company is further
authorized in its discretion to satisfy any such withholding requirement out of
any cash or share of Stock distributable to Optionee upon such exercise.
7. Status of Stock. Optionee acknowledges that this Option has been granted
by the Company in consideration of Optionee's service to the Company and further
acknowledges and understands that at the time of the execution of this Agreement
neither the Option nor the shares of Stock to be issued upon exercise of this
Option have been registered under the Securities Act of 1933, as amended (the
"Act"), or any state securities law. The Company will not issue such shares
unless the Company can secure, at its expense, a written opinion of legal
counsel, who shall be satisfactory to the Company, addressed to the Company and
satisfactory in form and substance to the Company's counsel, to the effect that
the proposed issuance of such shares to Optionee may be made without
registration under the Act. In the event exemption from registration under the
Act is available upon an exercise of this Option, Optionee (or the person
permitted to exercise this Option in the event of Optionee's death), if
requested by the Company to do so, will execute and deliver to the Company in
writing an agreement containing such provisions as the Company may require to
assure compliance with applicable securities laws.
Optionee agrees that the shares of Stock which Optionee may acquire by
exercising this Option shall be acquired for investment without a view to
distribution, within the meaning of the Act, and shall not be sold, transferred,
assigned, pledged or hypothecated in the absence of an effective registration
statement for the shares under the Act, and applicable state securities laws or
an applicable exemption from the registration requirements of the Act and any
applicable state securities laws. Optionee also agrees that the shares of Stock
which Optionee may acquire by exercising this Option will not be sold or
otherwise disposed of in any manner which would constitute a violation of any
applicable securities laws, whether federal or state.
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In addition, Optionee agrees (i) that the certificates representing the
shares of Stock purchased under this Option may bear such legend or legends as
the Company deems appropriate in order to assure compliance with applicable
securities laws, (ii) that the Company may refuse to register the transfer of
the shares of Stock purchased under this Option on the stock transfer records of
the Company if such proposed transfer would in the opinion of counsel
satisfactory to the Company constitute a violation of any applicable securities
laws and (iii) that the Company may give related instructions to its transfer
agent, if any, to stop registration of the transfer of the shares of Stock
purchased under this Option.
8. Recapitalization or Reorganization.
(a) The existence of the Option granted hereunder shall not affect in any
way the right or power of the Board of Directors or the shareholders of the
Company to make or authorize any adjustment, recapitalization, reorganization or
other change in the Company's capital structure or its business, any merger or
consolidation or the Company, any issue of debt or equity securities ahead of or
affecting Stock or the rights thereof, the dissolution or liquidation of the
Company or any sale, lease, exchange or other disposition of all or any part of
its assets or business or any other corporate act or proceeding.
(b) The shares with respect to which this Option has been granted are
shares of Stock as presently constituted, but if, and whenever, prior to the
expiration of this Option, the Company shall effect a subdivision or
consolidation of shares of Stock or the payment of a stock dividend on Stock
without receipt of consideration by the Company, the number of shares of Stock
with respect to which this Option may thereafter be exercised (i) in the event
of an increase in the number of outstanding shares shall be proportionately
increased, and the Purchase Price per share shall be proportionately reduced,
and (ii) in the event of a reduction in the number of outstanding shares shall
be proportionately reduced, and the Purchase Price per share shall be
proportionately increased.
(c) If the Company recapitalizes or otherwise changes it capital structure,
thereafter upon any exercise of this Option, Optionee shall be entitled to
purchase under this Option, in lieu of the number of shares of Stock as to which
this Option shall then be exercisable, the number and class of shares of stock
and securities to which Optionee would have been entitled pursuant to the terms
of the recapitalization if, immediately prior to such recapitalization, Optionee
had been the holder of record of the number of shares of Stock as to which this
Option was then exercisable. In the event of any reorganization or consolidation
of the Company with, or any merger of the Company with or into, another
corporation (other than a reorganization, consolidation or merger in which the
Company is a surviving corporation) or in case of any sale or transfer to
another corporation of all or substantially all of the assets of the Company,
the corporation resulting from such reorganization or consolidation or surviving
such merger or to which such sale or transfer shall be made, as the case may be,
shall make suitable provision (which shall be fair and equitable to the holder
of this Option) and shall assume the obligations of the Company hereunder (by
written instrument executed and mailed to the holder of this Option then
outstanding) pursuant to which, upon exercise of this Option, at any time after
the consummation of such reorganization, consolidation, merger or conveyance,
the holder shall be entitled to receive the stock or other securities or
property which such holder would have been entitled to upon consummation if such
holder had exercised this Option immediately prior thereto.
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(d) Any adjustment provided for in Subparagraphs (b) or (c) above shall be
subject to any required shareholder action.
(e) Except as hereinbefore expressly provided, the issuance by the Company
of shares of stock of any class or securities convertible into shares of stock
of any class, for cash, property, labor or services, upon conversion of shares
or obligations of the Company convertible into such shares or other securities,
and in any case whether or not for fair value, shall not affect, and no
adjustment by reason thereof shall be made with respect to, the number of shares
of Stock subject to this Option or the Purchase Price per share.
9. Reservation of Stock, etc. The Company will at times reserve and keep
available, solely for issuance and delivery upon the exercise of this Option,
all shares of Stock from time to time issuable upon the exercise of this Option
at the time outstanding. All shares of Stock issuable upon the exercise of this
Option shall be duly authorized, validly issued, fully paid and nonassessable
with no liability on the part of the holder hereof.
10. Binding Effect. This Agreement shall be binding upon and inure to the
benefit of any successors to the Company and all persons lawfully claiming under
Optionee.
11. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Texas.
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed by its officer thereunto duly authorized, and Optionee has executed
this Agreement, all as of the day and year first above written.
COMSTOCK RESOURCES, INC.
By: /s/M. JAY ALLISON
M. Jay Allison, President
/s/HERBERT C. PELL, III
Herbert C. Pell, III
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