1
Exhibit 10.8
ANKER COAL GROUP, INC.
1997 OMNIBUS STOCK INCENTIVE PLAN
STOCK OPTION GRANT AGREEMENT
This Grant Agreement (the "Agreement") is entered into this ____ day of
______________, 199___, to be effective _____________, 19___ (the "Grant Date"),
by and between Anker Coal Group, Inc., a Delaware corporation (the "Company"),
and ____________________________________ ("Grantee").
Grantee and the Company agree that the grant of options hereunder and the
purchase and sale of Stock upon exercise thereof are intended to comply with the
exemption from registration provided by Rule 701 of the Securities Act of 1933
and each shall use his or its best efforts to comply with Rule 701.
Unless otherwise defined herein, capitalized terms used in this Agreement
shall have the meanings given to them in the Plan.
ARTICLE 1
GRANT OF OPTION
Section 1.1 Grant of Options. Subject to the provisions of this Agreement
and pursuant to the provisions of the Plan, the Company hereby grants to Grantee
as of the Grant Date a Non-Qualified Stock Option (the "Option") to purchase all
or any part of _______ shares of voting common stock of the Company (the
"Stock") at an exercise price of $______ per share (the "Exercise Price"), which
is equal to the Fair Market Value of the Stock on the Grant Date.
Section 1.2 Term of Options. Unless the Option granted pursuant to Section
1.1 hereof terminates earlier pursuant to other provisions of the Agreement or
the Plan, the Option shall expire at 5:00 p.m. Eastern Time on the day prior to
the tenth (10th) anniversary of its Grant Date.
ARTICLE 2
VESTING
Section 2.1 Vesting Schedule. Unless the Option has earlier terminated
pursuant to the provisions of the Agreement or the Plan, Grantee shall become
vested in the underlying shares of Stock exercisable under the Option in
accordance with the schedule below, provided, however, that Grantee shall have
been in the continuous employ of the Company or an Affiliate from the Grant Date
through the specified anniversary of such Grant Date:
2
Anniversary of Grant Date Percentage Vested
------------------------- -----------------
Third 100%
Section 2.2 Acceleration of Vesting. Unless the Option has earlier
terminated pursuant to the provisions of the Agreement, vesting of the Option
granted hereunder shall be accelerated so that the Grantee shall become one
hundred percent (100%) vested in the unvested portion of the Option upon the
earlier to occur of: (i) Grantee's termination of employment with the Company or
an Affiliate on account of death, disability (as defined in the Company's long
term disability plan) or normal retirement at age 65 or otherwise pursuant to
the Company's policy, (ii) Grantee's involuntary termination of employment with
the Company or an Affiliate during the ninety (90)-day period immediately
following the date the Company merges with another entity, (iii) Grantee's
voluntary termination of employment at any time after the expiration of the one
(1) year period immediately following the date the Company merges with another
entity, or (iv) a Change of Control, as defined in the Plan.
ARTICLE 3
EXERCISE F OPTION
Section 3.1 Exercisability of Option. No portion of the Option granted to
Grantee shall be exercisable by Grantee prior to the time such portion of the
Option has vested.
Section 3.2 Manner of Exercise. The vested portion of the Option may be
exercised, in whole or in part, by delivering written notice to the Board in
accordance with Section 6.8 hereof in such form as the Board may require from
time to time and by delivering to the Board the Option Exercise Letter attached
as Exhibit A hereto, executed by Grantee. Such notice shall specify the number
of shares of Stock subject to the Option as to which the Option is being
exercised, and shall be accompanied by full payment of the Exercise Price of the
shares of Stock as to which the Option is being exercised. Payment of the
Exercise Price shall be made in cash (or cash equivalents acceptable to the
Board in the Board's discretion). In the Board's sole and absolute discretion,
the Board may authorize payment of the Exercise Price to be made, in whole or in
part, by such other means as the Board may prescribe. The Option may be
exercised only in multiples of whole shares and no partial shares shall be
issued.
Section 3.3 Issuance of Shares upon Exercise. Upon exercise of the Option,
in whole or in part, in accordance with the terms of the Agreement and upon
payment of the Exercise Price for the shares of Stock as to which the Option is
exercised, the Company shall issue to Grantee the number of shares of Stock so
paid for, in the form of fully paid and nonassessable Stock. The stock
certificates for any shares of Stock issued hereunder shall, unless such shares
are registered or an exemption from registration is available under applicable
federal and state law, bear a legend restricting transferability of such shares.
2
3
ARTICLE 4
TERMINATION OF OPTION
Section 4.1 Termination of Employment for Reason Other Than Death,
Disability or Retirement. Unless the Option has earlier terminated pursuant to
the provisions of the Agreement, the Option granted to Grantee shall terminate
in its entirety, regardless of whether the Option is vested in whole or in part,
three (3) months after the date Grantee is no longer employed by the Company or
an Affiliate for any reason other than Grantee's death, disability or
retirement.
Notwithstanding the foregoing, the Option granted to Grantee shall
terminate in its entirety, regardless of whether the Option is vested in whole
or in part, upon termination of Grantee's employment by the Company or an
Affiliate for "cause", as defined hereinafter. For purposes of this Section 4.1,
"Cause" means the termination of Grantee's employment by the Company or an
Affiliate because of (i) a felony conviction; (ii) the commission of an act of
fraud or embezzlement against the Company or an Affiliate; (iii) willful
misconduct which is materially detrimental to the Company or an Affiliate; (iv)
continued failure to implement reasonable requests or directions arising from
actions of the Board after thirty (30) days written notice to Grantee; (v)
wrongful dissemination of confidential or proprietary information; or (vi) the
intentional and habitual neglect by Grantee of his or her duties to the Company
or an Affiliate. The good faith determination by the Board of whether Grantee's
employment or other service relationship was terminated by the Company for
"cause" shall be final and binding for all purposes hereunder.
Section 4.2 Upon Grantee's Death or Disability. Unless the Option has
earlier terminated pursuant to the provisions of the Agreement, upon Grantee's
death or disability, Grantee or Grantee's executor, personal representative, the
person to whom the Option shall have been transferred by will or the laws of
descent and distribution, or such other permitted transferee, as the case may
be, may exercise all or any part of the outstanding Option, provided such
exercise occurs within one (1) year after the date of Grantee's death or
disability, as the case may be, but not later than the end of the stated term of
the Option.
Section 4.3 Termination of Employment by Reason of Retirement. Unless the
Option has earlier terminated pursuant to the provisions of the Agreement, in
the event Grantee ceases, by reason of retirement, to be an employee of the
Company or an Affiliate, all or any part of the outstanding Option may be
exercised any time within six (6) months after the date of retirement, but not
later than the stated term of the Option. For purposes of this Agreement,
retirement shall mean retirement from active employment with the Company or an
Affiliate pursuant to the normal or early retirement policies and procedures of
the Company or an Affiliate.
3
4
ARTICLE 5
COMPANY'S CALL RIGHTS AND RIGHT OF FIRST REFUSAL
Section 5.1 Call Rights of Company. So long as the Stock is not publicly
traded, the Company shall have the right to purchase, and Grantee shall have the
corresponding obligation to sell, upon delivery of written notice to Grantee,
any or all of Grantee's Options and any or all of the shares of Stock then owned
by Grantee, ownership of which shares was acquired through exercise of the
Option. The purchase price of shares of Stock pursuant to this Section 5.1 shall
be the Fair Market Value of such shares of Stock as of the date the Company
mails or otherwise delivers such written notice to Grantee. The purchase price
of any Options pursuant to this Section 5.1 shall be the difference between the
Exercise Price per share and the Fair Market Value of one share of Stock,
measured as of the date the Company mails or otherwise delivers such written
notice to Grantee, multiplied by the number of shares to which the Option
relates that are being purchased.
The provisions of this Section 5.1 shall apply in the event of
Grantee's death, to Grantee's executor, personal representative or the person to
whom the Option and/or shares of Stock shall have been transferred by will or
the laws of descent and distribution, as though such person is Grantee.
Section 5.2 Company's Right of First Refusal. So long as the Stock is not
publicly traded, the Stock issued upon exercise of the Option shall be subject
to a right of first refusal pursuant to which Grantee shall be required to
provide written notice to the Company of Grantee's intention to dispose of all
or any portion of such Stock. The written notice shall contain information
regarding the identity of the proposed purchaser or purchasers (the "Proposed
Purchaser(s)"), the number of shares of Stock subject to the proposed
transaction, the proposed price and terms of sale and the proposed closing date
of such sale.
For a period of thirty (30) days after the receipt by the Company of
the written notice specified above, the Company shall have a right of first
refusal to purchase the Stock subject to the proposed disposition at the price
and on the terms offered by the Proposed Purchaser(s). The Company must exercise
its right to purchase by giving written notice to the Grantee and to the
Proposed Purchaser(s) within thirty (30) days following receipt of the notice,
which notice shall specify the number of shares of Stock the Company intends to
purchase.
The closing of the purchase and sale pursuant to this Section 5.2
shall be held at the Company's principal office on the date determined by the
Company but not more than thirty (30) days following the Company's election to
purchase the Stock. At the closing, certificates representing the shares to be
sold shall be delivered to the Company, duly endorsed for transfer in blank or
with assignments separate from certificates duly endorsed, with all necessary
transfer tax stamps, if any, affixed or provided for against delivery of the
purchase price.
If the Company does not exercise its purchase rights within the time
period provided herein with respect to all of the offered Stock, Grantee shall
be free for a period of thirty (30) days thereafter to sell such shares to the
Proposed Purchaser(s), at the same price and on the same terms and conditions as
set forth in the notice, subject to all of the provisions of this Section 5.2.
If Grantee shall not, within such thirty (30) day period, consummate the sale
with the Proposed
4
5
Purchaser(s) in accordance with the terms of this Section 5.2, any subsequent
sale by Grantee to the Proposed Purchaser(s) or to any other purchaser on the
same or other terms and conditions must comply again with the provisions of this
Section 5.2.
ARTICLE 6
MISCELLANEOUS
Section 6.1 Non-Guarantee of Employment. Nothing in the Plan or the
Agreement shall be construed as a contract of employment between the Company (or
an Affiliate) and Grantee, or as a contractual right of Grantee to continued
employment with the Company or an Affiliate, or as a limitation of the right of
the Company or an Affiliate to terminate Grantee's employment at any time.
Section 6.2 No Rights of Stockholder. Grantee shall not have any of the
rights of a stockholder with respect to the shares of Stock that may be issued
upon the exercise of the Option until such shares of Stock have been issued to
him upon the due exercise of the Option.
Section 6.3 Withholding of Taxes. The Company or any Affiliate shall have
the right to deduct from any compensation or any other payment of any kind
(including withholding the issuance of shares of Stock) due Grantee the amount
of any federal, state or local taxes required by law to be withheld as the
result of the exercise of the Option; provided, however, that the value of the
shares of Stock withheld may not exceed the statutory minimum withholding amount
required by law. In lieu of such deduction, the Board may require Grantee to
make a cash payment to the Company or an Affiliate equal to the amount required
to be withheld. If Grantee does not make such payment when requested, the
Company may refuse to issue any Stock certificate under the Plan until
arrangements satisfactory to the Board for such payment have been made.
Section 6.4 Nontransferability of Option. The Option shall be
nontransferable otherwise than by will or the laws of descent and distribution,
and during the lifetime of Grantee, the Option may be exercised only by Grantee
or, during the period Grantee is under a legal disability, by Grantee's guardian
or legal representative.
Section 6.5 Agreement Subject to Charter, By-Laws and Governing Laws. This
Agreement is subject to the Charter and By-Laws of the Company, and any
applicable Federal or state laws, rules or regulations, including without
limitation, the laws, rules, and regulations of the State of Delaware, other
than the conflict of laws principles thereof.
Section 6.6 Gender. As used herein the masculine shall include the
feminine as the circumstances may require.
5
6
Section 6.7 Headings. The headings in the Agreement are for reference
purposes only and shall not affect the meaning or interpretation of the
Agreement.
Section 6.8 Notices. All notices and other communications made or given
pursuant to the Agreement shall be in writing and shall be sufficiently made or
given if hand delivered or mailed by certified mail, addressed to Grantee at the
address contained in the records of the Company, or addressed to the Board, care
of the Company for the attention of its Secretary at its principal office or, if
the receiving party consents in advance, transmitted and received via telecopy
or via such other electronic transmission mechanism as may be available to the
parties.
Section 6.9 Entire Agreement; Modification. The Agreement contains the
entire agreement between the parties with respect to the subject matter
contained herein and may not be modified, except as provided in the Plan or in a
written document signed by each of the parties hereto.
Section 6.10 Conformity with Plan. This Agreement is intended to conform
in all respects with, and is subject to all applicable provisions of, the Plan,
which is incorporated herein by reference. Unless stated otherwise herein,
capitalized terms in this Agreement shall have the same meaning as defined in
the Plan. Inconsistencies between this Agreement and the Plan shall be resolved
in accordance with the terms of the Plan. In the event of any ambiguity in the
Agreement or any matters as to which the Agreement is silent, the Plan shall
govern.
Section 6.11 Governing Law. The validity, construction and effect of this
Agreement shall be determined exclusively in accordance with the laws of the
State of Delaware, without regard to its conflict of laws rules and principles.
IN WITNESS WHEREOF, the parties have executed the Agreement as of the date
first above written.
ATTEST: ANKER COAL GROUP, INC.
_____________________________ By: ______________________________
WITNESS: GRANTEE
_____________________________ __________________________________
6
7
EXHIBIT A
OPTION EXERCISE LETTER
To: Anker Coal Group, Inc.
Pursuant to the provisions of the Stock Option Grant Agreement (the
"Agreement"), the undersigned Grantee (the "Undersigned") hereby exercises the
option to purchase _____________________________ shares of the Common Stock (the
"Shares") of Anker Coal Group, Inc. (the "Company") and delivers to the Company
herewith the sum of $_____________ (by certified or official bank check payable
to the order of the Company) in payment in full for those shares.
The Undersigned hereby represents and warrants to, and agrees with, the
Company, as follows:
(a) The Undersigned is acquiring the Shares for the Undersigned's own
account, for investment purposes only, not for the account of any other person,
and not with a view to the distribution, assignment or resale of the Shares to
others or to fractionalization in whole or in part. The Undersigned has been
advised that the Shares have not been registered under the Securities Act of
1933, as amended (the "Act"), or under the securities laws of any state, on the
ground that no distribution or public offering of the Shares is to be effected,
and that in this connection, the Company is relying on the Undersigned's
representations and agreements contained in the Agreement.
(b) The Undersigned understands that the Undersigned must bear the
economic risk of an investment in the Shares for an indefinite period of time
because the Shares have not been registered under the Act or under any
applicable state securities laws. In addition to the other restrictions on
transfer set forth in the Agreement, the Undersigned agrees that the Undersigned
will not offer, sell, pledge or otherwise dispose of the Shares except pursuant
to (i) an effective registration statement under the Act and qualification under
applicable state securities laws, or (ii) pursuant to an exemption from the
registration requirements of the Act and applicable state securities laws.
(c) The Undersigned understands that (i) the Shares are "restricted
securities" as defined in Rule 144 under the Act; (ii) the provisions of Rule
144 are not presently available to permit resales of the Shares, and it is
unlikely that the conditions necessary to permit sales under Rule 144 will ever
be satisfied; (iii) even if Rule 144 should become available, routine sales made
in reliance upon its provisions could be made only in limited amounts and in
accordance with the terms of Rule 144; and (iv) the Company is under no
obligation to register the Shares in a public offering or to comply with the
conditions of Rule 144 or to take any other action necessary in order to make an
exemption for the sale of the Shares without registration available.
(d) The Undersigned understands and acknowledges that legal counsel for
the Company does not represent the Undersigned in connection with the
transactions contemplated in the Agreement. The Undersigned has carefully
considered and to the extent the Undersigned believes such discussion necessary,
discussed with the Undersigned's professional legal, tax, accounting and
financial advisers,
7
8
the suitability of an investment in the Company for the Undersigned's particular
tax and financial situation. The Undersigned has determined that the Shares
being acquired by the Undersigned are a suitable investment for the Undersigned.
(e) The Undersigned has been given the opportunity to ask questions of,
and receive answers from, the executive officers of the Company regarding the
terms and conditions of the offering of the Shares and the Company. The
Undersigned has been furnished with and has carefully reviewed the following
documents concerning the Company: (i) the Company's 1997 Omnibus Stock Incentive
Plan, (ii) the Amended and Restated Certificate of Incorporation of the Company,
including the Certificates of Designation of the Class A Preferred Stock, Class
B Preferred Stock, Class C Preferred Stock and Class D Preferred Stock, (iii)
the First Restated and Amended Bylaws of the Company, (iv) Financial Statements
of the Company for the period ended _________________, and (v) the Stock Option
Grant Agreement and all documents delivered pursuant hereto. In addition, the
executive officers of the Company have made available to the Undersigned all
other documents and information that the Undersigned has requested relating to
an investment in the Company.
(f) The Undersigned has adequate means of providing for his current needs
and possible personal or family contingencies, and has no need for liquidity in
his investment in the Shares. The Undersigned is financially able to bear the
economic risk of this investment, and consequently, the Undersigned is able to
hold the Shares for an indefinite period of time. The Undersigned understands
that he may loose his entire investment in the Shares and the Undersigned has a
sufficient net worth to bear the loss of the entire investment in the Shares in
the event such loss should occur.
Please forward a certificate or certificates for the Shares purchased
hereby at the address shown below.
Date: __________________ __________________________________
Holder
Address:
__________________________________
__________________________________
__________________________________
8