EXHIBIT 10.31
Grantee: Lew P. Murray Grant Date: Jan. 1, 2000
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Number of Shares: 60,000 Expiration Date: Jan. 1, 2010
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Exercise Price Per Share: $ 0.01 Option Number: 057
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MILLER EXPLORATION COMPANY
STOCK OPTION AND RESTRICTED STOCK PLAN OF 1997
STOCK OPTION AGREEMENT
This Stock Option Agreement (the "AGREEMENT") is made as of the Grant
Date set forth above between MILLER EXPLORATION COMPANY, a Delaware corporation
(the "COMPANY"), and the grantee named above ("GRANTEE").
The Miller Exploration Company Stock Option and Restricted Stock Plan
of 1997 (the "PLAN") is administered by the Stock Plan Committee of the
Company's Board of Directors or such other committee (the "COMMITTEE") as the
Board of Directors shall designate to administer the Plan, which shall consist
of at least two members of the Board, all of who are Non-Employee Directors, as
defined in Rule 16b-3 under the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT"). The Committee has determined that Grantee is eligible to
participate in the Plan. The Committee has granted stock options to Grantee,
subject to the terms and conditions contained in this Agreement and in the Plan.
Grantee acknowledges receipt of a copy of the Plan and accepts these
options subject to all of the terms, conditions, and provisions of this
Agreement and the Plan.
1. GRANT. The Company grants to Grantee an option to purchase shares of
the Company's Common Stock, $.01 par value ("COMMON STOCK"), as set forth above,
to be issued upon exercise of this option in accordance with the terms and
conditions set forth in this Agreement. This option is NOT an incentive stock
option as defined in Section 422(b) of the Internal Revenue Code of 1986, as
amended.
2. TERM AND DELAYED VESTING. Grantee's conditional right to exercise
this option shall vest and be exercisable when the normal trading average of the
stock on the market remains above the designated values for a period of five
consecutive trading days as follows:
Five Day Daily Average Target Percentage Vested
$2.00 40%
$2.75 30%
$3.50 30%
In each case appropriately rounded to the closest whole share except that the
total shall be as set forth above. The Committee may, in its sole discretion,
accelerate the vesting of the option at any time before full vesting. If the
Company's headquarters are moved from Traverse City, Michigan, Grantee's delayed
vesting shall be accelerated and to the extent not previously terminated,
Grantee may thereafter exercise all of this outstanding unexercised option.
Grantee's right to exercise this option shall terminate on the Expiration Date
set forth above, unless earlier terminated as set forth in the Plan or this
Agreement.
3. PAYMENT BY GRANTEE. The Exercise Price per share shall be the amount
set forth above, subject to adjustment as provided in the Plan and this
Agreement. Grantee may pay the purchase price in cash or, if the Committee
consents, in shares of the Company's Common Stock (including Common Stock to be
received upon a simultaneous exercise). With Grantee's consent, the Committee
may amend the time and terms of payment before or after the exercise of the
option, but any such amendment shall not reduce the option price. The Committee
may authorize payment of all or a portion of the option price in the form of a
promissory note or installments according to such terms as the Committee may
approve. The Board of Directors may restrict or suspend the power of the
Committee to permit such loans and may require that adequate security be
provided.
4. REGISTRATION AND LISTING. The stock options granted under this
Agreement are conditional upon the effective registration or exemption of the
Plan and the options granted under the Plan and the stock to be received upon
exercise of options pursuant to the Plan under the Securities Act of 1933, as
amended (the "SECURITIES ACT") and applicable state or foreign securities laws.
5. EXERCISE OF OPTION. Grantee may exercise this option by giving the
Company written notice of the exercise of this option. The notice shall set
forth the number of shares to be purchased, and shall be effective when received
by the corporate Secretary at the Company's main office, accompanied by full
payment of the option price. The Company will deliver to Grantee a certificate
or certificates for such shares out of previously authorized but unissued shares
or reacquired shares of its Common Stock, as it may elect; provided, however,
that the time of delivery shall be postponed for such period as may be required
for the Company with reasonable diligence to comply with any registration
requirements under the Securities Act, the Exchange Act, and any requirements
under any other law, regulation, or agreement applicable to the issuance,
listing, or transfer of such shares. If Grantee fails to accept delivery of and
pay for all or any part of the number of shares specified in the notice upon
tender or delivery of the shares, Grantee's right to exercise the option with
respect to such undelivered shares shall terminate. In such event, Grantee's
remaining options not yet exercised or terminated shall continue in force.
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6. TERMINATION OF EMPLOYEE STATUS.
(a) TERMINATION FOR GOOD REASON. If Grantee's employment is
terminated by the Company or a subsidiary for any reason other than
disability, death or cause, Grantee may exercise the option for a period of
90 days after the date Grantee ceases to be an employee, but only to the
extent that Grantee was entitled to exercise the option on the date Grantee
ceased to be an employee unless the Committee otherwise consents. If
Grantee terminates employment with the Company for good reason (as defined
in any agreement between Grantee and the Company), all of Grantee's
unvested options will be deemed to have vested on the day immediately
preceding such termination.
(b) DISABILITY OR DEATH. If Grantee dies or becomes disabled, Grantee
or his or her personal representative may exercise the option for a period
of one year after the date Grantee ceases to be an employee, but only to
the extent that Grantee was entitled to exercise the option on the date
Grantee ceased to be an employee unless the Committee otherwise consents.
(c) TERMINATION FOR CAUSE. If Grantee is terminated for cause,
Grantee's right to exercise this option shall terminate. If the Committee
determines that Grantee has entered into competition with the Company or
any of its subsidiaries, Grantee's right to exercise any outstanding
options shall terminate as of the date of entry into competition. The
Committee shall have sole discretion in making such determination, and may
prevent exercise of the option during any period of determination of the
facts of the matter.
7. ADJUSTMENT PROVISIONS. If the number of shares of Common Stock
outstanding changes by reason of any stock dividend, stock split,
recapitalization, merger, consolidation, combination, exchange of shares, or any
other change in the corporate structure or shares of the Company, the aggregate
number and class of shares available under this Agreement and subject to each
option, together with the exercise price, shall be adjusted appropriately by the
Committee. No fractional shares shall be issued pursuant to the Plan, and any
fractional shares resulting from adjustments shall be eliminated from the
respective option award, with an appropriate cash adjustment for the value of
any option eliminated. If an option is canceled, surrendered, modified,
expired, or terminated during the term of the Plan but prior to the exercise or
vesting of the option in full, the shares subject to but not delivered under the
option shall be available for other option awards.
8. STOCKHOLDER RIGHTS. Grantee shall have no rights as a stockholder
with respect to any shares covered by this option until exercise of the option
and payment for such shares. Grantee shall have no claim to be granted any
stock option, and there is no obligation of uniformity of treatment among
Grantees or holders or beneficiaries of options.
9. TRANSFERABILITY. Unless the Committee otherwise consents, no option
granted under the Plan and this Agreement may be sold, transferred, pledged,
assigned, or otherwise alienated or
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hypothecated, other than by will or by the laws of descent and distribution. All
options granted to Grantee during Grantee's lifetime shall be exercisable during
Grantee's lifetime only by such Grantee, his or her guardian, or legal
representative. The Committee may impose such other restrictions on any shares
acquired pursuant to this option as it may deem advisable, including, without
limitation, restrictions under applicable federal and state securities laws.
10. CERTIFICATIONS. Grantee hereby represents and warrants that Grantee
is acquiring the option granted under this Agreement for Grantee's own account
and investment and without any intent to resell or distribute the shares upon
exercise of the option. Grantee shall not resell or distribute the shares
received upon exercise of the option except in compliance with such conditions
as the Company reasonably may specify to ensure compliance with federal and
state securities laws.
11. EFFECTIVE DATE. This option shall be effective as of the Grant Date
set forth above.
12. WITHHOLDING. Grantee consents to any applicable tax withholding
required by reason of this agreement or the vesting of the options hereunder,
and shall make appropriate provision for the same.
13. BINDING EFFECT; AMENDMENT. This Agreement shall be binding upon, and
shall inure to the benefit of, the parties to this Agreement and their
respective heirs, successors, and permitted assigns. This option shall not be
modified except in a writing executed by the parties to this Agreement.
14. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.
15. PLAN CONTROLS. The Plan is incorporated by reference into this
Agreement. Capitalized terms not defined in this Agreement shall have those
meanings provided in the Plan. In the event of any conflict between the terms
of this Agreement and the terms of the Plan, the provisions of the Plan shall
control.
MILLER EXPLORATION COMPANY
By /s/ Kelly E. Miller
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Its President
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I have received a copy of the Stock Option Agreement concerning the
grant of 60,000 shares on January 1, 2000 and agree to receive stock options
according to the terms of such agreement.
/s/ Lew P. Murray
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Signature
Lew P. Murray
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Print name
(Please detach this page after signing and return to Miller Exploration
Company)
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