Exhibit 10.12
OPTION AGREEMENT
This Option Agreement
(“Agreement”), made and entered into as of
(the “Date of Grant”), is by and between Approach
Resources Inc., a Delaware corporation (the “Company”),
and
(the “Optionee”).
WITNESSETH:
WHEREAS, the Company has adopted that
certain 2003 Stock Option Plan (the “Plan”) effective
as of January 1, 2003 (the “Plan Date”) for
certain employees of the Company; and
WHEREAS, the Optionee is an employee
of the Company eligible to participate in the Plan and the Board of
Directors of the Company, as administrator of the Plan, has
determined that the Company should recognize the potential
contributions that the Optionee may make to the success of the
Company by granting him an option to purchase shares of Common
Stock in the Company pursuant to the Plan and upon the terms set
forth herein;
NOW, THEREFORE, in consideration of
the premises and of the mutual covenants and agreements hereinafter
set forth, the Company and Optionee hereby agree as follows:
1. Certain Definitions .
Terms used in this Agreement and not otherwise defined shall have
the respective meanings assigned to such terms in the Plan.
2. The Plan . The terms
and provisions of the Plan are hereby incorporated into this
Agreement as if set forth herein in their entirety. In the event of
a conflict between any provision of this Agreement and the Plan,
the provisions of the Plan shall control. A copy of the Plan may be
obtained from the Company by the Optionee upon request. Capitalized
terms used herein and not otherwise defined shall have the meanings
ascribed thereto in the Plan.
3. Grant of Option .
Subject to the terms and conditions hereinafter set forth, the
Company hereby irrevocably grants to the Optionee the right and
option (the “Option”) to purchase
shares (“Option Shares”) of Common Stock.
4. Option Price . The
price to be paid by Optionee to the Company for each Option Share
purchased pursuant to the exercise of this Option (“Option
Price”) shall be $
.
5. Vesting of Right to
Exercise Option . Subject to earlier vesting of the Option
Shares pursuant to the Plan, 33 1 / 3 % of the
Option Shares shall vest immediately, 33 1 / 3 % of the
Option Shares shall vest on
and the remaining 33 1 / 3 % of the
Option Shares shall vest on
.
6. Restrictions on
Exercise . The right to exercise the Option shall be subject to
the following restrictions:
(a) Vesting . Optionee
shall have no right to exercise this Option to purchase any Option
Shares for which Optionee’s rights have not yet vested in
accordance with Section 5.
(b) No Fractional Option
Shares . The Option may be exercised only with respect to full
Option Shares.
(c) Compliance with Law
. The Option may not be exercised in whole or in part, and no
Option Shares shall be issued nor certificates representing such
Option Shares delivered pursuant to any exercise of the Option, if
any requisite approval or consent of any governmental authority of
any kind having jurisdiction over the exercise of options or the
issuance and sale of Option Shares shall not have been obtained or
if such exercise or issuance would violate any applicable
law.
(d) Exercise by Optionee
. The Option shall be exercisable only by the Optionee, any
representative of the Optionee, and by any transferee who has
received such Option in accordance with the Plan.
7. Exercise of Option
.
(a) Subject to the other terms
and provisions of this Agreement, the Option shall be exercisable
by written notice timely given to the Company by the Optionee,
which notice (i) shall state the number of Option Shares that
the Optionee then desires to purchase, and (ii) shall be
accompanied by payment in full of the Option Price for each of such
Option Shares, which such payment shall be made in cash or
certified check.
(b) The Company shall be
entitled to require the Optionee to deliver to the Company such
documents as the Company in its discretion shall deem necessary to
confirm that (i) such exercise and the Company’s
issuance and sale of such Option Shares are in compliance with the
requirements of any applicable laws (including, but not limited to,
the Securities Act of 1933, as amended (the “Securities
Act”) all applicable state securities or “blue
sky” laws (“State Law”)), and (ii) the
Optionee shall be bound by and comply with all of the terms and
provisions of the Stockholders Agreement.
(c) Unless the Company and
Optionee shall make mutually acceptable alternative arrangements,
at the time of exercise of the Option, Optionee shall pay to the
Company, in cash, any federal, state and local taxes required by
law to be paid or withheld in connection with such exercise.
8. Recapitalization or
Reorganization . The existence of this Option shall not affect
in any way the right or power 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 of, or share exchange involving, the Company, any
issuance of additional Company securities with priority over the
Common Stock or otherwise affecting the Common Stock or the rights
thereof, the dissolution or liquidation of the Company’s
Common Stock 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.
9. Termination of Option
. The Option shall terminate at such time as set forth in the
Plan.
2
10. Restriction on Transfer
of Option . The Option may not be sold, assigned, hypothecated
or
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