Exhibit
10.23
NON-QUALIFIED STOCK OPTION
AGREEMENT
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OPTION NO.
_____
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TO
PURCHASE ________
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SHARES OF
COMMON STOCK
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($0.01 PAR
VALUE)
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TXCO RESOURCES INC.
INCORPORATED UNDER THE LAWS
OF
THE STATE OF DELAWARE
For valuable
consideration, receipt of which is hereby acknowledged, TXCO
RESOURCES INC., a Delaware corporation (hereinafter
called the "Corporation"), hereby grants to __________
(hereinafter called the "Optionee"), a non-qualified
stock option (hereinafter called the "Option"), subject to the
terms and conditions thereof, and subject to the terms and
conditions of the 2005 Stock Incentive Plan of the Corporation
(hereinafter called the "Plan") which Plan is hereby incorporated
herein by reference. In the event of any conflict
between the terms of the Plan and this Agreement, the terms of the
Plan shall govern.
A. Basic
Terms . This certifies that, for value received, the
registered owner is entitled, subject to the terms and conditions
of this Option and the 2005 Stock Incentive Plan, until the
expiration date, to purchase up to the number of shares of the
Common Stock, par value $.01 (the "Common Stock") from the
Corporation at the purchase price shown below, on delivery of this
Option to the Corporation with the exercise form duly executed and
payment of the Purchase Price: (a) in United
States dollars in cash or by check, bank draft or money order
payable to the order of the
Corporation, (b) by delivering Common Stock
already owned by the Optionee with an aggregate Fair Market Value
on the date of exercise equal to the Option Price,
or (c) by a combination of the above methods
of payment, together with payment or arrangement for payment of any
federal income tax required to be withheld by the
Corporation. If Common Stock is to be delivered as a
payment of part or all of the Option Price, it must be tendered in
accordance with methods determined by the Committee to be
acceptable and appropriate as considered in Section 5.2(b) of the
Plan. As soon as practicable after receipt of such
notice and payment, the Corporation shall, without transfer or
issue tax or other incidental expense to the Optionee, deliver to
Optionee at the office of the Corporation, or such other place as
may be mutually acceptable, or, at the election of the Corporation,
by first class mail addressed to the Optionee at the address shown
in the records of the Corporation, a certificate or certificates
for such shares out of theretofore authorized but unissued shares
or reacquired shares of its Common Stock, as the Corporation may
elect.
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Registered
Owner: __________
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Purchase
Price:$ _____ per Common Share
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Expiration
Date: __________ , unless earlier terminated
pursuant to this paragraph, the paragraph immediately following or
Paragraph K of this Option. If, prior to the Expiration
Date, the Optionee ceases to serve as a director of the
Corporation, this Option shall terminate as to any portion of the
Option not fully vested. This Option shall be void and
of no effect after the Expiration Date.
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Vesting
Schedule:This Option is intended as an incentive to retain the
Optionee as a director of the Corporation. Therefore,
the Optionee shall become fully vested as to one third (1/3) of the
Option, __________ shares, after one
year of continuous service as a director from the date
hereof. The Optionee shall become fully vested as to an
additional one-third (1/3) of the Option, __________
shares, after two years of continuous service as a
director from the date hereof. The Optionee shall become
fully invested as to the remaining one-third (1/3) of the Option,
__________ shares, after three years of
continuous service as a director from the date
hereof. Should the Optionee’s service as a
director be terminated, either voluntarily or involuntarily, any
portion of the Option that has not been fully vested shall be
immediately forfeited. Any portion of the Option that
has been fully vested shall be subject to the terms and conditions
of this Option and the Plan.
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B.
Corporation's Covenants as to Common Stock
. Shares deliverable on the exercise of this Option
shall, at delivery, be fully paid and non-assessable, free from
taxes, liens and charges with respect to their
purchase. The Corporation shall take any necessary steps
to assure that the par value per share of the Common Stock is at
all times equal to or less than the then current Option purchase
price per share of the Common Stock issuable pursuant to this
Option. The Corporation shall at all times reserve and
hold available sufficient shares of Common Stock to satisfy all
conversion and purchase rights of outstanding convertible
securities, options and warrants.
C. Method of
Exercise . The purchase rights represented by this
Option are exercisable at the option of the registered owner in
whole at any time, on or prior to the expiration date, by payment
of the Purchase Price in a manner specified in Paragraph A for each
share purchased. The Corporation may postpone the time
of delivery of certificates for shares for such additional time as
the Corporation shall deem necessary or desirable to enable it to
comply with all applicable laws, regulations, rules, orders and
approvals which shall then be in effect and required by any
governmental entities or any stock exchanges on which the Common
Stock is traded.
D.
Adjustment of Shares Purchasable . The number of
shares purchasable hereunder and the purchase price per share are
subject to adjustment from time to time as specified in this
Option.
E. Limited
Rights of Owner . This Option does not entitle the
owner to any voting rights or other rights as a shareholder of the
Corpor
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