As filed with the Securities and Exchange Commission on December 4, 2006
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
GASTAR EXPLORATION LTD.
(Exact name of Registrant as specified in its charter)
| Alberta, Canada | 38-3324634 | |
|
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification Number) |
1331 Lamar Street, Suite 1080
Houston, Texas 77010
(713) 739-1800
(Address of Principal Executive Offices)
GASTAR EXPLORATION LTD.
2006 LONG-TERM STOCK INCENTIVE PLAN
(Full title of the plan)
J. Russell Porter
Chief Executive Officer and President
1331 Lamar Street, Suite 1080
Houston, Texas 77010
(713) 739-1800
(Name, address, including zip code, and telephone number, including area code, of agent for service)
COPY TO:
T. Mark Kelly
Vinson & Elkins L.L.P.
2300 First City Tower
1001 Fannin
Houston, Texas 77002-6760
CALCULATION OF REGISTRATION FEE
| Title of Securities to be Registered |
Amount to be Registered (1) |
Proposed
Offering Price Per Share (2) |
Proposed Maximum Aggregate Offering Price (2) |
Amount of Registration Fee |
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Common shares, without par value |
5,000,000 | $ | 2.34 | $ | 11,700,000 | $ | 1,251.90 | ||||
| (1) | Pursuant to Rule 416(a) under the Securities Act of 1933, as amended, the number of shares of common stock registered hereby pursuant to the Gastar Exploration Ltd. 2006 Long-Term Stock Incentive Plan is subject to adjustment to prevent dilution resulting from stock splits, stock dividends or similar transactions. |
| (2) | Estimated solely for purposes of calculating the registration fee pursuant to Rule 457. The maximum aggregate offering price is based on the average of the high and low sales prices of the registrant’s common shares on the American Stock Exchange on December 1, 2006. |
PART I
INFORMATION REQUIRED IN SECTION 10(A) PROSPECTUS
The documents containing the information required by Part I of Form S-8 will be sent or given to participants as specified by Rule 428(b)(1) under the Securities Act of 1933, as amended (the “Securities Act”).
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference .
The following documents that we filed with the Securities and Exchange Commission (the “Commission”) pursuant to Section 12, 13(a), or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) are incorporated by reference and made a part of this registration statement:
| • | Our Annual Report on Form 10-K for the year ended December 31, 2005, filed with the Commission on March 31, 2006; |
| • | Our Quarterly Report on Form 10-Q for the quarter ended March 31, 2006, filed with the Commission on May 12, 2006; |
| • | Our Quarterly Report on Form 10-Q for the quarter ended June 30, 2006, filed with the Commission on August 14, 2006; |
| • | Our Quarterly Report on Form 10-Q for the quarter ended September 30, 2006, filed with the Commission on November 14, 2006; |
| • | Our current reports on Form 8-K filed with the Commission on January 5, 2006, January 10, 2006, February 7, 2006, April 13, 2006, August 1, 2006, October 20, 2006, November 15, 2006, November 16, 2006 and November 20, 2006 (excluding any information furnished pursuant to Item 2.02 or Item 7.01 of any such current report on Form 8-K); and |
| • | The description of our common shares contained under the caption “Description of Capital Stock” in our Form 10-K for the year ended December 31, 2005, filed with the Commission on March 31, 2006. |
All documents we file pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act (excluding any information furnished pursuant to Item 2.02 or Item 7.01 on any current report on Form 8-K) subsequent to the effective date of this registration statement, and prior to the filing of a post-effective amendment to this registration statement indicating that all securities offered hereby have been sold or deregistering all securities then remaining unsold, will be deemed to be incorporated by reference herein and to be a part of this registration statement from the date of filing of those documents. Any statement contained in this registration statement or in any document incorporated or deemed to be incorporated by reference in this registration statement shall be deemed to be modified or superseded for purposes of this registration statement to the extent that a statement contained in any other subsequently filed document that also is or is deemed to be incorporated by reference in this registration statement modifies or supersedes that statement. Any statement so modified or superseded shall not be deemed to constitute a part of this registration statement, except as so modified or superseded.
Item 4. Description of Securities .
Not applicable.
Item 5. Interests of Named Experts and Counsel .
Not applicable.
Item 6. Indemnification of Directors and Officers .
The Business Corporations Act (Alberta) and our bylaws provide that we will indemnify each of our directors and officers and any person who acts or acted at our request as a director or officer of a body corporate of which we are or were a shareholder or creditor, and the heirs and legal representatives of each of them, against all costs, charges and expenses reasonably incurred by such director, officer or person, and their respective heirs or legal representatives, in respect of any action or proceeding to which any of them is made a party by reason of such director, officer or person being or having served in that position, if: (1) the director, officer or person acted honestly and in good faith with a view to the best interests of us; and (2) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, the director, officer or person had reasonable grounds for believing that his conduct was lawful. As used above, “costs, charges and expenses” includes but is not limited to the fees, charges and disbursements or legal counsel on an as-between-a solicitor-and-the-solicitor’s-own-client basis and an amount paid to settle an action or satisfy a judgment.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling us under the indemnification arrangements described above, the SEC is of the opinion that this indemnification is against public policy as
Item 7. Exemption from Registration Claimed .
Not applicable.
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Item 8. Exhibits .
|
Exhibit Number |
Description |
|
| 5.1 | Opinion of Sara-Lane Sirey Professional Corporation, Calgary, Alberta, Canada as to the legality of the shares being registered. † | |
| 10.1 | Gastar Exploration Ltd. 2006 Long-Term Stock Incentive Plan. (1) | |
| 10.2 | Form of Stock Option Agreement for Executives, Employees and Directors. * † | |
| 10.3 | Form of Restricted Stock Agreement. † | |
| 10.4 | Form of Stock Appreciation Rights Agreement. † | |
| 10.5 | Form of Stock Appreciation Rights Exercise Notice. † | |
| 23.1 | Consent of Independent Registered Public Accounting Firm. † | |
| 23.2 | Consent of Netherland, Sewell and Associates Inc. † | |
| 23.3 | Consent of Sara-Lane Sirey Professional Corporation, Calgary, Alberta, Canada (Included in Exhibit 5.1). † | |
| 24.1 | Power of Attorney (set forth on the signature page contained in Part II of this registration statement). † | |
| * | Management compensatory plan. |
| † | Filed herewith |
| (1) | Filed as an exhibit to the Company’s Quarterly Report on Form 10-Q, as filed with the Securities and Exchange Commission on August 14, 2006. |
Item 9. Undertakings .
The undersigned registrant hereby undertakes:
| (a) | To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement; |
| (i) | To include any prospectus required by Section 10(a)(3) of the Securities Act; |
| (ii) | To reflect in the prospectus any facts or events arising after the effective date of this registration statement (or the most recent post-effective amendment hereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of a prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; |
| (iii) | To include any material information with respect to the plan of distribution not previously disclosed in this registration statement or any material change to such information in this registration statement; provided, however , that paragraphs (a)(i) and (a)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the SEC by the registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in this registration statement; |
(b) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof;
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(c) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering;
(d) That, for the purposes of determining any liability under the Securities Act, each filing of the registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in this registration statement shall be deemed to be a new registration statement relating to the securities offered herein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof; and
(e) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. If a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act, Gastar Exploration Ltd. certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Houston, State of Texas on December 4, 2006.
| GASTAR EXPLORATION LTD. | ||
| (Registrant) | ||
| By: |
/s/ J. RUSSELL PORTER |
|
| J. Russell Porter | ||
| Chairman, Chief Executive Officer and President | ||
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned officers and directors of GASTAR EXPLORATION LTD. (the “Company”) hereby constitutes and appoints J. Russell Porter and Michael A. Gerlich, or either of them (with full power to each of them to act alone), his true and lawful attorney-in-fact and agent, with full power of substitution, for him and on his behalf and in his name, place and stead, in any and all capacities, to sign, execute and file this Registration Statement under the Securities Act, as amended, and any or all amendments (including, without limitation, post-effective amendments), with all exhibits and any and all documents required to be filed with respect thereto, with the Commission or any regulatory authority, granting unto such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises in order to effectuate the same, as fully to all intents and purposes as he himself might or could do, if personally present, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their substitute or substitutes, may lawfully do or cause to be done.
Pursuant to the requirements of the Securities Act, this Registration Statement has been signed below by the following persons in the capacities indicated below on December 4, 2006.
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Signature |
Title |
Date |
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/s/ J. RUSSELL PORTER J. Russell Porter |
Chairman, Chief Executive Officer, President and Principal Executive Officer) | December 4, 2006 | ||
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/s/ MICHAEL A. GERLICH Michael A. Gerlich |
Vice President and Chief Financial Officer and Director (Principal Financial and Accounting Officer) | December 4, 2006 | ||
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/s/ RICHARD KAPUSCINSKI Richard Kapuscinski |
Director | December 4, 2006 | ||
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/s/ THOMAS CROW Thomas Crow |
Director | December 4, 2006 | ||
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/s/ ABBY BADWI Abby Badwi |
Director | December 4, 2006 | ||
5
EXHIBIT INDEX
|
Exhibit Number |
Description |
|
| 5.1 | Opinion of Sara-Lane Sirey Professional Corporation, Calgary, Alberta, Canada as to the legality of the shares being registered. † | |
| 10.1 | Gastar Exploration Ltd. 2006 Long-Term Stock Incentive Plan. (1) | |
| 10.2 | Form of Stock Option Agreement for Executives, Employees and Directors. * † | |
| 10.3 | Form of Restricted Stock Agreement. † | |
| 10.4 | Form of Stock Appreciation Rights Agreement. † | |
| 10.5 | Form of Stock Appreciation Rights Exercise Notice. † | |
| 23.1 | Consent of Independent Registered Public Accounting Firm. † | |
| 23.2 | Consent of Netherland, Sewell and Associates Inc. † | |
| 23.3 | Consent of Sara-Lane Sirey Professional Corporation, Calgary, Alberta, Canada (Included in Exhibit 5.1). † | |
| 24.1 | Power of Attorney (set forth on the signature page contained in Part II of this registration statement). † | |
| * | Management compensatory plan. |
| † | Filed herewith |
| (1) | Filed as an exhibit to the Company’s Quarterly Report on Form 10-Q, as filed with the Securities and Exchange Commission on August 14, 2006. |
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EXHIBIT 5.1
SARA-LANE SIREY PROFESSIONAL CORPORATION
December 4, 2006
Gastar Exploration Ltd.
1331 Lamar Street, Suite 1080
Houston, Texas 77010
Ladies and Gentlemen:
This opinion is delivered in connection with a Registration Statement on Form S-8, (the “Registration Statement”) of Gastar Exploration Ltd., a corporation organized under the laws of the Province of Alberta, Canada (the “Company”), relating to the registration of up to 5,000,000 common shares of the Company (the “Common Shares”) to be issued upon the exercise of stock options granted under the Company’s 2006 Long Term Stock Incentive Plan (the “Plan”).
In connection with rendering this opinion, we have examined or are familiar with the Articles of Incorporation of the Company, as amended to the date hereof, the Bylaws of the Company, as amended to the date hereof, the corporate proceedings with respect to the issuance of the Common Shares, the Registration Statement, and such other certificates, instruments and documents as we have considered necessary or appropriate for purposes of this opinion. In such examination, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals, conformity to the original documents of all documents submitted to us as copies and the authenticity of the originals of such latter documents. As to any facts material to our opinion, we have, when relevant facts were not independently established, relied upon the aforesaid records, certificates and documents.
Subject to the foregoing and the additional qualifications, limitations and additional assumptions set forth below, we are of the opinion that:
1. The Company is a corporation duly organized and legally existing under the laws of the Province of Alberta, Canada and is in good standing under said laws.
2. The Board of Directors of the Company has approved the Plan.
3. When the Board of Directors authorizes the issuance and the grant of stock options pursuant to the Plan and reserves and authorizes the issuance of the Common Shares upon the exercise of such stock options, the Common Shares issued upon the exercise of such stock options pursuant to the terms and conditions of the Plan and the grant will be duly authorized and validly issued, fully paid and non-assessable.
The opinion expressed herein is limited exclusively to the laws of the Province of Alberta, Canada.
We consent to the filing of this opinion as an exhibit to the Registration Statement.
Yours truly,
Sara-Lane Sirey Professional Corporation
/s/ SARA-LANE SIREY PROFESSIONAL CORPORATION
EXHIBIT 10.2
EXHIBIT A
GASTAR EXPLORATION LTD. 2006 LONG-TERM STOCK INCENTIVE PLAN
STOCK OPTION EXERCISE AGREEMENT
This Exercise Agreement is made this day of , 20 between Gastar Exploration Ltd. (the “Company”), and the optionee named below (the “Optionee”) pursuant to the Gastar Exploration Ltd. 2006 Long-Term Stock Incentive Plan (the “Plan”). Unless otherwise defined herein, the capitalized terms used in this Exercise Agreement shall have the meanings ascribed to them in the Plan and in the Option Agreement to which this Exercise Agreement relates.
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| Number of Shares Purchased: |
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| Price Per Share: |
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| Aggregate Purchase Price: |
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| Date of Grant: |
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| Vesting Commencement Date: |
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| Type of Stock Option: | [ ] Incentive Stock Option | |||
| [ ] Non-Qualified Stock Option | ||||
The Optionee hereby delivers to the Company the Aggregate Purchase Price set forth above in cash as indicated below, or to the extent provided for in the Option Agreement and approved by the Committee by accepting this Exercise Agreement, as follows (as applicable, check and complete):
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in cash in the amount of $ , receipt of which is acknowledged by the Company; | |
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through a “same-day-sale” commitment, delivered herewith, from the Optionee and the NASD Dealer named therein in the amount of $ ; | |
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through a “margin” commitment, delivered herewith, from the Optionee and the NASD Dealer named therein in the amount of $ ; | |
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by surrender for cancellation Qualifying Shares at the Fair Market Value per share at the time of exercise (provided that such surrender does not result in an accounting charge for the Company). | |
The Company and the Optionee (the “Parties”) hereby agree as follows:
1. Purchase of Shares . On this date and subject to the terms and conditions of this Exercise Agreement, the Optionee hereby exercises the Option granted in the Option Agreement between the Parties, dated as
| Gastar Exploration Ltd. | ||
| 2006 Long-Term Stock Incentive Plan – Stock Option Exercise Agreement | Page 1 |
of the Date of Grant set forth above, with respect to the Number of Shares Purchased set forth above of the Common Stock (the “Shares”) at the Aggregate Purchase Price set forth above (the “Aggregate Purchase Price”) equal to the Price Per Share set forth above (the “Purchase Price Per Share”) multiplied by the Number of Shares Purchased set forth above. The term “Shares” refers to the Shares purchased under this Exercise Agreement and includes all securities received (a) in replacement of the Shares, and (b) as a result of stock dividends or stock splits in respect of the Shares.
2. Representations of the Optionee . The Optionee represents and warrants to the Company that the Optionee has received, read and understood the Plan, the Option Agreement and this Exercise Agreement and agrees to abide by and be bound by their terms and conditions.
3. Rights as Shareholder . Until the stock certificate evidencing the Shares is issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a shareholder shall exist with respect to the Shares, notwithstanding the exercise of the Option. The Company shall issue (or cause to be issued) such stock certificate promptly after the Option is exercised. No adjustment will be made for a dividend or other right for which the record date is prior to the date the stock certificate is issued.
4. Tax Withholding Obligations . The Optionee agrees to satisfy all applicable federal, state, and local income, employment, and other tax withholding obligations and herewith delivers to the Company the amount necessary, or has made arrangements acceptable to the Company, to satisfy such obligations as provided in the Plan and the Option Agreement.
5. Tax Consequences . The Optionee understands that he or she may suffer adverse tax consequences as a result of the Optionee’s purchase or disposition of the Shares. The Optionee represents that the Optionee has consulted with any tax consultant(s) he or she deems advisable in connection with the purchase or disposition of the Shares and that Optionee is not relying on the Company for any tax advice.
6. Successors and Assigns . The Company may assign any of its rights under this Exercise Agreement, and this Exercise Agreement shall inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer herein set forth, this Exercise Agreement shall be binding upon the Optionee and his or her heirs, executors, administrators, successors, and permitted assigns.
7. Interpretive Matters . Whenever required by the context, pronouns and any variation thereof shall be deemed to refer to the masculine, feminine, or neuter, and the singular shall include the plural, and vice versa. The term “include” or “including” does not denote or imply any limitation. The captions and headings used in this Exercise Agreement are inserted for convenience and shall not be deemed a part of this Exercise Agreement for construction or interpretation.
8. Dispute Resolution . The provisions of Section 16 of the Option Agreement shall be the exclusive means of resolving disputes arising out of or relating to this Exercise Agreement.
9. Entire Agreement; Governing Law . This Exercise Agreement, together with the Plan and the Option Agreement, constitute the entire agreement of the Parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Parties with respect to the subject matter hereof, and may not be modified adversely to the Optionee’s interest except by means of a writing signed by the Parties. Nothing in this Exercise Agreement or in the Plan or the Option Agreement (except as expressly provided herein or therein) is intended to confer any rights or remedies on any person other than the Parties. This Exercise Agreement (like the Plan and the Option Agreement) is to be construed in accordance with and governed by the internal laws of the State of Texas, without giving effect to any choice-of-law rule that would cause the application of the laws of any jurisdiction other than the internal laws of the State of Texas to the rights and duties of the Parties.
10. Severability and Reformation . The Company intends all provisions of this Exercise Agreement to be enforced to the fullest extent permitted by law. Accordingly, should a court of competent jurisdiction determine that the scope of any provision of this Exercise Agreement is too broad to be enforced as written, the court should
| Gastar Exploration Ltd. | ||
| 2006 Long-Term Stock Incentive Plan – Stock Option Exercise Agreement | Page 2 |
reform the provision to such narrower scope as it determines to be enforceable. If, however, any provision of this Exercise Agreement is held to be wholly illegal, invalid, or unenforceable under present or future law, such provision shall be fully severable and severed, and this Exercise Agreement shall be construed and enforced as if such illegal, invalid, or unenforceable provision were never a part hereof, and the remaining provisions of this Exercise Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid, or unenforceable provision or by its severance.
11. Notice . Any notice or other communication required or permitted hereunder shall be given in writing and shall be deemed given, effective, and received upon prepaid delivery in person or by courier or upon the earlier of delivery or the third business day after deposit in the United States mail if sent by certified mail, with postage and fees prepaid, addressed to the other Party at its address as shown beneath its signature in the Option Agreement, or to such other address as such Party may designate in writing from time to time by notice to the other Party in accordance with this Section 11.
12. Further Instruments . Each Party agrees to execute such further instruments and to take such further action as may be necessary or reasonably appropriate to carry out the purposes and intent of this Exercise Agreement.
| Submitted by: | Accepted by: | |||||||
| OPTIONEE: |
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GASTAR EXPLORATION LTD. | ||||||
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(signature) |
By: |
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| Its: |
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| Dated:s |
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Dated: |
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| Gastar Exploration Ltd. | ||
| 2006 Long-Term Stock Incentive Plan – Stock Option Exercise Agreement | Page 3 |
EXHIBIT 10.3
Award Number :
GASTAR EXPLORATION LTD. 2006 LONG-TERM STOCK INCENTIVE PLAN
RESTRICTED STOCK AGREEMENT
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Grantee: |
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Address: |
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Total Shares Subject to Restricted Stock Award: |
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Date of Award: |
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Vesting Commencement Date: |
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Expiration of the Restriction Period (Vesting): |
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1. Issuance of Stock . Gastar Exploration Ltd., a Canadian corporation (the “Company”), hereby agrees to issue to the Grantee named above, and the Grantee hereby accepts, an award (the “Award”) of the shares of Common Stock set forth above as the Total Shares Subject to Restricted Stock Award (the “Shares”), in accordance with this Restricted Stock Agreement and subject to the terms and conditions of the Gastar Exploration Ltd. 2006 Long-Term Stock Incentive Plan (the “Plan”), which are incorporated herein by reference. Unless otherwise defined herein, capitalized terms used herein shall have the meanings ascribed to them in the Plan.
2. Forfeiture; Company’s Cancellation Right . Except as specifically provided otherwise in this Restricted Stock Agreement, upon the date of any termination of the Grantee’s Continuous Service (the “Termination Date”) for any reason before all of the Shares are released from the Forfeiture Restrictions described in Section 3 of this Restricted Stock Agreement, all of the Shares in which the Grantee is not, as of the Termination Date, vested in accordance with the provisions of this Restricted Stock Agreement and that are subject to the Forfeiture Restrictions on that Termination Date (the “Unvested Shares”) shall automatically be forfeited by the Grantee on the Termination Date and the Company shall cancel, without any additional consideration, such Unvested Shares.
3. Forfeiture Restrictions; Vesting .
(a) The Grantee may not sell, transfer, pledge, exchange, hypothecate, or otherwise dispose of any of the Unvested Shares, or any right or interest therein, before the Expiration of the Restriction Period set forth on the first page of this Restricted Stock Agreement or any other lapse of the Forfeiture Restrictions under this Restricted Stock Agreement.
(b) A number of the Shares equal to the percentages specified in the following schedule shall vest and shall be released from the Forfeiture Restrictions on each anniversary of the Date of Award as set forth on the first page of this Restricted Stock Agreement, if at each such anniversary of the Date of Award the Grantee’s Continuous Service has not terminated:
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If an installment of the release of Shares from the Forfeiture Restrictions covers a fractional Share, such installment will be rounded to the next higher Share, except the final installment, which will be for the balance of the total Shares.
(c) The Forfeiture Restrictions may lapse, and the Unvested Shares may become vested and released from the Forfeiture Restrictions, earlier than the times stated above in accordance with Section 11(c) of the Plan.
(d) Upon the lapse or expiration of the Forfeiture Restrictions regarding any of the Shares and compliance with Section 5 of this Restricted Stock Agreement, the Company shall issue and deliver or cause the issuance and deliverance of, in the name of the Grantee or Grantee’s legal representative, one or more stock certificates representing those Shares, free of Forfeiture Restrictions.
4. Representations of the Grantee . The Grantee represents and warrants to the Company that the Grantee has received, read and understood the Plan and this Restricted Stock Agreement and agrees to abide by and be bound by their terms and conditions.
5. Tax Withholding Obligations . No Shares shall be delivered to the Grantee or any other person in accordance with the terms of this Restricted Stock Agreement until the Grantee or such other person has made arrangements acceptable to the Committee for the satisfaction of applicable income tax, employment tax, and social security tax withholding obligations, including obligations incident to the receipt of Shares or an election by the Grantee pursuant to Section 83(b) of the Code. Upon any lapse or release of the Forfeiture Restrictions with respect to any Shares, the Company or the Grantee’s employer may offset or withhold (from any amount owed by the Company or the Grantee’s employer to the Grantee) or collect from the Grantee or such other person an amount sufficient to satisfy such tax obligations and/or the employer’s withholding obligations.
6. Escrow of Shares; Shareholder Rights .
(a) To ensure the availability for delivery of the Grantee’s Unvested Shares upon forfeiture and cancellation of Unvested Shares pursuant to Section 2 of this Restricted Stock Agreement, the Company shall, upon execution of this Restricted Stock Agreement, deliver or cause to be delivered with an escrow holder designated by the Company (the “Escrow Holder”) a letter (the “Escrow Instruction Letter”) instructing that the Unvested Shares be placed into book entry in the Grantee’s name, together with the stock assignment duly endorsed in blank by the Grantee, attached hereto as Exhibit A. The Unvested Shares and stock assignment shall be held by the Escrow Holder, pursuant to the Escrow Instruction Letter of the Company, until such time as the Forfeiture Restrictions lapse as provided in Section 3 of this Restricted Stock Agreement.
(b) The Escrow Holder shall not be liable for any act it may do or omit to do with respect to holding the Unvested Shares in escrow while acting in good faith and in the exercise of its judgment.
(c) If Unvested Shares are forfeited under Section 2 of this Restricted Stock Agreement, the Escrow Holder, upon receipt of written notice from the Company, shall take all appropriate actions to facilitate the forfeiture and cancellation of the Unvested Shares.
(d) When Unvested Shares are released from the Forfeiture Restrictions pursuant to Section 3 of this Restricted Stock Agreement, upon request of the Company, the Escrow Holder shall promptly issue and deliver, or cause to be issued and delivered, to the Grantee a new certificate, for the released Shares. Alternatively, upon written request of the Grantee, the Company may direct that the Escrow Holder transfer the released Shares to a broker, designated by the Grantee.
(e) Subject to the terms hereof and the provisions of Section 11(b) of the Plan relating to the dissolution or liquidation of the Company, the Grantee shall have all the rights of a shareholder with respect to the Unvested Shares while they are held in escrow, including without limitation, the right to vote the Unvested Shares and to receive any cash dividends declared thereon.
| Gastar Exploration Ltd. 2006 Long-Term Stock Incentive Plan | ||
| Restricted Stock Agreement | Page 2 |
7. Capital Adjustments and Corporate Events . If, from time to time during the term of this Restricted Stock Agreement, there is (i) any capital adjustment with respect to the Unvested Shares, the Unvested Shares shall be adjusted in accordance with the provisions of Section 11(a) of the Plan, or (ii) any corporate event, including a Change in Control, the Shares shall be subject to the provisions of Sections 11(b) and 11(c) of the Plan. Any and all new, substituted or additional securities to which the Grantee may be entitled by reason of the Grantee’s ownership of the Unvested Shares hereunder and such capital adjustment or such corporate event shall be immediately subject to the forfeiture and cancellation provisions of this Restricted Stock Agreement and the escrow, deposited with the Escrow Holder and included thereafter as “Unvested Shares” for purposes of this Restricted Stock Agreement.
8. Refusal to Transfer . The Company shall not be required (i) to transfer on its books any Shares that have been sold or otherwise transferred in violation of any of the provisions of this Restricted Stock Agreement or the Plan, or (ii) to treat as owner of such Shares, or accord the right to vote or pay or deliver dividends or other distributions to, any purchaser or other transferee to whom or which such Shares shall have been so transferred.
9. Restrictive Legends . The Grantee understands and agrees that, unless and until the Company is advised otherwise by its counsel, the Company shall cause the legend set forth below or a legend substantially equivalent thereto, to be placed upon any certificate issued evidencing ownership of the Unvested Shares, together with any other legends that may be required by the Company or by state or federal securities laws:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN FORFEITURE AND CANCELLATION PROVISIONS CONTAINED IN THAT CERTAIN RESTRICTED STOCK AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES AND ACCORDINGLY MAY NOT BE SOLD, ASSIGNED, TRANSFERRED, ENCUMBERED, OR IN ANY MANNER DISPOSED OF EXCEPT IN CONFORMITY WITH THE TERMS OF THAT RESTRICTED STOCK AGREEMENT. A COPY OF SUCH AGREEMENT IS MAINTAINED AT THE ISSUER’S PRINCIPAL CORPORATE OFFICES.
10. Nontransferability of Restricted Stock Agreement . None of the Grantee’s rights under this Restricted Stock Agreement may be transferred or assigned in any manner other than by will or by the laws of descent and distribution. The Grantee’s rights under this Restricted Stock Agreement may be exercised during the lifetime of the Grantee only by the Grantee.
11. Tax Consequences . The issuance of Shares released from the Forfeiture Restrictions will have tax consequences to Grantee under the Code. The Grantee understands that the Grantee may elect to be taxed with respect to all or any portion of the Fair Market Value of the Shares at the time the Shares are awarded rather than when and as the restrictions lapse by filing an election under Section 83 of the Code with the Internal Revenue Service within 30 days from the Date of Award. THE GRANTEE SHOULD CONSULT A TAX ADVISOR. THE GRANTEE ACKNOWLEDGES THAT IT IS THE GRANTEE’S SOLE RESPONSIBILITY (AND NOT THE COMPANY’S) TO FILE TIMELY THE ELECTION UNDER SECTION 83(b) OF THE CODE, EVEN IF THE GRANTEE REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE GRANTEE’S BEHALF.
12. Entire Agreement; Governing Law . The Plan and this Restricted Stock Agreement constitute the entire agreement of the Company and the Grantee (collectively, the “Parties”) with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Parties with respect to the subject matter hereof, and may not be modified adversely to the Grantee’s interest except by means of a writing signed by the Parties. Nothing in the Plan and this Restricted Stock Agreement (except as expressly provided therein or herein) is intended to confer any rights or remedies on any person other than the Parties. The Plan and this Restricted Stock Agreement are to be construed in accordance with and governed by the internal laws of the State of Texas, without giving effect to any choice-of-law rule that would cause the application of the laws of any jurisdiction other than the internal laws of the State of Texas to the rights and duties of the Parties. Should any provision of the Plan or this Restricted Stock Agreement be determined by a court of law to be illegal or unenforceable, such provision shall be enforced to the fullest extent allowed by law and the other provisions shall nevertheless remain effective and shall remain enforceable.
| Gastar Exploration Ltd. 2006 Long-Term Stock Incentive Plan | ||
| Restricted Stock Agreement | Page 3 |
13. Severability and Reformation . The Company intends all provisions of this Restricted Stock Agreement to be enforced to the fullest extent permitted by law. Accordingly, should a court of competent jurisdiction determine that the scope of any provision of this Restricted Stock Agreement is too broad to be enforced as written, the court should reform the provision to such narrower scope as it determines to be enforceable. If, however, any provision of this Restricted Stock Agreement is held to be wholly illegal, invalid, or unenforceable under present or future law, such provision shall be fully severable and severed, and this Restricted Stock Agreement shall be construed and enforced as if such illegal, invalid, or unenforceable provision were never a part hereof, and the remaining provisions of this Restricted Stock Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid, or unenforceable provision or by its severance.
14. Interpretive Matters . Whenever required by the context, pronouns and any variation thereof shall be deemed to refer to the masculine, feminine, or neuter, and the singular shall include the plural, and vice versa. The term “include” “including” does not denote or imply any limitation. The term “business day” means any Monday through Friday other than such a day on which banks are authorized to be closed in the State of Texas. The captions and headings used in this Restricted Stock Agreement are inserted for convenience and shall not be deemed a part of the shares subject to this Restricted Stock Agreement or this Restricted Stock Agreement for construction or interpretation.
15. Dispute Resolution . The provisions of this Section 15 shall be the exclusive means of resolving disputes of the Parties (including any other persons claiming any rights or having any obligations through the Company or the Grantee) arising out of or relating to the Plan and this Restricted Stock Agreement. The Parties shall attempt in good faith to resolve any disputes arising out of or relating to the Plan and this Restricted Stock Agreement by negotiation between individuals who have authority to settle the controversy. Negotiations shall be commenced by either Party by a written statement of the Party’s position and the name and title of the individual who will represent the Party. Within thirty (30) days of the written notification, the Parties shall meet at a mutually acceptable time and place, and thereafter as often as they reasonably deem necessary, to resolve the dispute. If the dispute has not been resolved by negotiation, the Parties agree that any suit, action, or proceeding arising out of or relating to the Plan or this Restricted Stock Agreement shall be brought in the United States District Court for the Southern District of Texas (or should such court lack jurisdiction to hear such action, suit or proceeding, in a Texas state court in Harris County, Texas) and that the Parties shall submit to the jurisdiction of such court. The Parties irrevocably waive, to the fullest extent permitted by law, any objection a Party may have to the laying of venue for any such suit, action or proceeding brought in such court. THE PARTIES ALSO EXPRESSLY WAIVE ANY RIGHT THEY HAVE OR MAY HAVE TO A JURY TRIAL OF ANY SUCH SUIT, ACTION OR PROCEEDING. If any one or more provisions of this Section 15 shall for any reason be held invalid or unenforceable, it is the specific intent of the Parties that such provisions shall be modified to the minimum extent necessary to make it or its application valid and enforceable.
16. Notice . Any notice or other communication required or permitted hereunder shall be given in writing and shall be deemed given, effective, and received upon prepaid delivery in person or by courier or upon the earlier of delivery or the third business day after deposit in the United States mail if sent by certified mail, with postage and fees prepaid, addressed to the other Party at its address as shown beneath its signature in this Restricted Stock Agreement, or to such other address as such Party may designate in writing from time to time by notice to the other Party in accordance with this Section 16.
| GASTAR EXPLORATION LTD. | ||
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1313 Lamar St., Suite 1080 Houston, Texas 77010 |
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| Gastar Exploration Ltd. 2006 Long-Term Stock Incentive Plan | ||
| Restricted Stock Agreement | Page 4 |
THE GRANTEE ACKNOWLEDGES AND AGREES THAT, EXCEPT AS EXPRESSLY PROVIDED OTHERWISE HEREIN, THE FORFEITURE RESTRICTIONS ON THE SHARES SUBJECT TO THE RESTRICTED STOCK AWARD SHALL LAPSE, IF AT ALL, ONLY DURING THE PERIOD OF THE GRANTEE’S CONTINUOUS SERVICE (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THE RESTRICTED STOCK AWARD OR ACQUIRING SHARES HEREUNDER). THE GRANTEE FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS RESTRICTED STOCK AGREEMENT OR THE PLAN SHALL CONFER UPON THE GRANTEE ANY RIGHT WITH RESPECT TO FUTURE AWARDS OR CONTINUATION OF THE GRANTEE’S CONTINUOUS SERVICE, NOR SHALL IT INTERFERE IN ANY WAY WITH THE GRANTEE’S RIGHT OR THE RIGHT OF THE COMPANY OR ANY AFFILIATE TO TERMINATE THE GRANTEE’S CONTINUOUS SERVICE IN ACCORDANCE WITH THE WRITTEN EMPLOYMENT AGREEMENT BETWEEN THE COMPANY AND THE GRANTEE.
The Grantee acknowledges receipt of a copy of the Plan, represents that he or she is familiar with the terms and provisions thereof, and hereby accepts the Restricted Stock Award subject to all of the terms and provisions hereof and thereof.
The Grantee has reviewed this Restricted Stock Agreement and the Plan in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Restricted Stock Agreement, and fully understands all provisions of this Restricted Stock Agreement and the Plan. The Grantee hereby agrees that all disputes arising out of or relating to this Restricted Stock Agreement and the Plan shall be resolved in accordance with Section 15 of this Restricted Stock Agreement. The Grantee further agrees to notify the Company upon any change in the address for notice indicated in this Restricted Stock Agreement.
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| Restricted Stock Agreement | Page 5 |
EXHIBIT A
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED, I, , hereby sell, assign and transfer unto Gastar Exploration Ltd. (the “Company”) ( ) shares of the Company’s Common Stock standing in my name on the books of the Company held in book entry with the Escrow Holder in my name, and do hereby irrevocably constitute and appoint as attorney-in-fact, with full power of substitution, to transfer such shares on the books of the Company.
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INSTRUCTIONS:
Please do not fill in any blanks other than the signature lines and your name in the first blank. The purpose of this assignment is to enable the Company to receive the Shares ONLY upon forfeiture and cancellation of the Shares, as set forth in the Restricted Stock Agreement, without requiring additional signatures on the part of the Grantee. At this time, it is not possible to know the number of Shares, if any, that would be available upon forfeiture and cancellation of the Shares, so we ask that you leave this line blank. Additionally, due to unforeseen employee turnover, we cannot definitively select an attorney-in-fact, however we can definitively state that it will be an officer of the Company.
| Gastar Exploration Ltd. 2006 Long-Term Stock Incentive Plan | ||
| Restricted Stock Agreement | Page 6 |
EXHIBIT 10.4
GASTAR EXPLORATION LTD. 2006 LONG-TERM STOCK INCENTIVE PLAN
STOCK APPRECIATION RIGHTS AGREEMENT
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1. Award of Stock Appreciation Rights. Gastar Exploration Ltd., a Canadian corporation (the “Company”), hereby awards to the Grantee named above Stock Appreciation Rights in the aggregate number set forth above as the Total Stock Appreciation Rights Subject to Award (the “Award”) each at the Exercise Price Per SAR set forth above (the “Exercise Price”), in accordance with this Stock Appreciation Rights Agreement (the “Agreement”) and subject to the terms and conditions of the Gastar Exploration Ltd. 2006 Long-Term Stock Incentive Plan, as amended from time to time (the “Plan”), which are incorporated herein by reference. Each Stock Appreciation Right entitles the Grantee to the amount, if any, at the time of exercise of the Stock Appreciation Right by which the Fair Market Value of a share of Common Stock exceeds the Exercise Price Per SAR (the “Appreciation”) payable to the Grantee in whole shares of Common Stock as provided for in this Agreement. Unless otherwise defined herein, capitalized terms used herein shall have the same meanings ascribed to them in the Plan.
2. Vesting; Time of Exercise . Subject to the terms and conditions of the Plan and this Agreement, the Award granted herein shall vest and become exercisable in the following cumulative installments, as follows:
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If an installment covers a fractional Stock Appreciation Right, such installment will be rounded to the next highest Stock Appreciation Right, except the final installment, which will be for the balance of the total Stock Appreciation Rights; provided, that the Grantee shall in no event be entitled under the Award to Appreciation determined by reference to a number of stock appreciation rights greater than the “Total Stock Appreciation Rights Subject to Award” indicated above. Notwithstanding anything to the contrary herein, the Award shall expire on the Expiration Date set forth above and must be exercised, if at all, on or before the Expiration Date. If the Grantee’s Continuous Service is terminated, the Award shall be exercisable only to the extent that the Grantee could have
exercised it on the date of his or her termination of Continuous Service. Notwithstanding anything to the contrary herein, the Stock Appreciation Rights shall become fully exercisable upon the occurrence during the term hereof of a Change in Control.
3. Exercise of Award .
(a) Right to Exercise . The Award shall be exercisable in accordance with the vesting provisions contained in Section 2 of this Agreement and with the other applicable provisions of the Plan and this Agreement. The Award shall be subject to the provisions of Section 11(b) and (c) relating to the exercisability or termination of the Award in the event of a dissolution or liquidation of the Company, or a Change in Control of the Company, respectively.
(b) Method of Exercise . The Award shall be exercisable only by delivery to the Company of an executed Stock Appreciation Rights Exercise Notice (the “Exercise Notice”) in the form attached hereto as Exhibit A , or in such other form approved by the Committee, which shall state the Grantee’s election to exercise the Award, the whole number of Stock Appreciation Rights in respect of which the Award is being exercised, and such other provisions as may be required by the Committee or necessary to comply with securities and other applicable laws. The Exercise Notice shall be signed by the Grantee and shall be delivered to the Company by such method as may be permitted by the Committee. The Award shall be deemed to be exercised upon receipt by the Company of such written Exercise Notice.
(c) Issuance of Shares . If the Exercise Notice is in form and substance satisfactory to the Company (or its counsel), and the Grantee or any other person permitted to exercise the Award has complied with Section 4 of this Agreement, the Company shall issue or cause the issuance of, in the name of the Grantee or Grantee’s legal representative, the number of shares of Common Stock equal in Fair Market Value on the date of exercise to the Appreciation multiplied by the number of Stock Appreciation Rights being exercised. Fractional Common Stock share amounts, if any, relating to the exercise will be withheld by the Company and used as part of the tax withholding associated with the exercise of this Award as described in Section 4 of this Agreement.
4. Tax Withholding . No shares of Common Stock representing the payment of the Appreciation pursuant to the exercise of the Award shall be delivered to the Grantee or any other person permitted to exercise the Award until the Grantee or such other person has made arrangements acceptable to the Committee for the satisfaction of applicable income tax, employment tax, and social security tax withholding obligations, relating to such exercise. Upon exercise of the Award, the Company or the Grantee’s employer may offset or withhold (from any amount owed by the Company or the Grantee’s employer to the Grantee) or collect from the Grantee or such other person an amount sufficient to satisfy such tax obligations and/or the employer’s withholding obligations.
5. Exercise of Award Following Termination or Change of Continuous Service . Subject to the provisions of Sections 6 and 7 of this Agreement, if the Grantee’s Continuous Service terminates, the Grantee may, to the extent otherwise so entitled at the date of such termination (the “Termination Date”), exercise the Award during the Post-Termination Exercise Period set forth on the first page of this Agreement . In no event may the Award be exercised later than the Expiration Date set forth on the first page of this Agreement. In the event of the Grantee’s change in status from Employee to Director or from Director to Employee, the Award shall remain in effect and, except to the extent otherwise determined by the Committee, continue to vest. Except as provided in Sections 6 and 7 of this Agreement, to the extent that the Grantee is not entitled to exercise the Award on the Termination Date, or if the Grantee does not exercise the Award within the Post-Termination Exercise Period, the Award shall terminate.
6. . Disability of Grantee . If the Grantee’s Continuous Service terminates as a result of his or her Disability, or in the event of the Grantee’s Disability during the Post-Termination Exercise Period, the Grantee may, but only within one (1) year from the date his or her Continuous Service terminates because of his or her Disability (the “Disability Termination Date”) (and in no event later than the Expiration Date), exercise the Award to the extent he or she was otherwise entitled to exercise it on the Disability Termination Date. To the extent that the Grantee is not entitled to exercise the Award on the Disability Termination Date, or if the Grantee does not exercise the Award to the extent so entitled within the time specified in this Section 6, the Award shall terminate.
| Gastar Exploration Ltd. | ||
| 2006 Long-Term Stock Incentive Plan - Stock Appreciation Rights Agreement | Page 2 |
7. Death of Grantee . In the event of the termination of the Grantee’s Continuous Service as a result of his or her death, or in the event of the Grantee’s death during the Post-Termination Exercise Period, the Grantee’s estate, or a person who acquired the right to exercise the Award by bequest or inheritance, may exercise the Award, but only to the extent the Grantee could exercise the Award at the date of his or her death, within one (1) year from the date of death (but in no event later than the Expiration Date). To the extent that the Grantee is not entitled to exercise the Award on the date of death, or if the Award is not exercised to the extent so entitled within the applicable one (1)-year period, the Award shall terminate.
8. Transferability of Award . Neither the Award nor any of the Grantee’s rights under this Award Agreement may be transferred or assigned in any manner other than by will or by the laws of descent and distribution; the Award and those rights may be exercised during the lifetime of the Grantee only by the Grantee.
9. Tax Consequences . This section contains a brief summary, as of the Date of Grant, of the federal tax consequences of an exercise of the Award. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE GRANTEE SHOULD CONSULT A TAX ADVISOR BEFORE EXERCISING THE AWARD OR DISPOSING OF THE SHARES COMMON STOCK DELIVERED IN CONNECTION WITH THE EXERCISE OF THE AWARD.
There will be a regular federal income tax liability upon the exercise of the Award. The Grantee will be treated as having received compensation income (taxable at ordinary income tax rates) equal to the Appreciation payable in connection with the exercise of the Award. The Company will be required to withhold from the Grantee’s compensation or collect from the Grantee and pay to the applicable taxing authorities an amount equal to a percentage of this compensation income at the time of exercise for income and employment tax withholding purposes.
10. Term of Award . The Award may be exercised no later than the Expiration Date or such earlier date as otherwise provided in this Agreement.
11. Entire Agreement; Governing Law . The Plan and this Agreement (with the Exercise Notice, if the Award is exercised) constitute the entire agreement of the Company and the Grantee (collectively the “Parties”) with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Parties with respect to the subject matter hereof, and may not be modified adversely to the Grantee’s interest except by means of a writing signed by the Parties. Nothing in the Plan and this Agreement (except as expressly provided therein or herein) is intended to confer any rights or remedies on any person other than the Parties. The Plan and this Agreement are to be construed in accordance with and governed by the internal laws of the State of Texas without giving effect to any choice-of-law rule that would cause the application of the laws of any jurisdiction other than the internal laws of the State of Texas, to the rights and duties of the Parties. Should any provision of the Plan or this Agreement be determined by a court of law to be illegal or unenforceable, such provision shall be enforced to the fullest extent allowed by law and the other provisions shall nevertheless remain effective and shall remain enforceable.
12. Interpretive Matters . Whenever required by the context, pronouns and any variation thereof shall be deemed to refer to the masculine, feminine, or neuter, and the singular shall include the plural, and vice versa. The term “include” or “including” does not denote or imply any limitation. The captions and headings used in this Agreement are inserted for convenience and shall not be deemed a part of the Award or this Agreement for construction or interpretation.
13. Dispute Resolution . The provisions of this Section 13 shall be the exclusive means of resolving disputes of the Parties (including any other persons claiming any rights or having any obligations through the Company or the Grantee) arising out of or relating to the Plan and this Agreement (including the Exercise Notice, if the Award is exercised). The Parties shall attempt in good faith to resolve any disputes arising out of or relating to the Plan and this Agreement (including the Exercise Notice, if the Award is exercised) by negotiation between individuals who have authority to settle the controversy. Negotiations shall be commenced by either Party by a written statement of the Party’s position and the name and title of the individual who will represent the Party. Within thirty (30) days of the written notification, the Parties shall meet at a mutually acceptable time and place, and thereafter as often as they reasonably deem necessary, to resolve the dispute. If the dispute has not been resolved by
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| 2006 Long-Term Stock Incentive Plan - Stock Appreciation Rights Agreement | Page 3 |
negotiation, the Parties agree that any suit, action, or proceeding arising out of or relating to the Plan or this Agreement shall be brought in the United States District Court for the Southern District of Texas (or should such court lack jurisdiction to hear such action, suit or proceeding, in a Texas state court in Harris County, Texas) and that the Parties shall submit to the jurisdiction of such court. The Parties irrevocably waive, to the fullest extent permitted by law, any objection a Party may have to the laying of venue for any such suit, action or proceeding brought in such court. THE PARTIES ALSO EXPRESSLY WAIVE ANY RIGHT THEY HAVE OR MAY HAVE TO A JURY TRIAL OF ANY SUCH SUIT, ACTION OR PROCEEDING. If any one or more provisions of this Section 13 shall for any reason be held invalid or unenforceable, it is the specific intent of the Parties that such provisions shall be modified to the minimum extent necessary to make it or its application valid and enforceable.
14. Notice . Any notice or other communication required or permitted hereunder shall be given in writing and shall be deemed given, effective, and received upon prepaid delivery in person or by courier or upon the earliest of delivery or the third business day after deposit in the United States mail if sent by certified mail, with postage and fees prepaid, addressed to the other Party at its address as shown beneath its signature in this Agreement, or to such other address as such Party may designate in writing from time to time by notice to the other Party in accordance with this Section 14.
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THE GRANTEE ACKNOWLEDGES AND AGREES THAT, EXCEPT AS EXPRESSLY PROVIDED OTHERWISE HEREIN, THE STOCK APPRECIATION RIGHTS SHARES SUBJECT TO THE AWARD SHALL VEST, IF AT ALL, ONLY DURING THE PERIOD OF THE GRANTEE’S CONTINUOUS SERVICE (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THE AWARD OR ACQUIRING SHARES HEREUNDER). THE GRANTEE FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS AGREEMENT OR THE PLAN SHALL CONFER UPON THE GRANTEE ANY RIGHT WITH RESPECT TO FUTURE GRANTS OR CONTINUATION OF THE GRANTEE’S CONTINUOUS SERVICE, NOR SHALL IT INTERFERE IN ANY WAY WITH THE GRANTEE’S RIGHT OR THE RIGHT OF THE GRANTEE’S EMPLOYER TO TERMINATE GRANTEE’S CONTINUOUS SERVICE, WITH OR WITHOUT CAUSE, AND WITH OR WITHOUT NOTICE. THE GRANTEE ACKNOWLEDGES THAT UNLESS THE GRANTEE HAS A WRITTEN EMPLOYMENT AGREEMENT WITH THE COMPANY TO THE CONTRARY, THE GRANTEE’S STATUS IS AT-WILL.
The Grantee acknowledges receipt of a copy of the Plan, represents that he or she is familiar with the terms and provisions thereof, and hereby accepts this Award subject to all of the terms and provisions hereof and thereof. The Grantee has reviewed this Agreement, the Plan, and the Exercise Notice in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Agreement, and fully understands all provisions of this Agreement, the Plan and the Exercise Notice. The Grantee hereby agrees that all disputes arising out of or relating to this Agreement, the Plan and the Exercise Notice shall be resolved in accordance with Section 13 of this Agreement. The Grantee further agrees to notify the Company upon any change in the residence address indicated in this Agreement.
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| 2006 Long-Term Stock Incentive Plan - Stock Appreciation Rights Agreement | Page 4 |
EXHIBIT 10.5
EXHIBIT A
GASTAR EXPLORATION LTD. 2006 LONG-TERM STOCK INCENTIVE PLAN
STOCK APPRECIATION RIGHTS EXERCISE NOTICE
This Exercise Notice is made this day of , 20 (the “Exercise Date”) between Gastar Exploration Ltd. (the “Company”), and the grantee named below (the “Grantee”) pursuant to the Gastar Exploration Ltd. 2006 Long-Term Stock Incentive Plan (the “Plan”). Unless otherwise defined herein, the capitalized terms used in this Exercise Notice shall have the meaning ascribed to them in the Plan and in the Stock Appreciation Rights Agreement to which this Exercise Notice relates.
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The Company and the Grantee (the “Parties”) hereby agree as follows:
1. Exercise of Stock Appreciation Rights . On this date and subject to the terms and conditions of this Exercise Notice, the Grantee hereby exercises the Award granted in the Stock Appreciation Rights Agreement between the Parties, dated as of the Date of Award set forth above, with respect to the Number of Stock Appreciation Rights Exercised (the “Exercised Rights”) set forth above.
2. Payment of Appreciation . The Grantee shall receive a payment of the Appreciation with respect to the Exercised Rights in an amount determined by subtracting the Exercise Price Per SAR from the Fair Market Value of a share of Common Stock as of the Exercise Date and multiplying that amount by the number of the Exercised Rights. The Appreciation will be paid in the form of whole shares of Common Stock (the “Shares”) valued at the Fair Market Value of such Shares on the Exercise Date, which Shares will be transferred to the Grantee as soon as administratively practicable following the Exercise Date. The Parties agree that the portion of the Appreciation, if any, that represents less than a full share of Common Stock will be retained by the Company and used to satisfy a portion of the Company’s tax withholding obligations described in Section 5 below.
3. Representations of the Grantee . The Grantee represents and warrants to the Company that the Grantee has received, read and understood the Plan, the Stock Appreciation Rights Agreement and this Exercise Notice and agrees to abide by and be bound by their terms and conditions.
4. Rights as Stockholder . Until the stock certificate evidencing the Shares is issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a shareholder shall exist with respect to the Shares, notwithstanding the exercise of the Stock Appreciation Rights. The Company shall issue (or cause to be issued) such stock certificate promptly after the Stock Appreciation Rights are exercised. No adjustment will be made for a dividend or other right for which the record date is prior to the date the stock certificate is issued.
5. Tax Withholding Obligations . The Grantee agrees to satisfy all applicable federal, state and local income, employment and other tax withholding obligations and herewith delivers to the Company the amount necessary, or has made arrangements acceptable to the Company, to satisfy such obligations as provided in the Plan and the Stock Appreciation Rights Agreement. The Grantee understands and acknowledges that the Company’s obligation to deliver the Shares is conditioned on the Grantee’s compliance with the provisions of this Section 5.
6. Tax Consequences . The Grantee understands that he or she may suffer adverse tax consequences as a result of the Grantee’s exercise of the Stock Appreciation Rights or disposition of the Shares. The Grantee represents that the Grantee has consulted with any tax consultant(s) he or she deems advisable in connection with the exercise of the Stock Appreciation Rights or disposition of the Shares and that the Grantee is not relying on the Company for any tax advice.
7. Successors and Assigns . The Company may assign any of its rights under this Exercise Notice, and this Exercise Notice shall inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer herein set forth, this Exercise Notice shall be binding upon the Grantee and his or her heirs, executors, administrators, successors and permitted assigns.
8. Interpretive Matters . Whenever required by the context, pronouns and any variation thereof shall be deemed to refer to the masculine, feminine, or neuter, and the singular shall include the plural, and vice versa. The term “include” or “including” does not denote or imply any limitation. The captions and headings used in this Exercise Notice are inserted for convenience and shall not be deemed a part of this Exercise Notice for construction or interpretation.
9. Dispute Resolution . The provisions of Section 13 of the Stock Appreciation Rights Agreement shall be the exclusive means of resolving disputes arising out of or relating to this Exercise Notice.
10. Entire Agreement; Governing Law . This Exercise Notice, with the Plan and the Stock Appreciation Rights Agreement, constitute the entire agreement of the Parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Parties with respect to the subject matter hereof, and may not be modified adversely to the Grantee’s interest except by means of a writing signed by the Parties. Nothing in this Exercise Notice or in the Plan or the Stock Appreciation Rights Agreement (except as expressly provided herein or therein) is intended to confer any rights or remedies on any person other than the Parties. This Exercise Notice (like the Plan and the Stock Appreciation Rights Agreement) is to be construed in accordance with and governed by the internal laws of the State of Texas, without giving effect to any choice-of-law rule that would cause the application of the laws of any jurisdiction other than the internal laws of the State of Texas to the rights and duties of the Parties. Should any provision of the Plan, the Stock Appreciation Rights Agreement, or this Exercise Notice be determined by a court of law to be illegal or unenforceable, such provision shall be enforced to the fullest extent allowed by law, and the other provisions shall nevertheless remain effective and shall remain enforceable.
11. Notice . Any notice or other communication required or permitted hereunder shall be given in writing and shall be deemed given, effective, and received upon prepaid delivery in person or by courier or upon the earlier of delivery or the third business day after deposit in the United States mail if sent by certified mail, with postage and fees prepaid, addressed to the other Party at its address as shown beneath its signature in the Stock Appreciation Rights Agreement, or to such other address as such Party may designate in writing from time to time by notice to the other Party in accordance with this Section 11.
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| 2006 Long-Term Stock Incentive Plan - Stock Appreciation Rights Exercise Notice | Page 2 |
12. Further Instruments . Each Party agrees to execute such further instruments and to take such further action as may be necessary or reasonably appropriate to carry out the purposes and intent of this Exercise Notice.
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| GRANTEE: |
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GASTAR EXPLORATION LTD. | ||||||
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| By: |
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(Signature) |
Its: |
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| Dated: |
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Dated: |
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| 2006 Long-Term Stock Incentive Plan - Stock Appreciation Rights Exercise Notice | Page 3 |
Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
Gastar Exploration Ltd.
We hereby consent to the incorporation by reference in this Registration Statement of our report dated March 21, 2006, relating to the consolidated financial statements appearing in the Company’s Annual Report on Form 10-K for the year ended December 31, 2005.
BDO Seidman, LLP
Dallas, Texas
November 28, 2006
EXHIBIT 23.2
NETHERLAND, SEWELL & ASSOCIATES, INC.
November 28, 2006
Gastar Exploration Ltd.
1331 Lamar Street, Suite 1080
Houston, Texas 77010
Re: Gastar Exploration Ltd. Registration Statement on Form S-8
dated on or about December 1, 2006
Gentlemen:
As independent oil and gas consultants, Netherland, Sewell & Associates, Inc. hereby consents to the incorporation by reference in the Registration Statement on Form S-8 dated on or about December 1, 2006 of Gastar Exploration Ltd. of information from our reserve report dated March 10, 2006 entitled “Estimate of Reserves and Future Revenues to the Gastar Exploration Ltd. Interest in Certain Oil and Gas Properties located in the United States as of December 31, 2005, Based on Constant Prices and Costs in accordance with Securities and Exchange Commission Guidelines” and all references to our firm included in or made a part of the Gastar Exploration Ltd. Annual Report on Form 10-K for the year ended December 31, 2005.
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Yours very truly,
NETHERLAND, SEWELL & ASSOCIATES, INC. |
| /s/ C.H. (SCOTT) REES III |
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C.H. (Scott) Rees III, P.E. President and Chief Executive Officer |