-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UfBDxj9VOGZvCTiLoKO9h5lBcj9FIa6QKFJlcSuBXVq82SFFGi/4sUaAxhGQZ99G pr5CTQVKi+8gK5Nk9z1Jlw== 0000912057-01-513760.txt : 20010509 0000912057-01-513760.hdr.sgml : 20010509 ACCESSION NUMBER: 0000912057-01-513760 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 10 FILED AS OF DATE: 20010508 EFFECTIVENESS DATE: 20010508 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CARBON ENERGY CORP CENTRAL INDEX KEY: 0001096019 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 841515097 STATE OF INCORPORATION: CO FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: SEC FILE NUMBER: 333-60444 FILM NUMBER: 1625808 BUSINESS ADDRESS: STREET 1: 1700 BROADWAY SUITE 1150 CITY: DENVER STATE: CO ZIP: 80290-1101 MAIL ADDRESS: STREET 1: 1700 BROADWAY SUITE 1150 CITY: DENVER STATE: CO ZIP: 80290-1101 S-8 1 a2046706zs-8.txt FORM S-8 As filed with the Securities and Exchange Commission on May 8, 2001 Registration No. ___ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 -------- FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 CARBON ENERGY CORPORATION (Exact name of registrant as specified in its charter) Colorado 84-1515097 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1700 Broadway, Suite 1150 Denver, CO 80290 (Address of Principal Executive Offices and Zip Code) CARBON ENERGY CORPORATION 1999 STOCK OPTION PLAN (Full title of plan) Patrick R. McDonald President and Chief Executive Officer Carbon Energy Corporation 1700 Broadway, Suite 1150 Denver, Colorado 80290 (Name and address of agent for service) (303) 863-1555 (Telephone number, including area code, of agent for service) Copy to: Holland & Hart LLP Attn: Mark R. Levy 555 Seventeenth Street, Suite 3200 Denver, Colorado 80202 CALCULATION OF REGISTRATION FEE
Proposed maximum Proposed maximum Title of securities Amount to be offering price aggregate Amount of to be registered registered (1) per share offering price registration fee - ------------------- -------------- ---------------- ---------------- ---------------- Common Stock 700,000 $9.650(2) $6,755,000 $1,688.75 (no par value)
(1) Plus such indeterminate number of shares as may be issued to prevent dilution resulting from stock splits, stock dividends or similar transactions in accordance with Rule 416 under the Securities Act of 1933. (2) Estimated pursuant to Rule 457(h) under the Securities Act of 1933 solely for the purpose of calculating the registration fee and based on the average of the high and low sales prices for the Registrant's common stock as reported on the American Stock Exchange on May 4, 2001. PART I INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS This registration statement relates to the registration of 700,000 shares of Common Stock, no par value, of Carbon Energy Corporation (the "Company") available under the 1999 Stock Option Plan (the "Plan") of the Company. The documents containing the information required by Part I of Form S-8 will be sent or given to participants in the Plan as specified by Rule 428(b)(1) under the Securities Act of 1933. In reliance on Rule 428, such documents (i) are not being filed with the Securities and Exchange Commission (the "Commission") either as part of this registration statement or as prospectuses or prospectus supplements pursuant to Rule 424 and (ii) taken together with the documents incorporated by reference into this registration statement pursuant to Item 3 of Part II of this Form, constitute a prospectus (the "Prospectus") that meets the requirements of Section 10(a) of the Securities Act. PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE. The following documents are hereby incorporated by reference in this registration statement: (1) The Company's Annual Report on Form 10-K, filed pursuant to Section 13 of the Securities Exchange Act of 1934, for the year ended December 31, 2000. (2) The description of the Company's Common Stock contained in the Company's Registration Statement on Form 8-A (SEC File No. 001-15639) filed on January 25, 2000. All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 subsequent to the date of this registration statement, and prior to the filing of a post-effective amendment which indicates that all shares offered hereby have been sold or which deregisters all shares then remaining unsold, shall be deemed to be incorporated by reference in this registration statement and to be a part hereof from the date of filing such documents. Any statement contained in the Prospectus, this registration statement or in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of the Prospectus and this registration statement to the extent that a statement contained in any subsequently filed document that also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of the Prospectus or this registration statement. 3 Description of Securities: The Company is authorized to issue 20,000,000 shares of the Company's common stock, no par value, which Common Stock is listed on the American Stock Exchange. The Company also has authorized 10,000,000 shares of preferred stock. There are currently no outstanding shares of preferred stock. This summary of certain provisions of the Common Stock and preferred stock of the Company does not purport to be complete and is subject to, and qualified in its entirety by, the provisions of the Company's Articles of Incorporation, which is incorporated by reference as an exhibit to this registration statement, and the provisions of applicable law. COMMON STOCK The holders of Common Stock are entitled to one vote for each share held of record on all matters submitted to a vote of the shareholders. Subject to preferences that may be applicable to any then outstanding preferred stock, holders of common stock are entitled to receive ratably such dividends as may be declared by the Board of Directors out of funds legally available therefor. In the event of a liquidation, dissolution or winding up of the Company, holders of Common Stock are entitled to share ratably in all assets remaining after payment of liabilities of the Company and the liquidation preference of any then outstanding preferred stock. Holders of Common Stock have no preemptive rights and no right to convert their Common Stock into any other securities. There are no redemption or sinking fund provisions applicable to the Common Stock. All outstanding shares of Common Stock are, and the shares of Common Stock to be issued upon completion of this offering will be, fully paid and nonassessable. A quorum for purposes of a meeting of shareholders consists of a majority of the shares entitled to vote at the meeting. After a quorum has been established, a matter is approved by the shareholders if votes cast favoring the matter exceed the votes cast against the matter. Directors are elected by a plurality vote, with the nominees having the highest number of votes cast in favor of their election being elected to the Board of Directors. As a result, a majority of the outstanding shares has the ability to elect all of the Company's directors. Under Colorado law, the affirmative vote of the majority of the shares entitled to vote is required to approve: o A sale, lease, exchange or other disposition of all or substantially all of the Company's property and assets, with or without the Company's good will, other than in the usual or regular course of the Company's business. o A plan of merger of the Company with or into another entity, or a share exchange for which shareholder approval is required. o Dissolution of the Company. 4 PREFERRED STOCK The Board of Directors has the authority, without further vote or action by the shareholders to issue up to 10,000,000 shares of preferred stock in one or more series and to fix the rights, preferences, privileges and restrictions thereof, including dividend rights, conversion rights, voting rights, terms of redemption, liquidation preferences, sinking fund terms, and the number of shares constituting any series or the designation of such series. The issuance of preferred stock could adversely affect the voting power of holders of Common Stock and the likelihood that such holders will receive dividend payments and payments upon liquidation and could have the effect of delaying, deferring or preventing a change in control of the Company. There are no shares of preferred stock issued, and the Company has no present plans to issue any shares of preferred stock. CERTAIN EFFECTS OF AUTHORIZED BUT UNISSUED STOCK Under the Company's Articles of Incorporation, a substantial number of shares of Common Stock and shares of preferred stock are available for future issuance without stockholder approval (except that as part of the criteria for maintaining a listing on the American Stock Exchange, the Company is required to obtain stockholder approval of certain issuances of stock). These additional shares may be utilized for a variety of corporate purposes, including future public offerings to raise additional capital or to facilitate corporate acquisitions. One of the effects of the existence of unissued and unreserved Common Stock and preferred stock may be to enable the Board of Directors to issue shares to persons friendly to current management which could render more difficult or discourage an attempt to obtain control of the Company by means of a merger, tender offer, proxy contest or otherwise, and thereby protect the continuity of the Company's management. Such additional shares also could be used to dilute the stock ownership of persons seeking to obtain control of the Company. The Board of Directors is authorized without any further action by the shareholders, to determine the rights, preferences, privileges and restrictions of the unissued preferred stock. The purpose of authorizing the Board of Directors to determine such rights and preferences is to eliminate delays associated with a stockholder vote on special issuances. The Board of Directors may issue preferred stock with voting and conversion rights which could adversely affect the voting power of the holders of Common Stock, and which could, among other things, have the effect of delaying, deferring or preventing a change in control of the Company. The Company does not currently have any plans to issue additional shares of common stock or preferred stock other than the shares of Common Stock which may be issued upon the exercise of options which have been granted or which may be granted in the future to the Company's employees. 5 AMERICAN STOCK EXCHANGE LISTING The Common Stock of the Company is listed on the AMEX under the symbol CRB. 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 bylaws of the Company provide that the Company will indemnify its directors and executive officers and may indemnify other officers, employees, and other agents of the Company to the fullest extent permitted by Colorado law. The Company has also entered into indemnification agreements with each of its directors and executive officers. All indemnification agreements are identical. The agreements provide, among other things, for indemnification and advancement of expenses to the fullest extent permitted by law in connection with any legal proceeding in which the person was made a party because the person was a director or executive officer of the Company, place the burden of proof on the Company in regard to whether an individual has met the required standard of conduct for indemnification, cover procedural matters such as the hiring of counsel, and require the Company to pay the expenses of the director or executive officer in enforcing any required indemnification or advancement of expenses. In addition, the Company's Articles of Incorporation provided that to the fullest extent permitted by Colorado law, the Company's directors will not have personal liability to the Company or its stockholders for monetary damages for any breach of fiduciary duties as a director. This does not eliminate the duties themselves, and in appropriate circumstances, equitable remedies such as injunction or other forms of non-monetary relief remain available under Colorado law. This provision does not eliminate the liability of a director for (1) any breach of the director's duty of loyalty to the Company or its stockholders; (2) acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; (3) unlawful dividends, stock repurchases or redemptions; or (4) any transaction from which the director derived an improper personal benefit. This does not affect a director's responsibilities under other laws such as the federal or state securities laws. Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the "Securities Act") may be permitted to directors, officers or persons controlling the Company pursuant to the foregoing provisions or otherwise, the Company has been advised that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act, and is, therefore, unenforceable. 6 ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED. Not applicable. ITEM 8. EXHIBITS.
Exhibit No. Description. - ----------- ------------ 4.1 Articles of Incorporation (incorporated by reference to Exhibit 2 of the Company's registration statement on Form S-4, No. 333-89783, effective January 18, 2000). 4.2 Bylaws (incorporated by reference to Exhibit 3 of the Company's registration statement on Form S-4, No. 333-89783, effective January 18, 2000). 4.3 Carbon Energy Corporation's 1999 Stock Option Plan (incorporated by reference to Exhibit 10.1 of the Company's registration statement on Form S-4, No. 333-89783, effective January 18, 2000). 4.4 Form of Carbon Energy Corporation Incentive Stock Option Agreement for 1999 Stock Option Plan. 4.5 Form of Carbon Energy Corporation Incentive Stock Option Agreement for 1999 Stock Option Plan (With Authorization for Early Exercise). 4.6 Form of Carbon Energy Corporation Nonqualified Stock Option Agreement for 1999 Stock Option Plan. 4.7 Form of Carbon Energy Corporation Nonqualified Stock Option Agreement for 1999 Stock Option Plan (With Authorization for Early Exercise). 4.8 Form of Carbon Energy Corporation Early Exercise Stock Purchase Agreement. 5.1 Opinion of Holland & Hart LLP, counsel for the Company. 23.1 Consent of Arthur Andersen LLP. 23.2 Consent of Hein & Associates LLP. 23.3 Consent of Holland & Hart LLP (contained in its opinion filed as Exhibit 5.1). 24 Powers of Attorney.
7 ITEM 9. UNDERTAKINGS. The undersigned registrant hereby undertakes: (1) 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 of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the registration statement is on Form S-3 or Form S-8, and 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 Commission by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, 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. (3) To remove from the registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in the registration statement 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. Insofar as indemnification for liabilities arising under the Securities Act of 1933 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 8 opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that 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 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 Act and will be governed by the final adjudication of such issue. 9 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Company 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 Denver, State of Colorado, on May 8, 2001. CARBON ENERGY CORPORATION By:/s/ Patrick R. McDonald -------------------------------- Patrick R. McDonald, President Chief Executive Officer Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated. Date Name and Title - ---- -------------- May 8, 2001 Patrick R. McDonald, ) President and Director ) ) May 8, 2001 David H. Kennedy, ) Director ) By:/s/ Patrick R. McDonald ) --------------------------- May 8, 2001 Corlandt S. Dietler, ) Patrick R. McDonald, in the Director ) capacity indicated and as ) Attorney-In-Fact for the May 8, 2001 Peter A. Leidel, ) named Officers and named Director ) Directors, who constitute ) all of the Directors of the May 8, 2001 Bryan H. Lawrence, ) Company Director ) ) May 8, 2001 Harry A. Trueblood, Jr. ) Director ) ) 10 EXHIBITS INDEX
Exhibit No. Description Page - ----------- ----------- ---- 4.1 Articles of Incorporation (incorporated by reference to Exhibit 2 of the Company's registration statement on Form S-4, No. 333-89783, effective January 18, 2000). 4.2 Bylaws (incorporated by reference to Exhibit 3 of the Company's registration statement on Form S-4, No. 333-89783, effective January 18, 2000). 4.3 Carbon Energy Corporation's 1999 Stock Option Plan (incorporated by reference to Exhibit 10.1 of the Company's registration statement on Form S-4, No. 333-89783, effective January 18, 2000). 4.4 Form of Carbon Energy Corporation Incentive Stock Option Agreement for 1999 Stock Option Plan. 4.5 Form of Carbon Energy Corporation Incentive Stock Option Agreement for 1999 Stock Option Plan (With Authorization for Early Exercise). 4.6 Form of Carbon Energy Corporation Nonqualified Stock Option Agreement for 1999 Stock Option Plan. 4.7 Form of Carbon Energy Corporation Nonqualified Stock Option Agreement for 1999 Stock Option Plan (With Authorization for Early Exercise). 4.8 Form of Carbon Energy Corporation Early Exercise Stock Purchase Agreement. 5.1 Opinion of Holland & Hart LLP, counsel for the Company. 23.1 Consent of Arthur Andersen LLP. 23.2 Consent of Hein + Associates LLP. 23.3 Consent of Holland & Hart LLP (contained in its opinion filed as Exhibit 5.1). 24 Power of Attorney.
11 EX-4.4 2 a2046706zex-4_4.txt EXHIBIT 4.4 Exhibit 4.4 INCENTIVE STOCK OPTION AGREEMENT OPTIONEE: --------------------------------------- DATE OF GRANT: ---------------------------------- AGREEMENT between Carbon Energy Corporation (the "Company"), and the above named Optionee ("Optionee"), an employee of the Company or a Subsidiary thereof. The Company and Optionee agree as follows: 1. GRANT OF OPTION. Optionee is hereby granted an Incentive Stock Option, within the meaning of Section 422 of the Code (the "Option"), to purchase Common Stock of the Company pursuant to the Carbon Energy Corporation 1999 Stock Option Plan (the "Plan"). The Option and this Agreement are subject to and shall be construed in accordance with the terms and conditions of the Plan, as now or hereinafter in effect. Any terms which are used in this Agreement without being defined and which are defined in the Plan shall have the meaning specified in the Plan. 2. DATE OF GRANT. The date of the grant of the Option is the date first set forth above, the date of the action by the Plan Administrator in granting the same. 3. NUMBER AND PRICE OF SHARES. The number of shares as to which the Option is granted is the number set forth in Schedule 3A to this Agreement. The purchase price per share is the amount set forth in Schedule 3B to this Agreement. 4. EXPIRATION DATE. Unless sooner terminated as provided in Section 5.4 or Section 10 of the Plan, the Option shall expire and terminate on the date set forth in Schedule 4 to this Agreement, and in no event shall the Option be exercisable after that date. 5. MANNER OF EXERCISE. Except as provided in this Agreement, the Option shall be exercisable, in whole or in part, from time to time, in the manner provided in Section 8 of the Plan. 1 6. TIME OF EXERCISE. The Option granted hereby shall become vested in and exercisable by Optionee on the dates and subject to the conditions set forth in Schedule 6 to this Agreement; provided, however, that Optionee must have been continuously employed by the Company or a Subsidiary thereof from the date of grant of the Option until the date specified on Schedule 6 or until the conditions specified on Schedule 6 have been satisfied. 7. NONTRANSFERABILITY OF OPTION. The Option is not transferable by Optionee other than by Will or the laws of descent and distribution, and the Option shall be exercisable during Optionee's lifetime only by Optionee; provided, that the Option may be transferred solely to (i) members of the Optionee's immediate family (children, grandchildren, or spouse); (ii) trusts for the benefit of such family members; or (iii) partnerships where the only partners are such family members. Upon any attempt to transfer, assign, pledge, hypothecate or otherwise dispose of the Option contrary to the provisions hereof, or upon the levy of any attachment or similar process upon the Option, the Option shall immediately become null and void. 8. WITHHOLDING FOR TAXES. Optionee shall reimburse the Company, in cash or by certified or bank cashier's check, for any federal, state or local taxes required by law to be withheld with respect to the exercise of the Option or any disqualifying disposition of the Common Stock acquired upon exercise of the Option. The Company shall have the right to deduct from any salary or other payments to be made to Optionee any federal, state or local taxes required by law to be so withheld. The Company's obligation to deliver a certificate representing the Common Stock acquired upon exercise of the Option is subject to the payment by Optionee of any applicable federal, state and local withholding tax. 9. LEGENDS. Certificates representing Common Stock acquired upon exercise of this Option may contain such legends and transfer restrictions as the Company shall deem reasonably necessary or desirable, including, without limitation, legends restricting transfer of the Common Stock until there has been compliance with federal and state securities laws and until Optionee or any other holder of the Common Stock has paid the Company such amounts as may be necessary in order to satisfy any withholding tax liability of the Company resulting from a disqualifying disposition described in Section 422(a) of the Code. 10. EMPLOYEE BENEFITS. Optionee agrees that the grant and vesting of the Option and the receipt of shares of Common Stock upon exercise of the Option will constitute special incentive compensation that will not be taken into account as "salary" or "compensation" or "bonus" in determining the 2 amount of any payment under any pension, retirement, profit sharing or other remuneration plan of the Company unless so provided in such plan. 11. AMENDMENT. Subject to the terms and conditions of the Plan, the Plan Administrator may modify, extend or renew the Option, or accept the surrender of the Option to the extent not theretofore exercised and authorize the granting of new Options in substitution therefor, except that no such action shall diminish or impair the rights under the Option without the consent of Optionee. 12. INTERPRETATION. The interpretations and constructions of any provision of and determinations on any question arising under the Plan or this Agreement shall be made by the Plan Administrator, and all such interpretations, constructions and determinations shall be final and conclusive as to all parties. 13. RECEIPT OF PLAN. By entering into this Agreement, Optionee acknowledges (i) that he or she has received and read a copy of the Plan and (ii) that this Agreement is subject to and shall be construed in accordance with the terms and conditions of the Plan, as now or hereinafter in effect. 14. GOVERNING LAW. This Agreement shall be construed and shall take effect in accordance with the laws of the State of Colorado, without regard to the conflicts of laws rules of such State. 15. MISCELLANEOUS. This Agreement constitutes the entire understanding and agreement of the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements or understandings, inducements or conditions, express or implied, written or oral, between the parties with respect hereto. If any provision of this Agreement, or the application thereof, shall for any reason and to any extent be invalid or unenforceable, the remainder of this Agreement and the application of such provision to other circumstances shall be interpreted so as best to reasonably effect the intent of the parties hereto. All notices or other communications which are required to be given or may be given to either party pursuant to the terms of this Agreement shall be in writing and shall be delivered personally or by registered or certified mail, postage prepaid, to the address of the parties as set forth following the signature of such party. Notice shall be deemed given on the date of delivery in the case of personal delivery or on the delivery or refusal date as specified on the return receipt in the case of registered or certified mail. Either party may change its address for such communications by giving notice thereof to the other party in conformity with this Section 15. 3 IN WITNESS WHEREOF, the Company by a duly authorized officer of the Company and Optionee have executed this Agreement on _____________, effective as of the date of grant. CARBON ENERGY CORPORATION By: ------------------------------------- Title: ---------------------------------- Address: 1700 Broadway, Suite 1150 Denver, CO 80290 ------------------------------- OPTIONEE: ------------------------------- Address: -------------------------------- 4 SCHEDULES TO INCENTIVE STOCK OPTION AGREEMENT SCHEDULE 3A Number of Shares of Stock: ------------------ 3B Purchase Price per Share: ------------------ 4 Expiration Date: ------------------ 6 Vesting Schedule:
Number of Shares Date Which Become Exercisable ---- ------------------------ ------------------------------ ---------------------------- ------------------------------ ---------------------------- ------------------------------ ---------------------------- ------------------------------ ---------------------------- ------------------------------ ---------------------------- ------------------------------ ----------------------------
ADDITIONAL CONDITIONS TO VESTING: Notwithstanding the foregoing, no portion of the Option shall be vested and exercisable until the following conditions have been satisfied: - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 5 EX-4.5 3 a2046706zex-4_5.txt EXHIBIT 4.5 Exhibit 4.5 INCENTIVE STOCK OPTION AGREEMENT (WITH AUTHORIZATION FOR EARLY EXERCISE) OPTIONEE: --------------------------------------- DATE OF GRANT: ---------------------------------- AGREEMENT between Carbon Energy Corporation (the "Company"), and the above named Optionee ("Optionee"), an employee of the Company or a Subsidiary thereof. The Company and Optionee agree as follows: 1. GRANT OF OPTION. Optionee is hereby granted an Incentive Stock Option, within the meaning of Section 422 of the Code (the "Option"), to purchase Common Stock of the Company pursuant to the Carbon Energy Corporation 1999 Stock Option Plan (the "Plan"). The Option and this Agreement are subject to and shall be construed in accordance with the terms and conditions of the Plan, as now or hereinafter in effect. Any terms which are used in this Agreement without being defined and which are defined in the Plan shall have the meaning specified in the Plan. 2. DATE OF GRANT. The date of the grant of the Option is the date first set forth above, the date of the action by the Plan Administrator in granting the same. 3. NUMBER AND PRICE OF SHARES. The number of shares as to which the Option is granted is the number set forth in Schedule 3A to this Agreement. The purchase price per share is the amount set forth in Schedule 3B to this Agreement. 4. EXPIRATION DATE. Unless sooner terminated as provided in Section 5.4 or Section 10 of the Plan, the Option shall expire and terminate on the date set forth in Schedule 4 to this Agreement, and in no event shall the Option be exercisable after that date. 5. MANNER OF EXERCISE. Except as provided in this Agreement, the Option shall be exercisable, in whole or in part, from time to time, in the manner provided in Section 8 of the Plan. 1 6. TIME OF EXERCISE. The Option granted hereby shall become vested in and exercisable by Optionee on the dates and subject to the conditions set forth in Schedule 6 to this Agreement; provided, however, that Optionee must have been continuously employed by the Company or a Subsidiary thereof from the date of grant of the Option until the date specified on Schedule 6 or until the conditions specified on Schedule 6 have been satisfied. 7. EARLY EXERCISE. Notwithstanding the provisions of Section 6, Optionee may elect at any time prior to the termination of Optionee's employment with the Company or a Subsidiary thereof to exercise the Option as to any part or all of the shares subject to this Option, including without limitation, shares with respect to which the Option has not yet vested pursuant to Section 6; provided, however, that (i) a partial exercise of this Option shall be deemed to apply first to vested shares and then to the earliest vesting installment of unvested shares, and (ii) upon exercise of the Option with respect to unvested shares, Optionee shall execute and deliver to the Company an Early Exercise Stock Repurchase Agreement in substantially the form attached to this Agreement as EXHIBIT A, which Agreement shall apply with respect to the unvested shares. Execution and delivery of the Early Exercise Stock Repurchase Agreement prior to the transfer or delivery of any shares and prior to the expiration of the option period shall be a condition precedent to the right to purchase such shares. The election provided in this Section 7 to purchase shares prior to the vesting of the Option shall cease upon termination of Optionee's employment with the Company or a Subsidiary thereof and may not be exercised after the date of such termination. 8. NONTRANSFERABILITY OF OPTION. The Option is not transferable by Optionee other than by Will or the laws of descent and distribution, and the Option shall be exercisable during Optionee's lifetime only by Optionee; provided that the Optionee may transfer an Option solely to (i) members of the Optionee's immediate family (children, grandchildren, or spouse); (ii) trusts for the benefit of such family members; or (iii) partnerships where the only partners are such family members. Upon any attempt to transfer, assign, pledge, hypothecate or otherwise dispose of the Option contrary to the provisions hereof, or upon the levy of any attachment or similar process upon the Option, the Option shall immediately become null and void. 9. WITHHOLDING FOR TAXES. Optionee shall reimburse the Company, in cash or by certified or bank cashier's check, for any federal, state or local taxes required by law to be withheld with respect to the exercise of the Option or any disqualifying disposition of the Common Stock acquired upon exercise of the Option. The Company shall have the right to deduct from any salary or other payments to be made to Optionee any federal, state or local taxes required by law to be so withheld. The Company's obligation to deliver a certificate representing the Common Stock acquired upon exercise of the Option is subject to the payment by Optionee of any applicable federal, state and local withholding tax. 2 10. LEGENDS. Certificates representing Common Stock acquired upon exercise of this Option may contain such legends and transfer restrictions as the Company shall deem reasonably necessary or desirable, including, without limitation, legends restricting transfer of the Common Stock until there has been compliance with federal and state securities laws and until Optionee or any other holder of the Common Stock has paid the Company such amounts as may be necessary in order to satisfy any withholding tax liability of the Company resulting from a disqualifying disposition described in Section 422(a) of the Code. 11. EMPLOYEE BENEFITS. Optionee agrees that the grant and vesting of the Option and the receipt of shares of Common Stock upon exercise of the Option will constitute special incentive compensation that will not be taken into account as "salary" or "compensation" or "bonus" in determining the amount of any payment under any pension, retirement, profit sharing or other remuneration plan of the Company unless otherwise provided in such plan. 12. AMENDMENT. Subject to the terms and conditions of the Plan, the Plan Administrator may modify, extend or renew the Option, or accept the surrender of the Option to the extent not theretofore exercised and authorize the granting of new Options in substitution therefor, except that no such action shall diminish or impair the rights under the Option without the consent of Optionee. 13. INTERPRETATION. The interpretations and constructions of any provision of and determinations on any question arising under the Plan or this Agreement shall be made by the Plan Administrator, and all such interpretations, constructions and determinations shall be final and conclusive as to all parties. 14. RECEIPT OF PLAN. By entering into this Agreement, Optionee acknowledges (i) that he or she has received and read a copy of the Plan and (ii) that this Agreement is subject to and shall be construed in accordance with the terms and conditions of the Plan, as now or hereinafter in effect. 15. GOVERNING LAW. This Agreement shall be construed and shall take effect in accordance with the laws of the State of Colorado, without regard to the conflicts of laws rules of such State. 16. MISCELLANEOUS. This Agreement constitutes the entire understanding and agreement of the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements or 3 understandings, inducements or conditions, express or implied, written or oral, between the parties with respect hereto. If any provision of this Agreement, or the application thereof, shall for any reason and to any extent be invalid or unenforceable, the remainder of this Agreement and the application of such provision to other circumstances shall be interpreted so as best to reasonably effect the intent of the parties hereto. All notices or other communications which are required to be given or may be given to either party pursuant to the terms of this Agreement shall be in writing and shall be delivered personally or by registered or certified mail, postage prepaid, to the address of the parties as set forth following the signature of such party. Notice shall be deemed given on the date of delivery in the case of personal delivery or on the delivery or refusal date as specified on the return receipt in the case of registered or certified mail. Either party may change its address for such communications by giving notice thereof to the other party in conformity with this Section 16. IN WITNESS WHEREOF, the Company by a duly authorized officer of the Company and Optionee have executed this Agreement on _____________, effective as of the date of grant. CARBON ENERGY CORPORATION By: ------------------------------------- Title: ---------------------------------- Address: 1700 Broadway, Suite 1150 Denver, CO 80290 ------------------------------- OPTIONEE: ------------------------------- Address: -------------------------------- 4 SCHEDULES TO INCENTIVE STOCK OPTION AGREEMENT (WITH AUTHORIZATION FOR EARLY EXERCISE) SCHEDULE 3A Number of Shares of Stock: ------------------ 3B Purchase Price per Share: ------------------ 4 Expiration Date: ------------------ 6 Vesting Schedule:
Number of Shares Date Which Become Exercisable ---- ------------------------ ------------------------------ ---------------------------- ------------------------------ ---------------------------- ------------------------------ ---------------------------- ------------------------------ ---------------------------- ------------------------------ ---------------------------- ------------------------------ ----------------------------
ADDITIONAL CONDITIONS TO VESTING: Notwithstanding the foregoing, no portion of the Option shall be vested and exercisable until the following conditions have been satisfied: - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 5 EX-4.6 4 a2046706zex-4_6.txt EXHIBIT 4.6 Exhibit 4.6 NONQUALIFIED STOCK OPTION AGREEMENT OPTIONEE: --------------------------------------- DATE OF GRANT: ---------------------------------- AGREEMENT between Carbon Energy Corporation (the "Company"), and the above named Optionee ("Optionee"). The Company and Optionee agree as follows: 1. GRANT OF OPTION. Optionee is hereby granted a Nonqualified Stock Option (the "Option") to purchase Common Stock of the Company pursuant to the Carbon Energy Corporation 1999 Stock Option Plan (the "Plan"). The Option is not intended to qualify as an Incentive Stock Option within the meaning of Section 422 of the Code. The Option and this Agreement are subject to and shall be construed in accordance with the terms and conditions of the Plan, as now or hereinafter in effect. Any terms which are used in this Agreement without being defined and which are defined in the Plan shall have the meaning specified in the Plan. 2. DATE OF GRANT. The date of the grant of the Option is the date first set forth above, the date of the action by the Plan Administrator in granting the same. 3. NUMBER AND PRICE OF SHARES. The number of shares as to which the Option is granted is the number set forth in Schedule 3A to this Agreement. The purchase price per share is the amount set forth in Schedule 3B to this Agreement. 4. EXPIRATION DATE. Unless sooner terminated as provided in Section 5.4 or Section 10 of the Plan, the Option shall expire and terminate on the date set forth in Schedule 4 to this Agreement, and in no event shall the Option be exercisable after that date. 5. MANNER OF EXERCISE. Except as provided in this Agreement, the Option shall be exercisable, in whole or in part, from time to time, in the manner provided in Section 8 of the Plan. 1 6. TIME OF EXERCISE. The Option granted hereby shall become vested in and exercisable by Optionee on the dates and subject to the conditions set forth in Schedule 6 to this Agreement; provided, however, that Optionee must have been continuously employed by the Company or a Subsidiary thereof from the date of grant of the Option until the date specified on Schedule 6 or until the conditions specified on Schedule 6 have been satisfied. 7. NONTRANSFERABILITY OF OPTION. The Option is not transferable by Optionee other than by Will or the laws of descent and distribution, and the Option shall be exercisable during Optionee's lifetime only by Optionee; provided that the Optionee may transfer an Option solely to (i) members of the Optionee's immediate family (children, grandchildren, or spouse); (ii) trusts for the benefit of such family members; or (iii) partnerships where the only partners are such family members. Upon any attempt to transfer, assign, pledge, hypothecate or otherwise dispose of the Option contrary to the provisions hereof, or upon the levy of any attachment or similar process upon the Option, the Option shall immediately become null and void. 8. WITHHOLDING FOR TAXES. Optionee shall reimburse the Company, in cash or by certified or bank cashier's check, for any federal, state or local taxes required by law to be withheld with respect to the exercise of the Option. The Company shall have the right to deduct from any salary or other payments to be made to Optionee any federal, state or local taxes required by law to be so withheld. The Company's obligation to deliver a certificate representing the Common Stock acquired upon exercise of the Option is subject to the payment by Optionee of any applicable federal, state and local withholding tax. 9. LEGENDS. Certificates representing Common Stock acquired upon exercise of this Option may contain such legends and transfer restrictions as the Company shall deem reasonably necessary or desirable, including, without limitation, legends restricting transfer of the Common Stock until there has been compliance with federal and state securities laws. 10. EMPLOYEE BENEFITS. Optionee agrees that the grant and vesting of the Option and the receipt of shares of Common Stock upon exercise of the Option will constitute special incentive compensation that will not be taken into account as "salary" or "compensation" or "bonus" in determining the amount of any payment under any pension, retirement, profit sharing or other remuneration plan of the Company unless otherwise provided in such plan. 11. AMENDMENT. Subject to the terms and conditions of the Plan, the Plan Administrator may modify, extend or renew the Option, or accept the surrender of the Option to the extent not theretofore 2 exercised and authorize the granting of new Options in substitution therefor, except that no such action shall diminish or impair the rights under the Option without the consent of Optionee. 12. INTERPRETATION. The interpretations and constructions of any provision of and determinations on any question arising under the Plan or this Agreement shall be made by the Plan Administrator, and all such interpretations, constructions and determinations shall be final and conclusive as to all parties. 13. RECEIPT OF PLAN. By entering into this Agreement, Optionee acknowledges (i) that he or she has received and read a copy of the Plan and (ii) that this Agreement is subject to and shall be construed in accordance with the terms and conditions of the Plan, as now or hereinafter in effect. 14. GOVERNING LAW. This Agreement shall be construed and shall take effect in accordance with the laws of the State of Colorado, without regard to the conflicts of laws rules of such State. 15. MISCELLANEOUS. This Agreement constitutes the entire understanding and agreement of the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements or understandings, inducements or conditions, express or implied, written or oral, between the parties with respect hereto. If any provision of this Agreement, or the application thereof, shall for any reason and to any extent be invalid or unenforceable, the remainder of this Agreement and the application of such provision to other circumstances shall be interpreted so as best to reasonably effect the intent of the parties hereto. All notices or other communications which are required to be given or may be given to either party pursuant to the terms of this Agreement shall be in writing and shall be delivered personally or by registered or certified mail, postage prepaid, to the address of the parties as set forth following the signature of such party. Notice shall be deemed given on the date of delivery in the case of personal delivery or on the delivery or refusal date as specified on the return receipt in the case of registered or certified mail. Either party may change its address for such communications by giving notice thereof to the other party in conformity with this Section 15. 3 IN WITNESS WHEREOF, the Company by a duly authorized officer of the Company and Optionee have executed this Agreement on _____________, effective as of the date of grant. CARBON ENERGY CORPORATION By: ------------------------------------- Title: ---------------------------------- Address: 1700 Broadway, Suite 1150 Denver, CO 80290 ------------------------------- OPTIONEE: ------------------------------- Address: -------------------------------- 4 SCHEDULES TO NONQUALIFIED STOCK OPTION AGREEMENT SCHEDULE 3A Number of Shares of Stock: ------------------ 3B Purchase Price per Share: ------------------ 4 Expiration Date: ------------------ 6 Vesting Schedule:
Number of Shares Date Which Become Exercisable ---- ------------------------ ------------------------------ ---------------------------- ------------------------------ ---------------------------- ------------------------------ ---------------------------- ------------------------------ ---------------------------- ------------------------------ ---------------------------- ------------------------------ ----------------------------
ADDITIONAL CONDITIONS TO VESTING: Notwithstanding the foregoing, no portion of the Option shall be vested and exercisable until the following conditions have been satisfied: - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 5 EX-4.7 5 a2046706zex-4_7.txt EXHIBIT 4.7 Exhibit 4.7 NONQUALIFIED STOCK OPTION AGREEMENT (WITH AUTHORIZATION FOR EARLY EXERCISE) OPTIONEE: --------------------------------------- DATE OF GRANT: ---------------------------------- AGREEMENT between Carbon Energy Corporation (the "Company"), and the above named Optionee ("Optionee"). The Company and Optionee agree as follows: 1. GRANT OF OPTION. Optionee is hereby granted a Nonqualified Stock Option (the "Option") to purchase Common Stock of the Company pursuant to the Carbon Energy Corporation 1999 Stock Option Plan (the "Plan"). The Option is not intended to qualify as an Incentive Stock Option within the meaning of Section 422 of the Code. The Option and this Agreement are subject to and shall be construed in accordance with the terms and conditions of the Plan, as now or hereinafter in effect. Any terms which are used in this Agreement without being defined and which are defined in the Plan shall have the meaning specified in the Plan. 2. DATE OF GRANT. The date of the grant of the Option is the date first set forth above, the date of the action by the Plan Administrator in granting the same. 3. NUMBER AND PRICE OF SHARES. The number of shares as to which the Option is granted is the number set forth in Schedule 3A to this Agreement. The purchase price per share is the amount set forth in Schedule 3B to this Agreement. 4. EXPIRATION DATE. Unless sooner terminated as provided in Section 5.4 or Section 10 of the Plan, the Option shall expire and terminate on the date set forth in Schedule 4 to this Agreement, and in no event shall the Option be exercisable after that date. 5. MANNER OF EXERCISE. Except as provided in this Agreement, the Option shall be exercisable, in whole or in part, from time to time, in the manner provided in Section 8 of the Plan. 1 6. TIME OF EXERCISE. The Option granted hereby shall become vested in and exercisable by Optionee on the dates and subject to the conditions set forth in Schedule 6 to this Agreement; provided, however, that Optionee must have been continuously employed by the Company or a Subsidiary thereof from the date of grant of the Option until the date specified on Schedule 6 or until the conditions specified on Schedule 6 have been satisfied. 7. EARLY EXERCISE. Notwithstanding the provisions of Section 6, Optionee may elect at any time prior to the termination of Optionee's employment with the Company or a Subsidiary thereof to exercise the Option as to any part or all of the shares subject to this Option, including without limitation, shares with respect to which the Option has not yet vested pursuant to Section 6; provided, however, that (i) a partial exercise of this Option shall be deemed to apply first to vested shares and then to the earliest vesting installment of unvested shares, and (ii) upon exercise of the Option with respect to unvested shares, Optionee shall execute and deliver to the Company an Early Exercise Stock Repurchase Agreement in substantially the form attached to this Agreement as EXHIBIT A, which Agreement shall apply with respect to the unvested shares. Execution and delivery of the Early Exercise Stock Repurchase Agreement prior to the transfer or delivery of any shares and prior to the expiration of the option period shall be a condition precedent to the right to purchase such shares. The election provided in this Section 7 to purchase shares prior to the vesting of the Option shall cease upon termination of Optionee's employment with the Company or a Subsidiary thereof and may not be exercised after the date of such termination. 8. NONTRANSFERABILITY OF OPTION. The Option is not transferable by Optionee other than by Will or the laws of descent and distribution, and the Option shall be exercisable during Optionee's lifetime only by Optionee; provided that the Optionee may transfer an Option solely to (i) members of the Optionee's immediate family (children, grandchildren, or spouse); (ii) trusts for the benefit of such family members; or (iii) partnerships where the only partners are such family members. Upon any attempt to transfer, assign, pledge, hypothecate or otherwise dispose of the Option contrary to the provisions hereof, or upon the levy of any attachment or similar process upon the Option, the Option shall immediately become null and void. 9. WITHHOLDING FOR TAXES. Optionee shall reimburse the Company, in cash or by certified or bank cashier's check, for any federal, state or local taxes required by law to be withheld with respect to the exercise of the Option. The Company shall have the right to deduct from any salary or other payments to be made to Optionee any federal, state or local taxes required by law to be so withheld. The Company's obligation to deliver a certificate representing the Common Stock acquired upon exercise of the Option is subject to the payment by Optionee of any applicable federal, state and local withholding tax. 10. LEGENDS. 2 Certificates representing Common Stock acquired upon exercise of this Option may contain such legends and transfer restrictions as the Company shall deem reasonably necessary or desirable, including, without limitation, legends restricting transfer of the Common Stock until there has been compliance with federal and state securities laws. 11. EMPLOYEE BENEFITS. Optionee agrees that the grant and vesting of the Option and the receipt of shares of Common Stock upon exercise of the Option will constitute special incentive compensation that will not be taken into account as "salary" or "compensation" or "bonus" in determining the amount of any payment under any pension, retirement, profit sharing or other remuneration plan of the Company unless otherwise provided in such plan. 12. AMENDMENT. Subject to the terms and conditions of the Plan, the Plan Administrator may modify, extend or renew the Option, or accept the surrender of the Option to the extent not theretofore exercised and authorize the granting of new Options in substitution therefor, except that no such action shall diminish or impair the rights under the Option without the consent of Optionee. 13. INTERPRETATION. The interpretations and constructions of any provision of and determinations on any question arising under the Plan or this Agreement shall be made by the Plan Administrator, and all such interpretations, constructions and determinations shall be final and conclusive as to all parties. 14. RECEIPT OF PLAN. By entering into this Agreement, Optionee acknowledges (i) that he or she has received and read a copy of the Plan and (ii) that this Agreement is subject to and shall be construed in accordance with the terms and conditions of the Plan, as now or hereinafter in effect. 15. GOVERNING LAW. This Agreement shall be construed and shall take effect in accordance with the laws of the State of Colorado, without regard to the conflicts of laws rules of such State. 16. MISCELLANEOUS. This Agreement constitutes the entire understanding and agreement of the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements or understandings, inducements or conditions, express or implied, written or oral, between the parties with respect hereto. If any provision of this Agreement, or the application thereof, shall for any reason and to any extent be invalid or unenforceable, the remainder of this Agreement and the application of such provision to other circumstances shall be interpreted so as best to reasonably effect the intent of the parties hereto. All notices or other communications which are required to be given or may be given to either party pursuant to the terms of this Agreement shall 3 be in writing and shall be delivered personally or by registered or certified mail, postage prepaid, to the address of the parties as set forth following the signature of such party. Notice shall be deemed given on the date of delivery in the case of personal delivery or on the delivery or refusal date as specified on the return receipt in the case of registered or certified mail. Either party may change its address for such communications by giving notice thereof to the other party in conformity with this Section 16. IN WITNESS WHEREOF, the Company by a duly authorized officer of the Company and Optionee have executed this Agreement on ___________, effective as of the date of grant. CARBON ENERGY CORPORATION By: ------------------------------------- Title: ---------------------------------- Address: 1700 Broadway, Suite 1150 Denver, CO 80290 ------------------------------- OPTIONEE: ------------------------------- Address: -------------------------------- 4 SCHEDULES TO NONQUALIFIED STOCK OPTION AGREEMENT (WITH AUTHORIZATION FOR EARLY EXERCISE) SCHEDULE 3A Number of Shares of Stock: ------------------ 3B Purchase Price per Share: ------------------ 4 Expiration Date: ------------------ 6 Vesting Schedule:
Number of Shares Date Which Become Exercisable ---- ------------------------ ------------------------------ ---------------------------- ------------------------------ ---------------------------- ------------------------------ ---------------------------- ------------------------------ ---------------------------- ------------------------------ ---------------------------- ------------------------------ ----------------------------
ADDITIONAL CONDITIONS TO VESTING: Notwithstanding the foregoing, no portion of the Option shall be vested and exercisable until the following conditions have been satisfied: - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 5 EX-4.8 6 a2046706zex-4_8.txt EXHIBIT 4.8 Exhibit 4.8 CARBON ENERGY CORPORATION EARLY EXERCISE STOCK PURCHASE AGREEMENT THIS AGREEMENT is made by and between Carbon Energy Corporation, a Colorado corporation (the "Company"), and _______________________ ("Purchaser"). RECITALS: Purchaser holds a stock option (the "Option") to purchase ________ shares of common stock of the Company (the "Stock " or "Common Stock") granted on _________________________, ____ pursuant to the Company's 1999 Stock Option Plan (the "Plan"), which Purchaser desires to exercise. Purchaser wishes to take advantage of the early exercise provision of the Option and therefore to enter into this Agreement. AGREEMENT: Now, therefore, the parties hereto agree as follows: Purchaser hereby agrees to purchase from the Company, and the Company hereby agrees to sell to Purchaser, pursuant to the exercise of the Option, an aggregate of ____________ shares of the Common Stock, for an exercise price of _________ ($________) per share (total exercise price: $ _________), payable as follows: Cash at Closing $ Value of _________ shares of $ Common Stock (held outright by Purchaser for at least 6 months prior to the date of this Agreement) Total Exercise Price $
The closing hereunder shall occur at the offices of the Company on the date of this Agreement or at such other time and place as the parties may mutually agree upon in writing. At the closing, Purchaser shall deliver three (3) stock assignments in the form of Attachment A, duly endorsed (with date and number of shares left blank), joint escrow instructions (the "Joint Escrow Instructions") in the form of Attachment B, duly executed by Purchaser, and the total exercise price (including endorsed certificates representing the appropriate number of shares of the Company's Common Stock if a portion of the total exercise price is to be paid by Common Stock). At the closing or as soon thereafter as practicable, the Company shall deliver to the Escrow Agent (as defined below) share certificates for all of the Stock that is to be subject to the 1 Purchase Option (as defined below), and shall deliver share certificates to Purchaser for all of the Stock, if any, that is not to be subject to the Purchase Option. COMPANY'S PURCHASE OPTION. The Stock to be purchased by Purchaser pursuant to this Agreement shall be subject to the following option (the "Purchase Option"): If the Purchaser ceases to be an employee of the Company or (if the Purchaser is a non-employee director of the Company) if the Purchaser ceases to serve as a member of the Board of Directors of the Company, for any reason (including his death), or no reason, with or without cause, the Purchase Option may be exercised. The Company shall have the right at any time within ninety (90) days after such cessation of employment or service as a director, as the case may be, to purchase from Purchaser or his personal representative, as the case may be, at the price per share paid by Purchaser pursuant to this Agreement (the "Option Price"), up to but not exceeding the number of shares (including fractional shares) of Common Stock in which the Purchaser has not vested pursuant to the terms set forth in the schedule of the Option as of the date of such cessation of employment or service as a director, as the case may be. Immediately prior to the consummation of a Change in Control, as defined in the Plan, the Purchase Option shall automatically lapse in its entirety, except to the extent the Purchase Option is to be assigned to the successor corporation (or its parent company) in connection with such Change in Control. To the extent the Purchase Option remains in effect following Change in Control, the right shall apply to the new capital stock or other property (including cash paid other than as a regular cash dividend) received in exchange for the stock in consummation of the Change in Control, but only to the extent the Common Stock is at the time covered by such right. Appropriate adjustments shall be made to the price per share payable upon exercise of the Purchase Option to reflect the effect of the Change in Control upon the Company's capital structure; provided, however, that the aggregate price shall remain the same. The Company shall be entitled to pay for any shares purchased pursuant to its Purchase Option at the Company's option in cash, by offset against any indebtedness owing to the Company by Purchaser including without limitation any recourse note given in payment for the Stock, or a combination of both. The Purchase Option may be exercised by giving written notice of exercise delivered or mailed as provided herein. Upon provision of such notice and payment or tender of the purchase price, the Company shall become the legal and beneficial owner of the Stock being purchased and all rights and interests therein or related thereto. If from time to time during the term of the Purchase Option there is any stock dividend or liquidating dividend or distribution of cash and/or property, stock split or other change in the character or amount of any of the outstanding securities of the Company, then, in such event, any and all new, substituted or additional securities or other property to which Purchaser is entitled by reason of his ownership of Stock will be immediately subject to the Purchase Option and be included in the word "Stock" for all purposes of the Purchase Option with the same force and effect as the shares of Stock then subject to the Purchase Option. While the total Option Price 2 shall remain the same after each such event, the Option Price per share of Stock upon exercise of the Purchase Option shall be appropriately adjusted. As used herein, employment with the Company shall include employment with an affiliate of the Company. COMPANY'S DESIGNEE. The Company shall have the right to designate one or more persons or entities, or a combination of both (the "Company's Designee"), to exercise all or any part of the Company's rights, assume all or any part of the Company's benefits, and bear all or any part of the Company's burdens pursuant to this Agreement, and a reference to the Company shall mean the Company and/or the Company's Designee, as the case may be. Notwithstanding any provision herein to the contrary, a designation by the Company shall not relieve the Company of the responsibility to pay any part of the purchase price for Stock which is not paid by the Company's Designee. NOTICES. All notices or other communications required under this Agreement or given in connection herewith shall be in writing and shall either be delivered personally, in which event the effective date shall be the date of delivery, or shall be sent by United States mail addressed as hereinafter set forth, postage pre-paid, registered or certified, return receipt requested, in which event the effective date shall be the delivery date as specified on the return receipt. Unless otherwise directed by notice in writing, all notices shall be addressed as follows: (a) To the Company at: Carbon Energy Corporation 1700 Broadway, Suite 1150 Denver, Colorado 80290 Attention: Secretary (b) To the Purchaser at: The address of the Purchaser set forth on the transfer records of the Company. LEGEND ON STOCK. All certificates representing any shares of Stock of the Company subject to the provisions of this Agreement shall bear applicable legends which read substantially as follows: (a) THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO AN OPTION SET FORTH IN AN AGREEMENT BETWEEN THE ISSUER AND THE REGISTERED HOLDER, OR HIS PREDECESSOR IN INTEREST. A COPY OF THAT AGREEMENT MAY BE INSPECTED AT THE PRINCIPAL OFFICE OF THE ISSUER. ANY TRANSFER OR ATTEMPTED TRANSFER OF ANY SHARES SUBJECT TO SUCH OPTION IS VOID WITHOUT THE PRIOR EXPRESS WRITTEN CONSENT OF THE ISSUER OF THESE SHARES. 3 (b) Any legend required to be placed thereon by appropriate state blue sky officials. As security for his faithful performance of the terms of this Agreement and to ensure the availability for delivery of Purchaser's Stock upon exercise of the Purchase Option herein provided for, Purchaser agrees, at the closing hereunder (or as soon thereafter as practicable), to deliver (or have the Company deliver on the Purchaser's behalf) to and deposit with the Secretary of the Company ("Escrow Agent"), as Escrow Agent in this transaction, three (3) stock assignments duly endorsed (with date and number of shares left blank) in the form attached hereto as Attachment A, together with a certificate or certificates evidencing all of the Stock subject to the Purchase Option; said documents are to be held by the Escrow Agent and delivered by said Escrow Agent pursuant to the Joint Escrow Instructions of the Company and Purchaser set forth in Attachment B attached hereto and incorporated herein by this reference, which instructions shall also be delivered to the Escrow Agent at the closing hereunder (or as soon thereafter as practicable). The Company shall not be required (i) to transfer on its books any shares of Stock of the Company which shall have been sold or transferred in violation of any of the provisions set forth in this Agreement or (ii) to treat as owner of such shares or to accord the right to vote as such owner or to pay dividends to any transferee to whom such shares shall have been so transferred. Subject to the provisions of this Agreement, Purchaser (but not any unapproved transferee) shall, during the term of this Agreement, exercise all rights and privileges of a stockholder of the Company with respect to the Stock. The parties agree to execute such further instruments and to take such further action as reasonably may be necessary to carry out the intent of this Agreement. This Agreement is not an employment contract and nothing in this Agreement shall be deemed to create in any way whatsoever any obligation on the part of Purchaser to continue in the employ of the Company, or of the Company to continue Purchaser in the employ of the Company. In the event that the Option was granted in connection with the performance of services as a consultant or director, references to employment, employee and similar terms shall be deemed to include the performance of services as a consultant or a director, as the case may be, provided, however, that no rights as an employee shall arise by reason of the use of such terms. TERMINATION. Notwithstanding any provision herein to the contrary, this Agreement shall terminate, and neither party shall have any further obligation to the other, upon the occurrence of any of the following events: (a) The insolvency, receivership or dissolution of the Company. (b) The voluntary written agreement of the Company, upon the approval of its Board of Directors, and the Purchaser. 4 (c) September 1, 2014. SPECIFIC ENFORCEMENT. Because of the unique value of the Stock, in addition to any other remedies which the Company may have upon the breach of the agreements contained herein, the obligations of the Purchaser shall be specifically enforceable. MODIFICATION. This Agreement may only be altered or amended by a written instrument signed by the Company and the Purchaser setting forth such changes. COSTS OF ENFORCEMENT. In any action at law or in equity to enforce any of the provisions or rights under this Agreement, the unsuccessful party of such litigation, as determined by any court of competent jurisdiction in a final judgment or decree, shall pay the successful party or parties all costs, expenses and reasonable attorneys' fees incurred therein by such party or parties (including without limitation such costs, expenses and fees on any appeals), and if such successful party shall recover judgment in any action or proceeding, such costs, expenses and attorneys' fees shall be included as part of the judgment. SEVERABILITY. The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision hereof. ENTIRE AGREEMENT; COUNTERPARTS; HEADINGS. This Agreement constitutes the entire agreement between the parties pertaining to the subject matter hereof and supersedes all prior and contemporaneous agreements, representations and understandings. This Agreement may be executed in counterparts, all of which shall be deemed to be one and the same instrument, and it shall be sufficient for each party to have executed at least one, but not necessarily the same, counterpart. The headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement in any way. ASSIGNMENT. This Agreement shall be binding upon the parties and their respective legal representatives, beneficiaries, successors and assigns. GOVERNING LAW. This Agreement and the rights and obligations of the parties hereto shall be governed by and construed and enforced in accordance with the laws of the State of Colorado. 5 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the ____ day of _______________, 20__. CARBON ENERGY CORPORATION By: ------------------------------------- Title: ---------------------------------- Address: 1700 Broadway, Suite 1150 Denver, CO 80290 ------------------------------- PURCHASER: ------------------------------ Address: -------------------------------- ATTACHMENTS: Attachment A Assignment Separate from Certificate Attachment B Joint Escrow Instructions 6 ATTACHMENT A ASSIGNMENT SEPARATE FROM CERTIFICATE FOR VALUE RECEIVED and pursuant to that certain Early Exercise Stock Purchase Agreement (the "Agreement") dated as of ____________, ______, __________ hereby sells, assigns and transfers unto (____) shares of common stock of Carbon Energy Corporation, a Colorado corporation, standing in the undersigned's name on the books of said corporation represented by Certificate No. ___ herewith, and does hereby irrevocably constitute and appoint the Secretary of Carbon Energy Corporation as attorney in fact to transfer the said stock on the books of the said corporation with full power of substitution in the premises. This Assignment may be used only in accordance with and subject to the terms and conditions of the Agreement, in connection with the repurchase of shares of common stock issued to the undersigned pursuant to the Agreement, and only to the extent that such shares remain subject to the Company's Purchase Option under the Agreement. Dated: --------------------- ------------------------------------- [Signature] ------------------------------------- [Print Name] 7 ATTACHMENT B JOINT ESCROW INSTRUCTIONS Carbon Energy Corporation Attention: Secretary 1700 Broadway, Suite 1150 Denver, Colorado 80290 Dear Sir or Madam: As Escrow Agent for both Carbon Energy Corporation, a Colorado corporation (the "Company"), and the undersigned purchaser of stock of the Company ("Purchaser"), you are hereby authorized and directed to hold the documents delivered to you pursuant to the terms of that certain Early Exercise Stock Purchase Agreement (the "Agreement"), dated ________________, to which a copy of these Joint Escrow Instructions is attached as Attachment B, in accordance with the following instructions: 1. In the event the Company or an assignee shall elect to exercise the Purchase Option set forth in the Agreement, the Company or its assignee will give to Purchaser and you a written notice specifying the number of shares of stock to be purchased, the purchase price, and the time for a closing hereunder at the principal office of the Company. Purchaser and the Company hereby irrevocably authorize and direct you to close the transaction contemplated by such notice in accordance with the terms of said notice. 2. At the closing you are directed (a) to date any stock assignments necessary for the transfer in question, (b) to fill in the number of shares being transferred, and (c) to deliver same, together with the certificate evidencing the shares of stock to be transferred, to the Company against the simultaneous delivery to you of the purchase price (which may include suitable acknowledgment of cancellation of indebtedness) of the number of shares of stock being purchased pursuant to the exercise of the Purchase Option. 3. Purchaser irrevocably authorizes the Company to deposit with you any certificates evidencing shares of stock to be held by you hereunder and any additions and substitutions to said shares as specified in the Agreement. Purchaser does hereby irrevocably constitute and appoint you as his attorney-in-fact and agent for the term of this escrow to execute with respect to such securities and other property all documents of assignment and/or transfer and all stock certificates necessary or appropriate to make all securities negotiable and complete any transaction herein contemplated. 4. This escrow shall terminate upon expiration or exercise in full of the Purchase Option, whichever occurs first. 5. If at the time of termination of this escrow you should have in your possession any documents, securities, or other property belonging to Purchaser, you shall deliver all of same to Purchaser and shall be discharged of all further obligations hereunder; provided, however, that if at the time of termination of this escrow you are advised by the Company that the property 8 subject to this escrow is the subject of a pledge or other security agreement, you shall deliver all such property to the pledgeholder or other person designated by the Company. 6. Except at otherwise provided in these Joint Escrow Instructions, your duties hereunder may be altered, amended, modified or revoked only by a writing signed by all of the parties hereto. 7. You shall be obligated only for the performance of such duties as are specifically set forth herein and may rely and shall be protected in relying or refraining from acting on any instrument reasonably believed by you to be genuine and to have been signed or presented by the proper party or parties or their assignees. You shall not be personally liable for any act you may do or omit to do hereunder as Escrow Agent or as attorney-in-fact for Purchaser while acting in good faith and any act done or omitted by you pursuant to the advice of your own attorneys shall be conclusive evidence of such good faith. 8. You are hereby expressly authorized to disregard any and all warnings given by any of the parties hereto or by any other person or corporation, excepting only orders or process of courts of law, and are hereby expressly authorized to comply with and obey orders, judgments or decrees of any court. In case you obey or comply with any such order, judgment or decree of any court, you shall not be liable to any of the parties hereto or to any other person, firm or corporation by reason of such compliance, notwithstanding any such order, judgment or decree being subsequently reversed, modified, annulled, set aside, vacated or found to have been entered without jurisdiction. 9. You shall not be liable in any respect on account of the identity, authority or rights of the parties executing or delivering or purporting to execute or deliver the Agreement or any documents or papers deposited or called for hereunder. 10. You shall not be liable for the outlawing of any rights under any statute of limitations with respect to these Joint Escrow Instructions or any documents deposited with you. 11. You shall be entitled to employ such legal counsel and other experts as you may deem necessary properly to advise you in connection with your obligations hereunder, may rely upon the advice of such counsel, and may pay such counsel reasonable compensation therefor. 12. Your responsibilities as Escrow Agent hereunder shall terminate if you shall cease to be Secretary of the Company or if you shall resign by written notice to each party. In the event of any such termination, the Company may appoint any officer or assistant officer of the Company as successor Escrow Agent and Purchaser hereby confirms the appointment of such successor or successors as attorney-in-fact and agent to the full extent of your appointment. 13. If you reasonably require other or further instruments in connection with these Joint Escrow Instructions or obligations in respect hereto, the necessary parties hereto shall join in furnishing such instruments. 14. It is understood and agreed that should any dispute arise with respect to the delivery and/or ownership or right of possession of the securities, you may (but are not obligated to) retain in your possession without liability to anyone all or any part of said securities until such 9 dispute shall have been settled either by mutual written agreement of the parties concerned or by a final order, decree or judgment of a court of competent jurisdiction after the time for appeal has expired and no appeal has been perfected, but you shall be under no duty whatsoever to institute or defend any such proceedings. 15. Any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given upon personal delivery or upon deposit in any United States Post Box, by registered or certified mail with postage and fees prepaid, addressed to each of the other parties hereunto entitled at the following addresses specified below, or at such other addresses as a party may designate by ten days' written notice to each of the other parties hereto: 16. By signing these Joint Escrow Instructions you become a party hereto only for the purpose of said Joint Escrow Instructions; you do not become a party to the Agreement. 17. This instrument shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. It is understood and agreed that references to "you" or "your" herein refer to the original Escrow Agent and to any and all successor Escrow Agents. It is understood and agreed that the Company may at any time or from time to time assign its rights under the Agreement and these Joint Escrow Instructions in whole or in part. CARBON ENERGY CORPORATION By: ------------------------------------- Title: ---------------------------------- Address: 1700 Broadway, Suite 1150 Denver, CO 80290 ------------------------------- PURCHASER: ------------------------------ Address: -------------------------------- 10 EX-5.1 7 a2046706zex-5_1.txt EXHIBIT 5.1 Exhibit 5.1 HOLLAND & HART LLP [LETTERHEAD] May 7, 2001 Board of Directors Carbon Energy Corporation 1700 Broadway, Suite 1150 Denver, CO 80290 To the Board of Directors: As counsel for Carbon Energy Corporation (the "Company"), a Colorado corporation, we have examined and are familiar with its Articles of Incorporation, its Bylaws and its various corporate records and procedures relating to its incorporation. We are also familiar with the procedures taken by the Board of Directors of the Company to adopt the Carbon Energy Corporation 1999 Stock Option Plan (the "Plan"), effective October 14, 1999. Pursuant to the Plan, the Company may issue and sell 700,000 shares of its Common Stock (no par value), subject to possible adjustment, to eligible employees of the Company and its subsidiaries. We also have examined such other matters and have made such other inquiries as we deem relevant to our opinions expressed below. We are of the opinion that the total 700,000 shares of Common Stock of the Company, when issued in accordance with the Plan, will be legally issued and validly outstanding shares of the Common Stock of the Company, fully paid and non-assessable. We hereby consent to the filing of this opinion with the Securities and Exchange Commission as an Exhibit to the Company's Registration Statement on Form S-8 in connection with the Amendment. Very truly yours, Holland & Hart LLP EX-23.1 8 a2046706zex-23_1.txt EXHIBIT 23.1 Exhibit 23.1 CONSENT OF INDEPENDENT AUDITORS As independent public accountants, we hereby consent to the incorporation by reference in this registration statement of our report dated March 23, 2001 included in Carbon Energy Corporation's Form 10-K for the year ended December 31, 2001 and to all references to our Firm included in this registration statement. ARTHUR ANDERSEN LLP Denver, Colorado May 7, 2001 1 EX-23.2 9 a2046706zex-23_2.txt EXHIBIT 23.2 Exhibit 23.2 CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation by reference in the Registration Statement and Prospectus of Carbon Energy Corporation of our report dated March 1, 2000, accompanying the consolidated financial statements of Bonneville Fuels Corporation incorporated by reference in such Registration Statement, and to the use of our name and the statements with respect to us, as appearing under the heading "Experts" in the Prospectus. HEIN + ASSOCIATES LLP Denver, Colorado May 7, 2001 1 EX-24 10 a2046706zex-24.txt EXHIBIT 24 Exhibit 24 POWER OF ATTORNEY We, the undersigned directors and officers of Carbon Energy Corporation (the "Company") hereby appoint and authorize Patrick R. McDonald and Kevin D. Struzeski and each of them as their true and lawful attorneys-in-fact and agents: (1) to sign in the name of each such person and file with the Securities and Exchange Commission Registration Statements on Form S-8, and any and all amendments (including post-effective amendments) to such Registration Statements, for the registration under the Securities Act of 1933, as amended, of shares of Common Stock relating to the Carbon Energy Corporation 1999 Stock Option Plan; and (2) to take any and all actions necessary or required in connection with such Registration Statements and amendments to comply with the Securities Act of 1933, as amended, and the rules and regulations of the Securities and Exchange Commission promulgated thereunder. SIGNATURE TITLE DATE /s/ Patrick R. McDonald Director and President May 1, 2001 - ---------------------------- (Principal Executive ------------------- Patrick R. McDonald Officer) /s/ Kevin D. Struzeski Treasurer and Chief May 1, 2001 - ---------------------------- Financial Officer ------------------- Kevin D. Struzeski (Principal Financial and Accounting Officer) /s/ Cortlandt S. Dietler Director May 4, 2001 - ---------------------------- ------------------- Cortlandt S. Dietler /s/ David H. Kennedy Director May 4, 2001 - ---------------------------- ------------------- David H. Kennedy /s/ Bryan H. Lawrence Director May 4, 2001 - ---------------------------- ------------------- Bryan H. Lawrence /s/ Peter A. Leidel Director May 4, 2001 - ---------------------------- ------------------- Peter A. Leidel /s/ Harry A. Trueblood, Jr. Director May 4, 2001 - ---------------------------- ------------------- Harry A. Trueblood, Jr. -----END PRIVACY-ENHANCED MESSAGE-----