SOUTHWESTERN ENERGY COMPANY
NON-QUALIFIED STOCK OPTION
(Not Transferable)
THIS CERTIFIES, that SOUTHWESTERN ENERGY COMPANY, an Arkansas
corporation (the "Company"), has, as of the ____ day of _____, 2000, granted to
________________ (the "Participant"), a Non-Qualified Stock Option to purchase
______ shares (the "Optioned Shares") of the Company's Common Stock ($.10 par
value) on the terms and conditions attached hereto and made a part hereof
("Terms").
This Non-Qualified Stock Option is granted separate and apart
from the Southwestern Energy Company 2000 Stock Incentive Plan, and any shares
issued to the Participant upon exercise of this option shall be issued from
treasury shares.
This Non-Qualified Stock Option shall be exercisable only in
accordance with the provisions of this Certificate and the Terms. This
Non-Qualified Stock Option is not transferable except by Will or the laws of
descent and distribution.
The exercise price of the Optioned Shares shall be $_______ per
share.
This Non-Qualified Stock Option shall be exercisable in whole or
in part; provided, that no partial exercise shall be for an aggregate exercise
price of less than $1,000. The partial exercise of this Non-Qualified Stock
Option shall not cause the expiration, termination or cancellation of the
remaining portion hereof.
This Non-Qualified Stock Option shall be exercised by delivering
notice to the Company's principal office, to the attention of its Secretary, no
less than one business day in advance of the effective date of the proposed
exercise. Such notice shall be accompanied by this Certificate, shall specify
the number of Optioned Shares with respect to which this Non-Qualified Stock
Option is being exercised and the effective date of the proposed exercise and
shall be signed by the Participant. The Participant may withdraw such notice at
any time prior to the close of business on the business day immediately
preceding the effective date of the proposed exercise.
Payment for Optioned Shares purchased upon the exercise of this
Non-Qualified Stock Option shall be made on the effective date of such exercise
in accordance with the Terms.
THIS NON-QUALIFIED STOCK OPTION SHALL FIRST BECOME EXERCISABLE
WITH RESPECT TO THE FOLLOWING PERCENTAGE OF THE TOTAL SHARES SUBJECT HERETO ON
THE FOLLOWING DATES:
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First Date on Which Such Percentage
Percentage of Total Shares of Total Shares Becomes Exercisable
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33 1/3 %
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33 1/3 %
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33 1/3 %
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THIS NON-QUALIFIED STOCK OPTION SHALL BECOME FULLY VESTED AT THE
EARLIER OF ___________, _____ OR UPON PARTICIPANT'S RETIREMENT PROVIDED
PARTICIPANT HAS REACHED NORMAL RETIREMENT AGE (SIXTY-FIVE (65)), AS DEFINED IN
THE SOUTHWESTERN ENERGY COMPANY PENSION PLAN. PROVIDED, HOWEVER, UPON THE
OCCURRENCE OF A CHANGE IN CONTROL, IF AND TO THE EXTENT IT STILL IS OUTSTANDING,
THIS NON-QUALIFIED STOCK OPTION SHALL BECOME FULLY AND IMMEDIATELY EXERCISABLE
AND SHALL REMAIN EXERCISABLE UNTIL ITS EXPIRATION, TERMINATION OR CANCELLATION
PURSUANT TO THE TERMS.
THIS NON-QUALIFIED STOCK OPTION SHALL EXPIRE AND BE VOID AND
SHALL NOT BE EXERCISABLE AFTER THE EXPIRATION OF TEN (10) YEARS FROM THE DATE AS
OF WHICH IT WAS GRANTED AND MAY BE EXERCISED ONLY IN THE MANNER PROVIDED IN THE
TERMS. THIS NON-QUALIFIED STOCK OPTION SHALL BE SUBJECT TO EARLIER TERMINATION,
EXPIRATION OR CANCELLATION AS PROVIDED IN THE TERMS.
IN WITNESS WHEREOF, the Company has issued this Non-Qualified
Stock Option Certificate by its undersigned duly authorized officer as of the
____day of _____, 2000.
SOUTHWESTERN ENERGY COMPANY
ATTEST: (Seal) By:_____________________________
President and Chief
Executive Officer
By:____________________________
Executive Vice President and
Chief Financial Officer
_____________________________
(Participant)
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NQO TERMS AND CONDITIONS
1. Definitions
As used herein, the following definitions apply to the terms indicated
below:
(a) "Cause" when used in connection with the termination of a
Participant's employment with the Company, shall mean the termination
of the Participant's employment by the Company on account of (i) the
willful and continued failure by the Participant to substantially
perform the Participant's duties and obligations (other than any such
failure resulting from the Participant's incapacity due to physical or
mental illness), after a written demand for substantial performance has
been delivered to the Participant by the Company or by the
Participant's supervisor, which demand identifies in reasonable detail
the manner in which the Participant is believed to have not
substantially performed his or her duties, (ii) the Participant's
willful and serious misconduct which has resulted in or could
reasonably be expected to result in material injury to the business,
financial condition or reputation of the Company, (iii) the
Participant's conviction of, or entering of a plea of nolo contendere
to, a crime that constitutes a felony or serious misdemeanor or (iv)
the breach by the Participant of any written covenant or agreement with
the Company not to disclose any information pertaining to the Company
or not to compete or interfere with the Company.
(b) "Change in Control" shall mean the occurrence of any of
the following:
(i) any "person" (as such term is used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934 (the
"Exchange Act"), an "Acquiring Person") becomes the
"beneficial owner" (as such term is defined in Rule 13d-3
promulgated under the Exchange Act), directly or indirectly,
of securities of Southwestern representing 20% or more of the
combined voting power of Southwestern's then outstanding
securities, provided, however, that any acquisition by (A)
Southwestern or any of its subsidiaries, or any employee
benefit plan (or related trust) sponsored or maintained by
Southwestern or any of its subsidiaries or (B) any corporation
with respect to which, immediately following such acquisition,
more than 60% of, respectively, the then outstanding shares of
Common Stock of such corporation and the combined voting power
of the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors is
then beneficially owned, directly or indirectly, in the
aggregate by all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the
outstanding Southwestern Common Stock and Southwestern voting
securities immediately prior to such acquisition in
substantially the same proportion
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as their ownership, immediately prior to such acquisition, of
the outstanding Southwestern Common Stock and Southwestern
voting securities, as the case may be, shall not constitute a
Change in Control;
(ii) consummation by Southwestern of a reorganization,
merger or consolidation (a "Business Combination"), in each
case, with respect to which all or substantially all of the
individuals and entities who were their respective beneficial
owners of the outstanding Southwestern Common Stock and
Southwestern voting securities immediately prior to such
Business Combination do not in the aggregate, immediately
following such Business Combination, beneficially own,
directly or indirectly, more than 60% of, respectively, the
then outstanding shares of Common Stock and the combined
voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as
the case may be, of the corporation resulting from such
Business Combination in substantially the same proportion as
their ownership immediately prior to such Business Combination
of the outstanding Southwestern Common Stock and Southwestern
voting securities, as the case may be;
(iii) any individual who is nominated by the Board for
election to the Board on any date fails to be so elected as a
direct or indirect result of any proxy fight or contested
election for positions on the Board;
(iv) a "change in control" of Southwestern of a nature
that would be required to be reported in response to Item 6(e)
of Schedule 14A of Regulation 14A promulgated under the
Exchange Act occurs;
(v) (A) a complete liquidation or dissolution of
Southwestern or (B) a sale or other disposition of all or
substantially all of the assets of both the Exploration and
Production and the Utility business segments of Southwestern
other than to a corporation with respect to which, immediately
following such sale or disposition, more than 80% of,
respectively, the then outstanding shares of Common Stock and
the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of
directors is then beneficially owned, directly or indirectly,
in the aggregate by all or substantially all of the
individuals and entities who were the beneficial owners,
respectively, of the outstanding Southwestern Common Stock and
Southwestern voting securities immediately prior to such sale
or disposition in substantially the same proportion as their
ownership of the outstanding Southwestern Common Stock and
Southwestern voting securities, as the case may be,
immediately prior to such sale or disposition;
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(vi) other than with respect to a person who is employed
in the Utility business segment of Southwestern, the sale or
other disposition of all or substantially all the assets of
the Exploration and Production business segment other than to
a corporation with respect to which, immediately following
such sale or disposition, more than 80% of, respectively, the
then outstanding shares of Common Stock and the combined
voting power of the then outstanding voting securities
entitled to vote generally in the election of directors is
then beneficially owned, directly or indirectly, in the
aggregate by all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the
outstanding Southwestern Common Stock and Southwestern voting
securities immediately prior to such sale or disposition in
substantially the same proportion as their ownership of the
outstanding Southwestern Common Stock and Southwestern voting
securities, as the case may be, immediately prior to such sale
or disposition; or
(vii) a majority of the Board determines in its sole
and absolute discretion that there has been a Change in
Control of Southwestern or that there will be a Change in
Control of Southwestern upon the occurrence of certain
specified events and such events occur.
(c) "Code" shall mean the Internal Revenue Code of 1986.
(d) "Committee" shall mean the Compensation Committee of the
Board of Directors or such other committee as the Board of Directors
shall appoint from time to time to administer this agreement and to
otherwise exercise and perform the authority and functions assigned to
the Committee under the terms of the agreement.
(e) "Common Stock" shall mean Southwestern's Common Stock,
$.10 par value per share, or any other security into which the common
stock shall be changed pursuant to the adjustment provisions of Section
5 hereto.
(f) "Company" shall mean Southwestern and each of its
Subsidiaries.
(g) "Disability" shall mean a condition entitling a
Participant to benefits under the long-term disability policy
maintained by the Company and applicable to the Participant.
(h) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
(i) the "Fair Market Value" shall mean, with respect to a
share of Common Stock, as of the applicable date of determination (i)
the closing sales price
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on the immediately preceding business day of a share of Common Stock as
reported on the principal securities exchange on which shares of Common
Stock are then listed or admitted to trading or (ii) if not so
reported, the average of the closing bid and ask prices on the
immediately preceding business day as reported on the National
Association of Securities Dealers Automated Quotation System or (iii)
if not so reported, as furnished by any member of the National
Association of Securities Dealers, Inc. selected by the Committee. In
the event that the price of a share of Common Stock shall not be so
reported, the Fair Market Value of a share of Common Stock shall be
determined by the Committee in its absolute discretion.
(j) "Incentive Stock Option" shall mean an Option granted to a
Participant which, at the date of grant, is intended to be an
"incentive stock option" within the meaning of Section 422 of the Code
and which is identified as an Incentive Stock Option in the agreement
by which it is evidenced.
(k) "Non-Qualified Stock Option" shall mean an Option granted
to a Participant which is not an Incentive Stock Option.
(l) "Option" shall mean an option to purchase shares of Common
Stock granted pursuant to Section 3 hereof.
(m) "Person" shall mean a "person," as such term is used in
sections 13(d) and 14(d) of the Exchange Act.
(n) "Securities Act" shall mean the Securities Act of 1933, as
amended.
(o) "Subsidiary" shall mean any "subsidiary corporation"
within the meaning of Section 425(f) of the Code.
2. Administration
The Agreement shall be administered by a Committee of the Board of
Directors consisting of two or more persons, at least two of whom qualify as a
"disinterested person," within the meaning of Rule 16b-3 promulgated under
Section 16 of the Exchange Act, and an "outside director," within the meaning of
Treasury Regulation Section 1.162-27(e)(2). The Committee shall have full
authority to administer this agreement, including authority to interpret and
construe any provision of this agreement. Decisions of the Committee shall be
final and binding on all parties.
The Committee may, in its absolute discretion, without amendment to
this agreement, accelerate the date on which any Option granted hereunder
becomes exercisable or otherwise adjust any of the terms of such Option.
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The Committee shall determine whether an authorized leave of absence,
or absence in military or government service, shall constitute termination of
employment.
No member of the Committee shall be liable for any action, omission, or
determination relating to the Agreement, and Southwestern shall indemnify and
hold harmless each member of the Committee and each other director or employee
of the Company to whom any duty or power relating to the administration or
interpretation of the Agreement has been delegated against any cost or expense
(including counsel fees) or liability (including any sum paid in settlement of a
claim with the approval of the Committee) arising out of any action, omission or
determination relating to the Agreement, unless, in either case, such action,
omission or determination was taken or made by such member, director or employee
in bad faith and without reasonable belief that it was in the best interests of
the Company.
3. Options
(a) Term and Exercise of Options
(1) Each Option shall be exercisable in whole or in part; provided,
that no partial exercise of an Option shall be for an aggregate exercise price
of less than $1,000. The partial exercise of an Option shall not cause the
expiration, termination or cancellation of the remaining portion thereof. Upon
the partial exercise of an Option, the agreements evidencing such Option marked
with such notations as the Committee may deem appropriate to evidence such
partial exercise, shall be returned to the Participant together with the
delivery of the certificates described in Section 3(a)(4) hereof.
(2) An Option shall be exercised by delivering notice to the Company's
principal office, to the attention of its Secretary, no less than three business
days in advance of the effective date of the proposed exercise. Such notice
shall specify the number of shares of Common Stock with respect to which the
Option is being exercised and the effective date of the proposed exercise and
shall be signed by the Participant. The Participant may withdraw such notice at
any time prior to the close of business on the business day immediately
preceding the effective date of the proposed exercise. Payment for shares of
Common Stock purchased upon the exercise of an Option shall be made on the
effective date of such exercise either (i) in cash, by certified check, bank
cashier's check or wire transfer or (ii) through a directed brokerage service,
if any is made available to Participants of the Company or (iii) subject to the
approval of the Committee, in shares of Common Stock that have been owned by the
Participant for a least six months prior to the effective date of exercise and
valued at their Fair Market Value on the effective date of such exercise, or
partly in shares of Common Stock with the balance in cash, by certified check,
bank cashier's check or wire transfer. Any payment in shares of Common Stock
shall be effected by the delivery of such shares to the Secretary of
Southwestern, duly endorsed in blank or accompanied by stock powers duly
executed in blank, together
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with any other documents and evidences as the Secretary of Southwestern shall
require from time to time.
(3) During the lifetime of the Participant, each Option granted to the
Participant shall be exercisable only by the Participant. No Option shall be
assignable or transferable otherwise than by will or by the laws of descent and
distribution, nor shall any option be permitted to be pledged in any manner.
Notwithstanding the foregoing, with the prior consent of the Committee, any
Option, including the right to exercise such Option, may be transferred by a
Participant during the Participant's lifetime, but only to: (i) one or more of a
Participant's spouse or natural or adopted lineal descendants; or (ii) a trust,
partnership, or corporation or other similar entity which is owned solely by one
or more of the Participant's spouse or natural or adopted lineal descendants or
which will hold such options solely for the benefit of one or more of such
persons.
(4) Certificates for shares of Common Stock purchased upon the exercise
of an Option shall be issued in the name of the Participant and delivered to the
Participant as soon as practicable following the effective date on which the
Option is exercised.
(b) Effect of Termination of Employment
(1) In the event that the employment of a Participant with the Company
shall terminate for any reason other than Disability, Retirement, Cause, or
death (i) Options granted to such Participant, to the extent that they were
vested and exercisable at the time of such termination, shall remain exercisable
until the expiration of ninety days after such termination, on which date they
shall expire, and (ii) Options granted to such Participant, to the extent that
they were not exercisable at the time of such termination, shall expire at the
close of business on the date of such termination; provided, however, that no
Option shall be exercisable after the expiration of its term.
(2) In the event that the employment of a articipant with the Company
shall terminate on account of the Disability or Retirement of the Participant
such Participant shall be entitled to exercise at any time or from time to time
after such termination and until the first anniversary of such termination,
Options granted to the Participant hereunder to the extent that such Options
were vested and exercisable at the time of such termination provided, however,
that no Option shall be exercisable after the expiration of its original term.
(3) In the event that the employment of a Participant with the Company
shall terminate on account of the death of the Participant, such Participant's
estate or beneficiary under the Participant's will shall be entitled to
exercise, at any time or from time to time until the first anniversary of such
termination, Options granted to the Participant hereunder to the extent that
such Options were exercisable at the time of such termination; provided,
however, that no Option shall be exercisable after the expiration of its
original term.
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Options that are not exercised prior to the first anniversary of such
termination shall expire on such anniversary date.
(4) In the event of the termination of a Participant's employment for
Cause, all outstanding Options granted to the Participant shall expire at the
commencement of business on the date of such termination; provided, however,
that no Participant shall be deemed to have been terminated for Cause during the
two year period following any Change in Control.
(5) For purposes of this Section 3(b), an Option shall be deemed to be
exercisable on the date of the termination of the employment of a Participant
with the Company to the extent, if any, it becomes exercisable by acceleration
by the Committee.
(c) Acceleration of Exercise Date Upon Change in Control
Upon the occurrence of a Change in Control, each Option granted
hereunder and outstanding at such time shall become fully and immediately
exercisable and shall remain exercisable until its expiration, termination or
cancellation pursuant to the terms hereof.
4. Adjustment Upon Changes in Common Stock
(a) Adjustment upon Certain Events
In the event of any change in the shares of Common Stock outstanding by
reason of any stock dividend or split, recapitalization, merger, consolidation,
combination, spin-off, reclassification or exchange of shares or similar
corporate change, the number of options granted the Participant may be
appropriately adjusted as the Committee shall determine to prevent enlargement
or dilution of the rights of Participants hereunder and the Committee's
determination hereunder shall be conclusive.
(b) Outstanding Options - Certain Transactions
Notwithstanding any other provisions hereto, in the event of (i) a
dissolution or liquidation of Southwestern, (ii) a sale of all or substantially
all of Southwestern's assets or (iii) a merger or consolidation involving
Southwestern, the Committee shall have the power to:
(A) cancel, effective immediately prior to the occurrence of
such event, each Option outstanding immediately prior to such event
(whether or not then exercisable), and, in full consideration of such
cancellation, pay to the Participant an amount in cash, for each share
of Common Stock subject to such Option equal to the excess of (A) the
value, as determined by the Committee in its absolute discretion, of
the property (including cash) received by the holder of a share of
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Common Stock as a result of such event over (B) the exercise price of
such Option; or
(B) provide for the exchange of each Option outstanding
immediately prior to such event (whether or not then exercisable) for
equivalent options covering securities of the acquiring entity (or
ultimate parent thereof) and, incident thereto, make an equitable
adjustment as determined by the Committee in the exercise price of such
option or, if appropriate, provide for a cash payment to the
Participant in partial consideration for the exchange of the Option.
(c) No Other Rights
Except as expressly provided herein, the Participant shall not have any
rights by reason of any subdivision or consolidation of shares of stock of any
class, the payment of any dividend, any increase or decrease in the number of
shares of stock of any class or any dissolution, liquidation, merger or
consolidation of the Company or any other corporation. Except as expressly
provided herein, no issuance by Southwestern of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number of shares
of Common Stock subject to the exercise price of any Option.
5. Rights as a Stockholder
No person shall have any rights as a stockholder with respect to any
shares of Common Stock covered by or relating to any Option granted hereunder
until the date of the issuance of a stock certificate with respect to such
shares. Except as otherwise expressly provided in Section 4 hereof, no
adjustment to any Option shall be made for dividends or other rights for with
the record date occurs prior to the date such stock certificate is issued.
6. No Special Employment Rights; No Right to Options
Nothing contained herein shall confer upon a Participant any right with
respect to the continuation of a Participant's employment by the Company or
interfere in any way with the right of the Company, subject to the terms of any
separate employment agreement to the contrary, at any time to terminate such
employment or to increase or decrease the compensation of a Participant from the
rate in existence at the time of the grant hereunder.
The Participant shall have no claim or right to receive any additional
Options hereunder. The Committee's granting of Options to a Participant at any
time shall neither require the Committee to grant Options to the Participant at
any time nor preclude the Committee from making subsequent grants to the
Participant.
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7. Securities Matters
(a) Southwestern shall be under no obligation to effect the
registration pursuant to the Securities Act of any interests in any shares of
Common Stock to be issued hereunder or to effect similar compliance under any
state laws. Notwithstanding anything herein to the contrary, Southwestern shall
not be obligated to cause to be issued or delivered any certificates evidencing
shares of Common Stock pursuant to this agreement unless and until Southwestern
is advised by its counsel that the issuance and delivery of such certificates is
in compliance with all applicable laws, regulations of governmental authority
and the requirements of the New York Stock Exchange and any other securities
exchange on which shares of Common Stock are traded. The Committee may require,
as a condition of the issuance and delivery of certificates evidencing shares of
Common Stock pursuant to the terms hereof, that the recipient of such shares
make such covenants, agreements and representations, and that such certificates
bear such legends, as the Committee deems necessary or desirable.
(b) The exercise of any Option granted hereunder shall be effective
only at such time as counsel to Southwestern shall have determined that the
issuance and delivery of shares of Common Stock pursuant to such exercise is in
compliance with all applicable laws, regulations of governmental authority and
the requirements of the New York Stock Exchange and any other securities
exchange on which shares of Common Stock are traded. Southwestern may, in its
sole discretion, defer the effectiveness of any exercise of an Option granted
hereunder or the issuance or transfer of shares of Common Stock pursuant thereto
or ensure compliance under federal or state securities laws. Southwestern shall
inform the Participant in writing of its decision to defer the effectiveness of
the exercise of an Option or the issuance or transfer of shares of Common Stock
granted hereunder. During the period that the effectiveness of the exercise of
an Option has been deferred, the Participant may, by written notice, withdraw
such exercise and obtain the refund of any amount paid with respect thereto.
8. Withholding Taxes
(a) Cash Remittance
Whenever shares of Common Stock are to be issued upon the exercise of
an Option, Southwestern shall have the right to require the Participant to remit
to Southwestern in cash an amount sufficient to satisfy federal, state and local
withholding tax requirements, if any, attributable to such exercise, prior to
the delivery of any certificate or certificates for such shares.
(b) Stock Remittance
Subject to Section 8(d) hereof at the election of the Participant,
subject to the approval of the Committee, when shares of Common Stock are to be
issued upon the
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exercise of an Option, in lieu of the remittance required by Section 8(a)
hereof, the Participant may tender to Southwestern a number of shares of Common
Stock owned by the Participant for at least six months having a Fair Market
Value at the tender date determined by the Committee to be sufficient to satisfy
the federal, state and local withholding tax requirements, if any, attributable
to such exercise, and not greater than Participant's estimated total federal,
state and local tax obligations associated with such exercise.
(c) Stock Withholding
Southwestern shall have the right, when shares of Common Stock are to
be issued upon the exercise of an Option, in lieu of requiring the remittance
required by Section 8(a) hereof, to withhold a number of such shares, the Fair
Market Value of which at the exercise date the Committee determines to be
sufficient to satisfy the federal, state and local withholding tax requirements,
if any, attributable to such exercise, and is not greater than Participant's
estimated total federal, state and local tax obligations associated with such
exercise.
(d) Timing and Method of Elections
If the Participant is subject to Section 16(b) of the Exchange Act, the
Participant may only make such election described in Section 8(b) hereof if the
Participant is in compliance with the Southwestern Energy Company Statement of
Company Policy on Insider Trading and the Southwestern Energy Company Policy
Regarding Special Trading Procedures.
9. No Obligation to Exercise
The grant to the Participant of an Option shall impose no obligation
upon such Participant to exercise such Option.
10. Transfers Upon Death
Upon the death of a Participant, outstanding Options may be exercised
only by the executors or administrators of a Participant's estate or by any
person or persons who shall have acquired such right to exercise by Will or by
the laws of descent and distribution. No transfer by Will or the laws of descent
and distribution of any Option, or the right to exercise any Option, shall be
effective to bind Southwestern unless the Committee shall have been furnished
with (a) written notice thereof and with a copy of the Will and/or such evidence
as the Committee may deem necessary to establish the validity of the transfer
and (b) an agreement by the transferee to comply with all the terms and
conditions of this agreement that are or would have been applicable to the
Participant and to be bound by the acknowledgments made by the Participant in
connection with the grant of the Option.
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Except as provided in this Section 10, no Option shall be transferable, and
shall be exercisable only by a Participant during the Participant's lifetime.
11. Failure to Comply
In addition to the remedies of Southwestern elsewhere provided for
herein, failure by the Participant (or beneficiary) to comply with any of the
terms and conditions hereof, unless such failure is remedied by the Participant
(or beneficiary) within ten days after having been notified of such failure by
the Committee, shall be grounds for the cancellation and forfeiture of such
Option, in whole or in part, as the Committee, in its absolute discretion, may
determine.
12. Applicable Law
Except to the extent preempted by any applicable federal law, this
agreement will be construed and administered in accordance with the laws of the
State of Arkansas, without reference to the principles of conflicts of law.
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