ONEOK, Inc. Stock Option Agreement for Non-Employee Directors (2001)

Summary

This agreement is between ONEOK, Inc. and a non-employee director, granting the director an option to purchase 5,000 shares of ONEOK common stock at a set price, exercisable between January 25, 2002, and January 25, 2011. The agreement outlines the terms for exercising the option, payment methods, and tax obligations. It also specifies that the option fully vests upon the director's death. The agreement is governed by the company's Stock Compensation Plan for Non-Employee Directors.

EX-10.F 4 0004.txt STOCK COMPENSATION PLAN EXHIBIT (10)(f) ONEOK, Inc. STOCK COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS STOCK OPTION AGREEMENT THIS AGREEMENT, made in Tulsa, Oklahoma, as of the 25th day of January, ---- ------- 2001, between ONEOK, Inc., (hereinafter referred to as "Corporation"), and __________________ (hereinafter referred to as "Optionee"), a Non-Employee Director of the Corporation. WHEREAS, the Corporation desires to provide the Optionee with an added incentive to continue to contribute to the growth and profitability of the Corporation, to continue to perform services of major importance to the Corporation, and to encourage the Optionee to own shares of stock of the Corporation; and WHEREAS, the stock option granted hereunder is granted pursuant to the terms of the Corporation's Stock Compensation Plan for Non-Employee Directors initially adopted January 18, 2001 (hereinafter referred to as the Plan); and WHEREAS, this option is intended to be a "non-qualified" stock option; NOW, THEREFORE, in consideration of the mutual agreements stated hereinafter, the Corporation and the Optionee agree that: 1. Stock Option. The Optionee is hereby granted, and the Optionee ------------ accepts, an Option to purchase 5,000 shares of the Corporation's Common Stock after January 25, 2002, and prior to January 25, 2011, at a purchase price of $44.625 per share (the Fair Market Value as defined in Section 2(i) of the Plan) of each share at January 25, 2001, all subject to the terms, provisions, and conditions of this Agreement (including, without limitation, the provisions on the period of exercise in paragraph 5, below) and of the Plan, which are incorporated herein by reference. Should there be any inconsistency between the provisions of this Agreement and the Plan, the provisions of the Plan shall control. This option may be exercised in the manner and to the extent provided in this Agreement and the Plan as to all or any part of the shares of stock subject to the option from time to time during the option period stated above, and exercise of the option as to part of such shares shall not exhaust or terminate the option. The option shall be exercised as to not less than fifty (50) shares at any one time. Payment of the option price shall be made concurrently with the exercise of the option, as provided in the Plan and this Agreement. 2. Plan. This option is being made pursuant to the Plan initially adopted ---- by the Board of Directors of the Corporation on January 18, 2001, which provides that the aggregate number of shares of Common Stock of the Corporation which may be issued or transferred pursuant to stock options or other incentives under the Plan, as amended, is three hundred and fifty thousand (350,000) shares, and which Plan specifies the authority of the Corporation, its Board of Directors, and a committee of the Board of Directors (the "Committee") to select Non- Employee Directors to be granted options and other stock incentives. The Executive Compensation Page 1 of 7 Committee of the Board of Directors has been selected by the Board of Directors as the Committee authorized to administer the Plan with respect to this option. 3. Optionee's Agreement Concerning Service as a Director. In ----------------------------------------------------- consideration of the Corporation's granting of this option as incentive compensation to Optionee, the Optionee agrees to continue to contribute and perform service as a Director of the Corporation at the direction, will and pleasure of the Corporation and the Board of Directors. Provided, however, neither the foregoing agreement of the Optionee in this paragraph 3, nor any other provision in this Agreement shall confer on the Optionee any right to continue in service as a Director of the Corporation, or interfere in any way with the right of the Corporation to terminate the Optionee's service as a Director at any time. 4. Registration of Stock; Optionee's Representation With Respect To ---------------------------------------------------------------- Purchase for Investment. It is intended by the Corporation that the Plan and - ----------------------- the shares of Common Stock covered by this option are to be registered under the Securities Act of 1933, as amended, prior to the date the option first becomes exercisable; provided, that in the event such registration is for any reason not made effective for such shares, the Optionee agrees, for the Optionee, for the Optionee's heirs and legal representatives by inheritance or bequest, and for any permissible transferee of Optionee, that all shares purchased hereunder will be acquired for investment and not with a view to, or for sale or tender in connection with the distribution of any part thereof, including any transfer or distribution of such shares by the Optionee in exercising any part of this option or as otherwise allowed by the Plan. 5. Period of Exercise and Vesting of Option. This option may be exercised ---------------------------------------- at any time on and after January 25, 2002, and prior to January 25, 2011; provided, that this option may also be exercised at the times and under the conditions specified in paragraphs 8 and 9, below. Notwithstanding the foregoing, in the event of the Optionee's death, this ------------------------------------------------------------------------- option shall be one hundred percent (100%) exercisable and fully vested - ------ irrespective of the period of time that has then elapsed since the date this option is granted, provided, however, this paragraph does not extend the period of exercise of this option beyond the expiration of the term thereof stated in paragraph 1, above. 6. Method of Exercise and Payment. This option shall be exercised by ------------------------------ written notice delivered to the Corporate Secretary of the Corporation on and in the form authorized by the Corporation, accompanied by payment of the option price for the number of shares specified and paid for in such exercise. The Corporation shall then make delivery of such shares, provided that if any law or regulation requires the Corporation, as it determines, to take any action with respect to the shares specified in such notice before the issuance thereof, then the date of delivery of such shares shall be extended for the period necessary to take such action. The Optionee agrees to pay to the Corporation any applicable federal, state, or local income, employment, social security, medicare, or other withholding tax obligation arising in connection with this option, or the Optionee's exercise thereof; and the Corporation shall have the right, without the Optionee's prior approval or direction, to satisfy such withholding tax by withholding all or any part of the shares of Common Stock that would otherwise be transferred and delivered to the Optionee, with Page 2 of 7 any shares so withheld to be valued at the Fair Market Value (as defined in Section 2(i) of the Plan) on the date of such withholding. The Optionee, with the consent of the Corporation, may satisfy such withholding tax by delivery and transfer to the Corporation of shares of Common Stock of the Corporation previously owned by the Optionee for at least six months, with any shares so delivered and transferred to be valued at the Fair Market Value on the date of such delivery. The purchase price of shares subject to this option shall be paid in cash, or by bank-certified, cashiers, or personal check subject to collection; or, in the alternative, the Optionee (or other person authorized to exercise this option), may (i) pay the purchase price of such shares by delivering to the Corporation a properly executed exercise notice together with a copy of irrevocable instructions to a stockbroker to sell immediately some or all of the shares acquired by the exercise of the option and deliver promptly to the Corporation an amount of sale proceeds sufficient to pay the purchase price, or (ii) pay the purchase price in shares of Common Stock of the Corporation transferred and surrendered by the Optionee to the Corporation, or (iii) any combination of the foregoing means of payment; provided, that the making of any payment by the Optionee other than by cash or check shall be subject to any conditions, rules, regulations, and procedures which the Corporation may adopt or prescribe, which shall be effective as to the exercise of this option to the extent provided therein, without regard to the form of payment otherwise allowed or authorized with respect to any other option or participant under the Plan. Any payment other than by cash or check shall be made only at the time and in the manner which the Corporation determines is necessary to comply with any applicable provisions of SEC Rule 16b-3 (as defined in Section 2(r) of the Plan). 7. Restored Options. The Optionee shall be granted an Option (a Restored ---------------- Option) if and when (i) the Optionee exercises all or part of this option by -------- surrendering shares of Common Stock of the Corporation already owned by the Optionee in full or partial payment of the option price under this option, and/or (ii) shares of Common Stock are surrendered or withheld to satisfy withholding tax obligations incident to the exercise of this option; provided, that no Restored Option shall be granted hereunder unless the Optionee is in the service of the Corporation as a Director thereof at the time of any such exercise of this option and surrender or withholding of shares of Common Stock. Any such Restored Option shall be subject to the availability of shares of Common Stock under the Plan at the time of such exercise of this option. A Restored Option shall cover a number of shares of Common Stock not greater than the number of shares of Common Stock surrendered in payment of the option price under this option and/or used to satisfy any tax obligation incident to the exercise of this option. Each Restored Option shall have an option price equal to the Fair Market Value (as defined in Section 2(i) of the Plan) of the Common Stock on the date of grant of the Restored Option and shall expire on the stated expiration date of this option. The date of grant of a Restored Option shall be the date on which such Restored Option is granted as a result of an exercise of this Option. A Restored Option shall be exercisable at any time and from time to time after the expiration of a period of six (6) months following the date of grant of the Restored Option. Except as otherwise stated above in this paragraph 7 with respect to a Restored Option's exercise price and period of exercise, any Restored Option granted hereunder shall be evidenced by a written instrument which shall contain substantially the same terms and conditions as are contained in this Agreement, with such modifications as are necessary to reflect the nature of the option as a Restored Option granted under the Plan and this Agreement; and approval of this Agreement by Page 3 of 7 the Committee shall be deemed to be approval of all of the foregoing described terms and provisions of any Restored Option granted hereunder. The grant of each Restored Option shall be subject to such rules and procedures as the Committee, in its sole discretion, may prescribe. 8. Transferability of Option and Termination of Service ---------------------------------------------------- (a) Except as provided in subparagraph (b) of this paragraph 8, below, this option shall not be transferable by the Optionee otherwise than by will or the laws of descent and distribution which apply to the Optionee's estate, and this option shall be exercisable, during the Optionee's lifetime, only by the Optionee. (b) Notwithstanding the foregoing, the Optionee may transfer any part or all of this option to members of the Optionee's immediate family, or to one or more trusts for the benefit of such immediate family members, or partnerships in which such immediate family members are the only partners if the Optionee does not receive any consideration for the transfer. In the event of any such transfer, this option shall continue to be subject to the same terms and conditions otherwise applicable hereunder and under the Plan immediately prior to its transfer, except that this option shall not be further transferable by the transferee inter vivos, except for transfer back to the original Optionee. ----- ----- For any such transfer to be effective, the Optionee must provide prior written notice thereof to the Committee, unless otherwise authorized and approved by the Committee, in its sole discretion; and the Optionee shall furnish to the Committee such information as it may request with respect to the transferee and the terms and conditions of any such transfer. For purposes of any transfer of this option under this subparagraph (b), "immediate family" shall mean the Optionee's spouse, children and grandchildren, and the transferee shall sometimes be referred to herein as a "permissible transferee." (c) Notwithstanding anything to the contrary expressed or implied herein (including without limitation, the provisions of paragraph 5 on the exercise and vesting of this option), except for the provisions of subparagraph 9(f), the unexercised portion of this option (whether or not it is vested) shall become invalid and wholly terminated and forfeited upon (i) the Optionee's resignation from service as a Director of the Corporation or (ii) upon the removal by the Corporation of the Optionee from service as a Director of the Corporation. (d) Subject to the provisions of subparagraph 9(f), in the event of the Optionee's retirement from service as a Director of the Corporation in ---------- accordance with the Corporation's By-laws, the Optionee, or a permissible transferee, may exercise this option to the extent it is vested at the time of such retirement under paragraph 5, above, at any time within twelve (12) months after such retirement. Subject to the provisions of subparagraph 9(f), to the extent this option is not vested at such retirement under paragraph 5 above, it shall terminate and be forfeited upon such retirement. (e) Subject to the provisions of subparagraph 9(f), in the event of the Optionee's death while still serving as a Director of the Corporation, the legatees, or personal representatives or heirs, or permissible transferee of the Optionee, as the case may be, may exercise this option, Page 4 of 7 which shall be fully vested at the time of the Optionee's death under paragraph 5, above, at any time within twelve (12) months after the date of the Optionee's death. (f) Notwithstanding the foregoing, the period of time in which the Optionee, or the legatees, or personal representatives or heirs, or permissible transferee of an Optionee may exercise this option in the event of the Optionee's retirement from service as a Director of the Corporation, or death under the foregoing provisions of this paragraph 8, shall in no event extend beyond the expiration of the term of this option as stated in paragraph 1, above. (g) The Corporation may, in its sole discretion, allow this option to be exercised by a legal representative of the Optionee standing in a fiduciary -- relationship to the Optionee by reason of the Optionee being incapacitated or incompetent under applicable state law. 9. Adjustment Provisions. It is understood that, prior to the expiration --------------------- of this option or prior to the full exercise of this option, certain changes in capitalization of the Corporation may occur. It is, therefore, understood and agreed with respect to changes in capitalization that: (a) If a stock dividend is declared on the Common Stock of the Corporation, there shall be added to the shares of stock under the unexercised portion of this option the number of shares which would have been issuable to the Optionee ----- had the Optionee been the holder of record of the number of shares then under option, but not theretofore purchased and issued hereunder, and the option price per share shall be adjusted accordingly. Provided, however, that in making such adjustments, no fractional shares, or scrip certificates in lieu thereof, shall be issuable by the Corporation, and the Optionee shall be entitled to receive only the number of full shares to which the Optionee may be entitled by reason of such adjustment at the adjusted option price per share. (b) In the event of an increase in the outstanding shares of Common Stock of the Corporation, effectuated for the purpose of acquiring properties or securities of another corporation or business enterprise, there shall be no increase in the number of shares which are the subject matter of this option as a result of such acquisition. (c) In the event of an increase or decrease in the number of outstanding shares of Common Stock of the Corporation through recapitalization, reclassification, stock split-ups, consolidation of shares, changes in par value and the like, an appropriate adjustment shall be made in the number of shares and option price per share provided for under Section 1 of this Agreement, either by increasing the number of shares and decreasing the option price per share or by decreasing the number of shares and increasing the option price per share, as may be required to enable the Optionee to acquire the same proportionate stockholdings at the same aggregate purchase price. Provided, however, that in making such adjustments, no fractional shares, or scrip certificates in lieu thereof, shall be issuable by the Corporation, and the Optionee shall be entitled to receive only the number of full shares to which the Optionee may be entitled by reason of such adjustment at the adjusted option price per share. (d) The Corporation agrees that if during the term of this Agreement and prior to the exercise of this option as to all shares subject hereto, the Corporation (i) shall offer for sale to Page 5 of 7 holders of its Common Stock shares of Common Stock or of other classes of stock or other securities of the Corporation (except under a dividend reinvestment plan or similar plan), or (ii) in connection with any transaction shall acquire or shall cause to be issued rights to acquire shares of stock or other securities of another corporation to or for the benefit of the holders of Common Stock of the Corporation, the Corporation will give written notice to the Optionee of the rights which are thus to be acquired or issued to or for the benefit of the holders of Common Stock of the Corporation in sufficient time to permit the Optionee to exercise this option, to the extent this option is then exercisable, if the Optionee should elect to do so, and to permit the Optionee to participate in such rights as a holder of such Common Stock of the Corporation. (e) Subject to the provisions of subparagraph (f), below, in the event the Corporation proposes to merge or consolidate with another corporation, or to sell or dispose of all or substantially all of its assets and business, or to dissolve, the Corporation will give written notice thereof to the Optionee in sufficient time to permit the Optionee to exercise this option to the extent it is then exercisable (but without any acceleration or other modification of the terms thereof except as otherwise required and provided by the terms of the Plan --------- and this option), if the Optionee should elect to do so, and participate in such transaction as a shareholder of the Corporation. Provided, however, in connection with any merger or consolidation, or other transaction under which the Corporation or its holders of shares of Common Stock will acquire stock or other securities of the continuing, resulting, or another corporation, in exchange for their shares of Common Stock of the Corporation, provision shall be made for this option to become an option covering shares of the continuing, resulting, or other corporation in the same proportion, at an equivalent price, and subject to the same conditions, and for the issuance upon exercise by the Optionee of the Optionee's pro rata number of shares or other securities on the basis of the number of shares of Common Stock of the Corporation as to which the option hereby granted remains at the time unexercised at the same aggregate purchase price provided for in this Agreement, with the price per unit to be adjusted upward or downward according to the increase or decrease of the number of units involved. Provided, however, that no fractional shares shall be reserved for issuance or be issuable to the Optionee and the Optionee shall be entitled to receive only the number of full shares to which the Optionee may be entitled by reason of the foregoing at the adjusted option price per share. (f) Notwithstanding any provision to the contrary stated herein, including subparagraphs 8(c), (d), and (e), at the time of a Change in Control with --- respect to the Corporation, this option, to the extent it has not been previously forfeited, shall pursuant to the provisions of Section 7 of the Plan, (i) become fully vested and exercisable at that time to the extent not fully vested and exercisable, and (ii) shall remain fully vested and exercisable until it expires or terminates pursuant to its terms and conditions. The provisions of this subparagraph (f) shall be applied in addition to, and shall not reduce, modify, or change any other obligation or right of the Optionee otherwise provided for in paragraph 3, above, concerning the Optionee's continued service as a Director of the Corporation or the termination thereof. This option is subject to the provisions of Section 7(e) of the Plan authorizing the Corporation, or a committee of its Board of Directors, to provide in advance or at the time of a Change in Control for cash to be paid in settlement of this option, all subject to such terms and conditions as the Corporation or such committee, in its sole discretion, may determine and impose. For purposes of this subparagraph (f), the term "Change in Control" shall have the same meaning as provided in the definition thereof stated in Section Page 6 of 7 2(c) of the Plan, including any amendments thereof which may be made from time to time in the future pursuant to the provisions of the Plan, with any amended definition of such term to apply to all events thereafter coming within the amended meaning. 10. Stock Reserved. The Corporation shall at all times during the term of -------------- this Agreement reserve and keep available such number of shares of its Common Stock held as treasury shares of the Corporation as will be sufficient to satisfy the requirements of this Agreement, and shall pay all taxes imposed upon the Corporation upon the exercise of this option and all other fees and expenses necessarily incurred by the Corporation in connection therewith. 11. Rights of Shareholder. The Optionee shall have no rights as a --------------------- shareholder in respect of shares as to which this option shall not have been exercised and payment made as provided in the Plan, and the Optionee shall not be considered or treated as a record owner of shares with respect to which this option is exercised until the date that the stock certificate or certificates are actually issued and such issuance reflected on the stock records of the Corporation. 12. Successors and Assigns. This Agreement shall inure to the benefit of ---------------------- and be binding upon the heirs, legatees, legal representatives, successors, and assigns of the parties hereto. IN WITNESS WHEREOF, the Corporation has caused this Agreement to be duly executed by its officers thereunto duly authorized, and the Optionee has signed the same, in duplicate originals, as of the day and year first above written. ONEOK, Inc. Corporation By: ---------------------------------------- David L. Kyle Chairman of the Board, President and Chief Executive Officer --------------------------------------------- Optionee Page 7 of 7