Exhibit 10.16
EXHIBIT B
AMENDED AND RESTATED
1994 NONEMPLOYEE DIRECTOR STOCK OPTION PLAN
of
CABOT OIL & GAS CORPORATION
1. Purpose of the Plan. This Nonemployee Director Stock Option Plan (the
"Plan") is intended as an incentive to retain and attract persons of
training, experience and ability to serve as independent directors on the
Board of Directors of Cabot Oil & Corporation, a Delaware corporation (the
"Company"), to encourage the sense of proprietorship of such persons and to
stimulate the active interest of such persons in the development and
financial success of the Company. It is further intended that the options
granted pursuant to this Plan (the "Options") will be nonqualified options
within the meaning of Section 83 of the Internal Revenue Code of 1986, as
amended (the "Code").
2. Stockholder Approval. All Options granted pursuant to this Plan are subject
to, and may not be exercised before, the approval of this Plan by the
affirmative vote of the holders of a majority of the outstanding shares of
the Class A Common Stock, par value $.10 per share (the "Common Stock"), of
the Company that are present, or represented, and entitled to vote at a
meeting of the Company's stockholders.
3. Designation of Participants; Automatic Grant of Options. Each director of
the Company who is not an employee of the Company or any Subsidiary (as
hereinafter defined) of the Company (any such director being hereinafter
referred to as a "Nonemployee Director") shall be granted Options as
described hereunder. Each individual who becomes a Nonemployee Director
after the Effective Date shall automatically be granted Options to purchase
10,000 shares of Common Stock (subject to adjustment as provided in
Paragraph 10) on the date such person first becomes a Nonemployee Director.
Furthermore, at each annual meeting of stockholders (other than when the
director's status as such terminates at such meeting), each Nonemployee
Director shall automatically be granted Options to purchase an additional
5,000 shares of Common Stock (subject to adjustment as provided in
Paragraph 10) on such date. Notwithstanding the foregoing, in the case of
any grant of Options made on a date subsequent to the Effective Date, such
grant shall only be made if the number of shares subject to future grant
under this Plan is sufficient to make all automatic grants required to be
made pursuant to this Plan on such date of grant. As used herein, the term
"Subsidiary" of the Company shall mean any corporation of which the Company
directly or indirectly owns shares representing more than 50% of the voting
power of all classes or series of capital stock of such corporation which
have the right to vote generally on matters submitted to a vote of the
stockholders of such corporation.
4. Option Agreement. Each Option granted hereunder shall be embodied in a
written option agreement ("Option Agreement"), which shall be subject to
the terms and conditions set forth herein and shall be signed by the
Optionee and by the Chief Executive Officer, the Chief Operating Officer,
or any Vice President of the Company for and on behalf of the Company.
5. Common Stock Reserved for the Plan. Subject to adjustment as provided in
Paragraph 10 hereof, a total of 300,000 shares of Common Stock shall be
reserved for issuance upon the exercise of Options granted pursuant to this
Plan. The shares subject to the Plan shall consist of unissued shares or
previously issued shares reacquired and held by the Company, or any parent
or subsidiary of the Company, in its treasury. The Board of Directors and
the appropriate officers of the Company shall from time to time take
whatever actions are necessary to execute, acknowledge, file and deliver
any documents required to be filed with or delivered to any governmental
authority or any stock exchange or transaction reporting system on which
shares of Common Stock are listed or quoted in order to make shares of
Common Stock available for issuance to an Optionee (as hereinafter defined)
71
pursuant to this Plan. Common Stock subject to Options that are forfeited
or terminated or expire unexercised in such a manner that all or some of
the shares subject thereto are not issued to an Optionee shall immediately
become available for the granting of Options. As used herein, the term
"Optionee" shall mean any Nonemployee Director to whom Options are granted
hereunder.
6. Option Price.
(a) The purchase price of each share of Common Stock that is subject to an
Option granted pursuant to this Plan shall be 100% of the Fair Market
Value of such share of Common Stock on the date the Option is granted.
(b) The Fair Market Value of a share of Common Stock on a particular date
shall be deemed to be (i) if the shares of Common Stock are listed on
a national securities exchange, the average of the highest and lowest
sales price per share of Common Stock on the principal such national
securities exchange on that date, or, if there shall have been no such
sale so reported on that date, on the last preceding date on which
such a sale was so reported, (ii) if the shares of Common Stock are
not so listed but are quoted in the NASDAQ National Market System, the
average of the highest and lowest sales price per share of Common
Stock on the NASDAQ National Market System on that date, or, if there
shall have been no such sale so reported on that date, on the last
preceding date on which such a sale was so reported or (iii) if the
Common Stock is not so listed or quoted, the average of the closing
bid and asked price on that date, or, if there are no quotations
available for such date, on the last preceding date on which such
quotations shall be available, as reported by NASDAQ, or, if not
reported by NASDAQ, by the National Quotation Bureau, Inc.
7. Option Period. Each Option granted pursuant to this Plan shall terminate
and be of no force and effect with respect to any shares of Common Stock
not purchased by the Optionee upon the earliest to occur of the following:
(a) the expiration of five years following the date upon which the Option
is granted;
(b) the expiration of one year following the date upon which the Optionee
ceases to be a Nonemployee Director by reason of death, disability or
mandatory retirement; or
(c) the expiration of three months following the date on which the
Optionee ceases to be a Nonemployee Director for any reason other than
death, disability or mandatory retirement.
8. Exercise of Options.
(a) Options granted pursuant to this Plan shall be exercisable, on a
cumulative basis, as follows: (i) with respect to 33 1/3% of the total
number of shares of Common Stock initially subject to any Option, such
Option shall be exercisable on the first anniversary of the date of
grant; and (ii) with respect to the remaining shares of Common Stock
subject to any Option, such Option shall be exercisable with respect
to an additional 33 1/3% of the total number of shares initially
subject thereto as of the second and third anniversaries of the date
of the grant.
(b) An Option may be exercised solely by the Optionee during his lifetime
or after his death by the person or persons entitled thereto under his
will or the laws of descent and distribution.
(c) In the event that an Optionee ceases to serve as a Nonemployee
Director for any reason other than death, disability or mandatory
retirement, an Option granted to such Optionee may be exercised only
to the extent such Option was exercisable at the time he ceased to
serve in such capacity.
(d) In the event that an Optionee ceases to serve as a Nonemployee
Director by reason of death, disability or mandatory retirement, at a
time when an Option granted hereunder is still in force and unexpired
under the terms of Paragraph 7 hereof, each such unmatured Option
shall be accelerated. Such acceleration shall be effective as of the
date of death, disability or retirement, as appropriate, and each
Option so accelerated shall be exercisable in full for so long as it
is still in force and unexpired under the terms of Paragraph 7 hereof.
72
(e) The purchase price of the shares as to which an Option is exercised
shall be paid in full at the time of the exercise. Such purchase price
shall be payable in cash or by means of tendering theretofore owned
Common Stock which has been held by the Optionee for more than six
months, valued at Fair Market Value on the date of exercise, or any
combination thereof. An Optionee may also exercise an Option by use of
the proceeds to be received from the sale of Common Stock issuable
pursuant to the Option. No holder of an Option shall be, or have any
of the rights or privileges of, a stockholder of the Company in
respect of any shares subject to any Option unless and until
certificates evidencing such shares shall have been issued by the
Company to such holder.
9. Assignability. No Option shall be assignable or otherwise transferable
except by will or the laws of descent and distribution or pursuant to a
qualified domestic relations order as defined by the Code or Title I of the
Employee Retirement Income Security Act, or the rules thereunder. Any
attempted assignment of an Option in violation of this Paragraph 9 shall be
null and void.
10. Adjustments.
(a) The existence of outstanding Options shall not affect in any manner
the right or power of the Company or its stockholders to make or
authorize any or all adjustments, recapitalization, reorganizations or
other changes in the capital stock of the Company or its business or
any merger or consolidation of the Company, or any issue of bonds,
debentures, preferred or prior preference stock (whether or not such
issue is prior to, on a parity with or junior to the Common Stock) or
the dissolution or liquidation of the Company, or any sale or transfer
of all or any part of its assets or business, or any other corporate
act or proceeding of any kind, whether or not of a character similar
to that of the acts or proceedings enumerated above.
(b) In the event of any subdivision or consolidation of outstanding shares
of Common Stock or declaration of a dividend payable in shares of
Common Stock or capital reorganization or reclassification or other
transaction involving an increase or reduction in the number of
outstanding shares of Common Stock, the Board of Directors may adjust
proportionally (i) the number of shares of Common Stock reserved under
these Options; and (ii) the exercise price of such Options. In the
event of any consolidation or merger of the Company with another
corporation or entity or the adoption by the Company of a plan of
exchange affecting the Common Stock or any distribution to holders of
Common Stock of securities or property (other than normal cash
dividends or dividends payable in Common Stock), the Board of
Directors shall make such adjustments or other provisions as it may
deem equitable, including adjustments to avoid fractional shares, to
give proper effect to such event. In the event of a corporate merger,
consolidation, acquisition of property or stock, separation,
reorganization or liquidation, the Board of Directors shall be
authorized to issue or assume stock options, regardless of whether in
a transaction to which Section 424(a) of the Code applies, by means of
substitution of new options for previously issued options or an
assumption of previously issued options, or to make provision for the
acceleration of the exercisability of, or lapse of restrictions with
respect to, the termination of unexercised options in connection with
such transaction.
(c) An Option shall become fully exercisable upon a Change in Control (as
hereinafter defined) of the Company. For purposes of this Plan, a
"Change of Control" shall be conclusively deemed to have occurred if
(and only if) any of the following events shall have occurred: (a)
there shall have occurred an event required to be reported in response
to Item 6(e) of Schedule 14A of Regulation 14A (or in response to any
similar item on any similar schedule or form) promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
whether or not the Company is then subject to such reporting
requirement; (b) any "person" (as such term is used in Sections 13(d)
and 14(d) of the Exchange Act) shall have become the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing 20% or more of
the combined voting power of the Company's then outstanding voting
73
securities without prior approval of at least two-thirds of the
members of the Board of Directors in office immediately prior to such
person's attaining such percentage interest; (c) the Company is a
party to a merger, consolidation, sale of assets or other
reorganization, or a proxy contest, as a consequence of which members
of the Board of Directors in office immediately prior to such
transaction or event constitute less than a majority of the Board of
Directors thereafter or (d) during any period of two consecutiveyears,
individuals who at the beginning of such period constituted the Board
of Directors (including for this purpose any new director whose
election or nomination for election by the Company's stockholders was
approved by a vote of at least two-thirds of the directors then still
in office who were directors at the beginning of such period) cease
for any reason to constitute at least a majority of the Board of
Directors.
11. Purchase for Investment. Unless the Options and shares of Common Stock
covered by this Plan have been registered under the Securities Act of 1933,
as amended, each person exercising an Option under this Plan may be
required by the Company to give a representation in writing in form and
substance satisfactory to the Company to the effect that he is acquiring
such shares for his own account for investment and not with a view to, or
for sale in connection with, the distribution of such shares or any part
thereof.
12. Taxes. The Company may make such provisions as it may deem appropriate for
the withholding of any taxes that it determines is required in connection
with any Options granted to any Optionee hereunder.
13. Amendments or Termination. The Board of Directors of the Company may amend,
alter or discontinue this Plan, except that
(a) no amendment or alteration that would impair the rights of any
Optionee under any Option that he has been granted shall be made
without his consent and
(b) no amendment or alteration shall be effective prior to approval by the
Company's stockholders to the extent such approval is then required.
14. Government Regulations. This Plan, and the granting and exercise of Options
hereunder, and the obligation of the Company to sell and deliver shares of
Common Stock under such Options, shall be subject to all applicable laws,
rules and regulations, and to such approvals on the part of any
governmental agencies or national securities exchanges or transaction
reporting systems as may be required.
15. Governing Law. This Plan and all determinations made and actions taken
pursuant hereto, to the extent not otherwise governed by mandatory
provisions of the Code or the securities laws of the United States, shall
be governed by and construed in accordance with the laws of the State of
Delaware.
16. Effective Date of Plan. This amended and restated Plan shall be effective
as of the date (the "Effective Date") it is approved by the Board of
Directors of the Company. Notwithstanding the foregoing, the adoption of
this amended and restated Plan is expressly conditioned upon the approval
by the holders of a majority of shares of Common Stock present, or
represented, and entitled to vote at a meeting of the Company's
stockholders held on or before December 31, 1998. If the stockholders of
the Company should fail so to approve this amended and restated Plan prior
to such date, this amended and restated Plan shall revert to the provisions
of the prior plan and all grants of options hereunder in excess of The
Plan's limitations shall be null and void.
17. Miscellaneous. The granting of any Option shall not impose upon the
Company, the Board of Directors of the Company or any other directors of
the Company any obligation to nominate any Optionee for election as a
director and the right of the stockholders of the Company to remove any
person as a director of the Company shall not be diminished or affected by
reason of the fact that an Option has been granted to such person.
74