Exhibit 10.25
BOX ENERGY CORPORATION
1997 STOCK OPTION PLAN
1. Purpose. The purpose of this 1997 Stock Option Plan (the "Plan")
is to advance the interests of Box Energy Corporation (the "Company") by
encouraging certain employees of the Company and its subsidiaries and non-
employee directors of the Company to acquire a proprietary interest in the
Company through ownership of Class B Common Stock of the Company (the
"Common Stock") and thereby to provide such employees and directors
additional incentives in the success of the Company, to encourage such
employees to remain with the Company and to attract other qualified persons
to become employees.
2. Administration. The Plan shall be administered by a Committee
(the "Committee") appointed by the Board of Directors of the Company (the
"Board of Directors"), which Committee shall be composed of not less than
two directors of the Company who each qualify as (i) a "Non-Employee
Director" under Rule 16b-3 promulgated under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), or any successor provision and (ii)
an "outside director" under Treasury Regulations Section 1.162-27
promulgated under Section 162(m) of the Internal Revenue Code of 1986, as
amended (the "Code"), or any successor provision. Subject to the
provisions of the Plan, the Committee is authorized to determine
participants to whom options will be granted, the times at which options
will be granted, the periods during which they will be exercisable, and the
number of shares, the exercise price and other terms and conditions of such
options. The Committee shall have full and final authority to interpret
the Plan and options granted thereunder, to prescribe, amend and rescind
rules and regulations relating to the Plan and the options, and to make
other determinations necessary or advisable for the administration of the
Plan, all of which determinations shall be conclusive and binding on all
persons. A majority of the Committee shall constitute a quorum, and the
Committee shall act pursuant to a majority vote or by unanimous written
consent. The Board of Directors also may grant options to directors and
employees under the Plan, and any authority and discretion provided to the
Committee with respect to the granting of stock options by the Committee
hereunder shall also apply to the Board of Directors with respect to stock
options granted by the Board of Directors.
3. Eligibility. Directors of the Company, and such key employees of
the Company and any of its subsidiaries as the Committee shall determine
from time to time, shall be eligible to be granted options under the Plan.
4. Stock Subject to Options. The aggregate number of shares of
Common Stock that may be issued upon the exercise of options granted under
the Plan shall not exceed 2,750,000, subject to adjustment under the
provisions of paragraph 12. In addition, the maximum number of shares of
Common Stock that may be issued to any individual under the Plan shall be
275,000, subject to adjustment under the provisions of paragraph 12. Such
shares of Common Stock may be either authorized but unissued shares or
previously issued shares that shall have been reacquired by the Company.
If any outstanding option under the Plan is forfeited, expires or is
terminated for any reason, the shares of Common Stock subject to the
unexercised portion of such option shall again be available for issuance
pursuant to the grant of stock options.
5. Types of Options. Options granted pursuant to the Plan may be
either "incentive stock options" under Section 422 of the Code or "non-
qualified stock options" that do not qualify as incentive stock options.
The Committee shall have full authority to determine which options, if any,
shall be incentive stock options and which shall be non-qualified stock
options. The grant of an option under the Plan shall be evidenced by a
written agreement executed by the Company and the optionee, in such form
and containing such terms and conditions as the Committee may determine,
subject to the provisions and limitations contained in the Plan.
6. Transferability of Options. The Committee may in its discretion
provide in any stock option agreement that all or a portion of such option
may be transferred by the optionee on such terms and subject to such
limitations set forth in the stock option agreement. Unless a stock option
agreement specifically permits transfer of an option, no option shall be
transferable by the optionee otherwise than by will or the laws of descent
and distribution, and each option shall be exercisable during the lifetime
of the optionee only by the optionee or by his or her guardian or legal
representative.
7. Allotment of Shares; Exercise Price. The Committee shall
determine, subject to the limitations set forth in paragraph 4, the total
number of shares covered by each option and the exercise price therefor
(which may not be less than the par value of the Common Stock) to be
granted to each optionee under the Plan. The exercise price with respect
to incentive stock options shall not be less than the Fair Market Value (as
hereinafter defined) on the date of grant, nor less than 110% of such Fair
Market Value in the case of any incentive stock option granted to any
individual who, at the time the option is granted, owns stock possessing
more than 10% of the total combined voting power of all classes of stock of
the Company, any of its subsidiaries or its parent. "Fair Market Value" of
the Common Stock as of any date shall be the closing price on such date (or
if no trades occurred on such date on the next preceding day on which
trading occurred) as reported for consolidated transactions on the
principal national securities exchange on which the Common Stock is listed
or admitted to trading or on the NASDAQ National Market System or SmallCap
Market System, or if not so listed or admitted to trading, the average of
the high bid and low asked prices of the Common Stock on such date in the
over-the-counter market as reported by the NASDAQ reporting system or other
system then in use.
8. Term of Option. Each option shall be granted for such term as the
Committee shall determine; provided, that no option shall be exercisable
more than 10 years after the date of grant, and no incentive stock option
granted to an individual who, at the time the option is granted, owns stock
possessing more than 10% of the total combined voting power of all classes
of stock of the Company, any of its subsidiaries or its parent shall by its
terms be exercisable more than five years from the date of grant.
9. Exercises. Except as otherwise set forth herein, each option
shall be exercisable over such period and at such times as the Committee
shall determine. In addition to any other limitations set forth herein,
the aggregate Fair Market Value of the shares of Common Stock with respect
to which incentive stock options are exercisable for the first time by an
optionee in any calendar year (under all plans of the Company and its
subsidiaries and its parent) shall not exceed $100,000. No option shall be
exercised for fewer than 100 shares unless the remaining shares purchasable
under the option are fewer than 100 shares. The Committee may provide in
any stock option agreement that upon a Change in Control (as hereinafter
defined) all previously granted, unexpired options of an optionee will
immediately become fully exercisable to the extent of shares then covered
by such option. A "Change in Control" shall mean any of the following
events:
(i) a merger or consolidation to which the Company is a party if
the individuals and entities who were stockholders of the Company
immediately prior to the effective date of such merger or consolidation
have beneficial ownership (as defined in Rule 13d-3 under the Exchange Act)
of less than 50% of the total combined voting power for election of
directors of the surviving corporation following the effective date of such
merger or consolidation;
(ii) the acquisition or holding of direct or indirect beneficial
ownership (as defined under Rule 13d-3 of the Exchange Act) of securities
of the Company representing in the aggregate 30% or more of the total
combined voting power of the Company's then issued and outstanding voting
securities by any person, entity or group of associated persons or entities
acting in concert, other than S-Sixteen Holding Company, any employee
benefit plan of the Company or of any subsidiary of the Company, or any
entity holding such securities for or pursuant to the terms of any such
plan, beginning from and after such time as S-Sixteen Holding Company shall
no longer have direct or indirect beneficial ownership (as so defined) of
securities of the Company representing in the aggregate a larger percentage
of the total combined voting power of the Company's then issued and
outstanding securities than that held by any other person, entity or group;
(iii) the sale of all or substantially all of the assets of the
Company to any person or entity that is not a wholly owned subsidiary of
the Company; or
(iv) the approval by the stockholders of the Company of any plan
or proposal for the liquidation of the Company or its material
subsidiaries, other than into the Company.
(10) Payment for Shares.
(a) Purchase Price. The purchase price of each share of Common Stock
purchased upon the exercise of any option granted hereunder shall be paid
in full at the time of such purchase, and a stock certificate representing
such shares shall be delivered therefor. Until the stock certificate for
such shares is issued in the optionee's name, such optionee will have no
rights of a stockholder of the Company. Payment may be made in whole or in
part in cash or, unless the Committee shall object, in common stock of the
Company previously owned by the optionee for such period as the Committee
may require, valued at Fair Market Value on the day preceding the date of
exercise.
(b) Tax Withholding. It shall be a condition to the performance of
the Company's obligation to issue or transfer shares of Common Stock upon
exercise of an option that the optionee pay, or make provision satisfactory
to the Company for the payment of, any taxes which the Company is obligated
to collect with respect to the issuance or transfer of such shares. The
Committee may provide the optionee with the right to satisfy federal or
state tax obligations by delivery of previously owned shares, or electing
to have the Company withhold shares otherwise issuable upon exercise of a
non-qualified stock option, the Fair Market Value of which does not exceed
the amount required to cover the federal or state tax obligation (including
FICA) incurred in connection with the exercise of such option.
11. Termination of Options.
(a) Death or Disability. In the event of the death or total and
permanent disability (as provided in the Company's disability insurance
policy, under Company policy or under procedures established by the
Committee) of an optionee, any option granted hereunder and held by such
optionee may thereafter be exercised, to the extent exercisable on the date
of such death or disability, or to such greater extent as the Committee may
at any time determine, for a period of one year from the date of death or
disability, but in no event after the expiration of the term of such
option.
(b) Retirement or Resignation with Consent of the Company. In the
event of the retirement of an optionee at the normal retirement age in
accordance with the retirement policy of the Company, or the resignation of
the optionee with the written consent of the Company, or the ceasing to be
a member of the Board of Directors in the case of a director who is not an
employee of the Company, any option held by such optionee may thereafter be
exercised, to the extent exercisable on the date of such retirement,
resignation or ceasing to be a director, or to such greater extent as the
Committee may at any time determine, for a period of 60 days following the
date of such retirement, resignation, or ceasing to be a director, but in
no event after the expiration of the term of such option.
(c) Other Termination. In the event of a termination of employment
of an optionee other than by reason of death, disability, normal retirement
or resignation with the written consent of the Company, unless otherwise
determined by the Committee, any option granted hereunder and held by such
optionee shall, to the extent not previously exercised, forthwith terminate
on the date of such termination of employment.
12. Adjustment of Options. In the event of any stock dividend, stock
split, combination of shares, merger, consolidation, recapitalization,
reclassification or other similar capital or corporate structure change,
the number of shares of Common Stock at the time of such change remaining
subject to the Plan, the maximum number of shares issuable to any
individual, the number of shares subject to any outstanding options and the
exercise price thereof and any other relevant provisions of such options
shall be appropriately adjusted to reflect such change, and the Committee's
determination as to the terms of any such adjustments shall be binding and
conclusive on all persons.
13. Effective Date. The Plan shall become effective on the date of
approval of the Plan by the holders of a majority of the shares of Class A
Common Stock of the Company present at a duly held meeting of stockholders.
14. Amendment. The Board of Directors may at any time suspend or
terminate the Plan or amend it from time to time in any respect, except
that without the appropriate approval of the holders of Class A Common
Stock, no such amendment shall increase the maximum number of shares
subject to the Plan, increase the maximum number of shares issuable to any
person or change the designation of the class of persons eligible to
receive options.
15. Legal Compliance. The obligation of the Company to sell and
deliver shares of Common Stock pursuant to the exercise of an option is
subject to such compliance as the Company deems necessary or advisable with
federal and state laws, rules and regulations applying to the
authorization, issuance, listing or sale of securities. The Company may
also require in connection with any grant or exercise of an incentive stock
option that the optionee agree to notify the Company when making any
disposition of the shares received on exercise of such incentive stock
option, whether by sale, gift or otherwise, within two years of the date of
grant or within one year of the date of exercise.
16. No Employment Right. Nothing contained in the Plan or in any
option granted thereunder shall confer upon any optionee any right to
continued employment by the Company, any of its subsidiaries or parent, or
to continued membership on the Board of Directors, or limit in any way the
right of the Company, any of its subsidiaries or its parent to terminate
the optionee's employment at any time. The granting of any option
hereunder shall impose no obligation upon the optionee to exercise any
option.
17. Indemnification. In addition to any other rights of
indemnification as members of the Board of Directors of the Company and to
the extent permitted by law, the members of the Committee shall be
indemnified and held harmless by the Company against all loss, damage and
expenses, including reasonable attorneys' fees, actually and reasonably
incurred in connection with the defense of any action, suit or proceeding
to which any of them may be a party by reason of any action taken or any
failure to act under or in connection with the Plan or any option granted
thereunder, and against all amounts paid by them in settlement thereof
approved by legal counsel to the Company, provided that such members shall
have notified the Company promptly after the institution of any such
action, suit or proceeding.