EXHIBIT 10.47
ST. MARY LAND & EXPLORATION COMPANY
STOCK OPTION PLAN
ARTICLE I
ESTABLISHMENT AND PURPOSE
1.1 Establishment. St. Mary Land & Exploration Company, a Delaware
corporation (the "Company"), hereby establishes a stock option plan for key
employees, consultants and members of the Board of Directors of the Company or
of a subsidiary of the Company, providing material services to the Company,
which shall be known as the ST. MARY LAND & EXPLORATION COMPANY STOCK OPTION
PLAN (the "Plan"). The Company shall enter into Option agreements with Optionees
pursuant to the Plan.
1.2 Purpose. The purpose of the Plan is to enhance shareholder value by
attracting, retaining and motivating key employees, consultants and members of
the Board of Directors of the Company and of a subsidiary of the Company by
providing them with a means to acquire a proprietary interest in the Company's
success.
ARTICLE II
ELIGIBILITY AND PARTICIPATION
All current and former employees, consultants and members of the Board of
Directors of the Company (the "Board"), and of any subsidiary of the Company,
are eligible to participate in the Plan and receive Options under the Plan.
Optionees under the Plan shall be selected by the Board, in its sole discretion,
from among those current and former employees, consultants and members of the
Board of the Company, and of any subsidiary of the Company, who, in the opinion
of the Board, are or were in a position to contribute materially to the
Company's continued growth and development and to its long-term success.
ARTICLE III
ADMINISTRATION
Administration. The Board shall be responsible for administering the Plan.
(a) The Board is authorized to interpret the Plan; to prescribe,
amend, and rescind rules and regulations relating to the Plan; to provide
for conditions and assurances deemed necessary or advisable to protect the
interests of the Company with respect to the Plan; and to make all other
determinations necessary or advisable for the administration of the Plan.
Determinations, interpretations, or other actions made or taken by the
Board with respect to the Plan and Options granted under the Plan shall be
final and binding and conclusive for all purposes and upon all persons.
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(b) At the discretion of the Board the Plan may be administered by a
Committee of two or more non-employee Directors appointed by the Board (the
"Committee"). The members of the Committee may be Directors who are
eligible to receive Options under the Plan, but Options may be granted to
such persons only by action of the full Board and not by action of the
Committee. The Committee shall have full power and authority, subject to
the limitations of the Plan and any limitations imposed by the Board, to
construe, interpret and administer the Plan and to make determinations
which shall be final, conclusive and binding upon all persons, including
any persons having any interests in any Options which may be granted under
the Plan, and, by resolution or resolutions to provide for the creation and
issuance of any Option, to fix the terms upon which and the time or times
at or within which, and the price or prices at which any shares may be
purchased from the Company upon the exercise of an Option. Such terms, time
or times and price or prices shall, in every case, be set forth or
incorporated by reference in the instrument or instruments evidencing an
Option, and shall be consistent with the provisions of the Plan.
(c) Where a Committee has been created by the Board pursuant to this
Article III, references in the Plan to actions to be taken by the Board
shall be deemed to refer to the Committee as well, except where limited by
the Plan or by the Board.
(d) No member of the Board or the Committee shall be liable for any
action or determination made in good faith with respect to the Plan or any
Option granted under it.
ARTICLE IV
STOCK SUBJECT TO THE PLAN
4.1 Number. The total number of shares of common stock of the Company (the
"Stock") hereby made available and reserved for issuance under the Plan upon
exercise of Options shall be 700,000 shares. Notwithstanding anything to the
contrary contained in the foregoing, to the extent that options are issued under
any Incentive Stock Option Plan adopted by the Company, the shares of common
stock reserved for issuance pursuant to Options granted under this Plan shall be
reduced. The aggregate number of shares of Stock available under the Plan shall
be subject to adjustment as provided in Section 4.3.
4.2 Unused Stock. If an Option shall expire or terminate for any reason
without having been exercised in full, or if an "immaculate cashless exercise"
(as described in Section 5.4) results in the issuance of a reduced number of
shares in satisfaction of an option grant, the unpurchased shares of Stock
subject thereto shall (unless the Plan shall have terminated) become available
for other Options under the Plan.
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4.3 Adjustment in Capitalization. In the event of any change in the
outstanding shares of Stock of the Company by reason of a stock dividend or
split, recapitalization, reclassification, or other similar capital change, the
aggregate number of shares of Stock set forth in Section 4.1 shall be
appropriately adjusted by the Board, whose determination shall be conclusive. In
any such case, the number and kind of shares of Stock that are subject to any
Option and the Option price per share shall be proportionately and appropriately
adjusted without any change in the aggregate Option price to be paid therefor
upon exercise of the Option.
ARTICLE V
TERMS OF STOCK OPTIONS
5.1 Grant of Options. Subject to Section 4.1, Options may be granted to
current and former employees, consultants and members of the Board of the
Company and of any subsidiary of the Company at any time and from time to time
as determined by the Board. The Board shall have complete discretion in
determining the terms and conditions and number of Options granted to each
Optionee. In making such determinations, the Board may take into account the
nature of services rendered by such current and former employees, consultants
and members of the Board, their present and potential contributions to the
Company and such other factors as the Board in its discretion shall deem
relevant.
5.2 Option Agreement; Terms and Conditions to Apply Unless Otherwise
Specified. As determined by the Board on the date of grant, each Option shall be
evidenced by an option agreement (the "Option Agreement") that specifies: the
Option price; the duration of the Option; the number of shares of Stock to which
the Option applies; such vesting or exercisability restrictions which the Board
may impose; and any other terms or conditions which the Board may impose. All
such terms and conditions shall be determined by the Board at the time of grant
of the Option.
(a) If not otherwise specified by the Board, the following terms and
conditions shall apply to Options granted under the Plan:
(i) Term. The duration of the Option shall be for ten years from
the date of grant.
(ii) Exercise of Option. Unless an Option is terminated as
provided hereunder, an Optionee may exercise an Option pursuant to a
vesting schedule as determined by the Board. The Option may however
not be exercised prior to five years following the date of its grant.
(iii) Termination. Each Option granted pursuant to the Plan shall
expire upon the earliest to occur of:
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(A) The date set forth in such Option, not to exceed ten
years from the date of grant;
(B) The completion of the merger or sale of substantially
all of the Stock or assets of the Company with or to another
company in a transaction in which the Company is not the
survivor, except for the merger of the Company into a
wholly-owned subsidiary (and the Company shall not be considered
the surviving corporation for purposes hereof if the Company is
the survivor of a reverse triangular merger), provided that the
Company shall have given the Optionee at least thirty days' prior
written notice of its intent to enter into such merger or sale;
or
(C) The termination of the employment of an Optionee for
cause by the Company.
(iv) Acceleration. The Option shall become fully exercisable
irrespective of its other provisions (i) immediately prior to the
completion of the merger or sale of substantially all of the stock or
assets of the Company in a transaction in which the Company is not the
survivor, except for the merger of the Company into a wholly-owned
subsidiary (and the Company shall not be considered the surviving
corporation for purposes hereof if the Company is the survivor of a
reverse triangular merger); or (ii) upon termination of the Optionee's
employment with the Company or a subsidiary thereof because of death,
disability or normal retirement.
(v) Transferability. In addition to the Optionee, the Option may
be exercised, to the extent exercisable by the Optionee, by the person
or persons to whom the Optionee's rights under the Option pass by will
or the laws of descent and distribution, by the spouse or the
descendants of the Optionee or by trusts for such persons, to whom or
which the Optionee may have transferred the Option, or by legal
representative of any of the foregoing. Any such transfer shall be
made only in compliance with the Securities Act of 1933, as amended,
and the requirements therefor as set forth by the Company.
(b) The Board shall be free to specify terms and conditions other than
and in addition to those set forth above, in its discretion.
(c) All Option Agreements shall incorporate the provisions of the Plan
by reference.
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5.3 Option Price. No Option granted pursuant to the Plan shall have an
Option price that is less than the fair market value of Stock on the date the
Option is granted, as determined by the Board. The Option exercise price shall
be subject to adjustment as provided in Section 4.3 above.
5.4 Payment. Payment for all shares of Stock shall be made at the time that
an Option, or any part thereof, is exercised, and no shares shall be issued
until full payment therefor has been made. Payment shall be made (i) in cash, or
(ii) if acceptable to the Board, in Stock, by the surrender of Option rights
hereunder valued at the difference between the Option exercise price plus income
taxes to be withheld, if any, and the fair market value of the common stock
(referred to as "immaculate cashless exercise"), or in some other form.
ARTICLE VI
WRITTEN NOTICE, ISSUANCE OF STOCK
CERTIFICATES, SHAREHOLDER PRIVILEGES
6.1 Written Notice. An Optionee wishing to exercise an Option shall give
written notice to the Company, in the form and manner prescribed by the Board.
Full payment for the shares of Stock acquired pursuant to the Option must
accompany the written notice.
6.2 Issuance of Stock Certificates. As soon as practicable after the
receipt of written notice and payment, the Company shall deliver to the Optionee
a certificate or certificates for the requisite number of shares of Stock.
6.3 Privileges of a Shareholder. An Optionee or any other person entitled
to exercise an Option under the Option Agreement shall not have shareholder
privileges with respect to any Stock covered by the Option until the date of
issuance of a stock certificate for such Stock.
ARTICLE VII
RIGHTS OF OPTIONEES
Nothing in the Plan shall interfere with or limit in any way the right of
the Company or a subsidiary corporation to terminate any employee's or
consultant's employment at any time, nor confer upon any employee or consultant
any right to continue in the employ of the Company or a subsidiary corporation.
ARTICLE VIII
AMENDMENT, MODIFICATION, AND
TERMINATION OF THE PLAN
The Board may at any time terminate and from time to time may amend or
modify the Plan.
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No amendment, modification, or termination of the Plan shall in any manner
adversely affect any outstanding Option under the Plan without the consent of
the Optionee holding the Option.
ARTICLE IX
ACQUISITION, MERGER OR LIQUIDATION
9.1 Acquisition.
(b) In the event that an acquisition occurs with respect to the
Company, the Company shall have the option, but not the obligation, to
cancel Options outstanding as of the effective date of such acquisition,
whether or not such Options are then exercisable, in return for payment to
the Optionees of an amount equal to a reasonable estimate of an amount
(hereinafter the "Spread"), determined by the Board, equal to the
difference between the net amount per share payable in the acquisition or
as a result of the acquisition, less the exercise price of the Option. In
estimating the Spread, appropriate adjustments to give effect to the
existence of the Options shall be made, such as deeming the Options to have
been exercised, with the Company receiving the exercise price payable
thereunder, and treating the Stock receivable upon exercise of the Options
as being outstanding in determining the net amount per share.
(c) For purposes of this section, an "acquisition" shall mean any
transaction in which substantially all of the Company's assets are acquired
or in which a controlling amount of the Company's outstanding shares are
acquired, in each case by a single person or entity or an affiliated group
of persons and entities. For purposes of this section, a controlling amount
shall mean more than fifty percent of the issued and outstanding shares of
Stock of the Company. The Company shall have the above option to cancel
Options regardless of how the acquisition is effectuated, whether by direct
purchase, through a merger or similar corporate transaction, or otherwise.
In cases where the acquisition consists of the acquisition of assets of the
Company, the net amount per share shall be calculated on the basis of the
net amount receivable with respect to shares upon a distribution and
liquidation by the Company after giving effect to expenses and charges,
including but not limited to taxes, payable by the Company before the
liquidation can be completed.
(d) Where the Company does not exercise its option under this
Section 9.1 the remaining provisions of this Article IX shall apply, to the
extent applicable.
9.2 Merger or Consolidation. If the Company shall be the surviving
corporation in any merger or consolidation, any Option granted hereunder shall
pertain to and apply to the securities to which a holder of the number of shares
of Stock subject to the Option would have been entitled in such merger or
consolidation, provided that the Company shall not be considered the surviving
corporation for purposes hereof if the Company is the survivor of a reverse
triangular merger.
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9.3 Other Transactions. A dissolution or a liquidation of the Company or a
merger and consolidation in which the Company is not the surviving corporation
(the Company shall not be considered the surviving corporation for purposes
hereof if the Company is the survivor of a reverse triangular merger) shall
cause every Option outstanding hereunder to terminate as of the effective date
of such dissolution, liquidation, merger or consolidation. However, the Optionee
either (i) shall be offered a firm commitment whereby the resulting or surviving
corporation in a merger or consolidation will tender to the Optionee an option
(the "Substitute Option") to purchase its shares on terms and conditions both as
to number of shares and otherwise, which will substantially preserve to the
Optionee the rights and benefits of the Option outstanding hereunder granted by
the Company, or (ii) shall have the right immediately prior to such dissolution,
liquidation, merger, or consolidation to exercise any unexercised Options
whether or not then vested, subject to the other provisions of the Plan. The
Board shall have absolute and uncontrolled discretion to determine whether the
Optionee has been offered a firm commitment and whether the tendered Substitute
Option will substantially preserve to the Optionee the rights and benefits of
the Option outstanding hereunder.
ARTICLE X
SECURITIES REGISTRATION
10.1 Securities Registration. In the event that the Company shall deem it
necessary or desirable to register under the Securities Act of 1933, as amended,
or any other applicable statute, any Options or any Stock with respect to which
an Option may be or shall have been granted or exercised, or to qualify any such
Options or Stock under the Securities Act of 1933, as amended, or any other
statute, then the Optionee shall cooperate with the Company and take such action
as is necessary to permit registration or qualification of such Options or
Stock.
10.2 Representations. Unless the Company has determined that the following
representation is unnecessary, each person exercising an Option under the Plan
may be required by the Company, as a condition to the issuance of the shares of
Stock pursuant to exercise of the Option, to make a representation in writing
(i) 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 any part
thereof within the meaning of the Securities Act of 1933, and (ii) that before
any transfer in connection with the resale of such shares, he will obtain the
written opinion of counsel for the Company, or other counsel acceptable to the
Company, that such shares may be transferred without registration thereof. The
Company may also require that the certificates representing such shares contain
legends reflecting the foregoing. To the extent permitted by law, including the
Securities Act of 1933, nothing herein shall restrict the right of a person
exercising an Option to sell the shares received in an open market transaction.
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ARTICLE XI
TAX WITHHOLDING
Whenever shares of Stock are to be issued in satisfaction of Options
exercised under the Plan, the Company shall have the power to require the
recipient of the Stock to remit to the Company an amount sufficient to satisfy
federal, state, and local withholding tax requirements, if any.
ARTICLE XII
INDEMNIFICATION
To the extent permitted by law, each person who is or shall have been a
member of the Board or the Committee shall be indemnified and held harmless by
the Company against and from any loss, cost, liability, or expense that may be
imposed upon or reasonably incurred by him in connection with or resulting from
any claim, action, suit, or proceeding to which he may be a party or in which he
may be involved by reason of any action taken or failure to act under the Plan
and against and from any and all amounts paid by him in settlement thereof, with
the Company's approval, or paid by him in satisfaction of judgment in any such
action, suit, or proceeding against him, provided he shall give the Company an
opportunity, at its own expense, to handle and defend the same before he
undertakes to handle and defend it on his own behalf. The foregoing right of
indemnification shall not be exclusive of any other rights of indemnification to
which such persons may be entitled under the Company's certificate of
incorporation or bylaws, as a matter of law, or otherwise, or any power that the
Company or a Subsidiary Corporation may have to indemnify them or hold them
harmless.
ARTICLE XIII
REQUIREMENTS OF LAW
13.1 Requirements of Law. The granting of Options and the issuance of
shares of Stock upon the exercise of an Option shall be subject to all
applicable laws, rules, and regulations, and to such approvals by any
governmental agencies or national securities exchanges as may be required.
13.2 Governing Law. The Plan, and all agreements hereunder, shall be
construed in accordance with and governed by the laws of the State of Colorado.
ARTICLE XIV
EFFECTIVE DATE OF PLAN
The Plan shall be effective on November 21, 1996.
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ARTICLE XV
NO OBLIGATION TO EXERCISE OPTION
The granting of an Option shall impose no obligation upon the holder
thereof to exercise such Option.
THIS STOCK OPTION PLAN was adopted by the Board of Directors of St. Mary
Land & Exploration Company on November 21, 1996, to be effective upon adoption.
ST. MARY LAND & EXPLORATION COMPANY
By: /s/ John P. Congdon
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Title: Vice President and General Counsel
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