EXHIBIT 4.1
ST. MARY LAND & EXPLORATION COMPANY
EMPLOYEE STOCK PURCHASE PLAN
ARTICLE I
ESTABLISHMENT AND PURPOSE
1.1 Establishment. St. Mary Land & Exploration Company, a Delaware
corporation (the "Company"), hereby establishes an employee stock purchase plan
for employees 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 EMPLOYEE STOCK PURCHASE PLAN (the "Plan").
1.2 Purpose. The purpose of the Plan is to enhance shareholder value by
attracting, retaining and motivating employees 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
DEFINITIONS
2.1 Account. "Account" shall mean the account maintained by the Plan
Administrator consisting of payroll deductions with respect to such Participant
as adjusted for amounts used to purchase Stock and distributions to the
Participant.
2.2 Base Pay. "Base Pay" shall mean regular straight-time earnings
excluding payments for overtime, shift premium, bonuses and other special
payments, commissions and other incentive payments and as further defined in
Section 8.1.
2.3 Board. "Board" shall mean the Board of Directors of the Company.
2.4 Employee. "Employee" means any person who is customarily employed on a
full-time or part-time basis by the Company or a Subsidiary Corporation and is
regularly scheduled to work more than 20 hours per week.
2.5 Offering. "Offering" shall mean a semi-annual offering of the Company's
Stock as further described in Section 6.1.
2.6 Offering Commencement Date and Offering Termination Date. "Offering
Commencement Date" and "Offering Termination Date" are defined in Section 6.1.
2.7 Option. "Option" shall mean a Participant's right to purchase Stock of
the Company as of each Offering Termination Date for each Offering with the
accumulated payroll deductions in the Participant's Account.
2.8 Participant. "Participant" shall mean an Employee who becomes a
Participant by completing an authorization for payroll deduction under Section
3.4.
2.9 Plan Administrator. "Plan Administrator" shall mean the Vice President
of Accounting and Administration or such other person as may be designated from
time to time by the Board of the Company.
2.10 Stock. "Stock" shall mean shares of the Company's common stock subject
to this Plan.
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2.11 Subsidiary Corporation. "Subsidiary Corporation" shall mean any
present or future corporation which (i) would be a "subsidiary corporation" of
St. Mary Land & Exploration Company as that term is defined in Section 424 of
the Internal Revenue Code and (ii) is designated as a Participant in the Plan by
the Committee.
ARTICLE III
ELIGIBILITY AND PARTICIPATION
3.1 Initial Eligibility. Any Employee who shall have completed one year of
continuous employment and who is employed by the Company on the next following
Offering Commencement Date shall be eligible to participate in Offerings under
the Plan which commence on or after such Offering Commencement Date.
3.2 Leave of Absence. For purposes of participation in the Plan, a person
on leave of absence shall be deemed to be an Employee until his employment with
the Company otherwise terminates.
3.3 Restrictions on Participation. Notwithstanding any provisions of the
Plan to the contrary, no Employee shall be granted an Option
(a) if, immediately after the grant, such Employee would own Stock or
hold outstanding Options to purchase Stock possessing 5% or more of the
total combined voting power or value of all classes of stock of the Company
(for purposes of this paragraph, the rules of Section 424(d) of the Code
shall apply in determining stock ownership of any Employee); or
(b) which permits his rights to purchase Stock under all employee
stock purchase plans of the Company to accrue at a rate which exceeds
$25,000 in fair market value of the Stock (determined at the time such
option is granted) for each calendar year in which such Option is
outstanding.
3.4 Commencement of Participation. An Employee who meets the requirements
of Section 3.1 may become a Participant by completing an authorization for a
payroll deduction on the form provided by the Company and filing it with the
Plan Administrator on or before the date set for such purpose by the Plan
Administrator, which date shall be prior to the Offering Commencement Date for
the Offering (as such terms are defined below). Payroll deductions for a
Participant shall commence on the applicable Offering Commencement Date when his
authorization for a payroll deduction becomes effective and shall end on the
Offering Termination Date of the Offering to which such authorization is
applicable unless sooner terminated by the Participant as provided in Article X.
ARTICLE IV
ADMINISTRATION
Administration. The Board shall be responsible for administering the Plan
and appointing the Plan Administrator.
(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.
(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 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, or Stock purchased under the Plan.
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(c) Where a Committee has been created by the Board pursuant to this
Article IV, 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 V
STOCK SUBJECT TO THE PLAN
5.1 Number. The maximum number of shares of Stock which shall be issued
under the Plan, subject to adjustment upon changes in capitalization of the
Company as provided in Section 5.2 shall be 500,000 shares. If the total number
of shares of Stock for which Options are exercised on any Offering Termination
Date in accordance with Article V exceeds the maximum number of shares of Stock
remaining in the Plan, the Company shall make a pro rata allocation of the
shares available for delivery and distribution in as nearly a uniform manner as
shall be practicable and as it shall determine to be equitable, and the balance
of payroll deductions credited to the Account of each Participant under the Plan
shall be returned to him as promptly as possible.
5.2 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 5.1 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 VI
OFFERINGS
6.1 Semi-Annual Offerings. The Plan will be implemented by semi-annual
offerings of the Company's Stock (the "Offerings") commencing on January 1 and
July 1 of such year and terminating on June 30 and December 31 of such year,
respectively. The first Offering shall commence on January 1, 1998 and, unless
all shares of Stock in the Plan shall have been purchased prior thereto, the
last Offering shall commence on July 1, 2017.
As used in the Plan, "Offering Commencement Date" means the January 1 or
July 1, as the case may be, on which the particular Offering begins and
"Offering Termination Date" means the June 30 or December 31, as the case may
be, on which the particular Offering terminates.
ARTICLE VII
PAYROLL DEDUCTIONS
7.1 Amount of Deduction. At the time a Participant files his authorization
for payroll deduction, deductions shall be made from his Base Pay in accordance
with such authorization on each payday which falls on or after the Offering
Commencement Date and on or before the Offering Termination Date during the time
he is a Participant at the rate of not less than 1% and not more than 15% of his
Base Pay during the Offering. In the case of a part-time hourly Employee, such
Employee's Base Pay during an Offering shall be determined by multiplying such
Employee's hourly rate of Base Pay during the Offering by the number of
regularly scheduled hours of work for such Employee during such Offering.
7.2 Participant's Account. All payroll deductions made for a Participant
shall be credited to his Account under the Plan. A Participant may not make any
separate cash payment into such Account.
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7.3 Changes in Payroll Deductions. A Participant may discontinue his
participation in the Plan as provided in Article X or on one occasion only
during the Offering period may elect to decrease the percentage of Base Pay of
his contributions to his Account by filing with the Plan Administrator a new
payroll deduction authorization, but no other change can be made during an
Offering.
7.4 Leave of Absence. If a Participant goes on a leave of absence, such
Participant shall have the right to elect either: (a) to withdraw the balance in
his or her Account pursuant to Section 9.2 or (b) to remain a Participant in the
Plan authorizing deductions to be made from payments by the Company to the
Participant during such leave of absence, if any.
ARTICLE VIII
GRANTING OF OPTION
8.1 Number of Option Shares. On the Commencement Date of each Offering, a
Participant shall be deemed to have been granted an Option to purchase shares of
the Stock of the Company equal to (i) that percentage of the Employee's Base Pay
which he has elected to have withheld (but not in any case less than 1% or more
than 15%) multiplied by (ii) the Employee's Base Pay during the period of the
Offering (iii) divided by the lesser of 85% of the market value of Stock on the
applicable Offering Commencement Date or 85% of the market value of each share
of Stock on the applicable Offering Termination Date. The market value of the
Stock shall be determined as provided in paragraphs (a) and (b) of Section 8.2
below. An Employee's Base Pay during the six-month period of an Offering shall
be determined by multiplying his normal weekly Base Pay rate (as adjusted during
the Offering period) by 26 or the hourly rate by 1,040; provided that, in the
case of a part-time hourly Employee, the Employee's Base Pay during the period
of an Offering shall be determined by multiplying such Employee's hourly Base
Pay rate by the number of regularly scheduled hours of work for such Employee
during such Offering.
8.2 Option Price. The option price of each share of Stock purchased with
payroll deductions made during such annual Offering for a Participant therein
shall be the lower of:
(a) 85% of the closing price of the Stock on the Offering Commencement
Date or the nearest prior business day on which trading occurred on the
NASDAQ National Market System; or
(b) 85% of the closing price of the Stock on the Offering Termination
Date or the nearest prior business day on which trading occurred on the
NASDAQ National Market System. If the Stock of the Company is not admitted
to trading on any of the aforesaid dates for which closing prices of the
Stock are to be determined, then reference shall be made to the fair market
value of the Stock on that date, as determined on such basis as shall be
established or specified for the purpose by the Board.
ARTICLE IX
EXERCISE OF OPTION
9.1 Automatic Exercise. A Participant's Option for the purchase of Stock
with payroll deductions made during any Offering will be deemed to have been
exercised automatically on the Offering Termination Date applicable to such
Offering for the purchase of the number of full shares of Stock which the
accumulated payroll deductions in his Account at that time will purchase at the
applicable option price (but not in excess of the number of shares of Stock for
which Options have been granted to the Participant pursuant to Section 8.1).
9.2 Withdrawal of Account. By written notice to the Plan Administrator, at
any time prior to the Offering Termination Date applicable to any Offering, a
Participant may elect to withdraw all the accumulated payroll deductions in his
Account at such time.
9.3 Fractional Shares. Fractional shares will not be issued under the Plan
and any accumulated payroll deductions which would have been used to purchase
fractional shares will be returned to any Participant promptly following the
Offering Termination Date, without interest, unless the Participant has elected
to participate in the next following Offering, in which case such deductions
shall be retained in the Participant's Account and applied to the purchase of
shares of Stock in such Offering.
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9.4 Transferability of Option. During a Participant's lifetime, Options
held by such Participant shall be exercisable only by that Participant.
9.5 Delivery of Stock. As promptly as practicable after the Offering
Termination Date of each Offering, the Company will deliver to each Participant,
as appropriate, the Stock purchased upon exercise of his Option.
ARTICLE X
WITHDRAWAL
10.1 In General. As indicated in Section 9.2, a Participant may withdraw
payroll deductions credited to his Account under the Plan at any time by giving
written notice to the Plan Administrator of the Company. All of the
Participant's payroll deductions credited to his Account will be paid to him
promptly after receipt of his notice of withdrawal, and no further payroll
deductions will be made from his pay during such Offering. The Company may, at
its option, treat any attempt to borrow by an Employee on the security of his
accumulated payroll deductions as an election, under Section 9.2, to withdraw
such deductions.
10.2 Effect on Subsequent Participation. A Participant's withdrawal from
any Offering will not have any effect upon his eligibility to participate in any
succeeding Offering or in any similar plan which may hereafter be adopted by the
Company.
10.3 Termination of Employment. Upon termination of the Participant's
employment for any reason, including retirement (but excluding death while in
the employ of the Company) prior to the Offering Termination Date, the payroll
deductions credited to his Account will be returned to him or in the case of his
death to the person or persons entitled thereto under Section 19.1.
10.4 Termination of Employment Due to Death. Upon termination of the
Participant's employment because of his death, his beneficiary as defined in
Section 19.1, or if none is designated, his estate shall have the right to elect
by written notice given to the Plan Administrator of the Company prior to the
earlier of the Offering Termination Date or the expiration of a period of 60
days commencing with the date of the death of the Participant either:
(a) to withdraw all of the payroll deductions credited to the
Participant's Account under the Plan, or
(b) to exercise the Participant's Option for the purchase of Stock on
the Offering Termination Date next following the date of the Participant's
death for the purchase of the number of full shares of Stock which the
accumulated payroll deductions in the Participant's Account at the date of
the Participant's death will purchase at the applicable option price, and
any excess in such Account will be returned to said beneficiary, without
interest.
In the event that no such written notice of election shall be duly received
by the office of the Plan Administrator of the Company, the beneficiary shall
automatically be deemed to have elected, pursuant to paragraph (b), to exercise
the Participant's Option.
10.5 Leave of Absence. A Participant on leave of absence shall, subject to
the election made by such Participant pursuant to Section 7.4, continue to be a
Participant in the Plan so long as such Participant remains an Employee.
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ARTICLE XI
INTEREST
11.1 Payment of Interest. No interest will be paid or allowed on any money
paid into the Plan or credited to the Account of any Participant, including
money which is distributed to an Employee or his beneficiary pursuant to any
provision of this Plan.
ARTICLE XII
NO RIGHT TO EMPLOYMENT
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 employment
at any time, nor confer upon any Employee any right to continue in the employ of
the Company or a Subsidiary Corporation.
ARTICLE XIII
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. Any amendment or modification of the Plan by the Board may be
accomplished without approval of the shareholders of the Company, except in the
event that shareholder approval of such amendment or modification is required by
any law or regulation governing the Company.
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 Participant holding the Option.
ARTICLE XIV
ACQUISITION, MERGER OR LIQUIDATION
14.1 Acquisition.
(a) In the event that an acquisition occurs with respect to the
Company, the Company may, but shall not be required to, cancel an Offering
and all Options outstanding as of the effective date of such acquisition,
whether or not such Options are then exercisable. In that event, the
payroll deductions credited to the Account of each Participant shall be
returned to him. If the Company does not elect to cancel the Offering, such
Offering shall terminate on the day immediately prior to the effective date
of the Acquisition and such date shall be considered the Offering
Termination Date for the Offering.
(b) 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 an
Offering and all Options regardless of how the acquisition is effectuated,
whether by direct purchase, through a merger or similar corporate
transaction, or otherwise.
(c) Where the Company does not exercise its option under this Section
14.1 the remaining provisions of this Article XIV shall apply, to the
extent applicable.
14.2 Merger or Consolidation. If the Company shall be the surviving
corporation in any merger or consolidation, any Offering 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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14.3 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 Offering outstanding hereunder to terminate as of the effective date
of such dissolution, liquidation, merger or consolidation. In that event, the
payroll deductions credited to the Account of each Participant shall be returned
to him.
ARTICLE XV
SECURITIES REGISTRATION
15.1 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 Participant shall cooperate with the Company and take such
action as is necessary to permit registration or qualification of such Options
or Stock.
15.2 Representations. Unless the Company has determined that the following
representation is unnecessary, each person participating in an Offering may be
required by the Company, as a condition to the issuance of the shares of Stock
pursuant to such Offering 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 Participant
to sell the shares received in an open market transaction.
ARTICLE XVI
TAX WITHHOLDING
Whenever shares of Stock are to be issued pursuant to an Offering, 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 XVII
INDEMNIFICATION
To the extent permitted by law, each person who is or shall have been a
member of the Board or the Committee and the Plan Administrator 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.
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ARTICLE XVIII
REQUIREMENTS OF LAW
18.1 Requirements of Law. The granting of Options pursuant to an Offering
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.
18.2 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 XIX
MISCELLANEOUS
19.1 Designation of Beneficiary. A Participant may file a written
designation of a beneficiary who is to receive any Stock or cash. Such
designation of beneficiary may be changed by the Participant at any time by
written notice to the Plan Administrator of the Company. Upon the death of a
Participant and upon receipt by the Company of proof of identity and existence
at the Participant's death of a beneficiary validly designated by him under the
Plan, the Company shall deliver such Stock or cash to such beneficiary. In the
event of the death of a Participant and in the absence of a beneficiary validly
designated under the Plan who is living at the time of such Participant's death,
the Company shall deliver such Stock or cash to the executor or administrator of
the estate of the Participant, or if no such executor or administrator has been
appointed (to the knowledge of the Company), the Company, in its discretion, may
deliver such Stock or cash to the spouse or to any one or more dependents of the
Participant as the Company may designate. No beneficiary shall, prior to the
death of the Participant by whom he has been designed, acquire any interest in
the Stock or cash credited to the Participant under the Plan.
19.2 Transferability. Neither payroll deductions credited to a
Participant's Account nor any rights with regard to the exercise of an Option or
to receive Stock under the plan may be assigned, transferred, pledged, or
otherwise disposed of in any way by the Participant other than by will or the
laws of descent and distribution. Any such attempted assignment, transfer,
pledge or other disposition shall be without effect, except that the Company may
treat such act as an election to withdraw funds in accordance with Section 9.2.
19.3 Use of Funds. All payroll deductions received or held by the Company
under this Plan may be used by the Company for any corporate purpose and the
Company shall not be obligated to segregate such payroll deductions.
19.4 Effect of Plan. The provisions of the Plan shall, in accordance with
its terms, be binding upon, and inure to the benefit of, all successors of each
Employee in the Plan, including, without limitation, such Employee's estate and
the executors, administrators or trustees thereof, heirs and legatees, and any
receiver, trustee in bankruptcy or representative of creditors of such Employee.
ARTICLE XX
EFFECTIVE DATE OF PLAN
The Plan shall be effective on January 1, 1998.
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THIS EMPLOYEE STOCK PURCHASE PLAN was adopted by the Board of Directors of
St. Mary Land & Exploration Company on September 18, 1997, to be effective upon
adoption.
The Plan requires approval of the shareholders of the Company and shall be
submitted to a vote for their approval by the Board of Directors as soon as is
practicable. If this Plan is not approved by vote of the shareholders within 12
months after its adoption by the Board of Directors, it shall be void and any
Offering then in process shall terminate and all Participants shall be returned
the balances in their Accounts. Participants may retain, however, any Stock
already purchased pursuant to a completed Offering and the Company shall deduct
and withhold from any amounts subsequently due and owing to the Participant such
federal, state and local taxes as shall be required pursuant to applicable law
based on failure of the Plan to qualify as an "employee stock purchase plan" as
defined under Internal Revenue Code Section 423.
ST. MARY LAND & EXPLORATION COMPANY
By: /s/ MARK A. HELLERSTEIN
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Title: President and Chief Executive Officer
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