EXHIBIT 10.3
DYNEGY INC.
AMENDED AND RESTATED 1991 STOCK OPTION PLAN
[AS AMENDED THROUGH AUGUST 20, 1998]/1/
I. PURPOSES
Dynegy Inc., a Delaware corporation (the "Company"), desires to afford
certain of its directors and key employees (herein, "Key Persons") and the Key
Persons of any Related Entity (as defined below) who are responsible for the
continued growth of the Company an opportunity to acquire a proprietary interest
in the Company, and thus to create in such Key Persons an increased interest in
and a greater concern for the welfare of the Company and its stockholders.
From and after December 8, 1995, for all purposes under the Plan, the term
"Related Entity" shall mean (i) Novagas Clearinghouse Ltd., (ii) Accord Energy
Ltd., and (iii) any corporation, partnership, limited liability company or
partnership, association, trust or other organization now existing or hereafter
formed or acquired which, directly or indirectly, controls, is controlled by, or
is under common control with, the Company: provided, however, that (1) for
purposes of Articles V, VI and VIII of the Plan, and (2) with respect to
Incentive Options (as defined below) granted prior to May 10, 1996, for purposes
of Article XII of the Plan, the term "Related Entity" shall mean a subsidiary
corporation or parent corporation of the Company now existing or hereafter
formed or acquired. For purposes of the preceding sentence, "control"
(including, with correlative meanings, the terms "controlled by" and "under
common control with"), as used with respect to any entity or organization, shall
mean the possession, directly or indirectly, of the power (A) to vote more than
50% of the securities having ordinary voting power for the election of directors
of the controlled entity or organization, or (B) to direct or cause the
direction of the management and policies of the controlled entity or
organization, whether through the ownership of voting securities or by contract
or otherwise. As used in the Plan, the terms "subsidiary corporation" and
"parent corporation" shall mean, respectively, a corporation coming within the
definition of such terms contained in Sections 424(f) and 424(e) of the Internal
Revenue Code of 1986, as amended (the "Code ").
The stock options ("Options") offered pursuant to this Amended and Restated
1991 Stock Option Plan (the "Plan") are a matter of separate inducement and are
not in lieu of any salary or other compensation for services of any Key Person.
The Company, by means of the Plan, seeks to retain the services of persons
now holding key positions and to secure the services of persons capable of
filling such positions.
The Options granted under the Plan are intended to be either incentive
stock options ("Incentive Options") within the meaning of Section 422 of the
Code, or options that do not meet
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/1/ The Plan was amended and restated effective as of May 10, 1996. This
version of the Plan reflects all amendments to the Plan through August 20,
1998, including, without limitation, the amendments implemented to reflect
the corporate name change from "NGC Corporation" to "Dynegy Inc."
the requirements for Incentive Options ("Non-Qualified Options"), but the
Company makes no warranty as to the qualification of any Option as an Incentive
Option.
II. AMOUNT OF STOCK SUBJECT TO THE PLAN
Subject to the adjustments provided in Article XIII hereof, the total
number of shares of capital stock of the Company that may be purchased pursuant
to the exercise of Options granted under the Plan shall not exceed, in the
aggregate, 9,892,610 shares of authorized voting common stock, par value $0.01
per share, of the Company (the "Shares"); provided, however, that
notwithstanding any provision in the Plan to the contrary, the Committee (as
defined below) may not grant Options under the Plan that could result in more
than 6,692,610 Shares (subject to adjustment in the same manner as provided in
Article XIII hereof with respect to the maximum number of Shares subject to the
Plan) being issued upon the exercise of such Options unless the proposed
transaction with Chevron U.S.A. Inc. ("Chevron") to combine substantially all of
Chevron's gas gathering, processing and marketing operations with the Company is
consummated. As used herein, the authorized common stock of the Company shall
be referred to as "Company Stock."
Shares that may be acquired under the Plan may be authorized but unissued
Shares, Shares of issued stock held in the Company's treasury, issued Shares
reacquired by the Company, or a combination thereof, in each case as the
Committee may determine from time to time at its sole option. If and to the
extent that Options granted under the Plan expire or terminate without having
been exercised, new Options may be granted with respect to the Shares covered by
such expired or terminated Options, provided that the grant and the terms of
such new Options shall in all respects comply with the provisions of the Plan;
provided, however, that no Option shall be granted under the Plan after the
Termination Date (as defined below).
The Company may from time to time grant to certain Key Persons of the
Company or a Related Entity Options under the terms hereinafter set forth;
provided, however, that, except with respect to Options then outstanding, if not
sooner terminated under the provisions of Article XX, the Plan shall terminate
upon and no further Options shall be granted after May 9, 2006 (the "Termination
Date"). Notwithstanding any provision in the Plan to the contrary, Incentive
Options may be granted only to Key Persons who are employed by the Company or a
Related Entity that is a subsidiary corporation or parent corporation of the
Company on the date of grant of any such Option.
III. ADMINISTRATION
The Plan shall be administered by the Option Committee, or any successor
thereto, of the Board of Directors of the Company (the "Board of Directors"), or
by any other committee appointed by the Board of Directors to administer this
Plan (the "Committee"). The number of individuals that shall constitute the
Committee shall be no less than two individuals. A majority of the Committee
shall constitute a quorum (or if the Committee consists of only two members,
then both members shall constitute a quorum), and the acts of a majority of the
members present at any meeting at which a quorum is present, or acts approved
in writing by a majority of the
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Committee, shall be the acts of the Committee. The Committee shall be comprised
exclusively of "outside directors" as such term is used pursuant to Section
162(m) of the Code and any rules and regulations promulgated thereunder. At any
time that the Company shall have a class of equity securities registered
pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), (i) each member of the Committee shall be required to also be a
"disinterested person" to administer the Plan within the meaning of Rule 16b-3,
as amended (herein so called), or other applicable rules under Section 16(b) of
the Exchange Act, and the Committee shall administer the Plan so as to comply at
all times with the Exchange Act and (ii) no member of the Committee shall be
eligible for grants or awards hereunder.
The members of the Committee shall serve at the pleasure of the Board of
Directors, which shall have the power, at any time and from time to time, to
remove members from or add members to the Committee. Removal from the Committee
may be with or without cause. Any individual serving as a member of the
Committee shall have the right to resign from membership in the Committee by
written notice to the Board of Directors. The Board of Directors, and not the
remaining members of the Committee, shall have the power and authority to fill
vacancies on the Committee, however caused. The Board of Directors shall
promptly fill any vacancy that causes the number of members of the Committee to
be below two or any other number that Rule 16b-3 or Section 162(m) of the Code
(or other applicable rules or regulations) may require from time to time.
Subject to the express provisions of the Plan, the Committee shall have
authority, in its discretion, to determine the Key Persons to whom Options shall
be granted, the time when such Options shall be granted to Key Persons, the
number of Shares which shall be subject to each Option, the purchase price of
each Share which shall be subject to each Option, the period(s) during which
such Options shall be exercisable (whether in whole or in part), and the other
terms and provisions thereof. In determining the Key Persons to whom Options
shall be granted and the number of Shares for which Options shall be granted to
each Key Person, the Committee shall consider the length of service, the
contributions to the Company, its parents and subsidiaries taken as a whole, and
the responsibilities and duties of each Key Person.
Subject to the express provisions of the Plan, the Committee also shall
have authority to construe the Plan and Options granted thereunder, to amend, or
in the case of material amendments to the Plan, to recommend to the Board of
Directors and the stockholders of the Company the amendment of, the Plan, to
amend Options granted thereunder, to prescribe amend and rescind rules and
regulations relating to the Plan, to determine the terms and provisions of the
respective Options (which need not be identical) and to make all other
determinations necessary or advisable for administering the Plan. The Committee
also shall have the authority to require, in its discretion, as a condition of
the granting of any such Option, that an employee recipient agree (i) not to
sell or otherwise dispose of Shares acquired pursuant to the exercise of an
Incentive Option for a period of two (2) years from the grant of such Incentive
Option nor within one (1) year from the date of the acquisition of such Shares
pursuant to the exercise of such Incentive Option and (ii) that in the event of
termination of employment of such employee, other than as a result of dismissal
without cause, such employee will not, for a period to be fixed at the time of
the grant of the Option, enter into any other employment or participate directly
or
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indirectly in any other business or enterprise which is competitive with the
business of the Company or any Related Entity, or enter into any employment in
which such employee will be called upon to utilize special knowledge obtained
through employment with the Compary or any Related Entity. The Committee shall
also have the authority to require, as a condition to the granting of any
Option, that the person receiving such Option agree not to sell or otherwise
dispose of such Option, any Company Stock acquired pursuant to such Option or
any other "derivative security" (as defined by Rule 16a-1(c) under the Exchange
Act) for a period of six (6)) months following the later of (i) the date of the
grant of such Option, or (ii) the date when the exercise price of such Option is
fixed if such exercise price is not fixed at the date of grant of such Option.
Subject to and consistent with the express provisions of the Code and Rule
16b-3 promulgated under the Exchange Act, the Committee shall have plenary
authority, in lieu of requiring a cash payment from the Key Person upon the
exercise of an Option, to:
(a) provide the establishment of procedures for a Key Person (1) to
have withheld from the total number of Shares to be acquired upon the
exercise of an Option that number of Shares having a fair market value (as
defined herein) which, together with such cash as shall be paid in respect
of fractional Shares, shall equal the Option exercise price, (2) to
exercise an Option by delivering that number of Shares of Company Stock
already owned by such Key Person having a fair market value which shall
equal the Option exercise price, (3) to exercise a portion of an Option by
delivering that number of Shares or Share of Company Stock already owned by
such Key Person having a fair market value which shall equal the partial
Option exercise price and to deliver the Shares thus acquired by such Key
Person in payment of Shares to be received pursuant to the exercise of
additional portions of such Option, the effect of which shall be that such
Key Person can in sequence utilize such newly acquired Shares in payment of
the exercise price of the entire Option, together with such cash as shall
be paid in respect of fractional Shares, if any, or (4) to utilize a
combination of the methods stated in clauses (1) and (3) above, or of cash
and one or both of such methods, in payment of the exercise price of all or
a portion of such Option; provided, however, that in the case of an
Incentive Option, no Shares shall be used to pay the exercise price unless
such Shares were not acquired through the exercise of an Incentive Option
or, if so acquired, have been held for more than two years since the grant
of such Option and for more than one year since the exercise of such
Option; and
(b) if appropriate, to provide an arrangement through registered
broker-dealers whereby temporary financing may be made available by the
broker-dealer to a Key Person who wishes to deliver Shares of the Company
in partial or full payment of the exercise price of such Key Person's
Option, under the rules and regulations of the Board of Governors of the
Federal Reserve, for the purpose of assisting the Key Person in the
exercise of an Option, such authority to include the payment by the Company
of the commissions of the broker-dealer.
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The determination of the Committee on matters referred to in this Article
III shall be conclusive.
The Committee may employ such legal counsel, consultants and agents as it
may deem desirable for the administration of the Plan and may rely upon any
opinion received from any such counsel or consultant and any computation
received from any such consultant or agent. Expenses incurred by the Committee
in the engagement of such counsel, consultant or agent shall be paid by the
Company. No member or former member of the Committee shall be liable for any
action or determination made in good faith with respect to the Plan or any
Option granted hereunder.
IV. ELIGIBILITY
Grants of Incentive Options and Non-Qualified Options may be made under the
Plan, subject to and in accordance with the terms of the Plan, to Key Employees.
As used herein, the term "Key Employee" shall mean any employee of the Company
or any Related Entity, including officers and directors of the Company or any
Related Entity who are also employees of the Company or any Related Entity, who
are regularly employed on a salaried basis and who are so employed on the date
of such grant, whom the Committee identifies as having a direct and significant
effect on the performance of the Company or any Related Entity. Notwithstanding
the preceding provisions of this Article IV, Incentive Options may be granted
only to Key Employees who are employed by the Company or a Related Entity that
is a subsidiary corporation or parent corporation of the Company on the date of
grant of any such Option.
Grants of Non-Qualified Options shall be made, subject to and in accordance
with the terms hereof, to individuals not regularly employed by the Company who
serve as directors of the Company ("Outside Director Participants").
The adoption of this Plan shall not be deemed to give any person a right to
be granted any Options.
Subject to the adjustment provisions contained in Article XIII, the
aggregate number of Shares with respect to which Options granted to any Key
Employee (which for purposes of this sentence shall include the Chairman of the
Board, whether or not such person would otherwise be considered a Key Employee)
are exercisable shall not exceed 1,063,083.
V. LIMITATION ON EXERCISE OF INCENTIVE OPTIONS
Except as otherwise provided under the Code, to the extent that the
aggregate fair market value of stock with respect to which Incentive Options are
exercisable for the first time by an employee during any calendar year (under
all stock option plans of the Company and any Related Entity) exceeds $100,000,
such Options shall be treated as Non-Qualified Options. For purposes of this
limitation (i) the fair market value of stock is determined as of the time the
Option is granted, and (ii) the limitation will be applied by taking into
account Options in the order in which they were granted.
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VI. OPTION PRICE AND PAYMENT
The price ("Exercise Price") for each Share purchasable under any Option
granted hereunder shall be such amount as the Committee shall, in its best
judgment made in good faith, determine on the basis of facts and circumstances
and the requirements, if any, of Section 162(m) of the Code and any rules or
regulations promulgated thereunder to be not less than 100% of the fair market
value per Share at the date such Option is granted; provided, however, that in
the case of an Incentive Option granted to a person who, at the time such
Incentive Option is granted, owns shares of the Company or any Related Entity
which possesses ten percent (10%) of the total combined voting power of all
classes of shares of the Company or of any Related Entity, the Exercise Price
for each Share purchasable thereunder shall be such amount as the Committee, in
its best judgment, shall determine to be not less than one hundred ten percent
(110%), of the fair market value per Share at the date the Incentive Option is
granted. In determining stock ownership of a Key Employee for any purposes
under the Plan, the rules of Section 424(d) of the Code shall be applied, and
the Committee may rely on representations of fact made to it by the Key Employee
and believed by it to be true.
If the Shares are listed on a national securities exchange in the United
States on the date any Option is granted, the fair market value per share shall
be deemed to be the average of the high and low quotations at which such Shares
are sold on such national securities exchange on the date such Option is
granted. If the Shares are listed on a national securities exchange in the
United States on such date but the Shares are not traded on such date, or such
national securities exchange is not open for business on such date, the fair
market value per Share shall be determined as of the closest preceding date on
which such exchange shall have been open for business and the Shares were
traded. If the Shares are listed on more than one national securities exchange
in the United States on the date any such Option is granted, the Committee shall
determine which national securities exchange shall be used for the purpose of
determining the fair market value per Share. If the Shares are not listed on a
national securities exchange on such date, the last reported bid price in the
over-the-counter market shall be the fair market value per share, or if the
Shares are not traded on the over-the-counter market on such date, the fair
market value per share shall be determined by the Committee in good faith.
Notwithstanding the prior provisions of this paragraph, to the extent that
Section 162(m) of the Code or any rule or regulation promulgated thereunder
provides a different or inconsistent definition of "fair market value," such
definition shall be applied in determining the fair market value per share of
Options issued hereunder. For purposes of establishing the fair market value of
Shares or underlying Options, the fair market value shall be determined without
regard to any restriction on transfer thereof.
For purposes of this Plan. the determination by the Committee of the fair
market value of a Share shall be conclusive.
Upon the exercise of an Option granted hereunder, the Company shall cause
the purchased Shares to be issued only when it shall have received the full
purchase price for the Shares in cash or by certified check, except as otherwise
provided in Article III hereof.
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VII. USE OF PROCEEDS
The cash proceeds of the sale of Shares subject to the Options granted
hereunder are to be added to the general funds of the Company and used for its
general corporate purposes as the Board of Directors shall determine.
VIII. TERMS OF OPTIONS AND LIMITATIONS ON THE RIGHT OF EXERCISE
Subject to Article V, any Incentive Option granted hereunder shall be
exercisable during a period of not more than ten (10) years from the date of
grant of such Option at such times and in such amounts as the Committee shall
determine at such date of grant; provided, however, that in the case of an
Incentive Option granted to a person who, at the time the Incentive Option is
granted, owns shares in the Company or in any Related Entity which possesses
more than ten percent (10%) of the total combined voting power of all classes of
shares of the Company or of any Related Entity, such Option shall expire not
more than five (5) years from the date of grant.
Any Non-Qualified Option granted hereunder shall be exercisable at such
times, in such amounts and during such period or periods as the Committee shall
determine at the date of the grant of such Option.
The Committee shall have the right to accelerate, in whole or in part, from
time to time, conditionally or unconditionally, rights to exercise any Option
granted hereunder.
To the extent that an Option is not exercised within the period of
exercisability specified therein, it shall expire as to the then unexercised
part. If any Option granted hereunder shall terminate prior to the Termination
Date, the Committee shall have the right to use the Shares as to which such
Option shall not have been exercised to grant one or more additional Options to
any eligible Key Person. but any such grant of an additional Option shall be
made prior to the close of business on the Termination Date.
In no event shall an Option granted hereunder be exercised for a fraction
of a share.
IX. EXERCISE OF OPTIONS
Options granted under the Plan shall be exercised by the Optionee as to all
or part of the Shares covered thereby by the giving of written notice of the
exercise thereof to the Corporate Secretary of the Company at the principal
business office of the Company, specifying the number of Shares to be purchased
and specifying a business day not more than fifteen (15) days from the date such
notice is given, for the payment of the purchase price against delivery of the
Shares being purchased. Subject to the terms of Articles III, XV, XVII and
XVIII, the Company shall cause certificates for the Shares so purchased to be
delivered to the Optionee at the principal business office of the Company,
against payment of the full purchase price in cash or by certified check except
as otherwise provided in Article III.
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X. STOCK APPRECIATION RIGHTS
[DELETED]
XI. NON-TRANSFERABILITY OF OPTIONS
An Option granted hereunder shall not be transferable, whether by operation
of law or otherwise, other than by will or the laws of descent and distribution,
and any Option granted hereunder shall be exercisable, during the lifetime of
the holder, only by such holder.
XII. TERMINATION OF EMPLOYMENT AND SERVICE
Upon termination of a Key Person's service with the Company and all Related
Entities, any Option previously granted hereunder, unless otherwise specified by
the Committee in the Option, shall, to the extent not theretofore exercised,
terminate and become null and void, provided that:
(a) if the recipient shall die while in the service of the Company or
a Related Entity or during either the three (3) month or one (1) year
period, whichever is applicable, specified in clause (b) below and at a
time when such recipient was entitled to exercise an Option as herein
provided, the legal representative of such recipient, or such person who
acquired such Option by bequest or inheritance or by reason of the death of
the recipient, may, not later than one (1) year from the date of death (or
such longer period as may be specified by the Committee with respect to a
Non-Qualified Option), exercise such Option to the extent not theretofore
exercised, in respect of any or all of such number of Shares as specified
by the Committee in such Option; and
(b) if the service of any recipient to whom such Option shall have
been granted shall terminate by reason of the recipient's retirement (at
such age or upon such conditions as shall be specified by the Committee),
disability (as described in Section 22(e)(3) of the Code) or dismissal by
the Company or a Related Entity other than for cause (as defined below),
and while such recipient is entitled to exercise such Option as herein
provided, such recipient shall have the right to exercise such Option so
granted, to the extent not theretofore exercised, in respect of any or all
of such number of Shares as specified by the Committee in such Option, at
any time up to and including (i) three (3) months after the date of such
termination in the case of termination by reason of retirement or dismissal
other than for cause (or such longer period as may be specified by the
Committee with respect to a Non-Qualified Option), and (ii) one (1) year
after the date of termination in the case of termination by reason of
disability (or such longer period as may be specified by the Committee with
respect to a Non-Qualified Option).
If a recipient voluntarily terminates his or her employment or service as
an Outside Director Participant, or is discharged for cause, any Option granted
hereunder shall, unless otherwise specified by the Committee in the Option,
forthwith terminate with respect to any unexercised portion thereof.
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Each Incentive Option by its terms shall require the recipient to remain in
the continuous employ of the Company or any subsidiary corporation or parent
corporation of the Company from the date of grant of the Incentive Option until
no more than three (3) months prior to the date of exercise of the Incentive
Option (except as otherwise provided herein in the event of' death or
disability).
Notwithstanding the preceding paragraphs of this Article XII, if the
service of any recipient with the Company and all Related Entities is
terminated, whether voluntarily or involuntarily, within a one-year period
following a change in control of the Company (as defined Article XIII), other
than a termination of such service for cause, such recipient shall have the
right to exercise all or any portion of the Option, whether vested or unvested,
at any time up and to and including three (3) months after the date of such
termination (or such longer period as may be specified by the Committee with
respect to a Non-Qualified Option), at which time such Option shall cease to be
exercisable.
Notwithstanding the immediately preceding paragraphs of this Article XII,
no Option may be exercised after the expiration of the period of exercisability
provided for in such Option.
If an Option granted hereunder shall be exercised by the legal
representative of a deceased recipient or former recipient, or by a person who
acquired an Option granted hereunder by bequest or inheritance or by reason of
the death of any recipient or former recipient, written notice of such exercise
shall be accompanied by a certified copy of letters testamentary or equivalent
proof of the right of such legal representative or other person to exercise such
Option.
For the purposes of the Plan, the term "for cause" shall mean (i) with
respect to an employee who is a party to a written agreement with, or
alternatively, participates in a compensation or benefit plan of the Company or
a Related Entity, which agreement or plan contains a definition of "for cause"
or "cause" (or words of like import) for purposes of termination of employment
thereunder by the Company or such Related Entity, "for cause" or "cause" as
defined in the most recent of such agreements or plans, or (ii) in all other
cases, as determined by the Committee in its sole discretion, (a) the willful
commission by an employee of a criminal or other act that causes or will
probably cause substantial economic damage to the Company or a Related Entity or
substantial injury to the business reputation of the Company or a Related
Entity; (b) the continuing willful failure of an employee to perform the duties
of such employee to the Company or a Related Entity (other than such failure
resulting from the employee's incapacity due to physical or mental illness)
after written notice thereof (specifying the particulars thereof in reasonable
detail) and a reasonable opportunity to be heard and cure such failure are given
to the employee by the Committee; (c) the order of a court of competent
jurisdiction requiring the termination of the employee's employment; or (d) in
the case of an Outside Director Participant, the failure of such Outside
Director Participant to act in good faith or the taking of any action that
constitutes a material breach of such person's fiduciary duty to the Company.
For purposes of the Plan, no act or failure to act, on the employee's part shall
be considered "willful" unless done or omitted to be done by the employee not in
good faith and
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without reasonable belief that the employee's action or omission was in the best
interest of the Company or a Related Entity.
For the purposes of the Plan, an employment relationship shall be deemed to
exist between an individual and the Company or a Related Entity if, at the time
of the determination, the individual was an "employee" of the Company or such
Related Entity. If an individual is on military, sick leave or other bona fide
leave of absence, such individual shall be considered an "employee" for purposes
of the exercise of an Option and shall be entitled to exercise such Option
during such leave if the period of such leave does not exceed 90 days, or, if
longer, so long as the individual's right to reemployment with the Company (or a
Related Entity) is guaranteed either by statute or by contract. If the period
of leave exceeds ninety (90) days, the employment relationship shall be deemed
to have terminated on the ninety-first (91st) day of such leave, unless the
individuals right to re-employment is guaranteed by statute or contract.
A termination of employment shall not be deemed to occur by reason of (i)
the transfer of an employee from employment by the Company to employment by a
Related Entity, or (ii) the transfer of an employee from employment by a Related
Entity to employment by the Company or by another Related Entity.
XIII. ADJUSTMENT OF SHARES; EFFECT OF CERTAIN TRANSACTION
In the event of any change in the outstanding Shares through merger,
consolidation, reorganization, recapitalization, stock dividend, stock split,
split-up, split-off, spin-off, combination of shares, exchange of shares, or
other like change in capital structure of the Company, an adjustment shall be
made to each outstanding Option such that each such Option shall thereafter be
exercisable for such securities, cash and/or other property as would have been
received in respect of the Shares subject to such Option had such Option been
exercised in full immediately prior to such change, and such an adjustment shall
be made successively each time any such change shall occur. The term "Shares"
shall after any such change refer to the securities, cash and/or property then
receivable upon exercise of an Option. In addition, in the event of any such
change, the Committee shall make any further adjustment as may be appropriate to
the maximum number of Shares subject to the Plan, the maximum number of Shares
of which Options may be granted to any one recipient, and the number of Shares
and price per Share subject to outstanding Options as shall be equitable to
prevent dilution or enlargement of rights under such Options, and the
determination of the Committee as to these matters shall be conclusive.
Notwithstanding the foregoing, (i) each such adjustment with respect to an
Incentive Option shall comply with the rules of Section 424(a) of the Code, and
(ii) in no event shall any adjustment be made which would render any Incentive
Option granted hereunder other than an incentive stock option for purposes of
Section 422 of the Code.
In the event of a change in control of the Company, all then outstanding
vested Options shall immediately become exercisable. For purposes of the Plan,
a "change in control" of the Company occurs if: (a) any "person" (defined as
such term is used in Sections 13(d) and 14(d)(2) of the Exchange Act, as
amended), other than a stockholder of the Company as of the date of the adoption
of the Plan by the Board of Directors or any affiliate of any such stockholder,
is or
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becomes the beneficial owner, directly or indirectly, of securities of the
Company representing fifty percent (50%) or more of the combined voting power of
the Company's outstanding securities then entitled to vote for the election of
directors; (b) the Board of Directors shall approve the sale of all or
substantially all of the assets of the Company; or (c) the Board of Directors
shall approve any merger, consolidation, issuance of securities or purchase of
assets, the result of which would be the occurrence of any event described in
clause (a) above.
The Committee in its discretion may determine that, upon the occurrence of
a transaction described in the preceding paragraph, each Option outstanding
hereunder shall terminate within a specified number of days after notice to the
holder, and such holder shall receive, with respect to each Share subject to
such Option, cash in an amount equal to the excess of the fair market value of
such Share immediately prior to the occurrence of such transaction over the
exercise price per Share of such Option immediately prior to the occurrence of
such transaction. The provisions contained in the preceding sentence shall be
inapplicable to an Option granted within six (6) months before the occurrence of
a transaction described above if the holder of such Option is subject to the
reporting requirements of Section 16(a) of the Exchange Act.
XIV. RIGHT TO TERMINATE EMPLOYMENT
The Plan shall not impose any obligation on the Company or on any Related
Entity thereof to continue the employment of any holder of an Option; and it
shall not impose any obligation on the part of any holder of an Option to remain
in the employ of the Company or of any Related Entity.
XV. PURCHASE FOR INVESTMENT
Except as hereafter provided, the holder of an Option granted hereunder
shall, upon any exercise thereof, execute and deliver to the Company a written
statement, in form satisfactory to the Company, in which such holder represents
and warrants that such holder is purchasing or acquiring the Shares acquired
thereunder for such holder's own account, for investment only and not with a
view to the resale or distribution thereof, and agrees that any subsequent offer
for sale or sale or distribution of any of such Shares shall be made pursuant to
either (a) a Registration Statement on an appropriate form under the Securities
Act of 1933, as amended (the "Securities Act"), which Registration Statement has
become effective and is current with regard to the Shares being offered or sold,
or (b) a specific exemption from the registration requirements of the Securities
Act and any applicable state securities law or regulation, but in claiming such
exemption the holder shall, prior to any offer for sale or sale of such Shares,
obtain a prior favorable written opinion, in form and substance satisfactory to
the Company, from counsel for or approved by the Company, as to the
applicability of such exemption thereto. Notwithstanding the prior sentence, no
exercise of an Option shall be deemed to be effective if the Company, in its
sole discretion, determines that a violation of any federal or state securities
law or rule or regulation promulgated thereunder, would result therefrom. The
foregoing restrictions shall not apply to (i) issuances by the Company so long
as the Shares being issued are registered under the Securities Act and a
prospectus in respect thereof is current, or (ii) reofferings of Shares by
affiliates of the Company (as defined in Rule 405 or any successor rule or
regulation promulgated
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under the Securities Act) if the Shares being reoffered are registered under the
Securities Act and a prospectus in respect thereof is current.
XVI. ISSUANCE OF CERTIFICATES; LEGENDS; PAYMENT OF EXPENSES
Subject to the provisions of Articles III, XV and XVIII hereof, upon any
exercise of an Option which may be granted hereunder and payment of the purchase
price in full in cash or by certified check, a certificate or certificates for
the Shares as to which the Option has been exercised shall be issued by the
Company in the name of the person exercising the Option and shall be delivered
to or upon the order of such person.
The Company may endorse such legend or legends upon the certificates for
Shares issued upon exercise of an Option granted hereunder and may issue such
"stop transfer" instructions to its transfer agent in respect of such Shares as,
in its discretion, it determines to be necessary or appropriate to (i) prevent a
violation of, or to perfect an exemption from, the registration requirements of
the Securities Act or any state "blue sky" law or regulation, (ii) implement the
provisions of the Plan and any agreement between the Company and the optionee or
grantee with respect to such Shares, or (iii) permit the Company to determine
the occurrence of a disqualifying disposition as described in Section 421(b) of
the Code, of Shares transferred upon exercise of an Incentive Option granted
under the Plan.
The Company shall pay all issue taxes with respect to the issuance of
Shares to the person exercising the Option, as well as all fees and expenses
necessarily incurred by the Company in connection with such issuance.
All Shares issued as provided herein shall be fully paid and non-assessable
to the extent permitted by law.
XVII. WITHHOLDING TAXES
The Company may require a Key Person exercising a Non-Qualified Option
granted hereunder, or disposing of Shares acquired pursuant to the exercise of
an Incentive Option in a disqualifying disposition (within the meaning of
Section 421(b) of the Code), to reimburse the Company or Related Entity, as
appropriate, for any taxes required by any governmental authority to be withheld
or otherwise deducted and paid by such corporation in respect of the issuance or
disposition of Shares. In lieu thereof, the Company or Related Entity, as
appropriate, shall have the right to withhold the amount of such taxes from any
other sums due or to become due from such Corporation to the Key Person upon
such terms and conditions as the Committee shall prescribe. At any time that
the Company or a Related Entity becomes subject to a withholding obligation
under applicable law with respect to the exercise of a Non-Qualified Option
except as set forth below, a Key Person may elect to satisfy, in whole or in
part, the Key Person's related personal tax liabilities (an "Election") by (i)
the payment of cash, (ii) electing to have such amount withheld from sums
otherwise due to the Key Person, (iii) subject to the other requirements of this
Section XVII, directing the Company or the subsidiary to withhold from Shares
issuable in the related exercise either a specified number of Shares or Shares
having a
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specified value in each case with a value not in excess of such tax liabilities,
(iv) subject to the requirements of Section 16(b) of the Exchange Act and the
rules promulgated thereunder, tendering Shares previously issued pursuant to an
exercise or other shares of the Company's common stock owned by the Key Person,
or (v) combining any or all of the foregoing options; provided, that the Company
will not be required to redeem any Shares or shares of non-voting or other
common stock in violation of applicable laws. An Election shall be irrevocable.
The withheld Shares and other shares tendered in payment should be valued at
their fair market value on the date that the withholding obligation arises (the
"Tax Date"). The Committee may disapprove of any Election, suspend, or terminate
the right to make Elections or provide that the right to make Elections shall
not apply to particular grants, Shares or exercises. If a Key Person is a person
subject to Section 16 of the Exchange Act and such Key Person intends to satisfy
all or any portion of such withholding obligation by directing the withholding
of Shares issuable or tendering Shares, then (1) any Election by such Key Person
must be made (i) at least six (6) months prior to the relevant Tax Date, or (ii)
on or prior to the relevant Tax Date and during a period that begins on the
third business day following the date of release for publication of the
Company's quarterly or annual summary statements of sales and earnings and that
ends on the twelfth business day following such date, and (2) the Election may
not be made with respect to an exercise, or the withholding obligation arising
thereon, if the relevant Non-Qualified Option was granted six (6) months or less
prior to the date of Election. The Committee may impose any other conditions or
restrictions on the right to make an Election as it shall deem appropriate. If
the Key Person has informed the Company in writing that such withholding would
subject such Key Person to liability under Section 16(b) of the Exchange Act,
the Company shall not be authorized to effect any such withholding without the
prior written consent of the Key Person. The Committee may prescribe such rules
as it determines with respect to Key Persons subject to the reporting
requirements of Section 16(a) of the Exchange Act to effect such tax withholding
in compliance with the rules established by the Securities and Exchange
Commission (the "Commission") under Section 16 of the Exchange Act and the
positions of the staff of the Commission thereunder expressed in no-action
letters exempting such tax withholding from liability under Section 16(b) of the
Exchange Act.
XVIII. LISTING OF SHARES AND RELATED MATTERS
Upon the consummation of a public offering of voting common stock of the
Company which is underwritten on a firm commitment basis by a nationally
recognized investment banking firm, (i) each granted but unexercised Option
shall be deemed from the date thereof to be an option to purchase voting common
stock of the Company instead of an option to purchase nonvoting common stock of
the Company, and (ii) all Options granted after the date thereof shall be
options to purchase voting common stock of the Company and not nonvoting common
stock of the Company.
If at any time the Board of Directors shall determine in its discretion
that the listing, registration or qualification of the Shares covered by the
Plan upon any national securities exchange or under any state or federal law, or
the consent or approval of any governmental regulatory body, is necessary or
desirable as a condition of, or in connection with, the sale or purchase of
Shares under the Plan, no Shares shall be issued unless and until such listing,
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registration, qualification, consent or approval shall have been effected or
obtained, or otherwise provided for, free of any conditions not acceptable to
the Board of Directors. During such suspension of the issuance of Shares,
neither the Company not its parents or subsidiaries shall be liable for any
payment of interest or fees of any kind on Shares not yet issued. Under no
circumstances shall the Company be required to effect any registration or
qualification of any Shares under any federal or state securities laws.
XIX. AMENDMENT OF THE PLAN
The Board of Directors or the Committee, as the case may be, may, from time
to time, amend the Plan, provided that no amendment shall be made, without the
approval of the stockholders of the Company, that will (i) increase the total
number of Shares reserved for Options under the Plan (other than an increase
resulting from an adjustment provided for in Article XIII), (ii) reduce the
exercise price of any Option granted hereunder below the price required by
Article VI, (iii) modify the provisions of the Plan relating to eligibility,
(iv) materially increase the benefits accruing to participants under the Plan,
(v) increase the number of Shares which may be granted to an individual Key
Employee under the Plan, (vi) adversely affect the Plan's qualification under
Section 162(m)(4)(C) of the Code, (vii) adversely affect the qualification of
Incentive Options under Section 422 of the Code, or (viii) otherwise materially
modify the Plan. The Committee shall be authorized to amend the Plan and the
Options granted thereunder to permit the Incentive Options granted thereunder to
qualify as incentive stock Options within the meaning of Section 422 of the Code
and to qualify the Plan under Section 162(m)(4)(C) of the Code. The rights and
obligations under any Option granted before amendment of the Plan or any
unexercised portion of such Option shall not be adversely affected by amendment
of the Plan or the Option without the consent of the holder of the Option.
XX. TERMINATION OR SUSPENSION OF THE PLAN
The Board of Directors may at any time suspend or terminate the Plan. The
Plan, unless sooner terminated by action of the Board of Directors, shall
terminate at the close of business on the Termination Date. An Option may not
be granted while the Plan is suspended or after it is terminated. Rights and
obligations under any Option granted while the Plan is in effect shall not be
altered or impaired by suspension or termination of the Plan, except upon the
consent of the person to whom the Option was granted. The power of the
Committee to construe and administer any Options granted prior to the
termination or suspension of the Plan under Article III nevertheless shall
continue after such termination or during such suspension.
XXI. SAVINGS PROVISION
With respect to persons subject to Section 16 of the Exchange Act,
transactions under the Plan are intended to comply with all applicable
conditions of Rule 16b-3 or its successors under the Exchange Act. To the extent
any provision of the Plan or action by the Committee fails to comply, it shall
be deemed null and void, to the extent permitted by law and deemed advisable by
the Committee.
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XXII. GOVERNING LAW
The Plan, such Options as may be granted thereunder and all related matters
shall be governed by, and construed and enforced in accordance with, the laws of
the State of Delaware from time to time obtaining.
XXIII. PARTIAL INVALIDITY
The invalidity or illegality of any provision herein shall not be deemed to
affect the validity of any other provision.
XXIV. EFFECTIVE DATE OF AMENDMENT AND RESTATEMENT OF THE PLAN
The Plan as set forth herein constitutes an amendment and restatement of
the Trident NGL Holding, Inc. Amended and Restated 1991 Stock Option Plan, as
previously adopted by Trident NGL Holding, Inc. (a predecessor to the Company).
This amendment and restatement of the Plan shall be effective as of May 10,
1996, provided this amendment and restatement of the Plan is approved by the
stockholders of the Company on such date at the Company's 1996 Annual Meeting of
Stockholders./2/
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/2/ The referenced amendment and restatement of the Plan was effective as of May
10, 1996. This version of the Plan reflects all amendments to the Plan
through August 20, 1998, including, without limitation, the amendments
implemented to reflect the corporate name change from "NGC Corporation" to
"Dynegy Inc."
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