Exhibit 10.3
McMoRan OIL & GAS CO.
1994 STOCK OPTION PLAN
SECTION 1
Purpose. The purpose of the McMoRan Oil & Gas Co.
1994 Stock Option Plan (the "Plan") is to motivate and
reward key personnel by giving them a proprietary interest
in the Company's continued success.
SECTION 2
Definitions. As used in the Plan, the following
terms shall have the meanings set forth below:
"Award" shall mean any Option, Stock Appreciation
Right, Limited Right or Other Stock-Based Award.
"Award Agreement" shall mean any written
agreement, contract or other instrument or document
evidencing any Award, which may, but need not, be executed
or acknowledged by a Participant.
"Board" shall mean the Board of Directors of
McMoRan Oil & Gas Co.
"Code" shall mean the Internal Revenue Code of
1986, as amended from time to time.
"Committee" shall mean a committee of the Board
designated by the Board to administer the Plan and composed
of not fewer than two directors, each of whom, to the extent
necessary to comply with Rule 16b-3 only, is a "non-employee
director" within the meaning of Rule 16b-3 and, to the
extent necessary to comply with Section 162(m) only, is an
"outside director" under Section 162(m). Until otherwise
determined by the Board, the Committee shall be the
Corporate Personnel Committee of the Board.
"Company" shall mean McMoRan Oil & Gas Co.
"Designated Beneficiary" shall mean the
beneficiary designated by the Participant, in a manner
determined by the Committee, to receive the benefits due the
Participant under the Plan in the event of the Participant's
death. In the absence of an effective designation by the
Participant, Designated Beneficiary shall mean the
Participant's estate.
"Employee" shall mean (i) any person providing
services as an officer of the Company or a Subsidiary,
whether or not employed by such entity, (ii) any employee of
the Company or a Subsidiary, including any director who is
also an employee of the Company or a Subsidiary, (iii) any
officer or employee of an entity with which the Company has
contracted to receive management services who provides
services to the Company or a Subsidiary through such
arrangement and (iv) any person who has agreed in writing to
become a person described in clauses (i), (ii) or (iii)
within not more than 30 days following the date of grant of
such person's first Award under the Plan.
"Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended from time to time.
"Incentive Stock Option" shall mean an option
granted under Section 6 of the Plan that is intended to meet
the requirements of Section 422 of the Code or any successor
provision thereto.
"Limited Right" shall mean any right granted under
Section 8 of the Plan.
"Nonqualified Stock Option" shall mean an option
granted under Section 6 of the Plan that is not intended to
be an Incentive Stock Option.
"Offer" shall mean any tender offer, exchange
offer or series of purchases or other acquisitions, or any
combination of those transactions, as a result of which any
person, or any two or more persons acting as a group, and
all affiliates of such person or persons, shall own
beneficially more than 40% of the Shares outstanding
(exclusive of Shares held in the Company's treasury or by
the Company's Subsidiaries).
"Offer Price" shall mean the highest price per
Share paid in any Offer that is in effect at any time during
the period beginning on the ninetieth day prior to the date
on which a Limited Right is exercised and ending on and
including the date of exercise of such Limited Right. Any
securities or property that comprise all or a portion of the
consideration paid for Shares in the Offer shall be valued
in determining the Offer Price at the higher of (i) the
valuation placed on such securities or property by the
person or persons making such Offer, or (ii) the valuation,
if any, placed on such securities or property by the
Committee or the Board.
"Option" shall mean an Incentive Stock Option or a
Nonqualified Stock Option.
"Other Stock-Based Award" shall mean any right or
award granted under Section 9 of the Plan.
"Participant" shall mean any Employee granted an
Award under the Plan.
"Person" shall mean any individual, corporation,
partnership, association, joint-stock company, trust,
unincorporated organization, government or political
subdivision thereof or other entity.
"Rule 16b-3" shall mean Rule 16b-3 promulgated by
the SEC under the Exchange Act, or any successor rule or
regulation thereto as in effect from time to time.
"SAR" shall mean any Stock Appreciation Right.
"SEC" shall mean the Securities and Exchange
Commission, including the staff thereof, or any successor
thereto.
"Section 162(m)" shall mean Section 162(m) of the
Code and all regulations promulgated thereunder as in effect
from time to time.
"Shares" shall mean the shares of common stock,
par value $0.01 per share, of McMoRan Oil & Gas Co.
(including any attached Preferred Stock Purchase Rights),
and such other securities of the Company or a Subsidiary as
the Committee may from time to time designate.
"Stock Appreciation Right" shall mean any right
granted under Section 7 of the Plan.
"Subsidiary" shall mean (i) any corporation or
other entity in which the Company possesses directly or
indirectly equity interests representing at least 50% of the
total ordinary voting power or at least 50% of the total
value of all classes of equity interests of such corporation
or other entity and (ii) any other entity in which the
Company has a direct or indirect economic interest that is
designated as a Subsidiary by the Committee.
SECTION 3
Administration. The Plan shall be administered by
the Committee. Subject to the terms of the Plan and
applicable law, and in addition to other express powers and
authorizations conferred on the Committee by the Plan, the
Committee shall have full power and authority to: (i)
designate Participants; (ii) determine the type or types of
Awards to be granted to an eligible Employee; (iii)
determine the number of Shares to be covered by, or with
respect to which payments, rights or other matters are to be
calculated in connection with, Awards; (iv) determine the
terms and conditions of any Award; (v) determine whether, to
what extent, and under what circumstances Awards may be
settled or exercised in cash, whole Shares, other whole
securities, other Awards, other property or other cash
amounts payable by the Company upon the exercise of that or
other Awards, or cancelled, forfeited or suspended and the
method or methods by which Awards may be settled, exercised,
cancelled, forfeited or suspended; (vi) determine whether,
to what extent, and under what circumstances cash, Shares,
other securities, other Awards, other property, and other
amounts payable by the Company with respect to an Award
shall be deferred either automatically or at the election of
the holder thereof or of the Committee; (vii) interpret and
administer the Plan and any instrument or agreement relating
to, or Award made under, the Plan; (viii) establish, amend,
suspend or waive such rules and regulations and appoint such
agents as it shall deem appropriate for the proper
administration of the Plan; and (ix) make any other
determination and take any other action that the Committee
deems necessary or desirable for the administration of the
Plan. Unless otherwise expressly provided in the Plan, all
designations, determinations, interpretations and other
decisions under or with respect to the Plan or any Award
shall be within the sole discretion of the Committee, may be
made at any time and shall be final, conclusive and binding
upon all Persons, including the Company, any Subsidiary, any
Participant, any holder or beneficiary of any Award, any
stockholder of the Company and any Employee.
SECTION 4
Eligibility. Any Employee who is not a member of
the Committee shall be eligible to be granted an Award.
SECTION 5
(a) Shares Available for Awards. Subject to
adjustment as provided in Section 5(b):
(i) Calculation of Number of Shares Available.
The number of Shares with respect to which Awards may be
granted under the Plan shall be 1,000,000. If, after the
effective date of the Plan, an Award granted under the Plan
expires or is exercised, forfeited, cancelled or terminated
without the delivery of Shares, then the Shares covered by
such Award or to which such Award relates, or the number of
Shares otherwise counted against the aggregate number of
Shares with respect to which Awards may be granted, to the
extent of any such expiration, exercise, forfeiture,
cancellation or termination without the delivery of Shares,
shall again be, or shall become, Shares with respect to
which Awards may be granted.
(ii) Substitute Awards. Any Shares delivered by
the Company, any Shares with respect to which Awards are
made by the Company, or any Shares with respect to which the
Company becomes obligated to make Awards, through the
assumption of, or in substitution for, outstanding awards
previously granted by an acquired company or a company with
which the Company combines, shall not be counted against the
Shares available for Awards under the Plan.
(iii) Sources of Shares Deliverable Under Awards.
Any Shares delivered pursuant to an Award may consist of
authorized and unissued Shares or of treasury Shares,
including Shares held by the Company or a Subsidiary and
acquired in the open market or otherwise obtained by the
Company or a Subsidiary.
(iv) Individual Limit. Any provision of the Plan
to the contrary notwithstanding, no individual may receive
in any year Awards under the Plan that relate to more than
200,000 Shares.
(b) Adjustments. In the event that the Committee
determines that any dividend or other distribution (whether
in the form of cash, Shares, Subsidiary securities, other
securities or other property), recapitalization, stock
split, reverse stock split, reorganization, merger,
consolidation, split-up, spin-off, combination, repurchase
or exchange of Shares or other securities of the Company,
issuance of warrants or other rights to purchase Shares or
other securities of the Company, or other similar corporate
transaction or event affects the Shares such that an
adjustment is determined by the Committee to be appropriate
to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the
Plan, then the Committee may, in its sole discretion and in
such manner as it may deem equitable, adjust any or all of
(i) the number and type of Shares (or other securities or
property) with respect to which Awards may be granted, (ii)
the number and type of Shares (or other securities or
property) subject to outstanding Awards, and (iii) the grant
or exercise price with respect to any Award or, if deemed
appropriate, make provision for a cash payment to the holder
of an outstanding Award or, if deemed appropriate, adjust
outstanding Awards to provide the rights contemplated by
Section 9(b) hereof; provided, in each case, that with
respect to Awards of Incentive Stock Options no such
adjustment shall be authorized to the extent that such
authority would cause the Plan to violate Section 422(b)(1)
of the Code or any successor provision thereto and, with
respect to all Awards under the Plan, no such adjustment
shall be authorized to the extent that such authority would
be inconsistent with the requirements for full deductibility
under Section 162(m) of the Code and the regulations
thereunder; and provided further, that the number of Shares
subject to any Award denominated in Shares shall always be a
whole number.
SECTION 6
(a) Stock Options. Subject to the provisions of
the Plan, the Committee shall have sole and complete
authority to determine the Employees to whom Options shall
be granted, the number of Shares to be covered by each
Option, the option price therefor and the conditions and
limitations applicable to the exercise of the Option. The
Committee shall have the authority to grant Incentive Stock
Options, Nonqualified Stock Options or both. In the case
of Incentive Stock Options, the terms and conditions of such
grants shall be subject to and comply with such rules as may
be required by Section 422 of the Code, as from time to time
amended, and any implementing regulations. Except in the
case of an Option granted in assumption of or substitution
for an outstanding award of a company acquired by the
Company or with which the Company combines, the exercise
price of any Option granted under this Plan shall not be
less than 100% of the fair market value of the underlying
Shares on the date of grant.
(b) Exercise. Each Option shall be exercisable
at such times and subject to such terms and conditions as
the Committee may, in its sole discretion, specify in the
applicable Award Agreement or thereafter, provided, however,
that in no event may any Option granted hereunder be
exercisable after the expiration of 10 years after the date
of such grant. The Committee may impose such conditions
with respect to the exercise of Options, including without
limitation, any condition relating to the application of
Federal or state securities laws, as it may deem necessary
or advisable.
(c) Payment. No Shares shall be delivered
pursuant to any exercise of an Option until payment in full
of the option price therefor is received by the Company.
Such payment may be made in cash, or its equivalent, or, if
and to the extent permitted by the Committee, by applying
cash amounts payable by the Company upon the exercise of
such Option or other Awards by the holder thereof or by
exchanging whole Shares owned by such holder (which are not
the subject of any pledge or other security interest), or by
a combination of the foregoing, provided that the combined
value of all cash, cash equivalents, cash amounts so payable
by the Company upon exercises of Awards and the fair market
value of any such whole Shares so tendered to the Company,
valued (in accordance with procedures established by the
Committee) as of the effective date of such exercise, is at
least equal to such option price.
SECTION 7
(a) Stock Appreciation Rights. Subject to the
provisions of the Plan, the Committee shall have sole and
complete authority to determine the Employees to whom Stock
Appreciation Rights shall be granted, the number of Shares
to be covered by each Stock Appreciation Right, the grant
price thereof and the conditions and limitations applicable
to the exercise thereof. Stock Appreciation Rights may be
granted in tandem with another Award, in addition to another
Award, or freestanding and unrelated to any other Award.
Stock Appreciation Rights granted in tandem with or in
addition to an Option or other Award may be granted either
at the same time as the Option or other Award or at a later
time. Stock Appreciation Rights shall not be exercisable
after the expiration of 10 years after the date of grant.
Except in the case of a Stock Appreciation Right granted in
assumption of or substitution for an outstanding award of a
company acquired by the Company or with which the Company
combines, the grant price of any Stock Appreciation Right
granted under this Plan shall not be less than 100% of the
fair market value of the Shares covered by such Stock
Appreciation Right on the date of grant or, in the case of a
Stock Appreciation Right granted in tandem with a then
outstanding Option or other Award, on the date of grant of
such related Option or Award.
(b) A Stock Appreciation Right shall entitle the
holder thereof to receive an amount equal to the excess, if
any, of the fair market value of a Share on the date of
exercise of the Stock Appreciation Right over the grant
price. Any Stock Appreciation Right shall be settled in
cash, unless the Committee shall determine at the time of
grant of a Stock Appreciation Right that it shall or may be
settled in cash, Shares or a combination of cash and Shares.
SECTION 8
(a) Limited Rights. Subject to the provisions
of the Plan, the Committee shall have sole and complete
authority to determine the Employees to whom Limited Rights
shall be granted, the number of Shares to be covered by each
Limited Right, the grant price thereof and the conditions
and limitations applicable to the exercise thereof. Limited
Rights may be granted in tandem with another Award, in
addition to another Award, or freestanding and unrelated to
any Award. Limited Rights granted in tandem with or in
addition to an Award may be granted either at the same time
as the Award or at a later time. Limited Rights shall not
be exercisable after the expiration of 10 years after the
date of grant and shall only be exercisable during a period
determined at the time of grant by the Committee beginning
not earlier than one day and ending not more than ninety
days after the expiration date of an Offer. Except in the
case of a Limited Right granted in assumption of or
substitution for an outstanding award of a company acquired
by the Company or with which the Company combines, the grant
price of any Limited Right granted under this Plan shall not
be less than 100% of the fair market value of the Shares
covered by such Limited Right on the date of grant or, in
the case of a Limited Right granted in tandem with a then
outstanding Option or other Award, on the date of grant of
such related Option or Award.
(b) A Limited Right shall entitle the holder
thereof to receive an amount equal to the excess, if any, of
the Offer Price on the date of exercise of the Limited Right
over the grant price. Any Limited Right shall be settled in
cash, unless the Committee shall determine at the time of
grant of a Limited Right that it shall or may be settled in
cash, Shares or a combination of cash and Shares.
SECTION 9
(a) Other Stock-Based Awards. The Committee is
hereby authorized to grant to eligible Employees an "Other
Stock-Based Award", which shall consist of an Award, the
value of which is based in whole or in part on the value of
Shares, that is not an instrument or Award specified in
Sections 6 through 8 of this Plan. Other Stock-Based Awards
may be awards of Shares or may be denominated or payable in,
valued in whole or in part by reference to, or otherwise
based on or related to, Shares (including, without
limitation, securities convertible or exchangeable into or
exercisable for Shares), as deemed by the Committee
consistent with the purposes of the Plan. The Committee
shall determine the terms and conditions of any such Other
Stock-Based Award. Except in the case of an Other
Stock-Based Award granted in assumption of or in
substitution for an outstanding award of a company acquired
by the Company or with which the Company combines, the price
at which securities may be purchased pursuant to any Other
Stock-Based Award granted under this Plan, or the provision,
if any, of any such Award that is analogous to the purchase
or exercise price, shall not be less than 100% of the fair
market value of the securities to which such Award relates
on the date of grant.
(b) Dividend Equivalents. In the sole and
complete discretion of the Committee, an Award, whether made
as an Other Stock-Based Award under this Section 9 or as an
Award granted pursuant to Sections 6 through 8 hereof, may
provide the holder thereof with dividends or dividend
equivalents, payable in cash, Shares, Subsidiary securities,
other securities or other property on a current or deferred
basis.
SECTION 10
(a) Amendments to the Plan. The Board may
amend, suspend or terminate the Plan or any portion thereof
at any time, provided that no amendment shall be made
without stockholder approval if such approval is necessary
to comply with any tax or regulatory requirement.
Notwithstanding anything to the contrary contained herein,
the Committee may amend the Plan in such manner as may be
necessary for the Plan to conform with local rules and
regulations in any jurisdiction outside the United States.
(b) Amendments to Awards. The Committee may
amend, modify or terminate any outstanding Award with the
holder's consent at any time prior to payment or exercise in
any manner not inconsistent with the terms of the Plan,
including without limitation, (i) to change the date or
dates as of which an Award becomes exercisable, or (ii) to
cancel an Award and grant a new Award in substitution
therefor under such different terms and conditions as it
determines in its sole and complete discretion to be
appropriate.
(c) Adjustment of Awards Upon the Occurrence of
Certain Unusual or Nonrecurring Events. The Committee is
hereby authorized to make adjustments in the terms and
conditions of, and the criteria included in, Awards in
recognition of unusual or nonrecurring events (including,
without limitation, the events described in Section 5(b)
hereof) affecting the Company, or the financial statements
of the Company or any Subsidiary, or of changes in
applicable laws, regulations, or accounting principles,
whenever the Committee determines that such adjustments are
appropriate to prevent dilution or enlargement of the
benefits or potential benefits intended to be made available
under the Plan.
(d) Cancellation. Any provision of this Plan or
any Award Agreement to the contrary notwithstanding, the
Committee may cause any Award granted hereunder to be
cancelled in consideration of a cash payment or alternative
Award made to the holder of such cancelled Award equal in
value to such cancelled Award. The determinations of value
under this subparagraph shall be made by the Committee in
its sole discretion.
SECTION 11
(a) Delegation. Subject to the terms of the Plan
and applicable law, the Committee may delegate to one or
more officers of the Company the authority, subject to such
terms and limitations as the Committee shall determine, to
grant Awards to, or to cancel, modify or waive rights with
respect to, or to alter, discontinue, suspend, or terminate
Awards held by, Employees who are not officers or directors
of the Company for purposes of Section 16 of the Exchange
Act, or any successor section thereto, or who are otherwise
not subject to such Section.
(b) Award Agreements. Each Award hereunder
shall be evidenced by a writing delivered to the Participant
that shall specify the terms and conditions thereof and any
rules applicable thereto, including but not limited to the
effect on such Award of the death, retirement or other
termination of employment of the Participant and the effect
thereon, if any, of a change in control of the Company.
(c) Withholding. A Participant may be required
to pay to the Company, and the Company shall have the right
to deduct from all amounts paid to a Participant (whether
under the Plan or otherwise), any taxes required by law to
be paid or withheld in respect of Awards hereunder to such
Participant. The Committee may provide for additional cash
payments to holders of Awards to defray or offset any tax
arising from the grant, vesting, exercise or payment of any
Award.
(d) Transferability. No Awards granted hereunder
may be transferred, pledged, assigned or otherwise
encumbered by a Participant except: (i) by will; (ii) by the
laws of descent and distribution; (iii) pursuant to a
domestic relations order, as defined in the Code, if
permitted by the Committee and so provided in the Award
Agreement or an amendment thereto; or (iv) as to Options
only, if permitted by the Committee and so provided in the
Award Agreement or an amendment thereto, (a) to Immediate
Family Members, (b) to a partnership in which Immediate
Family Members, or entities in which Immediate Family
Members are the sole owners, members or beneficiaries, as
appropriate, are the only partners, (c) to a limited
liability company in which Immediate Family Members, or
entities in which Immediate Family Members are the sole
owners, members or beneficiaries, as appropriate, are the
only members, or (d) to a trust for the sole benefit of
Immediate Family Members. "Immediate Family Members" shall
be defined as the spouse and natural or adopted children or
grandchildren of the Participant and their spouses. To the
extent that an Incentive Stock Option is permitted to be
transferred during the lifetime of the Participant, it shall
be treated thereafter as a Nonqualified Stock Option. Any
attempted assignment, transfer, pledge, hypothecation or
other disposition of Awards, or levy of attachment or
similar process upon Awards not specifically permitted
herein, shall be null and void and without effect. The
designation of a Designated Beneficiary shall not be a
violation of this Section 11(d).
(e) Share Certificates. All certificates for
Shares or other securities delivered under the Plan pursuant
to any Award or the exercise thereof shall be subject to
such stop transfer orders and other restrictions as the
Committee may deem advisable under the Plan or the rules,
regulations, and other requirements of the SEC, any stock
exchange upon which such Shares or other securities are then
listed, and any applicable federal or state laws, and the
Committee may cause a legend or legends to be put on any
such certificates to make appropriate reference to such
restrictions.
(f) No Limit on Other Compensation Arrangements.
Nothing contained in the Plan shall prevent the Company from
adopting or continuing in effect other compensation
arrangements, which may, but need not, provide for the grant
of options, stock appreciation rights and other types of
Awards provided for hereunder (subject to stockholder
approval of any such arrangement if approval is required),
and such arrangements may be either generally applicable or
applicable only in specific cases.
(g) No Right to Employment. The grant of an
Award shall not be construed as giving a Participant the
right to be retained in the employ of the Company or any
Subsidiary or in the employ of any other entity providing
services to the Company. The Company or any Subsidiary or
any such entity may at any time dismiss a Participant from
employment, free from any liability or any claim under the
Plan, unless otherwise expressly provided in the Plan or in
any Award Agreement. No Employee, Participant or other
person shall have any claim to be granted any Award, and
there is no obligation for uniformity of treatment of
Employees, Participants or holders or beneficiaries of
Awards.
(h) Governing Law. The validity, construction,
and effect of the Plan, any rules and regulations relating
to the Plan and any Award Agreement shall be determined in
accordance with the laws of the State of Delaware.
(i) Severability. If any provision of the Plan
or any Award is or becomes or is deemed to be invalid,
illegal, or unenforceable in any jurisdiction or as to any
Person or Award, or would disqualify the Plan or any Award
under any law deemed applicable by the Committee, such
provision shall be construed or deemed amended to conform to
applicable laws, or if it cannot be construed or deemed
amended without, in the determination of the Committee,
materially altering the intent of the Plan or the Award,
such provision shall be stricken as to such jurisdiction,
Person or Award and the remainder of the Plan and any such
Award shall remain in full force and effect.
(j) No Trust or Fund Created. Neither the Plan
nor any Award shall create or be construed to create a trust
or separate fund of any kind or a fiduciary relationship
between the Company and a Participant or any other Person.
To the extent that any Person acquires a right to receive
payments from the Company pursuant to an Award, such right
shall be no greater than the right of any unsecured general
creditor of the Company.
(k) No Fractional Shares. No fractional Shares
shall be issued or delivered pursuant to the Plan or any
Award, and the Committee shall determine whether cash, other
securities or other property shall be paid or transferred in
lieu of any fractional Shares or whether such fractional
Shares or any rights thereto shall be cancelled, terminated,
or otherwise eliminated.
(l) Headings. Headings are given to the
subsections of the Plan solely as a convenience to
facilitate reference. Such headings shall not be deemed in
any way material or relevant to the construction or
interpretation of the Plan or any provision thereof.
SECTION 12
Effective Date of the Plan. The Plan shall be
effective as of the date of its approval by the stockholder
of the Company.
SECTION 13
Term of the Plan. No Award shall be granted under
the Plan after the tenth anniversary of the effective date
of the Plan; however, unless otherwise expressly provided in
the Plan or in an applicable Award Agreement, any Award
theretofore granted may, and the authority of the Committee
to amend, alter, adjust, suspend, discontinue, or terminate
any such Award or to waive any conditions or rights under
any such Award shall, extend beyond such date.
As amended effective December 10, 1996