RUTHERFORD--MORAN OIL CORPORATION
1996 NON-EMPLOYEE DIRECTOR STOCK PLAN
RUTHERFORD--MORAN OIL CORPORATION
1996 NON-EMPLOYEE DIRECTOR STOCK PLAN
TABLE OF CONTENTS
Page
1. Purpose. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Effective Date of Plan . . . . . . . . . . . . . . . . . . . . . . 1
3. Administration . . . . . . . . . . . . . . . . . . . . . . . . . . 1
4. Dedicated Shares . . . . . . . . . . . . . . . . . . . . . . . . . 1
5. Grant of Options . . . . . . . . . . . . . . . . . . . . . . . . . 1
6. Eligibility. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
7. Option Grant Size and Grant Dates. . . . . . . . . . . . . . . . . 2
8. Option Price; Fair Market Value. . . . . . . . . . . . . . . . . . 2
9. Duration of Options. . . . . . . . . . . . . . . . . . . . . . . . 2
10. Amount Exercisable . . . . . . . . . . . . . . . . . . . . . . . . 2
11. Exercise of Options. . . . . . . . . . . . . . . . . . . . . . . . 2
12. Non-Transferability of Options . . . . . . . . . . . . . . . . . . 3
13. Termination of Directorship of Optionee. . . . . . . . . . . . . . 3
14. Requirements of Law. . . . . . . . . . . . . . . . . . . . . . . . 3
15. No Rights as Stockholder . . . . . . . . . . . . . . . . . . . . . 4
16. No Obligation to Retain Optionee . . . . . . . . . . . . . . . . . 4
17. Changes in the Company's Capital Structure . . . . . . . . . . . . 4
18. Termination and Amendment of Plan. . . . . . . . . . . . . . . . . 5
19. Written Agreement. . . . . . . . . . . . . . . . . . . . . . . . . 6
20. Indemnification of Board . . . . . . . . . . . . . . . . . . . . . 6
21. Forfeitures. . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
22. Gender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
23. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
24. Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . 7
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RUTHERFORD--MORAN OIL CORPORATION
1996 NON-EMPLOYEE DIRECTOR STOCK PLAN
1. PURPOSE. The 1996 Non-Employee Director Stock Plan (the "Plan") of
Rutherford--Moran Oil Corporation (the "Company") is for the benefit of members
of the Board of Directors of the Company who, at the time of their service, are
not employees of the Company or any of its affiliates, by providing them an
opportunity to become owners of the Common Stock, $.01 par value, of the Company
(the "Stock"), thereby advancing the best interests of the Company by increasing
their proprietary interest in the success of the Company and encouraging them to
continue in their present capacity.
2. EFFECTIVE DATE OF PLAN. The Plan is effective May 24, 1996, if within
one year of that date it shall have been approved by the holders of at least a
majority of the outstanding shares of voting stock of the Company voting in
person or by proxy at a duly held shareholders' meeting, or if the provisions of
the corporate charter, bylaws or applicable state law prescribes a greater
degree of shareholder approval for this action, the approval by the holders of
that percentage, at a duly held meeting of shareholders, or in either case by a
consent in lieu of a meeting if permitted by the corporate charter, bylaws and
applicable law.
3. ADMINISTRATION. The Plan shall be administered by the Board of
Directors
of the Company (the "Board"). Subject to the terms of the Plan, the Board shall
have the power to construe the provisions of the Plan, Options, and Stock issued
hereunder, to determine all questions arising hereunder, and to adopt and amend
such rules and regulations for administering the Plan as the Board deems
desirable.
4. DEDICATED SHARES. The total number of shares of Stock with respect to
which Initial Grants and Annual Grants (collectively, the "Options") may be
granted under this Plan shall not exceed, in the aggregate, 50,000 shares;
provided, that the class and aggregate number of shares of Stock which may be
granted hereunder shall be subject to adjustment in accordance with the
provisions of Paragraph 17. The shares of Stock may be treasury shares or
authorized but unissued shares of Stock. In the event that any outstanding
Option shall expire or is terminated or canceled for any reason, the shares of
Stock allocable to the unexercised portion of that Option may again be subject
to an Option or Options under the Plan.
5. GRANT OF OPTIONS. All Options granted under the Plan shall be
Nonqualified Options which are not intended to satisfy the requirements of
Section 422 of the Internal Revenue Code of 1986, as amended. No options shall
be granted under the Plan subsequent to May 23, 2006.
6. ELIGIBILITY. The individuals who shall be eligible to receive Options
under the Plan shall be each member of the Board who is not an employee of the
Company or any affiliate of the Company ("Eligible Director").
7. OPTION GRANT SIZE AND GRANT DATES.
INITIAL GRANTS -- Contemporaneously with the public offering, each Eligible
Director shall be granted an Option to purchase 2,500 shares of Stock.
ANNUAL GRANTS -- On the day following each Annual Meeting after the Initial
Grants, each Eligible Director who has served as a director for the immediately
preceding six months and who is continuing to serve as a director, shall receive
a grant of an Option to purchase 1,000 shares of Stock (an "Annual Grant").
If the General Counsel of the Company determines, in his sole discretion,
that the Company is in possession of material, nonpublic information about the
Company or any of its subsidiaries, he may suspend granting of the Initial Grant
and Annual Grant to each Eligible Director until the second trading day after
public dissemination of that information, and the determination by the General
Counsel that issuance of the Options is then appropriate.
8. OPTION PRICE; FAIR MARKET VALUE. The price at which shares of Stock
may be purchased by each Eligible Director (the "Optionee") pursuant to his
Initial Grant and each Annual Grant, respectively, shall be 100% of the "Fair
Market Value" of the shares of Stock on the date of grant of the Initial Grant
and each Annual Grant, as applicable.
For all purposes of this Plan, the "Fair Market Value" of the Stock as of
any date means (a) the average of the high and low sale prices of the Stock on
that date on the principal securities exchange on which the Stock is listed; or
(b) if the Stock is not listed on a securities exchange, the average of the high
and low sale prices of the Stock on that date as reported on the NASDAQ National
Market System; or (c) if the Stock is not listed on the NASDAQ National Market
System, the average of the high and low bid quotations for the Stock on that
date as reported by the National Quotation Bureau Incorporated; (d) for any
Options issued prior to the initial public offering of the Stock, the initial
public offering price; or (e) if none of the foregoing is applicable, the
average between the closing bid and ask prices per share of stock on the last
preceding date on which those prices were reported or that amount as determined
by the Board.
9. DURATION OF OPTIONS. The term of each Option shall be ten years from
the date of grant. No Option shall be exercisable after the expiration of ten
years from the date the Option is granted.
10. AMOUNT EXERCISABLE. Each Option hereunder shall be exercisable in
full after the first anniversary of the grant of the Option.
11. EXERCISE OF OPTIONS. Options shall be exercised by the delivery of
written notice to the Company setting forth the number of shares with respect to
which the Option is to be exercised, together with: (a) cash, certified check,
bank draft, or postal or express money order payable to the order of the Company
for an amount equal to the option price of the shares or (b) Stock at its Fair
Market Value on the date of exercise; and specifying the address to which the
certificates for the shares are to be mailed. As promptly as practicable after
receipt of written notification and payment,
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the Company shall deliver to the Eligible Director certificates for the
number of shares with respect to which the Option has been exercised, issued
in the Eligible Director's name. If shares of Stock are used in payment, the
Fair Market Value of the shares of Stock tendered must be less than the
option price of the shares being purchased, and the difference must be paid
by check. Delivery shall be deemed effected for all purposes when a stock
transfer agent of the Company shall have deposited the certificates in the
United States mail, addressed to the Eligible Director, at the address
specified by the Eligible Director.
Whenever an Option is exercised by exchanging shares of Stock owned by the
Optionee, the Optionee shall deliver to the Company certificates registered in
the name of the Optionee representing a number of shares of Stock legally and
beneficially owned by the Optionee, free of all liens, claims, and encumbrances
of every kind, accompanied by stock powers duly endorsed in blank by the record
holder of the shares represented by the certificates, (with signature guaranteed
by a commercial bank or trust company or by a brokerage firm having a membership
on a registered national stock exchange). The delivery of certificates upon the
exercise of Options is subject to the condition that the person exercising the
Option provide the Company with the information the Company might reasonably
request pertaining to exercise, sale or other disposition.
12. NON-TRANSFERABILITY OF OPTIONS. Options shall not be transferable by
the Optionee other than by will or under the laws of descent and distribution,
and shall be exercisable, during the Optionee's lifetime, only by him.
13. TERMINATION OF DIRECTORSHIP OF OPTIONEE. If, before the date of
expiration of the Option, the Optionee shall cease to be a director of the
Company, the Option shall terminate on the earlier of the date of expiration or
one year after the date of ceasing to serve as a director. In this event, the
Optionee shall have the right, prior to the termination of the Option, to
exercise the Option if he was entitled to exercise the Option immediately prior
to ceasing to serve as a director; however, in the event that the Optionee has
ceased to serve as a director on or after attaining the age of seventy (70)
years, the Optionee shall be entitled to exercise all or any part of such Option
without regard to any limitations imposed pursuant to Paragraph 10, provided
that in no event shall the Option be exercisable within six months after the
date of grant.
Upon the death of the Optionee while serving as a director, his executors,
administrators, or any person or persons to whom his Option may be transferred
by will or by the laws of descent and distribution, shall have the right, at any
time prior to the earlier of the date of expiration of the Option or one year
following the date of his death, to exercise the Option, in whole or in part
without regard to any limitations imposed pursuant to Paragraph 10, provided
that in no event shall the Option be exercisable within six months after the
date of grant.
14. REQUIREMENTS OF LAW. The Company shall not be required to sell or
issue any Stock under any Option if issuing that Stock would constitute or
result in a violation by the Optionee or the Company of any provision of any
law, statute, or regulation of any governmental authority. Specifically, in
connection with any applicable statute or regulation relating to the
registration of securities, upon exercise
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of any Option, the Company shall not be required to issue any Stock unless
the Company has received evidence satisfactory to it to the effect that the
holder of that Option will not transfer the Stock except in accordance with
applicable law, including receipt of an opinion of counsel satisfactory to
the Company to the effect that any proposed transfer complies with applicable
law. The determination by the Company on this matter shall be final, binding
and conclusive. The Company may, but shall in no event be obligated to,
register any Stock covered by this Plan pursuant to applicable securities
laws of any country or any political subdivision. In the event the Stock
issuable on exercise of an Option is not registered, the Company may imprint
on the certificate evidencing the Stock any legend that counsel for the
Company considers necessary or advisable to comply with applicable law. The
Company shall not be obligated to take any other affirmative action in order
to cause the exercise of an Option, or the issuance of shares under it, to
comply with any law or regulation of any governmental authority.
15. NO RIGHTS AS STOCKHOLDER. No Optionee shall have any rights as a
stockholder with respect to Stock covered by any Option until the date a stock
certificate is issued for the Stock, and, except as otherwise provided in
Paragraph 17 hereof, no adjustment for dividends, or otherwise, shall be made if
the record date thereof is prior to the date of issuance of such certificate.
16. NO OBLIGATION TO RETAIN OPTIONEE. The granting of any Option shall
not impose upon the Company or its stockholders any obligation to retain or
continue to retain any Optionee or nominate any Optionee for election to
continue in his capacity as a director of the Company. The right of the
Company, the Board of Directors, and the Stockholders to terminate the service
of any Optionee as a director shall not be diminished or affected by reason of
the fact that one or more Options have been or would be granted to him.
17. CHANGES IN THE COMPANY'S CAPITAL STRUCTURE. The existence of
outstanding Options shall not affect in any way the right or power of the
Company or its stockholders to make or authorize any or all adjustments,
recapitalizations, reorganizations or other changes in the Company's capital
structure or its business, or any merger or consolidation of the Company, or any
issue of bonds, debentures, preferred or prior preference stock ahead of or
affecting the Stock or its rights, or the dissolution or liquidation of the
Company, or any sale or transfer of all or any part of its assets or business,
or any other corporate act or proceeding, whether of a similar character or
otherwise.
If the Company shall effect a subdivision or consolidation of shares or
other capital readjustment, the payment of a stock dividend, or other increase
or reduction of the number of shares of the Stock outstanding, without receiving
compensation for it in money, services or property, then (a) the number, class,
and per share price of shares of Stock subject to outstanding Options under this
Plan shall be appropriately adjusted in such a manner as to entitle an Optionee
to receive upon exercise of an Option, for the same aggregate cash
consideration, the equivalent total number and class of shares he would have
received had he exercised his Option in full immediately prior to the event
requiring the adjustment; and (b) the number and class of shares of Stock with
respect to which Options may be granted under the Plan shall be adjusted
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by substituting for the total number and class of shares of Stock then
available for grant, that number and class of shares of Stock that would have
been received by the owner of an equal number of outstanding shares of each
class of Stock as the result of the event requiring the adjustment.
If the Company is merged or consolidated with another corporation or if the
Company is liquidated or sells or otherwise disposes of substantially all its
assets while unexercised Options remain outstanding under the Plan, then unless
the provisions of clause (a) below are applicable pursuant to operation of law
or the documents effecting the transaction, the provisions of clause (b) shall
apply:
(a) after the effective date of the merger, consolidation,
liquidation, sale or other disposition, as the case may be, each holder of
an outstanding Option shall be entitled, upon exercise of the Option, to
receive, in lieu of shares of Stock, the number and class or classes of
shares of stock or other securities or property to which the holder would
have been entitled if, immediately prior to the merger, consolidation,
liquidation, sale or other disposition, the holder had been the holder of
record of a number of shares of Stock equal to the number of shares as to
which the Option shall be so exercised; or
(b) if the provisions of clause (a) above are not applicable, all
outstanding Options shall be automatically canceled as of the effective
date of any merger, consolidation, liquidation, sale or other disposition,
and reasonable notice of cancellation shall be given to each holder of an
Option and each holder of an Option shall have the right to exercise that
Option in full (without regard to any limitations set out in or imposed
under the Plan) during the period from the date of such notice until five
days prior to the effective date of the merger, consolidation, liquidation,
sale or other disposition and, if in the event all outstanding Options may
not be exercised in full under applicable securities laws without
registration of the shares of Stock issuable on exercise of the Options,
the exercise of the Options shall be limited to the number of shares of
Stock, if any, as may be issued without registration.
The issue by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, for cash or property, or for
labor or services either upon direct sale or upon the exercise of rights or
warrants to subscribe for them, or upon conversion of shares or obligations of
the Company convertible into shares or other securities, shall not affect, and
no adjustment by reason of it shall be made with respect to, the number, class,
or price of shares of Stock then subject to outstanding Options.
18. TERMINATION AND AMENDMENT OF PLAN. The Board of Directors of the
Company may amend, terminate or suspend the Plan at any time, in its sole and
absolute discretion; provided, however, to the extent required to qualify the
Plan under Rule 16b-3 promulgated under Section 16 of the Securities Exchange
Act of 1934, as amended, no amendment shall be made more than once every six
months that would change the amount, price or timing of the Initial and Annual
Grants, other than to comport with changes in the Internal Revenue Code of 1986,
as amended, the Employee Retirement Income Security Act or the rules and
regulations promulgated thereunder;
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and provided, further, to the extent required to qualify the Plan under Rule
16b-3, no amendment that would (a) materially increase the number of shares
of the Stock that may be issued under the Plan, (b) materially modify the
requirements as to eligibility for participation in the Plan, or (c)
otherwise materially increase the benefits accruing to participants under the
Plan, shall be made without the approval of the Company's stockholders.
19. WRITTEN AGREEMENT. Each Option granted hereunder shall be embodied in
a written agreement, which shall be subject to the terms and conditions of this
Plan and shall be signed by the Optionee and by the Chairman of the Board, the
Vice Chairman, the President or any Vice President of the Company for and in the
name and on behalf of the Company.
20. INDEMNIFICATION OF BOARD. With respect to administration of the Plan,
the Company shall indemnify each present and future member of the Board of
Directors against, and each member of the Board of Directors shall be entitled
without further act on his part to indemnity from the Company for, all expenses
(including the amount of judgments and the amount of approved settlements made
with a view to the curtailment of costs of litigation, other than amounts paid
to the Company itself) reasonably incurred by him in connection with or arising
out of any action, suit, or proceeding in which he may be involved by reason of
his being or having been a member of the Board of Directors, whether or not he
continues to be a member of the Board of Directors at the time of incurring the
expenses. However, this indemnity shall not include any expenses incurred by
any member of the Board of Directors (a) in respect of matters as to which he
shall be finally adjudged in any action, suit or proceeding to have been guilty
of gross negligence or willful misconduct in the performance of his duty as a
member of the Board of Directors, or (b) in respect of any matter in which any
settlement is effected, to an amount in excess of the amount approved by the
Company on the advice of its legal counsel. In addition, no right of
indemnification under this Plan shall be available to or enforceable by any
member of the Board of Directors unless, within 60 days after institution of any
action, suit or proceeding, he shall have offered the Company, in writing, the
opportunity to handle and defend same at its own expense. This right of
indemnification shall inure to the benefit of the heirs, executors or
administrators of each member of the Board of Directors and shall be in addition
to all other rights to which a member of the Board of Directors may be entitled
as a matter of law, contract, or otherwise.
21. FORFEITURES. Notwithstanding any other provision of this Plan, if,
before or after termination of the Optionee's capacity as a director of the
Company, there is an adjudication by a court of competent jurisdiction that the
Optionee committed fraud, embezzlement, theft, commission of felony, or proven
dishonesty in the course of his advisory relationship to the Company and its
affiliates which conduct materially damaged the Company or its affiliates, or
disclosed trade secrets of the Company or its affiliates, then any outstanding
options which have not been exercised by Optionee shall be forfeited. In order
to provide the Company with an opportunity to enforce this Section, an Option
may not be exercised if a lawsuit alleging that an action described in the
preceding sentence has taken place until a final resolution of the lawsuit
favorable to the Optionee.
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22. GENDER. If the context requires, words of one gender when used in
this Plan shall include the others and words used in the singular or plural
shall include the other.
23. HEADINGS. Headings are included for convenience of reference only and
do not constitute part of the Plan and shall not be used in construing the terms
of the Plan.
24. GOVERNING LAW. The provisions of this Plan shall be construed,
administered, and governed under the laws of the State of Texas.
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