GREAT FALLS GAS COMPANY
INCENTIVE STOCK OPTION PLAN
THIS AGREEMENT, made in Great Falls, Montana on this 6th day of November,
1992, between Great Falls Gas Company (hereinafter referred to as "Company")
and hereinafter referred to as "Optionee"), an employee of the Company or a
subsidiary thereof.
WHEREAS, the Company desires to maintain and develop personnel capable of
assuring the future success of the Company, to offer such personnel additional
incentives to put forth maximum efforts for the success of the business, and to
afford them an opportunity to acquire a proprietary interest in the Company
through stock options:
NOW, THEREFORE, in consideration of the mutual agreements stated hereinafter,
the Company and Optionee agree that:
1. STOCK OPTION. The Company hereby grants to the Optionee and the Optionee
accepts an incentive option to purchase 2200 shares of the Company's stock
at any time prior to November 6, 1997 at a purchase price of $14.25 per
share, all subject to the terms, provisions and conditions of this
Agreement and of the Company's 1984 Stock Option Plan (hereinafter referred
to as the "Plan"), which is incorporated herein by reference. Should there
be any inconsistency between the provisions of this Agreement and the Plan,
the provisions of the Plan shall control. This option may be exercised in
the following manner. In the first twelve months from the date of this
agreement no more than twenty percent (440) of the options granted herein
may be exercised; in the next succeeding twelve months no more than forty
percent (880) of said options shall be exercisable, in the next succeeding
twelve months no more than sixty percent (1320) of said options shall be
exercisable; in the next succeeding twelve months no more than eighty
percent (1760) of the options shall be exercisable. Other than the
foregoing restriction this Agreement shall be exercised in the manner
provided in the Plan as to all or any part of the shares of stock subject
to the option from time to time during the option period, and exercise of
the option as to part of such shares shall not exhaust or terminate the
option. The option shall be exercised as to not less than One Hundred (100)
shares at any one time, however. Payment of the option price shall be made
concurrently with the exercise of the option as provided in the Plan.
2. LIMITATION ON AMOUNT. In any calendar year, the aggregate fair market value
(such value being determined as of the time the option is granted) of stock
for which Optionee may be granted Incentive Stock Options shall not exceed
One Hundred Thousand Dollars (100,000) plus any unused limit carryover to
such year. (Any unused limit carryover amount shall be
determined as prescribed by Section 422A(c)(4) of the Internal Revenue Code
of 1954, or similar provisions in succeeding enactments, and the
regulations and rulings promulgated thereunder). In determining the maximum
permissible value of Incentive Stock Options which may be granted to
Optionee in any calendar year, all Incentive Stock Options granted under
Incentive Stock Option Plans of the Company and its divisions or subsidiary
corporations shall be considered in the aggregate. This annual $100,000
limitation shall not apply to any stock option which is not an Incentive
Stock Option as defined by Section 433A of the Internal Revenue Code of
1954 (or similar provisions in succeeding enactments).
3. EXERCISE OF OPTION. All Incentive Stock Options must be exercised
sequentially; i.e., no Incentive Stock Option may be exercised by any one
individual while there is outstanding any Incentive Stock Option to that
same individual which was granted prior to the grant date of the Incentive
Stock Option sought to be exercised. Any outstanding Incentive Stock Option
shall be treated as outstanding until such option is exercised in full or
expires by reason of lapse of time.
4. PERCENT SHAREHOLDER RULE. Notwithstanding any other provision in the Plan,
if at the time an option is otherwise to be granted pursuant to the Plan
the Optionee owns directly or indirectly (within the meaning of Section
425(d) of the Code), common stock of the Company possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of
the Company or its parent or subsidiary corporations, if any (within the
meaning of Section 422A(c)(8) of the Code, and the option price shall be
not less than 110% of the fair market value of the common stock of the
Company determined as described herein, and such option by its terms shall
not be exercisable after the expiration of five (5) years from the date
such option is granted.
5. NON-TRANSFERABILITY AND TERMINATION OF EMPLOYMENT. No option granted under
the Plan shall be transferable by an Optionee, otherwise than by will or
the laws of descent of distribution as provided in Section 9(c) of the
Plan. During the lifetime of an Optionee, the option shall be exercisable
only by such Optionee. In the event that Optionee ceases to be employed
by the Company or its subsidiaries, if any, for any reason other than his
gross and willful misconduct or his death or disability, such Optionee
shall have the right to exercise the option at any time within three (3)
months after such termination of employment to the extent of the full
number of shares he was entitled to purchase under the option on the date
of termination, subject to the condition that no option shall be
exercisable after the expiration of the term of the option.
6. DILUTION OR OTHER ADJUSTMENTS. If there shall be any change in the common
stock through merger, consolidation, reorganization, recapitalization,
stock dividend (of whatever amount), stock split or other
change in the corporate structure, appropriate adjustments in the Plan and
outstanding options shall be made by the Committee. In the event of any
such changes adjustments shall include, where appropriate, changes in the
aggregate number of shares subject to the Plan and the number of shares and
the price per share subject to outstanding options.
7. RIGHTS OF OPTIONEE NOT THAT OF SHAREHOLDER. The Optionee shall have no
rights as a shareholder in respect of shares as to which this option shall
not have been exercised and payment made as provided in the Plan, and the
Optionee shall not be considered or treated as a record owner of shares
with respect to which this option is exercised until the date that the
stock certificate or certificates are actually issued and such issuance
reflected on the stock records of the Company.
8. SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of and be
binding upon the heirs, legatees, legal representatives, successors and
assigns of the parties hereto.
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by
its Compensation Committee thereunto duly authorized, and the Optionee has
signed the same, in duplicate originals, on the date and year first above
written.
GREAT FALLS GAS COMPANY
/s/ Ian B. Davidson /s/ Thomas N. McGowen, Jr.
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Ian B. Davidson Thomas N. McGowen, Jr.
/s/ Timothy J. Moylan
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Timothy Moylan
/s/ John P. Allen
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Optionee