1994 Stock Option Plan of Empire Gas Corporation
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1994 Stock Option Plan of Empire Gas Corporation
I. General Provisions
1.1 Purposes of the Plan
Under this 1994 Stock Option Plan of Empire Gas Corporation
(the "Plan"), Empire Gas Corporation (the "Corporation") will grant options
to eligible employees, consultants, and outside directors to purchase shares
of the capital stock of the Corporation. The Plan is designed to enable the
Corporation and certain related companies to attract, retain, and motivate
their employees and other service providers by providing for or increasing
their proprietary interests in the Corporation. The options issued pursuant
to the Plan are intended to be either Incentive Stock Options or
Nonqualified Stock Options as determined by the Administrator and specified
in the recipient's option agreement.
1.2 Definitions
(a) "Administrator" means the Board, or, if the Board
delegates responsibility for any matter to the Committee, the Committee.
(b) "Board" means the Board of Directors of Empire Gas
Corporation.
(c) "Code" means the Internal Revenue Code of 1986, as
amended.
(d) "Committee" means the Compensation Committee of the
Board, or such other committee as the Board may appoint to administer all or
a part of this Plan.
(e) "Common Stock" means the common stock, one-tenth of a
cent per share par value, of Empire Gas Corporation
(f) "Corporation" means Empire Gas Corporation, a Missouri
corporation (or any successor corporation).
(g) "Date of Exercise" means the date the Optionee delivers
to the Secretary of the Corporation or his office the notice specified in
Section 2.7(a)(i).
(h) "Date of Grant" means the date as of which the
Administrator awards an Option to an Optionee, as specified in the minutes
of the Administrator.
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(i) "Employee" means any regular full-time common law
employee, including any who are also officers or directors, of the Group or
any successor thereto. Solely for purposes of determining eligibility of
persons to be recipients of Nonqualified Stock Option grants, the term
"Employee" shall also include independent contractors and outside directors
of and consultants to the Group.
(j) "Exchange Act" means the Securities Exchange Act of
1934, as amended.
(k) "Exercise Price" means the value of the consideration
required under an Option Agreement to be provided in exchange for one share
of Common Stock.
(l) "Fair Market Value" of a share of Common Stock as of a
given date means (1) the closing price of a share of Common Stock on the
principal exchange on which Common Stock is then trading, if any, on the
trading day before such date, or, if no shares were traded on the trading
day before such date, then on the next preceding trading day during which a
sale occurred; or (2) if such stock is not traded on an exchange but is
quoted on NASDAQ or a successor quotation system, (A) the last sales price
(if the stock is then listed as a National Market Issue under the NASD
National Market System) or (B) the mean between the closing representative
bid and asked prices (in all other cases) for the stock on the trading day
before such date as reported by NASDAQ or such successor quotation system;
or (3) if such stock is not publicly traded on an exchange and not quoted on
NASDAQ or a successor quotation system, the mean between the closing bid and
asked prices for the stock on the trading day before such date, as
determined in good faith by the Administrator; or (4) if Common Stock is not
publicly traded, the fair market value established by the Administrator
acting in good faith.
(m) "Group" means the Corporation and its Subsidiaries.
(n) "Incentive Stock Option" means an Option that is an
"incentive stock option" within the meaning of Section 422 of the Code. Only
officers and other employees of the Group may be granted Incentive Stock
Options under this plan.
(o) "Nonqualified Stock Option" means an Option that does
not quality as an incentive stock option under Section 422 of the Code.
(p) "Option" means a right to purchase Common Stock granted
under the Plan.
(q) "Option Agreement" means a written agreement executed by
the Optionee and the Corporation that contains the terms and conditions
provided in Article II and such additional terms and conditions, consistent
with the Plan, as the Administrator may decide.
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(r) "Optionee" means any Employee selected to receive
Options pursuant to Section 2.1 or, where the context requires, a person
described in Section 2.5.
(s) "Plan" means the Corporation's 1994 Stock Option Plan as
set forth herein, as amended from time to time.
(t) "Rule 16b-3" means Rule 16b-3 promulgated under Section
16 of the Exchange Act.
(u) "Subsidiary" means a subsidiary corporation of the
Corporation within the meaning of Section 424(f) of the Code.
(v) "Termination of Employment" shall mean the time when the
employer-employee or other service-providing relationship between the
Employee and the Corporation ends for any reason, including death,
disability, or retirement. Notwithstanding the foregoing and unless
otherwise provided in the Option Agreement, "Termination of Employment" for
purposes of Nonqualified Stock Options shall not include instances in which
the Corporation immediately rehires a common law employee as an independent
contractor or an independent contractor as an employee. The Administrator,
in its sole discretion, shall determine all questions of whether particular
terminations or leaves of absence are Terminations of Employment.
1.3 Shares of Common Stock Subject to the Plan
(a) Subject to the provisions of Sections 1.3(c) and 3.1
(concerning corporate changes), the aggregate number of shares of Common
Stock that may be issued pursuant to Options may not exceed 500,000 shares.
The number of shares of Common Stock subject to any particular exercise of
an Option shall be subtracted from that total, with no adjustment for the
number of shares, if any, an Optionee delivers or relinquishes in
satisfaction of tax withholding obligations or delivers in payment for
exercise of an Option.
(b) At the discretion of the Board or the Committee, the
Common Stock to be issued pursuant to Options under the Plan will be made
available either from authorized but unissued shares of Common Stock or from
previously issued shares of Common Stock reacquired by the Corporation,
including shares purchased on the open market.
(c) If any Option expires, is canceled, or terminates for
any reason, the shares of Common Stock available under such Option shall
again be available for the granting of Options to the extent consistent with
Rule 16b-3 if then applicable.
1.4 Administration of the Plan
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(a) The Board shall administer the Plan unless and to the
extent that it provides for administration by the Committee. If the
Committee administers the Plan, the Committee will consist of two or more
members of the Board who are appointed by the Board. With respect to grants
made after the Common Stock is registered under Section 12 of the Exchange
Act, the members of the Committee shall be "disinterested persons" within
the meaning of Rule 16b-3 and "outside directors" for purposes of Section
162(m) of the Code. No members of the Committee shall be eligible to receive
Options under Section 2.1 while serving on the Committee.
(b) Subject to the express provisions of the Plan, the
Committee has and may exercise such powers and authority of the Board as may
be necessary or appropriate for the Committee to carry out its functions as
described in the Plan.
(c) The Administrator has the authority to interpret the
Plan, to make all other determinations necessary or advisable for the
administration of the Plan, and to prescribe, amend, and rescind reasonable
rules and regulations relating to the Plan. All Administrator
interpretations, determinations, and actions will be final, conclusive, and
binding upon all parties. The Administrator shall take all actions in
connection with the administration of the Plan pursuant to a majority vote
or by the unanimous written consent of its members.
(d) No member of the Board, the Committee, or the
agents thereof shall be liable for any action, inaction, or determination
made in good faith with respect to the Plan or any transaction arising under
the Plan.
II. Option Terms and Conditions
2.1 Authority to Grant Options
(a) The Administrator shall, in its sole discretion,
select the Employees who receive Options and determine the terms of such
Options, including the number of shares of Common Stock subject to an
Option, the schedule for exercisability (including any requirements for
satisfying performance criteria with respect to the Group and/or the
Optionee), the time and conditions for expiration of the Option, and the
form of payment due upon exercise. (In determining the type of payment that
may be used, the Administrator shall consider whether the acceptance of that
form of payment will likely benefit the Corporation.) The Administrator's
determinations under the Plan need not be uniform and may be made by it
selectively among persons who receive or are eligible to receive grants
under the Plan, whether or not such persons are similarly situated. The
Administrator may grant more than one Option to an Employee, provided the
Employee is eligible under the terms of the Plan at the time of each
succeeding grant. In its discretion, the Administrator may condition the
granting of Options upon the Employee's cancellation of all or part of a
previously granted Option. The Administrator may set the Exercise Price of
the Options without regard to any existing Options.
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(b) No more than 120,000 shares of Common Stock may be
subject to Options granted to a single Employee under this Plan within a one
calendar year period. If a portion of an Option is repriced, the number of
shares subject to that portion shall be counted against the foregoing
individual limit. Canceled options shall be counted against the limit for
the period during which they were granted.
(c) No Options shall be granted more than ten (10)
years after the date on which the Board adopts this Plan.
2.2 Conditions of Grant
The Administrator, in its sole discretion, may, as a
condition to the grant of an Option, require an Employee who is the
recipient of such Option to enter into one or more of the following
agreements with the Corporation and/or the Group on or before the Date of
Grant of such Option:
(a) A covenant not to compete with the
Corporation and the Group, which shall become effective on Termination of
Employment and which shall contain such terms and conditions as the
Administrator shall specify; or
(b) An agreement to cancel any employment
agreement, fringe benefit, or compensation arrangement in effect between the
Employee and the Corporation or the Group.
2.3 Option Agreement
The terms of each Option shall be contained in an Option
Agreement, signed by the Optionee, that includes such terms and conditions
consistent with the Plan and Rule 16b-3 as the Administrator may in its
discretion determine necessary or advisable.
2.4 Exercise Price
The Administrator shall determine the Exercise Price under
each Option, but the Exercise Price may not be less than one hundred percent
(100%) of the Fair Market Value on the Date of Grant for a Nonqualified
Stock Option nor less than 100 percent (100%) of the Fair Market Value on
the Date of Grant for an Incentive Stock Option. If an Option intended to be
an Incentive Stock Option is granted to any Employee who, at the Date of
Grant, owns Common Stock possessing more than 10 percent (10%) of the total
combined voting power of all classes of the Corporation's stock (or the
stock of any "subsidiary" or "parent" of the Corporation as those terms are
defined in Section 424 of the Code), the Exercise Price shall be no less
than 110 percent (110%) of the Fair Market Value on the Date of Grant.
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2.5 Person who may Exercise Options
During the lifetime of the Optionee and except as provided
in Section 3.5, only the Optionee or his duly appointed guardian or personal
representative may exercise the Options. After his death, any exercisable
portion of an Option may, before such portion becomes unexercisable under
the Plan or the applicable Option Agreement, be exercised by the personal
representative of the Optionee or by any person empowered to do so under the
deceased Optionee's will or under the then applicable laws of descent and
distribution.
2.6 Exercisability
(a) Options granted pursuant to this Plan shall be
exercisable at such times and under such conditions as the Administrator
shall determine; provided, however, that no portion of an Option shall be
exercisable after the expiration of ten (10) years from its Date of Grant
and that no portion of an Incentive Stock Option granted to any Employee
who, at the Date of Grant, owns stock possessing more than 10 percent (10%)
of the total combined voting power for all classes of the Corporation's
stock (or the stock of any "subsidiary" or "parent" of the Corporation as
those terms are defined in Section 424 of the Code) shall be exercisable
after the expiration of five (5) years from the Date of Grant.
(b) Subject to the provision of Section 3.7 (relating
to shareholder approval), Options shall become exercisable at such times and
in such manner as the Option Agreement may provide; provided, however, that
by a resolution adopted after an Option Agreement is entered into, the
Administrator may, on such terms and conditions as it determines
appropriate, and subject to Section 3.7, accelerate the time at which the
Optionee may exercise any portion of an Option.
(c) No portion of an Option that is unexercisable by
reason of Termination of Employment shall thereafter become exercisable,
unless the Option Agreement provides otherwise, either initially or by
amendment thereto.
(d) The Corporation will not issue fractional shares
pursuant to the exercise of an Option, but the Administrator may, in its
discretion, direct the Corporation to make a cash payment instead of issuing
fractional shares.
(e) Notwithstanding any other provision of this Plan or
of an Option Agreement, if an Employee's Termination of Employment is for
"cause" or if the Board makes a determination that the Employee (i) has
engaged in any type of disloyalty to the Group, including without
limitation, fraud, embezzlement, theft, or dishonesty in the course of his
employment or his provision of service to the Group, (ii) has been convicted
of a felony, (iii) has disclosed trade secrets or confidential information
of the Group, or (iv) has breached any agreement with any member of the
Group in respect of confidentiality, non-disclosure, or non-competition, all
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of the Employee's unexercised Options shall terminate upon the earlier of
the date of Termination of Employment for "cause" or the date of such a
finding. In the event of such a finding, in addition to immediate
termination of all of the Employee's unexercised Options, the Optionee shall
forfeit all Shares for which the Corporation has not yet delivered share
certificates to the Optionee and the Corporation shall refund to the
Optionee the Exercise Price paid to it. Moreover, the Corporation may
withhold delivery of share certificates pending the resolution of any
inquiry that could lead to a finding resulting in forfeiture.
2.7 Exercise of Options
(a) An Optionee shall exercise any portion of an Option
by delivering the notice described in Paragraph (1) below to the Secretary
of the Corporation or his office on or before the date such portion of the
Option becomes unexercisable under the applicable Option Agreement or the
Plan and making payment as provided in Paragraph (2) within three (3)
business days after such delivery:
(1) A written notice of exercise, in a form
complying with any rules the Administrator may issue, signed by the
Optionee, and specifying the number of shares of Common Stock underlying the
portion of the Option being exercised; and
(2) Full payment by cashier's or certified
check of the Exercise Price for the shares of Common Stock with respect to
which the Option is being exercised. To the extent provided in the
applicable Option Agreement, payment may also be made in one of the
following alternative forms:
(A) Full payment in shares of Common
Stock having a Fair Market Value on the Date of Exercise equal to the
Exercise Price;
(B) A combination of shares of Common
Stock valued at Fair Market Value on the Date of Exercise and cash or cash
equivalents, equal in the aggregate to the Exercise Price; or
(C) By delivering a properly executed
exercise notice together with irrevocable instructions to a broker to
promptly deliver to the Corporation the sale or loan proceeds to pay the
Exercise Price.
The Optionee may deliver shares of Common Stock in
payment only if he has previously held those shares for at least six months,
unless the Administrator waives that holding requirement after due
consideration of the effect on the Corporation's financial statements.
Moreover, unless the applicable Option Agreement provides otherwise, the
alternative methods of payment are available only if and when the Common
Stock is publicly traded.
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(b) The Optionee shall also deliver to the
Administrator such representations and documents as the Administrator, in
its sole discretion, may consider necessary or advisable to comply with
applicable provisions of the Securities Act of 1933 and any other Federal or
state securities or other laws or regulations. The Administrator may, in its
sole discretion, take whatever additional actions it deems appropriate to so
comply including, without limitation, placing legends on certificates and
issuing stop-transfer orders to transfer agents and registrars.
(c) If someone other than the Employee exercises any
portion of an Option pursuant to Section 2.5, the Administrator may request
such proof as it may consider necessary or appropriate of the person's right
to exercise the Option.
(d) No adjustment will be made for a dividend or other
right for which the record date precedes the Date of Exercise, except as
provided in Section 3.1(a).
2.8 Tax Withholding
The Corporation's obligation to deliver stock certificates
upon the exercise of any Option shall be subject to the Optionee's
satisfaction of all applicable Federal, State, and local income and
employment tax withholding requirements. If such certificates have been
delivered before the time a withholding obligation arises, the Corporation
shall have the right to require the Employee to remit to the Corporation an
amount sufficient to satisfy all Federal, state, or local withholding tax
requirements at the time such obligation arises and to withhold from other
amounts payable to the Optionee, as compensation or otherwise, as necessary.
The Administrator may, in its discretion, and subject to such rules as it
may prescribe in its discretion, permit an Optionee to satisfy applicable
tax withholding obligations by any of the following means or by a
combination of such means: (a) tendering a cash payment; (b) authorizing the
Corporation to withhold from the Common Stock otherwise issuable to the
Optionee as the result of the exercise of an Option, a number of shares
having a Fair Market Value, as of the date the withholding tax obligation
arises, less than or equal to the amount of the withholding tax obligation;
or (c) delivering to the Corporation already owned and unencumbered shares
of Common Stock having a Fair Market Value, as of the date the withholding
tax obligation arises, less than or equal to the amount of the withholding
tax obligation. An Optionee may use shares of the Corporation's Common Stock
issuable to the Optionee upon exercise of the Option to satisfy the tax
withholding consequences of such exercise only after the Common Stock is
publicly-traded and then only (a) during the period beginning on the third
business day following the date of release of the quarterly or annual
summary statement of sales and earnings of the Corporation and ending on the
twelfth business day following such date or (b) pursuant to the Optionee's
irrevocable written election to use such shares of the Corporation's Common
Stock to pay all or part of the withholding taxes made at least six months
before the payment of such withholding taxes. In the absence of one of the
foregoing methods, the Optionee must deliver to the Corporation the payment
by cashier's or certified check to the Corporation of all amounts that the
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Corporation must withhold under Federal, state, or local law in connection
with the exercise of the Option if the Corporation cannot, or decides not
to, satisfy withholding obligations through additional withholding on salary
or wages. Payment of withholding obligations is due for Nonqualified Stock
Options at the same time as is payment of the Exercise Price and is due for
Incentive Stock Options as of the date, if any, at which a withholding
obligation relating thereto arises.
2.9 Expiration of Options
(a) No one may exercise an Option after the expiration
of ten (10) years from the Date of Grant or, if earlier for an Incentive
Stock Option, the first to occur of the following events:
(1) Except in the case of any Optionee who is
disabled (within the meaning of Section 22(e)(3) of the Code) or dies, the
Optionee's Termination of Employment;
(2) In the case of an Optionee who is disabled
(within the meaning of Section 22(e)(3) of the Code), the earlier of the
expiration of six months from the date of the Optionee' s Termination of
Employment for any reason other than such Optionee's death or 30 days after
the Administrator determines that the Optionee is disabled, unless the
Optionee dies before the earlier of those dates; or
(3) The expiration of 90 days from the date of
the Optionee's death.
The Administrator may, but need not, use the foregoing
standards for early expiration of a Nonqualified Stock Option.
(b) Subject to the provisions of Section 2.8(a), the
Administrator may provide in the terms of an Option Agreement that any
portion of the Option, whether then exercisable or not, expires immediately
upon a Termination of Employment or that any portion of the Option shall
become exercisable in the event of a Termination of Employment because of
the Optionee's retirement, death, or disability. In the event that exercise
is permitted after Termination of Employment, the Option shall nevertheless
expire as of the date that such former Employee violates (as determined by
the Board) any covenant not to compete in effect between any member of the
Group and the former Employee.
2.10 $100,000 Limit for Incentive Stock Options
No portion of an Option granted to an Optionee shall be
treated as an Incentive Stock Option to the extent such portion of an Option
would cause the aggregate Fair Market Value of all shares with respect to
which Incentive Stock Options are exercisable by such Optionee for the first
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time during any calendar year to exceed $100,000. That portion of the Option
shall instead be treated as a Nonqualified Stock Option. For purposes of
determining whether an Incentive Stock Option would cause such aggregate
Fair Market Value to exceed the $100,000 limitation, all such Incentive
Stock Options shall be taken into account in the order granted and the Fair
Market Value for each share under an option shall be determined as of that
option's date of grant. For purposes of this section, Incentive Stock
Options include all incentive stock options under all plans of the
Corporation that are "incentive stock option plans" within the meaning of
Section 422 of the Code.
2.11 No Exercise of Out-of-the-Money Options
If Rule 16b-3 is then applicable to the Option, an Optionee
may not exercise any portion of an Option while that portion of the Option
is out-of-the-money, i.e., while the Exercise Price for a share of Common
Stock underlying that portion of the Option exceeds the Fair Market Value of
a share of Common Stock.
III. Other Provisions
3.1 Adjustment Provisions
(a) Subject to any required action by the Corporation
(which it shall promptly take) or its shareholders, and subject to the
provisions of the General and Business Corporation Law of Missouri, if,
after the Date of Grant of an Option, the outstanding shares of Common Stock
are increased or decreased or changed into or exchanged for a different
number or kind of security by reason of any recapitalization,
reclassification, stock split, reverse stock split, combination of shares,
exchange of shares, stock dividend, or other distribution payable in capital
stock, or other increase or decrease in such Common Stock is effected
without the Corporation's receiving consideration, a proportionate and
appropriate adjustment shall be made in the number of shares of Common Stock
underlying the Option, so that the proportionate interest of the Optionee
immediately following such event shall, to the extent practicable, be the
same as immediately before such event. A commensurate change will be made in
the maximum number and kind of shares provided in Section 1.3(a) and 2.1(b).
Any such adjustment in an Option shall not change the total price with
respect to shares of Common Stock underlying the unexercised portion of the
Option but shall include a corresponding proportionate adjustment in the
Option's Exercise Price.
(b) In addition to the adjustments covered under
Section 3.1(a) above, any Option grant may contain provisions to the effect
that upon the occurrence of certain events, including a change in control of
the Corporation (as defined by the Administrator in the Optionee's Option
Agreement), any outstanding Options not theretofore exercisable or free from
restrictions, as the case may be, shall either immediately, or upon a
further determination made by the Administrator at the time of the event,
become fully exercisable or free from restrictions.
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(c) The Administrator will make adjustments and
determinations under Sections 3.1(a) and 3.1(b), and its determination will
be final, binding, and conclusive.
(d) Upon the dissolution or liquidation of the
Corporation, or upon a reorganization, merger, or consolidation of the
Corporation as a result of which the outstanding securities of the class of
securities then subject to the Options are changed into or exchanged for
cash or property or securities not of the Corporation's issue, or any
combination thereof, or upon a sale of substantially all the property of the
Corporation to, or the acquisition of shares of Common Stock representing
more than eighty percent (80%) of the voting power of the shares of Common
Stock then outstanding by, another corporation or person, the Options shall
terminate, unless provision be made in writing in connection with such
transaction for the assumption of Options theretofore granted under the
Plan, or the substitution for such options of any options covering the stock
or securities of a successor employer corporation, or a parent or subsidiary
thereof, with appropriate adjustments as to the number and kind of shares of
stock and prices, in which event the Options shall continue in the manner
and under the terms so provided. If an Option would otherwise terminate
pursuant to the preceding sentence, the Optionee shall have the right, at
such time before the consummation of the transaction causing such
termination as the Corporation shall reasonably designate, to exercise the
unexercised portions of the Option, including the portions thereof that
would, but for this subsection, not yet be exercisable.
3.2 Continuation of Employment or Service
Nothing in the Plan or in any instrument executed pursuant
to the Plan will confer upon any Optionee any right to continue in the
employ or service of the Corporation or affect the right of the Corporation
to terminate the employment or service of any Optionee at any time with or
without cause, subject to any contrary terms in a written employment
agreement or contract for services with the Optionee.
3.3 Compliance with Government Regulations
No shares of Common Stock will be issued pursuant to an
Option until all applicable requirements imposed by Federal and state
securities and other laws, rules, and regulations, and by any regulatory
agencies having jurisdiction, and by any stock exchanges upon which the
Common Stock may be listed have been fully met. As a condition precedent to
the issuance of shares of Common Stock pursuant to an Option, the
Corporation may require the Optionee to take any reasonable action to comply
with such requirements. No provision in the Plan or action taken pursuant
thereto shall authorize any action that is otherwise prohibited by Federal
or State laws.
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3.4 Privileges of Stock Ownership
No Optionee and no beneficiary or other person claiming
under or through such Optionee will have any right, title, or interest in or
to any shares of Common Stock allocated or reserved under the Plan or
subject to any Option except as to such shares of Common Stock, if any, that
have been issued to such Optionee.
3.5 Restrictions on Transferability of Options and Common Stock
Unless the Administrator otherwise approves in writing, an
Option may not be assigned, transferred, pledged, hypothecated, or disposed
of in any way, whether by operation of law or otherwise or through any legal
or equitable proceedings (including bankruptcy), to any person by the
Optionee, except by will or by operation of applicable laws of descent and
distribution. Unless the Administrator otherwise approves in advance in
writing, the Optionee may not sell, assign, pledge, encumber, or otherwise
transfer shares of Common Stock acquired upon exercise of an Option until at
least six (6) months have elapsed from (but excluding) the Grant Date, where
the Grant Date occurs upon the later of the Date of Grant as defined in
Section 1.2(h) or the date on which the shareholders approve the Plan as
provided in Section 3.7 hereof. The Administrator, in its sole discretion,
may impose such other restrictions on the transferability of Options or
shares purchasable upon the exercise of an Option, as it deems appropriate.
The Option Agreement shall set forth any such other restrictions, and the
certificates evidencing such shares of Common Stock may refer to such
restrictions.
Notwithstanding the preceding paragraph, an Optionee may, at
any time before his death, assign all or any portion of his Nonqualified
Stock Option to the trustee of a trust for the primary benefit of himself,
his spouse, or his lineal descendant. In such event, the trustee will be
entitled to all of the rights of the Optionee with respect to the assigned
portion of such Option, and such portion of the Option will continue to be
subject to all of the terms, conditions, and restrictions applicable to the
Option, as set forth herein and in the related Option Agreement, immediately
before the date of the assignment. Any such assignment will be permitted
only if (i) the Optionee does not receive any consideration therefore, and
(ii) the assignment is expressly permitted by the Option Agreement, as
approved by the Administrator. Any such assignment shall be evidenced by an
appropriate written document executed by the Optionee, and a copy thereof
shall be delivered to the Secretary of the Corporation or his office on or
before the effective date of the assignment.
3.6 Amendment and Termination of Plan; Amendment of Option
(a) The Board will have the power, in its sole
discretion, to amend, suspend, or terminate the Plan at any time; provided,
however, that the Board may not amend the Plan without approval of the
shareholders of the Corporation if Rule 16b-3 requires such approval. The
Board is specifically authorized to adopt any amendment to this Plan the
Board deems necessary or advisable to ensure that the Incentive Stock
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Options or Nonqualified Stock Options available under the Plan continue to
be treated as such, respectively, under all applicable laws.
(b) Except as otherwise provided by the applicable
Option Agreement or by Section 1.4, 3.1, or 3.8, the Administrator may not,
without the Optionee's consent, make modifications in the terms and
conditions of an Option that adversely affect the Optionee. No Incentive
Stock Option may be modified, extended, or renewed, without the Optionee's
consent, if such action would cause it to cease to be an incentive stock
option within the meaning of Section 422 of the Code.
(c) No amendment, suspension, or termination of the
Plan will, without the consent of the Optionee, alter, terminate, impair, or
adversely affect any right or obligations under any Option previously
granted under the Plan.
3.7 Approval of Plan by Stockholders
The Corporation will submit this Plan for the approval of
the Corporation's shareholders. The Administrator may grant Options before
such shareholder approval, but the Optionee cannot exercise Options before
the shareholders approve the Plan. Moreover, if the shareholders do not
approve the Plan within 12 months after the Board's initial adoption of the
Plan, all Options previously granted under the Plan shall thereupon be
canceled and become void. The Corporation shall take such actions regarding
the Plan as may be necessary to satisfy the requirements of Rule 16b-3(b),
when and if it becomes applicable.
3.8 Conformity to Securities Law
The Plan is intended to conform to the extent necessary with
all provisions of the Securities Act of 1933 and the Exchange Act and all
regulations and rules promulgated by the Securities and Exchange Commission
thereunder, including without limitation Rule 16b-3 to the extent
applicable. Notwithstanding anything herein to the contrary, the
Administrator shall administer the Plan, and Options shall be granted and
may be exercised, only in a way that conforms to such laws, rules, and
regulations. To the extent permitted by applicable law, the Plan and Options
granted hereunder shall be deemed amended to the extent necessary to conform
to such laws, rules, and regulations. To the extent any provision of the
Plan or action by the Administrator fails to comply with Rule 16b-3 (as in
effect with respect to the Plan on the date such action is taken), the
provision or action shall be deemed null and void, to the extent permitted
by law and deemed advisable by the Administrator.
3.9 Purchase for Investment and Other Restrictions
The issuance of Shares on the exercise of an Option shall be
conditioned on obtaining such appropriate representations, warranties,
restrictions, and agreements of the Optionee as set forth in the applicable
Option Agreement and any Stock Purchase Agreement. Among other
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representations, warranties, restrictions, and agreements, the Optionee
shall represent and agree that the purchase of Shares under the applicable
Option Agreement shall be for investment, and not with a view to the public
resale or distribution thereof, unless the Shares subject to the Option are
registered under the Securities Act and the transfer or sale of such Shares
complies with all other laws, rules, and regulations applicable thereto.
Unless the Shares are registered under the Securities Act, the Optionee
shall acknowledge that the Shares purchased on exercise of the Option are
not registered under the Securities Act and may not be sold or otherwise
transferred unless the Shares have been registered under the Securities Act
in connection with the sale or transfer thereof, or that counsel
satisfactory to the Corporation has issued an opinion satisfactory to the
Corporation that the sale or other transfer of such Shares is exempt from
registration under the Securities Act, and unless said sale or transfer
complies with all other applicable laws, rules, and regulations, including
all applicable Federal and state securities laws, rules, and regulations.
Additionally, the Shares, when issued upon the exercise of an Option, shall
be subject to other transfer restrictions, rights of first refusal, and
rights of repurchase as set forth in or incorporated by reference into the
applicable Stock Purchase Agreement. The certificates representing the
Shares shall contain a legend substantially similar to the following:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED OR
UNDER ANY APPLICABLE STATE SECURITIES LAWS. THESE SHARES
HAVE NOT BEEN ACQUIRED WITH A VIEW TO DISTRIBUTION OR RESALE
AND MAY NOT BE SOLD, ASSIGNED, EXCHANGED, MORTGAGED,
PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED OR DISPOSED
OF, BY GIFT OR OTHERWISE (EXCEPT AS PROVIDED IN SECTION 3.5
OF THE PLAN), OR IN ANY WAY ENCUMBERED WITHOUT AN EFFECTIVE
REGISTRATION STATEMENT FOR SUCH SHARES UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, AND ANY APPLICABLE STATE SECURITIES
LAWS, OR A SATISFACTORY OPINION OF COUNSEL SATISFACTORY TO
EMPIRE GAS CORPORATION THAT REGISTRATION IS NOT REQUIRED
UNDER SUCH ACT AND UNDER APPLICABLE STATE SECURITIES LAWS.
MOREOVER, THE SHARES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO AND RESTRICTED BY THE PROVISIONS OF A CERTAIN
STOCK PURCHASE AGREEMENT BETWEEN EMPIRE GAS CORPORATION AND
THE STOCKHOLDER, A COPY OF WHICH AGREEMENT WILL BE FURNISHED
BY EMPIRE GAS CORPORATION UPON WRITTEN REQUEST AND WITHOUT
CHARGE, AND ALL OF THE PROVISIONS OF SUCH AGREEMENT ARE
INCORPORATED BY REFERENCE IN THIS CERTIFICATE.
3.10 Applicable Law
This Plan shall be governed by and construed in accordance
with the laws of the State of Missouri.
IV. Duration of Plan
Unless sooner terminated by the Board, the Plan will
terminate on October 24, 2004.