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 owners, members
or beneficiaries, as appropriate, are the partners, (c) to a
limited liability company in which Immediate Family Members, or
entities in which Immediate Family Members are the owners, members
or beneficiaries, as appropriate, are the members, or (d) to a
trust for the benefit of Immediate Family Members; provided,
however, that no more than a de minimus beneficial interest in a
partnership, limited liability company or trust described in (b),
(c) or (d) above may be owned by a person who is not an Immediate
Family Member or by an entity that is not beneficially owned solely
by 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.