Exhibit 10.5
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THE WISER OIL COMPANY
1991 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN
The purposes of the 1991 Non-Employee Directors' Stock Option Plan (the
"Plan") are to promote the long-term success of The Wiser Oil Company (the
"Company") by creating a long-term mutuality of interests between the non-
employee Directors and stockholders of the company, to provide an additional
inducement for such Directors to remain with the Company and to provide a means
through which the company may attract able persons to serve as Directors of the
company.
SECTION 1
ADMINISTRATION
The Plan shall be administered by a Committee (the "Committee") appointed
by the Board of Directors of the Company (the "Board") and consisting of not
less than two members of the Board. The Committee shall keep records of action
taken at its meetings. A majority of the Committee shall constitute a quorum at
any meeting, and the acts of a majority of the members present at any meeting at
which a quorum is present, or acts approved in writing by a majority of the
Committee, shall be the acts of the Committee.
The Committee shall interpret the Plan and prescribe such rules,
regulations and procedures in connection with the operations of the Plan as it
shall deem to be necessary and advisable for the administration of the Plan
consistent with the purposes of the Plan. All questions of interpretation and
application of the Plan, or as to stock options granted under the Plan, shall be
subject to the determination of the Committee, which shall be final and binding.
Notwithstanding the above, the selection of the Directors to whom stock
options are to be granted, the timing of such grants, the number of shares
subject to any stock option, the exercise price of any stock option, the periods
during which any stock option may be exercised and the term of any stock option
shall be as hereinafter provided, and the Committee shall have no discretion as
to such matters.
SECTION 2
SHARES AVAILABLE UNDER THE PLAN
The aggregate number of shares which may be issued or delivered and as to
which grants of stock options may be made under the Plan is 30,000 shares of the
Common Stock, $3.00 par value, of the Company (the "Common Stock"), subject to
adjustment and substitution as set forth in Section 5. If any stock option
granted under the Plan is cancelled by mutual consent or terminates or expires
for any reason without having been exercised in full, the number
of shares subject thereto shall again be available for purposes of the Plan. The
shares which may be issued or delivered under the Plan may be either authorized
but unissued shares or reacquired shares or partly each, as shall be determined
from time to time by the Board.
SECTION 3
GRANT OF STOCK OPTIONS
On the first business day following the day of each annual meeting of the
stockholders of the Company, each person who is then a member of the Board and
who is not then an employee of the Company or any of its subsidiaries (a "non-
employee Director") shall automatically and without further action by the Board
or the Committee be granted a "nonstatutory stock option" (i.e., a stock option
which does not qualify under Section 422 or 423 of the Internal Revenue Code of
1986 (the "Code")) to purchase 750 shares of Common Stock, subject to adjustment
and substitution as set forth in Section 5. If the number of shares then
remaining available for the grant of stock options under the Plan is not
sufficient for each non-employee Director to be granted an option for 750 shares
(or the number of adjusted or substituted shares pursuant to Section 5), then
each non-employee Director shall be granted an option for a number of whole
shares equal to the number of shares then remaining available divided by the
number of non-employee Directors, disregarding any fractions of a share.
SECTION 4
TERMS AND CONDITIONS OF STOCK OPTIONS
Stock options granted under the Plan shall be subject to the following
terms and conditions:
(A) The purchase price at which each stock option may be exercised (the
"option price") shall be one hundred percent (100%) of the fair market value per
share of the Common Stock covered by the stock option on the date of grant,
determined as provided in Section 4(G).
(B) The option price for each stock option shall be paid in full upon
exercise and shall be payable in cash in United States dollars (including check,
bank draft or money order), which may include cash forwarded through a broker or
other agent-sponsored exercise or financing program; provided, however, that in
lieu of such cash the person exercising the stock option may pay the option
price in whole or in part by delivering to the Company shares of the Common
Stock having a fair market value on the date of exercise of the stock option,
determined as provided in Section 4(G), equal to the option price for the shares
being purchased; except that (i) any portion of the option price representing a
fraction of a share shall in any event be paid in cash and (ii) no shares of the
Common Stock which have been held for less than one year may be delivered in
payment of the option price of a stock option. If the person exercising a
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stock option participates in a broker or other agent-sponsored exercise or
financing program, the Company will cooperate with all reasonable procedures of
the broker or other agent to permit participation by the person exercising the
stock option in the exercise or financing program. Notwithstanding any procedure
of the broker or other agent-sponsored exercise or financing program, if the
option price is paid in cash, the exercise of the stock option shall not be
deemed to occur and no shares of the Common Stock will be issued or delivered
until the Company has received full payment in cash (including check, bank draft
or money order) for the option price from the broker or other agent. The date of
exercise of a stock option shall be determined under procedures established by
the Committee, and as of the date of exercise the person exercising the stock
option shall be considered for all purposes to be the owner of the shares with
respect to which the stock option has been exercised. Payment of the option
price with shares shall not increase the number of shares of the Common Stock
which may be issued or delivered under the Plan as provided in Section 2.
(C) No stock option shall be exercisable during the first six months of its
term except in case of death as provided in Section 4(E). Subject to the terms
of Section 4(E) providing for earlier termination of a stock option, no stock
option shall be exercisable after the expiration of five years from the date of
grant. A stock option to the extent exercisable at any time may be exercised in
whole or in part.
(D) No stock option shall be transferable by the grantee otherwise than by
Will, or if the grantee dies intestate, by the laws of descent and distribution
of the state of domicile of the grantee at the time of death. All stock options
shall be exercisable during the lifetime of the grantee only by the grantee or
the grantee's guardian or legal representative.
(E) If a grantee ceases to be a Director of the Company, any outstanding
stock options held by the grantee shall be exercisable and shall terminate,
according to the following provisions:
(i) If a grantee ceases to be a Director of the Company for any
reason other than resignation, removal for cause or death, any then
outstanding stock option held by such grantee shall be exercisable by
the grantee (but only to the extent exercisable by the grantee
immediately prior to ceasing to be a Director) at any time prior to
the expiration date of such stock option or within one year after the
date the grantee ceases to be a Director, whichever is the shorter
period;
(ii) If during his term of office as a Director a grantee resigns
from the Board or is removed from office for cause, any outstanding
stock option held by the grantee which is not exercisable by the
grantee immediately prior to resignation or
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removal shall terminate as of the date of resignation or removal, and
any outstanding stock option held by the grantee which is exercisable
by the grantee immediately prior to resignation or removal shall be
exercisable by the grantee at any time prior to the expiration date of
such stock option or within 90 days after the date of resignation or
removal, whichever is the shorter period;
(iii) Following the death of a grantee during service as a
Director of the Company, any outstanding stock option held by the
grantee at the time of death (whether or not exercisable by the
grantee immediately prior to death) shall be exercisable by the person
entitled to do so under the Will of the grantee, or, if the grantee
shall fail to make testamentary disposition of the stock option or
shall die intestate, by the legal representative of the grantee at any
time prior to the expiration date of such stock option or within two
years after the date of death, whichever is the shorter period;
(iv) Following the death of a grantee after ceasing to be a
Director and during a period when a stock option is exercisable, any
outstanding stock option held by the grantee at the time of death
shall be exercisable by such person entitled to do so under the Will
of the grantee or by such legal representative at any time prior to
the expiration date of such stock option or within one year after the
date of death, whichever is the shorter period.
(F) All stock options shall be confirmed by an agreement, or an amendment
thereto, which shall be executed on behalf of the Company by the Chief Executive
Officer (if other than the President), the President or any Vice President and
by the grantee.
(G) Fair market value of the Common Stock shall be the mean between the
following prices, as applicable, for the date as of which fair market value is
to be determined as quoted in The Wall Street Journal (or in such other reliable
publication as the Committee, in its discretion, may determine to rely upon):
(a) if the Common Stock is listed on the New York Stock Exchange, the highest
and lowest sales prices per share of the Common Stock as quoted in the NYSE-
Composite Transactions listing for such date, (b) if the Common Stock is not
listed on such exchange, the highest and lowest sales prices per share of Common
Stock for such date on (or on any composite index including) the principal
United States securities exchange registered under the Securities Exchange Act
of 1934 (the "1934 Act") on which the Common Stock is listed, or (c) if the
Common Stock is not listed on any such exchange, the highest and lowest sales
prices per share of the Common Stock for such date on the National Association
of Securities Dealer Automated Quotations System or any successor system then in
use ("NASDAQ"). If there are no such sale price quotations for the date as of
which fair market value is to be
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determined but there are such sale price quotations within a reasonable period
both before and after such date, then fair market value shall be determined by
taking a weighted average of the means between the highest and lowest sales
prices per share of the Common Stock as so quoted on the nearest date before and
the nearest date after the date as of which fair market value is to be
determined. The average should be weighted inversely by the respective numbers
of trading days between the selling dates and the date as of which fair market
value is to be determined. If there are no such sale price quotations on or
within a reasonable period both before and after the date as of which fair
market value is to be determined, then fair market value of the Common Stock
shall be the mean between the bona fide bid and asked prices per share of Common
Stock as so quoted for such date on NASDAQ, or if none, the weighted average of
the means between such bona fide bid and asked prices on the nearest trading
date before and the nearest trading date after the date as of which fair market
value is to be determined, if both such dates are within a reasonable period.
The average is to be determined in the manner described above in this Section
4(G). If the fair market value of the Common Stock cannot be determined on the
basis previously set forth in this Section 4(G) for the date as of which fair
market value is to be determined, the Committee shall in good faith determine
the fair market value of the Common Stock on such date. Fair market value shall
be determined without regard to any restriction other than a restriction which,
by its terms, will never lapse.
(H) The obligation of the Company to issue or deliver shares of the Common
Stock under the Plan shall be subject to (i) the effectiveness of a registration
statement under the Securities Act of 1933, as amended, with respect to such
shares, if deemed necessary or appropriate by counsel for the Company, (ii) the
condition that the shares shall have been listed (or authorized for listing upon
official notice of issuance) upon each stock exchange, if any, on which the
Common Stock shares may then be listed and (iii) all other applicable laws,
regulations, rules and orders which may then be in effect.
Subject to the foregoing provisions of this Section 4 and the other
provisions of the Plan, any stock option granted under the Plan may be subject
to such restrictions and other terms and conditions if any, as shall be
determined, in its discretion, by the Committee and set forth in the agreement
referred to in Section 4(F), or an amendment thereto.
SECTION 5
ADJUSTMENT AND SUBSTITUTION OF SHARES
If a dividend or other distribution shall be declared upon the Common
Stock payable in shares of the Common Stock the number of shares of the Common
Stock set forth in Section 3, the number of shares of the Common Stock then
subject to any outstanding stock options and the number of shares of the Common
Stock which may be issued or delivered under the Plan but are not then subject
to outstanding stock options shall be adjusted by adding thereto the number of
shares of the Common Stock which would have been distributable thereon if such
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shares had been outstanding on the date fixed for determining the stockholders
entitled to receive such stock dividend or distribution.
If the outstanding shares of the Common Stock shall be changed into or
exchangeable for a different number or kind of shares of stock or other
securities of the Company or another corporation, whether through
reorganization, reclassification, recapitalization, stock split-up, combination
of shares, merger or consolidation, then there shall be substituted for each
shares of the Common Stock set forth in Section 3, for each share of the Common
Stock subject to any then outstanding stock option, and for each share of the
Common Stock which may be issued or delivered under the Plan but which is not
then subject to any outstanding stock option, the number and kind of shares of
stock or other securities into which each outstanding share of the Common Stock
shall be so changed or for which each such share shall be exchangeable.
In case of any adjustment or substitution as provided for in this
Section 5, the aggregate option price for all shares subject to each then
outstanding stock option prior to such adjustment or substitution shall be the
aggregate option price for all shares of stock or other securities (including
any fraction) to which such shares shall have been adjusted or which shall have
been substituted for such shares. Any new option price per share shall be
carried to at least three decimal places with the last decimal place rounded
upwards to the nearest whole number.
No adjustment or substitution provided for in this Section 5 shall
require the Company to issue or deliver or sell a fraction of a share or other
security. Accordingly, all fractional shares or other securities which result
from any such adjustment or substitution shall be eliminated and not carried
forward to any subsequent adjustment or substitution.
SECTION 6
EFFECT OF THE PLAN ON THE RIGHTS OF COMPANY AND STOCKHOLDERS
Nothing in the Plan, in any stock option granted under the Plan, or in
any stock option agreement shall confer any right to any person to continue as a
Director of the company or interfere in any way with the rights of the
stockholders of the Company or the Board of Directors to elect and remove
Directors.
SECTION 7
AMENDMENT AND TERMINATION
The right to amend the Plan at any time and from time to time and the
right to terminate the Plan at any time are hereby specifically reserved to the
Board; provided always that no such termination shall terminate any outstanding
stock options granted under the Plan; and provided further that no amendment of
the Plan shall (a) be made without stockholder approval if stockholder approval
of the amendment is at the time required for stock options under the Plan to
qualify for the exemption from Section 16(b) of the 1934 Act provided by Rule
16b-3 or by
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the rules of the NASDAQ National Market System or any stock exchange on which
the Common Stock may then be listed, (b) amend more than once every six months
the provisions of the Plan relating to the selection of the Directors to whom
stock options are to be granted, the timing of such grants, the number of shares
subject to any stock option, the exercise price of any stock option, the periods
during which any stock option may be exercised and the term of any stock option
other than to comport with changes in the Code or the rules and regulations
thereunder or (c) otherwise amend the Plan in any manner that would cause stock
options under the Plan not to qualify for the exemption provided by Rule 16b-3.
No amendment or termination of the Plan shall, without the written consent of
the holder of a stock option theretofore awarded under the Plan, adversely
affect the rights of such holder with respect thereto.
Notwithstanding anything contained in the preceding paragraph or any
other provision of the Plan or any stock option agreement, the Board shall have
the power to amend the Plan in any manner deemed necessary or advisable for
stock options granted under the Plan to qualify for the exemption provided by
Rule 16b-3 (or any successor rule relating to exemption from Section 16(b) of
the 1934 Act), and any such amendment shall, to the extent deemed necessary or
advisable by the Board, be applicable to any outstanding stock options
theretofore granted under the plan notwithstanding any contrary provisions
contained in any stock option agreement. In the event of any such amendment to
the Plan, the holder of any stock option outstanding under the Plan shall, upon
request of the Committee and as a condition to the exercisability of such
option, execute a conforming amendment in the form prescribed by the Committee
to the stock option agreement referred to in Section 4(F) within such reasonable
time as the Committee shall specify in such request.
SECTION 8
EFFECTIVE DATE AND DURATION OF PLAN
The effective date and date of adoption of the Plan shall be July 1,
1991, the date of adoption of the Plan by the Board, provided that on or prior
to June 30, 1992 such adoption of the Plan by the Board is approved by the
affirmative vote of the holders of at least a majority of the outstanding shares
of voting stock of the company represented in person or by proxy at a duly
called and convened meeting of such holders. Notwithstanding any other
provisions contained in the Plan, no stock option granted under the Plan may be
exercised until after such stockholder approval. No stock option may be granted
under the Plan subsequent to June 30, 1996.
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