EXHIBIT 10.5
INTERCOAST ENERGY COMPANY
LONG TERM INCENTIVE PLAN
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1. PURPOSE. This InterCoast Energy Company Long Term Incentive Plan
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(this "Plan") is designed to retain executives and other selected key employees
of InterCoast Energy Company ("InterCoast") and its subsidiaries (collectively,
the "Company") and reward them for making major contributions to the success of
the Company. This is accomplished by means of grants of Stock Options (as
hereinafter defined) in accordance with the provisions, terms and conditions set
forth below.
2. DEFINITIONS. Unless the context clearly indicates otherwise, the
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following terms, when used in this Plan, shall have the following meanings:
(a) "Board of Directors" means the Board of Directors of InterCoast.
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(b) "Code" means the Internal Revenue Code of 1986, as amended.
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(c) "Committee" and "Special Committee" have the meanings set forth in
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Section 4 hereof.
(d) "Common Stock" means the authorized and issued or unissued shares
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of InterCoast's common stock, par value $0.01 per share.
(e) "Company" means InterCoast and its subsidiary companies, including
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subsidiaries of subsidiaries.
(f) "Covered Employees" means those employees of the Company who are
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considered "covered employees" under Section 162(m) of the Code.
(g) "Exchange Act" means the Securities Exchange Act of 1934, as
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amended.
(h) "Fair Market Value" means the closing price of a share of the
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Common Stock on the date as of which Fair Market Value is to be determined,
which closing price shall be the last reported sales price regular way or,
in case no such reported sales took place on such date, the average of the
last reported bid and ask prices regular way, in either case on the
principal national securities exchange on which the Common Stock is listed
or admitted to trading, or if not listed or admitted to trading on any
national
securities exchange, the average of the highest bid and the lowest ask
prices quoted on NASDAQ; provided, however, that if the Common Stock is not
traded in such manner that the prices or quotations referred to above are
available, or if a majority of the members of the Committee in their sole
discretion shall determine that, because of the occurrence of events
relating to the Company or the Common Stock, such closing price does not
properly reflect the fair market value of a share of the Common Stock, Fair
Market Value shall be determined in good faith by the Committee, in which
case the determination of the Committee shall be binding and conclusive.
(I) "Initial Public Offering" shall mean that offering and sale of
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shares of Common Stock to the public pursuant to a registration statement
to be filed with the SEC in accordance with the Securities Act expected to
be consummated on or before September 1, 1996 and after which such shares
are registered under Section 12(b) or (g) of the Exchange Act and listed
for trading on a national stock exchange or approved for trading on Nasdaq.
(j) "Insiders" means those directors, officers and key employees of
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the Company who are otherwise eligible to receive Options pursuant to
Section 5 hereof and who are subject to the limitations of Section 16(b) of
the Exchange Act.
(k) "Option" or "Stock Option" means a right granted under this Plan
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to an Optionee to purchase a stated number of shares of Common Stock at a
fixed price for a specified period of time.
(l) "Optionee" means an employee of the Company who has received an
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Option granted under this Plan.
(m) "InterCoast" means InterCoast Energy Company, a Delaware
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corporation.
(n) "SEC" means the Securities and Exchange Commission.
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(o) "Securities Act" means the Securities Act of 1933, as amended.
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(p) "Stock Option Agreement" means the agreement between InterCoast
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and an Optionee which sets forth the terms and conditions of Options
granted to such Optionee.
3. GENERAL. That number of shares of InterCoast's Common Stock equal to
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ten percent (10%) of the number of shares of Common Stock outstanding
immediately after the issuance of shares of Common Stock pursuant to the Initial
Public Offering (including any shares issued pursuant to an over allotment
option granted) have been reserved for issuance under this Plan. All options
granted under this Plan shall be nonstatutory (non-qualified) options.
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4. ADMINISTRATION. This Plan shall be administered by the Compensation
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Committee (the "Committee") of the Board of Directors. The Committee shall be
appointed by and serve at the pleasure of the Board of Directors. A majority of
the Committee members shall constitute a quorum, and the act of a majority of
the members present at any meeting at which a quorum is present, and any act
approved in writing by a majority of the members without a meeting, shall be the
act of the Committee. Any such act shall be final and binding upon all persons.
The Committee shall have full power to construe and interpret this Plan and to
adopt such rules, regulations, guidelines, subplans, procedures and the like for
carrying out this Plan as it may deem necessary, proper and in the best
interests of the Company.
Notwithstanding anything in this Section 4 to the contrary, in the event
the Committee ever includes a member who is not both a "disinterested person"
and an "outside director," as such terms are hereinafter defined, this Plan
shall be administered, as to Insiders and Covered Employees, by a Special Stock
Plan Committee (the "Special Committee") consisting of not less than two members
of the Board of Directors each of whom shall be (I) a "disinterested person"
within the meaning of applicable rules and regulations promulgated by the SEC
and (ii) an "outside director" as such term is defined at Section 162(m) of the
Code. The Special Committee shall be appointed, governed, indemnified and
authorized as is the Committee hereinabove described. However, the Special
Committee shall have absolute discretion as to all matters concerning Insiders.
The term "Committee," as used herein, shall refer to the Compensation Committee
or the Special Stock Plan Committee as the context requires.
5. ELIGIBILITY. Eligibility for the grant of Options under provisions of
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this Plan shall be limited to employees of the Company in positions of
responsibility whose business decisions, in the judgment of the Committee, have
a significant effect upon the performance of the Company and to such other key
employees as the Committee may from time to time designate.
Recommendations for the grant of Options under this Plan shall be made by
management to the Committee. The Committee has the full and exclusive power to
determine which of such eligible employees shall receive Options; provided,
however, that, subject to the limitations of this Plan, the Committee may
delegate to management the authority to determine (a) which of those Company
employees who are not Insiders are eligible for grants or awards of Options
hereunder, and (b) the number of such Options such employees are to be granted
or awarded.
6. OPTION GRANTS.
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(a) The Committee shall determine the number of shares of Common Stock
to be included in each Option granted under this Plan, the type of grant or
grants each individual will receive, and the terms and conditions of each
grant to be set forth in the Stock Option Agreement. No grants for
fractional shares may be made.
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(b) In the event of a corporate merger, consolidation, acquisition of
property or stock, separation, reorganization or liquidation, the Committee
shall be authorized to issue or assume stock options, whether or not in a
transaction to which Section 424(a) of the Code applies, by means of
substitution of a new Option for previously issued options or an assumption
of previously issued options.
(c) If any Option granted hereunder should expire or terminate for any
reason without having been exercised in full, the unpurchased shares shall
again become available for the granting of Options.
7. EXERCISE PRICE AND DELIVERY OF SHARES.
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(a) The price at which shares of Common Stock may be purchased under
an Option shall be that price determined by the Committee at the time of
grant, but in any case such price shall not be less than the fair market
value of a share of Common Stock. No fractional shares shall be issued as a
result of the exercise of an Option. The payment of the exercise price for
all shares purchased shall be (w) by cash or check in full on the date of
exercise (such cash or check may be delivered on behalf of an optionee by a
stock broker designated by the Company to whom the optionee has submitted
an irrevocable notice of election, on forms approved by the Company, to
sell shares of Common Stock deliverable upon exercise of an Option), (x)
through the delivery of shares of Common Stock held by the Optionee for at
least six months and having a Fair Market Value equal to the full amount of
the exercise price, (y) by the withholding by the Company from the shares
of Common Stock issuable upon any exercise of the option that number of
shares having a Fair Market Value equal to such exercise price pursuant to
a written election delivered to the Committee at least six months prior to
the date of exercise, or (z) by a combination of such methods. The
Committee shall determine acceptable methods for tendering Common Stock and
may impose such limitations and prohibitions on the use of Common Stock to
exercise an Option as it deems appropriate.
(b) Upon the exercise of an Option, the Optionee will be required to
pay to the Company for remittance to the appropriate taxing authorities an
amount necessary to satisfy the employee's portion of federal, state and
local taxes, if any, incurred by reason of the exercise of an Option. In
lieu of delivering cash to satisfy such withholding obligation, the
Optionee may elect to have shares of Common Stock withheld from the shares
deliverable upon such exercise; provided, however, that an Insider who
desires to have shares of Common Stock withheld from the shares deliverable
upon such exercise to satisfy such withholding obligation must make such
election by notice in writing delivered to the Board of Directors either
(I) at least six months prior to the date the amount of the tax to be
withheld is determined (the "Tax Date") or (ii) prior to the Tax Date and
in any ten business day period beginning on the third business day
following the release of
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InterCoast's quarterly or annual summary statement of sales and earnings.
The number of shares so withheld shall have an aggregate Fair Market Value
on the date of exercise sufficient to satisfy the applicable tax
withholding requirements.
(c) Upon any exercise of an Option, the Optionee shall certify on a
form acceptable to the Committee that he or she is in compliance with the
terms and conditions of this Plan.
8. OPTION PERIOD AND EXERCISABILITY; ACCELERATION OF VESTING. Each
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Option granted under this Plan shall be exercisable for a period of 10 years
from the date of grant. Except as provided in Section 10 below, each Option
shall become exercisable in whole or in installments as set forth in the Stock
Option Agreement. Where Options are exercisable in installments, the right to
purchase any shares shall be cumulative, so that when the right to purchase any
shares has matured, such shares may be purchased thereafter until the expiration
of the Option. The Committee shall have the power to accelerate the
exercisability of installments for any Option granted under this Plan. Subject
to the immediately preceding sentence, when and if a "Triggering Event" occurs
with respect to InterCoast, all Options granted under this Plan which have not
been exercised, forfeited or canceled shall become immediately exercisable
without any action on the part of the Committee or the Board of Directors. A
Triggering Event shall be deemed to have occurred upon the acquisition by any
individual, corporation, firm or other entity, including the successors,
affiliates and associates thereof (within the meanings ascribed to "affiliates"
and "associates" in Rule 12b-2 of the General Rules and Regulations under the
Exchange Act ), other than the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or any Subsidiary of the Company, or any
entity holding shares of Common Stock for or pursuant to the terms of any such
plan, of the beneficial ownership (for purposes of Section 13(d) of the Exchange
Act and Rule 13d-3 thereunder), directly or indirectly, of 25% or more of the
shares of Common Stock then outstanding without the consent or approval of the
Board of Directors.
9. AMENDMENT, MODIFICATION, SUSPENSION OR DISCONTINUANCE OF THIS PLAN.
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Except as provided in this Section 9, the Board of Directors may amend, modify,
suspend or discontinue this Plan for the purpose of meeting any changes in legal
requirements or for any other purpose permitted by law. Except for any
adjustments pursuant to Section 12 below, the Board of Directors may not (a)
increase the maximum number of shares that may be purchased pursuant to the
exercise of Options, except with the approval of the stockholders of InterCoast
or (b) withdraw the administration of this Plan from the Committee.
10. TERMINATION OF EMPLOYMENT. If the employment of an Optionee with the
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Company shall be terminated, the following rules shall apply:
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(a) In the event of termination of an Optionee's employment with the
Company "for cause" (as hereinafter defined), any Option granted to such
Optionee shall expire forthwith. An Optionee's employment with the Company
shall be deemed to be "for cause" if such employment is terminated by
reason of such Optionee's willful misconduct or intentional and continual
neglect of duties (other than any such failure resulting from an Optionee's
incapacity due to physical or mental illness) which, in the business
judgment of the Committee, has adversely affected the Company or is likely
to have an adverse effect on the Company or is intended to improperly
personally enrich the Optionee at the expense of the Company or by reason
of such Optionee's theft or conviction of a felony or any crime involving
dishonesty or moral turpitude.
(b) In the event of an Optionee's death either during employment with
the Company or following termination of employment due to retirement or
disability, the Optionee's estate or beneficiaries shall have a period of
up to the later of three years after the Optionee's death or the expiration
date specified in the Stock Option Agreement within which to exercise the
Option; and any Option may be immediately exercised in full (i.e., all
unvested options shall become fully vested) by the Optionee's estate or
beneficiaries. In the event the Optionee's estate is closed with
exercisable Options then unexercised, the rights under this paragraph (b)
shall pass by will or the laws of descent and distribution.
(c) In the event of an Optionee's disability during employment with
the Company, the Optionee, or his or her guardian or legal representative
shall have a period of up to the later of three years after the Optionee is
determined to be disabled or the expiration date specified in the Stock
Option Agreement within which to exercise the Option; and any Option may be
immediately exercised in full (i.e., all unvested options shall become
fully vested) by the Optionee, his or her guardian or legal representative
estate or beneficiaries. For purposes of this Plan, an individual is
disabled if he or she is unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death or which has lasted or
can be expected to last for a continuous period of not less than 6 months.
(d) If the Optionee's employment terminates as a result of retirement
in accordance with the terms of a Company retirement plan, Options
exercisable at the time of such retirement may be exercised for a period of
up to three years from the date of retirement, but not beyond the date the
Option otherwise would have expired in accordance with the Stock Option
Agreement establishing the term of the original grant; and any Option may
be immediately exercised in full (i.e., all unvested options shall become
fully vested).
(e) In the event an Optionee terminates his employment with the
Company voluntarily or his employment with the Company is terminated other
than "for cause," Options exercisable at the time of such retirement (i.e.,
unvested Options shall be
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forfeited) may be exercised for a period of up to ninety days from the date
of such Optionee's termination of employment with the Company, but not
beyond the date the Option otherwise would have expired in accordance with
the Stock Option Agreement establishing the term of the original grant.
Notwithstanding anything to the contrary contained in this Section 10, at
termination of employment for any reason, the Committee may, in its sole
discretion, (I) authorize the continuation of Options granted prior to
termination, including without limitation Options granted less than one year
prior to such termination, as if the Optionee were still employed by the
Company, and (ii) permit the exercise of such Options during periods after such
termination of employment but not beyond the original expiration date of the
Option.
11. NONASSIGNABILITY.
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(a) Except as set forth in paragraphs (b) of this Section 11 (I) no
Option or any other benefit under this Plan shall be transferable or
assignable otherwise than by will or the laws of descent and distribution,
and (ii) no Option shall be exercisable during the lifetime of the person
to whom it was granted except by such person or such person's guardian or
legal representative.
(b) An Optionee may assign his or her rights in Options to one or more
members of his or her immediate family (spouse, children and parents) or to
one or more trusts of which the only beneficiaries are the Optionee or
members of his or her immediate family and the Optionee's assignees shall
be entitled to exercise such Optionee's rights if, at the time of such
assignment, (I) such Optionee is not an Insider (provided, that this
restriction shall be eliminated if so permitted under the rules promulgated
by the SEC under Section 16 of the Exchange Act), and (ii) the Committee
approves in writing and in advance the assignment proposed by such
Optionee.
12. ADJUSTMENTS. In the event of a merger, consolidation, reorganization,
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recapitalization, stock split or stock dividend or a combination or
reclassification of shares, the number of shares of Common Stock reserved under
this Plan, the number of shares covered by outstanding Options and the exercise
prices of outstanding Options shall be adjusted proportionately. In the event
of any other change affecting the Common Stock, such adjustments as may be
deemed equitable by the Board of Directors, in its sole discretion, shall be
made to give proper effect to such event. The Committee may make adjustments to
avoid fractional shares.
13. LIMITATIONS AS TO COVERED EMPLOYEES. Notwithstanding the provisions of
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Sections 6 and 7 hereof, no covered employee may be granted options entitling
him or her to acquire more
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than 150,000 shares in any one calendar year and the exercise price per share
for all options granted to covered employees must equal or exceed the Fair
Market Value.
14. GOVERNMENT REGULATIONS. The Company's obligation to sell and deliver
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shares under an Option granted under this Plan is subject to the requirements of
any governmental authority with jurisdiction over the authorization, issuance or
sale of such shares.
15. NOTICE. Any written notice to InterCoast or the Company required or
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permitted by any of the provisions of this Plan shall be addressed to the
Chairman of the Committee or to the Chief Executive Officer of InterCoast at the
principal offices of InterCoast and shall become effective only when it is
received by the office of such Chairman or Chief Executive Officer. Any written
notice to an Optionee required or permitted by any of the provisions of this
Plan shall be addressed to such Optionee at his or her address as reflected in
the records of the Company and shall become effective on the third day after
mailing to such Optionee.
16. COMPANY BENEFIT AND COMPENSATION PLANS. Nothing contained in this
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Plan shall prevent any Optionee, prior to death, or any Optionee's dependents or
beneficiaries, after such Optionee's death, from receiving, in addition to any
Options provided for under this Plan, any salary, incentive or performance plan
awards, payments under a Company retirement plan or other benefits that may be
otherwise payable or distributable to such Optionee, or to such Optionee's
dependents or beneficiaries under any other plan or policy of the Company or
otherwise. To the extent permitted by law, grants of Options under this Plan may
be made in combination with, or as alternatives to, grants, awards or payments
under other Company plans.
17. REPRESENTATIONS AND WARRANTIES. No employee shall at any time have a
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right (a) to be selected as a participant in this Plan, or (b) having been
selected as a participant for one grant, to be selected as a participant for any
other grant. No person shall have any authority to enter into any agreement
assuring such selection or making any warranty or representation with respect
thereto. An Optionee shall have no rights to or interest in any Option except
as set forth herein.
18. UNFUNDED PLAN. Insofar as it provides for grants of Options to
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acquire shares of Common Stock in the future, this Plan shall be unfunded.
Although bookkeeping accounts may be established with respect to Optionees who
are entitled to Common Stock under this Plan, any such accounts shall be used
merely as a bookkeeping convenience. The Company shall not be required to
segregate any assets that may at any time be represented by Common Stock
purchasable under this Plan, and this Plan shall not be construed as providing
for such segregation. Neither the Company nor the Board of Directors nor the
Committee shall be deemed
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to be a trustee of any Common Stock purchasable under this Plan. Any liability
of the Company to an Optionee with respect to a grant under this Plan shall be
based solely upon any contractual obligations that may be created by this Plan
and the Stock Option Agreement; no such obligation of the Company shall be
deemed to be secured by any pledge or other encumbrance on any property of the
Company. Neither the Company nor the Board of Directors nor the Committee shall
be required to give any security or bond for the performance of any obligation
that may be created by this Plan.
19. GOVERNING LAW. This Plan and all determinations made and actions
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taken pursuant to this Plan, to the extent not otherwise governed by the Code,
the Securities Act or the Exchange Act, shall be governed by the laws of the
State of Delaware (without regard to the conflicts of laws rules thereof) and
construed accordingly.
20. EFFECTIVE DATE AND TERMINATION. This Plan shall become effective on
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the date the Initial Public Offering is consummated. Any Options granted by the
Committee prior to such approval shall be granted subject to such consummation
and, upon such consummation, shall be effective as of the date of grant. No
Options may be granted on or after the tenth anniversary of such date. This
Plan shall terminate on the earlier of the tenth anniversary of the date the
Initial Public Offering is consummated or the date the Board of Directors
declares it terminated and no Options may be awarded or granted hereunder after
this Plan has terminated.
The undersigned, being the duly elected Secretary of InterCoast Energy
Company, does hereby certify that the InterCoast Energy Company Long Term
Incentive Plan was duly approved by the Board of Directors of InterCoast Energy
Company on May 22, 1996 and by the stockholders of InterCoast Energy Company on
May 22, 1996.
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Secretary of
InterCoast Energy Company
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Optionee: ____________________________
Shares: ____________________________
Date: __________________, ________
NON-QUALIFIED STOCK OPTION
AGREEMENT
UNDER THE INTERCOAST ENERGY COMPANY
LONG TERM INCENTIVE PLAN
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THIS NON-QUALIFIED STOCK OPTION AGREEMENT (this "Agreement") is made and
entered into as of _________, 199__, by and between InterCoast Energy Company, a
Delaware corporation ("InterCoast"), and the below named individual
("Optionee").
R E C I T A L S
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A. Optionee is an officer or key employee of InterCoast or a subsidiary of
InterCoast (collectively, the "Company").
B. InterCoast desires to provide an additional inducement to Optionee to
remain in the employ of the Company and to provide a means for Optionee to
acquire a proprietary interest in InterCoast.
NOW, THEREFORE, in consideration of the presently existing employment
relationship between the Company and Optionee, and as an additional inducement
to Optionee to remain in the employ of the Company, and in order to provide a
means for Optionee to acquire a proprietary interest in InterCoast, it is agreed
between InterCoast and Optionee as follows:
1. Defined Terms. As used herein, the following terms shall have the
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following meanings:
(a) "Plan" shall mean the InterCoast Energy Company Long Term
Incentive Plan, including any amendments thereto.
(b) "Optionee" shall mean _____________.
(c) "Option Shares" shall mean _____ shares of the Common Stock of the
Company, par value $0.01 per share.
(d) "Expiration Date" shall mean __________, 200__.
(e) "Committee" shall have the meaning set forth in the Plan.
Terms used herein and not defined herein shall have the meanings ascribed to
them in the Plan.
2. Option Grant. The Company hereby grants to Optionee, subject to the
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terms hereof and the terms of the Plan, the right and option to purchase all or
any part of the Option Shares on or before the Expiration Date (the "Option");
provided, however, that the Option shall mature and become exercisable in three
cumulative installments of _____ shares, _____ shares and _____ shares on
_________, ____, ________, ____, and ________, ____, respectively. No exercise
as to a portion of the Option Shares shall preclude a later exercise or
exercises as to additional portions. The Option shall be exercisable only (a)
as provided in paragraph 3(b) hereof, (b) during such time as Optionee remains
in the employ of the Company, (c) in the event of disability (for purposes of
this Agreement, Optionee shall be considered disabled if he/she is unable to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or which has lasted or can be expected to last for a continuous period of
not less than 6 months) or death during employment, or retirement in accordance
with the terms of a Company retirement plan, until the earlier of the Expiration
Date or three years after commencement of Optionee's disability, Optionee's
death or Optionee's retirement, respectively, or (d) in the event of Optionee's
voluntary termination of employment with the Company or termination other than
"for cause" (as such term is defined in the Plan), until the earlier of the
Expiration Date or ninety days after Optionee's termination of employment with
the Company.
3. Terms and Conditions of the Option. The Option shall be subject to the
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following terms and conditions:
(a) Exercise Price. The price to be paid for each of the Option Shares
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with respect to which the Option is exercised, shall be $_____ (the
"Exercise Price").
(b) Exercise of Option. The Option shall be exercisable as specified
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herein and in the Plan. Payment of the Exercise Price for the number of
shares as to which the Option is being exercised shall be (I) by cash or
check and in full on the date of exercise (such cash or check may be
delivered on behalf of an optionee by a stock broker designated by the
Company to whom the optionee has submitted an irrevocable notice of
election, on forms approved by the Company, to sell shares of Common Stock
deliverable upon exercise of an Option), (ii) through the delivery of
shares of Common Stock held by Optionee for at least six months and having
a Fair Market Value (as defined in the Plan) equal to the full amount of
the Exercise Price, (iii) by the withholding by the Company from the shares
of Common Stock issuable upon any exercise of the option that number of
shares
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having a Fair Market Value equal to such exercise price pursuant to a
written election delivered to the Committee at least six months prior to
the date of exercise, or (iv) by a combination of such methods. The Option
shall not be exercisable with respect to fractions of a share.
(c) Notice of Exercise. Each exercise of the Option shall be by
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written notice to the Company. Each such notice shall state the number of
Option Shares with respect to which the Option is being exercised and shall
specify a date, not less than five nor more than ten days after the date of
such notice, as the date on which the shares will be delivered and payment
made therefor at the principal offices of the Company. If any law or
regulation requires the Company to take any action with respect to the
shares specified in such notice, then the date for delivery of such shares
against payment therefor shall be extended for the period necessary to take
such action. In the event of any failure to pay for the number of shares
specified in such notice on the date set forth therein, subject to such
date being extended as provided above, the Option shall terminate with
respect to such number of shares, but shall continue with respect to the
remaining shares covered by this Agreement and not yet acquired by exercise
of the Option or any portion thereof.
(d) Investment Representation. If shares of stock issued pursuant to
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exercise of the Option have not been registered under the Securities Act of
1933, as amended (the "Securities Act"), Optionee agrees to represent and
warrant in writing at the time of any exercise of the Option or any portion
thereof that the Option Shares are being purchased only for investment and
without any present intention to sell or distribute such shares, and
further agrees that shares so acquired may be appropriately legended and
will be sold or transferred only in accordance with the rules and
regulations of the Securities and Exchange Commission (the "SEC") or any
applicable law, regulation, or rule of any governmental agency.
(e) Taxes. Optionee shall pay all original issue or transfer taxes and
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all other fees and expenses incident to the issue, transfer, or delivery of
Option Shares.
(f) Nonassignability. The Option shall be exercisable during
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Optionee's lifetime only by Optionee, and, except as specifically permitted
under the Plan, shall not be assigned, transferred, pledged, hypothecated,
sold or otherwise disposed of, in whole or in part, voluntarily or
involuntarily, any such assignment, transfer, pledge, hypothecation, sale
or other disposition being void and of no effect; provided, however, that
the Option shall be transferable by will or the laws of descent and
distribution.
(g) No Rights Until Issue. No right to vote or receive dividends or
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any other rights as a stockholder of the Company shall exist with respect
to the Option
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Shares, notwithstanding the exercise of the Option, until the issuance to
the Optionee of a stock certificate or certificates representing such
shares.
(h) Anti-dilution. In the event of a merger, consolidation,
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reorganization, recapitalization, stock dividend, stock split or other
change in the corporate structure or capitalization of the Company, the
number of Option Shares and the exercise price shall be subject to
appropriate adjustments as described in the Plan.
The Option is also subject to, and, by accepting and executing this Agreement,
Optionee agrees to be bound by, all of the terms, provisions, limitations and
conditions of the Plan.
4. The Plan. Optionee acknowledges receipt of a copy of the Plan and
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represents that he/she is familiar with the terms and provisions thereof and
hereby accepts the Option subject to all such terms and provisions.
5. Withholding. Upon the exercise of an Option, the Optionee will be
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required to pay to the Company for remittance to the appropriate taxing
authorities an amount necessary to satisfy the employee's portion of federal,
state and local taxes incurred by reason of the exercise of an Option. In lieu
of delivering cash to satisfy such withholding obligation, the Optionee may
elect to have shares of Common Stock withheld from the shares deliverable upon
such exercise; provided, however, that, if the Optionee is an Insider he or she
must make such election by notice in writing delivered to the Board of Directors
either (I) at least six months prior to the date the amount of the tax to be
withheld is determined (the "Tax Date") or (ii) prior to the Tax Date and in any
ten business day period beginning on the third business day following the
release of InterCoast's quarterly or annual summary statement of sales and
earnings. The number of shares so withheld shall have an aggregate Fair Market
Value, as such term is defined in the Plan, on the date of exercise sufficient
to satisfy the applicable tax withholding requirements.
6. Employment. Nothing in the Plan or in this Agreement shall confer upon
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Optionee any right to continued employment as an employee of the Company or
interfere in any way with the right of the Company to terminate Optionee's
employment at any time.
7. Transferability of Shares of Common Stock. In the event a registration
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statement with respect to the issuance of Option Shares to Optionee upon the
exercise of the Option or any portion thereof is not in effect at the time of
such issuance of Option Shares by the Company, at the time of the proposed
transfer of Option Shares, Optionee shall not offer, sell, hypothecate, transfer
or otherwise dispose of any of the Option Shares
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issued pursuant to the exercise of the Option or any portion thereof unless
either (a) a registration statement with respect to such Option Shares is then
in effect under the Securities Act, and any applicable state securities laws,
and such offer, sale, transfer or other disposition is accompanied by a
prospectus relating to such registration statement and meeting the requirements
of the Securities Act; or (b) counsel satisfactory to InterCoast renders an
opinion in writing, addressed to InterCoast and acceptable to InterCoast and its
counsel, to the effect that, in the opinion of such counsel, such proposed
offer, sale, transfer or other disposition of such Option Shares is exempt from
the provisions of Section 5 of the Securities Act and the applicable state
securities laws in view of the circumstances of such proposed offer, sale,
transfer or other disposition.
8. Binding Agreement. This Agreement shall be binding upon and shall
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inure to the benefit of the parties hereto and their respective heirs,
executors, administrators, trustees, successors and assigns.
EXECUTED as of the day and year first above written.
"InterCoast"
InterCoast Energy Company
By:____________________________________
Name:______________________________
Title:_____________________________
"Optionee"
_______________________________________
Name:__________________________________
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