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EXHIBIT 4.5
1994 LONG-TERM INCENTIVE PLAN
OF
CABOT OIL & GAS CORPORATION
1. Objectives. The Cabot Oil & Gas Corporation 1994 Long-Term
Incentive Plan (the "Plan") is designed to retain key executives and other
selected employees and reward them for making major contributions to the
success of Cabot Oil & Gas Corporation, a Delaware corporation (the "Company"),
and its Subsidiaries (as hereinafter defined). These objectives are to be
accomplished by making awards under the Plan and thereby providing Participants
(as hereinafter defined) with a proprietary interest in the growth and
performance of the Company and its Subsidiaries.
2. Definitions. As used herein, the terms set forth below shall
have the following respective meanings:
"Award" means the grant of any form of stock option, stock
appreciation right, stock award or cash award, whether granted singly, in
combination or in tandem, to a Participant pursuant to any applicable terms,
conditions and limitations as the Committee may establish in order to fulfill
the objectives of the Plan.
"Award Agreement" means a written agreement between the Company and a
Participant that sets forth the terms, conditions and limitations applicable to
an Award.
"Board" means the Board of Directors of the Company.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time.
"Committee" means such committee of the Board as is designated by the
Board to administer the Plan. The Committee shall be constituted to permit the
Plan to comply with Rule 16b-3.
"Common Stock" means the Class A Common Stock, par value $.10 per
share, of the Company.
"Director" means an individual serving as a member of the Board.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time.
"Fair Market Value" means, as of a particular date, (i) if the shares
of Common Stock are listed on a national securities exchange, the average
between the highest and lowest sales price per share of Common Stock on the
consolidated transaction reporting system for the principal such national
securities exchange on that date, or, if there shall have been no such sale so
reported on that date, on the last preceding date on which such a sale was so
reported, (ii) if the shares of Common Stock are not so listed but are quoted
in the NASDAQ National Market System, the average between the highest and
lowest sales price per share of Common Stock on the NASDAQ National Market
System on that date, or, if there shall have been no such sale so reported on
that date, on the last preceding date on which such a sale was so reported or
(iii) if the Common Stock is not so listed or quoted, the average between the
closing bid and asked price on that date, or, if there are no quotations
available for such date, on the last preceding date on which such quotations
shall be available, as reported by NASDAQ, or, if not reported by NASDAQ, by
the National Quotation Bureau, Inc.
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"Participant" means an employee of the Company or any of its
Subsidiaries to whom an Award has been made under this Plan.
"Rule 16b-3" means Rule 16b-3 promulgated under the Exchange Act, or
any successor rule.
"Subsidiary" means any corporation of which the Company directly or
indirectly owns shares representing more than 50% of the voting power of all
classes or series of capital stock of such corporation which have the right to
vote generally on matters submitted to a vote of the stockholders of such
corporation.
3. Eligibility. Employees of the Company and its Subsidiaries are
eligible for an Award under this Plan.
4. Common Stock Available for Awards. There shall be available
for Awards granted wholly or partly in Common Stock (including rights or
options which may be exercised for or settled in Common Stock) during the term
of this Plan an aggregate of 1,500,000 shares of Common Stock of which no more
than 600,000 shares will be used for Stock Awards. The Board of Directors and
the appropriate officers of the Company shall from time to time take whatever
actions are necessary to file required documents with governmental authorities
and stock exchanges and transaction reporting systems to make shares of Common
Stock available for issuance pursuant to Awards. Common Stock related to
Awards that are forfeited or terminated, expire unexercised, are settled in
cash in lieu of Stock or in a manner such that all or some of the shares
covered by an Award are not issued to a Participant, or are exchanged for
Awards that do not involve Common Stock, shall immediately become available for
Awards hereunder. The Committee may from time to time adopt and observe such
procedures concerning the counting of shares against the Plan maximum as it may
deem appropriate under Rule 16b-3.
5. Administration. This Plan shall be administered by the
Committee, which shall have full and exclusive power to interpret this Plan and
to adopt such rules, regulations and guidelines for carrying out this Plan as
it may deem necessary or proper, all of which powers shall be exercised in the
best interests of the Company and in keeping with the objectives of this Plan.
The Committee may, in its discretion, provide for the extension of the
exercisability of an Award, accelerate the vesting or exercisability of an
Award, eliminate or make less restrictive any restrictions contained in an
Award, waive any restriction or other provision of this Plan or an Award or
otherwise amend or modify an Award in any manner that is either (i) not adverse
to the Participant holding such Award or (ii) consented to by such Participant.
The Committee may correct any defect or supply any omission or reconcile any
inconsistency in this Plan or in any Award in the manner and to the extent the
Committee deems necessary or desirable to carry it into effect. Any decision
of the Committee in the interpretation and administration of this Plan shall
lie within its sole and absolute discretion and shall be final, conclusive and
binding on all parties concerned. No member of the Committee or officer of the
Company to whom it has delegated authority in accordance with the provisions of
Paragraph 6 of this Plan shall be liable for anything done or omitted to be
done by him or her, by any member of the Committee or by any officer of the
Company in connection with the performance of any duties under this Plan,
except for his or her own willful misconduct or as expressly provided by
statute. The Committee shall establish the vesting schedule, if any, for each
award. It is the intent of this Plan that any stock option grants will never
be repriced or reissued.
6. Delegation of Authority. The Committee may delegate to the
Chief Executive Officer and to other senior officers of the Company its duties
under this Plan pursuant to such conditions or limitations as the Committee may
establish, except that the Committee may not delegate to any person the
authority to grant Awards to, or take other action with respect to,
Participants who are subject to Section 16 of the Exchange Act.
7. Awards. The Committee shall determine the type or types of
Awards to be made to each Participant under this Plan. Each Award made
hereunder shall be embodied in an Award Agreement, which shall contain such
terms, conditions, performance requirements and limitations as shall be
determined by the Committee in its sole discretion and shall be signed by the
Participant and by the Chief Executive Officer, the
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Chief Operating Officer, or any Vice President of the Company for and on behalf
of the Company. Awards may consist of those listed in this Paragraph 7 and may
be granted singly, in combination or in tandem. Awards may also be made in
combination or in tandem with, in replacement of, or as alternatives to, grants
or rights under this Plan or any other employee plan of the Company or any of
its Subsidiaries, including the plan of any acquired entity. An Award may
provide for the granting or issuance of additional, replacement or alternative
Awards upon the occurrence of specified events, including the exercise of the
original Award. Notwithstanding anything herein to the contrary, no Participant
may be granted, during any calendar year, Awards consisting of stock options or
stock appreciation rights on more than 15% of the total number of shares of
Common Stock initially available for award under the Plan.
(a) Stock Option. An Award may consist of a right to purchase a
specified number of shares of Common Stock at a specified price that is not
less than the greater of (i) the Fair Market Value of the Common Stock on the
date of grant and (ii) the par value of the Common Stock on the date of grant.
A stock option may be in the form of an incentive stock option ("ISO") which,
in addition to being subject to applicable terms, conditions and limitations
established by the Committee, complies with Section 422 of the Code.
(b) Stock Appreciation Right. An Award may consist of a right to
receive a payment, in cash or Common Stock, equal to the excess of the Fair
Market Value or other specified valuation of a specified number of shares of
Common Stock on the date the stock appreciation right ("SAR") is exercised over
a specified strike price as set forth in the applicable Award Agreement.
(c) Stock Award. An Award may consist of Common Stock or may be
denominated in units of Common Stock. All or part of any stock award may be
subject to conditions established by the Committee, and set forth in the Award
Agreement, which may include, but are not limited to, continuous service with
the Company and its Subsidiaries, achievement of specific business objectives,
increases in specified indices, attaining specified growth rates and other
comparable measurements of performance. Such Awards may be based on Fair
Market Value or other specified valuations. The certificates evidencing shares
of Common Stock issued in connection with a stock award shall contain
appropriate legends and restrictions describing the terms and conditions of the
restrictions applicable thereto.
(d) Cash Award. An Award may be denominated in cash with the
amount of the eventual payment subject to future service and such other
restrictions and conditions as may be established by the Committee, and set
forth in the Award Agreement, including, but not limited to, continuous service
with the Company and its Subsidiaries, achievement of specific business
objectives, increases in specified indices, attaining specified growth rates
and other comparable measurements of performance.
8. Payment of Awards.
(a) General. Payment of Awards may be made in the form of cash or
Common Stock or combinations thereof and may include such restrictions as the
Committee shall determine, including in the case of Common Stock, restrictions
on transfer and forfeiture provisions. As used herein, "Restricted Stock"
means Common Stock that is restricted or subject to forfeiture provisions.
(b) Deferral. With the approval of the Committee, payments may be
deferred, either in the form of installments or a future lump sum payment. The
Committee may permit selected Participants to elect to defer payments of some
or all types of Awards in accordance with procedures established by the
Committee. Any deferred payment, whether elected by the Participant or
specified by the Award Agreement or by the Committee, may be forfeited if and
to the extent that the Award Agreement so provides.
(c) Dividends and Interest. Dividends or dividend equivalent
rights may be extended to and made part of any Award denominated in Common
Stock or units of Common Stock, subject to such terms, conditions and
restrictions as the Committee may establish. The Committee may also establish
rules and
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procedures for the crediting of interest on deferred cash payments and dividend
equivalents for deferred payment denominated in Common Stock or units of Common
Stock.
(d) Substitution of Awards. At the discretion of the Committee, a
Participant may be offered an election to substitute an Award for another Award
or Awards of the same or different type.
9. Stock Option Exercise. The price at which shares of Common
Stock may be purchased under a stock option shall be paid in full at the time
of exercise in cash or, if permitted by the Committee, by means of tendering
Common Stock or surrendering another Award, including Restricted Stock, valued
at Fair Market Value on the date of exercise, or any combination thereof. The
Committee shall determine acceptable methods for tendering Common Stock or
other Awards to exercise a stock option as it deems appropriate. If permitted
by the Committee, payment may be made by successive exercises by the
Participant. The Committee may provide for loans from the Company to permit
the exercise or purchase of Awards and may provide for procedures to permit the
exercise or purchase of Awards by use of the proceeds to be received from the
sale of Common Stock issuable pursuant to an Award. Unless otherwise provided
in the applicable Award Agreement, in the event shares of Restricted Stock are
tendered as consideration for the exercise of a stock option, a number of the
shares issued upon the exercise of the stock option, equal to the number of
shares of Restricted Stock used as consideration therefor, shall be subject to
the same restrictions as the Restricted Stock so submitted as well as any
additional restrictions that may be imposed by the Committee.
10. Tax Withholding. The Company shall have the right to deduct
applicable taxes from any Award payment and withhold, at the time of delivery
or vesting of cash or shares of Common Stock under this Plan, an appropriate
amount of cash or number of shares of Common Stock or a combination thereof for
payment of taxes required by law or to take such other action as may be
necessary in the opinion of the Company to satisfy all obligations for
withholding of such taxes. The Committee may also permit withholding to be
satisfied by the transfer to the Company of shares of Common Stock theretofore
owned by the holder of the Award with respect to which withholding is required.
If shares of Common Stock are used to satisfy tax withholding, such shares
shall be valued based on the Fair Market Value when the tax withholding is
required to be made.
11. Amendment, Modification, Suspension or Termination. The Board
may amend, modify, suspend or terminate this Plan for the purpose of meeting or
addressing any changes in legal requirements or for any other purpose permitted
by law except that (i) no amendment or alteration that would impair the rights
of any Participant under any Award previously granted to such Participant shall
be made without such Participant's consent and (ii) no amendment or alteration
shall be effective prior to approval by the Company's stockholders to the
extent such approval is then required pursuant to Rule 16b-3 in order to
preserve the applicability of any exemption provided by such rule to any Award
then outstanding (unless the holder of such Award consents) or to the extent
stockholder approval is otherwise required by applicable legal requirements.
12. Termination of Employment. Upon the termination of employment
by a Participant, any unexercised, deferred or unpaid Awards shall be treated
as provided in the specific Award Agreement evidencing the Award. In the event
of such a termination, the Committee may, in its discretion, provide for the
extension of the exercisability of an Award, accelerate the vesting or
exercisability of an Award, eliminate or make less restrictive any restrictions
contained in an Award, waive any restriction or other provision of this Plan or
an Award or otherwise amend or modify the Award in any manner that is either
(i) not adverse to such Participant or (ii) consented to by such Participant.
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13. Assignability. Unless otherwise determined by the Committee
and provided in the Award Agreement, no Award or any other benefit under this
Plan constituting a derivative security within the meaning of Rule 16a-1(c)
under the Exchange Act shall be assignable or otherwise transferable except by
will or the laws of descent and distribution or pursuant to a qualified
domestic relations order as defined by the Code or Title I of the Employee
Retirement Income Security Act, or the rules thereunder. The Committee may
prescribe and include in applicable Award Agreements other restrictions on
transfer. Any attempted assignment of an Award or any other benefit under this
Plan in violation of this Paragraph 13 shall be null and void.
14. Adjustments.
(a) The existence of outstanding Awards shall not affect in any
manner the right or power of the Company or its stockholders to make or
authorize any or all adjustments, recapitalizations, reorganizations or other
changes in the capital stock of the Company or its business or any merger or
consolidation of the Company, or any issue of bonds, debentures, preferred or
prior preference stock (whether or not such issue is prior to, on a parity with
or junior to the Common Stock) or the dissolution or liquidation of the
Company, or any sale or transfer of all or any part of its assets or business,
or any other corporate act or proceeding of any kind, whether or not of a
character similar to that of the acts or proceedings enumerated above.
(b) In the event of any subdivision or consolidation of outstanding
shares of Common Stock or declaration of a dividend payable in shares of Common
Stock or capital reorganization or reclassification or other transaction
involving an increase or reduction in the number of outstanding shares of
Common Stock, the Committee may adjust proportionally (i) the number of shares
of Common Stock reserved under this Plan and covered by outstanding Awards
denominated in Common Stock or units of Common Stock; (ii) the exercise or
other price in respect of such Awards; and (iii) the appropriate Fair Market
Value and other price determinations for such Awards. In the event of any
consolidation or merger of the Company with another corporation or entity or
the adoption by the Company of a plan of exchange affecting the Common Stock or
any distribution to holders of Common Stock of securities or property (other
than normal cash dividends or dividends payable in Common Stock), the Committee
shall make such adjustments or other provisions as it may deem equitable,
including adjustments to avoid fractional shares, to give proper effect to such
event. 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, regardless of whether in
a transaction to which Section 424(a) of the Code applies, by means of
substitution of new options for previously issued options or an assumption of
previously issued options, or to make provision for the acceleration of the
exercisability of, or lapse of restrictions with respect to, Awards and the
termination of unexercised options in connection with such transaction.
15. Restrictions. No Common Stock or other form of payment shall
be issued with respect to any Award unless the Company shall be satisfied based
on the advice of its counsel that such issuance will be in compliance with
applicable federal and state securities laws. It is the intent of the Company
that this Plan comply with Rule 16b-3 with respect to persons subject to
Section 16 of the Exchange Act unless otherwise provided herein or in an Award
Agreement, that any ambiguities or inconsistencies in the construction of this
Plan be interpreted to give effect to such intention, and that if any provision
of this Plan is found not to be in compliance with Rule 16b-3, such provision
shall be null and void to the extent required to permit this Plan to comply
with Rule 16b-3. Certificates evidencing shares of Common Stock delivered
under this Plan may be subject to such stop transfer orders and other
restrictions as the Committee may deem advisable under the rules, regulations
and other requirements of the Securities and Exchange Commission, any
securities exchange or transaction reporting system upon which the Common Stock
is then listed and any applicable federal and state securities law. The
Committee may cause a legend or legends to be placed upon any such certificates
to make appropriate reference to such restrictions.
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16. Unfunded Plan. Insofar as it provides for Awards of cash,
Common Stock or rights thereto, this Plan shall be unfunded. Although
bookkeeping accounts may be established with respect to Participants who are
entitled to cash, Common Stock or rights thereto 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
cash, Common Stock or rights thereto, nor shall this Plan be construed as
providing for such segregation, nor shall the Company nor the Board nor the
Committee be deemed to be a trustee of any cash, Common Stock or rights thereto
to be granted under this Plan. Any liability or obligation of the Company to
any Participant with respect to a grant of cash, Common Stock or rights thereto
under this Plan shall be based solely upon any contractual obligations that may
be created by this Plan and any Award Agreement, and no such liability or
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
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.
17. Governing Law. This Plan and all determinations made and
actions taken pursuant hereto, to the extent not otherwise governed by
mandatory provisions of the Code or the securities laws of the United States,
shall be governed by and construed in accordance with the laws of the State of
Delaware.
18. Effective Date of Plan. This Plan shall be effective as of the
date (the "Effective Date") it is approved by the Board of Directors of the
Company. Notwithstanding the foregoing, the adoption of this Plan is expressly
conditioned upon the approval by the holders of a majority of shares of Common
Stock present, or represented, and entitled to vote at a meeting of the
Company's stockholders held on or before December 17, 1994. If the
stockholders of the Company should fail so to approve this Plan prior to such
date, this Plan shall terminate and cease to be of any further force or effect
and all grants of Awards hereunder shall be null and void.