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EXHIBIT 4.6
1994 NONEMPLOYEE DIRECTOR STOCK OPTION PLAN
OF
CABOT OIL & GAS CORPORATION
1. Purpose of the Plan. This Nonemployee Director Stock Option
Plan (the "Plan") is intended as an incentive to retain and attract persons of
training, experience and ability to serve as independent directors on the Board
of Directors of Cabot Oil & Gas Corporation, a Delaware corporation (the
"Company"), to encourage the sense of proprietorship of such persons and to
stimulate the active interest of such persons in the development and financial
success of the Company. It is further intended that the options granted
pursuant to this Plan (the "Options") will be nonqualified options within the
meaning of Section 83 of the Internal Revenue Code of 1986, as amended (the
"Code").
2. Stockholder Approval. All Options granted pursuant to this Plan
are subject to, and may not be exercised before, the approval of this Plan by
the affirmative vote of the holders of a majority of the outstanding shares of
the Class A Common Stock, par value $.10 per share (the "Common Stock"), of the
Company that are present, or represented, and entitled to vote at a meeting of
the Company's stockholders.
3. Designation of Participants; Automatic Grant of Options. Each
director of the Company who is not an employee of the Company or any Subsidiary
(as hereinafter defined) of the Company (any such director being hereinafter
referred to as a "Nonemployee Director") shall be granted Options as described
hereunder. Each Nonemployee Director who is a director as of the Effective
Date (as hereinafter defined) and who has not already received a grant of
options under the 1990 Nonemployee Director Stock Option Plan shall
automatically be granted Options to purchase 10,000 shares of Common Stock at
the Effective Date. Thereafter, each individual who becomes a Nonemployee
Director shall automatically be granted Options to purchase 10,000 shares of
Common Stock (subject to adjustment as provided in Paragraph 10) on the date
such person first becomes a Nonemployee Director. Furthermore, upon the
reelection to a new term of office on the Company's Board of Directors, each
Nonemployee Director shall automatically be granted Options to purchase an
additional 5,000 shares of Common Stock (subject to adjustment as provided in
Paragraph 10) on such date. Notwithstanding the foregoing, in the case of any
grant of Options made on a date subsequent to the Effective Date, such grant
shall only be made if the number of shares subject to future grant under this
Plan is sufficient to make all automatic grants required to be made pursuant to
this Plan on such date of grant. As used herein, the term "Subsidiary" of the
Company shall mean 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.
4. Option Agreement. Each Option granted hereunder shall be
embodied in a written option agreement ("Option Agreement"), which shall be
subject to the terms and conditions set forth above and shall be signed by the
Optionee and by the Chief Executive Officer, the Chief Operating Officer, or
any Vice President of the Company for and on behalf of the Company. Such an
Option Agreement shall be in the form attached as Exhibit A hereto.
5. Common Stock Reserved for the Plan. Subject to adjustment as
provided in Paragraph 10 hereof, a total of 100,000 shares of Common Stock
shall be reserved for issuance upon the exercise of Options granted pursuant to
this Plan. The shares subject to the Plan shall consist of unissued shares or
previously issued shares reacquired and held by the Company, or any parent or
subsidiary of the Company, in its treasury. The Board of Directors and the
appropriate officers of the Company shall from time to time take
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whatever actions are necessary to execute, acknowledge, file and deliver any
documents required to be filed with or delivered to any governmental authority
or any stock exchange or transaction reporting system on which shares of Common
Stock are listed or quoted in order to make shares of Common Stock available
for issuance to an Optionee (as hereinafter defined) pursuant to this Plan.
Common Stock subject to Options that are forfeited or terminated or expire
unexercised in such a manner that all or some of the shares subject thereto are
not issued to an Optionee shall immediately become available for the granting
of Options. As used herein, the term "Optionee" shall mean any Nonemployee
Director to whom Options are granted hereunder.
6. Option Price.
(a) The purchase price of each share of Common Stock that is subject
to an Option granted pursuant to this Plan shall be 100% of the Fair Market
Value of such share of Common Stock on the date the Option is granted.
(b) The Fair Market Value of a share of Common Stock on a particular
date shall be deemed to be (i) if the shares of Common Stock are listed on a
national securities exchange, the average of the highest and lowest sales price
per share of Common Stock on 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 of 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 of 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.
7. Option Period. Each Option granted pursuant to this Plan shall
terminate and be of no force and effect with respect to any shares of Common
Stock not purchased by the Optionee upon the earliest to occur of the
following: (a) the expiration of five years following the date upon which the
Option is granted; (b) the expiration of one year following the date upon which
the Optionee ceases to be a Nonemployee Director by reason of death, disability
or mandatory retirement; or (c) the expiration of three months following the
date on which the Optionee ceases to be a Nonemployee Director for any reason
other than death, disability or mandatory retirement.
8. Exercise of Options.
(a) Options granted pursuant to this Plan shall be exercisable, on a
cumulative basis, as follows: (i) with respect to 33 1/3% of the total number
of shares of Common Stock initially subject to any Option, such Option shall be
exercisable on the first anniversary of the date of grant; and (ii) with
respect to the remaining shares of Common Stock subject to any Option, such
Option shall be exercisable with respect to an additional 33 1/3% of the total
number of shares initially subject thereto as of the second and third
anniversaries of the date of the grant.
(b) An Option may be exercised solely by the Optionee during his
lifetime or after his death by the person or persons entitled thereto under his
will or the laws of descent and distribution.
(c) In the event that an Optionee ceases to serve as a Nonemployee
Director for any reason other than death, disability or mandatory retirement,
an Option granted to such Optionee may be exercised only to the extent such
Option was exercisable at the time he ceased to serve in such capacity.
(d) In the event that an Optionee ceases to serve as a Nonemployee
Director by reason of death, disability or mandatory retirement, at a time when
an Option granted hereunder is still in force and unexpired under the terms of
Paragraph 7 hereof, each such unmatured Option shall be accelerated. Such
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acceleration shall be effective as of the date of death, disability or
retirement, as appropriate, and each Option so accelerated shall be exercisable
in full for so long as it is still in force and unexpired under the terms of
Paragraph 7 hereof.
(e) The purchase price of the shares as to which an Option is
exercised shall be paid in full at the time of the exercise. Such purchase
price shall be payable in cash or by means of tendering theretofore owned
Common Stock which has been held by the Optionee for more than six months,
valued at Fair Market Value on the date of exercise, or any combination
thereof. An Optionee may also exercise an Option by use of the proceeds to be
received from the sale of Common Stock issuable pursuant to the Option. No
holder of an Option shall be, or have any of the rights or privileges of, a
stockholder of the Company in respect of any shares subject to any Option
unless and until certificates evidencing such shares shall have been issued by
the Company to such holder.
9. Assignability. No Option 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. Any
attempted assignment of an Option in violation of this Paragraph 9 shall be
null and void.
10. Adjustments.
(a) The existence of outstanding Options 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 Board of Directors may adjust proportionally (i) the number
of shares of Common Stock reserved under these Options; and (ii) the exercise
price of such Options. 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 Board of Directors 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 Board of Directors 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, the termination of
unexercised options in connection with such transaction.
(c) An Option shall become fully exercisable upon a Change in
Control (as hereinafter defined) of the Company. For purposes of this Plan, a
"Change of Control" shall be conclusively deemed to have occurred if (and only
if) any of the following events shall have occurred: (a) there shall have
occurred an event required to be reported in response to Item 6(e) of Schedule
14A of Regulation 14A (or in response to any similar item on any similar
schedule or form) promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), whether or not the Company is then subject to
such reporting requirement; (b) any "person" (as such term is used in Sections
13(d) and 14(d) of the Exchange Act) shall have become the "beneficial owner"
(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 20% or more of the combined voting power
of the Company's then outstanding voting
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securities without prior approval of at least two-thirds of the members of the
Board of Directors in office immediately prior to such person's attaining such
percentage interest; (c) the Company is a party to a merger, consolidation,
sale of assets or other reorganization, or a proxy contest, as a consequence of
which members of the Board of Directors in office immediately prior to such
transaction or event constitute less than a majority of the Board of Directors
thereafter or (d) during any period of two consecutive years, individuals who
at the beginning of such period constituted the Board of Directors (including
for this purpose any new director whose election or nomination for election by
the Company's stockholders was approved by a vote of at least two-thirds of the
directors then still in office who were directors at the beginning of such
period) cease for any reason to constitute at least a majority of the Board of
Directors.
11. Purchase for Investment. Unless the Options and shares of
Common Stock covered by this Plan have been registered under the Securities Act
of 1933, as amended, each person exercising an Option under this Plan may be
required by the Company to give a representation in writing in form and
substance satisfactory to the Company to the effect that he is acquiring such
shares for his own account for investment and not with a view to, or for sale
in connection with, the distribution of such shares or any part thereof.
12. Taxes. The Company may make such provisions as it may deem
appropriate for the withholding of any taxes that it determines is required in
connection with any Options granted to any Optionee hereunder.
13. Amendments or Termination. The Board of Directors of the
Company may amend, alter or discontinue this Plan, except that (a) no amendment
or alteration that would impair the rights of any Optionee under any Option
that he has been granted shall be made without his consent, (b) 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 (or any
successor provision) under the Exchange Act in order to preserve the
applicability of any exemption provided by such rule to any Option then
outstanding (unless the holder of such Option consents) or to the extent
stockholder approval is otherwise required by applicable legal requirements,
and (c) the Plan shall not be amended more than once every six months to the
extent such limitation is required by Rule 16b-3(c)(2)(ii) (or any successor
provision) under the Exchange Act as then in effect.
14. Government Regulations. This Plan, and the granting and
exercise of Options hereunder, and the obligation of the Company to sell and
deliver shares of Common Stock under such Options, shall be subject to all
applicable laws, rules and regulations, and to such approvals on the part of
any governmental agencies or national securities exchanges or transaction
reporting systems as may be required.
15. 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.
16. 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 options hereunder shall be null and void.
17. Miscellaneous. The granting of any Option shall not impose upon
the Company, the Board of Directors of the Company or any other directors of
the Company any obligation to nominate any Optionee for election as a director
and the right of the stockholders of the Company to remove any person as a
director of the Company shall not be diminished or affected by reason of the
fact that an Option has been granted to such person.