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EXHIBIT 4.1
PIONEER NATURAL RESOURCES COMPANY
EMPLOYEE STOCK PURCHASE PLAN
1. PURPOSE. The purpose of the Pioneer Natural Resources Company
Employee Stock Purchase Plan (the "PLAN") is to provide eligible employees with
an incentive to advance the interests of Pioneer Natural Resources Company
(the "COMPANY") by affording an opportunity to purchase stock of the Company at
a favorable price.
2. ADMINISTRATION OF THE PLAN. The Plan shall be administered by a
committee (the "COMMITTEE") of, and appointed by, the Board of Directors of the
Company (the "BOARD"). Subject to the provisions of the Plan, the Committee
shall interpret and construe the Plan and all options granted under the Plan,
shall make such rules as it deems necessary for the proper administration of
the Plan, shall make all other determinations necessary or advisable for the
administration of the Plan, including the determination of eligibility to
participate in the Plan and the amount of a participant's option under the
Plan, and shall correct any defect or supply any omission or reconcile any
inconsistency in the Plan or in any option granted under the Plan in the manner
and to the extent that the Committee deems desirable to carry the Plan or any
option into effect. The Committee shall, in its sole discretion exercised in
good faith, make such decisions or determinations and take such actions as it
deems appropriate, and all such decisions, determinations and actions taken or
made by the Committee pursuant to this and the other paragraphs of the Plan
shall be conclusive on all parties. The Committee shall not be liable for any
decision, determination or action taken in good faith in connection with the
administration of the Plan.
3. PARTICIPATING COMPANIES. Each present and future parent or
subsidiary corporation of the Company (within the meaning of Sections 424(e)
and (f) of the Internal Revenue Code of 1986, as amended (the "CODE")) that is
eligible by law to participate in the Plan shall be a "Participating Company"
during the period that such corporation is such a parent or subsidiary
corporation; provided, however, that the Committee may at any time and from
time to time, in its sole discretion, terminate a Participating Company's Plan
participation. Any Participating Company may, by appropriate action of its
board of directors, terminate its participation in the Plan. Transfer of
employment among the Company and Participating Companies (and among any other
parent or subsidiary corporation of the Company) shall not be considered a
termination of employment hereunder.
4. ELIGIBILITY. All employees of the Company and the Participating
Companies who have been employed by the Company or any Participating Company
(including any predecessor company) for at least six (6) months (including any
authorized leave of absence meeting the requirements of Treasury Regulation ss.
1.421 -7(h)(2)) as of the applicable date of grant (defined below) and who are
customarily employed at least 20 hours per week and at least five (5) months
per year shall be eligible to participate in the Plan; provided, however, that
no option shall be granted to an employee if such employee, immediately after
the option is granted, owns stock possessing five percent or more of the total
combined voting power or value of all classes of stock of the Company or of its
parent or subsidiary corporation (within the meaning of Sections 423(b)(3) and
424(d) of the Code) ("ELIGIBLE EMPLOYEE").
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5. STOCK SUBJECT TO THE PLAN. Subject to the provisions of paragraph
12 (relating to adjustment upon changes in stock), the aggregate number of
shares which may be sold pursuant to options granted under the Plan shall not
exceed 750,000 shares of the authorized common stock, par value $.01 per share,
of the Company (the "STOCK"), which shares may be unissued shares, reacquired
shares, or shares bought on the market for purposes of the Plan. Should any
option granted under the Plan expire or terminate prior to its exercise in
full, the shares theretofore subject to such option may again be subject to an
option granted under the Plan. Any shares which are not subject to outstanding
options upon the termination of the Plan shall cease to be subject to the Plan.
6. GRANT OF OPTIONS. (a) General Statement; "Date Of Grant;" "Option
Period;" "Date Of Exercise." Upon the effective date of the Plan and continuing
while the Plan remains in force, the Company shall offer options under the Plan
to all Eligible Employees to purchase shares of Stock. Except as otherwise
determined by the Committee, these options shall be granted on January 1, 1998,
and, thereafter, on the first day of January of each subsequent year (each of
which dates is herein referred to as a "DATE OF GRANT"). The term of each
option granted shall be for a period of nine (9) months beginning on date of
grant and ending on September 30 (each such nine (9)-month period is herein
referred to as an "OPTION PERIOD"). The last day of each option period is
herein referred to as a "date of exercise." The number of shares subject to
each option shall be the quotient of the sum of the payroll deductions withheld
on behalf of each participant in accordance with subparagraph 6(b), the
payments made by such participant pursuant to subparagraph 6(f) during the
option period and any amount carried forward from the preceding option period
pursuant to subparagraph 7(a), divided by the "option price" (defined in
subparagraph 7(b) of the Stock, excluding all fractions; provided, however,
that the maximum number of shares that may be subject to any option may not
exceed one thousand (1000) (subject to adjustment as provided in paragraph 12).
(b) Election To Participate; Payroll Deduction Authorization. Except
as provided in subparagraph 6(f), an Eligible Employee may participate in the
Plan only by means of payroll deduction. Except as provided in subparagraph
6(g), each Eligible Employee who elects to participate in the Plan (each such
participating Eligible Employee being a "PARTICIPANT") shall deliver to the
Company, within the time period prescribed by the Committee, a written payroll
deduction authorization on a form prepared by the Committee whereby he gives
notice of his election to participate in the Plan as of the next following date
of grant, and whereby he designates an integral percentage or specific amount
of his "eligible compensation" (as defined in subparagraph 6(d)) to be deducted
from his compensation for each pay period and credited to a book entry account
established in his name. The designated percentage or specific amount may not
result in a deduction during any payroll period of an amount less than $20.00.
The designated percentage or specific amount may not exceed either of the
following: (i) 15% of the amount of eligible compensation from which the
deduction is made; or (ii) an amount which will result in noncompliance with
the $25,000 limitation stated in subparagraph 6(e).
(c) Changes in Payroll Authorization. Except as provided in
subparagraph 8(a), the payroll deduction authorization referred to in
subparagraph 6(b) may not be changed during the option period.
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(d) "Eligible Compensation" Defined. The term "eligible
compensation" means the gross (before taxes are withheld) total of all wages,
salaries, commissions and bonuses received during the option period, except
that such term shall include elective contributions made on an employee's
behalf by the Company or a Participating Company that are not includable in
income under Section 125 or Section 402(e)(3) of the Code. Notwithstanding the
foregoing, "eligible compensation" shall not include (i) employer contributions
to or payments from any deferred compensation program, whether such program is
qualified under Section 401(a) of the Code (other than amounts considered as
employer contributions under Section 402(e)(3) of the Code) or nonqualified,
(ii) amounts realized from the receipt or exercise of a stock option that is
not an incentive stock option within the meaning of Section 422 of the Code,
(iii) amounts realized at the time property described in Section 83 of the Code
is freely transferable or no longer subject to a substantial risk of
forfeiture, (iv) amounts realized as a result of an election described in
Section 83(b) of the Code, and (v) any amount realized as a result of a
disqualifying disposition within the meaning of Section 421(a) of the Code.
(e) $25,000 Limitation. No Eligible Employee shall be granted an
option under the Plan to the extent such grant would permit him to purchase
Stock under the Plan and under all other employee stock purchase plans of the
Company and its parent and subsidiary corporations (as such terms are defined
in Section 424(e) and (f) of the Code) to accrue at a rate which exceeds
$25,000 of the Fair Market Value of Stock (determined at the time the option is
granted) for each calendar year in which any such option granted to such
employee is outstanding at any time (within the meaning of Section 423(b)(8) of
the Code).
(f) Leaves of Absence. During a paid leave of absence approved by the
Company and meeting the requirements of Treasury Regulation ss. 1.421-7(h)(2),
a participant's elected payroll deductions shall continue. If a participant
takes an unpaid leave of absence that is approved by the Company or a
Participating Company and meets the requirements of Treasury Regulation ss.
1.421-7(h)(2), then such participant may continue participation in the Plan by
cash payments to the Company on his normal pay days equal to the reduction in
his payroll deductions caused by his leave. If a participant on such leave
fails to make such payments, or if a participant takes a leave of absence that
is not described in the preceding provisions of this subparagraph 6(f), then
the Committee shall determine whether the participant shall be considered to
have withdrawn from the Plan pursuant to the provisions of paragraph 8 hereof
or whether the participant's payroll deductions shall remain subject to the
Plan and used to exercise options on the next following date of exercise.
(g) Continuing Election. A participant (i) who has elected to
participate in the Plan pursuant to subparagraph 6(b) as of a date of grant and
(ii) who takes no action to change or revoke such election as of the next
following date of grant and/or as of any subsequent date of grant prior to any
such respective date of grant, shall be deemed to have made the same election,
including the same attendant payroll deduction authorization, for such next
following and/or subsequent date(s) of grant as was in effect for the date of
grant for which he made such election to participate. A participant who wants
to discontinue participation in the Plan for a subsequent option period shall
deliver to the Company a notice of withdrawal pursuant to paragraph 8, at least
thirty (30) days prior to the beginning of the option period.
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7. EXERCISE OF OPTIONS. (a) General Statement. Each Eligible
Employee who is a participant in the Plan, automatically and without any act on
his part, shall be deemed to have exercised his option on each date of exercise
to the extent that the cash balance then in his account under the Plan is
sufficient to purchase at the "option price" (as defined in subparagraph 7(b))
whole shares of Stock. Any balance remaining in his account after payment of
the purchase price of those whole shares shall be carried forward and used
towards the purchase of whole shares in the next following option period.
(b) "Option Price" Defined. The option price per share of Stock to be
paid by each Eligible Employee on each exercise of his option shall be an
amount equal to the lesser of 85% of the Fair Market Value of the Stock on the
date of exercise or on the date of grant. For all purposes under the Plan, the
"fair market value" of a share of Stock means, for a particular day:
(i) If shares of Stock of the same class are listed or
admitted to unlisted trading privileges on any national or regional
securities exchange at the date of determining the Fair Market Value,
then the last reported sale price, regular way, on the composite tape
of that exchange on that business day or, if no such sale takes place
on that business day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or
admitted to unlisted trading privileges on that securities exchange
or, if no such closing prices are available for that day, the last
reported sale price, regular way, on the composite tape of that
exchange on the last business day before the date in question; or
(ii) If shares of Stock of the same class are not listed or
admitted to unlisted trading privileges as provided in subparagraph
(i) and if sales prices for shares of Stock of the same class in the
over- the-counter market are reported by the National Association of
Securities Dealers, Inc. Automated Quotations, Inc. ("NASDAQ")
National Market System (or a similar system then in use) at the date
of determining the Fair Market Value, then the last reported sales
price so reported on that business day or, if no such sale takes place
on that business day, the average of the high bid and low asked prices
so reported or, if no such prices are available for that day, the last
reported sale price so reported on the last business day before the
date in question; or
(iii) If shares of Stock of the same class are not listed or
admitted to unlisted trading privileges as provided in subparagraph
(i) and sales prices for shares of Stock of the same class are not
reported by the NASDAQ National Market System (or a similar system
then in use) as provided in subparagraph (ii), and if bid and asked
prices for shares of Stock of the same class in the over-the-counter
market are reported by NASDAQ (or, if not so reported, by the National
Quotation Bureau Incorporated) at the date of determining the Fair
Market Value, then the average of the high bid and low asked prices on
that business day or, if no such prices are available for that day,
the average of the high bid and low asked prices on the last business
day before the date in question; or
(iv) If shares of Stock of the same class are not listed or
admitted to unlisted trading privileges as provided in subparagraph
(i) and sales prices or bid and asked prices therefor
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are not reported by NASDAQ (or the National Quotation Bureau
Incorporated) as provided in subparagraph (ii) or subparagraph (iii)
at the date of determining the Fair Market Value, then the value
determined in good faith by the Committee, which determination shall
be conclusive for all purposes; or
(v) If shares of Stock of the same class are listed or
admitted to unlisted trading privileges as provided in subparagraph
(i) or sales prices or bid and asked prices therefor are reported by
NASDAQ (or the National Quotation Bureau Incorporated) as provided in
subparagraph (ii) or subparagraph (iii) at the date of determining the
Fair Market Value, but the volume of trading is so low that the Board
of Directors determines in good faith that such prices are not
indicative of the fair value of the Stock, then the value determined
in good faith by the Committee, which determination shall be
conclusive for all purposes notwithstanding the provisions of
subparagraphs (i), (ii) or (iii).
(c) Delivery of Share Certificates. As soon as practicable after each
date of exercise, the Company shall arrange for the delivery to each
participant, as appropriate, of a certificate representing the number of whole
shares of Stock purchased upon exercise of the option. In the event the
Company is required to obtain from any commission or agency authority to issue
any shares of Stock hereunder, the Company shall seek to obtain such authority.
Inability of the Company to obtain from any such commission or agency authority
which counsel for the Company deems necessary for the lawful issuance of any
shares of Stock shall relieve the Company from liability to any participant in
the Plan except to return to the participant the amount of the balance in the
participant's account. The Company may cause the Stock certificates issued in
connection with the exercise of options under the Plan to bear such legend or
legends, and the Company may take such other actions, as it deems appropriate
in order to reflect the provisions of this subparagraph 7(c) and to assure
compliance with applicable securities laws. Neither the Company nor the
Committee shall have any liability with respect to a delay in the delivery of
Stock or a certificate pursuant to this subparagraph 7(c).
8. WITHDRAWAL FROM THE PLAN. (a) General Statement. Any participant
may withdraw in whole from the Plan at any time prior to 30 days before the
exercise date relating to a particular option period. Partial withdrawals shall
not be permitted. A participant who wishes to withdraw from the Plan must
timely deliver to the Company a notice of withdrawal on a form prepared by the
Committee. The Company, promptly following the time when the notice of
withdrawal is delivered, shall refund to the participant the amount of the cash
balance in his account under the Plan; and thereupon, automatically and without
any further act on his part, his payroll deduction authorization and his
interest in unexercised options under the Plan shall terminate.
(b) Eligibility Following Withdrawal. A participant who withdraws
from the Plan shall not be eligible to participate in the Plan during the then
current option period (if any), but shall be eligible to participate again in
the Plan in a subsequent option period (provided that he is otherwise an
Eligible Employee at such time).
9. TERMINATION OF EMPLOYMENT. If the employment of a participant
terminates for any reason whatsoever, his participation in the Plan
automatically and without any act on his part shall
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terminate as of the date of the termination of his employment. The Company
shall refund to him the amount of the cash balance in his account under the
Plan, and thereupon his interest in unexercised options under the Plan shall
terminate.
10. RESTRICTION UPON ASSIGNMENT OF OPTION. An option granted under
the Plan shall not be pledged, assigned or transferred otherwise than by will
or the laws of descent and distribution. Each option shall be exercisable, only
by the participant to whom granted during such participant's lifetime. The
Company shall not recognize and shall be under no duty to recognize any
assignment or purported assignment by a participant of his option or of any
rights under his option, and any such attempt may be treated by the Company as
an election to withdraw from the Plan the notice for which has been delivered
to the Company.
11. NO RIGHTS OF STOCKHOLDER UNTIL CERTIFICATE ISSUES. With respect
to shares of Stock subject to an option, a participant shall not be deemed to
be a stockholder, and he shall not have any of the rights or privileges of a
stockholder. A participant shall have the rights and privileges of a
stockholder upon, but not until, a certificate for shares has been issued on
his behalf following exercise of his option.
12. (a) ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. In the event of
any change in the number or kind of outstanding shares of Stock subject to
options hereunder effected without receipt of consideration therefor by the
Company, by reason of a stock dividend, stock split, combination, exchange of
shares or other recapitalization, merger, or otherwise, in which the Company is
the surviving corporation, an appropriate and proportionate adjustment shall be
made in the number or kind of shares as to which options are or may be granted
hereunder. A corresponding adjustment changing the number or kind of shares
allocated to unexercised options or portions thereof, which shall have been
granted prior to any such change, shall likewise be made. Any such adjustment,
however, in the outstanding options shall be made without change in the total
price applicable to the unexercised portion of the option but with a
corresponding adjustment, if appropriate, in the price for each share of Stock
covered by the option. In the event of a dispute concerning such adjustment,
the decision of the Committee shall be conclusive. The number of shares
subject to any option granted hereunder shall be automatically reduced by any
fraction included therein which results from any adjustment made pursuant to
this Section 12(a).
(b) CHANGE OF CONTROL. Further, in the event of a Change of Control
(as defined below) of the Company, the Committee shall, at its option,(i)
substitute for the shares of the Company subject to the unexercised portions of
such outstanding options an appropriate number of shares of each class of stock
or other securities of the reorganized or merged or consolidated corporation
which were distributed to the stockholders of the Company with respect to the
same class of shares of the Company (or, as appropriate, in the case of an
acquisition of the Company by another corporation, substitute the shares of the
acquiring corporation for the shares of the Company), or (ii) cancel all such
options as of the effective date of any such transaction by giving notice to
each holder thereof or his personal representative of its intention to do so
and by permitting the holders thereof to exercise of all such outstanding
options, without regard to any other provisions of the Plan, during the 30-day
period immediately preceding such effective date, or (iii) allow the options
granted under the Plan to remain outstanding without any modifications or
amendments.
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(c) CHANGE OF CONTROL DEFINED. As used in subparagraph 12(b),
"Change of Control" means the occurrence of any of the following events:
(i) The acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange
Act) (a "PERSON") of beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of 20% or more of either (x)
the then outstanding shares of common stock of the Company (the
"OUTSTANDING COMPANY COMMON STOCK") or (y) the combined voting power
of the then outstanding voting securities of the Company entitled to
vote generally in the election of directors (the "OUTSTANDING COMPANY
VOTING SECURITIES"); provided, however, that for purposes of this
subsection (i), the following acquisitions shall not constitute a
Change of Control; (A) any acquisition directly from the Company, (B)
any acquisition by the Company, (C) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Company
or any corporation controlled by the Company, or (D) any acquisition
by any corporation pursuant to a transaction which complies with
clauses (A), (B) and (C) of paragraph (iii) below; or
(ii) Individuals who, as of the date of this Plan, constitute
the Board (the "INCUMBENT BOARD") cease for any reason to constitute
at least a majority of the Board; provided, however, that any
individual who becomes a director subsequent to the date of this Plan
and whose election, appointment by the Board, or nomination for
election by the Company's stockholders, was approved by a vote of at
least a majority of the directors then comprising the Incumbent Board
shall be considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such individual
whose initial assumption of office occurs as a result of an actual or
threatened election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Incumbent Board;
or
(iii) Consummation of a reorganization, merger or
consolidation or sale or other disposition of all or substantially all
of the assets of the Company or an acquisition of assets of another
corporation (a "BUSINESS COMBINATION"), in each case, unless,
following such Business Combination, (A) all or substantially all of
the individuals and entities who were the beneficial owners,
respectively, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 50%
of, respectively, the then outstanding shares of common stock and the
combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as the case
may be, of the corporation resulting from such Business Combination
(including, without limitation, a corporation which as a result of
such transaction owns the Company or all or substantially all of the
Company's assets either directly or through one or more subsidiaries)
in substantially the same proportions as their ownership, immediately
prior to such Business Combination of the Outstanding Company Common
Stock and Outstanding Company Voting Securities, as the case may be,
(B) no Person (excluding any employee benefit plan (or related trust)
of the Company or the corporation resulting from such Business
Combination) beneficially owns, directly or indirectly, 20% or more
of, respectively, the then
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outstanding shares of common stock of the corporation resulting from
such Business Combination or the combined voting power of the then
outstanding voting securities of such corporation except to the extent
that such ownership results solely from the ownership of the Company
that existed prior to the Business Combination and (C) at least a
majority of the members of the board of directors of the corporation
resulting from such Business Combination were members of the Incumbent
Board at the time of the execution of the initial agreement, or of the
action of the Board, providing for such Business Combination; or
(iv) Approval by the stockholders of the Company of a
complete liquidation or dissolution of the Company.
13. USE OF FUNDS; NO INTEREST PAID. All funds received or held by the
Company under the Plan shall be included in the general funds of the Company
free of any trust or other restriction, and may be used for any corporate
purpose. No interest shall be paid to any participant or credited to his
account under the Plan.
14. TERM OF THE PLAN. The Plan shall be effective as of January 1,
1998, provided the Plan is approved by the stockholders of the Company within
12 months of the date of adoption by the Board. Notwithstanding any provision
in the Plan, no option granted under the Plan shall be exercisable prior to
such stockholder approval, and, if the stockholders of the Company do not
approve the Plan within 12 months after its adoption by the Board, then the
Plan shall automatically terminate. If not sooner terminated under the
provisions of paragraph 15, the Plan shall terminate upon and no further
options shall be granted after December 31, 2007.
15. AMENDMENT OR TERMINATION OF THE PLAN. The Board in its discretion
may terminate the Plan at any time with respect to any shares for which options
have not theretofore been granted. The Board shall have the right to alter or
amend the Plan or any part thereof from time to time; provided, that no change
in any option theretofore granted may be made which would impair the rights of
the participant without the consent of such participant; and provided, further,
that the Board may not make any alteration or amendment which would materially
increase the benefits accruing to participants under the Plan, increase the
aggregate number of shares which may be issued pursuant to the provisions of
the Plan (other than as a result of the anti-dilution provisions of the Plan),
change the class of individuals eligible to receive options under the Plan,
extend the term of the Plan, cause options issued under the Plan to fail to
meet the requirements for employee stock purchase plans as defined in Section
423 of the Code, or otherwise modify the requirements as to eligibility for
participation in the Plan without the approval of the stockholders of the
Company.
16. SECURITIES LAWS. The Company shall not be obligated to issue any
Stock pursuant to any option granted under the Plan at any time when the shares
covered by such option have not been registered under the Securities Act of
1933, as amended, and such other state and federal laws, rules or regulations
as the Company or the Committee deems applicable and, in the opinion of legal
counsel for the Company, there is no exemption from the registration
requirements of such laws, rules or regulations available for the issuance and
sale of such shares. Further, all Stock acquired pursuant to the Plan shall be
subject to the Company's policy or policies, if any, concerning compliance with
securities laws and regulations, as the same may be amended from time to time.
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17. NO RESTRICTION ON CORPORATE ACTION. Nothing contained in the Plan
shall be construed to prevent the Company or any subsidiary from taking any
corporate action which is deemed by the Company or such subsidiary to be
appropriate or in its best interest, whether or not such action would have an
adverse effect on the Plan or any award made under the Plan. No employee,
beneficiary or other person shall have any claim against the Company or any
subsidiary as a result of any such action.
EXECUTED this 7th day of August, 1997.
PIONEER NATURAL RESOURCES COMPANY
By: /s/ MARK L. WITHROW
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Mark L. Withrow
Executive Vice President and
General Counsel
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