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EXHIBIT 4.3
1996 MIDLAND RESOURCES, INC. LONG-TERM INCENTIVE PLAN
ARTICLE 1. - PURPOSE
1.1 PURPOSE. The purpose of the 1996 Midland Resources, Inc., Long-Term
Incentive Plan (the "Plan") is to further the growth and financial success of
Midland Resources, Inc., a Texas corporation (the "Company") and its
Subsidiaries by aligning the personal interests of key employees, through the
ownership of shares of the Company's Common Stock and through their incentives,
to those of the Company's shareholders. The Plan is further intended to provide
flexibility to the Company in its ability to compensate key employees and to
motivate, attract and retain the services of such key employees. The Plan
permits the granting of Options, Stock Appreciation Rights, Restricted Stock and
other Stock-based Awards.
ARTICLE 2. - DEFINITIONS
2.1 AGREEMENT. Agreement shall mean the agreement as described in
Section 4.4 of the Plan between the Company and the Participant under which such
Participant receives an Award pursuant to this Plan.
2.2 AWARD. Award shall mean an incentive award granted under the Plan,
whether in the form of Options, Stock Appreciation Rights, Restricted Stock or
any other form of Stock-Based consideration (which may provide for settlement in
shares of Stock, cash and/or a combination thereof) determined by the Committee
to be consistent with the purposes of the Plan, including but not limited to,
restricted units, phantom stock, performance awards, performance units,
performance shares, stock appreciation shares, stock acquisition rights,
valuation protection rights or any other type of stock-based award or
combination or derivative of various types of awards.
2.3 BOARD OF DIRECTORS. Board or Board of Directors shall mean the
Board of Directors of the Company.
2.4 CODE. Code shall mean the Internal Revenue Code of 1986, as
amended, unless otherwise specifically provided herein.
2.5 COMMITTEE. Committee shall mean the Compensation Committee of the
Board. No member of the Committee, during the one year prior to which membership
or during such membership, shall be granted or awarded equity securities
pursuant to the Plan or any other plan of the Company or any of its
Subsidiaries, except as permitted by Rule 16b-3 as promulgated under the
Exchange Act.
2.6 COMPANY. Company shall mean Midland Resources, Inc., a Texas
corporation, and any successor thereof.
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2.7 COVERED EMPLOYEE. Covered Employee means, for any Plan Year, the
Company's Chief Executive Officer (or any individual acting in such capacity)
and any employee of the Company or its Subsidiaries who, in the discretion of
the Committee for purposes of determining those employees who are "covered
employees" under Section 162(m) of the Code, is likely to be among the four
other highest compensated officers of the Company for such plan year.
2.8 EFFECTIVE DATE. Effective Date shall have the meaning assigned to
such term in Section 14.01 hereof.
2.9 EXCHANGE ACT. Exchange Act shall mean the Securities Exchange Act
of 1934, as amended.
2.10 FAIR MARKET VALUE. Fair Market Value of the Stock shall mean the
last sale price at which Stock is traded on any given date, or if no Stock is
traded on such date, the most recent prior date on which Stock was traded, as
reported in The Wall Street Journal for the NASDAQ Small-Cap Issues or such
other reporting system as may be selected by the Committee from time to time.
2.11 INCENTIVE STOCK OPTION. Incentive Stock Option shall have the
meaning given to it by Section 422(b) of the Code and as further defined in
Article VI hereof.
2.12 NONSTATUTORY STOCK OPTION. Nonstatutory Stock Option shall mean
any Option granted by the Company pursuant to this Plan which is not an
Incentive Stock Option.
2.13 OPTION. Option shall mean an option granted by the Company to
purchase Stock pursuant to the provisions of this Plan and the Agreement
executed pursuant hereto.
2.14 OPTION PRICE. Option Price shall mean the price per share of Stock
purchasable under an Option. The Option Price shall not be less than the Fair
Market Value on the date of grant.
2.15 PARTICIPANT. Participant shall mean an employee or former employee
of the Company or one of its Subsidiaries (or a member of the Board under terms
permitted under Rule 16b-3 of the Securities & Exchange Act) who has received an
Award granted by the Committee hereunder.
2.16 RESTRICTED STOCK AWARDS. A Restricted Stock Award shall mean a
grant made by the Committee entitling the Participant to acquire, either at no
cost or for a purchase price determined by the Committee at the time of grant,
shares of Stock subject to such restrictions and conditions as the Committee may
determine at the time of grant ("Restricted Stock").
2.17 STOCK. Stock shall mean common stock, par value $.001 per share,
of the Company.
2.18 STOCK APPRECIATION RIGHTS. A Stock Appreciation Right shall mean a
grant entitling the Participant to receive an amount in cash, or shares of
Stock, or a combination thereof, having a
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value equal to (or if the Committee shall so determine at the time of grant,
less than) the excess of the fair Market Value of a share of Stock on the date
of exercise over the Fair Market Value of a share of Stock on the date of grant
(or over the Option Price, if the Stock Appreciation Right was granted in tandem
with an Option) multiplied by the number of shares with respect to which the
Stock Appreciation Right shall have been exercised, with the Committee having
sole discretion to determine the form for payment. A Stock Appreciation Right is
further defined in Article 7 hereof.
2.19 SUBSIDIARY. Subsidiary shall have the same meaning as defined in
Section 424 of the Code.
ARTICLE 3. - PARTICIPATION
3.1 PARTICIPATION. Subject to the provisions of the Plan, the Committee
may grant Awards under this Plan to any officer or other key employee of the
Company or Subsidiary who, in its sole discretion, is expected to contribute to
its success and to members of the Board under terms permitted under Rule 16b-3
of the Securities Act that do not result in any such grant preventing a
disinterested Director from continuing to be such. Awards may be granted to the
same individual on more than one occasion.
ARTICLE 4. - SHARES SUBJECT TO THE PLAN
4.1 LIMITATIONS.
4.2 Subject to adjustments pursuant to the provisions of Section 4.3
hereof, the number of shares of Stock or Stock equivalents which may be granted
to Participants under all forms of Awards shall not exceed 400,000 shares. These
shares may consist in whole or in part of authorized and unissued Stock or
Treasury Stock.
(a) For purposes of this Section 4 1, the shares of Stock that shall be
counted toward such limitation shall include all Stock:
4.2.1.1 issued or issuable pursuant to Options that
have been or may be exercised;
4.2.1.2 subject to Stock Appreciation Rights that
have been or may be exercised (other than
Stock Appreciation Rights granted in tandem
with outstanding Options);
4.2.1.3 issued as, or subject to issuance as,
Restricted Stock;
4.2.1.4 used to calculate payments of dividends and
dividend equivalents in conjunction with any
outstanding Awards; and
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4.2.1.5 to the extent that an Award is settled in
cash or any form other than in Stock, the
appropriate shares of Stock represented by
such settlement of the Awards, as determined
by the Committee.
4.3 AVAILABILITY OF SHARES ONCE ISSUED UNDER PLAN. Once grants of
Awards have lapsed, terminated or are forfeited, the Committee shall have the
sole discretion to issue a new grant to any Participant, covering the number of
shares to which such lapsed, terminated or forfeited grant related; provided,
however, that the Participant has received no monetary benefits of ownership
therefrom, such as dividends.
4.4 ANTI-DILUTION ADJUSTMENTS. In the event that the outstanding shares
of Stock are changed into or exchanged for a different number or kind of share
or other securities of the Company or of another corporation by reason of
merger, consolidation, other reorganization, recapitalization, reclassification,
combination of shares, stock split-up, or stock dividend, the Committee shall
make such corresponding adjustment, if any, as is appropriate, adjusting the
number and kind of shares which may be granted under the Plan, the maximum
number and kind of shares which may be granted to any one eligible Participant,
and the number, the Option Price, and the kind of shares or property subject to
each outstanding grant.
4.5 GRANTS AND AGREEMENTS. Each grant of an Award under this Plan shall
be evidenced by a written Agreement dated as of the date of the grant and
executed by the Company and the Participant. This Agreement shall set forth the
terms and conditions of such Award, as may be determined by the Committee
consistent with this Plan, and if such Agreement related to the grant of an
Option, shall indicate whether the Option is intended to be an Incentive Stock
Option or a Nonstatutory Stock Option.
ARTICLE 5. - OPTIONS
5.1 OPTION EXERCISE. Subject to Federal and state statutes then
applicable, the terms and procedures by which an Option may be exercised shall
be set forth in the Participant's Agreement or in procedures established by the
Committee; provided, however, that no Option shall be exercisable later than ten
(10) years (or five (5) years as required by Section 422(b)(6) of the Code)
after date granted if an Incentive Stock Option. The Committee may permit
payment of the Option Price to be made through the tender of cash or securities,
the withholding of Stock or cash to be received through Awards, or any other
arrangement satisfactory to the Committee.
5.2 NONSTATUTORY STOCK OPTIONS. The Committee may grant Nonstatutory
Stock Options under this Plan. Such Nonstatutory Stock Options must comply with
all requirements of this Plan except for those contained in Article 6, Article
7, and Article 8 hereof.
5.3 VESTING OF OPTIONS. The Agreement shall specify the date or dates
on which the Participant may begin to exercise all or a portion of his Option.
Notwithstanding the terms of any Agreement, the Committee may, at any time,
accelerate such date or dates and otherwise waive or amend any conditions of the
Option; provided, however, that with respect to an Incentive Stock
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Option, the Committee shall not take any action which would constitute a
modification, extension or renewal (within the meaning of Section 424(h) of the
Code) of such Incentive Stock Option.
ARTICLE 6. - INCENTIVE STOCK OPTIONS
6.1 GENERAL. All Incentive Stock Options shall comply with all the
restrictions and limitations set forth in Section 422 of the Code and this Plan.
No Incentive Stock Option shall be granted to an individual if, at the time the
Option is granted, such individual owns stock possessing more than 10% of the
total combined voting power of all classes of stock of the Company or of its
parent or subsidiary corporation, within the meaning of Section 422(b)(6) of the
Code, unless (i) at the time such Incentive Stock Option is granted the Option
Price is at least 110% of the Fair Market Value of the Stock subject to the
Option and (ii) such Incentive Stock Option by its terms is not exercisable
after the expiration of five years from the date of grant. To the extent that
the aggregate Fair Market Value (determined at the time the respective Incentive
Stock Option is granted) of stock with respect to which Incentive Stock Options
are exercisable for the first time by any individual during any calendar year
under all incentive stock option plans of the Company and its parent and
Subsidiaries exceeds $100,000, such excess Incentive Stock Options shall be
treated as Options which do not constitute incentive Stock Options. The
Committee shall determine, in accordance with applicable provisions of the Code,
Treasury Regulations and other administrative pronouncements, which of an
Optionee's Incentive Stock Options will not constitute Incentive Stock Options
because of such limitation and shall notify the Optionee of such determination
as soon as practicable after such determination.
ARTICLE 7. - STOCK APPRECIATION RIGHTS
7.1 GRANT AND EXERCISE OF STOCK APPRECIATION RIGHTS. Stock Appreciation
Rights may be granted to Participants by the Committee in tandem with, or
independently of, any Option granted pursuant to Article 5 or Article 6 of this
Plan. In the case of a Stock Appreciation Right granted in tandem with a
Nonstatutory Stock Option, such Stock Appreciation Right may be granted either
at or after the time of the grant of such Nonstatutory Stock Option. In the case
of a Stock Appreciation Right granted in tandem with an Incentive Stock Option,
such Stock Appreciation Right may be granted only at the time of the grant of
such Incentive Stock Option.
A Stock Appreciation Right, or the applicable portion thereof granted
in tandem with an Option, shall terminate and no longer be exercisable upon the
termination or exercise of the related Option. However, if a Stock Appreciation
Right is granted with respect to less than the full number of shares covered by
a related option, such Stock Appreciation Right shall terminate only if and to
the extent that the number of shares covered by the exercise or termination of
the related Option exceeds the number of shares not covered by such Stock
Appreciation Right.
7.2 TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS. Stock
Appreciation Rights shall be subject to such terms and conditions as shall be
determined from time to time by the Committee and embodied in the Agreements and
in procedures established by the Committee. The Committee may, at any time,
accelerate the exercisability of any Stock Appreciation Right and
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otherwise waive or amend any conditions of the grant of a Stock Appreciation
Right; provided, however, that with respect to any Stock Appreciation Right
granted in tandem of an Incentive Stock Option, the Committee shall not take any
action which would constitute a modification, extension or renewal (within the
meaning of Section 424(h) of the Code) of such Incentive Stock Option.
ARTICLE 8. - RESTRICTED STOCK AWARDS
8.1 AGREEMENT. (a) If the purchase of Restricted Stock is required by
the Agreement, a Participant who is granted a Restricted Stock Award shall have
rights with respect to such grant provided the Participant shall have accepted
the grant within sixty (60) days (or such shorter date as the Committee may
specify) following the date of the grant, by making payment to the Company by
certified bank check or other instrument acceptable to the Committee in an
amount equal to the specified purchase price, if any, of the shares covered by
the grant and by executing and delivering to the Company an Agreement in such
form as the Committee shall determine.
(b) RIGHTS AS A SHAREHOLDER. After the issuance of the Restricted Stock
has been recorded in the stock ledger of the Company and
8.1.2.1 upon complying with Section 8.1(a) above, if
the purchase of Restricted Stock is required
by the Agreement, or
8.1.2.2 immediately, if no purchase of Restricted
Stock is required by the Agreement,
a Participant shall have all the rights of a shareholder with respect to such
Restricted Stock including voting and dividend rights, subject to
non-transferability restrictions and Company purchase or forfeiture rights
described in this Section and Section 8.1(c), and subject to such other
conditions (including but not limited to, any conditions on voting and dividend
rights) as are contained in the Agreement. Unless the Committee shall otherwise
determine, certificates evidencing shares of Restricted Stock shall remain in
the possession of the Company until such shares are vested as provided in
Section 8.1(d) below and the Agreement.
(c) RESTRICTIONS. Shares of Restricted Stock may not be sold, assigned,
transferred, pledged, or otherwise encumbered or disposed of except as
specifically provided herein. Restrictions on shares of Restricted Stock shall
be set forth in an Agreement and may include such vesting restrictions as the
Committee shall determine, including but not limited to, restrictions related to
timing, profitability of the Company, and growth of the share price. In the
event of a Participant's termination of employment with the Company and its
Subsidiaries for any reason (including death) prior to the date shares of
Restricted Stock awarded to such Participant become vested, the Company shall
have the right, at the discretion of the Committee, to repurchase such shares at
their purchase price, or to require forfeiture of such shares to the Company if
acquired at no cost, from such Participant or the Participant's legal
representative.
(d) VESTING OF RESTRICTED STOCK. The Committee at the time of grant
shall specify the date or dates (which may depend upon or be related to the
attainment of performance goals and other
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conditions) on which the restrictions imposed upon the Restricted Stock and the
Company's right of repurchase or forfeiture shall lapse. The Committee at any
time may accelerate such date or dates and otherwise waive or amend any
conditions of the grant. A Participant may transfer or dispose of any Restricted
Stock that has vested, subject to any Federal and state laws then applicable,
specifically securities laws.
8.2 PERFORMANCE UNITS. A performance unit is a promise by the Company
to make a payment to, or on behalf of, the Participant, which may be contingent
upon the achievement of one or more performance targets specified by the
Committee. A performance unit is a right to receive or be credited with an
amount that may be determined by reference to Common Stock, other securities of
the Company or an Affiliate, or by reference to dollar amounts. Performance
units shall be subject to such conditions with respect to vesting, timing,
amount and payment as the Committee shall determine at the time of the Award.
Performance units shall be payable in cash. Performance unit Awards may be made
without cash payment by, or other out-of-pocket consideration from, the
Participant, either on the date of grant or the date of payment. By way of
example, but not limitation, performance units, called "EPS Units," may be
granted in tandem with Awards of stock options and the credited amount with
respect to an EPS Unit shall be determined with reference to the difference
between (i) the Company's annual earnings per share of Common Stock, as adjusted
to exclude items that the Committee determines to be appropriate for purposes of
the Award, and (ii) an amount specified by the Committee that reflects the level
of such earnings at the time of the Award and the principal manner of payment
shall be by application toward the option price upon the Participant's exercise
of the stock option.
8.3 PERFORMANCE SHARES. A performance share is a promise by the Company
to make a payment to the Participant, which may be contingent upon the
achievement of one or more performance targets specified by the Committee at the
time of the award. A performance share is a right to receive an amount that may
be determined by reference to Common Stock, other securities of the Company or
an Affiliate, or by reference to dollar amounts. Performance shares shall be
subject to such conditions with respect to vesting, timing, and amount of
payments as the Committee shall determine at the time of the Award. Performance
shares shall be payable in Common Stock, or other securities of the Company or
an Affiliate. Performance share Awards may be made without cash payment by, or
other out-of-pocket consideration from the Participant, either on the date of
grant or the date of payment.
8.4 DIVIDEND EQUIVALENTS. A dividend equivalent is the right to receive
an amount equal to the dividends paid on a specified number of shares of Common
Stock. A dividend equivalent shall be payable in cash.
8.5 OTHER AWARDS. The Committee may, from time to time, grant such
other Awards as the Committee may determine, provided that no such Award shall
be inconsistent with the terms of this Plan.
Amounts received pursuant to cash-only Awards granted under Sections
7.1 and 8.2 through 8.5 of this Plan, or any combination thereof, if intending
to comply with Rule 16a-1(c)(3)(i) under
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the Exchange Act or any successor provision, for each plan year to any
Participant who is subject to Section 16 of the Exchange Act shall be limited to
a maximum value of 500% of the Participant's annual salary at the rate in effect
on the first day of such plan year. For purposes of the preceding sentence, if a
Participant who is not a Covered Employee, but is subject to Section 16 of the
Exchange Act, does not receive a salary, the Participant shall be deemed to have
an annual salary of $250,000.
ARTICLE 9. - STOCK CERTIFICATES
9.1 STOCK CERTIFICATES. The Company shall not be required to issue or
deliver any certificate for shares of Stock under this Plan prior to fulfillment
of all of the following conditions:
(a) the admission of such shares to listing on all stock exchanges on
which the Stock is then listed, if any;
(b) the completion of any registration or other qualification of such
shares under any Federal or state law, under the rules or regulations of the
Securities and Exchange Commission, or under any other governmental regulatory
agency which the Committee shall in its sole discretion determine to be
necessary or advisable;
(c) the obtaining of any approval or other clearance from any Federal
or state governmental agency which the Committee shall in its sole discretion
determine to be necessary or advisable; and
(d) the lapse of such reasonable period of time following the exercise
of the grant as the Committee from time to time may establish for reasons of
administrative convenience.
If these conditions are not satisfied, the employee may lose his rights
to such Stock as determined by the Committee.
Separate stock certificates shall be issued by the Company for those
shares acquired pursuant to the exercise of an Incentive Stock Option and for
those shares acquired pursuant to the exercise of a Nonstatutory Stock Option.
ARTICLE 10. - DIVIDENDS
10.1 DIVIDENDS. At the time of each grant of an Award (other then an
Option Stock Appreciation Right or Restricted Stock) the Committee may, in its
sole discretion, determine whether the grant shall provide a dividend or a
dividend equivalent and the terms and conditions under which any such dividend
or dividend equivalent is to be provided, including but not limited to,
permitting or requiring immediate payment, deferral or investment of dividends
or dividend equivalents.
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ARTICLE 11. - PLAN ADMINISTRATION
11.1 PLAN ADMINISTRATION. The Plan and all Agreements shall be
administered, and all grants under this Plan shall be awarded, by the Committee.
The Committee shall have full authority and absolute sole discretion to:
(a) determine, consistent with provisions of the Plan, which of the
employees shall be granted Awards; the form and terms of such Awards; the timing
of such grants; the number of shares subject to each Award and the Option Price
of Stock covered by each Option (if applicable); and the period over which the
Awards shall become and remain exercisable (if applicable);
(b) construe and interpret the Plan and any Agreement or instrument
entered into under the Plan;
(c) determine the terms and provisions of each respective Agreement,
which need not be identical;
(d) make all other determinations and take all other actions deemed
necessary or advisable for the proper administration of the Plan; and
(e) adopt, alter, and repeal such rules, guidelines, and practices for
administration of the Plan and for its own acts and proceedings as it shall deem
advisable; to interpret the terms and provisions of the Plan and any grant
(including related Agreements); to decide all disputes arising in connection
with the Plan; and to otherwise supervise the administration of the Plan.
11.2 PERFORMANCE. The Committee may establish minimum performance
targets with respect to each Award. Performance targets may be based on
financial criteria, such as the Fair Market Value of Common Stock or other
measures of financial performance of the Company, or may be based on the
performance of a division or Subsidiary of the Company, or the performance of an
individual Participant. Notwithstanding anything in this Plan to the contrary,
any Awards of stock options or similar rights, stock appreciation rights,
performance units, or performance shares shall contain the restrictions on
assignability to the extent required by Rule 16b-3 under the Exchange Act or any
successor provision.
11.3 DECISIONS BINDING. All determinations and decisions by the
Committee pursuant to the Plan and all related orders or resolutions of the
Board of Directors shall be final, conclusive and binding on all persons,
including the Company, its Subsidiaries, its shareholders, Participants and
their estates and beneficiaries.
ARTICLE 12. - MISCELLANEOUS PROVISIONS
12.1 APPLICABLE LAW. To the extent not preempted by any laws of the
United States, the Plan shall be construed, regulated, interpreted and
administered according to the laws of the State of Texas.
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12.2 EXPENSES. The cost of Awards and the expenses of administering the
Plan shall be borne by the Company.
12.3 GENDER AND NUMBER. Unless the context clearly requires otherwise,
the masculine pronoun whenever used shall include the feminine and neuter
pronoun, the singular shall include the plural, and vice versa.
12.4 HEADINGS NOT PART OF PLAN. Headings of Articles and Sections are
inserted for convenience of reference only.
12.5 INDEMNIFICATION. No member of the Board of Directors or the
Committee shall be liable for any action or determination taken or made in good
faith with respect to this Plan nor shall any member of the Board of Directors
or the Committee be liable for any Agreement issued pursuant to this Plan or any
grants under it. Each member of the Board of Directors and the Committee shall
be indemnified by the Company against any losses incurred in such administration
of the Plan, unless his action constitutes gross negligence or willful
misconduct.
12.6 LIMITATION OF RIGHTS. Neither the adoption and maintenance of the
Plan or any Agreement nor anything contained herein shall, with respect to any
Participant, be deemed to:
(a) limit the right of the Company or any Subsidiary to discharge or
discipline any such person, or otherwise terminate or modify the terms of his
employment; or
(b) create any contract or other right or interest under the Plan other
than as specifically provided in the Plan and an Agreement.
12.7 NONTRANSFERABILITY. An Award shall not be transferable by the
Participant otherwise than by will or the laws of descent and distribution.
During the lifetime of the Participant, such Award shall be exercisable or
perfected only by the Participant or his guardian or legal representative in
accordance with the terms of this Plan and the Agreement.
12.8 OTHER COMPENSATION PLANS. The adoption of the Plan shall not
affect any other existing or future incentive or compensation plans for
directors, officers or employees of the Company or its Subsidiaries. Moreover,
the adoption of this Plan shall not preclude the Company or its Subsidiaries
from:
(a) establishing any other forms of incentive or other compensation for
directors, officers or employees of the Company or its Subsidiaries; or
(b) assuming any forms of incentive or other compensation of any person
or entity in connection with the acquisition or the business or assets, in whole
or in part, of any person or entity.
12.9 PLAN BINDING ON SUCCESSORS. This Plan shall be binding upon the
successors of the Company.
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12.10 TAX WITHHOLDING. Each Participant shall, no later than the date
as of which the value of a grant or of any Stock or other amount received
thereunder first becomes includable in the gross income of the Participant for
Federal income tax purposes, pay to the Company, or make arrangements
satisfactory to the Committee regarding payment of any Federal, state, or local
taxes of any kind required by law to be withheld with respect to such income.
The Committee may permit or require payment of such taxes to be made through the
tender of cash or Stock, the withholding of Stock or cash to be received through
Awards or any other arrangement satisfactory to the Committee. The Company and
its Subsidiaries shall, to the extent permitted by law, have the right to deduct
any such taxes from any payment of any kind otherwise due to the Participant.
12.11 SECURITIES LAWS. Notwithstanding anything to the contrary
expressed in the Plan, any provisions that vary from or conflict with any
applicable Federal or state securities laws (including any regulations
promulgated thereunder) shall be deemed to be modified to conform to and comply
with such laws. Without limiting the generality of the foregoing, it is the
intention of the Company that the Plan shall comply in all respect with Rule
16b-3 under the Exchange Act and, if any Plan provision is later found not to be
in compliance with Section 16 of the Exchange Act, the provision shall be deemed
null and void, and in all events the Plan shall be construed in favor of its
meeting the requirements of Rule 16b-3. Notwithstanding anything in the Plan to
the Contrary, the Board, in its absolute discretion, may bifurcate the Plan so
as to restrict, limit or condition the use of any provision of the Plan to
Participants who are officers subject to Section 16 of the Exchange Act without
so restricting, limiting or conditioning the Plan with respect to other
Participants.
12.12 SEVERABILITY. In the event any provision of the Plan shall be
held illegal or invalid for any reason, the illegality or invalidity shall not
affect the remaining provisions of the Plan, and the Plan shall be construed and
enforced as though the illegal or invalid provision had not been included.
12.13 UNFUNDED STATUS OF THE PLAN. The Plan is intended to be unfunded.
With respect to any payments as to which a Participant has a fixed and vested
interest but which are not yet made to a Participant by the Company, nothing
contained herein shall give any Participant any rights that are greater than
those of a general creditor of the Company. The adoption of this Plan and any
setting aside of amounts by the Company with which to discharge its obligations
hereunder shall not be deemed to create a trust.
12.14 FRACTIONAL SHARES. No Option may at any time be exercised with
respect to a fractional share. In the event shares of Stock are issued pursuant
to exercise of a Stock Appreciation Right, no fractional shares shall be issued;
however, a fractional Stock Appreciation Right may be exercised for cash.
12.15 RIGHT OF DISCHARGE RESERVED. Nothing in this Plan or in any Award
shall confer upon any employee or other individual the right to continue in the
employment or service of the Company or any Subsidiary or affect any right that
the Company or any Subsidiary may have to terminate the employment or service of
any such employee or other individual at any time for any reason.
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ARTICLE 13. - CHANGE OF CONTROL
13.1 CHANGE IN CONTROL. In the event of a Change in Control of the
Company, all Awards granted under the Plan that are still outstanding and not
yet exercisable or are subject to restrictions, shall, unless otherwise provided
for in the related Agreements, become immediately exercisable, and all
restrictions shall be removed, as of the first date that the Change in Control
has been deemed to have occurred, and shall remain as such for the remaining
life of the Award as provided herein and within the provisions of the related
Agreements.
For purposes of this Section 13.1, a Change in Control of the Company
shall be deemed to have occurred if the conditions set forth in any one or more
of the following shall have been satisfied:
(a) any "person", other than Deas H. Warley III, as such term is used
in Sections 13(d) and 14(d) of the Exchange Act (other than the Company, any
trustee or other fiduciary holding securities under an employee benefit plan of
the Company or any corporation owned, directly or indirectly, by the
shareholders of the Company in substantially the same proportions as their
ownership of stock of the Company), is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing thirty percent (30%) or more of the
combined voting power of the Company's then outstanding securities;
(b) during any period of two consecutive years (not including any
period prior to the Effective Date of the Plan), individuals who at the
beginning of such period constitute the Board of Directors, and any new director
(other than a director designated by a person who has entered into an agreement
with the Company to effect a transaction described in paragraph (A), (B) or (C)
of this Section 13.01) whose election by the Board of Directors or nomination
for election by the Company's shareholders was approved by a vote of a least
two-thirds (2/3) of the directors then still in office who either were director,
at the beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute at least a majority
thereof; or
(c) the shareholders of the Company approve a merger or consolidation
of the Company with any other person, other than (i) a merger or consolidation
which would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities for the surviving
entity) more than fifty percent (50%) of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation, or (ii) a merger in which no "person" (as defined
above) acquires more than thirty percent (30%) of the combined voting power of
the Company's then outstanding securities; or
(d) the shareholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets (or any transaction
having a similar effect).
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ARTICLE 14. - EFFECTIVE DATE AND PLAN AMENDMENTS TERMINATION
14.1 EFFECTIVE DATE. This Plan shall become effective upon the approval
of the shareholders. The date of such approval is herein called the "Effective
Date". All Awards granted under the Plan shall be granted on or before the tenth
anniversary of the Effective Date.
14.2 TERMINATION, AMENDMENT AND MODIFICATION OF PLAN. The Board of
Directors may at any time terminate or suspend, and may at any time and from
time to time and in any respect amend or modify, the Plan; provided, however,
that no such action of the Board of Directors shall be taken without approval of
the Company's shareholders if such approval is required to comply with Rule
16b-3 under the Exchange Act or Section 422 of the Code, or any successor
provision.
[EFFECTIVE AS OF THE 1996 ANNUAL MEETING OF SHAREHOLDERS OF MIDLAND
RESOURCES, INC., HELD ON MAY 31, 1996.]
MIDLAND RESOURCES, INC.
By: /s/ Deas H. Warley III
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Chairman of the Board of Directors
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