1
EXHIBIT 4.4
MIDLAND RESOURCES, INC.
1995 DIRECTORS' STOCK OPTION PLAN
PREAMBLE. The Board of Directors of Midland Resources, Inc. adopted the
hereinbelow described 1995 Directors' Stock Option Plan effective as of April
10, 1995 and it was approved by the shareholders on May 19, 1995 with an
effective date for all purposes of April 10, 1995.
1. PURPOSE
The purpose of this 1995 Directors' Stock Option Plan (the "Plan") is
to give those members of the Board of Directors of Midland Resources, Inc. (the
"Company") who are not employees of the Company ("Eligible Director") an
opportunity to acquire shares of the common stock of the Company, $.001 par
value ("Common Stock"), to provide an incentive for such directors to continue
to promote the best interests of the Company and enhance growth, success and
long-term performance.
2. ADMINISTRATION.
(a) BOARD OF DIRECTORS. The Plan shall be administered by the
Board of Directors of the Company (the "Board"), which, to the
extent it shall determine, may delegate its powers with
respect to the administration of the Plan (except its powers
under Section 12(c)) to a committee of directors (the
"Committee") appointed by the Board and composed of not less
than two members of the Board, none of whom can be an Eligible
Director. If the Board chooses to appoint a Committee,
references hereinafter to the Board (except in Section 12(c))
shall be deemed to refer to the Committee. Notwithstanding
the preceding provisions of this Section, no member of the
Board may exercise discretion with respect to, or participate
in, the administration of the Plan if, at any time within one
year prior to such exercise or participation, he or she has
received stock, stock options, stock appreciation rights or
any other derivative security pursuant to the Plan.
(b) POWERS. Within the limits of the express provisions of the
Plan, the Board shall determine the limitations, restrictions
and conditions applicable to any such award. In making such
determinations, the Board may take into account the nature of
the services rendered by such directors, their present and
potential contributions to the Company's success and such
other factors as the Board in its discretion shall deem
relevant.
(c) INTERPRETATIONS. Subject to the express provisions of the
Plan, the Board may interpret the Plan, prescribe, amend and
rescind rules and regulations relating to it, determine the
terms and provisions of the respective awards and make all
other determinations it deems necessary or advisable for the
administration of the Plan.
2
(d) DETERMINATIONS. The determinations of the Board on all
matters regarding the Plan shall be conclusive. A member of
the Board shall only be liable for any action taken or
determination made in bad faith.
3. AWARDS UNDER THE PLAN.
(a) TYPE OF AWARD. Awards under the Plan may be granted as
Nonstatutory Stock Options, as described in Section 4.
Nonstatutory Stock Options shall be referred to herein as
"Stock Options."
(b) MAXIMUM LIMITATIONS. The aggregate number of shares of Common
Stock available for grant under the Plan is 100,000, subject
to adjustment pursuant to Section 8. Shares of Common Stock
issued pursuant to the Plan may be either authorized but
unissued shares or shares now or hereafter held in the
treasury of the Company. In the event that, prior to the end
of the period during which Stock Options may be granted under
the Plan, any Stock Option under the Plan expires unexercised
or is terminated, surrendered or canceled without being
exercised, in whole or in part, for any reason, the number of
shares theretofore subject to such Stock Option or the
unexercised, terminated, forfeited or unearned portion
thereof, shall be added to the remaining number of shares of
Common stock available for grant as a Stock Option under the
Plan, including a grant to a former holder of such Stock
Option, upon such terms and conditions as the Board shall
determine, which terms may be more or less favorable than
those applicable to such former Stock Option.
(c) ANNUAL AWARDS. Eligible Directors shall be entitled to
receive a Stock Option award for 10,000 shares upon their
election or re-election to the Board at the Company's annual
meeting of shareholders, or should any annual meeting of
shareholders not be held in a calendar year, then upon the
election or re-election of an Eligible Director at a special
meeting of Shareholders. Following the grant of the awards in
Section 3(d), the first annual award will not occur until the
annual meeting of shareholders held in 1996.
(d) INITIAL AWARD. Subject to approval of the Plan, an initial
award was made April 10, 1995 of a Stock Option for 15,000
shares to Robert R. Donnelly and a Stock Option for 5,000
shares to Sam R. Brock.
4. STOCK OPTIONS.
(a) CONDITIONS. Stock Options may be granted under the Plan for
the purchase of shares of Common Stock. Stock Options shall
be in such form and upon such terms and conditions as the
Board shall from time to time determine, subject to the
following.
2
3
(i) OPTION PRICE. The price per share of Common Stock
subject to an Option (the "Option Price") shall not
be less than the fair market value of Common Stock.
The Board of Directors also determines the manner in
which the Option Price of an Option may be paid,
which may include the tender of cash or securities or
the withholding of Common Stock or cash to be
received through grants or any other arrangements
satisfactory to the Board of Directors.
(ii) TERM OF OPTIONS. No Stock Option shall be
exercisable after the date ten (10) years and one (1)
day from the date such Stock Option is granted.
(b) FORM. The form of the stock option agreement shall be subject
to paragraph (a) immediately above, be substantially in the
form as Exhibit 1 hereto.
5. PROVISIONS APPLICABLE TO STOCK OPTIONS.
(a) EXERCISE. Stock Options shall be subject to such terms and
conditions, shall be exercisable at such time or times, and
shall be evidenced by such form of written option agreement
between the optionee and the Company, as the Board shall
determine; provided, that such determinations are not
inconsistent with the other provisions of the Plan.
(b) MANNER OF EXERCISE OF OPTIONS AND PAYMENT FOR COMMON STOCK.
Stock Options may be exercised by an optionee by giving
written notice to the Secretary of the Company stating the
number of shares of Common Stock with respect to which the
Stock Option is being exercised and tendering payment
therefor. At the time that a Stock Option granted under the
Plan, or any part thereof, is exercised, payment for the
Common Stock issuable thereupon shall be made in full in cash
or by certified check or, if the Board in its discretion
agrees to accept, in shares of Common Stock of the Company
(the number of such shares paid for each share subject to the
Stock Option, or part thereof, being exercised shall be
determined by dividing the option price by the fair market
value per share of the Common Stock on the date of exercise).
As soon as reasonably possible following such exercise, a
certificate representing shares of Common Stock purchased,
registered in the name of the optionee, shall be delivered to
the optionee.
6. TRANSFERABILITY.
No Stock Option may be transferred, assigned, pledged or hypothecated
(whether by operation of law or otherwise), except as provided by will or the
applicable laws of descent or distribution, and no Stock Option shall be
subject to execution, attachment or similar process. Any attempted assignment,
transfer, pledge, hypothecation or other disposition of a Stock Option, or levy
of attachment or similar process upon the Stock Option not specifically
permitted herein shall be null
3
4
and void and without effect. A Stock Option may be exercised only by an
Eligible Director in his or her lifetime, or pursuant to Section 11(c), by his
or her estate or the person who acquires the right to exercise such Stock
Option upon his or her death by bequest or inheritance.
7. ADJUSTMENT PROVISIONS.
The aggregate number of shares of Common Stock with respect to which
Stock Options may be granted, the aggregate number of shares of Common Stock
subject to each outstanding Stock Option, and the option price per share of
each such Stock Option, may all be appropriately adjusted as the Board may
determine for any increase or decrease in the number of shares of issued Common
Stock resulting from a subdivision or consolidation of shares, whether through
reorganization, recapitalization, stock split-up, stock distribution or
combination of shares, or the payment of a share dividend or other increase or
decrease in the number of such shares outstanding effected without receipt of
consideration by the Company. Adjustments under this Section 7 shall be made
according to the sole discretion of the Board, and its decisions shall be
binding and conclusive.
8. DISSOLUTION, MERGER AND CONSOLIDATION.
Except as otherwise provided in Section 6, upon the dissolution or
liquidation of the Company, or upon a merger or consolidation of the Company in
which the Company is not the surviving corporation, each Stock Option granted
hereunder shall expire as of the effective date of such transaction; provided,
however, that the Board shall give at least 30 days prior written notice of
such event to each optionee during which time he or she shall have a right to
exercise his or her (1) vested or (2) if specifically provided in the option
grant, vested and not vested, wholly or partially unexercised Stock Option
(without regard to installment exercise limitations, if any) and, subject to
prior expiration pursuant to Section 10(b) or (c), each Stock Option shall be
exercisable after receipt of such written notice and prior to the effective
date of such transaction.
9. EFFECTIVE DATE AND CONDITIONS SUBSEQUENT TO EFFECTIVE DATE.
The Plan shall become effective on the date of the approval of the
Plan by the holders of a majority of the shares of Common Stock of the Company,
and the Plan shall be null and void and of no effect if such condition is not
fulfilled, and in such event each Stock Option granted hereunder shall,
notwithstanding any of the preceding provisions of the Plan, be null and void
and of no effect. No grant or award shall be made under the Plan more than ten
(10) years from the date of shareholder approval hereof; provided, however,
that the Plan and all Stock Options granted under the Plan prior to such date
shall remain in effect and subject to adjustment and amendment as herein
provided until they have been satisfied or terminated in accordance with the
terms of the respective grants or awards and the related agreements.
4
5
10. TERMINATION OF DIRECTORSHIP.
(a) Each Stock Option shall, unless sooner expired pursuant to
Section 11(b) or (c) below, expire on the first to occur of
the date one day after the tenth anniversary of the date of
grant thereof or the expiration date set forth in the
applicable option agreement.
(b) A Stock Option shall expire on the first to occur of the
applicable date set forth in paragraph (a) next above or
ninety (90) days after the date that the Eligible Director
ceases to be a director of the Company for any reason other
than death or disability. Notwithstanding the preceding
provisions of this paragraph, the Board, in its sole
discretion, may, be written notice given to a former Eligible
Director, permit the former director to exercise Stock
Options during a period which period shall not exceed ninety
(90) days. In no event, however, may the Board permit a
former director to exercise a Stock Option after the
expiration date contained in the agreement evidencing such
Stock Option.
(c) If an Eligible Director terminates his position by reason of
disability (as determined by the Board) or by reason of death,
his or her Stock Options, if any, shall expire on the first to
occur of the date set forth in paragraph (a) of this Section
10 and the first anniversary of such termination.
11. MISCELLANEOUS.
(a) LEGAL AND OTHER REQUIREMENTS. The obligation of the Company
to sell and deliver Common Stock under the Plan shall be
subject to all applicable laws, regulations, rules and
approvals, including, but not by way of limitation, the
effectiveness of a registration statement under the Securities
Act of 1933 if deemed necessary or appropriate by the Company.
Certificates for shares of Common Stock issued hereunder may
bear such legend as the Board shall deem appropriate.
(b) NO OBLIGATION TO EXERCISE OPTIONS. The granting of a Stock
Option shall impose no obligation upon an optionee to exercise
such Stock Option.
(c) TERMINATION AND AMENDMENT OF PLAN. The Board, without further
action on the part of the shareholders of the Company, may
from time to time alter, amend or suspend the Plan or any
Stock Option granted hereunder or may at any time terminate
the Plan, except that, unless approved by the shareholders in
accordance with Section 9 hereof, it may not (except to the
extent provided in Section 7 hereof): (i) change the total
number of shares of Common Stock available for grant under the
Plan; (ii) extend the duration of the Plan; (iii) increase the
maximum term of Stock Options; or (iv) change the class of
persons eligible to be granted Stock Options under the Plan.
No action taken by the Board under this Section may materially
and
5
6
adversely affect any outstanding Stock Option without the
consent of the holder thereof.
(d) APPLICATION OF FUNDS. The proceeds received by the Company
from the sale of Common Stock pursuant to Stock Options will
be used for general corporate purposes.
(e) WITHHOLDING TAXES. Upon the exercise of any Stock Option, the
Company shall have the right to require the optionee to remit
to the Company an amount sufficient to satisfy an federal,
state and local withholding tax requirements prior to the
delivery of any certificate or certificates for shares of
Common Stock. Whenever under the Plan payments are to be made
by the Company in cash or by check, such payments shall be net
of any amounts sufficient to satisfy all federal, state and
local withholding tax requirements.
(f) RIGHT TO TERMINATE. Nothing in the Plan or any agreement
entered into pursuant to the Plan shall confer upon any
Eligible Director the right to continue in such position or
affect any right which the Company may have to terminate the
position of such Eligible Director.
(g) RIGHTS AS A SHAREHOLDER. No optionee shall have any right or
privileges as a shareholder unless and until certificates for
shares of Common Stock are issued to him or her.
(h) FAIR MARKET VALUE. Whenever the fair market value of Common
Stock is to be determined under the Plan as of a given date,
such fair market value shall be:
(i) If the Common Stock is traded on the over-the-counter
market, the average of the mean between the sale
price for the Common Stock at the close of trading on
the date of grant as reported in The Wall Street
Journal for NASDAQ Small Cap Issues;
(ii) If the Common Stock is listed on a national
securities exchange, the closing price of the Common
Stock on the Composite Tape for the grant date; and
(iii) If the Common Stock is neither traded on the
over-the-counter market nor listed on a national
securities exchange, such value as the Board, in good
faith, shall determine.
(i) NOTICES. Every direction, revocation or notice authorized or
required by the Plan shall be deemed delivered to the Company
(a) on the date it is personally delivered to the Secretary of
the Company at its principal executive offices or (b) three
business days after it is sent by registered or certified
mail, postage prepaid, addressed to the
6
7
Secretary at such offices; and shall be deemed delivered to an
optionee (a) on the date it is personally delivered to him or
her or (b) three business days after it is sent by registered
or certified mail, postage prepaid, addressed to him or her at
the last address shown for him or her on the records of the
Company.
(j) APPLICABLE LAW. All questions pertaining to the validity,
construction and administration of the Plan and Stock Options
and Stock Appreciation Rights granted hereunder shall be
determined in conformity with the laws of the State of Texas.
(k) ELIMINATION OF FRACTIONAL SHARES. If under any provision of
the Plan which requires a computation of the number of shares
of Common Stock subject to a Stock Option, the number so
computed is not a whole number of shares of Common Stock, such
number of shares of Common Stock shall be rounded down to the
next whole number.
This Plan, in accordance with Section 9, is effective as of the
approval of shareholders evidenced in the Preamble hereof.
MIDLAND RESOURCES, INC.
By:
--------------------------------
Its:
-------------------------------
7