1
EXHIBIT 4.4
SABA PETROLEUM COMPANY
1996 INCENTIVE EQUITY PLAN
1. PURPOSE. The purpose this Plan is to attract and retain
officers and other key employees of and consultants to Saba Petroleum Company
(the "Corporation") and its Subsidiaries and to provide such persons with
incentives and rewards for superior performance.
2. DEFINITIONS. As used in this Plan,
"APPRECIATION RIGHT" means a right granted Pursuant to Section 5
of this Plan, including a Free-standing Appreciation Right and a Tandem
Appreciation Right.
"BASE PRICE" means the price to be used as the basis for
determining the Spread upon the exercise of a Free-standing Appreciation Right.
"BOARD" means the Board of Directors of the Corporation.
"CODE" means the Internal Revenue Code of 1986, as amended from
time to time.
"COMMITTEE" means the committee described in Section 14(a) of
this Plan.
"COMMON SHARES" means (i) shares of the Common Stock, no par
value, of the Corporation and (ii) any security into which Common Shares may be
converted by reason of any transaction or event of the type referred to in
Section 10 of this Plan.
"DATE OF GRANT" means the date specified by the Committee on
which a grant of Option Rights, Appreciation Rights, Performance Shares or
Performance Units or a grant or sale of Restricted Shares or Deferred Shares
shall become effective, which shall not be earlier than the date on which the
Committee takes action with respect thereto.
"DEFERRAL PERIOD" means the period of time during which Deferred
Shares are subject to deferral limitations under Section 7 of this Plan.
"DEFERRED SHARES" means an award pursuant to Section 7 of this
Plan of the right to receive Common Shares at the end of a specified Deferral
Period.
"EFFECTIVE DATE" shall have the meaning set forth in Section 17.
"FREE-STANDING APPRECIATION RIGHT" means an Appreciation Right
granted pursuant to Section 5 of this Plan that is not granted in tandem with an
Option Right or similar right.
A-1
2
"INCENTIVE STOCK OPTION" means an Option Right that is intended
to qualify as an "incentive stock option" under Section 422 of the Code or any
successor provision thereto.
"MANAGEMENT OBJECTIVES" means the achievement of performance
objectives established pursuant to this Plan, which may be described in terms of
Corporation-wide objectives or objectives that are related to the performance of
the individual Participant, or the Subsidiary, division, department or function
within the corporation or Subsidiary in which the Participant is employed or
with respect to which the Participant provides consulting services. The
Committee may adjust Management Objectives and the related minimum acceptable
level of achievement if, in the sole judgment of the Committee, events or
transactions have occurred after the Date of Grant that are unrelated to the
performance of the Participant and result in distortion of the Management
Objectives or the related minimum acceptable level of achievement.
"MARKET VALUE PER SHARE" means the fair market value of the
Common Shares as determined by the Committee from time to time.
"NONQUALIFIED OPTION" means an Option Right that is not intended
to qualify as an Incentive Stock Option.
"OPTIONEE" means the person so designated in an agreement
evidencing an outstanding Option Right or the Successor of an Optionee, as the
context so requires.
"OPTION PRICE" means the purchase price payable upon the exercise
of an Option Right.
"OPTION RIGHT" means the right to purchase Common Shares from the
Corporation upon the exercise of a Nonqualified Option or an Incentive Stock
Option granted pursuant to Section 4 of this Plan.
"PARTICIPANT" means a person who is selected by the Committee to
receive benefits under this Plan and (i) is at that time an officer, including
without limitation an officer who may also be a member of the Board, or other
key employee of or a consultant to the Corporation or any Subsidiary or (ii) has
agreed to commence serving in any such capacity, or the Successor of a
Participant, as the context requires.
"PERFORMANCE PERIOD" means, in respect of a Performance Share or
Performance Unit, a period of time established pursuant to Section 8 of this
Plan within which the Management Objectives relating thereto are to be achieved.
"PERFORMANCE SHARE" means a bookkeeping entry that records the
equivalent of one Common Share awarded pursuant to Section 8 of this Plan.
"PERFORMANCE UNIT" means a bookkeeping entry that records a unit
equivalent to $1.00 awarded pursuant to Section 8 of this Plan.
A-2
3
"RELOAD OPTION RIGHTS" means additional Option Rights
automatically granted to an Optionee upon the exercise of Option Rights pursuant
to Section 4(f) of this Plan.
"RESTRICTED SHARES" means Common Shares granted or sold pursuant
to Section 6 of this Plan as to which neither the substantial risk of forfeiture
nor the restrictions on transfer referred to in Section 6 hereof has expired.
"RULE 16B-3" means Rule 16b-3, as promulgated and amended from
time to time by the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended, or any successor rule to the same effect.
"SPREAD" means, in the case of a Free-standing Appreciation
Right, the amount by which the Market Value per Share on the date when the
Appreciation Right is exercised exceeds the Base Price specified therein or, in
the case of a Tandem Appreciation Right, the amount by which the Market Value
per Share on the date when the Appreciation Right is exercised exceeds the
Option Price specified in the related Option Right.
"SUBSIDIARY" means any corporation in which the Corporation owns
or controls directly or indirectly more than 50 percent of the total combined
voting power represented by all classes of stock issued by such corporation at
the time of the grant.
"SUCCESSOR" of a Participant means the legal representative of
the estate of a deceased Participant or the person or persons who shall acquire
the right to exercise an award hereunder by bequest or inheritance or by reason
of death of the Participant.
"TANDEM APPRECIATION RIGHT" means an Appreciation Right granted
pursuant to Section 5 of this Plan that is granted in tandem with an Option
Right or any similar right granted under any other plan of the Corporation.
3. SHARES AND PERFORMANCE UNITS AVAILABLE UNDER THE PLAN.
(a) Subject to adjustment as provided in Section 10 of this Plan, the number of
Common Shares issued or transferred, plus the number of Common Shares covered by
outstanding awards granted under this Plan, shall not in the aggregate exceed
500,000 Common Shares, which may be Common Shares of original issuance or Common
Shares held in treasury or a combination thereof. For the purposes of this
Section 3(a):
(i) Upon payment in cash of the benefit provided by
any award granted under this Plan, any Common Shares that were
covered by that award shall again be available for issuance or
transfer hereunder.
(ii) Common Shares covered by any award granted under
this Plan shall be deemed to have been issued or transferred,
and shall cease to be available for future issuance or transfer
in respect of any other award granted hereunder, at the earlier
of the time when they are actually issued or transferred or the
time when dividends or
A-3
4
dividend equivalents are paid thereon; provided, however, that
Restricted Shares shall be deemed to have been issued or
transferred at the earlier of the time when they cease to be
subject to a substantial risk of forfeiture or the time when
dividends are paid thereon.
(b) The number of Performance Units that may be granted under
this Plan shall not in the aggregate exceed 100,000. Performance Units
that are granted under this Plan, but are paid in Common Shares or are
not earned by the Participant at the end of the Performance Period,
shall be available for future grants of Performance Units hereunder.
4. OPTION RIGHTS. The Committee may from time to time
authorize grants to Participants of options to purchase Common Shares upon such
terms and conditions as the Committee may determine in accordance with the
following provisions:
(a) Each grant shall specify the number of Common Shares to
which it pertains; provided, however, that no participant shall be
granted Option Rights for more than 100,000 Common Shares in any one
fiscal year of the Corporation, subject to adjustment as provided in
Section 10 of this Plan.
(b) Each grant shall specify an Option Price per Common Share,
which may be less than, equal to or greater than the Market Value per
Share on the Date of Grant; provided, however, (i) the Option Price
shall equal at least 85% of the Market Value per Share on the Date of
Grant, or (ii) the Option Price with respect to each Incentive Stock
Option shall not be less than 100% (or 110%, in the case of an
individual described in Section 422(b)(6) of the Code (relating to
certain 10% owners)) of the Market Value per Share on the Date of Grant.
(c) Each grant shall specify the form of consideration to be
paid in satisfaction of the Option Price and the manner of payment of
such consideration, which may include (i) cash in the form of currency
or check or other cash equivalents acceptable to the Committee, (ii)
subject to Section 4(d), nonforfeitable, unrestricted Common Shares,
which are already owned by the Optionee and have a value at the time of
exercise that is equal to the Option Price, (iii) any other legal
consideration that the Committee may deem appropriate, including without
limitation any form of consideration authorized under Section 4(d)
below, on such basis as the Committee may determine in accordance with
this Plan and (iv) any combination of the foregoing.
(d) On or after the Date of Grant of any Nonqualified Option,
the Committee may determine that payment of the Option Price may also be
made in whole or in part in the form of Restricted Shares or other
Common Shares that are subject to risk of forfeiture or restrictions on
transfer. Unless otherwise determined by the Committee on or after the
Date of Grant, whenever any Option Price is paid in whole or in part by
means of any of the forms of consideration specified in this Section
4(d), the Common Shares received by the Optionee upon the exercise of
the Nonqualified Option shall be subject to the same risks of forfeiture
or restrictions on transfer as those that applied to the consideration
surrendered by the Optionee; provided, however, that such risks of
forfeiture and restrictions on transfer shall
A-4
5
apply only to the same number of Common Shares received by the Optionee
as applied to the forfeitable or restricted Common Shares surrendered by
the Optionee.
(e) Any grant may provide for deferred payment of the Option
Price from the proceeds of sale through a broker on the date of exercise
of some or all of the Common Shares to which the exercise relates.
(f) On or after the Date of Grant of any Option Rights, the
Committee may provide for the automatic grant to the Optionee of Reload
Option Rights upon the exercise of Option Rights, including Reload
Option Rights for Common Shares or any other noncash consideration
authorized under Sections 4(c) and (d) above.
(g) Successive grants may be made to the same Participant
regardless of whether any Option Rights previously granted to the
Participant remain unexercised.
(h) Each grant shall specify the conditions, including as and to
the extent determined by the Committee, the period or periods of
continuous employment, or continuous engagement of the consulting
services, of the Optionee by the Corporation or any Subsidiary, or the
achievement of Management Objectives, that are necessary before the
Option Rights or installments thereof shall become exercisable, and any
grant may provide for the earlier exercise of the Option Rights,
including, without limitation, in the event of a change in control of
the Corporation or other similar transaction or event.
(i) Option Rights granted pursuant to this Section 4 may be
Nonqualified Options or Incentive Stock Options or combinations thereof,
as set forth in the award agreement.
(j) On or after the Date of Grant of any Nonqualified Option, the
Committee may provide for the payment to the Optionee of dividend
equivalents thereon in cash or Common Shares on a current, deferred or
contingent basis, or the Committee may provide that any dividend
equivalents shall be credited against the Option Price.
(k) No Option Right granted pursuant to this Section 4 may be
exercised more than 10 years from the Date of Grant (except that, in the
case of an individual described in Section 422(b)(6) of the Code
(relating to certain 10% owners) who is granted an Incentive Stock
Option, the term of such Option Right shall be no more than five years
from the Date of Grant).
(l) Each grant shall be evidenced by an agreement, which shall be
executed on behalf of the Corporation by any officer thereof and
delivered to and accepted by the Optionee and shall contain such terms
and provisions as the Committee may determine consistent with this Plan.
(m) The aggregate Market Value per Share, determined as of the
Date of Grant, of the Common Shares for which any Optionee may be
awarded Incentive Stock Options which are first exercisable by the
Optionee during any calendar year under this Plan (or any other
A-5
6
stock option plan required to be taken into account under Section 422(d)
of the Code) shall not exceed $100,000.
(n) If and to the extent otherwise advisable herein or under the
applicable option agreement, upon and after the death of an Optionee,
such Optionee's Option Rights, to the extent exercisable after death may
be exercised by the Successors of the Optionee. An Option Right may be
exercised, and payment in full of the aggregate Option Price made, by
the Successors of an Optionee only by written notice (in the form
prescribed by the Committee) to the Corporation specifying the number of
Common Shares to be purchased. Such notice shall state that the
aggregate Option Price will be paid in full, or that the Option Right
will be exercised as otherwise provided hereunder, in the discretion of
the Corporation or the Committee, if and as applicable.
5. APPRECIATION RIGHTS. The Committee may also authorize grants
to Participants of Appreciation Rights. An Appreciation Right shall be a right
of the Participant to receive from the Corporation an amount, which shall be
determined by the Committee and shall be expressed as a percentage (not
exceeding 100 percent) of the Spread at the time of the exercise of an
Appreciation Right. Any grant of Appreciation Rights under this Plan shall be
upon such terms and conditions as the Committee may determine in accordance with
the following provisions:
(a) Any grant may specify that the amount payable upon the
exercise of an Appreciation Right may be paid by the Corporation in
cash, Common Shares or any combination thereof and may (i) either grant
to the Participant or reserve to the Committee the right to elect among
those alternatives or (ii) preclude the right of the Participant to
receive and the Corporation to issue Common Shares or other equity
securities in lieu of cash; provided, however, that no form of
consideration or manner of payment that would cause Rule 16b-3 to cease
to apply to this Plan shall be permitted.
(b) Any grant may specify that the amount payable upon the
exercise of an Appreciation Right shall not exceed a maximum specified
by the Committee on the Date of Grant.
(c) Any grant may specify (i) a waiting period or periods before
Appreciation Rights shall become exercisable and (ii) permissible dates
or periods on or during which Appreciation Rights shall be exercisable.
(d) Any grant may specify that an Appreciation Right may be
exercised only in the event of a change in control of the Corporation or
other similar transaction or event.
(e) On or after the Date of Grant of any Appreciation Rights,
the Committee may provide for the payment to the Participant of dividend
equivalents thereon in cash or Common Shares on a current, deferred or
contingent basis.
(f) Each grant shall be evidenced by an agreement, which shall
be executed on behalf of the Corporation by any officer thereof and
delivered to and accepted by the Optionee
A-6
7
and shall contain such other terms and provisions as the Committee may
determine consistent with this Plan.
(g) Regarding Tandem Appreciation Rights only: Each grant
shall provide that a Tandem Appreciation Right may be exercised only (i)
at a time when the related Option Right (or any similar right granted
under any other plan of the Corporation) is also exercisable and the
Spread is positive and (ii) by surrender of the related Option Right (or
such other right) for cancellation.
(h) Regarding Free-standing Appreciation Rights only:
(i) Each grant shall specify in respect of each
Free-standing Appreciation Right a Base Price per Common Share,
which shall be equal to or greater than the Market Value per
Share on the Date of Grant;
(ii) Successive grants may be made to the same
Participant regardless of whether any Free-standing Appreciation
Rights previously granted to the Participant remain unexercised;
provided, however, that no participant shall be granted more
than 100,000 Freestanding Appreciation Rights in any one fiscal
year of the Corporation, subject to adjustment as provided in
Section 10 of this Plan;
(iii) Each grant shall specify the conditions, including
as and to the extent determined by the Committee, the period or
periods of continuous employment, or continuous engagement of the
consulting services, of the Participant by the Corporation or any
Subsidiary, or the achievement of Management Objectives, that are
necessary before the Free-standing Appreciation Rights or
installments thereof shall become exercisable, and any grant may
provide for the earlier exercise of the Free-standing
Appreciation Rights, including, without limitation, in the event
of a change in control of the Corporation or other similar
transaction or event; and
(iv) No Free-standing Appreciation Right granted under
this Plan may be exercised more than 10 years from the Date of
Grant.
6. RESTRICTED SHARES. The Committee may also authorize
grants or sales to Participants of Restricted Shares upon such terms and
conditions as the Committee may determine in accordance with the following
provisions:
(a) Each grant or sale shall constitute an immediate transfer
of the ownership of Common Shares to the Participant in consideration of
the performance of services, or as and to the extent determined by the
Committee, the achievement of Management Objectives, entitling such
Participant to dividend, voting and other ownership rights, subject to
the substantial risk of forfeiture and restrictions on transfer
hereinafter referred to.
A-7
8
(b) Each grant or sale may be made without additional
consideration from the Participant or in consideration of a payment by
the Participant that is less than the Market Value per Share on the Date
of Grant.
(c) Each grant or sale shall provide that the Restricted
Shares covered thereby shall be subject to a "substantial risk of
forfeiture" within the meaning of Section 83 of the Code for a period to
be determined by the Committee on the Date of Grant, and any grant or
sale may provide for the earlier termination of such period, including
without limitation, in the event of a change in control of the
Corporation or other similar transaction or event.
(d) Each grant or sale shall provide that, during the period
for which such substantial risk of forfeiture is to continue, the
transferability of the Restricted Shares shall be prohibited or
restricted in the manner and to the extent prescribed by the Committee
on the Date of Grant. Such restrictions may include, without limitation,
rights of repurchase or first refusal in the Corporation or provisions
subjecting the Restricted Shares to a continuing substantial risk of
forfeiture in the hands of any transferee.
(e) Any grant or sale may require that any or all dividends or
other distributions paid on the Restricted Shares during the period of
such restrictions be automatically sequestered and reinvested on an
immediate or deferred basis in additional Common Shares, which may be
subject to the same restrictions as the underlying award or such other
restrictions as the Committee may determine.
(f) Each grant or sale shall be evidenced by an agreement,
which shall be executed an behalf of the Corporation by any officer
thereof and delivered to and accepted by the Participant and shall
contain such terms and provisions as the Committee may determine
consistent with this Plan. Unless otherwise directed by the Committee,
all certificates representing Restricted Shares, together with a stock
power that shall be endorsed in blank by the Participant with respect to
the Restricted Shares, shall be held in custody by the Corporation until
all restrictions thereon lapse.
7. DEFERRED SHARES. The Committee may also authorize
grants or sales of Deferred Shares to Participants upon such terms and
conditions as the Committee may determine in accordance with the following
provisions:
(a) Each grant or sale shall constitute the agreement by the
Corporation to issue or transfer Common Shares to the Participant in the
future in consideration of the performance of services rendered, subject
to the fulfillment during the Deferral Period of such conditions as the
Committee may specify.
(b) Each grant or sale may be made without additional
consideration from the Participant or in consideration of a payment by
the Participant that is less than the Market value per Share on the Date
of Grant.
A-8
9
(c) Each grant or sale shall provide that the Deferred Shares
covered thereby shall be subject to a Deferral Period, which shall be
fixed by the Committee on the Date of Grant, and any grant or sale may
provide for the earlier termination of the Deferral Period, including
without limitation, in the event of a change in control of the
Corporation or other similar transaction or event.
(d) During the Deferral Period, the Participant shall not have
any right to transfer any rights under the subject award, shall not have
any rights of ownership in the Deferred Shares and shall not have any
right to vote the Deferred Shares, but the Committee may on or after the
Date of Grant authorize the payment of dividend equivalents on the
Deferred Shares in cash or additional Common Shares on a current,
deferred or contingent basis.
(e) Each grant or sale shall be evidenced by an agreement,
which shall be executed on behalf of the Corporation by any officer
thereof and delivered to and accepted by the Participant and shall
contain such terms and provisions as the Committee may determine
consistent with this Plan.
8. PERFORMANCE SHARES AND PERFORMANCE UNITS. The Committee
may also authorize grants of Performance Shares and Performance Units, which
shall become payable to the Participant upon the achievement of specified
Management Objectives, upon such terms and conditions as the Committee may
determine in accordance with the following provisions:
(a) Each grant shall specify the number of Performance Shares
or Performance Units to which it pertains, which may be subject to
adjustment to reflect changes in compensation or other factors.
(b) The Performance Period with respect to each Performance
Share or Performance Unit shall be determined by the Committee on the
Date of Grant and may be subject to earlier termination, including,
without limitation, in the event of a change in control of the
Corporation or other similar transaction or event.
(c) Each grant shall specify the Management Objectives that
are to be achieved by the Participant.
(d) Each grant shall specify in respect of the specified
Management Objectives a minimum acceptable level of achievement below
which no payment will be made and shall set forth a formula for
determining the amount of any payment to be made if performance is at or
above the minimum acceptable level but falls short of full achievement
of the specified Management Objectives.
(e) Each grant shall specify the time and manner of payment of
Performance Shares or Performance Units that shall have been earned, and
any grant may specify that any such amount may be paid by the
Corporation in cash, Common Shares or any combination thereof and may
either grant to the Participant or reserve to the Committee the right to
elect
A-9
10
among those alternatives; provided, however, that no form of
consideration or manner of payment that would cause Rule 16b-3 to cease
to apply to this Plan shall be permitted.
(f) Any grant of Performance Shares may specify that the amount
payable with respect thereto may not exceed a maximum specified by the
Committee on the Date of Grant. Any grant of Performance Units may
specify that the amount payable, or the number of Common Shares issued,
with respect thereto may not exceed maximums specified by the Committee
on the Date of Grant.
(g) On or after the Date of Grant of Performance Shares, the
Committee may provide for the payment to the Participant of dividend
equivalents thereon in cash or additional Common Shares on a current,
deferred or contingent basis.
(h) Each grant shall be evidenced by an agreement, which shall be
executed on behalf of the Corporation by any officer thereof and
delivered to and accepted by the Participant and shall contain such
terms and provisions as the Committee may determine consistent with this
Plan.
9. TRANSFERABILITY. (a) No Option Right or other derivative
security (as that term is used in Rule 16b-3) granted under this Plan may be
transferred by a Participant except by will or the laws of descent and
distribution. Option Rights and Appreciation Rights granted under this Plan may
not be exercised during a Participant's lifetime except by the Participant or,
in the event of the Participant's legal incapacity, by his guardian or legal
representative acting in a fiduciary capacity on behalf of the Participant under
state law and court supervision.
(b) Any grant made under this Plan may provide that all or any
part of the Common Shares that are to be issued or transferred by the
Corporation upon the exercise of Option Rights or Appreciation Rights or upon
the termination of the Deferral Period applicable to Deferred Shares or in
payment of Performance Shares or Performance Units, or are no longer subject to
the substantial risk of forfeiture and restrictions on transfer referred to in
Section 6 of this Plan, shall be subject to further restrictions upon transfer.
10. ADJUSTMENTS. The Committee may make or provide for such
adjustments in the number of Common Shares covered by outstanding awards granted
hereunder, the Option Prices per Common Share or Base Prices per Common Share
applicable to any such awards, and the kind of shares (including shares of
another issuer) covered thereby, as the Committee may in good faith determine to
be equitably required in order to prevent dilution or expansion of the rights of
Participants that otherwise would result from (a) any stock dividend, stock
split, combination of shares, recapitalization or other change in the capital
structure of the Corporation or (b) any merger, consolidation, spin-off,
spin-out, split-off, split-up, reorganization, partial or complete liquidation
or other distribution of assets, issuance of warrants or other rights to
purchase securities or any other corporate transaction or event having an effect
similar to any of the foregoing. In the event of any such transaction or event,
the Committee may provide in substitution for any or all outstanding awards
under this Plan such alternative consideration as it may in good faith determine
to be equitable under the circumstances and may require in connection therewith
the surrender of all awards so replaced.
A-10
11
Moreover, the Committee may on or after the Date of Grant provide in the
agreement evidencing any award under this Plan that the holder of the award may
elect to receive an equivalent award in respect of securities of the surviving
entity of any merger, consolidation or other transaction or event having a
similar effect, or the Committee may provide that the holder will automatically
be entitled to receive such an equivalent award. The Committee may also make or
provide for such adjustments in the maximum number of Common Shares specified in
Section 3(a) of this Plan, the maximum number of Performance Units specified in
Section 3(b), and the maximum number of Common Shares and Free-standing
Appreciation Rights specified in Sections 4(a) and 5(h)(ii) of this Plan as the
Committee may in good faith determine to be appropriate in order to reflect any
transaction or event described in this Section 10.
11. FRACTIONAL SHARES. The Corporation shall not be required
to issue any fractional Common Shares pursuant to this Plan. The Committee may
provide for the elimination of fractions or for the settlement thereof in cash.
12. WITHHOLDING TAXES. To the extent that the Corporation is
required to withhold federal, state, local or foreign taxes in connection with
any payment made or benefit realized by a Participant or other person under this
Plan, and the amounts available to the Corporation for the withholding are
insufficient, it shall be a condition to the receipt of any such payment or the
realization of any such benefit that the Participant or such other person make
arrangements satisfactory to the Corporation for payment of the balance of any
taxes required to be withheld. At the discretion of the Committee and subject to
the provisions of Rule 16b-3, any such arrangements may include relinquishment
of a portion of any such payment or benefit. The Corporation and any Participant
or such other person may also make similar arrangements with respect to the
payment of any taxes with respect to which withholding is not required.
13. CERTAIN TERMINATIONS OF EMPLOYMENT OR CONSULTING SERVICES,
HARDSHIP AND APPROVED LEAVES OF ABSENCE. Notwithstanding any other provision of
this Plan to the contrary, in the event of termination of employment or
consulting services by reason of death, disability, normal retirement, early
retirement, with the consent of the Corporation, termination of employment or
consulting services to enter public service with the consent of the Corporation
or leave of absence approved by the Corporation, or in the event of hardship or
other special circumstances, of a Participant who holds an Option Right or
Appreciation Right that is not immediately and fully exercisable, any Restricted
Shares as to which the substantial risk of forfeiture or the prohibition or
restriction on transfer has not lapsed, any Deferred Shares as to which the
Deferral Period is not complete, any Performance Shares or Performance Units
that have not been fully earned, or any Common Shares that are subject to any
transfer restriction pursuant to Section 9(b) of this Plan, the Committee may
take any action that it deems to be equitable under the circumstances or in the
best interests of the Corporation, including without limitation, waiving or
modifying any limitation or requirement with respect to any award under this
Plan.
14. ADMINISTRATION OF THE PLAN. (a) This Plan shall be
administered by a Committee of the Board, which shall be composed of not less
than two members of the Board, each of whom shall be a "disinterested person"
within the meaning of Rule 16b-3.
A-11
12
(b) The interpretation and construction by the Committee of
any provision of this Plan or any agreement, notification or document evidencing
the grant of Option Rights, Appreciation Rights, Restricted Shares, Deferred
Shares, Performance Shares or Performance Units, and any determination by the
Committee pursuant to any provision of this Plan or any such agreement,
notification or document, shall be final and conclusive. No member of the
Committee shall be liable for any such action taken or determination made in
good faith.
15. AMENDMENTS AND OTHER MATTERS. (a) This Plan may be amended
from time to time by the Committee; provided, however, that except as expressly
authorized by this Plan, no such amendment shall increase the number of Common
Shares specified in Section 3(a) hereof, increase the number of Performance
Units specified in Section 3(b) hereof, or otherwise cause this Plan to cease to
satisfy any applicable condition of Rule 16b-3, without further approval of the
stockholders of the Corporation.
(b) With the concurrence of the affected Participant, the
Committee may cancel any agreement evidencing Option Rights or any other award
granted under this Plan. In the event of any such cancellation, the Committee
may authorize the granting of new Option Rights or other awards hereunder, which
may or may not cover the same number of Common Shares or Performance Units as
had been covered by the cancelled Option Rights or other award, at such Option
Price, in such manner and subject to such other terms, conditions and discretion
as would have been permitted under this Plan had the cancelled Option Rights or
other award not been granted.
(c) The Committee may grant under this Plan any award or
combination of awards authorized under this Plan in exchange for the
cancellation of an award that was not granted under this Plan, including without
limitation any award that was granted prior to the adoption of this Plan by the
Board, and any such award or combination of awards so granted under this Plan
may or may not cover the same number of Common Shares as had been covered by the
cancelled award and shall be subject to such other terms, conditions and
discretion as would have been permitted under this Plan had the cancelled award
not been granted.
(d) This Plan shall not confer upon any Participant any right
with respect to continuance of employment or other service with the Corporation
or any Subsidiary and shall not interfere in any way with any right that the
Corporation or any Subsidiary would otherwise have to terminate any
Participant's employment or other service at any time.
(e) (i) To the extent that any provision of this Plan
would prevent any Option Right that was intended to
qualify as an Incentive Stock Option from so qualifying,
any such provision shall be null and void with respect to
any such Option Right: provided, however, that any such
provision shall remain in effect with respect to other
Option Rights, and there shall be no further effect on any
provision of this Plan.
(ii) Any award that may be made pursuant to an
amendment to this Plan that shall have been adopted
without the approval of the stockholders of the
Corporation shall be null and void if it is subsequently
determined that such
A-12
13
approval was required in order for this Plan to continue
to satisfy the applicable conditions of Rule 16b-3.
16. TERMINATION OF THE PLAN. No further awards shall be
granted under this Plan after the passage of 10 years from the date on which
this Plan is first approved by the stockholders of the Corporation.
17. EFFECTIVE DATE. The effective date of this Plan (the
Effective Date") shall be April 6, 1996, provided, however, that this Plan and
each award granted hereunder shall be void and of no force or effect until and
unless this Plan shall have been approved by a vote of the holders of the
majority of the Common Shares of the Corporation present, or represented, and
entitled to vote at a meeting duly held in accordance with Colorado law.
18. NONTRANSFERABILITY. Each award granted under this Plan
shall by its terms be nontransferable by the Participant except by will or the
laws of decent and distribution of the state wherein the Participant is
domiciled at the time of his death; provided, however, that the Committee may
(but need not) permit other transfers, to the extent consistent with Rule 16b-3;
where the Committee concludes that such transferability does not result in
accelerated taxation and is otherwise appropriate and desirable.
A-13