<PAGE> 1
As filed with the Securities and Exchange Commission on March 8, 1995
Registration No. 33-____________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
LANDMARK GRAPHICS CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
Delaware 76-0029459
(State or other jurisdiction of (I.R.S. Employer Identification Code)
incorporation or organization)
15150 Memorial Drive
Houston, Texas 77079
(Address of principal executive offices) (zip code)
</TABLE>
1994 FLEXIBLE INCENTIVE PLAN
(Full title of the plan)
Patti L. Massaro, Esq.
General Counsel
15150 Memorial Drive
Houston, Texas 77079
(Name and address of agent for service)
(713) 560-1000
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===========================================================================================================
Proposed Proposed
Title of Amount Maximum Maximum Amount of
Securities to be Offering Price Aggregate Registration
to be Registered Registered Per Share* Offering Price* Fee
===========================================================================================================
<S> <C> <C> <C> <C> <C>
Common Stock, $.05 par value per
share 1,000,000 $20.13 $20,130,000 $6,941.38
shares
===========================================================================================================
</TABLE>
* Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(h). Pursuant to Rule 457(h), this estimate is based
upon the average of the high and low prices of the Registrant's common stock,
$.05 par value per share, on March 3, 1995 (as reported on the National
Market System of the National Association of Securities Dealers Automated
Quotation System).
================================================================================
<PAGE> 2
PART I.
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
ITEM 1. PLAN INFORMATION*
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.*
__________________________
* Information required in Part I of Form S-8 to be contained in a
prospectus meeting the requirements of Section 10(a) of the Securities
Act of 1933 is omitted from this Registration Statement in accordance
with Rule 428 under the Securities Act of 1933 and the Note to Part I
of Form S-8.
I-1
<PAGE> 3
PART II.
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The Registrant hereby incorporates by reference into this Prospectus:
(i) the reports listed below (which include all reports filed by the Registrant
with the Commission pursuant to Sections 13(a) or 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") since June 30, 1994; and
(ii) the description of the Common Stock contained in the Registrant's
registration statement on Form 8-A under the Exchange Act (Registration No.
0-17195) filed by the Registrant with the Commission, including any amendments
or reports filed for the purpose of updating such description:
Reports Incorporated by Reference
(a) Annual Report on Form 10-K, for the fiscal year ended June 30,
1994;
(b) Current Report on Form 8-K, dated September 29, 1994, as
amended;
(c) Quarterly Report on Form 10-Q, for the fiscal quarter ended
September 30, 1994; and
(d) Quarterly Report on Form 10-Q, for the fiscal quarter ended
December 31, 1994.
In addition, all documents filed by the Registrant subsequent to the
date hereof pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act
but prior to the filing of a post-effective amendment which indicates that all
securities offered have been sold or which deregisters all securities then
remaining unsold shall be deemed to be incorporated by reference into this
Prospectus and to be a part hereof from the date of the filing of such
documents. Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is incorporated or
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
II-1
<PAGE> 4
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The General Corporation Law of the State of Delaware permits the
Registrant and its stockholders to limit directors' exposure to liability for
certain breaches of the directors' fiduciary duty, either in a suit on behalf
of the Registrant or in an action by stockholders of the Registrant. The
Registrant's Restated Certificate of Incorporation provides that no director of
the Registrant will be personally liable to the Registrant or any of its
stockholders for monetary damages arising from the director's breach of
fiduciary duty as a director. However, this does not apply with respect to any
action in which the director would be liable under Section 174 of Title 8 of
the General Corporation Law of Delaware nor does it apply with respect to any
liability resulting from (i) a director's breach of his or her duty of loyalty
to the Registrant or its stockholders; (ii) acts or omissions of a director not
in good faith; (iii) acts or omissions of a director involving intentional
misconduct or a knowing violation of law; or (iv) a transaction from which a
director derived an improper personal benefit.
The Registrant's Restated Certificate of Incorporation further
provides that, other than with respect to an action or proceeding brought by or
on behalf of the Registrant, the Registrant will indemnify its officers and
directors and former officers and directors against any expenses, judgments or
settlement payments sustained or paid by such persons as a result of having
acted as an officer or director of the Registrant, or at the request of the
Registrant, as an officer, director, agent or employee of another business
entity. Such right of indemnification is conditioned upon such person having
(i) acted in good faith and in a manner he or she reasonably believed to be in
or not opposed to the best interests of the Registrant and (ii) with respect to
criminal matters, no reasonable cause to believe his or her conduct was
unlawful.
The Registrant's Restated Certificate of Incorporation also provides
for a similar right of indemnification with respect to actions brought by or on
behalf of the Registrant. However, in connection with an action brought by or
on behalf of the Registrant, no right of indemnification exists with respect to
amounts paid in settlement or satisfaction of any claim for which the person
seeking indemnity has been adjudged to have been liable to the Registrant,
unless a court determines that, despite the adjudication of liability and in
view of all the circumstances of the case, such person is fairly entitled to
indemnity for expenses deemed proper by the court.
Any indemnification will be made by the Registrant only upon a
determination that indemnification is proper under the circumstances because
the party seeking indemnity has met the applicable standard of conduct. Such
determination will be made by the stockholders or by majority vote of a
disinterested quorum of the Board of Directors, or, if the Board of Directors
so directs, by independent counsel.
Pursuant to the Restated Certificate of Incorporation, the Registrant
will advance litigation expenses to any officer or director upon receipt of an
undertaking by such person to repay such advances in the event no right of
indemnification is subsequently shown. The Registrant also may obtain
insurance at its expense on behalf of any person who might be entitled to
II-2
<PAGE> 5
indemnification, regardless of whether the Registrant would have the power to
indemnify such person against liability under the Restated Certificate of
Incorporation.
The Registrant's bylaws provide that the Registrant will indemnify its
officers and directors in accordance with the Registrant's Restated Certificate
of Incorporation. Any right of indemnification granted by the Certificate of
Incorporation or the bylaws is in addition to, and not in lieu of, any other
right of indemnification to which an officer or director may be entitled under
any agreement, vote of stockholders or disinterested directors or law of
Delaware.
The Registrant enters into indemnification agreements with each of its
executive officers and directors. Each such Indemnification Agreement provides
for indemnification of officers and directors of the Registrant to the greatest
extent permitted by the General Corporation Law of Delaware and additionally
provides (i) that such persons shall be indemnified for amounts paid in
settlement of derivative actions, (ii) for advances of investigation and
litigation expenses subject to repayment if indemnification is disallowed,
(iii) that indemnification is available unless the board of directors or
independent legal counsel or the stockholders determine that the relevant
standards of conduct were not satisfied, with the Registrant bearing the burden
of proving same in any suit for indemnification and (iv) for payment to such
persons of expenses incurred in connection with the successful prosecution of
an action for indemnification, in whole or in part, of any amount not timely
paid (generally within 30 days of demand) by the Registrant.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
The following exhibits are furnished pursuant to Item 601 of
Regulation S-K;
<TABLE>
<CAPTION>
Incorporated by Reference
(If applicable)
-------------------------------------
Exhibit Number and Description Form Date File No. Exhibit
- ------------------------------ ---- ------ -------- -------
<S> <C> <C> <C> <C>
(5) Opinion regarding legality
5.1 Opinion of Winstead
Sechrest & Minick P.C. N/A N/A N/A N/A
(23) Consents of experts and counsel
23.1 Consent of Ernst & Young LLP N/A N/A N/A N/A
23.2 Consent of Price Waterhouse LLP N/A N/A N/A N/A
23.3 Consent of Levine, Hughes &
Mithuen, Inc. N/A N/A N/A N/A
</TABLE>
II-3
<PAGE> 6
<TABLE>
<S> <C> <C> <C> <C>
23.4 Consent of Winstead
Sechrest & Minick P.C.
(included in Exhibit 5.1) N/A N/A N/A N/A
(24) Power of attorney
24.1 Powers of Attorney
(included on Page II-6) N/A N/A N/A N/A
(99) Additional Exhibits
99.1 1994 Flexible Incentive Plan,
together with forms of stock
option agreement and restricted
stock grant used thereunder. N/A N/A N/A N/A
</TABLE>
ITEM 9. UNDERTAKINGS.
(a) The Registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration
Statement:
(i) to include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events
arising after the effective date of the Registration
Statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in the Registration Statement;
(iii) to include any material information with respect to
the plan of distribution not previously disclosed in
the Registration Statement or any material change to
such information in the Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
Registration Statement is on Form S-3 or Form S-8, and the information required
to be included in a post-effective amendment by those paragraphs is contained
in periodic reports filed by the Registrant pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934 that are incorporated by reference in the
Registration Statement.
(2) that, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
II-4
<PAGE> 7
(3) to remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
The Registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the Registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act
of 1934) that is incorporated by reference in the Registration Statement shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
II-5
<PAGE> 8
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Houston, State of Texas, on March 2, 1995.
LANDMARK GRAPHICS CORPORATION
By:/s/ Robert P. Peebler
------------------------------------------------
Robert P. Peebler, President and Chief Executive
Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and
appoints Robert P. Peebler and William H. Seippel, and each of them, his true
and lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, and hereby grants to such attorneys-in-fact
and agents, and each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or any of them, or their
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
II-6
<PAGE> 9
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature and Title Date
------------------- ----
<S> <C>
/s/ Robert P. Peebler March 2, 1995
--------------------------
Robert P. Peebler
Director, President, and
Chief Executive Officer
(Principal Executive Officer)
/s/ William H. Seippel
--------------------------
William H. Seippel March 2, 1995
Vice President, Finance and
Chief Financial Officer
(Principal Financial and Accounting Officer)
/s/ Sam K. Smith March 2, 1995
--------------------------
Sam K. Smith
Chairman of the Board
/s/ Lucio Lanza March 2, 1995
--------------------------
Lucio Lanza
Director
March 2, 1995
/s/ James A. Downing, II
--------------------------
James A. Downing, II
Director
March 2, 1995
/s/ Charles L. Blackburn
--------------------------
Charles L. Blackburn
Director
March 2, 1995
/s/ Theodore Levitt
--------------------------
Theodore Levitt
Director
March 2, 1995
/s/ S. Rutt Bridges
--------------------------
S. Rutt Bridges
Director
</TABLE>
II-7
<PAGE> 10
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Incorporated by Reference
(If applicable)
-------------------------------------
Exhibit Number and Description Form Date File No. Exhibit
- ------------------------------ ---- ------ -------- -------
<S> <C> <C> <C> <C>
(5) Opinion regarding legality
5.1 Opinion of Winstead
Sechrest & Minick P.C. N/A N/A N/A N/A
(23) Consents of experts and counsel
23.1 Consent of Ernst & Young LLP N/A N/A N/A N/A
23.2 Consent of Price Waterhouse LLP N/A N/A N/A N/A
23.3 Consent of Levine, Hughes &
Mithuen, Inc. N/A N/A N/A N/A
23.4 Consent of Winstead
Sechrest & Minick P.C.
(included in Exhibit 5.1) N/A N/A N/A N/A
(24) Power of attorney
24.1 Powers of Attorney
(included on Page II-6) N/A N/A N/A N/A
(99) Additional Exhibits
99.1 1994 Flexible Incentive Plan,
together with forms of stock
option agreement and restricted
stock grant used thereunder. N/A N/A N/A N/A
</TABLE>
<PAGE> 1
EXHIBIT 5.1
[WINSTEAD SECHREST & MINICK LETTERHEAD]
214/745-5120
OPINION REGARDING LEGALITY
March 6, 1995
Landmark Graphics Corporation
15150 Memorial Drive
Houston, Texas 77079
Gentlemen:
Landmark Graphics Corporation, a Delaware corporation (the "Company"),
is today filing with the Securities and Exchange Commission (the "Commission")
a Registration Statement on Form S-8 (the "Registration Statement") under the
Securities Act of 1933, as amended, with respect to the registration of
1,000,000 shares (the "Shares") of common stock ("Common Stock"), $0.05 par
value per share, of the Company which may hereafter be issued pursuant to The
Landmark Graphics Corporation 1994 Flexible Incentive Plan (the "Plan").
In rendering the opinions expressed herein, we have examined (i) the
Company's Restated Certificate of Incorporation and all amendments thereto,
(ii) the Company's Bylaws, as amended, (iii) minutes of meetings or consents
in lieu of meetings of the Company's board of directors and stockholders, and
(iv) such other corporate records and documents, certificates of corporate and
public officials and statutes as we have deemed necessary for the purposes of
this opinion. In such examination, we have assumed the genuineness of all
signatures, the authenticity of all corporate records, documents and
instruments submitted to us as originals, the conformity to original documents
of all documents submitted to us as conformed, certified or photostatic copies
thereof, the authenticity of the originals of such photostatic, certified or
conformed copies, and compliance both in the past and in the future with the
terms of the Plan by the Company and its employees, officers, Board of
Directors and any committees appointed to administer the Plan.
Based upon such examination and in reliance thereon, we are of the
opinion that:
Upon the issuance of Shares in accordance with the terms and
conditions of the Plan, including receipt prior to issuance by the Company of
the full consideration for the Shares (which consideration shall be at least
equal to the par value thereof), the Shares will be validly issued, fully paid
and nonassessable shares of Common Stock.
<PAGE> 2
This firm consents to the filing of this opinion with the Commission
as Exhibit 5.1 to the Registration Statement.
Very truly yours,
WINSTEAD SECHREST & MINICK P.C.
By: /s/ Robert E. Crawford, Jr.
----------------------------
Robert E. Crawford, Jr.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-8) pertaining to the 1994 Flexible Incentive Plan of Landmark Graphics
Corporation of our report dated July 28, 1993, except for Note 21 as to which
the date is May 17, 1994, with respect to the consolidated financial statements
and schedules as of June 30, 1993 and for each of the two years then ended, of
Landmark Graphics Corporation included in its Annual Report (Form 10-K) for the
year ended June 30, 1994, filed with the Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
Houston, Texas
March 6, 1995
<PAGE> 1
EXHIBIT 23.2
CONSENT OF PRICE WATERHOUSE
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated July 27, 1994 appearing on page 23 of
Landmark Graphics Corporation's Annual Report on Form 10-K for the year ended
June 30, 1994.
/s/ PRICE WATERHOUSE LLP
Houston, Texas
March 6, 1995
<PAGE> 1
EXHIBIT 23.3
CONSENT OF LEVINE, HUGHES & MITHUEN, INC.
We consent to the incorporation by reference in the Registration Statement
(Form S-8) and related prospectus pertaining to the 1994 Flexible Incentive
Plan of our report dated December 16, 1992, with respect to the consolidated
financial statements and schedules of Landmark Graphics Corporation included in
the Annual Report on Form 10-K for the fiscal year ended June 30, 1994.
/s/ Levine, Hughes & Mithuen, Inc.
Englewood, Colorado
February 23, 1995
<PAGE> 1
EXHIBIT 99.1
FORM OF 1994 FLEXIBLE INCENTIVE PLAN,
STOCK OPTION AGREEMENT AND RESTRICTED STOCK GRANT
<PAGE> 2
LANDMARK GRAPHICS CORPORATION
1994 FLEXIBLE INCENTIVE PLAN
____________________________________
SECTION 1. PURPOSE OF THE PLAN
The purposes of the Landmark Graphics Corporation 1994 Flexible
Incentive Plan (the "Plan") are to promote the interests of Landmark Graphics
Corporation (together with any successor thereto, the "Company") and its
stockholders by enabling the Company to attract, motivate and retain key
employees of the Company and its Subsidiaries by offering such key employees
performance-based stock incentives and other equity interests in the Company
and other incentive awards that recognize the creation of value for the
stockholders of the Company and promote the Company's long-term growth and
success. To achieve these purposes, eligible persons may receive stock
options, Stock Appreciation Rights, Restricted Stock, Performance Awards,
performance stock, Dividend Equivalent Rights and any other Awards, or any
combination thereof.
SECTION 2. DEFINITIONS
As used in the Plan, the following terms shall have the meanings set
forth below unless the content otherwise requires:
2.1 "Award" shall mean the grant of a stock option, a
Stock Appreciation Right, a Restricted Stock, a Performance Award,
performance stock, a Dividend Equivalent Right or any other award
under the Plan.
2.2 "Board" shall mean the Board of Directors of the
Company, as the same may be constituted from time to time.
2.3 "Change in Control" shall mean, after the effective
date of the Plan, (i) the occurrence of an event of a nature that
would be required to be reported in response to Item 1 or Item 2 of a
Form 8-K Current Report of the Company promulgated pursuant to
Sections 13 and 15(d) of the Exchange Act provided that, without
limitation, such a Change in Control shall be deemed to have occurred
if (a) any "person," 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 any employee benefit plan of the
Company, or any company owned, directly or indirectly, by the
stockholders 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
twenty-five percent (25%) or more of the combined voting power of the
Company's then outstanding securities or (b) during any period of two
consecutive years, individuals who at the beginning of such period
constitute the Board cease for any reason to constitute at least a
majority thereof, unless the election by the Board or the nomination
for election by the Company's stockholders was approved by a vote of
at least two-thirds (2/3) of the directors then still in office who
either were directors at the beginning of the two-year period or whose
election or nomination for election was previously so approved; (ii)
the stockholders of the Company approve a merger or consolidation of
the Company with any other corporation, other than a merger or
consolidation that 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 of the surviving entity) more than eighty percent (80%) of
the combined voting power of the voting securities of the surviving
entity outstanding immediately after such merger or consolidation;
provided, however, that a merger or consolidation effected to
implement a reorganization or recapitalization of the Company, or a
similar transaction (collectively, a "Reorganization"), in which no
"person" acquires more than twenty percent (20%) of the combined
voting power of the Company's then outstanding securities shall not
constitute a Change in Control of the Company; or (iii) the
stockholders 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.
<PAGE> 3
2.4 "Code" shall mean the Internal Revenue Code of 1986,
as amended from time to time.
2.5 "Committee" shall mean the Stock Option and
Compensation Committee of the Board of Directors of the Company. The
Committee shall meet the applicable requirements for "disinterested
administration" within the requirements of Rule 16b-3 promulgated
under the Exchange Act and any successor thereunder promulgated during
the duration of the Plan. The Board may amend the Plan to modify the
definition of Committee within the limits of Rule 16b-3 to assure that
the Plan is administered in compliance with Rule 16b-3. Initially,
the Committee will consist of not less than three (3) members of the
Board who are appointed by, and serve at the pleasure of, the Board
and who are (i) "disinterested" within the meaning of Rule 16b-3 and
(ii) "outside director," as required under Section 162(m) of the Code
and such Treasury Regulations as may be promulgated thereunder.
2.6 "Common Stock" shall mean the Common Stock, par value
$.05 per share, of the Company.
2.7 "Designated Beneficiary" shall mean the beneficiary
designated by a Participant, in a manner determined by the Committee,
to exercise rights of the Participant in the event of the
Participant's death. In the absence of an effective designation by a
Participant, the Designated Beneficiary shall be the Participant's
estate.
2.8 "Disability" shall mean permanent and total inability
to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment which can be
expected to result in death or which has lasted or can be expected to
last for a continuous period of not less than twelve (12) months, as
determined in the sole and absolute discretion of the Committee.
2.9 "Dividend Equivalent Right" shall mean the right of
the holder thereof to receive credits based on the cash dividends that
would have been paid on the Shares specified in an Award granting
Dividend Equivalent Rights if the Shares subject to such Award were
held by the person to whom the Award is made.
2.10 "Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended from time to time.
2.11 "Fair Market Value" shall mean with respect to the
Shares, as of any date, (i) the last reported sales price on any stock
exchange on which the Common Stock is traded or, if not reported on
such exchange, on the composite tape, or, in case no such sale takes
place on such day, the average of the reported closing bid and asked
quotations on such exchange; (ii) if the Common Stock is not listed on
a stock exchange or no such quotations are available, the closing
price of the Common Stock as reported by the National Market System of
the National Association of Securities Dealers, Inc., or, if no such
quotations are available, the average of the high bid and low asked
quotations in the over-the-counter market as reported by the National
Quotation Bureau Incorporated, or similar organization; or (iii) in
the event that there shall be no public market for the Common Stock,
the fair market value of the Common Stock as determined (which
determination shall be conclusive) in good faith by the Committee,
based upon the value of the Company as a going concern, as if such
Common Stock were publicly owned stock, but without any discount with
respect to minority ownership.
2.12 "Incentive Stock Option" shall mean any stock option
awarded under the Plan which qualifies as an "Incentive Stock Option"
under Section 422 of the Code or any successor provision.
2.13 "Non-Tandem Stock Appreciation Right" shall mean any
Stock Appreciation Right granted alone and not in connection with an
Award which is a stock option.
2.14 "Non-Qualified Stock Option" shall mean any stock
option awarded under the Plan that does not qualify as an Incentive
Stock Option.
-2-
<PAGE> 4
2.15 "Optionee" shall mean any person who has been granted
a stock option under the Plan and who has executed a written stock
option agreement with the Company reflecting the terms of such grant.
2.16 "Performance Award" shall mean any Award hereunder of
Shares, units or rights based upon, payable in, or otherwise related
to, Shares (including Restricted Stock), or cash of an equivalent
value, as the Committee may determine, at the end of a specified
performance period established by the Committee.
2.17 "Plan" shall mean the Landmark Graphics Corporation
1994 Flexible Incentive Plan set forth herein.
2.18 "Reload Option" shall mean a stock option as defined
in Subsection 6.6(b) herein.
2.19 "Restricted Stock" shall mean any Award of Shares
under the Plan that are subject to restrictions or risk of forfeiture.
2.20 "Retirement" shall mean termination of employment,
other than discharge for cause, after age 65 or on or before age 65 if
pursuant to the terms of any retirement plan maintained by the Company
in which such person participates.
2.21 "Shares" shall mean shares of the Company's Common
Stock and any shares of capital stock or other securities of the
Company hereafter issued or issuable upon, in respect of or in
substitution or exchange for such Shares.
2.22 "Stock Appreciation Right" shall mean the right of
the holder thereof to receive an amount in cash or Shares equal to the
excess of the Fair Market Value of a Share on the date of exercise
over the Fair Market Value of a Share on the date of the grant (or
such other value as may be specified in the agreement granting the
Stock Appreciation Right).
2.23 "Subsidiary" shall mean a subsidiary corporation of
the Company, as defined in Section 424(f) of the Code.
2.24 "Tandem Stock Appreciation Right" shall mean a Stock
Appreciation Right granted in connection with an Award which is a
stock option.
SECTION 3. ADMINISTRATION OF THE PLAN
3.1 Committee. The Plan shall be administered and
interpreted by the Committee.
3.2 Awards. Subject to the provisions of the Plan and
directions from the Board, the Committee is authorized to:
(a) determine the persons to whom Awards are to
be granted;
(b) determine the types and combinations of
Awards to be granted, the number of Shares to be covered by
the Award, the pricing of the Award, the time or times when
the Award shall be granted and may be exercised, the terms,
performance criteria or other conditions, vesting periods or
any restrictions for an Award, any restrictions on Shares
acquired pursuant to the exercise of an Award and any other
terms and conditions of an Award;
(c) conclusively interpret the provisions of the
Plan;
(d) prescribe, amend and rescind rules and
regulations relating to the Plan or make individual decisions
as questions arise, or both;
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(e) determine whether, to what extent and under
what circumstances to provide loans from the Company to
participants to purchase Shares subject to Awards under the
Plan, and the terms and conditions of such loans;
(f) rely upon employees of the Company for such
clerical and recordkeeping duties as may be necessary in
connection with the administration of the Plan; and
(g) make all other determinations and take all
other actions necessary or advisable for the administration of
the Plan.
3.3 Procedures. A majority of the Committee members
shall constitute a quorum. All determinations of the Committee shall
be made by a majority of its members. All questions of interpretation
and application of the Plan or pertaining to any question of fact or
Award granted hereunder shall be decided by the Committee, whose
decision shall be final, conclusive and binding upon the Company and
each other affected party.
SECTION 4. SHARES SUBJECT TO PLAN
4.1 Limitations. The maximum number of Shares that may
be issued with respect to Awards under the Plan shall not exceed
1,000,000 unless such maximum shall be increased or decreased by
reason of changes in capitalization of the Company as hereinafter
provided. The Shares issued pursuant to the Plan may be authorized
but unissued Shares, or may be issued Shares which have been
reacquired by the Company.
4.2 Changes. To the extent that any Award under the
Plan, or any stock option or performance award granted under any prior
incentive plan of the Company, shall be forfeited, shall expire or
shall be cancelled, in whole or in part, then the number of Shares
covered by the Award or stock option so forfeited, expired or
cancelled may again be awarded pursuant to the provisions of the Plan.
In the event that Shares are delivered to the Company in full or
partial payment of the exercise price for the exercise of a stock
option granted under the Plan or any prior incentive plan of the
Company, the number of Shares available for future Awards under the
Plan shall be reduced only by the net number of Shares issued upon the
exercise of the option. Awards that may be satisfied either by the
issuance of Shares or by cash or other consideration shall, until the
form of consideration to be paid is finally determined, be counted
against the maximum number of Shares that may be issued under the
Plan. If the Award is ultimately satisfied by the payment of
consideration other than Shares, as, for example, a stock option
granted in tandem with a Stock Appreciation Right that is settled by a
cash payment of the stock appreciation, such Shares may again be made
the subject of an Award under the Plan. Awards will not reduce the
number of Shares that may be issued pursuant to the Plan if the
settlement of the Award will not require the issuance of Shares, as,
for example, a Stock Appreciation Right that can be satisfied only by
the payment of cash.
SECTION 5. ELIGIBILITY
Eligibility for participation in the Plan shall be confined to those
persons who are employed by the Company or a Subsidiary, and who are either
officers of the Company or a Subsidiary, or who are in managerial or other key
positions within the Company or a Subsidiary. In making any determination as
to persons to whom Awards shall be granted, the type of Award, and/or the
number of Shares to be covered by the Award, the Committee shall consider the
position and responsibilities of the person, his or her importance to the
Company, the duties of such person, his or her past, present and potential
contributions to the growth and success of the Company, and such other factors
as the Committee shall deem relevant in connection with accomplishing the
purposes of the Plan.
SECTION 6. STOCK OPTIONS
6.1 Grants. The Committee may grant stock options alone
or in addition to other Awards granted under the Plan to any eligible
officer or other key employee. Each person so selected shall be
offered an option to purchase the number of Shares determined by the
Committee. The Committee shall
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specify whether such option is an Incentive Stock Option or
Non-Qualified Stock Option and any other terms or conditions relating
to such Award. To the extent that any stock option does not qualify
as an Incentive Stock Option (whether because of its provisions or the
time or manner of its exercise or otherwise), such stock option or the
portion thereof which does not qualify shall constitute a separate
Non-Qualified Stock Option. Each such person so selected shall have a
reasonable period of time within which to accept or reject the offered
option. Failure to accept within the period so fixed by the Committee
may be treated as a rejection. Each person who accepts an option
shall enter into a written agreement with the Company, in such form as
the Committee may prescribe, setting forth the terms and conditions of
the option, consistent with the provisions of the Plan. The Optionee
and the Company shall enter into option agreements for Incentive Stock
Options and Non-Qualified Stock Options. At any time and from time to
time, the Optionee and the Company may agree to modify an option
agreement so that an Incentive Stock Option may be converted to a
Non-Qualified Stock Option.
The Committee may require that an Optionee meet certain
conditions before the option or a portion thereof may vest or be
exercised, as, for example, that the Optionee remain in the employ of
the Company or a Subsidiary for a stated period or periods of time
before the option, or stated portions thereof, may vest or be
exercised.
6.2 Option Price. The option exercise price of the
Shares covered by each stock option shall be determined by the
Committee; provided, however, that the option exercise price of an
Incentive Stock Option shall not be less than one hundred percent
(100%) of the Fair Market Value of Shares on the date of the grant of
such Incentive Stock Option.
6.3 Incentive Stock Options Limitations.
(a) In no event shall any person be granted
Incentive Stock Options to the extent that the Shares covered
by any Incentive Stock Options (and any incentive stock
options granted under any other plans of the Company and its
Subsidiaries) that may be exercised for the first time by such
person in any calendar year have an aggregate Fair Market
Value in excess of $100,000. For this purpose, the Fair
Market Value of the Shares shall be determined as of the dates
on which the Incentive Stock Options are granted. It is
intended that the limitation on Incentive Stock Options
provided in this Subsection 6.3(a) be the maximum limitation
on options which may be considered Incentive Stock Options
under the Code.
(b) Notwithstanding anything herein to the
contrary, in no event shall any employee owning more than ten
percent (10%) of the total combined voting power of the
Company or any Subsidiary be granted an Incentive Stock Option
hereunder unless(a) the option exercise price shall be at
least one hundred ten percent (110%) of the Fair Market Value
of the Shares subject to such Incentive Stock Option at the
time that the Incentive Stock Option is granted and (b) the
term of such Incentive Stock Option shall not exceed five (5)
years.
6.4 Option Term. Subject to Subsection 6.3(b) hereof,
the term of a stock option shall be for such period of months or years
from the date of its grant as may be determined by the Committee;
provided, however, that no Incentive Stock Option shall be exercisable
later than ten (10) years from the date of its grant. Furthermore, no
Incentive Stock Option may be exercised unless, at the time of such
exercise, the Optionee is, and has been continuously since the date of
grant of his or her Incentive Stock Option, employed by the Company or
a Subsidiary, except that:
(a) An Incentive Stock Option may, to the extent
vested, be exercised within the period of three months after
the date the Participant ceases to be an employee of the
Company (or within such lesser period as may be specified in
the applicable option agreement), provided that the option
agreement may designate a longer exercise period and that the
exercise after such three-month period shall be treated as the
exercise of a Non-Qualified Stock Option under the Plan;
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<PAGE> 7
(b) If the Optionee dies while in the employ of
the Company or a Subsidiary, or within three months after the
Optionee ceases to be such an employee, the Incentive Stock
Option may, to the extent vested, be exercised by the
Optionee's Designated Beneficiary within the period of one
year after the date of death (or within such lesser period as
may be specified in the applicable option agreement); and
(c) If the Optionee ceases to be an employee of
the Company or a Subsidiary by reason of the Optionee's
Disability, the Incentive Stock Option may be exercised within
the period of one year after the date of Disability (or within
such lesser period as may be specified in the applicable
option agreement).
6.5 Vesting of Stock Options.
(a) Each stock option granted hereunder may only
be exercised to the extent that the Optionee is vested in such
option. Each stock option shall vest separately in accordance
with the option vesting schedule, if any, determined by the
Committee in its sole discretion, which will be incorporated
in the stock option agreement entered into between the Company
and each Optionee. The option vesting schedule will be
accelerated if, in the sole discretion of the Committee, the
Committee determines that acceleration of the option vesting
schedule would be desirable for the Company.
(b) In the event of the dissolution or
liquidation of the Company, each stock option granted under
the Plan shall terminate as of a date to be fixed by the
Board; provided, however, that not less than thirty (30) days'
written notice of the date so fixed shall be given to each
Optionee and each such Optionee shall be fully vested in and
shall have the right during such period to exercise the
option, even though such option would not otherwise be
exercisable under the option vesting schedule. At the end of
such period, any unexercised option shall terminate and be of
no further effect.
(c) In the event of a Reorganization (as defined
in Section 2.3 hereof):
(1) If there is no plan or agreement
respecting the Reorganization, or if such plan or
agreement does not specifically provide for the
change, conversion or exchange of the Shares under
outstanding and unexercised stock options for other
securities, then the provisions of Subsection 6.5(b)
shall apply as if the Company had dissolved or been
liquidated on the effective date of the
Reorganization; or
(2) If there is a plan or agreement
respecting the Reorganization, and if such plan or
agreement specifically provides for the change,
conversion or exchange of the Shares under
outstanding and unexercised stock options for
securities of another corporation, then the Board
shall adjust the Shares under such outstanding and
unexercised stock options (and shall adjust the
Shares remaining under the Plan which are then
available to be awarded under the Plan, if such plan
or agreement makes no specific provision therefor) in
a manner not inconsistent with the provisions of such
plan or agreement for the adjustment, change,
conversion or exchange of such Shares and such
options.
(d) In the event of a Change in Control of the
Company, all stock options and any associated Stock
Appreciation Rights shall become fully vested and immediately
exercisable and the vesting of all performance-based stock
options shall be determined as if the performance period or
cycle applicable to such stock options had ended immediately
upon such Change in Control; provided, however, that if in the
opinion of counsel to the Company the immediate exercisability
of options when taken into consideration with all other
"parachute payments" as defined in Section 280G of the Code,
as amended, would result in an "excess parachute payment" as
defined in such section as well as an excise tax imposed by
Section 4999 of the Code, such options and any
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<PAGE> 8
associated Stock Appreciation Rights shall become fully vested
and immediately exercisable, except as and to the extent the
Committee, in its sole discretion, shall otherwise determine,
and which determination by the Committee shall be based solely
upon maximizing the after-tax benefits to be received by any
such Optionee.
6.6 Exercise of Stock Options.
(a) Stock options may be exercised as to Shares
only in amounts and at intervals of time specified in the
written option agreement between the Company and the Optionee.
Each exercise of a stock option, or any part thereof, shall be
evidenced by a notice in writing to the Company. The purchase
price of the Shares as to which an option shall be exercised
shall be paid in full at the time of exercise, and may be paid
to the Company either:
(1) in cash (including check, bank draft
or money order);
(2) by the delivery of Shares having a
Fair Market Value equal to the aggregate option price;
(3) by a combination of cash and Shares;
or
(4) by other consideration deemed
acceptable by the Committee in its sole discretion.
(b) If an Optionee delivers Shares (including
Shares of Restricted Stock) already owned by him or her in
full or partial payment of the exercise price for any stock
option granted under the Plan or any prior incentive plan of
the Company, or if the Optionee elects to have the Company
retain that number of Shares out of the Shares being acquired
through the exercise of the option having a Fair Market Value
equal to the exercise price of the stock option being
exercised, the Committee may authorize the automatic grant of
a new option (a "Reload Option") for that number of Shares as
shall equal the number of already owned Shares surrendered
(including Shares of Restricted Stock) or newly acquired
Shares being retained in payment of the option exercise price
of the underlying stock option being exercised. The grant of
a Reload Option will become effective upon the exercise of the
underlying stock option. The option exercise price of the
Reload Option shall be the Fair Market Value of a Share on the
effective date of the grant of the Reload Option. Each Reload
Option shall be exercisable no earlier than six (6) months
from the date of its grant and no later than the time when the
underlying stock option being exercised could be last
exercised. The Committee may also specify additional terms,
conditions and restrictions for the Reload Option and the
Shares to be acquired upon the exercise thereof.
(c) The amount, as determined by the Committee,
of any federal, state or local tax required to be withheld by
the Company due to the exercise of a stock option shall be
satisfied, at the election of the Optionee, either (a) by
payment by the Optionee to the Company of the amount of such
withholding obligation in cash or other consideration
acceptable to the Committee in its sole discretion (the
"Non-Share Method") or (b) through either the retention by the
Company of a number of Shares out of the Shares being acquired
through the exercise of the option or the delivery of already
owned Shares having a Fair Market Value equal to the amount of
the withholding obligation (the "Share Retention Method"). If
an Optionee elects to use the Share Retention Method in full
or partial satisfaction for any tax liability resulting from
the exercise of a stock option, the Committee may authorize
the grant of a Reload Option for that number of Shares as
shall equal the number of Shares used to satisfy the tax
liabilities of the stock option being exercised on the price
and terms set forth in Subsection (b) above. The cash payment
or the amount equal to the Fair Market Value of the Shares so
withheld, as the case may be, shall be remitted by the Company
to the appropriate taxing authorities. The Committee shall
determine the time and manner in which an Optionee may elect
to satisfy a withholding obligation by either the Non-Share
Method or the Share Retention Method.
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(d) An Optionee shall not have any of the rights
of a stockholder of the Company with respect to the Shares
covered by a stock option except to the extent that one or
more certificates representing such Shares shall have been
delivered to the Optionee, or the Optionee has been determined
to be a stockholder of record by the Company's transfer agent,
upon due exercise of the option.
6.7 Date of a Stock Option Grant. The granting of a
stock option shall take place only upon the execution and delivery by
the Company and an optionee of an option agreement. Neither any
action taken by the Board nor anything contained in the Plan or in any
resolution adopted or to be adopted by the Board or the stockholders
of the Company shall constitute the granting of a stock option under
the Plan.
SECTION 7. STOCK APPRECIATION RIGHTS
7.1 Grants. The Committee may grant to any eligible
employee either Non-Tandem Stock Appreciation Rights or Tandem Stock
Appreciation Rights. Stock Appreciation Rights shall be subject to
such terms and conditions as the Committee shall impose. The grant of
the Stock Appreciation Right may provide that the holder may be paid
for the value of the Stock Appreciation Right either in cash or in
Shares, or a combination thereof, at the discretion of the Committee.
In the event of the exercise of a Stock Appreciation Right payable in
Shares, the holder of the Stock Appreciation Right shall receive that
number of whole Shares of stock of the Company having an aggregate
Fair Market Value on the date of exercise equal to the value obtained
by multiplying (i) either (a) in the case of a Tandem Stock
Appreciation Right, the difference between the Fair Market Value of a
Share on the date of exercise over the per share exercise price of the
related option, or (b) in the case of a Non-Tandem Stock Appreciation
Right, the difference between the Fair Market Value of a Share on the
date of exercise over the Fair Market Value on the date of the grant
by (ii) the number of Shares as to which the Stock Appreciation Right
is exercised. However, notwithstanding the foregoing, the Committee,
in its sole discretion, may place a ceiling on the amount payable upon
exercise of a Stock Appreciation Right, but any such limitation shall
be specified at the time that the Stock Appreciation Right is granted.
7.2 Exercisability. A Tandem Stock Appreciation Right
may be granted at the time of the grant of the related stock option
or, if the related stock option is a Non-Qualified Stock Option, at
any time thereafter during the term of the stock option. A Tandem
Stock Appreciation Right granted in connection with an Incentive Stock
Option (i) may be exercised at, and only at, the times and to the
extent the related Incentive Stock Option is exercisable, (ii) expires
upon the termination of the related Incentive Stock Option, (iii) may
not exceed 100% of the difference between the exercise price of the
related Incentive Stock Option and the market price of the Shares
subject to the related Incentive Stock Option at the time the Tandem
Stock Appreciation Right is exercised and (iv) may be exercised at,
and only at, such times as the market price of the Shares subject to
the related Incentive Stock Option exceeds the exercise price of the
related Incentive Stock Option. The Tandem Stock Appreciation Right
may be transferred at, and only at, the times and to the extent the
related stock option is transferable. If a Tandem Stock Appreciation
Right is granted, there shall be surrendered and cancelled from the
related option at the time of exercise of the Tandem Stock
Appreciation Right, in lieu of exercise under the related option, that
number of Shares as shall equal the number of Shares as to which the
Tandem Stock Appreciation Right shall have been exercised.
7.3 Certain Limitations on Non-Tandem Stock Appreciation
Rights. A Non-Tandem Stock Appreciation Right will be exercisable as
provided by the Committee and will have such other terms and
conditions as the Committee may determine. A Non-Tandem Stock
Appreciation Right is subject to acceleration of vesting or immediate
termination in certain circumstances in the same manner as stock
options pursuant to Subsections 6.4 and 6.5 of the Plan.
7.4 Limited Stock Appreciation Rights. The Committee is
also authorized to grant "limited stock appreciation rights," either
as Tandem Stock Appreciation Rights or Non-Tandem Stock Appreciation
Rights. Limited stock appreciation rights would become exercisable
only upon the occurrence of a Change in Control or such other event as
the Committee may designate at the time of grant or thereafter.
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SECTION 8. RESTRICTED STOCK
8.1 Grants. The Committee may grant Awards of Restricted
Stock for no cash consideration, for such minimum consideration as may
be required by applicable law, or for such other consideration as may
be specified by the grant. The terms and conditions of the Restricted
Stock shall be specified by the grant agreement. The Committee, in
its sole discretion, may specify any particular rights which the
person to whom an Award of Restricted Stock is made shall have in the
Restricted Stock during the restriction period and the restrictions
applicable to the particular Award, the vesting schedule (which may be
based on service, performance or other factors) and rights to
acceleration of vesting (including, without limitation, whether
non-vested Shares are forfeited or vested upon termination of
employment). Further, the Committee may award performance-based
Restricted Stock by conditioning the grant, or vesting or such other
factors, such as the release, expiration or lapse of restrictions upon
any such Award (including the acceleration of any such conditions or
terms) of such Restricted Stock upon the attainment of specified
performance goals or such other factors as the Committee may
determine. The Committee shall also determine when the restrictions
shall lapse or expire and the conditions, if any, under which the
Restricted Stock will be forfeited or sold back to the Company. Each
Award of Restricted Stock may have different restrictions and
conditions. The Committee, in its discretion, may prospectively
change the restriction period and the restrictions applicable to any
particular Award of Restricted Stock. Unless otherwise set forth in
the Plan, Restricted Stock may not be disposed of by the recipient
until the restrictions specified in the Award expire.
8.2 Awards and Certificates. Any Restricted Stock issued
hereunder may be evidenced in such manner as the Committee, in its
sole discretion, shall deem appropriate including, without limitation,
book-entry registration or issuance of a stock certificate or
certificates. In the event any stock certificate is issued in respect
of Shares of Restricted Stock awarded hereunder, such certificate
shall bear an appropriate legend with respect to the restrictions
applicable to such Award. The Company may retain, at its option, the
physical custody of any stock certificate representing any awards of
Restricted Stock during the restriction period or require that the
Restricted Stock be placed in escrow or trust, along with a stock
power endorsed in blank, until all restrictions are removed or expire.
SECTION 9. PERFORMANCE AWARDS
9.1 Grants. A Performance Award may consist of either or
both, as the Committee may determine, of (i) "Performance Shares" or
the right to receive Shares, Restricted Stock or cash of an equivalent
value, or any combination thereof as the Committee may determine, or
(ii) "Performance Units," or the right to receive a fixed dollar
amount payable in cash, Common Stock, Restricted Stock or any
combination thereof, as the Committee may determine. The Committee
may grant Performance Awards to any eligible employee, for no cash
consideration, for such minimum consideration as may be required by
applicable law or for such other consideration as may be specified at
the time of the grant. The terms and conditions of Performance Awards
shall be specified at the time of the grant and may include provisions
establishing the performance period, the performance criteria to be
achieved during a performance period, the criteria used to determine
vesting (including the acceleration thereof), whether Performance
Awards are forfeited or vest upon termination of employment during a
performance period and the maximum or minimum settlement values. Each
Performance Award shall have its own terms and conditions, which shall
be determined in the discretion of the Committee. If the Committee
determines, in its sole discretion, that the established performance
measures or objectives are no longer suitable because of a change in
the Company's business, operations, corporate structure or for other
reasons that the Committee deems satisfactory, the Committee may
modify the performance measures or objectives and/or the performance
period.
9.2 Terms and Conditions. Performance Awards may be
valued by reference to the Fair Market Value of a Share or according
to any formula or method deemed appropriate by the Committee, in its
sole discretion, including, but not limited to, achievement of
specific financial, production, sales, cost or earnings performance
objectives that the Committee believes to be relevant to the Company's
business and for remaining in the employ of the Company for a
specified period of time, or the Company's performance or the
performance of its Common Stock measured against the performance of
the market, the
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Company's industry segment or its direct competitors. Performance
Awards may be paid in cash, Shares (including Restricted Stock) or
other consideration, or any combination thereof. If payable in
Shares, the consideration for the issuance of the Shares may be the
achievement of the performance objective established at the time of
the grant of the Performance Award. Performance Awards may be payable
in a single payment or in installments and may be payable at a
specified date or dates or upon attaining the performance objective,
all at the Committee's discretion. The extent to which any applicable
performance objective has been achieved shall be conclusively
determined by the Committee.
SECTION 10. DIVIDEND EQUIVALENT RIGHTS
The Committee may grant a Dividend Equivalent Right, either as a
component of another Award or as a separate Award, and, in general, each such
holder of a Dividend Equivalent Right that is outstanding on a dividend record
date for the Company's Common Stock shall be credited with an amount equal to
the cash or stock dividends or other distributions that would have been
received had the Shares covered by the Award been issued and outstanding on the
dividend record date. The terms and conditions of the Dividend Equivalent
Right shall be specified by the grant. Dividend equivalents credited to the
holder of a Dividend Equivalent Right may be paid currently or may be deemed to
be reinvested in additional Shares (which may thereafter accrue additional
Dividend Equivalent Rights). Any such reinvestment shall be at the Fair Market
Value at the time thereof. Dividend Equivalent Rights may be settled in cash
or Shares, or a combination thereof, in a single payment or in installments. A
Dividend Equivalent Right granted as a component of another Award may provide
that such Dividend Equivalent Right shall be settled upon exercise, settlement
or payment for or lapse of restrictions on such other Award, and that such
Dividend Equivalent Right shall expire or be forfeited or annulled under the
same conditions as such other Award. A Dividend Equivalent Right granted as a
component of another Award may also contain terms and conditions different from
such other Award.
SECTION 11. OTHER AWARDS
The Committee may grant to any eligible employee other forms of Awards
based upon, payable in or otherwise related to, in whole or in part, Shares, if
the Committee, in its sole discretion, determines that such other form of Award
is consistent with the purposes and restrictions of the Plan. The terms and
conditions of such other form of Award shall be specified by the grant,
including, but not limited to, the price, if any, and the vesting schedule, if
any. Such Awards may be granted for no cash consideration, for such minimum
consideration as may be required by applicable law or for such other
consideration as may be specified by the grant.
SECTION 12. COMPLIANCE WITH SECURITIES AND OTHER LAWS
In no event shall the Company be required to sell or issue Shares
under any Award if the sale or issuance thereof would constitute a violation of
applicable federal or state securities laws or regulations or a violation of
any other law or regulation of any governmental or regulatory agency or
authority or any national securities exchange. As a condition to any sale or
issuance of Shares, the Company may place legends on Shares, issue stop
transfer orders and require such agreements or undertakings as the Company may
deem necessary or advisable to assure compliance with any such laws or
regulations, including, if the Company or its counsel deems it appropriate,
representations from the person to whom an Award is granted that he or she is
acquiring the Shares solely for investment and not with a view to distribution
and that no distribution of the Shares will be made unless registered pursuant
to applicable federal and state securities laws, or in the opinion of counsel
of the Company, such registration is unnecessary.
SECTION 13. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR
REORGANIZATION
The value of an Award in Shares shall be adjusted from time to time as
follows:
(a) Subject to any required action by stockholders, the
number of Shares covered by each outstanding Award, and the exercise
price, shall be proportionately adjusted for any increase or decrease
in the number of issued Shares of the Company resulting from a
subdivision or consolidation of Shares or
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the payment of a stock dividend (but only in Shares) or any other
increase or decrease in the number of Shares effected without receipt
of consideration by the Company.
(b) Subject to any required action by stockholders, if
the Company shall be the surviving corporation in any Reorganization,
merger or consolidation, each outstanding Award shall pertain to and
apply to the securities to which a holder of the number of Shares
subject to the Award would have been entitled, and if a plan or
agreement reflecting any such event is in effect that specifically
provides for the change, conversion or exchange of Shares, then any
adjustment to Shares relating to an Award hereunder shall not be
inconsistent with the terms of any such plan or agreement.
(c) In the event of a change in the Shares of the
Company as presently constituted, which is limited to a change of par
value into the same number of Shares with a different par value or
without par value, the Shares resulting from any such change shall be
deemed to be the Shares within the meaning of the Plan.
To the extent that the foregoing adjustments relate to stock
or securities of the Company, such adjustments shall be made by the
Board, whose determination shall be final, binding and conclusive.
Except as hereinbefore expressly provided in the Plan, any
person to whom an Award is granted shall have no rights by reason of
any subdivision or consolidation of stock of any class or the payment
of any stock dividend or any other increase or decrease in the number
of shares of stock of any class or by reason of any dissolution,
liquidation, reorganization, merger or consolidation or spinoff of
assets or stock of another corporation, and any issue by the Company
of shares of stock of any class, or securities convertible into shares
of stock of any class, shall not affect, and no adjustment by reason
thereof shall be made with respect to, the number or exercise price of
Shares subject to an Award.
The grant of an Award pursuant to the Plan shall not affect in
any way the right or power of the Company to make adjustments,
reclassifications, Reorganizations or changes of its capital or
business structure or to merge or to consolidate or to dissolve,
liquidate or sell or transfer all or any part of its business or
assets.
SECTION 14. AMENDMENT OR TERMINATION OF THE PLAN
14.1 Amendment of the Plan. Notwithstanding anything contained in
the Plan to the contrary, all provisions of the Plan may at any time or from
time to time be modified or amended by the Board; provided, however, that no
Award at any time outstanding under the Plan may be modified, impaired or
cancelled adversely to the holder of the Award without the consent of such
holder; and provided, further, that the Plan may not be amended without
approval by the holders of a majority of the Shares of the Company represented
and voted at a meeting of the stockholders (a) to increase the maximum number
of Shares subject to the Plan, (b) to materially modify the requirements as to
eligibility for participation in the Plan, (c) to decrease the minimum exercise
price for options, (d) to otherwise materially increase the benefits accruing
to persons to whom Awards may be made under the Plan, as amended, or (e) if
such approval is otherwise necessary, to comply with Rule 16b-3 promulgated
under the Exchange Act, as amended, or to comply with any other applicable
laws, regulations or listing requirements, or to qualify for an exemption or
characterization that is deemed desirable by the Board.
14.2 Termination of the Plan. The Board may suspend or terminate
the Plan at any time, and such suspension or termination may be retroactive or
prospective. However, no Award may be granted on or after the tenth
anniversary of the adoption of the Plan. Termination of the Plan shall not
impair or affect any Award previously granted hereunder and the rights of the
holder of the Award shall remain in effect until the Award has been exercised
in its entirety or has expired or otherwise has been terminated by the terms of
such Award.
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<PAGE> 13
SECTION 15. AMENDMENTS AND ADJUSTMENTS TO AWARDS
The Committee may amend, modify or terminate any outstanding Award
with the Participant's consent at any time prior to payment or exercise in any
manner not inconsistent with the terms of the Plan, including, without
limitation, (i) to change the date or dates as of which (A) an option becomes
exercisable or (B) a performance-based Award is deemed earned, (ii) to amend
the terms of any outstanding Award to provide an exercise price per share which
is higher or lower than the then current exercise price per share of such
outstanding Award or (iii) to cancel an Award and grant a new Award in
substitution therefor under such different terms and conditions as it
determines in its sole and complete discretion to be appropriate including, but
not limited to, having an exercise price per share which may be higher or lower
than the exercise price per share of the cancelled Award. The Committee is
also authorized to make adjustments in the terms and conditions of, and the
criteria included in, Awards in recognition of unusual or nonrecurring events
(including, without limitation, the events described in Section 13 hereof)
affecting the Company, or the financial statements of the Company or any
Affiliate, or of changes in applicable laws, regulations or accounting
principles, whenever the Committee determines that such adjustments are
appropriate in order to prevent reduction or enlargement of the benefits or
potential benefits intended to be made available under the Plan. Any provision
of the Plan or any agreement regarding an Award to the contrary
notwithstanding, the Committee may cause any Award granted to be cancelled in
consideration of a cash payment or alternative Award made to the holder of such
cancelled Award equal in value to the Fair Market Value of such cancelled
Award. The determinations of value under this Section 15 shall be made by the
Committee in its sole discretion.
SECTION 16. GENERAL PROVISIONS
16.1 No Limit on Other Compensation Arrangements. Nothing
contained in the Plan shall prevent the Company from adopting or continuing in
effect other compensation arrangements, and such arrangements may be either
generally applicable or applicable only in specific cases.
16.2 No Right to Employment. Nothing in the Plan or in any Award,
nor the grant of any Award, shall confer upon or be construed as giving any
recipient of an Award any right to remain in the employ of the Company.
Further, the Company may at any time dismiss a participant in the Plan from
employment, free from any liability or any claim under the Plan, unless
otherwise expressly provided in the Plan or in any Award agreement. No
employee, participant or other person shall have any claim to be granted any
Award, and there is no obligation for uniformity or treatment of employees,
participants or holders or beneficiaries of Awards.
16.3 GOVERNING LAW. THE VALIDITY, CONSTRUCTION AND EFFECT OF THE
PLAN AND ANY RULES AND REGULATIONS RELATING TO THE PLAN SHALL BE DETERMINED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.
16.4 Severability. If any provision of the Plan or any Award is or
becomes or is deemed to be invalid, illegal or unenforceable in any
jurisdiction or as to any person or Award, or would disqualify the Plan or any
Award under any law deemed applicable by the Committee, such provision shall be
construed or deemed amended to conform to applicable laws, or if it cannot be
construed or deemed amended without, in the sole determination of the
Committee, materially altering the intent of the Plan or the Award, such
provision shall be stricken as to such jurisdiction, person or Award and the
remainder of the Plan and any such Award shall remain in full force and effect.
16.5 No Fractional Shares. No fractional Shares shall be issued or
delivered pursuant to the Plan or any Award, and the Committee shall determine
whether cash, other securities or other property shall be paid or transferred
in lieu of any fractional Shares or whether such fractional Shares or any
rights thereto shall be cancelled, terminated or otherwise eliminated.
16.6 Headings. Headings are given to the Subsections of the Plan
solely as a convenience to facilitate reference. Such headings shall not be
deemed in any way material or relevant to the construction or interpretation of
the Plan or any provision thereof.
16.7 Effective Date. The Plan shall be effective as of the date of
its approval by the holders of a majority of the Shares of the Company
represented and voting at the next Annual Meeting of Stockholders. If the
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<PAGE> 14
Plan is not approved by the stockholders at the 1994 Annual Meeting, after such
date, the Plan and all Awards granted hereunder, if any, shall be void.
16.8 Non-Transferability of Awards. Awards shall not be
transferable otherwise than by will or the laws of descent and distribution,
and Awards may be exercised, during the lifetime of the holder, only by the
holder; provided, however, that with the approval of the Committee, Awards
other than Incentive Stock Options may be transferred as directed under a
qualified domestic relations order. Any attempted assignment, transfer,
pledge, hypothecation or other disposition of an Award contrary to the
provisions hereof, or the levy of any execution, attachment or similar process
upon an Award shall be null and void and without effect.
SECTION 17. NAMED EXECUTIVE OFFICERS
17.1 Applicability of Section 17. The provisions of this Section
17 shall apply only to those executive officers (i) whose compensation is
required to be reported in the Company's proxy statement pursuant to Item
402(a)(3)(i) and (ii) of Regulation S-K under the general rules and regulations
under the Exchange Act, as amended, and (ii) whose total compensation,
including estimated Awards, is determined by the Committee to possibly be
subject to the limitations on deductions imposed by Section 162(m) of the Code
("Named Executive Officers"). In the event of any inconsistencies between this
Section 17 and the other Plan provisions as they pertain to Named Executive
Officers, the provisions of this Section 17 shall control.
17.2 Establishment of Performance Goals. Awards for Named
Executive Officers, other than stock options and Stock Appreciation Rights,
shall be based on the attainment of certain performance goals. No later than
the earlier of (i) ninety (90) days after the commencement of the applicable
fiscal year or such other award period as may be established by the Committee
("Award Period") and (ii) the completion of twenty-five percent (25%) of such
Award Period, the Committee shall establish, in writing, the performance goals
applicable to each such Award for Named Executive Officers. At the time the
performance goals are established by the Committee, their outcome must be
substantially uncertain. In addition, the performance goal must state, in
terms of an objective formula or standard, the method for computing the amount
of compensation payable to the Named Executive Officer if the goal is obtained.
Such formula or standard shall be sufficiently objective so that a third party
with knowledge of the relevant performance results could calculate the amount
to be paid to the subject Named Executive Officer. The material terms of the
performance goals for Named Executive Officers and the compensation payable
thereunder shall be submitted to the shareholders of the Company for their
review and approval if and to the extent required under Section 162(m) of the
Code, and the Treasury Regulations thereunder. Shareholder approval, if
necessary, shall be obtained for such performance goals prior to any Award
being paid to such Named Executive Officer. If shareholder approval is
required and not received with respect to such performance goals, no amount
shall be paid to such Named Executive Officer for such applicable Award Period
under the Plan.
17.3 Components of Awards. Each Award of a Named Executive
Officer, other than stock options and Stock Appreciation Rights, shall be based
on performance goals which are sufficiently objective so that a third party
having knowledge of the relevant facts could determine whether the goal was
met. Except as provided in Subsection 17.8 herein, performance measures which
may serve as determinants of Named Executive Officers' Awards shall be limited
to the following measures: earnings per share; return on assets; return on
equity; return on capital; net profit after taxes; net profit before taxes;
operating profits; stock price; and sales or expenses. Within ninety (90) days
following the end of each Award Period, the Committee shall certify in writing
that the performance goals, and any other material terms were satisfied.
Thereafter, Awards shall be made for each Named Executive Officer as determined
by the Committee. The Awards may not vary from the preestablished amount based
on the level of achievement.
17.4 No Mid-Year Change in Awards. Except as provided in
Subsections 17.8 and 17.9 herein, each Named Executive Officer's Awards shall
be based exclusively on the performance measures established by the Committee
pursuant to Subsection 17.2.
17.5 No Partial Award Period Participation. A Named Executive
Officer who becomes eligible to participate in the Plan after performance goals
have been established in an Award Period pursuant to Subsection 17.2
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<PAGE> 15
may not participate in the Plan prior to the next succeeding Award Period,
except with respect to Awards which are stock options or Stock Appreciation
Rights.
17.6 Performance Goals. Except as provided in Subsection 17.8
herein, performance goals shall not be changed following their establishment,
and Named Executive Officers shall not receive any payout, except with respect
to Awards which are stock options or Stock Appreciation Rights, when the
minimum performance goals are not met or exceeded.
17.7 Individual Performance and Discretionary Adjustments. Except
as provided in Subsection 17.8 herein, subjective evaluations of individual
performance of Named Executive Officers shall not be reflected in their Awards,
other than Awards which are stock options or Stock Appreciation Rights. The
payment of such Awards shall be entirely dependent upon the attainment of the
preestablished performance goals.
17.8 Amendments. No amendment of the Plan with respect to any
Named Executive Officer may be made which would (i) increase the maximum amount
that can be paid to any one Participant under the Plan, (ii) change the
specified performance goal for payment of Awards, or (iii) modify the
requirements as to eligibility for participation in the Plan, unless the
Company's shareholders have first approved such amendment in a manner which
would permit the deduction under Section 162(m) of the Code of such payment in
the fiscal year it is paid. The Committee shall amend this Section 17 and such
other provisions as it deems appropriate, to cause amounts payable to Named
Executive Officers to satisfy the requirements of Section 162(m) and the
Treasury Regulations promulgated thereunder.
17.9 Stock Options and Stock Appreciation Rights. Notwithstanding
any provision of the Plan (including the provisions of this Section 17) to the
contrary, the amount of compensation which a Named Executive Officer may
receive with respect to stock options and Stock Appreciation Rights which are
granted hereunder is based solely on an increase in the value of the applicable
Shares after the date of grant of such Award. Thus, no stock option may be
granted hereunder to a Named Executive Officer with an exercise price less than
the Fair Market Value of Shares on the date of grant. Furthermore, the maximum
number of Shares (or cash equivalent value) with respect to which stock options
or Stock Appreciation Rights may be granted hereunder to any Named Executive
Officer during any calendar year may not exceed 200,000 Shares, subject to
adjustment as provided in Section 13 hereunder.
17.10 Maximum Amount of Compensation. The maximum amount of
compensation payable as an Award (other than an Award which is a stock option
or Stock Appreciation Right) to any Named Executive Officer during any calendar
year may not exceed $1,000,000.
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<PAGE> 16
STOCK OPTION AGREEMENT
between
LANDMARK GRAPHICS CORPORATION
and
________________________________
Landmark Graphics Corporation 1994 Flexible Incentive Plan
Grant Number __________________ (Date of Grant)
<PAGE> 17
STOCK OPTION AGREEMENT
This Stock Option Agreement (this "Agreement") is made and entered
into as of ___________________, 199___ (the "Date of Grant") between Landmark
Graphics Corporation, a Delaware corporation (the "Company"), and
________________________ (the "Optionee").
W I T N E S S E T H
WHEREAS, the Company has adopted the Landmark Graphics Corporation
1994 Flexible Incentive Plan (the "Plan") to enable the Company to attract and
retain key employees by awarding stock-based incentives and other equity
interests that encourage stock ownership by such employees; and acting upon the
recommendation of the Stock Option and Compensation Committee (the "Committee")
appointed by the Board of Directors of the Company to administer the Plan, the
Company desires to grant this non-qualified stock option (the "Option") to the
Optionee pursuant to the Plan.
NOW, THEREFORE, the parties hereto agree that these options are
granted under and governed by the "Terms and Conditions of Non-Qualified Stock
Option," attached hereto and made part of this Agreement. The Company hereby
grants to the Optionee the right and option to purchase from the Company up to:
_______ shares (the "Shares")
of the Company's $.05 par value common stock (the "Common Stock") at $______
per share (the "Option Price"); such Option to vest from _____________, 199___
(the "Vesting Date") as provided hereinafter in said Terms and Conditions of
Non-Qualified Stock Option.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the day and year first above written.
LANDMARK GRAPHICS CORPORATION
___________________________________ ___________________________
Daniel L. Casaccia, Vice President Patti L. Massaro, Secretary
OPTIONEE:
___________________________________
<PAGE> 18
TERMS AND CONDITIONS OF
NON-QUALIFIED STOCK OPTION
(LANDMARK GRAPHICS CORPORATION
1994 FLEXIBLE INCENTIVE PLAN)
This Option is granted pursuant to the Landmark Graphics Corporation
1994 Flexible Incentive Plan and is evidenced by a Stock Option Agreement
between Landmark Graphics Corporation and the Optionee. The terms and
provisions of the Plan are incorporated herein by reference. Certain terms
used herein are defined on page 7.
1. Option Price. The option price of the Shares covered by the Option
was determined by the Committee in its sole discretion.
2. Payment of Purchase Price. The purchase price of the Shares as to
which the Option may be exercised shall be paid in full to the Company
at the time of the exercise of the Option, or any portion thereof, in
cash, Shares of Common Stock owned by the Optionee, a combination of
cash and Shares, or other consideration deemed acceptable by the
Committee in its sole discretion.
3. Exercise of Option.
3.1 Subject to the terms and conditions of this Agreement and the
Plan, the Optionee may exercise the Option from time to time
with respect to all or any part of the Vested Shares during
the period commencing on the Vesting Date and ending on the
date ten (10) years from the Date of Grant.
3.2 Subject to the terms and conditions of this Agreement and the
Plan, the Option may be exercised by giving written notice to
the Company stating that the Optionee elects to exercise the
Option and the number of Shares with respect to which the
Option is being exercised. Such notice shall be signed by the
person or persons exercising the Option and shall be
accompanied by the payment required by Section 2. The stock
certificate or certificates representing the Shares as to
which the Option is exercised shall be registered in the name
of the Optionee and may contain a legend or legends making
appropriate reference to the restrictions, if any, imposed
under this Agreement and the Plan. If the Option is exercised
by any person or persons other than the Optionee pursuant to
the provisions of Sections 5 or 7 hereof, the notice required
hereunder shall be accompanied by appropriate proof of the
right of such person or persons to exercise the Option, as set
forth in Section 7 hereof.
3.3 The Optionee (or, if the Optionee has died, the person or
persons specified in Section 5) shall have no rights as a
stockholder with respect to any Shares until the issuance of a
stock certificate representing such Shares or until he has
been determined to be a stockholder of record by the Company's
transfer agent upon
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<PAGE> 19
due exercise of the Option. No adjustment shall be made for
dividends (ordinary or extraordinary, whether in cash,
securities or other property) or distributions or other rights
on or with respect to Shares purchased pursuant to this Option
for which the record date is prior to the date of purchase,
except as otherwise provided in Section 9.
3.4 The Optionee shall satisfy all federal, state or local taxes
required to be withheld by the Company with respect to the
exercise of the Option, or any part thereof, either (a) by
payment of the amount of such withholding in cash or other
consideration acceptable to the Committee or (b) through
either the retention by the Company of Shares out of the
Shares being acquired through the exercise of the Option or
the delivery of already owned Shares.
4. Termination of Employment.
4.1 If the Optionee's employment with the Company or any of its
Subsidiaries terminates for any reason other than death or
Disability, the Option shall terminate with respect to any
Unvested Shares as of the date of termination of employment.
With respect to Vested Shares covered by the Option, the
Optionee shall have the right, during the period ending thirty
(30) days after such termination of employment (the "Grace
Period"), to exercise the Option or any portion thereof to the
extent it was exercisable on the date of such termination of
employment, subject to the expiration of the term of the
Option as set forth in Section 3.1. Upon the expiration of
such Grace Period, all of the Optionee's rights hereunder
shall cease.
4.2 If the Optionee dies while employed by the Company or any of
its Subsidiaries, or if the Optionee dies within the Grace
Period, the Option shall terminate with respect to any
Unvested Shares as of the date of termination of employment.
With respect to Vested Shares covered by the Option, Section 5
shall apply, and the person or persons set forth therein shall
have the right, during the period ending on the day six (6)
months after the date of the Optionee's death or the
termination of the Optionee's employment, to exercise the
Option or any portion thereof to the extent it would have been
exercisable by the Optionee on the date of death or
termination of employment, subject to the expiration of the
term of the Option as set forth in Section 3.1. The Option
shall terminate with respect to all Vested Shares upon the
expiration of such six (6) month period.
4.3 If, as a result of Disability, the Optionee's employment with
the Company or any of its Subsidiaries terminates, the Option
shall terminate with respect to any Unvested Shares as of the
date of termination of employment. With respect to Vested
Shares covered by the Option, the Optionee shall have the
right, during the period ending on the day six (6) months
after such termination of employment, to exercise the Option
or any portion thereof to the extent it was exercisable on the
date of termination of employment, subject to the expiration
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<PAGE> 20
of the term of the Option as set forth in Section 3.1. Upon
the expiration of such six (6) month period, all of the
Optionee's rights hereunder shall cease.
4.4 In the event of a Change in Control, all Shares subject to the
Option shall immediately become Vested Shares and the Optionee
shall immediately have the right to exercise the Option,
subject to the expiration of the term of the Option as set
forth in Section 3.1.
5. Effect of Death. Upon the Optionee's death, the legal representative,
executor or administrator of the Optionee's estate or the person or
persons to whom the Option or any portion thereof shall have been
validly transferred by the legal representative, executor or
administrator, pursuant to a will or the laws of descent and
distribution, shall have the right, subject to the expiration of the
term of the Option as set forth in Section 3.1, to exercise the Option
to the extent that such Option or portion thereof would have been
exercisable by the Optionee in accordance with the provisions of
Sections 3 and 4 hereof.
6. Vesting of Shares.
6.1 Subject to Sections 4.4 and 11, the Shares covered by the
Option shall constitute "Vested Shares" in accordance with the
following schedule:
<TABLE>
<CAPTION>
Anniversary of Portion of Shares which are Vested Shares on
Vesting Date and after such Anniversary and before next Anniversary
------------ ------------------------------------------------------
<S> <C>
First 25%
Second 50%
Third 75%
Fourth 100%
</TABLE>
Notwithstanding the foregoing schedule, the Committee may deem
all or any portion of the Shares to be Vested Shares whenever,
in the Committee's sole discretion, circumstances warrant such
action.
6.2 "Unvested Shares" shall mean Shares which are not Vested Shares
in accordance with Section 6.1 above.
7. Options Not Transferable. Neither this Option nor any of the rights
and privileges hereby conferred may be transferred, sold, assigned,
pledged, gifted or otherwise transferred in any manner other than by
will or by the laws of descent and distribution or as directed under a
qualified domestic relations order, and shall not otherwise be
assignable by operation of law or subject to execution, attachment or
similar process. This Option may be exercised during the Optionee's
lifetime only by the Optionee or by the Optionee's alternate payee
under a qualified domestic relations order. Any attempted transfer,
sale, assignment, pledge, gift or other transfer of the Option or of
any right or privilege hereby conferred
3
<PAGE> 21
contrary to the provisions of this Agreement, and the levy of any
execution, attachment or similar process upon such Option, right or
privilege, shall be null and void and without force or effect. No
exercise of the Option by an alternate payee or transfer of the Option
by will or by the laws of descent and distribution shall be effective
to bind the Company unless the Company is furnished with written notice
thereof and an authenticated copy of the will and/or such other
evidence as the Committee may deem necessary to establish the validity
of the exercise or transfer and the acceptance by the transferee or
transferees of the terms and conditions of this Agreement and the Plan.
8. Compliance with Securities and Other Laws. The Company shall not be
required to issue or deliver any certificates for Shares purchased
pursuant to the Option prior to: (i) the obtaining of any approval
from any governmental agency which the Company shall, in its sole
discretion, determine to be necessary or advisable; (ii) the completion
of any registration or other qualification of such Shares under any
state or federal law or ruling or regulation of any governmental body
which the Company shall, in its sole discretion, determine to be
necessary or advisable; and (iii) the determination by the Committee
that the Optionee has tendered to the Company or otherwise satisfied
any federal, state or local tax owed by the Optionee as a result of
exercising the Option when the Company has a legal liability to satisfy
such tax. In addition, if Shares reserved for issuance upon the
exercise of the Option shall not then be registered under the Act, the
Company may, upon the Optionee's exercise of the Option, require the
Optionee or his permitted transferee to represent in writing that the
Shares being acquired are for investment and not with a view to
distribution, and may mark the certificate for the Shares with a legend
restricting transfer and may issue stop transfer orders relating to
such certificate to the Company's transfer agent.
9. Withholding. In connection with the exercise of the Option by the
Optionee and, as a condition to the Company's obligation to deliver
Shares upon exercise of the Option, the Optionee shall make
arrangements, as set forth in the Plan, to insure that the amount of
the federal, state or local withholding tax, if any, required to be
withheld with respect to delivery of the Shares is made available by
the Optionee for timely payment of the tax by the Company to the
appropriate taxing authorities.
10. Changes in Capitalization. If the number of outstanding Shares is
changed as a result of a subdivision or consolidation of Shares, or the
payment of a stock dividend (but only in Shares), or any other increase
or decrease in the number of Shares effected without receipt of
consideration by the Company, the number of Shares covered by this
Agreement and the price per share payable upon exercise of the Option
shall be appropriately adjusted by the Committee subject to any
required action by stockholders so as to reflect such change in
capitalization.
11. Dissolution, Liquidation or Reorganization.
11.1 In the event of a dissolution or liquidation of the Company, the
Option granted hereunder shall terminate as of a date to be
fixed by the Board; provided, however,
4
<PAGE> 22
that the Optionee shall be given not less than thirty (30) days
prior written notice of the termination date. Upon such
notification, all Shares subject to the Option shall immediately
become Vested Shares and the Optionee shall have the right to
exercise the Option, subject to the expiration of the term of
the Option as set forth in Section 3.1, before the date of
termination. After this date, the Option shall terminate as to
any unexercised portion and shall be of no further effect.
11.2 In the event of a Reorganization:
a. If there is no plan or agreement respecting the
Reorganization, or if such plan or agreement does not
specifically provide for the change, conversion or
exchange of Shares under outstanding and unexercised
options for other securities, then the provisions of
Section 11.1 shall apply and the Option granted
hereunder shall terminate as if the Company had
dissolved or been liquidated.
b. If there is a plan or agreement respecting the
Reorganization that specifically provides for the
change, conversion or exchange of Shares under
outstanding and unexercised options for securities of
another corporation, then the Option granted hereunder
shall continue in force and effect and the Board shall
adjust the Shares under the Option in a manner not
inconsistent with the provisions of the plan or
agreement in order to reflect any capital adjustments
that might arise from such Reorganization.
12. Reservation of Shares. During the term of this Agreement, the Company
agrees that it will at all times reserve and keep available such number
of Shares as shall be sufficient to satisfy the requirements of this
Agreement. The inability of the Company to obtain authority from any
regulatory body having jurisdiction which is deemed by the Company's
counsel to be necessary to the lawful issuance and sale of any Shares
of its common stock hereunder shall relieve the Company of any
liability in respect of the nonissuance or nonsale of any common stock
as to which such requisite authority shall not have been obtained.
13. General.
13.1 No Right to Employment. Neither the granting of this Option,
the exercise of any part hereof, nor any provision of this
Agreement shall confer upon or be construed as giving the
Optionee any right to remain in the employ of the Company or any
of its Subsidiaries.
13.2 Benefit. This Agreement shall be binding upon and shall inure
to the benefit of the successors, assigns, legal
representatives, heirs, legatees, executors and administrators
of the respective parties hereto.
5
<PAGE> 23
13.3 Modifications. This Agreement may be altered or amended, within
the limitations of the Plan, in whole or in part at any time by
a written instrument signed by the Company and the Optionee
setting forth such changes.
13.4 Entire Agreement. This Agreement contains the entire agreement
between the parties, and no waiver of any of the terms of this
Agreement shall be valid unless signed by the party against whom
such waiver is asserted.
13.5 Severability. Should any one or more of the provisions hereof
be determined to be illegal or unenforceable, all of the other
provisions hereof shall be given effect separately therefrom and
shall not be affected thereby.
13.6 Notices. Any notice or other written instrument required or
permitted to be given, made or sent hereunder shall be in
writing, signed by the party giving or making the same and shall
be sent by United States Mail, registered or certified, with
postage prepaid, to the addresses set forth below:
<TABLE>
<S> <C>
If to Company: Landmark Graphics Corporation
Attention: Corporate Secretary
15150 Memorial Drive
Houston, Texas 77079-4304
If to Optionee: To the latest address of record for the Optionee
according to the personnel records of the Company.
</TABLE>
Either party hereto shall have the right to change the place to
which any such notice or other written instrument shall be sent
by a similar notice sent in like manner to the other party
hereto. The date of mailing of any notice or other written
instrument shall be deemed to be the date of such notice or
instrument and shall be effective from such date.
13.7 Governing Law. This Agreement will be governed by and construed
in accordance with the laws of the State of Texas (exclusive of
conflicts of law principles) and will, to the maximum extent
practicable, be deemed to call for performance in Harris County,
Texas.
13.8 Status of Option. This Option is not intended to qualify as
an "incentive stock option" within the meaning of Section 422
of the Code.
6
<PAGE> 24
DEFINITIONS
Except as otherwise defined, the following words and phrases shall have
the following meanings when used in this Agreement.
"Act" shall mean the Securities Act of 1933, as amended.
"Agreement" shall mean the Stock Option Agreement between the Company
and Optionee, the Terms and Conditions of Non-Qualified Stock Option attached
thereto and incorporated therein by reference and the terms and conditions of
the Plan, which are incorporated therein by reference.
"Change in Control" is defined in the Plan.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Committee" is defined in the Plan.
"Common Stock" is defined in the Plan.
"Company" is defined in the Plan.
"Date of Grant" shall mean the date of the Agreement.
"Disability" is defined in the Plan.
"Grace Period" is defined in Section 4.1 of the Agreement.
"Option" shall mean the option granted pursuant to the Agreement.
"Optionee" shall mean the recipient of the Option granted pursuant to
the Agreement.
"Plan" shall mean the Landmark Graphics Corporation 1994 Flexible
Incentive Plan.
"Reorganization" is defined in the Plan. For purposes of the
Agreement, the term "reorganization" does not include an internal realignment,
reassignment or similar restructuring of Company personnel.
"Section" means a section or subsection of the Agreement.
"Shares" is defined in the Plan.
"Unvested Shares" is defined in Section 6.2 of the Agreement.
"Vested Shares" is defined in Section 6.1 of the Agreement.
"Vesting Date" is defined on the signature page of the Agreement.
7
<PAGE> 25
RESTRICTED STOCK AGREEMENT
between
LANDMARK GRAPHICS CORPORATION
and
________________________________
Landmark Graphics Corporation 1994 Flexible Incentive Plan
Grant Number __________________ (Date of Grant)
<PAGE> 26
RESTRICTED STOCK AGREEMENT
This Restricted Stock Agreement (this "Agreement") is made and entered
into as of ___________________, 199___ (the "Date of Grant") between Landmark
Graphics Corporation, a Delaware corporation (the "Company"), and
________________________ (the "Grantee").
W I T N E S S E T H
WHEREAS, the Company has adopted the Landmark Graphics Corporation 1994
Flexible Incentive Plan (the "Plan") to enable the Company to attract and
retain key employees by awarding stock-based incentives and other equity
interests in the Company that encourage stock ownership by such employees; and
acting upon the recommendation of the Stock Option and Compensation Committee
(the "Committee") appointed by the Board of Directors of the Company to
administer the Plan, the Company desires to grant shares of restricted stock to
the Grantee pursuant to the Plan.
NOW, THEREFORE, the parties hereto agree that these shares are granted
under and governed by the "Terms and Conditions of Restricted Stock Grant,"
attached hereto and made a part of this Agreement. The Company hereby grants
to the Grantee _______ shares (the "Restricted Shares") of the Company's $.05
par value common stock (the "Common Stock") such Restricted Shares to vest from
_____________, 199___ (the "Vesting Date") as provided hereinafter in said
Terms and Conditions of Restricted Stock Grant.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the day and year first above written.
LANDMARK GRAPHICS CORPORATION
___________________________________ _____________________________
Daniel L. Casaccia, Vice President Patti L. Massaro, Secretary
Grantee:
___________________________________
<PAGE> 27
TERMS AND CONDITIONS OF
RESTRICTED STOCK GRANT
(LANDMARK GRAPHICS CORPORATION
1994 FLEXIBLE INCENTIVE PLAN)
The Restricted Shares are granted pursuant to the Landmark Graphics
Corporation 1994 Flexible Incentive Plan and are evidenced by a Restricted
Stock Agreement between Landmark Graphics Corporation and the Grantee. The
terms and provisions of the Plan are incorporated herein by reference. Certain
terms used herein are defined on page 3.
1. Restrictions Applicable to Transfers of Restricted Shares. Grantee
acknowledges that the Restricted Shares are subject to certain
restrictions on transfer set forth on Exhibit A attached hereto and
that until such restrictions have lapsed or been satisfied, or have
been waived by the Committee, in its sole discretion, Grantee shall not
sell, assign, transfer, pledge, encumber or otherwise dispose of such
portion of the Restricted Shares to which such restrictions apply
without the written consent of the Company as authorized by the
Committee.
2. Legend. Grantee acknowledges that a legend indicating that the
Restricted Shares are subject to restrictions on transfer may be
placed on any certificate(s) representing the Restricted Shares, and
the Company, or any transfer agent thereof, shall require compliance
therewith, either through the issuance of stop transfer instructions or
through the making of notations in the appropriate records of the
Company. The Company may retain, at its election, any certificate(s)
representing the Restricted Shares or deliver such certificate(s) to
the Grantee.
3. Termination of Employment. Upon the termination of the Grantee's
employment with the Company, all Unvested Shares shall be returned to
the Company and shall be deemed to have been forfeited by the Grantee;
provided, however, that the Committee may, in its sole discretion,
waive any or all remaining restrictions with respect to all or any
portion of the Unvested Shares. The Company may retain any stock
certificates representing the Restricted Shares until such time as the
Restricted Shares become vested and require that the Grantee execute
and deliver to the Company a stock power in blank until all
restrictions are removed or expire.
4. General.
4.1 No Right to Employment. Neither the granting of the Restricted
Shares nor any provision of this Agreement shall confer upon or
be construed as giving the Grantee any right to remain in the
employ of the Company or any of its Subsidiaries.
4.2 Benefit. This Agreement shall be binding upon and shall inure
to the benefit of the successors, assigns, legal
representatives, heirs, legatees, executors and administrators
of the respective parties hereto.
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<PAGE> 28
4.3 Modifications. This Agreement may be altered or amended, within
the limitations of the Plan, in whole or in part at any time by
a written instrument signed by the Company and the Grantee
setting forth such changes.
4.4 Entire Agreement. This Agreement contains the entire agreement
between the parties and no waiver of any of the terms of this
Agreement shall be valid unless signed by the party against whom
such waiver is asserted.
4.5 Severability. Should any one or more of the provisions hereof
be determined to be illegal or unenforceable, all of the other
provisions hereof shall be given effect separately therefrom and
shall not be affected thereby.
4.6 Notices. Any notice or other written instrument required or
permitted to be given, made or sent hereunder shall be in
writing, signed by the party giving or making the same and shall
be sent by United States mail, registered or certified, with
postage prepaid, to the addresses set forth below:
<TABLE>
<S> <C>
If to Company: Landmark Graphics Corporation
Attention: Corporate Secretary
15150 Memorial Drive
Houston, Texas 77079-4304
If to Grantee: To the latest address of record for the
Grantee according to the personnel
records of the Company
</TABLE>
Either party hereto shall have the right to change the place to
which any such notice or other written instrument shall be sent
by a similar notice sent in like manner to the other party
hereto. The date of mailing of any notice or other written
instrument shall be deemed to be the date of such notice or
instrument and shall be effective from such date.
4.7 Governing Law. This Agreement will be governed by and construed
in accordance with the laws of the State of Texas (exclusive of
conflicts of law principles) and will, to the maximum extent
practicable, be deemed to call for performance in Harris County,
Texas.
2
<PAGE> 29
DEFINITIONS
Except as otherwise defined, the following words and phrases shall have
the following meanings when used in this Agreement.
"Agreement" shall mean the Restricted Stock Agreement between the
Company and Grantee, the Terms and Conditions of Restricted Stock Grant
attached thereto and incorporated therein by reference and the terms and
conditions of the Plan, which are incorporated therein by reference.
"Committee" is defined in the Plan.
"Company" is defined in the Plan.
"Date of Grant" shall mean the date of the Agreement.
"Grantee" shall mean the recipient of the Restricted Shares granted
pursuant to the Agreement.
"Plan" shall mean the Landmark Graphics Corporation 1994 Flexible
Incentive Plan.
"Restricted Shares" is defined on the signature page of the Agreement.
"Section" means a section or subsection of the Agreement.
"Unvested Shares" shall mean Restricted Shares as to which the
restrictions set forth on Exhibit A to the Agreement have not lapsed or
otherwise been satisfied or waived by the Committee.
"Vested Shares" shall mean Restricted Shares as to which the
restrictions set forth on Exhibit A to the Agreement have lapsed or otherwise
been satisfied or waived by the Committee.
"Vesting Date" is defined on the signature page of the Agreement.
3
<PAGE> 30
EXHIBIT A
Vesting Schedule and Description
of Restrictions Affecting Restricted Shares
EXHIBIT A
