SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended March 31, 1997
Commission File Number: 0-23870
McMoRan Oil & Gas Co.
Incorporated in Delaware 72-1266477
(IRS Employer Identification No.)
1615 Poydras Street, New Orleans, Louisiana 70112
Registrant's telephone number, including area code: (504) 582-4000
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90
days. Yes X No
On March 31, 1997, there were issued and outstanding 14,036,519 shares
of the registrant's Common Stock, par value $0.01 per share.
<PAGE> 1
MCMORAN OIL & GAS CO.
TABLE OF CONTENTS
Page
Part I. Financial Information
Financial Statements:
Condensed Balance Sheets 3
Statements of Operations 4
Statements of Cash Flow 5
Notes to Financial Statements 6
Remarks 6
Report of Independent Public Accountants 6
Management's Discussion and Analysis
of Financial Condition and Results of Operations 7
Part II. Other Information 9
Signature 10
Exhibit Index E-1
<PAGE> 2
McMoRan Oil & Gas Co.
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements.
MCMORAN OIL & GAS CO.
CONDENSED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
---------- ----------
(In Thousands)
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 8,073 $ 10,500
Accounts receivable and other 4,425 2,249
---------- ----------
Total current assets 12,498 12,749
Oil and gas properties, net 18,492 18,231
---------- ----------
Total assets $ 30,990 $ 30,980
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued
liabilities $ 10,615 $ 9,411
Current portion of production loan 2,304 366
---------- ----------
Total current liabilities 12,919 9,777
Production loan, less current
portion 11,718 12,391
Other liabilities 461 566
Stockholders' equity 5,892 8,246
---------- ----------
Total liabilities and
stockholders' equity $ 30,990 $ 30,980
========== ==========
</TABLE>
The accompanying notes are an integral part of these financial
statements.
<PAGE> 3
MCMORAN OIL & GAS CO.
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------------
1997 1996
---------- ----------
(In Thousands, Except
Per Share Amounts)
<S> <C> <C>
Revenues:
Oil and gas sales $ 2,364 $ 664
Management fees 409 409
---------- ----------
Total revenues 2,773 1,073
---------- ----------
Costs and expenses:
Production and delivery, including
depreciation and amortization 1,960 398
Exploration expenses 2,362 4,475
General and administrative expenses 711 653
---------- ----------
Total costs and expenses 5,033 5,526
---------- ----------
Operating loss (2,260) (4,453)
Interest expense (360) -
Other income, net 131 123
---------- ----------
Net loss $ (2,489) $ (4,330)
========== ==========
Net loss per share $(.18) $(.31)
===== =====
Average shares outstanding 14,107 13,826
====== ======
</TABLE>
The accompanying notes are an integral part of these financial
statements.
<PAGE> 4
MCMORAN OIL & GAS CO.
STATEMENTS OF CASH FLOW
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
--------------------------
1997 1996
---------- ----------
(In Thousands)
<S> <C> <C>
Cash flow from operating activities:
Net loss $ (2,489) $ (4,330)
Adjustments to reconcile net loss
to net cash provided by operating
activities:
Depreciation and amortization 1,857 177
Exploration expenses 2,362 4,475
(Increase) decrease in working
capital (427) 2,511
---------- ----------
Net cash provided by operating
activities 1,303 2,833
---------- ----------
Cash flow from investing activities:
Exploration and development
expenditures (4,995) (4,002)
---------- ----------
Net cash used in investing
activities (4,995) (4,002)
---------- ----------
Cash flow from financing activities:
Borrowings under production loan 1,511 -
Repayments under production loan (246) (399)
---------- ----------
Net cash provided by (used in)
financing activities 1,265 (399)
---------- ----------
Net decrease in cash and cash
equivalents (2,427) (1,568)
Cash and cash equivalents at
beginning of year 10,500 10,323
---------- ----------
Cash and cash equivalents at
end of period $ 8,073 $ 8,755
========== ==========
</TABLE>
The accompanying notes are an integral part of these financial
statements.
<PAGE> 5
McMoRan Oil & Gas Co.
NOTES TO FINANCIAL STATEMENTS
1. EARNINGS PER SHARE
In February 1997, the Financial Accounting Standards Board issued
Statement No. 128 (FAS 128), "Earnings Per Share", which simplifies
the computation of earnings per share. FAS 128 is effective for
financial statements issued for periods ending after December 15, 1997
and requires restatement for all prior period earnings per share data
presented. Earnings per share calculated in accordance with FAS 128
would have been unchanged for the periods presented.
-----------------
Remarks
The information furnished herein should be read in conjunction with
MOXY's financial statements contained in its 1996 Annual Report to
stockholders included in its Annual Report on Form 10-K.
The information furnished herein reflects all adjustments which are,
in the opinion of management, necessary for a fair statement of the
results for the periods. All such adjustments are, in the opinion of
management, of a normal recurring nature.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of
McMoRan Oil & Gas Co.:
We have reviewed the accompanying condensed balance sheet of McMoRan
Oil & Gas Co. a (Delaware corporation) as of March 31, 1997, and the
related statements of operations and cash flow for the three-month
periods ended March 31, 1997 and 1996. These financial statements are
the responsibility of the company's management.
We conducted our review in accordance with standards established by
the American Institute of Certified Public Accountants. A review of
interim financial information consists principally of applying
analytical procedures to financial data and making inquiries of
persons responsible for financial and accounting matters. It is
substantially less in scope than an audit conducted in accordance with
generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken as a
whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications
that should be made to the financial statements referred to above for
them to be in conformity with generally accepted accounting
principles.
We have previously audited, in accordance with generally accepted
auditing standards, the balance sheet of McMoRan Oil & Gas Co. as of
December 31, 1996 (not presented herein), and, in our report dated
January 21, 1997, we expressed an unqualified opinion on that
statement. In our opinion, the information set forth in the
accompanying condensed balance sheet as of December 31, 1996, is
fairly stated, in all material respects, in relation to the balance
sheet from which it has been derived.
ARTHUR ANDERSEN LLP
New Orleans, Louisiana
April 22, 1997
<PAGE> 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
OVERVIEW
McMoRan Oil & Gas Co. (MOXY) is an independent oil and gas company
engaged in the exploration, development and production of oil and
natural gas. MOXY commenced operations in May 1994 following the
distribution of its common stock to the stockholders of Freeport-
McMoRan Inc. (FTX) in order to carry on substantially all of the oil
and gas exploration activities previously conducted by FTX for its own
account. Prior to the distribution, FTX transferred to MOXY $35
million in cash, an inventory of oil and gas exploration prospects and
a significant amount of seismic and well log data. MOXY's activities
are primarily in the Gulf of Mexico and the onshore Gulf Coast region.
OPERATIONAL ACTIVITIES
During the first quarter of 1997, MOXY had the following activity
within its 40 percent owned exploration and development program with
MCN Corporation (MCN):
* Daily gross production at the Vermilion Block 160 field averaged
approximately 14 million cubic feet (Mmcf) of natural gas and 570
barrels of condensate. Additional drilling on a development well,
which discovered approximately 215 feet of net pay in 1996, resulted
in the discovery of an additional 47 feet of net pay. MOXY
immediately began drilling an additional well to develop the newly
discovered reserves. After completion of all drilling activity from
the platform, the wells will be completed and could be on stream
during the third quarter of 1997, depending on the number of wells
drilled. The MOXY/MCN program has a 28 percent revenue interest in
this field unit which is subject to re-determination subsequent to
final development drilling. In addition, the MOXY/MCN program's
interest in two of the four blocks within the Vermilion Block 160
field unit is subject to a 30 percent net profits interest.
* Production at the Vermilion Block 410 field began in late
December 1996 from the first of the two production platforms.
Production began from the second platform in February 1997.
Daily gross production currently totals approximately 75 Mmcf of gas
and is expected to exceed 80 Mmcf of gas after the completion of limited
remediation work. The MOXY/MCN program has a 28 percent revenue interest in
this field.
* In March 1997, the MOXY/MCN program agreed to sell its interest
in West Cameron Block 503 for $7.2 million, $2.9 million net to MOXY.
The sale closed in April 1997, with MOXY recognizing a $2.3 million
gain and using the proceeds to repay borrowings from MCN.
* New 3-D seismic data was received and mapping began on West
Cameron Blocks 616 and 617, as well as on Grand Isle Block 65 and the
adjacent Grand Isle Blocks 58 and 59. Depending on the results of
analyzing the new seismic data, exploratory drilling could commence
during the second half of 1997.
MOXY was high bidder on seven of the eight leases on which it bid
at the OCS Lease Sale 166, held in March 1997. Awarding of the leases
is subject to approval by the Minerals Management Service, which is
expected during the second quarter of 1997. MOXY's seven high bids
totaled $5.5 million. MOXY entered into an agreement with Freeport-
McMoRan Resource Partners, Limited Partnership (FRP) pursuant to which
FRP will acquire a 50 percent working interest ownership in these
leases and will bear 60 percent of the associated acquisition and
exploration costs. MCN will have no interest in these new leases.
In April 1997, MOXY's 25 percent owned exploration joint venture
with Phillips Petroleum Company and FRP completed drilling of an
exploratory well on the North Bay Junop prospect, the second of two
high-risk, high-potential prospects which have been drilled within the
joint venture's project area in south Louisiana. The well reached
total depth but did not encounter commercial hydrocarbons in the
primary objective zones. MOXY is currently reviewing several
alternatives regarding shallower potentially productive zones
encountered in this well, as well as evaluating other leads for
drilling additional wells within the project area which have been
identified by 3-D seismic survey.
<PAGE> 7
RESULTS OF OPERATIONS
MOXY reported a net loss of $2.5 million ($0.18 per share) for the
first quarter of 1997 compared with a net loss of $4.3 million ($0.31
per share) for the 1996 period. MOXY's 1997 revenues consisted of
$2.4 million from its 40 percent share of the MOXY/MCN program's
interest in production from the Vermilion Block 160 and 410 fields and
$0.4 million from administrative fees earned from the MOXY/MCN
program. Revenues for the 1996 period consisted of its revenue
interest in the Vermilion Block 160 field and administrative fees
earned from the MOXY/MCN program.
Exploration expenses consisted of the following:
First Quarter
------------------------
1997 1996
-------- ----------
(In Millions)
Geological and geophysical $ 1.5 $ 1.2
Exploratory drilling and
leasehold costs 0.9 3.3
------ ------
$ 2.4 $ 4.5
====== =====
As a result of anticipated future exploration expenditures, MOXY
expects to continue to report losses for at least the near future.
CAPITAL RESOURCES AND LIQUIDITY
Management believes the opportunities for MOXY to discover significant
oil and gas reserves can best be achieved through the use of advanced
3-D seismic technology, applied in conjunction with a larger, longer-
term exploration program. In late 1996, MOXY entered into an
agreement with a geophysical services company pursuant to which MOXY
committed to purchase 3-D seismic surveys covering a significant
number of lease blocks over a multi-year period. With the anticipated
conclusion of the exploration portion of the MOXY/MCN program in mid-
1997 ($9.0 million remained to be spent at March 31, 1997), MOXY must
secure alternative sources of funding to finance its future
exploration activities. Management is currently evaluating options to
obtain additional long-term funding, none of which can be considered
assured, including entering into one or more new exploration joint
ventures, issuing additional equity or undertaking a business
combination with another entity.
MCN did not participate in the new 3-D seismic program discussed
above and will have no right to any of the leases acquired as a result
of this new seismic data. Furthermore, MCN has indicated that it does
not wish to enter into the type of long-term agreement that MOXY
believes will best enable MOXY to pursue its future exploration
activities. At March 31, 1997, MOXY had $14.0 million of borrowings
outstanding from MCN, with an additional $7.5 million of borrowings
available from MCN for past expenditures. MOXY's share of net
revenues from the program's properties, which includes Vermilion
Blocks 160 and 410, and its share of proceeds from the West Cameron
Block 503 sale are dedicated to the repayment of the MCN loan.
MOXY has committed expenditures of approximately $6.5 million for
the remainder of 1997, which approximates the remaining available
borrowings under the MOXY/MCN program. MOXY's future viability
depends on a number of factors, primarily its ability to secure
additional funding, the success of its exploration and development
activities, the production of its proved reserves and the prices of
oil and gas, none of which can be assured because of the uncertainties
and risks inherent in oil and gas operations. MOXY's ability to
continue its operations beyond the funding provided by the MOXY/MCN
program depends on securing additional funding and achieving success
in its exploration activities. No payment of dividends to MOXY
shareholders is presently contemplated.
MOXY incurred $5.0 million of cash exploration and development
expenditures during the first three months of 1997, principally
consisting of $1.6 million for development at Vermilion Blocks 160 and
410, $0.4 million for lease acquisition costs, $0.9 million in
drilling and leasehold costs charged to expense and $1.5 million of
geological and geophysical costs.
CAUTIONARY STATEMENT
Management's discussion and analysis contains certain forward-looking
statements. Important factors that might cause future results to
differ from these projections are described in more detail under the
heading "Cautionary Statement" in MOXY's Form 10-K for the year ended
December 31, 1996.
_________________________
The results of operations reported and summarized above are not
necessarily indicative of future operating results.
<PAGE> 8
PART II--OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) The exhibits to this report are listed in the Exhibit Index
appearing on page E-1 hereof.
(b) No reports on Form 8-K were filed by the registrant during the
quarter for which this report is filed.
<PAGE> 9
McMoRan Oil & Gas Co.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
McMoRan Oil & Gas Co.
By:/s/William J. Blackwell
-----------------------
William J. Blackwell
Controller
(authorized signatory and
Principal Accounting Officer)
Date: May 1, 1997
<PAGE> 10
McMoRan OIL & GAS CO.
EXHIBIT INDEX
Exhibit
Number
2.1 Distribution Agreement dated as of May 1, 1994 between
Freeport- McMoRan Inc. and the Company. Incorporated by reference to
Exhibit 2.1 to Amendment No. 2 to Form 10 as filed with the Commission
on May 16, 1994 ("Amendment No. 2").
3.1 Amended and Restated Certificate of Incorporation of the
Company. Incorporated by reference to Exhibit 3.1 to the Company's
Annual Report for the year ended December 31, 1994 on Form 10-K (the
"1994 10-K").
3.2 Bylaws of the Company. Incorporated by reference to
Exhibit 3.2 to the Company's 1994 10-K.
4.1 Form of the Company's Certificate of Designation of
Series A Participating Cumulative Preferred Stock. Incorporated by
reference to Exhibit 4.1 to Amendment No. 2.
4.2 Rights Agreement dated as of May 19, 1994 between the
Company and Mellon Securities Trust Company, as Rights Agent.
Incorporated by reference to Exhibit 4.2 to the Company's 1994 10-K.
10.1 McMoRan Oil & Gas Co. Adjusted Stock Award Plan, as
amended.
10.2 McMoRan Oil & Gas Co. 1994 Stock Option Plan, as
amended.
10.3 McMoRan Oil & Gas Co. 1994 Stock Option Plan for Non-
Employee Directors, as amended.
27.1 Financial Data Schedule
<PAGE> 11
McMoRan OIL & GAS CO.
ADJUSTED STOCK AWARD PLAN
SECTION 1
Purpose. The purpose of the McMoRan Oil & Gas Co.
Adjusted Stock Award Plan (the "Plan") is to provide for the
issuance and administration of certain awards relating to common
stock of the Company issued to employees, officers and directors of
Freeport-McMoRan Inc. ("FTX"), the Company's parent, in connection
with FTX's distribution to FTX stockholders of all of the common
stock of the Company.
SECTION 2
Definitions. As used in the Plan, the following terms
shall have the meanings set forth below:
"Award" shall mean any Option, Limited Right or Stock
Incentive Unit granted under this Plan.
"Award Agreement" shall mean any written agreement,
contract or other instrument or document evidencing any Award,
which may, but need not, be executed or acknowledged by a
Participant.
"Board" shall mean the Board of Directors of the Company.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
"Committee" shall mean a committee of the Board
designated by the Board to administer the Plan and composed of not
fewer than two directors, each of whom, to the extent necessary to
comply with Rule 16b-3 only, is a "non-employee director" within
the meaning of Rule 16b-3 and, to the extent necessary to comply
with Section 162(m) only, is an "outside director" under Section
162(m). In the absence of such a designation, "Committee" shall
mean the Board.
"Company" shall mean McMoRan Oil & Gas Co.
"Designated Beneficiary" shall mean the beneficiary
designated by the Participant, in a manner determined by the
Committee, to receive the benefits due the Participant under the
Plan in the event of the Participant's death. In the absence of an
effective designation by the Participant, Designated Beneficiary
shall mean the Participant's estate.
"Distribution" shall mean the distribution by FTX of all
the then outstanding Shares to the holders of FTX common stock, as
described in the Information Statement.
"Distribution Date" shall mean the Distribution Date, as
disclosed in the Information Statement.
"Eligible Individual" shall mean any present or former
employee, officer or director of FTX who on the Distribution Date
holds an FTX Award.
"Exchange Act" shall mean the Securities Exchange Act of
1934, as amended from time to time.
"FTX Award" shall mean any of the FTX Options, FTX
Director Options, FTX SARs and FTX SIUs.
"FTX Director Option" shall mean an option to purchase
FTX common stock granted under the FTX 1988 Stock Option Plan for
Non-Employee Directors that is outstanding and unexercised on the
Distribution Date.
"FTX Option" shall mean an option to purchase FTX common
stock granted by FTX to a present or former officer or employee of
FTX that is outstanding and unexercised on the Distribution Date.
"FTX SAR" shall mean a stock appreciation right granted
to a present or former officer or employee of FTX that is
outstanding and unexercised on the Distribution Date.
"FTX SIU" shall mean a stock incentive unit granted under
the FTX 1992 Stock Incentive Unit Plan that is outstanding and
unexercised on the Distribution Date.
"Information Statement" shall mean the Information
Statement dated May 18, 1994 included in the Registration Statement
on Form 10A-2 filed by the Company under the Exchange Act with
respect to the Shares.
"Limited Right" shall mean any right granted under
Section 8 of the Plan.
"Offer" shall mean any tender offer, exchange offer or
series of purchases or other acquisitions, or any combination of
those transactions, as a result of which any person, or any two or
more persons acting as a group, and all affiliates of such person
or persons, shall own beneficially more than 40% of the Shares
outstanding (exclusive of Shares held in the Company's treasury or
by the Company's Subsidiaries).
"Offer Price" shall mean the highest price per Share paid
in any Offer that is in effect at any time during the period
beginning on the ninetieth day prior to the date on which a Limited
Right is exercised and ending on and including the date of exercise
of such Limited Right. Any securities or property that comprise
all or a portion of the consideration paid for Shares in the Offer
shall be valued in determining the Offer Price at the higher of (i)
the valuation placed on such securities or property by the person
or persons making such Offer, or (ii) the valuation, if any, placed
on such securities or property by the Committee or the Board.
"Option" shall mean an Option granted under Section 6 of
the Plan.
"Participant" shall mean any Eligible Individual granted
an Award under the Plan.
"Person" shall mean any individual, corporation,
partnership, association, joint-stock company, trust,
unincorporated organization, government or political subdivision
thereof or other entity.
"Rule 16b-3" shall mean Rule 16b-3 promulgated by the SEC
under the Exchange Act, or any successor rule or regulation thereto
as in effect from time to time.
"SEC" shall mean the Securities and Exchange Commission,
including the staff thereof, or any successor thereto.
"Section 162(m)" shall mean Section 162(m) of the Code
and all regulations promulgated thereunder as in effect from time
to time.
"SIU" shall mean a Stock Incentive Unit.
"Shares" shall mean the shares of common stock, par value
$.01 per share, of the Company (including any attached Preferred
Stock Purchase Rights), and such other securities of the Company or
a Subsidiary as the Committee may from time to time designate.
"Stock Incentive Unit" shall mean any award of stock
incentive units granted under Section 7 of the Plan.
"Subsidiary" shall mean any corporation or other entity
in which the Company possesses directly or indirectly equity
interests representing at least 50% of the total ordinary voting
power or at least 50% of the total value of all classes of equity
interests of such corporation or other entity.
SECTION 3
Administration. The Plan shall be administered by the
Committee. Subject to the terms of the Plan and applicable law,
and in addition to other express powers and authorizations
conferred on the Committee by the Plan, the Committee shall have
full power and authority to interpret and administer the Plan and
any instrument or agreement relating to, or Award made under, the
Plan; establish, amend, suspend or waive such rules and regulations
and appoint such agents as it shall deem appropriate for the proper
administration of the Plan; and make any other determination and
take any other action that the Committee deems necessary or
desirable for the administration of the Plan. The Committee shall
have no discretion relating to the timing, pricing and size of
Awards granted under the Plan, which shall be determined in
accordance with the provisions of Sections 6, 7 and 8. Unless
otherwise expressly provided in the Plan, all designations,
determinations, interpretations and other decisions under or with
respect to the Plan or any Award shall be within the sole
discretion of the Committee, may be made at any time and shall be
final, conclusive and binding upon all Persons, including the
Company, any Subsidiary, any Participant, any holder or beneficiary
of any Award, any stockholder of the Company and any Eligible
Individual.
SECTION 4
Eligibility. Each Eligible Individual shall be granted
an Award in accordance with the provisions of the Plan.
SECTION 5
(a) Shares Available for Awards. Subject to adjustment
as provided in paragraph 5(b):
(i) Calculation of Number of Shares Available. The
number of Shares with respect to which Awards may be granted
under the Plan shall be such number of Shares as results from
the application of the award formulas set forth in Sections 6
and 8. Such number of Shares shall not be reduced by the
number of Shares with respect to which SIUs shall be granted,
which shall be determined in accordance with Section 7. If,
after the effective date of the Plan, an Award granted under
the Plan expires or is exercised, forfeited, canceled or
terminated without the delivery of Shares, then the Shares
covered by such Award or to which such Award relates, or the
number of Shares otherwise counted against the aggregate
number of Shares with respect to which Awards may be granted,
to the extent of any such expiration, exercise, forfeiture,
cancellation or termination, shall not thereafter be available
for grants or Awards under the Plan.
(ii) Sources of Shares Deliverable Under Awards. Any
Shares delivered pursuant to an Award may consist of
authorized and unissued Shares or of treasury Shares,
including Shares held by the Company or a Subsidiary and
acquired in the open market or otherwise obtained by the
Company or a Subsidiary.
(b) Adjustments. In the event that the Committee
determines that any dividend or other distribution (whether in the
form of cash, Shares, Subsidiary securities, other securities or
other property), recapitalization, stock split, reverse stock
split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase or exchange of Shares or other securities
of the Company, issuance of warrants or other rights to purchase
Shares or other securities of the Company, or other similar
corporate transaction or event affects the Shares such that an
adjustment is determined by the Committee to be appropriate to
prevent dilution or enlargement of the benefits or potential
benefits intended to be made available under the Plan, then the
Committee may, in its sole discretion and in such manner as it may
deem equitable, adjust any or all of (i) the number and type of
Shares (or other securities or property) subject to outstanding
Awards, and (ii) the grant or exercise price with respect to any
Award or, if deemed appropriate, make provision for a cash payment
to the holder of an outstanding Award; provided, that the number of
Shares subject to any Award denominated in Shares shall always be
a whole number.
SECTION 6
(a) Stock Options. Immediately prior to the
Distribution, each holder of an FTX Option, an FTX SAR or an FTX
Director Option shall receive an Option to purchase such number of
Shares (disregarding any fractional Share) as such holder would be
eligible to receive in the Distribution with respect to the number
of shares of FTX common stock subject to such FTX Award if such
holder were the owner of record of such FTX shares on the record
date for the Distribution. Except as set forth in paragraphs 6(b)
and 6(c), each such Option shall have the same remaining term and
other terms and conditions (whether such terms and conditions are
contained in the related FTX Award agreement or in the plan under
which such FTX Award was made) and shall be exercisable to the same
extent as the FTX Award from which they were derived, with such
changes and modifications as are necessary to substitute the
Company for FTX as the issuer of the Option.
(b) Exercise Price. The per Share exercise price of
each Option granted pursuant to paragraph 6(a) shall be the per
share exercise price or grant price of the FTX Award from which
such Option was derived multiplied by a fraction, the numerator of
which is the per Share fair market value of the Shares at the time
of the Distribution, determined as set forth below, and the
denominator of which is the per share fair market value of FTX
common stock at the time of the Distribution, determined as set
forth below. For purposes of this paragraph 6(b), the per Share
fair market value at the time of the Distribution shall be the
weighted average when-issued per Share price of the Shares on the
NASDAQ National Market System on the first trading date on which
the Shares are traded on a when-issued basis on the NASDAQ National
Market System, and the per share fair market value of FTX common
stock at the time of the Distribution shall be the weighted average
per share price of the FTX common stock on the New York Stock
Exchange on such trading date.
(c) Tax-Offset Right Adjustment. Notwithstanding the
foregoing, if the FTX Award from which the Option granted under
this Section 6 derives contained a right to receive a cash payment
upon exercise of such FTX Award related to and intended to defray
the income tax liability associated therewith, the number of Shares
to be subject to the Option, determined according to the provisions
of paragraph 6(a) (without disregarding fractional Shares), shall
be multiplied by 1.6556 and any fractional Share resulting from
such adjustment shall be disregarded. Such adjustment shall not
affect the calculation of the per Share exercise price of the
Option as set forth in paragraph 6(b).
(d) Payment. No Shares shall be delivered pursuant to
any exercise of an Option until payment in full of the option price
therefor is received by the Company. Such payment may be made in
cash, or its equivalent, or, if and to the extent permitted by the
Committee, by applying cash amounts payable by the Company upon the
exercise of such Option or other Awards by the holder thereof or by
exchanging whole Shares owned by such holder (which are not the
subject of any pledge or other security interest), or by a
combination of the foregoing, provided that the combined value of
all cash, cash equivalents, cash amounts so payable by the Company
upon exercises of Awards and the fair market value of any such
whole Shares so tendered to the Company, valued (in accordance with
procedures established by the Committee) as of the effective date
of such exercise, is at least equal to such option price.
SECTION 7
(a) Stock Incentive Units. Immediately prior to the
Distribution, each holder of an FTX SIU shall receive a Stock
Incentive Unit relating to such number of Shares (disregarding any
fractional Share) as such holder would be eligible to receive in
the Distribution with respect to the number of shares of FTX common
stock to which such FTX SIU relates if such holder were the owner
of record of such FTX shares on the record date for the
Distribution. Except as set forth in paragraphs 7(b) and 7(c),
each such SIU shall have the same remaining term and other terms
and conditions (whether such terms and conditions are contained in
the related FTX SIU agreement or in the plan under which such FTX
SIU was made) and shall be exercisable to the same extent as the
FTX SIU from which they were derived, with such changes and
modifications as are necessary to substitute the Company for FTX as
the issuer of the SIU. The per Share exercise price of each SIU
shall be determined in the same manner as the exercise price of
Options granted pursuant to Section 6, as described in paragraph
6(b).
(b) A Stock Incentive Unit shall entitle the holder
thereof to receive an amount equal to the excess, if any, of the
fair market value of a Share on the date of exercise of the SIU
over the exercise price. In the event that the SIU is exercised
during a period beginning not earlier than one day after the
expiration date of an Offer and ending not more than ninety days
after the expiration date of such Offer, an SIU shall entitle the
holder thereof to receive upon exercise the higher of (i) the
amount described in the first sentence of this paragraph 7(b) and
(ii) an amount in cash equal to the excess, if any, of the Offer
Price on the date of exercise of the SIU over the exercise price.
SECTION 8
(a) Limited Rights. Each holder of an FTX Option or FTX
SAR shall receive, at the same time as and in tandem with each
Option granted to such holder under Section 6, Limited Rights equal
in number to the number of Shares subject to such Option with which
such Limited Rights are in tandem. Such Limited Rights shall have
a grant price equal to the exercise price of the Option under
Section 6 with which it is in tandem, and shall in all other
respects contain the same terms and conditions as the agreement
pertaining to the FTX Award from which they derived.
(b) A Limited Right shall entitle the holder thereof to
receive an amount equal to the excess, if any, of the Offer Price
on the date of exercise of the Limited Right over the grant price.
Any Limited Right may be settled in cash, Shares or a combination
of cash and Shares, as determined by the Committee or the Board at
the time of exercise, and shall only be exercisable during a period
beginning not earlier than one day and ending not more than ninety
days after the expiration date of an Offer.
SECTION 9
(a) Amendments to the Plan. The Board may amend,
suspend or terminate the Plan or any portion thereof at any time,
provided that no amendment shall be made without stockholder
approval if such approval is necessary to comply with any tax or
regulatory requirement. Notwithstanding anything to the contrary
contained herein, (i) the Committee may amend the Plan in such
manner as may be necessary for the Plan to conform with local rules
and regulations in any jurisdiction outside the United States and
(ii) any amendment, suspension or termination made in accordance
with this paragraph 9(a) that would adversely affect a holder's
rights under an Award made under the Plan may not be made without
such holder's consent.
(b) Amendments to Awards. The Committee may amend,
modify or terminate any outstanding Award with the holder'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 an Award
becomes exercisable, or (ii) 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.
(c) Adjustment of Awards Upon the Occurrence of Certain
Unusual or Nonrecurring Events. The Committee is hereby 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 paragraph 5(b) hereof) affecting the Company, or the
financial statements of the Company or any Subsidiary, or of
changes in applicable laws, regulations, or accounting principles,
whenever the Committee determines that such adjustments are
appropriate to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan.
(d) Cancellation. Any provision of this Plan or any
Award Agreement to the contrary notwithstanding, the Committee may
cause any Award granted hereunder to be canceled in consideration
of a cash payment or alternative Award made to the holder of such
canceled Award equal in value to such canceled Award. The
determinations of value under this subparagraph shall be made by
the Committee in its sole discretion.
SECTION 10
(a) Award Agreements. Each Award hereunder shall be
evidenced by a writing delivered to the Participant that shall
specify the terms and conditions thereof and any rules applicable
thereto and that shall, in accordance with the provisions of the
Plan, replicate as closely as possible the terms, conditions and
other contractual attributes of the FTX Award from which the Award
is derived, as in effect on the Distribution Date.
(b) Transferability. No Awards granted hereunder may be
transferred, pledged, assigned or otherwise encumbered by a
Participant except: (i) by will; (ii) by the laws of descent and
distribution; (iii) pursuant to a domestic relations order, as
defined in the Code, if permitted by the Committee and so provided
in the Award Agreement or an amendment thereto; or (iv) as to
Options only, if permitted by the Committee and so provided in the
Award Agreement or an amendment thereto, (a) to Immediate Family
Members, (b) to a partnership in which Immediate Family Members, or
entities in which Immediate Family Members are the owners, members
or beneficiaries, as appropriate, are the partners, (c) to a
limited liability company in which Immediate Family Members, or
entities in which Immediate Family Members are the owners, members
or beneficiaries, as appropriate, are the members, or (d) to a
trust for the benefit of Immediate Family Members; provided,
however, that no more than a de minimus beneficial interest in a
partnership, limited liability company or trust described in (b),
(c) or (d) above may be owned by a person who is not an Immediate
Family Member or by an entity that is not beneficially owned solely
by Immediate Family Members. "Immediate Family Members" shall be
defined as the spouse and natural or adopted children or
grandchildren of the Participant and their spouses. Any attempted
assignment, transfer, pledge, hypothecation or other disposition of
Awards, or levy of attachment or similar process upon Awards not
specifically permitted herein, shall be null and void and without
effect. The designation of a Designated Beneficiary shall not be
a violation of this Section 10(b).
(c) Share Certificates. All certificates for Shares or
other securities delivered under the Plan pursuant to any Award or
the exercise thereof shall be subject to such stop transfer orders
and other restrictions as the Committee may deem advisable under
the Plan or the rules, regulations, and other requirements of the
SEC, any stock exchange upon which such Shares or other securities
are then listed, and any applicable federal or state laws, and the
Committee may cause a legend or legends to be put on any such
certificates to make appropriate reference to such restrictions.
(d) No Limit on Other Compensation Arrangements.
Nothing contained in the Plan shall prevent the Company from
adopting or continuing in effect other compensation arrangements,
which may, but need not, provide for the grant of options, stock
appreciation rights and other types of Awards provided for
hereunder (subject to stockholder approval of any such arrangement
if approval is required), and such arrangements may be either
generally applicable or applicable only in specific cases.
(e) No Right to Employment. The grant of an Award shall
not be construed as giving a Participant the right to be engaged or
employed by or retained in the employ of FTX, the Company or any
Subsidiary. FTX, the Company or any Subsidiary may at any time
dismiss a Participant from engagement or employment, free from any
liability or any claim under the Plan, unless otherwise expressly
provided in the Plan or in any Award Agreement or any agreement
relating to the engagement or employment of the Participant by FTX,
the Company or any Subsidiary.
(f) Governing Law. The validity, construction, and
effect of the Plan, any rules and regulations relating to the Plan
and any Award Agreement shall be determined in accordance with the
laws of the State of Delaware.
(g) 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 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.
(h) No Trust or Fund Created. Neither the Plan nor any
Award shall create or be construed to create a trust or separate
fund of any kind or a fiduciary relationship between the Company
and a Participant or any other Person. To the extent that any
Person acquires a right to receive payments from the Company
pursuant to an Award, such right shall be no greater than the right
of any unsecured general creditor of the Company.
(i) No Fractional Shares. No fractional Shares shall be
issued or delivered pursuant to the Plan or any Award, and the
Committee shall determine, in accordance with the terms of the
Plan, as applicable, 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 canceled, terminated, or otherwise eliminated.
(j) 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.
SECTION 11
Effective Date of the Plan. The Plan shall be effective
as of the date of its approval by the stockholder of the Company.
SECTION 12
Term of the Plan. Subject to paragraph 5(b), no Award
shall be granted under the Plan except the Awards provided for in
Sections 6, 7 and 8. Awards granted hereunder shall continue until
their respective expiration dates, and the authority of the
Committee to administer, interpret, amend, alter, adjust, suspend,
discontinue, or terminate, in accordance with the provisions of the
Plan, any such Award or to waive any conditions or rights under any
such Award shall extend until the latest such date.
McMoRan OIL & GAS CO.
1994 STOCK OPTION PLAN
SECTION 1
Purpose. The purpose of the McMoRan Oil & Gas Co. 1994
Stock Option Plan (the "Plan") is to motivate and reward key
personnel by giving them a proprietary interest in the Company's
continued success.
SECTION 2
Definitions. As used in the Plan, the following terms
shall have the meanings set forth below:
"Award" shall mean any Option, Stock Appreciation Right,
Limited Right or Other Stock-Based Award.
"Award Agreement" shall mean any written agreement,
contract or other instrument or document evidencing any Award,
which may, but need not, be executed or acknowledged by a
Participant.
"Board" shall mean the Board of Directors of McMoRan Oil
& Gas Co.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
"Committee" shall mean a committee of the Board
designated by the Board to administer the Plan and composed of not
fewer than two directors, each of whom, to the extent necessary to
comply with Rule 16b-3 only, is a "non-employee director" within
the meaning of Rule 16b-3 and, to the extent necessary to comply
with Section 162(m) only, is an "outside director" under Section
162(m). Until otherwise determined by the Board, the Committee
shall be the Corporate Personnel Committee of the Board.
"Company" shall mean McMoRan Oil & Gas Co.
"Designated Beneficiary" shall mean the beneficiary
designated by the Participant, in a manner determined by the
Committee, to receive the benefits due the Participant under the
Plan in the event of the Participant's death. In the absence of an
effective designation by the Participant, Designated Beneficiary
shall mean the Participant's estate.
"Employee" shall mean (i) any person providing services
as an officer of the Company or a Subsidiary, whether or not
employed by such entity, (ii) any employee of the Company or a
Subsidiary, including any director who is also an employee of the
Company or a Subsidiary, (iii) any officer or employee of an entity
with which the Company has contracted to receive management
services who provides services to the Company or a Subsidiary
through such arrangement and (iv) any person who has agreed in
writing to become a person described in clauses (i), (ii) or (iii)
within not more than 30 days following the date of grant of such
person's first Award under the Plan.
"Exchange Act" shall mean the Securities Exchange Act of
1934, as amended from time to time.
"Incentive Stock Option" shall mean an option granted
under Section 6 of the Plan that is intended to meet the
requirements of Section 422 of the Code or any successor provision
thereto.
"Limited Right" shall mean any right granted under
Section 8 of the Plan.
"Nonqualified Stock Option" shall mean an option granted
under Section 6 of the Plan that is not intended to be an Incentive
Stock Option.
"Offer" shall mean any tender offer, exchange offer or
series of purchases or other acquisitions, or any combination of
those transactions, as a result of which any person, or any two or
more persons acting as a group, and all affiliates of such person
or persons, shall own beneficially more than 40% of the Shares
outstanding (exclusive of Shares held in the Company's treasury or
by the Company's Subsidiaries).
"Offer Price" shall mean the highest price per Share paid
in any Offer that is in effect at any time during the period
beginning on the ninetieth day prior to the date on which a Limited
Right is exercised and ending on and including the date of exercise
of such Limited Right. Any securities or property that comprise
all or a portion of the consideration paid for Shares in the Offer
shall be valued in determining the Offer Price at the higher of (i)
the valuation placed on such securities or property by the person
or persons making such Offer, or (ii) the valuation, if any, placed
on such securities or property by the Committee or the Board.
"Option" shall mean an Incentive Stock Option or a
Nonqualified Stock Option.
"Other Stock-Based Award" shall mean any right or award
granted under Section 9 of the Plan.
"Participant" shall mean any Employee granted an Award
under the Plan.
"Person" shall mean any individual, corporation,
partnership, association, joint-stock company, trust,
unincorporated organization, government or political subdivision
thereof or other entity.
"Rule 16b-3" shall mean Rule 16b-3 promulgated by the SEC
under the Exchange Act, or any successor rule or regulation thereto
as in effect from time to time.
"SAR" shall mean any Stock Appreciation Right.
"SEC" shall mean the Securities and Exchange Commission,
including the staff thereof, or any successor thereto.
"Section 162(m)" shall mean Section 162(m) of the Code
and all regulations promulgated thereunder as in effect from time
to time.
"Shares" shall mean the shares of common stock, par value
$0.01 per share, of McMoRan Oil & Gas Co. (including any attached
Preferred Stock Purchase Rights), and such other securities of the
Company or a Subsidiary as the Committee may from time to time
designate.
"Stock Appreciation Right" shall mean any right granted
under Section 7 of the Plan.
"Subsidiary" shall mean (i) any corporation or other
entity in which the Company possesses directly or indirectly equity
interests representing at least 50% of the total ordinary voting
power or at least 50% of the total value of all classes of equity
interests of such corporation or other entity and (ii) any other
entity in which the Company has a direct or indirect economic
interest that is designated as a Subsidiary by the Committee.
SECTION 3
Administration. The Plan shall be administered by the
Committee. Subject to the terms of the Plan and applicable law,
and in addition to other express powers and authorizations
conferred on the Committee by the Plan, the Committee shall have
full power and authority to: (i) designate Participants; (ii)
determine the type or types of Awards to be granted to an eligible
Employee; (iii) determine the number of Shares to be covered by, or
with respect to which payments, rights or other matters are to be
calculated in connection with, Awards; (iv) determine the terms and
conditions of any Award; (v) determine whether, to what extent, and
under what circumstances Awards may be settled or exercised in
cash, whole Shares, other whole securities, other Awards, other
property or other cash amounts payable by the Company upon the
exercise of that or other Awards, or cancelled, forfeited or
suspended and the method or methods by which Awards may be settled,
exercised, cancelled, forfeited or suspended; (vi) determine
whether, to what extent, and under what circumstances cash, Shares,
other securities, other Awards, other property, and other amounts
payable by the Company with respect to an Award shall be deferred
either automatically or at the election of the holder thereof or of
the Committee; (vii) interpret and administer the Plan and any
instrument or agreement relating to, or Award made under, the Plan;
(viii) establish, amend, suspend or waive such rules and
regulations and appoint such agents as it shall deem appropriate
for the proper administration of the Plan; and (ix) make any other
determination and take any other action that the Committee deems
necessary or desirable for the administration of the Plan. Unless
otherwise expressly provided in the Plan, all designations,
determinations, interpretations and other decisions under or with
respect to the Plan or any Award shall be within the sole
discretion of the Committee, may be made at any time and shall be
final, conclusive and binding upon all Persons, including the
Company, any Subsidiary, any Participant, any holder or beneficiary
of any Award, any stockholder of the Company and any Employee.
SECTION 4
Eligibility. Any Employee who is not a member of the
Committee shall be eligible to be granted an Award.
SECTION 5
(a) Shares Available for Awards. Subject to adjustment
as provided in Section 5(b):
(i) Calculation of Number of Shares Available. The
number of Shares with respect to which Awards may be granted under
the Plan shall be 1,000,000. If, after the effective date of the
Plan, an Award granted under the Plan expires or is exercised,
forfeited, cancelled or terminated without the delivery of Shares,
then the Shares covered by such Award or to which such Award
relates, or the number of Shares otherwise counted against the
aggregate number of Shares with respect to which Awards may be
granted, to the extent of any such expiration, exercise,
forfeiture, cancellation or termination without the delivery of
Shares, shall again be, or shall become, Shares with respect to
which Awards may be granted.
(ii) Substitute Awards. Any Shares delivered by the
Company, any Shares with respect to which Awards are made by the
Company, or any Shares with respect to which the Company becomes
obligated to make Awards, through the assumption of, or in
substitution for, outstanding awards previously granted by an
acquired company or a company with which the Company combines,
shall not be counted against the Shares available for Awards under
the Plan.
(iii) Sources of Shares Deliverable Under Awards. Any
Shares delivered pursuant to an Award may consist of authorized and
unissued Shares or of treasury Shares, including Shares held by the
Company or a Subsidiary and acquired in the open market or
otherwise obtained by the Company or a Subsidiary.
(iv) Individual Limit. Any provision of the Plan to the
contrary notwithstanding, no individual may receive in any year
Awards under the Plan that relate to more than 200,000 Shares.
(b) Adjustments. In the event that the Committee
determines that any dividend or other distribution (whether in the
form of cash, Shares, Subsidiary securities, other securities or
other property), recapitalization, stock split, reverse stock
split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase or exchange of Shares or other securities
of the Company, issuance of warrants or other rights to purchase
Shares or other securities of the Company, or other similar
corporate transaction or event affects the Shares such that an
adjustment is determined by the Committee to be appropriate to
prevent dilution or enlargement of the benefits or potential
benefits intended to be made available under the Plan, then the
Committee may, in its sole discretion and in such manner as it may
deem equitable, adjust any or all of (i) the number and type of
Shares (or other securities or property) with respect to which
Awards may be granted, (ii) the number and type of Shares (or other
securities or property) subject to outstanding Awards, and (iii)
the grant or exercise price with respect to any Award or, if deemed
appropriate, make provision for a cash payment to the holder of an
outstanding Award or, if deemed appropriate, adjust outstanding
Awards to provide the rights contemplated by Section 9(b) hereof;
provided, in each case, that with respect to Awards of Incentive
Stock Options no such adjustment shall be authorized to the extent
that such authority would cause the Plan to violate Section
422(b)(1) of the Code or any successor provision thereto and, with
respect to all Awards under the Plan, no such adjustment shall be
authorized to the extent that such authority would be inconsistent
with the requirements for full deductibility under Section 162(m)
of the Code and the regulations thereunder; and provided further,
that the number of Shares subject to any Award denominated in
Shares shall always be a whole number.
SECTION 6
(a) Stock Options. Subject to the provisions of the
Plan, the Committee shall have sole and complete authority to
determine the Employees to whom Options shall be granted, the
number of Shares to be covered by each Option, the option price
therefor and the conditions and limitations applicable to the
exercise of the Option. The Committee shall have the authority to
grant Incentive Stock Options, Nonqualified Stock Options or both.
In the case of Incentive Stock Options, the terms and conditions
of such grants shall be subject to and comply with such rules as
may be required by Section 422 of the Code, as from time to time
amended, and any implementing regulations. Except in the case of
an Option granted in assumption of or substitution for an
outstanding award of a company acquired by the Company or with
which the Company combines, the exercise price of any Option
granted under this Plan shall not be less than 100% of the fair
market value of the underlying Shares on the date of grant.
(b) Exercise. Each Option shall be exercisable at such
times and subject to such terms and conditions as the Committee
may, in its sole discretion, specify in the applicable Award
Agreement or thereafter, provided, however, that in no event may
any Option granted hereunder be exercisable after the expiration of
10 years after the date of such grant. The Committee may impose
such conditions with respect to the exercise of Options, including
without limitation, any condition relating to the application of
Federal or state securities laws, as it may deem necessary or
advisable.
(c) Payment. No Shares shall be delivered pursuant to
any exercise of an Option until payment in full of the option price
therefor is received by the Company. Such payment may be made in
cash, or its equivalent, or, if and to the extent permitted by the
Committee, by applying cash amounts payable by the Company upon the
exercise of such Option or other Awards by the holder thereof or by
exchanging whole Shares owned by such holder (which are not the
subject of any pledge or other security interest), or by a
combination of the foregoing, provided that the combined value of
all cash, cash equivalents, cash amounts so payable by the Company
upon exercises of Awards and the fair market value of any such
whole Shares so tendered to the Company, valued (in accordance with
procedures established by the Committee) as of the effective date
of such exercise, is at least equal to such option price.
SECTION 7
(a) Stock Appreciation Rights. Subject to the
provisions of the Plan, the Committee shall have sole and complete
authority to determine the Employees to whom Stock Appreciation
Rights shall be granted, the number of Shares to be covered by each
Stock Appreciation Right, the grant price thereof and the
conditions and limitations applicable to the exercise thereof.
Stock Appreciation Rights may be granted in tandem with another
Award, in addition to another Award, or freestanding and unrelated
to any other Award. Stock Appreciation Rights granted in tandem
with or in addition to an Option or other Award may be granted
either at the same time as the Option or other Award or at a later
time. Stock Appreciation Rights shall not be exercisable after the
expiration of 10 years after the date of grant. Except in the
case of a Stock Appreciation Right granted in assumption of or
substitution for an outstanding award of a company acquired by the
Company or with which the Company combines, the grant price of any
Stock Appreciation Right granted under this Plan shall not be less
than 100% of the fair market value of the Shares covered by such
Stock Appreciation Right on the date of grant or, in the case of a
Stock Appreciation Right granted in tandem with a then outstanding
Option or other Award, on the date of grant of such related Option
or Award.
(b) A Stock Appreciation Right shall entitle the holder
thereof to receive an amount equal to the excess, if any, of the
fair market value of a Share on the date of exercise of the Stock
Appreciation Right over the grant price. Any Stock Appreciation
Right shall be settled in cash, unless the Committee shall
determine at the time of grant of a Stock Appreciation Right that
it shall or may be settled in cash, Shares or a combination of cash
and Shares.
SECTION 8
(a) Limited Rights. Subject to the provisions of the
Plan, the Committee shall have sole and complete authority to
determine the Employees to whom Limited Rights shall be granted,
the number of Shares to be covered by each Limited Right, the grant
price thereof and the conditions and limitations applicable to the
exercise thereof. Limited Rights may be granted in tandem with
another Award, in addition to another Award, or freestanding and
unrelated to any Award. Limited Rights granted in tandem with or
in addition to an Award may be granted either at the same time as
the Award or at a later time. Limited Rights shall not be
exercisable after the expiration of 10 years after the date of
grant and shall only be exercisable during a period determined at
the time of grant by the Committee beginning not earlier than one
day and ending not more than ninety days after the expiration date
of an Offer. Except in the case of a Limited Right granted in
assumption of or substitution for an outstanding award of a company
acquired by the Company or with which the Company combines, the
grant price of any Limited Right granted under this Plan shall not
be less than 100% of the fair market value of the Shares covered by
such Limited Right on the date of grant or, in the case of a
Limited Right granted in tandem with a then outstanding Option or
other Award, on the date of grant of such related Option or Award.
(b) A Limited Right shall entitle the holder thereof to
receive an amount equal to the excess, if any, of the Offer Price
on the date of exercise of the Limited Right over the grant price.
Any Limited Right shall be settled in cash, unless the Committee
shall determine at the time of grant of a Limited Right that it
shall or may be settled in cash, Shares or a combination of cash
and Shares.
SECTION 9
(a) Other Stock-Based Awards. The Committee is hereby
authorized to grant to eligible Employees an "Other Stock-Based
Award", which shall consist of an Award, the value of which is
based in whole or in part on the value of Shares, that is not an
instrument or Award specified in Sections 6 through 8 of this Plan.
Other Stock-Based Awards may be awards of Shares or may be
denominated or payable in, valued in whole or in part by reference
to, or otherwise based on or related to, Shares (including, without
limitation, securities convertible or exchangeable into or
exercisable for Shares), as deemed by the Committee consistent with
the purposes of the Plan. The Committee shall determine the terms
and conditions of any such Other Stock-Based Award. Except in the
case of an Other Stock-Based Award granted in assumption of or in
substitution for an outstanding award of a company acquired by the
Company or with which the Company combines, the price at which
securities may be purchased pursuant to any Other Stock-Based Award
granted under this Plan, or the provision, if any, of any such
Award that is analogous to the purchase or exercise price, shall
not be less than 100% of the fair market value of the securities to
which such Award relates on the date of grant.
(b) Dividend Equivalents. In the sole and complete
discretion of the Committee, an Award, whether made as an Other
Stock-Based Award under this Section 9 or as an Award granted
pursuant to Sections 6 through 8 hereof, may provide the holder
thereof with dividends or dividend equivalents, payable in cash,
Shares, Subsidiary securities, other securities or other property
on a current or deferred basis.
SECTION 10
(a) Amendments to the Plan. The Board may amend,
suspend or terminate the Plan or any portion thereof at any time,
provided that no amendment shall be made without stockholder
approval if such approval is necessary to comply with any tax or
regulatory requirement. Notwithstanding anything to the contrary
contained herein, the Committee may amend the Plan in such manner
as may be necessary for the Plan to conform with local rules and
regulations in any jurisdiction outside the United States.
(b) Amendments to Awards. The Committee may amend,
modify or terminate any outstanding Award with the holder'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 an Award
becomes exercisable, or (ii) 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.
(c) Adjustment of Awards Upon the Occurrence of Certain
Unusual or Nonrecurring Events. The Committee is hereby 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 5(b) hereof) affecting the Company, or the
financial statements of the Company or any Subsidiary, or of
changes in applicable laws, regulations, or accounting principles,
whenever the Committee determines that such adjustments are
appropriate to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan.
(d) Cancellation. Any provision of this Plan or any
Award Agreement to the contrary notwithstanding, the Committee may
cause any Award granted hereunder to be cancelled in consideration
of a cash payment or alternative Award made to the holder of such
cancelled Award equal in value to such cancelled Award. The
determinations of value under this subparagraph shall be made by
the Committee in its sole discretion.
SECTION 11
(a) Delegation. Subject to the terms of the Plan and
applicable law, the Committee may delegate to one or more officers
of the Company the authority, subject to such terms and limitations
as the Committee shall determine, to grant Awards to, or to cancel,
modify or waive rights with respect to, or to alter, discontinue,
suspend, or terminate Awards held by, Employees who are not
officers or directors of the Company for purposes of Section 16 of
the Exchange Act, or any successor section thereto, or who are
otherwise not subject to such Section.
(b) Award Agreements. Each Award hereunder shall be
evidenced by a writing delivered to the Participant that shall
specify the terms and conditions thereof and any rules applicable
thereto, including but not limited to the effect on such Award of
the death, retirement or other termination of employment of the
Participant and the effect thereon, if any, of a change in control
of the Company.
(c) Withholding. A Participant may be required to pay
to the Company, and the Company shall have the right to deduct from
all amounts paid to a Participant (whether under the Plan or
otherwise), any taxes required by law to be paid or withheld in
respect of Awards hereunder to such Participant. The Committee
may provide for additional cash payments to holders of Awards to
defray or offset any tax arising from the grant, vesting, exercise
or payment of any Award.
(d) Transferability. No Awards granted hereunder may be
transferred, pledged, assigned or otherwise encumbered by a
Participant except: (i) by will; (ii) by the laws of descent and
distribution; (iii) pursuant to a domestic relations order, as
defined in the Code, if permitted by the Committee and so provided
in the Award Agreement or an amendment thereto; or (iv) as to
Options only, if permitted by the Committee and so provided in the
Award Agreement or an amendment thereto, (a) to Immediate Family
Members, (b) to a partnership in which Immediate Family Members, or
entities in which Immediate Family Members are the owners, members
or beneficiaries, as appropriate, are the partners, (c) to a
limited liability company in which Immediate Family Members, or
entities in which Immediate Family Members are the owners, members
or beneficiaries, as appropriate, are the members, or (d) to a
trust for the benefit of Immediate Family Members; provided,
however, that no more than a de minimus beneficial interest in a
partnership, limited liability company or trust described in (b),
(c) or (d) above may be owned by a person who is not an Immediate
Family Member or by an entity that is not beneficially owned solely
by Immediate Family Members. "Immediate Family Members" shall be
defined as the spouse and natural or adopted children or
grandchildren of the Participant and their spouses. To the extent
that an Incentive Stock Option is permitted to be transferred
during the lifetime of the Participant, it shall be treated
thereafter as a Nonqualified Stock Option. Any attempted
assignment, transfer, pledge, hypothecation or other disposition of
Awards, or levy of attachment or similar process upon Awards not
specifically permitted herein, shall be null and void and without
effect. The designation of a Designated Beneficiary shall not be
a violation of this Section 11(d).
(e) Share Certificates. All certificates for Shares or
other securities delivered under the Plan pursuant to any Award or
the exercise thereof shall be subject to such stop transfer orders
and other restrictions as the Committee may deem advisable under
the Plan or the rules, regulations, and other requirements of the
SEC, any stock exchange upon which such Shares or other securities
are then listed, and any applicable federal or state laws, and the
Committee may cause a legend or legends to be put on any such
certificates to make appropriate reference to such restrictions.
(f) No Limit on Other Compensation Arrangements.
Nothing contained in the Plan shall prevent the Company from
adopting or continuing in effect other compensation arrangements,
which may, but need not, provide for the grant of options, stock
appreciation rights and other types of Awards provided for
hereunder (subject to stockholder approval of any such arrangement
if approval is required), and such arrangements may be either
generally applicable or applicable only in specific cases.
(g) No Right to Employment. The grant of an Award
shall not be construed as giving a Participant the right to be
retained in the employ of the Company or any Subsidiary or in the
employ of any other entity providing services to the Company. The
Company or any Subsidiary or any such entity may at any time
dismiss a Participant 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 of treatment of Employees,
Participants or holders or beneficiaries of Awards.
(h) Governing Law. The validity, construction, and
effect of the Plan, any rules and regulations relating to the Plan
and any Award Agreement shall be determined in accordance with the
laws of the State of Delaware.
(i) 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 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.
(j) No Trust or Fund Created. Neither the Plan nor any
Award shall create or be construed to create a trust or separate
fund of any kind or a fiduciary relationship between the Company
and a Participant or any other Person. To the extent that any
Person acquires a right to receive payments from the Company
pursuant to an Award, such right shall be no greater than the right
of any unsecured general creditor of the Company.
(k) 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.
(l) 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.
SECTION 12
Effective Date of the Plan. The Plan shall be effective
as of the date of its approval by the stockholder of the Company.
SECTION 13
Term of the Plan. No Award shall be granted under the
Plan after the tenth anniversary of the effective date of the Plan;
however, unless otherwise expressly provided in the Plan or in an
applicable Award Agreement, any Award theretofore granted may, and
the authority of the Committee to amend, alter, adjust, suspend,
discontinue, or terminate any such Award or to waive any conditions
or rights under any such Award shall, extend beyond such date.
McMoRan OIL & GAS CO.
1994 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
ARTICLE I
PURPOSE OF THE PLAN
The purpose of the 1994 Stock Option Plan for
Non-Employee Directors (the "Plan") is to align more closely the
interests of the non-employee directors of McMoRan Oil & Gas Co.
(the "Company") with that of the Company's stockholders by
providing for the automatic grant to such directors of stock
options ("Options") to purchase Shares (as hereinafter defined), in
accordance with the terms of the Plan.
ARTICLE II
DEFINITIONS
For the purposes of this Plan, the following terms shall
have the meanings indicated:
Board: The Board of Directors of the Company.
Change in Control: A Change in Control shall be deemed
to have occurred if either (a) any person, or any two or more
persons acting as a group, and all affiliates of such person or
persons, shall own beneficially more than 20% of the Common Stock
outstanding (exclusive of shares held in the Company's treasury or
by the Company's Subsidiaries) pursuant to a tender offer, exchange
offer or series of purchases or other acquisitions, or any
combination of those transactions, or (b) there shall be a change
in the composition of the Board at any time within two years after
any tender offer, exchange offer, merger, consolidation, sale of
assets or contested election, or any combination of those
transactions (a "Transaction"), so that (i) the persons who were
directors of the Company immediately before the first such
Transaction cease to constitute a majority of the Board of
Directors of the corporation which shall thereafter be in control
of the companies that were parties to or otherwise involved in such
Transaction, or (ii) the number of persons who shall thereafter be
directors of such corporation shall be fewer than two-thirds of the
number of directors of the Company immediately prior to such first
Transaction. A Change in Control shall be deemed to take place
upon the first to occur of the events specified in the foregoing
clauses (a) and (b).
Code: The Internal Revenue Code of 1986, as amended from
time to time.
Committee: A committee of the Board designated by the
Board to administer the Plan and composed of not fewer than two
directors, each of whom, to the extent necessary to comply with
Rule 16b-3 only, is a "non-employee director" within the meaning of
Rule 16b-3 and, to the extent necessary to comply with Section
162(m) only, is an "outside director" under Section 162(m). Until
otherwise determined by the Board, the Committee shall be the
Corporate Personnel Committee of the Board.
Election Period: The period beginning on the third
business day following a date on which the Company releases for
publication its quarterly or annual summary statements of sales and
earnings, and ending on the twelfth business day following such
date.
Eligible Director: A director of the Company who is not,
and within the preceding one year has not been, an officer or an
employee of the Company or a Subsidiary, an officer or an employee
of an entity with which the Company has contracted to receive
Management Services, or otherwise eligible for selection to
participate in any plan of the Company or any Subsidiary that
entitles the participants therein to acquire stock, stock options
or stock appreciation rights of the Company or its Subsidiaries.
Exchange Act: The Securities Exchange Act of 1934, as
amended from time to time.
Fair Market Value: The average of the per Share high and
low quoted sale prices on the date in question (or, if there is no
reported sale on such date, on the last preceding date on which any
reported sale occurred) on the principal exchange or market on
which such Shares are quoted.
Option Cancellation Gain: With respect to the
cancellation of an Option pursuant to Section 3 of Article IV
hereof, the excess of the Fair Market Value as of the Option
Cancellation Date (as that term is defined in Section 3 of Article
IV hereof) of all the outstanding Shares covered by such Option,
whether or not then exercisable, over the purchase price of such
Shares under such Option.
Rule 16b-3: Rule 16b-3 promulgated by the SEC under the
Exchange Act, or any successor rule or regulation thereto as in
effect from time to time.
SEC: The Securities and Exchange Commission, including
the staff thereof, or any successor thereto.
Section 162(m): Section 162(m) of the Code and all
regulations promulgated thereunder as in effect from time to time.
Shares: Shares of common stock, par value $0.01 per
share, of the Company (including any attached Preferred Stock
Purchase Rights).
Subsidiary: Any corporation of which stock representing
at least 50% of the ordinary voting power is owned, directly or
indirectly, by the Company; and any other entity of which equity
securities or interests representing at least 50% of the ordinary
voting power or 50% of the total value of all classes of equity
securities or interests of such entity are owned, directly or
indirectly, by the Company.
ARTICLE III
ADMINISTRATION OF THE PLAN
This Plan shall be administered by the Board. The Board
will interpret this Plan and may from time to time adopt such rules
and regulations for carrying out the terms and provisions of this
Plan as it may deem best; however, the Board shall have no
discretion with respect to the selection of directors who receive
Options, the timing of the grant of Options, the number of Shares
subject to any Options or the purchase price thereof.
Notwithstanding the foregoing, the Committee shall have the
authority to make all determinations with respect to the
transferability of Options in accordance with Article VIII hereof.
All determinations by the Board or the Committee shall be made by
the affirmative vote of a majority of its respective members, but
any determination reduced to writing and signed by a majority of
its respective members shall be fully as effective as if it had
been made by a majority vote at a meeting duly called and held.
Subject to any applicable provisions of the Company's By-Laws or of
this Plan, all determinations by the Board and the Committee
pursuant to the provisions of this Plan, and all related orders or
resolutions of the Board and the Committee, shall be final,
conclusive and binding on all persons, including the Company and
its stockholders, employees, directors and optionees. In the event
of any conflict or inconsistency between determinations, orders,
resolutions, or other actions of the Committee and the Board taken
in connection with this Plan, the action of the Board shall
control.
ARTICLE IV
STOCK SUBJECT TO THE PLAN
SECTION 1. The Shares to be issued or delivered upon
exercise of Options shall be made available, at the discretion of
the Board, either from the authorized but unissued Shares of the
Company or from Shares reacquired by the Company, including Shares
purchased by the Company in the open market or otherwise obtained;
provided, however, that the Company, at the discretion of the
Board, may, upon exercise of Options granted under this Plan, cause
a Subsidiary to deliver Shares held by such Subsidiary.
SECTION 2. Subject to the provisions of Section 3 of
this Article IV, the aggregate number of Shares which may be
purchased pursuant to Options shall not exceed 250,000.
SECTION 3. In the event of the payment of any dividends
payable in Shares, or in the event of any subdivision or
combination of the Shares, the number of Shares which may be
purchased under this Plan, and the number of Shares subject to each
Option granted in accordance with Section 2 of Article VII, shall
be increased or decreased proportionately, as the case may be, and
the number of Shares deliverable upon the exercise thereafter of
any Option theretofore granted (whether or not then exercisable)
shall be increased or decreased proportionately, as the case may
be, without change in the aggregate purchase price. In the event
the Company is merged or consolidated into or with another
corporation in a transaction in which the Company is not the
survivor, or in the event that substantially all of the Company's
assets are sold to another entity not affiliated with the Company,
any holder of an Option, whether or not then exercisable, shall be
entitled to receive (unless the Company shall take such alternative
action as may be necessary to preserve the economic benefit of the
Option for the optionee) on the effective date of any such
transaction (the "Option Cancellation Date"), in cancellation of
such Option, an amount in cash equal to the Option Cancellation
Gain relating thereto, determined as of the Option Cancellation
Date.
ARTICLE V
PURCHASE PRICE OF OPTIONED SHARES
The purchase price per Share under each Option shall be
100% of the Fair Market Value of a Share at the time such Option is
granted, but in no case shall such price be less than the par value
of the Shares subject to such Option.
ARTICLE VI
ELIGIBILITY OF RECIPIENTS
Options will be granted only to individuals who are
Eligible Directors at the time of such grant.
ARTICLE VII
GRANT OF OPTIONS
SECTION 1. Each Option shall constitute a nonqualified
stock option which is not intended to qualify under Section 422 of
the Code.
SECTION 2. On June 1, 1994 and June 1 of each
subsequent year through and including 2003, each Eligible Director,
as of each such date, shall be granted an Option to purchase 1,656
Shares. Each Option shall become exercisable with respect to 414
Shares on each of the first, second, third and fourth anniversaries
of the date of grant and may be exercised by the holder thereof
with respect to all or any part of the Shares comprising each
installment as such holder may elect at any time after such
installment becomes exercisable but no later than the termination
date of such Option; provided that each Option shall become
exercisable in full upon a Change in Control.
SECTION 3. The purchase price of Shares subject to any
Option shall be the Fair Market Value thereof on the respective
date of grant.
ARTICLE VIII
TRANSFERABILITY OF OPTIONS
No Options granted hereunder may be transferred, pledged,
assigned or otherwise encumbered by an optionee except:
(a) by will;
(b) by the laws of descent and distribution; or
(c) if permitted by the Committee and so provided in the
Option or an amendment thereto, (i) pursuant to a domestic
relations order, as defined in the Code, (ii) to Immediate
Family Members, (iii) to a partnership in which Immediate
Family Members, or entities in which Immediate Family Members
are the owners, members or beneficiaries, as appropriate, are
the partners, (iv) to a limited liability company in which
Immediate Family Members, or entities in which Immediate
Family Members are the owners, members or beneficiaries, as
appropriate, are the members, or (v) to a trust for the
benefit of Immediate Family Members; provided, however, that
no more than a de minimus beneficial interest in a
partnership, limited liability company or trust described in
(iii), (iv) or (v) above may be owned by a person who is not
an Immediate Family Member or by an entity that is not
beneficially owned solely by Immediate Family Members.
"Immediate Family Members" shall be defined as the spouse and
natural or adopted children or grandchildren of the optionee
and their spouses.
Any attempted assignment, transfer, pledge, hypothecation or other
disposition of Options, or levy of attachment or similar process
upon Options not specifically permitted herein, shall be null and
void and without effect.
ARTICLE IX
EXERCISE OF OPTIONS
SECTION 1. Each Option shall terminate 10 years after
the date on which it was granted.
SECTION 2. Except in cases provided for in Article X
hereof, each Option may be exercised by the holder thereof only
while the optionee to whom such Option was granted is an Eligible
Director.
SECTION 3. Each Option shall provide that the Option or
any portion thereof may be exercised only during an Election
Period. Each Option shall provide, however, that in the event of
a Change in Control, the Election Period exercise requirement is
waived.
SECTION 4. A person electing to exercise an Option or
any portion thereof then exercisable shall give written notice to
the Company of such election and of the number of Shares such
person has elected to purchase, and shall at the time of purchase
tender the full purchase price of such Shares, which tender shall
be made in cash or cash equivalent (which may be such person's
personal check) or in Shares already owned by such person (which
Shares shall be valued for such purpose on the basis of their Fair
Market Value on the date of exercise), or in any combination
thereof. The Company shall have no obligation to deliver Shares
pursuant to the exercise of any Option, in whole or in part, until
such payment in full of the purchase price of such Shares is
received by the Company. No optionee, or legal representative,
legatee, distributee, or assignee of such optionee shall be or be
deemed to be a holder of any Shares subject to such Option or
entitled to any rights of a stockholder of the Company in respect
of any Shares covered by such Option distributable in connection
therewith until such Shares have been paid for in full and
certificates for such Shares have been issued or delivered by the
Company.
SECTION 5. Each Option shall be subject to the
requirement that if at any time the Board shall be advised by
counsel that the listing, registration or qualification of the
Shares subject to such Option upon any securities exchange or under
any state or federal law, or the consent or approval of any
governmental regulatory body, is necessary or desirable as a
condition of, or in connection with, the granting of such Option or
the issue or purchase of Shares thereunder, such Option may not be
exercised in whole or in part unless such listing, registration,
qualification, consent or approval shall have been effected or
obtained free from any conditions not reasonably acceptable to such
counsel for the Board.
SECTION 6. The Company may establish appropriate
procedures to provide for payment or withholding of such income or
other taxes as may be required by law to be paid or withheld in
connection with the exercise of Options, and to ensure that the
Company receives prompt advice concerning the occurrence of any
event which may create, or affect the timing or amount of, any
obligation to pay or withhold any such taxes or which may make
available to the Company any tax deduction resulting from the
occurrence of such event.
ARTICLE X
TERMINATION OF SERVICE
AS AN ELIGIBLE DIRECTOR
SECTION 1. If and when an optionee shall cease to be an
Eligible Director for any reason other than death or retirement
from the Board, all of the Options granted to such optionee shall
be terminated except that any Option, to the extent then
exercisable, may be exercised by the holder thereof within three
months after such optionee ceases to be an Eligible Director, but
not later than the termination date of the Option.
SECTION 2. If and when an optionee shall cease to be an
Eligible Director by reason of the optionee's retirement from the
Board, all of the Options granted to such optionee shall be
terminated except that any Option, to the extent then exercisable
or exercisable within one year thereafter, may be exercised by the
holder thereof within three years after such retirement, but not
later than the termination date of the Option.
SECTION 3. Should an optionee die while serving as an
Eligible Director, all the Options granted to such optionee shall
be terminated, except that any Option to the extent exercisable by
the holder thereof at the time of such death, together with the
unmatured installment (if any) of such Option which at that time is
next scheduled to become exercisable, may be exercised within one
year after the date of such death, but not later than the
termination date of the Option, by the holder thereof, the
optionee's estate, or the person designated in the optionee's last
will and testament, as appropriate.
SECTION 4. Should an optionee die after ceasing to be an
Eligible Director, all of the Options granted to such optionee
shall be terminated, except that any Option, to the extent
exercisable by the holder thereof at the time of such death, may be
exercised within one year after the date of such death, but not
later than the termination date of the Option, by the holder
thereof, the optionee's estate, or the person designated in the
optionee's last will and testament, as appropriate.
ARTICLE XI
AMENDMENTS TO PLAN AND OPTIONS
The Board may at any time terminate or from time to time
amend, modify or suspend this Plan; provided, however, that no such
amendment or modification without the approval of the stockholders
shall:
(a) except pursuant to Section 3 of Article IV, increase
the maximum number (determined as provided in this Plan) of
Shares which may be purchased pursuant to Options, either
individually or in aggregate;
(b) permit the granting of any Option at a purchase
price other than 100% of the Fair Market Value of the Shares
at the time such Option is granted, subject to adjustment
pursuant to Section 3 of Article IV;
(c) permit the exercise of an Option unless the full
purchase price of the Shares as to which the Option is
exercised is paid at the time of exercise;
(d) extend beyond June 1, 2003 the period during which
Options may be granted;
(e) modify in any respect the class of individuals who
constitute Eligible Directors; or
(f) materially increase the benefits accruing to
participants hereunder.
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