<PAGE>
As filed with the Securities and Exchange Commission on July 14, 1997
File No. 333-_____
==============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
SOUTHWEST GAS CORPORATION
(Exact name of Registrant as specified in its charter)
California 88-0085720
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
5241 Spring Mountain Road
P.O. Box 98510
Las Vegas, Nevada 89193-8510
(Address of principal executive offices) (Zip Code)
SOUTHWEST GAS CORPORATION 1996 STOCK INCENTIVE PLAN
(Full title of the plan)
GEORGE C. BIEHL
Senior Vice President/Chief Financial Officer and Corporate Secretary
Southwest Gas Corporation
5241 Spring Mountain Road
P.O. Box 98510
Las Vegas, Nevada 89193-8510
(Name and address of agent for service)
(702) 876-7237
(Telephone number, including area code, of agent for service)
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
-------------------------------
Amount Proposed maximum Proposed maximum Amount of
to be offering price per aggregate Registration
Title of securities being registered registered(1)(2) share(3) offering price(3) fee(3)
- ------------------------------------ ----------------- ------------------ ----------------- ------------
<S> <C> <C> <C> <C>
Common Stock ($1 par value) 1,500,000 shares $19-1/16 $28,593,750 $8,664.77
</TABLE>
(1) This Registration Statement covers, in addition to the number of shares
of Common Stock stated above, options to purchase the shares of Common
Stock covered by the Prospectus and, pursuant to Rule 416 an indeterminate
number of shares which by reason of certain events specified in the Plan
may become subject to the Plan.
(2) Each share is accompanied by a common share purchase right pursuant to the
Registrant's Rights Agreement, dated March 5, 1996 with Harris Trust
Company, as Rights Agent.
(3) Pursuant to Rule 457(h), the maximum offering price, per share and in the
aggregate, and the registration fee were calculated based upon the average
of the high and low prices of the Common Stock on July 9, 1997, as
reported on the New York Stock Exchange and published in The Western
Edition of The Wall Street Journal.
==============================================================================
<PAGE>
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
The documents containing the information specified in Part I of Form S-8
(plan information and registrant information) will be sent or given to optionees
as specified by Rule 428(b)(1) of the Securities Act of 1933, as amended (the
"Act"). Such documents need not be filed with the Securities and Exchange
Commission either as part of this Registration Statement or as prospectuses or
prospectus supplements pursuant to Rule 424 of the Act. These documents, which
include the statement of availability required by Item 2 of Form S-8, and the
documents incorporated by reference in this Registration Statement pursuant to
Item 3 of Form S-8 (Part II hereof), taken together, constitute a prospectus
that meets the requirements of Section 10(a) of the Act.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. Incorporation of Certain Documents by Reference
The following documents of Southwest Gas Corporation (the "Company") filed
with the Securities and Exchange Commission are incorporated herein by
reference:
(a) Annual Report on Form 10-K for the Company's fiscal year ended
December 31, 1996;
(b) Quarterly Report on Form 10-Q for the Company's quarterly period ended
March 31, 1997;
(c) Current Reports on Form 8-K dated February 11, 1997 and April 30,
1997; and
(d) The description of the Company's Common Stock contained in its
Registration Statement on Form 8-A filed on June 8, 1979, and any
amendment or report filed for the purpose of updating such
description.
All documents subsequently filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), prior to the filing of a post-effective amendment which
indicates that all securities offered hereby have been sold or which deregisters
all securities then remaining unsold shall be deemed to be incorporated by
reference into the prospectus and to be a part hereof from the date of filing of
such documents. Any statement contained herein or in a document, all or a
portion of which is incorporated or deemed to be incorporated by reference
herein, shall be deemed to be modified or superseded for purposes of this
Registration Statement to the extent that a statement contained herein or in any
other subsequently filed document which also is or is 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 amended,
to constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES
The Company's Common Stock, $1.00 par value, (the "Common Stock") is
registered pursuant to Section 12 of the Exchange Act, and, therefore, the
description of securities is omitted.
S-1<PAGE>
<PAGE>
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Robert M. Johnson, Esq., as Assistant General Counsel for the Company, has
given an opinion to the Securities and Exchange Commission upon the validity of
the shares of Common Stock registered.
The financial statements incorporated by reference in this Registration
Statement have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their report included in the Annual Report on Form
10-K for the year ended December 31, 1996, and are included herein in reliance
upon the authority of said firm as experts in accounting and auditing in giving
said report.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Articles of Incorporation contain a provision which eliminates
the liability of directors for monetary damages to the fullest extent
permissible under California law. The General Corporation Law of California
(the "Law") (i) authorizes the elimination of liability of directors for
monetary damages in an action brought by a shareholder in the right of the
Company (referred to herein as a "derivative action") or by the Company for
breach of a director's duties to the Company and its shareholders and (ii)
authorizes the Company to indemnify directors and officers for monetary
damages for all acts or omissions committed by them in their respective
capacities; provided, however, that liability is not limited nor may
indemnification be provided for (a) acts or omissions that involve
intentional misconduct or knowing and culpable violation of law, (b) for acts
or omissions that a director or officer believes to be contrary to the best
interests of the Company or its shareholders or that involve the absence of
good faith on the part of a director or officer seeking indemnification, (c)
for any transaction from which a director or officer derives an improper
personal benefit, (d) for acts or omissions that show a reckless disregard for
the director's or officer's duty to the Company or its shareholders in
circumstances in which such person was aware, or should have been aware, in
the ordinary course of performing his or her duties, of a risk of serious
injury to the Company or its shareholders, (e) for acts or omissions that
constitute an unexcused pattern of inattention that amounts to an abdication
of the director's or officer's duty to the Company or its shareholders, and (f)
for liabilities arising under Section 310 (contracts in which a director has a
material financial interest) and Section 316 (certain unlawful dividends,
distributions, loans and guarantees) of the Law. In addition, the Company may
not indemnify directors and officers in circumstances in which indemnification
is expressly prohibited by Section 317 of the Law.
The bylaws of the Company provide that the Company has the power to indemnify
directors and officers to the fullest extent permitted under California
law and the Company's Articles of Incorporation. The Company has entered into
indemnification agreements with its directors and officers which require that
the Company indemnify such directors and officers in all cases to the fullest
extent permitted by applicable provisions of the Law. The Company also
maintains a directors' and officers' liability insurance policy insuring
directors and officers of the Company for covered losses as defined in the
policy.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
4.1 Southwest Gas Corporation 1996 Stock Incentive Plan
4.2 Form of Employee Nonqualified Stock Option Agreement
4.3 Form of Employee Incentive Stock Option Agreement
5.1 Opinion of Counsel of Southwest regarding legality of the
securities to be registered
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Counsel of Southwest (included in opinion filed as
Exhibit 5.1 to this Registration Statement)
24.1 Powers of Attorney (included on pages S-4 and S-5 of this
Registration Statement)
__________
S-2<PAGE>
<PAGE>
ITEM 9. UNDERTAKINGS
The undersigned 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, as amended (the "Securities Act");
(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, and;
(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 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 Section 15(d) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act") 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; and
(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 undersigned registrant hereby undertakes that, for purposes of determining
any liability under the Act, each filing of the registrant's annual report
pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and, where
applicable, each filing of an employee benefit plan's annual report pursuant
to Section 15(d) of the Exchange Act) 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
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described in Item 6 above, 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 Securities 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
Securities Act and will be governed by the final adjudication of such issue.
S-3<PAGE>
<PAGE>
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 Las Vegas, State of Nevada, on the
10th day of July, 1997.
SOUTHWEST GAS CORPORATION
By /s/ MICHAEL O. MAFFIE
-------------------------------------
Michael O. Maffie
President and Chief Executive Officer
SIGNATURES
Each person whose signature appears below constitutes and appoints
Michael O. Maffie and George C. Biehl his true and lawful attorneys-in-fact
and agents, each acting alone, with full powers of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any or all 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, granting unto said
attorneys-in-fact and agents, each acting alone, full power and authority to
do and perform each and every act and thing necessary and requisite to be done
in and about the premises, 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, each acting alone, or his substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated.
Signature Title Date
--------- ----- ----
/s/ MICHAEL O. MAFFIE Director, President and July 10, 1997
- ----------------------------- Chief Executive Officer
(Michael O. Maffie) (Principal Executive Officer)
/s/ GEORGE C. BIEHL Senior Vice President, July 10, 1997
- ----------------------------- Chief Financial Officer and
(George C. Biehl) Corporate Secretary
(Principal Financial Officer)
/s/ EDWARD A. JANOV Vice President, Controller July 10, 1997
- ----------------------------- and Chief Accounting Officer
(Edward A. Janov) (Principal Accounting Officer)
/s/ RALPH C. BATASTINI Director July 10, 1997
- -----------------------------
(Ralph C. Batastini)
/s/ MANUEL J. CORTEZ Director July 10, 1997
- -----------------------------
(Manuel J. Cortez)
S-4<PAGE>
<PAGE>
/s/ LLOYD T. DYER Director July 10, 1997
- -----------------------------
(Lloyd T. Dyer)
/s/ KENNY C. GUINN Chairman of the Board July 10, 1997
- ----------------------------- of Directors
(Kenny C. Guinn)
/s/ THOMAS Y. HARTLEY Director July 10, 1997
- -----------------------------
(Thomas Y. Hartley)
/s/ MICHAEL B. JAGER Director July 10, 1997
- -----------------------------
(Michael B. Jager)
/s/ LEONARD R. JUDD Director July 10, 1997
- -----------------------------
(Leonard R. Judd)
/s/ JAMES R. LINCICOME Director July 10, 1997
- -----------------------------
(James R. Lincicome)
/s/ CAROLYN M. SPARKS Director July 10, 1997
- -----------------------------
(Carolyn M. Sparks)
/s/ ROBERT S. SUNDT Director July 10, 1997
- -----------------------------
(Robert S. Sundt)
S-5<PAGE>
<PAGE>
<PAGE>
Exhibit 4.1
SOUTHWEST GAS CORPORATION
1996 STOCK INCENTIVE PLAN
<PAGE>
<PAGE>
TABLE OF CONTENTS
Page
1. THE PLAN. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Purpose. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Administration and Authorization; Power and
Procedure. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.3 Participation. . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.4 Shares Available for Options; Share Limits . . . . . . . . . . . 3
1.5 Grant of Option. . . . . . . . . . . . . . . . . . . . . . . . . 4
1.6 Option Period. . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.7 Limitations on Exercise and Vesting of Options . . . . . . . . . 4
1.8 No Transferability . . . . . . . . . . . . . . . . . . . . . . . 4
2. EMPLOYEE OPTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.1 Grants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.2 Option Price . . . . . . . . . . . . . . . . . . . . . . . . . .. 6
2.3 Limitations on Grant and Terms of Incentive Stock
Options. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.4 Limits on 10% Holders. . . . . . . . . . . . . . . . . . . . . . 7
2.5 Cancellation and Regrant/Waiver of Restrictions. . . . . . . . . 7
3. OTHER PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.1 Rights of Eligible Employees, Participants and
Beneficiaries. . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.2 Adjustments; Acceleration. . . . . . . . . . . . . . . . . . . . 8
3.3 Effect of Termination of Employment. . . . . . . . . . . . . . . 9
3.4 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . 10
3.5 Tax Withholding. . . . . . . . . . . . . . . . . . . . . . . . . 10
3.6 Plan Amendment, Terminination and Suspension. . . . . . . . . . 11
3.7 Privileges of Stock Ownership. . . . . . . . . . . . . . . . . . 11
3.8 Effective Date of the Plan . . . . . . . . . . . . . . . . . . . 12
3.9 Term of the Plan . . . . . . . . . . . . . . . . . . . . . . . . 12
3.10 Governing Law/Construction/Severability. . . . . . . . . . . . . 12
3.11 Captions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.12 Effect of Change of Subsidiary Status. . . . . . . . . . . . . . 13
3.13 Non-Exclusivity of Plan. . . . . . . . . . . . . . . . . . . . . 13
4. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.1 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . 13
i<PAGE>
<PAGE>
5. NON-EMPLOYEE DIRECTOR OPTIONS . . . . . . . . . . . . . . . . . . . . 17
5.1 Participation. . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.2 Annual Option Grants . . . . . . . . . . . . . . . . . . . . . . 18
5.3 Option Price . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.4 Option Period and Exercisability . . . . . . . . . . . . . . . . 19
5.5 Termination of Directorship. . . . . . . . . . . . . . . . . . . 19
5.6 Adjustments. . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.7 Acceleration Upon a Change in Control Event. . . . . . . . . . . 19
5.8 Limitation on Amendments . . . . . . . . . . . . . . . . . . . . 20
ii<PAGE>
<PAGE>
SOUTHWEST GAS CORPORATION
1996 STOCK INCENTIVE PLAN
1. THE PLAN
1.1 Purpose.
-------
The purpose of this Plan is to promote the success of the Company by
providing an additional means through the grant of Options to attract,
motivate, retain and reward key employees, including officers, whether or not
directors, of the Company with awards and incentives for high levels of
individual performance and improved financial performance of the Company and
to attract, motivate and retain experienced and knowledgeable independent
directors through the benefits provided under Article 5. "Corporation" means
Southwest Gas Corporation and "Company" means the Corporation and its
Subsidiaries, collectively. These terms and other capitalized terms are
defined in Article 4.
1.2 Administration and Authorization; Power and Procedure.
-----------------------------------------------------
(a) COMMITTEE. This Plan shall be administered by and all Options
to Eligible Employees shall be authorized by the Committee. Action of the
Committee with respect to the administration of this Plan shall be taken
pursuant to a majority vote or by written consent of its members.
(b) PLAN AWARDS; INTERPRETATION; POWERS OF COMMITTEE. Subject to
the express provisions of this Plan, the Committee shall have the authority:
(i) to determine from among those persons eligible the particular
Eligible Employees who will receive any Options;
(ii) to grant Options to Eligible Employees, determine the price at
which securities will be offered and the amount of securities to be
offered to any of such persons, and determine the other specific terms
and conditions of such Options consistent with the express limits of this
Plan, and establish the installments (if any) in which such Options shall
become exercisable or shall vest, or determine that no delayed
exercisability or vesting is required, and establish the events of
termination of such Options;
(iii) to approve the forms of Option Agreements (which need not
be identical either as to type of award or among Participants);
(iv) to construe and interpret this Plan and any agreements defining
the rights and obligations of the Company and Participants who are
1<PAGE>
<PAGE>
granted Options under Article 2 of this Plan, further define the terms
used in this Plan, and prescribe, amend and rescind rules and regulations
relating to the administration of this Plan;
(v) to cancel, modify, or waive the Corporation's rights with
respect to, or modify, discontinue, suspend, or terminate any or all
outstanding Options held by Eligible Employees, subject to any required
consent under Section 3.6;
(vi) to accelerate or extend the exercisability or extend the term
of any or all such outstanding Options within the maximum ten-year term
of Options under Section 1.6; and
(vii) to make all other determinations and take such other
action as contemplated by this Plan or as may be necessary or advisable
for the administration of this Plan and the effectuation of its purposes.
Notwithstanding the foregoing, the provisions of Article 5 relating to
Non-Employee Director Options shall be automatic and, to the maximum extent
possible, self-effectuating, and the discretion of the Committee shall not
extend to such Options in any manner that would be impermissible under Rule
16b-3(c)(2).
(c) BINDING DETERMINATIONS. Any action taken by, or inaction of,
the Corporation, any Subsidiary, the Board or the Committee relating or
pursuant to this Plan shall be within the absolute discretion of that entity
or body and shall be conclusive and binding upon all persons. No member of
the Board or Committee, or officer of the Corporation or any Subsidiary, shall
be liable for any such action or inaction of the entity or body, of another
person or, except in circumstances involving bad faith, of himself or herself.
Subject only to compliance with the express provisions hereof, the Board and
Committee may act in their absolute discretion in matters within their
authority related to this Plan.
(d) RELIANCE ON EXPERTS. In making any determination or in taking
or not taking any action under this Plan, the Committee or the Board, as the
case may be, may obtain and may rely upon the advice of experts, including
professional advisors to the Corporation. No director, officer or agent of
the Company shall be liable for any such action or determination taken or made
or omitted in good faith.
(e) DELEGATION. The Committee may delegate ministerial,
non-discretionary functions to individuals who are officers or
employees of the Company.
2<PAGE>
<PAGE>
1.3 Participation.
-------------
Options may be granted by the Committee only to those persons that
the Committee determines to be Eligible Employees. An Eligible Employee who
has been granted an Option may, if otherwise eligible, be granted additional
Options if the Committee shall so determine. Non-Employee Directors shall
only be eligible to receive Non-Qualified Stock Options granted automatically
without action of the Committee under the provisions of Article 5.
1.4 Shares Available for Options; Share Limits.
------------------------------------------
(a) SHARES AVAILABLE. Subject to the provisions of Section 3.2,
the capital stock that may be delivered under this Plan shall be shares of the
Corporation's authorized but unissued Common Stock and any shares of its
Common Stock held as treasury shares. The shares may be delivered for any
lawful consideration.
(b) SHARE LIMITS. The maximum number of shares of Common Stock
that may be delivered pursuant to all Options (including both Nonqualified
Stock Options and Incentive Stock Options) granted under this Plan shall not
exceed 1,500,000 shares (the "SHARE LIMIT"). The maximum number of shares of
Common Stock that may be delivered pursuant to options qualified as Incentive
Stock Options granted under this Plan is 1,500,000 shares. The maximum number
of shares of Common Stock that may be delivered to Non-Employee Directors
under the provisions of Article 5 shall not exceed 350,000 shares. The
maximum number of shares subject to those options that are granted during any
calendar year to any Eligible Employee shall be limited to 100,000. Each of
the four foregoing numerical limits shall be subject to adjustment as
contemplated by this Section 1.4 and Section 3.2.
(c) SHARE RESERVATION; REPLENISHMENT AND REISSUE OF UNVESTED
OPTIONS. No Option may be granted under this Plan unless, on the date of
grant, the sum of (i) the maximum number of shares issuable at any time
pursuant to such Option, plus (ii) the number of shares that have previously
been issued pursuant to Options granted under this Plan, other than reacquired
shares available for reissue consistent with any applicable limitations under
Rule 16b-3, plus (iii) the maximum number of shares that may be issued at any
time after such date of grant pursuant to Options that are outstanding on such
date, does not exceed the Share Limit. Shares that are subject to or underlie
Options which expire or for any reason are canceled or terminated, are
forfeited, fail to vest, or for any other reason are not paid or delivered
under this Plan, as well as reacquired shares, shall again, except to the
extent prohibited by Rule 16b-3, be available for subsequent Options under the
Plan. Except as limited by Rule 16b-3, if an Option is settled only in cash
and satisfies the requirements for exemption under Rule 16b-3 or for exclusion
3<PAGE>
<PAGE>
from the definition of derivative security under Rule 16a-1(c)(3)(ii), such
Option need not be counted against any of the limits under this Section 1.4.
1.5 Grant of Option.
---------------
Subject to the express provisions of this Plan, the Committee shall
determine the number of shares of Common Stock subject to each Option and the
price to be paid for the shares. Each Option shall be evidenced by an Option
Agreement signed by the Corporation and, if required by the Committee, by the
Participant.
1.6 Option Period.
-------------
Each Option and all executory rights or obligations under the
related Option Agreement shall expire on such date (if any) as shall be
determined by the Committee, but not later than ten (10) years after the
Option Date.
1.7 Limitations on Exercise and Vesting of Options.
----------------------------------------------
(a) PROVISIONS FOR EXERCISE. Unless the Committee otherwise
expressly provides, no Option shall be exercisable or shall vest until at
least six months after the initial Option Date, and once exercisable an Option
shall remain exercisable until the expiration or earlier termination of the
Option.
(b) PROCEDURE. Any exercisable Option shall be deemed to be
exercised when the Secretary of the Corporation receives written notice of
such exercise from the Participant, together with any required payment made in
accordance with Section 2.2(a) or 5.3, as the case may be.
(c) FRACTIONAL SHARES/MINIMUM ISSUE. Fractional share interests
shall be disregarded, but may be accumulated. The Committee, however, may
determine in the case of Eligible Employees that cash, other securities, or
other property will be paid or transferred in lieu of any fractional share
interests. No fewer than 100 shares may be purchased on exercise of any
Option at one time unless the number purchased is the total number at the time
available for purchase under the Option.
1.8 No Transferability.
------------------
(a) LIMIT ON EXERCISE. Unless otherwise expressly permitted by the
Committee and by applicable law (including (if applicable) Rule 16b-3) and the
express terms of an Option Agreement, Options may be exercised only by, and
shares issuable pursuant to an Option shall be paid only to (or for the
account of), the Participant or, if the Participant has died, the
Participant's Beneficiary or, if the Participant has suffered a Total
4<PAGE>
<PAGE>
Disability, the Participant's Personal Representative, if any, or if there is
none, the Participant. The Committee may permit Options to be exercised by
certain persons or entities related to the Participant who are transferees of
the Participant without consideration pursuant to such conditions and
procedures as the Committee may establish and (for Options intended to satisfy
the conditions of Rule 16b-3) as may be permitted under Rule 16b-3.
(b) LIMIT ON TRANSFER. No right or similar benefit granted under
this Plan or any Option, shall be transferrable by the Participant or shall be
subject in any manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance or charge (other than to the Corporation), except (i) by
will or the laws of descent and distribution, or (ii) pursuant to a QDRO or
pursuant to any other exception to transfer restrictions expressly permitted
by the Committee and set forth in the Option Agreement (or an amendment
thereto) and, in the case of Options intended to satisfy the conditions of
Rule 16b-3, to the extent permitted by Rule 16b-3 (or, in the case of Options
not intended to satisfy Rule 16b-3, as may be not inconsistent with the issue
of Options under this Plan that do satisfy the Rule), or (iii) in the case of
Incentive Stock Options, as permitted by the Code. Any attempted transfer in
violation of these provisions shall be void and the Corporation shall
disregard any attempt at transfer, assignment or other alienation prohibited
hereby.
(c) DESIGNATION OF BENEFICIARY. The designation of a Beneficiary
hereunder shall not constitute a transfer prohibited by the foregoing
provisions.
(d) EXCEPTIONS. The restrictions on exercise and transfer above
shall not be deemed to prohibit the authorization by the Committee of
"cashless exercise" procedures with unaffiliated third parties who provide
financing for the purpose of (or who otherwise facilitate) the exercise of
Options consistent with applicable legal restrictions and Rule 16b-3, nor, to
the extent permitted by the Committee, transfers for estate and financial
planning purposes, notwithstanding that the inclusion of such features may
render the particular Options ineligible for the benefits of Rule 16b-3, nor,
in the case of Participants who are not Section 16 Persons, transfers to such
other persons or in such other circumstances as the Committee may in the
Option Agreement or other writing signed by the Corporation expressly permit.
5<PAGE>
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2. EMPLOYEE OPTIONS.
2.1 Grants.
------
One or more Options may be granted under this Article to any
Eligible Employee. Each Option granted may be either an Option intended to be
an Incentive Stock Option, or not so intended, and such intent shall be
indicated in the applicable Option Agreement.
2.2 Option Price.
------------
(a) PRICING LIMITS. The purchase price per share of the Common
Stock covered by each Option shall be determined by the Committee at the time
of the grant, but in the case of Incentive Stock Options shall not be less
than 100% (110% in the case of a Participant who owns or is deemed to own
under Section 424(d) of the Code more than 10% of the total combined voting
power of all classes of stock of the Corporation) of the Fair Market Value of
the Common Stock on the date of grant.
(b) PAYMENT PROVISIONS. The purchase price of any shares purchased
on exercise of an Option granted under this Article shall be paid in full at
the time of each purchase in one or a combination of the following methods:
(i) in cash or by electronic funds transfer; (ii) by check payable to the
order of the Corporation; (iii) by notice and third party payment in such
manner as may be authorized by the Committee; or (iv) by the delivery of
shares of Common Stock of the Corporation already owned by the Participant,
provided, however, that the Committee may in its absolute discretion limit the
Participant's ability to exercise an Option by delivering such shares. Shares
of Common Stock used to satisfy the exercise price of an Option shall be
valued at their Fair Market Value on the date of exercise.
2.3 Limitations on Grant and Terms of Incentive Stock Options.
---------------------------------------------------------
(a) $100,000 LIMIT. To the extent that the aggregate "fair market
value" of stock with respect to which incentive stock options first become
exercisable by a Participant in any calendar year exceeds $100,000, taking
into account both Common Stock subject to Incentive Stock Options under this
Plan and stock subject to incentive stock options under all other plans of the
Company or any parent corporation, such options shall be treated as
nonqualified stock options. For this purpose, the "fair market value" of the
stock subject to options shall be determined as of the date the options were
awarded. In reducing the number of options treated as incentive stock options
to meet the $100,000 limit, the most recently granted options shall be reduced
first. To the extent a reduction of simultaneously granted options is
necessary to meet the $100,000 limit, the Committee may, in the manner and to
6<PAGE>
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the extent permitted by law, designate which shares of Common Stock are to be
treated as shares acquired pursuant to the exercise of an Incentive Stock
Option.
(b) OPTION PERIOD. Each Option and all rights thereunder shall
expire no later than ten years after the Option Date.
(c) OTHER CODE LIMITS. There shall be imposed in any Option
Agreement relating to Incentive Stock Options such terms and conditions as
from time to time are required in order that the Option be an "incentive stock
option" as that term is defined in Section 422 of the Code.
2.4 Limits on 10% Holders.
---------------------
No Incentive Stock Option may be granted to any person who, at the
time the Option is granted, owns (or is deemed to own under Section 424(d) of
the Code) shares of outstanding Common Stock possessing more than 10% of the
total combined voting power of all classes of stock of the Corporation, unless
the exercise price of such Option is at least 110% of the Fair Market Value of
the stock subject to the Option and such Option by its terms is not
exercisable after the expiration of five years from the date such Option is
granted.
2.5 Cancellation and Regrant/Waiver of Restrictions.
-----------------------------------------------
Subject to Section 1.4 and Section 3.6 and the specific limitations
on Options contained in this Plan, the Committee from time to time may
authorize, generally or in specific cases only, for the benefit of any
Eligible Employee any adjustment in the number of shares subject to, the
restrictions upon or the term of, an Option granted under this Article by
cancellation of an outstanding Option and a subsequent regranting of an
Option, by amendment, by substitution of an outstanding Option, by waiver or
by other legally valid means. Such amendment or other action may provide for
a greater or lesser number of shares subject to the Option, or provide for a
longer or shorter vesting or exercise period.
3. OTHER PROVISIONS.
3.1 Rights of Eligible Employees, Participants and Beneficiaries.
------------------------------------------------------------
(a) EMPLOYMENT STATUS. Status as an Eligible Employee shall not be
construed as a commitment that any Option will be made under this Plan to an
Eligible Employee or to Eligible Employees generally.
7<PAGE>
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(b) NO EMPLOYMENT CONTRACT. Nothing contained in this Plan (or in
any other documents related to this Plan or to any Option) shall confer upon
any Eligible Employee or other Participant any right to continue in the employ
or other service of the Company or constitute any contract or agreement of
employment or other service, nor shall interfere in any way with the right of
the Company to change such person's compensation or other benefits or to
terminate the employment of such person, with or without cause, but nothing
contained in this Plan or any document related hereto shall adversely affect
any independent contractual right of such person without his or her consent
thereto.
(c) PLAN NOT FUNDED. Awards payable under this Plan shall be
payable in shares or from the general assets of the Corporation, and (except
as provided in Section 1.4(c)) no special or separate reserve, fund or deposit
shall be made to assure payment of such Awards. No Participant, Beneficiary
or other person shall have any right, title or interest in any fund or in any
specific asset (including shares of Common Stock, except as expressly
otherwise provided) of the Company by reason of any Option hereunder. Neither
the provisions of this Plan (or of any related documents), nor the creation or
adoption of this Plan, nor any action taken pursuant to the provisions of this
Plan shall create, or be construed to create, a trust of any kind or a
fiduciary relationship between the Company and any Participant, Beneficiary or
other person. To the extent that a Participant, Beneficiary or other person
acquires a right to receive payment pursuant to any Option hereunder, such
right shall be no greater than the right of any unsecured general creditor of
the Company.
3.2 Adjustments; Acceleration.
-------------------------
(a) ADJUSTMENTS. If there shall occur any extraordinary dividend
or other extraordinary distribution in respect of the Common Stock (whether in
the form of cash, Common Stock, other securities, or other property), or any
recapitalization, stock split (including a stock split in the form of a stock
dividend), reverse stock split, reorganization, merger, combination,
consolidation, split-up, spin-off, combination, repurchase, or exchange of
Common Stock or other securities of the Corporation, or there shall occur any
other like corporate transaction or event in respect of the Common Stock or a
sale of substantially all the assets of the Corporation as an entirety, then
the Committee shall, in such manner and to such extent (if any) as it deems
appropriate and equitable (1) proportionately adjust any or all of (a) the
number and type of shares of Common Stock (or other securities) which
thereafter may be made the subject of Options (including the specific numbers
of shares set forth elsewhere in this Plan), (b) the number, amount and type
of shares of Common Stock (or other securities or property) subject to any or
all outstanding Options, (c) the exercise price of any or all outstanding
Options, or (d) the securities, cash or other property deliverable upon
exercise of any outstanding Options, or (2) in the case of an extraordinary
8<PAGE>
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dividend or other distribution, merger, reorganization, consolidation,
combination, sale of assets, split up, exchange, or spin off, make provision
for a cash payment or for the substitution or exchange of any or all
outstanding Options or the cash, securities or property deliverable to the
holder of any or all outstanding Options based upon the distribution or
consideration payable to holders of the Common Stock of the Corporation upon
or in respect of such event; provided, however, in each case, that with
respect to Incentive Stock Options, no such adjustment shall be made which
would cause the Plan to violate Section 424(a) of the Code or any successor
provisions thereto without the written consent of holders materially adversely
affected thereby. In any of such events, the Committee may take such action
sufficiently prior to such event if necessary to permit the Participant to
realize the benefits intended to be conveyed with respect to the underlying
shares in the same manner as is available to shareholders generally.
(b) ACCELERATION OF OPTIONS UPON CHANGE IN CONTROL. As to any
Participant who has been granted an Option pursuant to Article 2, unless prior
to a Change in Control Event the Committee determines that, upon its
occurrence, there shall be no acceleration of benefits under Options or
determines that only certain or limited benefits under Options shall be
accelerated and the extent to which they shall be accelerated, and/or
establishes a different time in respect of such Change in Control Event for
such acceleration, then upon the occurrence of a Change in Control Event each
Option shall become immediately exercisable provided, however, that in no
event shall any Option be accelerated as to any Section 16 Person to a date
less than six months after the Option Date of such Award. The Committee may
override the limitations on acceleration in this Section 3.2(b) by express
provision in the Option Agreement and may accord any Eligible Employee a right
to refuse any acceleration, whether pursuant to the Option Agreement or
otherwise, in such circumstances as the Committee may approve. Any
acceleration of Options shall comply with applicable regulatory requirements,
including without limitation Section 422 of the Code.
(c) POSSIBLE EARLY TERMINATION OF ACCELERATED AWARDS. If any
Option under this Plan (other than an Option granted under Article 5) has been
fully accelerated as permitted by Section 3.2(b) but is not exercised prior to
(i) a dissolution of the Corporation, or (ii) a reorganization event described
in Section 3.2(a) that the Corporation does not survive, or (iii) the
consummation of reorganization event described in Section 3.2(a) that results
in a Change in Control Event approved by the Board, and no provision has been
made for the survival, substitution, exchange or other settlement of such
Option, such Option shall thereupon terminate.
3.3 Effect of Termination of Employment.
-----------------------------------
9<PAGE>
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The Committee shall establish in respect of each Option granted to
an Eligible Employee the effect of a termination of employment on the rights
and benefits thereunder and in so doing may make distinctions based upon the
cause of termination.
3.4 Compliance with Laws.
--------------------
This Plan, the granting and vesting of Options under this Plan and
the issuance and delivery of shares of Common Stock and/or the payment of
money under this Plan or under Options granted hereunder are subject to
compliance with all applicable federal and state laws, rules and regulations
(including but not limited to state and federal securities law and federal
margin requirements) and to such approvals by any listing, regulatory or
governmental authority as may, in the opinion of counsel for the Corporation,
be necessary or advisable in connection therewith. Any securities delivered
under this Plan shall be subject to such restrictions, and the person
acquiring such securities shall, if requested by the Corporation, provide such
assurances and representations to the Corporation as the Corporation may deem
necessary or desirable to assure compliance with all applicable legal
requirements.
3.5 Tax Withholding.
---------------
(a) CASH OR SHARES. Upon any exercise of any Option or upon the
disposition of shares of Common Stock acquired pursuant to the exercise of an
Incentive Stock Option prior to satisfaction of the holding period
requirements of Section 422 of the Code, the Company shall have the right at
its option to (i) require the Participant (or Personal Representative or
Beneficiary, as the case may be) to pay or provide for payment of the amount
of any taxes which the Company may be required to withhold with respect to
such Option event or payment or (ii) deduct from any amount payable in cash
the amount of any taxes which the Company may be required to withhold with
respect to such cash payment. In any case where a tax is required to be
withheld in connection with the delivery of shares of Common Stock under this
Plan, the Committee may in its sole discretion grant (either at the time of
the Option or thereafter) to the Participant the right to elect, pursuant to
such rules and subject to such conditions as the Committee may establish, to
have the Corporation reduce the number of shares to be delivered by (or
otherwise reacquire) the appropriate number of shares valued at their then
Fair Market Value, to satisfy such withholding obligation.
(b) TAX LOANS. The Company may, in its discretion, authorize a
loan to an Eligible Employee in the amount of any taxes which the Company may
be required to withhold with respect to shares of Common Stock received (or
disposed of, as the case may be) pursuant to a transaction described in
subsection (a) above. Such a loan shall be for a term, at a rate of interest
and pursuant to such other terms and conditions as the Company, under
applicable law may establish.
10<PAGE>
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3.6 Plan Amendment, Termination and Suspension.
------------------------------------------
(a) BOARD AUTHORIZATION. The Board may, at any time, terminate or,
from time to time, amend, modify or suspend this Plan, in whole or in part.
No Options may be granted during any suspension of this Plan or after
termination of this Plan, but the Committee shall retain jurisdiction as to
Options then outstanding in accordance with the terms of this Plan.
(b) SHAREHOLDER APPROVAL. If any amendment would (i) materially
increase the benefits accruing to Participants under this Plan, (ii)
materially increase the aggregate number of securities that may be issued
under this Plan, or (iii) materially modify the requirements as to eligibility
for participation in this Plan, then to the extent then required by Rule 16b-3
to secure benefits thereunder or to avoid liability under Section 16 of the
Exchange Act (and Rules thereunder) or required under Section 425 of the Code
or any other applicable law, or deemed necessary or advisable by the Board,
such amendment shall be subject to shareholder approval.
(c) AMENDMENTS TO OPTIONS. Without limiting any other express
authority of the Committee under but subject to the express limits of this
Plan, the Committee by agreement or resolution may waive conditions of or
limitations on Options to Eligible Employees that the Committee in the prior
exercise of its discretion has imposed, without the consent of a Participant,
and may make other changes to the terms and conditions of Options that do not
affect in any manner materially adverse to the Participant, his or her rights
and benefits under an Option. Notwithstanding anything else contained herein
to the contrary, the Committee shall not, without prior shareholder approval
(i) authorize the amendment of outstanding Options to reduce the exercise
price, as applicable, except as contemplated by Section 3.2, or (ii) cancel
and replace outstanding Options with similar Options having an exercise or
base price which is lower, except as contemplated by Section 3.2.
(d) LIMITATIONS ON AMENDMENTS TO PLAN AND OPTIONS. No amendment,
suspension or termination of the Plan or change of or affecting any
outstanding Option shall, without written consent of the Participant, affect
in any manner materially adverse to the Participant any rights or benefits of
the Participant or obligations of the Corporation under any Option granted
under this Plan prior to the effective date of such change. Changes
contemplated by Section 3.2 shall not be deemed to constitute changes or
amendments for purposes of this Section 3.6.
11<PAGE>
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3.7 Privileges of Stock Ownership.
-----------------------------
Except as otherwise expressly authorized by the Committee or this
Plan, a Participant shall not be entitled to any privilege of stock ownership
as to any shares of Common Stock not actually delivered to and held of record
by him or her. No adjustment will be made for dividends or other rights as a
shareholder for which a record date is prior to such date of delivery.
3.8 Effective Date of the Plan.
--------------------------
This Plan shall be effective as of March 5, 1996, the date of Board
approval, subject to shareholder approval within 12 months thereafter.
3.9 Term of the Plan.
----------------
No Option shall be granted more than ten years after the effective
date of this Plan (the "termination date"). Unless otherwise expressly
provided in this Plan or in an applicable Option Agreement, any Option
theretofore granted may extend beyond such date, and all authority of the
Committee with respect to Options hereunder shall continue during any
suspension of this Plan and in respect of outstanding Options on such
termination date.
3.10 Governing Law/Construction/Severability.
---------------------------------------
(a) CHOICE OF LAW. This Plan, the Options, all documents
evidencing Options and all other related documents shall be governed by, and
construed in accordance with the laws of the State of California.
(b) SEVERABILITY. If any provision shall be held by a court of
competent jurisdiction to be invalid and unenforceable, the remaining
provisions of this Plan shall continue in effect.
(c) Plan Construction.
-----------------
(1) RULE 16B-3. It is the intent of the Corporation that this
Plan and Options hereunder satisfy and be interpreted in a manner that in
the case of Participants who are or may be subject to Section 16 of the
Exchange Act satisfies the applicable requirements of Rule 16b-3 so that
such persons (unless they otherwise agree) will be entitled to the
benefits of Rule 16b-3 or other exemptive rules under Section 16 of the
Exchange Act and will not be subjected to avoidable liability thereunder.
If any provision of this Plan or of any Award would otherwise frustrate
or conflict with the intent expressed above, that provision to the extent
possible shall be interpreted and deemed amended so as to avoid such
12<PAGE>
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conflict, but to the extent of any remaining irreconcilable conflict with
such intent as to such persons in the circumstances, such provision shall
be disregarded.
(2) SECTION 162(M). It is the further intent of the Company
that Options with an exercise price not less than Fair Market Value on
the date of grant shall qualify as performance-based compensation under
Section 162(m) of the Code, and this Plan shall be interpreted consistent
with such intent.
(d) TRANSITION PERIOD PROVISIONS. During the transition period
under new Rule 16b-3, any derivative security the grant of which is intended
to be exempt form Rule 16b-3 shall not be transferable other than as permitted
by former Rule 16b-3(d)(ii), and the consideration for any grant or award
shall conform to any additional limitations under former Rule 16b-3.
3.11 Captions.
--------
Captions and headings are given to the sections and subsections of
this 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.
3.12 Effect of Change of Subsidiary Status.
-------------------------------------
For purposes of this Plan and any Option hereunder, if an entity
ceases to be a Subsidiary a termination of employment shall be deemed to have
occurred with respect to each employee of such Subsidiary who does not
continue as an employee of another entity within the Company.
3.13 Non-Exclusivity of Plan.
-----------------------
Nothing in this Plan shall limit or be deemed to limit the authority
of the Board or the Committee to grant awards or authorize any other
compensation, with or without reference to the Common Stock, under any other
plan or authority.
4. DEFINITIONS.
4.1 Definitions.
-----------
(a) "BENEFICIARY" shall mean the person, persons, trust or trusts
designated by a Participant or, in the absence of a designation, entitled by
will or the laws of descent and distribution, to receive the benefits
specified in the Option Agreement and under this Plan in the event of a
Participant's death, and shall mean the Participant's executor or
13<PAGE>
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administrator if no other Beneficiary is designated and able to act under the
circumstances.
(b) "BOARD" shall mean the Board of Directors of the Corporation.
(c) "CHANGE IN CONTROL EVENT" shall mean any of the following:
(1) Approval by the shareholders of the Corporation of the
dissolution or liquidation of the Corporation;
(2) Approval by the shareholders of the Corporation of an
agreement to merge or consolidate, or otherwise reorganize, with or into
one or more entities that are not wholly owned by the Corporation, as a
result of which less than 50% of the outstanding voting securities of the
surviving or resulting entity immediately after the reorganization are,
or will be, owned by shareholders of the Corporation immediately before
such reorganization (assuming for purposes of such determination that
there is no change in the record ownership of the Corporation's
securities from the record date for such approval until such
reorganization and that such record owners hold no securities of the
other parties to such reorganization);
(3) Approval by the shareholders of the Corporation of the
sale of substantially all of the Corporation's business and/or assets to
a person or entity which is not a Subsidiary;
(4) Any "person" (as such term is used in Sections 13(d) and
14(d) of the Exchange Act but excluding any person described in and
satisfying the conditions of Rule 13d-1(b)(1) thereunder), becomes the
beneficial owner (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Corporation representing
more than 50% of the combined voting power of the Corporation's then
outstanding securities entitled to then vote generally in the election of
directors of the Corporation; or
(5) A majority of the Board not being comprised of Continuing
Directors.
(d) "CODE" shall mean the Internal Revenue Code of 1986, as amended
from time to time.
(e) "COMMISSION" shall mean the Securities and Exchange Commission.
14<PAGE>
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(f) "COMMITTEE" shall mean a subcommittee of the Nominating and
Compensation Committee appointed by the Board to administer this Plan, which
committee shall be comprised only of three [or, effective September 1, 1996
(or such other date as the Committee may determine or the Commission may
designate as the expiration of the transition period with respect to former
Rule 16b-3 under the Exchange Act), two] or more directors or such greater
number of directors as may be required under applicable law, each of whom,
during such time as one or more Participants may be subject to Section 16 of
the Exchange Act, shall be Disinterested and "outside" within the meaning of
Section 162(m) of the Code.
(g) "COMMON STOCK" shall mean the Common Stock of the Corporation
and such other securities or property as may become the subject of Options, or
become subject to Options, pursuant to an adjustment made under Section 3.2 of
this Plan.
(h) "COMPANY" shall mean, collectively, the Corporation and its
Subsidiaries.
(i) "CONTINUING DIRECTORS" shall mean persons who are members of
the Board on March 5, 1996 or nominated for election or elected to the Board
with the affirmative vote of at least three-fourths of the directors who were
Continuing Directors at the time of such nomination or election.
(j) "CORPORATION" shall mean Southwest Gas Corporation, a
California corporation and its successors.
(k) "DISINTERESTED" shall mean disinterested within the meaning of
any applicable regulatory requirements, including Rule 16b-3.
(l) "ELIGIBLE EMPLOYEE" shall mean an officer (whether or not a
director) or other key employee of the Company.
(m) "ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.
(n) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934,
as amended from time to time.
(o) "FAIR MARKET VALUE" shall mean (i) if the stock is listed or
admitted to trade on a national securities exchange, the closing price of the
stock on the Composite Tape, as published in the Western Edition of The Wall
Street Journal, of the principal national securities exchange on which the
stock is so listed or admitted to trade, on such date, or, if there is no
trading of the stock on such date, then the closing price of the stock as
15<PAGE>
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quoted on such Composite Tape on the next preceding date on which there was
trading in such shares; (ii) if the stock is not listed or admitted to trade
on a national securities exchange, the last price for the stock on such date,
as furnished by the National Association of Securities Dealers, Inc. ("NASD")
through the NASDAQ National Market Reporting System or a similar organization
if the NASD is no longer reporting such information; (iii) if the stock is not
listed or admitted to trade on a national securities exchange and is not
reported on the National Market Reporting System, the mean between the bid and
asked price for the stock on such date, as furnished by the NASD or a similar
organization; or (iv) if the stock is not listed or admitted to trade on a
national securities exchange, is not reported on the National Market Reporting
System and if bid and asked prices for the stock are not furnished by the NASD
or a similar organization, the value as established by the Committee at such
time for purposes of this Plan.
(p) "INCENTIVE STOCK OPTION" shall mean an Option which is
designated as an incentive stock option within the meaning of Section 422 of
the Code, the award of which contains such provisions (including but not
limited to the receipt of shareholder approval of this Plan, if the award is
made prior to such approval) and is made under such circumstances and to such
persons as may be necessary to comply with that section.
(q) "NOMINATING AND COMPENSATION COMMITTEE" shall mean the standing
committee of the Board charged, among other things, with the responsibility
to advise the Board on all benefit and compensation program for Directors,
Officers and all Company employees.
(r) "NONQUALIFIED STOCK OPTION" shall mean an Option that is
designated as a Nonqualified Stock Option and shall include any Option
intended as an Incentive Stock Option that fails to meet the applicable legal
requirements thereof. Any Option granted hereunder that is not designated as
an incentive stock option shall be deemed to be designated a nonqualified
stock option under this Plan and not an incentive stock option under the Code.
(s) "NON-EMPLOYEE DIRECTOR" shall mean a member of the Board of
Directors of the Corporation who is not an officer or employee of the Company.
(t) "OPTION" shall mean an option to purchase Common Stock granted
under this Plan. The Committee shall designate any Option granted to an
Eligible Employee as a Nonqualified Stock Option or an Incentive Stock Option.
Options granted under Article 5 shall be Nonqualified Stock Options.
(u) "OPTION AGREEMENT" shall mean any writing setting forth the
terms of an Option that has been authorized by the Committee.
16<PAGE>
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(v) "OPTION DATE" shall mean the date upon which the Committee took
the action granting an Option or such later date as the Committee designates
as the Option Date at the time of the Option or, in the case of Options under
Article 5, the applicable dates set forth therein.
(w) "OPTION PERIOD" shall mean the period beginning on an Option
Date and ending on the expiration date of such Option.
(X) "PARTICIPANT" shall mean an Eligible Employee who has been
granted an Option under this Plan and a Non-Employee Director who has been
granted an Option under Article 5 of this Plan.
(y) "PERSONAL REPRESENTATIVE" shall mean the person or persons who,
upon the disability or incompetence of a Participant, shall have acquired on
behalf of the Participant, by legal proceeding or otherwise, the power to
exercise the rights or receive benefits under this Plan and who shall have
become the legal representative of the Participant.
(z) "PLAN" shall mean this 1996 Stock Incentive Plan.
(aa) "QDRO" shall mean a qualified domestic relations order as
defined in Section 414(p) of the Code or Title I, Section 206(d)(3) of ERISA
(to the same extent as if this Plan were subject thereto), or the applicable
rules thereunder.
(bb) "RULE" shall mean any Rule promulgated by the Commission
pursuant to the Exchange Act, as amended from time to time.
(cc) "SECTION 16 PERSON" shall mean a person subject to Section
16(a) of the Exchange Act.
(dd) "SECURITIES ACT" shall mean the Securities Act of 1933, as
amended from time to time.
(ee) "SUBSIDIARY" shall mean any corporation or other entity a
majority of whose outstanding voting stock or voting power is beneficially
owned directly or indirectly by the Corporation.
(ff) "TOTAL DISABILITY" shall mean a "permanent and total
disability" within the meaning of Section 22(e)(3) of the Code and (except in
the case of a Non-Employee Director) such other disabilities, infirmities,
afflictions or conditions as the Committee by rule may include.
5. NON-EMPLOYEE DIRECTOR OPTIONS.
17<PAGE>
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5.1 Participation.
-------------
Options under this Article 5 shall be made only to Non-Employee
Directors and shall be evidenced by Option Agreements substantially in the
form of Exhibit A hereto.
5.2 Annual Option Grants.
--------------------
(a) TIME OF INITIAL OPTION. Persons who are Non-Employee Directors
in office at the time this Plan is first approved by the shareholders of the
Corporation shall be granted without further action an Option to purchase
3,000 shares of Common Stock (the Option Date of which shall be the date of
shareholder approval of this Plan). After approval of this Plan by the
shareholders of the Corporation, if any person who is not then an officer or
employee of the Company shall become a director of the Corporation, there
shall be granted automatically to such person (without any action by the Board
or Committee) a Nonqualified Stock Option (the Option Date of which shall be
the date such person takes office) to purchase that number of shares of Common
Stock determined by multiplying 2,000 by a fraction, the numerator of which is
the number of days between the Option Date and the next annual shareholders
meeting, and the denominator of which is 365.
(b) SUBSEQUENT ANNUAL OPTIONS. On the date of each annual
shareholders meeting in each year during the term of the Plan, commencing with
the annual meeting occurring in 1997, there shall be granted automatically
(without any action by the Committee or the Board) a Nonqualified Stock Option
(the Option Date of which shall be such date) to each Non-Employee Director
then continuing in office to purchase 2,000 shares of Common Stock.
(c) MAXIMUM NUMBER OF SHARES. Annual grants that would otherwise
exceed the maximum number of shares under Section 1.4(a) shall be prorated
within such limitation. A Non-Employee Director shall not receive more than
one Nonqualified Stock Option under this Section 5.2 in any calendar year.
5.3 Option Price.
------------
The purchase price per share of the Common Stock covered by each
Option granted pursuant to Section 5.2 hereof shall be 100 percent of the Fair
Market Value of the Common Stock on the Option Date. The exercise price of
any Option granted under this Article shall be paid in full at the time of
each purchase in cash or by check or in shares of Common Stock valued at their
Fair Market Value on the date of exercise of the Option, or partly in such
shares and partly in cash, provided that any such shares used in payment shall
have been owned by the Participant at least six months prior to the date of
exercise.
18<PAGE>
<PAGE>
5.4 Option Period and Exercisability.
--------------------------------
Each Option granted under this Article 5 and all rights or
obligations thereunder shall expire ten years after the Option Date and shall
be subject to earlier termination as provided below. Each Option granted
under Section 5.2 shall become exercisable in three installments as follows:
(i) 40% on the first anniversary of the Option Date, (ii) 30% on the second
anniversary of the Option Date, and (iii) 30% on the third anniversary of the
Option Date.
5.5 Termination of Directorship.
---------------------------
If a Non-Employee Director's service as a member of the Board of
Directors terminate for any reason other than retirement, any portion of an
Option granted pursuant to this Article which is not then exercisable shall
terminate and any portion of such Option which is then exercisable may be
exercised for two years after the date of such termination or until the
expiration of the stated term, whichever first occurs. If a Non-Employee
Director retires (terminates service on or after age 65 and after ten years of
service as a Director), all Options granted pursuant to this Article shall
become exercisable and may be exercised for two years after the date of
retirement or until the expiration of the stated term, whichever first occurs.
5.6 Adjustments.
-----------
Options granted under this Article 5 shall be subject to adjustment
as provided in Section 5.2, but only to the extent that (a) such adjustment
and the Committee's actions in respect thereof satisfy applicable criteria
under Rule 16b-3, (b) such adjustment in the case of a Change in Control Event
is effected pursuant to the terms of a reorganization agreement approved by
shareholders of the Corporation, and (c) such adjustment is consistent with
adjustments to Options held by persons other than executive officers or
directors of the Corporation.
5.7 Acceleration Upon a Change in Control Event
-------------------------------------------
Upon the occurrence of a Change in Control Event, each Option
granted under Section 5.2 hereof shall become immediately exercisable in full;
provided, however, that none of the Options granted under Section 5.2 shall be
accelerated to a date less than six months after the Award Date of such
Option. To the extent that any Option granted under this Article 5 is not
exercised prior to (i) a dissolution of the Corporation or (ii) a merger or
other corporate event that the Corporation does not survive, and no provision
is (or consistent with the provisions of Section 5.7 can be) made for the
assumption, conversion, substitution or exchange of the Option, the Option
shall terminate upon the occurrence of such event.
19<PAGE>
<PAGE>
5.8 Limitation on Amendments.
------------------------
The provisions of this Article 5 shall not be amended more than once
every six months (other than as may be necessary to conform to any applicable
changes in the Code or the rules thereunder), unless such amendment would be
consistent with the provisions of Rule 16b-3(c)(2)(ii)(or any successor
provision).
SOUTHWEST GAS CORPORATION
By
------------------------
Michael O. Maffie
President and
Chief Executive Officer
20<PAGE>
<PAGE>
Exhibit A
SOUTHWEST GAS CORPORATION
ELIGIBLE DIRECTOR
NONQUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT dated as of the _____ day of _____________, 19__, between
Southwest Gas Corporation, a California corporation (the "Corporation"), and
________________ (the "Director").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, the Corporation has adopted and the shareholders of the
Corporation have approved the Southwest Gas Corporation 1996 Stock Incentive
Plan (the "Plan"); and
WHEREAS, pursuant to Article 5 of the Plan, the Corporation has
granted an option (the "Option") to the Director upon the terms and conditions
evidenced hereby, as required by the Plan, which Option is not intended as and
shall not be deemed to be an incentive stock option within the meaning of
Section 422 of the Code;
NOW, THEREFORE, in consideration of the services rendered and to be
rendered by the Director, the Corporation and the Director agree to the terms
and conditions set forth herein as required by the terms of the Plan.
1. OPTION GRANT. This Agreement evidences the grant to the
Director, as of ___________, ____ (the "Option Date"), of an Option to
purchase an aggregate of _____ shares of Common Stock, $1.00 par value, under
Article 5 of the Plan, subject to the terms and conditions and to adjustment
as set forth herein or in pursuant to the Plan.
2. EXERCISE PRICE. The Option entitles the Director to purchase
(subject to the terms of Sections 3 through 5 below) all or any part of the
Option shares at a price per share of $_______, which amount represents the
Fair Market Value of the shares on the Option Date.
3. OPTION EXERCISABILITY AND TERM. The Option shall first become
and remain exercisable as to ______________ of the shares on
___________________ and as to an additional _________ shares on each of the
following dates: ______________, 199_, __________, 199_ and _____________,
199_, in each case subject to adjustments under Section 5.6 of the Plan and
acceleration under Section 5.7 of the Plan. The Option shall terminate on
____________, 19__, unless earlier terminated in accordance with the terms of
Sections _____ of the Plan.
4. SERVICE AND EFFECT OF TERMINATION OF SERVICE. The Director
agrees to serve as a director in accordance with the provisions of the
Corporation's Articles of Incorporation, bylaws and applicable law. If the
Director's services as a member of the Board shall terminate, this Option
shall terminate at the times and to the extent set forth in Section 5.5 of
the Plan.
5. GENERAL TERMS. The Option and this Agreement are subject to,
and the Corporation and the Director agree to be bound by, the provisions of
the Plan that apply to the Option. Such provisions are incorporated herein
by this reference. The Director acknowledges receiving a copy of the Plan
and reading its applicable provisions. Capitalized terms not otherwise
defined herein shall have the meaning assigned to such terms in the Plan.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first above written.
SOUTHWEST GAS CORPORATION
(a California corporation)
By ___________________________
_________________________
*insert day before tenth anniversary of date of grant.
A-1<PAGE>
<PAGE>
Title ________________________
DIRECTOR
_____________________________
(Signature)
_____________________________
(Print Name)
_____________________________
(Address)
_____________________________
(City, State, Zip Code)
CONSENT OF SPOUSE
-----------------
In consideration of the execution of the foregoing Nonqualified Stock Option
Agreement by Southwest Gas Corporation, I,_________________________________,
the spouse of the Director therein named, do hereby agree to be bound by all
of the terms and provisions thereof and of the Plan.
DATED: ______________, 19__.
_______________________
Signature of Spouse
A-2<PAGE>
<PAGE>
<PAGE>
Exhibit 4.2
SOUTHWEST GAS CORPORATION
1996 STOCK INCENTIVE PLAN
NONQUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT dated as of the ________ day of _________ _____,
between Southwest Gas Corporation, a California corporation (the
"Corporation"), and
______________________________(the "Employee").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, pursuant to the Southwest Gas Corporation 1996 Stock
Incentive Plan (the "Plan"), the Corporation has granted to the Employee
effective as of the ______ day of _________, _____ (the "Option Date") an
option to purchase all or any part of _________________ authorized but
unissued shares of Common Stock, par value $1.00 per share, of the
Corporation upon the terms and conditions set forth herein
and in the Plan.
NOW, THEREFORE, in consideration of the mutual promises and
covenants made herein and the mutual benefits to be derived herefrom, the
parties agree as follows:
1. DEFINED TERMS. Capitalized terms used herein and not otherwise
defined herein shall have the meaning assigned to such terms in the Plan.
2. GRANT OF OPTION. This Agreement evidences the Corporation's
grant to the Employee of the right and option to purchase, on the terms and
conditions set forth herein and in the Plan, all or any part of an aggregate
of ______ shares of the Common Stock at the price of $______ per share (the
"Option"), exercisable from time to time, subject to the provisions of this
Agreement and the Plan, prior to the close of business on the day before the
tenth anniversary of the Option Date (the "Expiration Date"). Such price
equals the Fair Market Value of the Corporation's Common Stock as of the
Option Date. It is the intent of the Corporation that this Option constitute
a nonqualified stock option and such option shall not be deemed an incentive
stock option within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended ("Code").
3. EXERCISABILITY OF OPTION. Except as earlier permitted by or
pursuant to the Plan or by resolution of the Committee adopted after the date
hereof, no shares may be
1<PAGE>
<PAGE>
purchased by exercise of the Option until the expiration of six months after
the Option Date. [ALTERNATIVE 1: The Option may be exercised in installments
as to __% of the aggregate number of shares set forth in Section 2 hereof
(subject to adjustment) on and after the first anniversary of the Option Date
and as to an additional __% of such aggregate number of such shares (subject
to adjustment) on each of the second, ____, _____ anniversaries of the Option
Date.] [Alternative 2: After such date, the Option may be exercised in whole
or in part, from time to time, until its expiration or earlier termination.]
To the extent the Employee does not in any year purchase all or any
part of the shares to which the Employee is entitled, the Employee has the
right cumulatively thereafter to purchase any shares not so purchased and such
right shall continue until the Option terminates or expires. Fractional share
interests shall be disregarded, but may be cumulated. No fewer than [100]
shares may be purchased at any one time, unless the number purchased is the
total number at the time available for purchase under the Option.
4. METHOD OF EXERCISE OF OPTION. The Option shall be exercisable
by the delivery to the Corporation of a written notice stating the number of
shares to be purchased pursuant to the Option and accompanied by payment made
in accordance with and in a form permitted in Section 2.2 of the Plan for the
full purchase price of the shares to be purchased, subject to such further
limitations and rules or procedures as the Committee may from time to time
establish as to any non-cash payment and as to the tax withholding
requirements of Section 3.5 of the Plan. Shares delivered in payment of the
exercise price must have been owned by the Employee for at least six months
prior to the exercise. In addition, the Employee (or the Employee's
Beneficiary or Personal Representative) shall furnish any written statements
required pursuant to Section 3.4 of the Plan.
5. EFFECT OF TERMINATION OF EMPLOYMENT OR DEATH; CHANGE IN
SUBSIDIARY STATUS. The Option and all other rights hereunder, to the extent
not exercised, shall terminate and become null and void at such time as the
Employee ceases to be employed by either the Corporation or any Subsidiary,
except that
(a) if the Employee terminates by reason other than by death,
Total Disability (as defined in subsection (b) below) or for Cause (as
defined below and as determined by the Committee in its sole discretion),
the Employee may at any time within a period of three months after such
termination exercise the Option to the extent the Option was exercisable
at the date of such termination;
2<PAGE>
<PAGE>
(b) if the Employee terminates by reason of becoming Totally
Disabled (within the meaning of Code Section 22(e)(3) or as otherwise
defined by the Committee), or if the Employee becomes Totally Disabled
within three months after a termination described in subsection (a), then
the Option may be exercised within a period of 12 months after the
Employee becomes Totally Disabled (or, if earlier, the Employee's
termination from employment), to the extent that the Option was
exercisable on such date; and
(c) if the Employee dies prior to a termination of employment,
or within three months after a termination of employment under subsection
(a) or (b) above, then the Option may be exercised within a period of one
year after the Employee's termination from employment, to the extent that
the Option was exercisable on such date;
provided, however, that in no event may the Option be exercised by anyone
under this Section or otherwise after the Expiration Date. If the Employee is
employed by an entity which ceases to be a Subsidiary, such event shall be
deemed for purposes of this Section 5 to be a termination of employment
described in subsection (a) in respect of the Employee. Absence from work
caused by military service or authorized sick leave shall not be considered as
a termination of employment for purposes of this Section.
For purposes of this Agreement, "Cause" means that the Committee,
acting in good faith, determines that the Employee has: (a) committed a
material breach of the Employee's duties and responsibilities (other than as a
result of incapacity due to a Total Disability); or (b) been convicted of a
felony, or entered a plea of guilty or nolo contendere with respect to such a
crime; or (c) violated any fiduciary duty or duty of loyalty owed to the
Corporation; or (d) been generally incompetent or grossly negligent in the
discharge of the Employee's duties and responsibilities; or (e) engaged or is
engaging in immoderate use of alcoholic beverages or narcotics or other
substance abuse; or (f) violated any of the Corporation's established
employment policies in effect from time to time.
6. TERMINATION OF OPTION UNDER CERTAIN EVENTS. As permitted by
Section 3.2(c) of the Plan, the Committee retains the right to terminate the
Option to the extent not previously exercised upon an event or transaction
which the Corporation does not survive.
7. NON-TRANSFERABILITY OF OPTION. The Option and any other rights
of the Employee under this Agreement or the Plan are nontransferable as
provided in Section 1.8 of the Plan.
3<PAGE>
<PAGE>
8. NOTICES. Any notice to be given under the terms of this
Agreement shall be in writing and addressed to the Corporation at its
principal office located at 5241 Spring Mountain Road, P.O. Box 98510, Las
Vegas, Nevada 89193-8510, to the attention of the Corporate Secretary and to
the Employee at the address given beneath the Employee's signature hereto, or
at such other address as either party may hereafter designate in writing to
the other.
9. PLAN. The Option and all rights of the Employee thereunder are
subject to, and the Employee agrees to be bound by, all of the terms and
conditions of Articles 1, 2, 3, and 4 of the Plan, incorporated herein by this
reference, to the extent such provisions are applicable to options granted to
Eligible Employees. The Employee acknowledges receipt of a copy of the Plan,
which is made a part hereof by this reference, and agrees to be bound by the
terms thereof. Unless otherwise expressly provided in other Sections of this
Agreement, provisions of the Plan that confer discretionary authority on the
Committee do not (and shall not be deemed to) create any rights in the
Employee unless such rights are expressly set forth herein or are otherwise in
the sole discretion of the Committee so conferred by appropriate action of the
Committee under the Plan after the date hereof.
IN WITNESS WHEREOF, the Corporation has caused this Agreement to be
executed on its behalf by a duly authorized officer and the Employee has
hereunto set his or her hand.
SOUTHWEST GAS CORPORATION
(a California corporation)
By_________________________
Title______________________
EMPLOYEE
__________________________
4<PAGE>
<PAGE>
(Signature)
__________________________
(Print Name)
__________________________
(Address)
__________________________
(City, State, Zip Code)
5<PAGE>
<PAGE>
CONSENT OF SPOUSE
_________________
In consideration of the execution of the foregoing Nonqualified
Stock Option Agreement by Southwest Gas Corporation, I,
_________________________, the spouse of the Employee herein named, do
hereby join with my spouse in executing the foregoing Nonqualified Stock
Option Agreement and do hereby agree to be bound by all of the terms and
provisions thereof and of the Plan.
DATED: ____________, _____. _____________________________
Signature of Spouse
6<PAGE>
<PAGE>
<PAGE>
Exhibit 4.3
SOUTHWEST GAS CORPORATION
1996 STOCK INCENTIVE PLAN
INCENTIVE STOCK OPTION AGREEMENT
THIS AGREEMENT dated as of the ______ day of
___________, ________ between Southwest Gas Corporation, a
California corporation (the "Corporation"), and
________________________________(the "Employee").
W I T N E S S E T H
-------------------
WHEREAS, pursuant to the Southwest Gas Corporation 1996
Stock Incentive Plan (the "Plan"), the Corporation has granted to
the Employee effective as of the ______ day of ___________,______
(the "Option Date") an option to purchase all or any part of
_________________ authorized but unissued of Common Stock, par
value $1.00 per share, of the Corporation upon the terms and
conditions set forth herein and in the Plan.
NOW, THEREFORE, in consideration of the mutual promises
and covenants made herein and the mutual benefits to be derived
herefrom, the parties agree as follows:
1. DEFINED TERMS. Capitalized terms used herein and
not otherwise defined herein shall have the meaning assigned to
such terms in the Plan.
2. GRANT OF OPTION. This Agreement evidences the
Corporation's grant to the Employee of the right and option to
purchase, on the terms and conditions set forth herein and in the
Plan, all or any part of an aggregate of _______ shares of the
Common Stock at the price of $______ per share (the "Option"),
exercisable from time to time, subject to the provisions of this
Agreement and the Plan, prior to the close of business on the day
before the tenth anniversary of the Option Date (the "Expiration
Date"). Such price equals the Fair Market Value of the
Corporation's Common Stock as of the Option Date. It is the
intent of the Corporation that this Option constitute an
incentive stock option within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended ("Code").
3. EXERCISABILITY OF OPTION. Except as earlier
permitted by or pursuant to the Plan or by resolution of the
Committee adopted AFTER the date hereof, no shares may be
purchased by exercise of the Option until the expiration of
1<PAGE>
<PAGE>
six months after the Option Date. [ALTERNATIVE 1: The Option may be
exercised in installments as to __% of the aggregate number of
shares set forth in Section 2 hereof (subject to adjustment) on
and after the first anniversary of the Option Date and as to an
additional __% of such aggregate number of such shares (subject
to adjustment) on each of the second, ____, _____ anniversaries
of the Option Date.] [ALTERNATIVE 2: After such date, the
Option may be exercised in whole or in part, from time to time,
until its expiration or earlier termination.]
To the extent the Employee does not in any year
purchase all or any part of the shares to which the Employee is
entitled, the Employee has the right cumulatively thereafter to
purchase any shares not so purchased and such right shall
continue until the Option terminates or expires. Fractional
share interests shall be disregarded, but may be cumulated. No
fewer than [100] shares may be purchased at any one time, unless
the number purchased is the total number at the time available
for purchase under the Option.
4. LIMITATION ON EXERCISE OF OPTION. In the event
the Employee is granted incentive stock options (whether under
this Agreement or any other incentive stock option agreement) and
the aggregate fair market value (determined as of the respective
dates of grant of such options) of the Common Stock with respect
to which such options are first exercisable in any calendar year
exceeds $100,000, the most recently granted options shall be
treated as nonqualified stock options to the extent of the
excess. In addition, in the case of simultaneously granted
options, the Corporation may, in the manner and to the extent
permitted by law, designate which shares are to be treated as
stock acquired pursuant to the exercise of an incentive stock
option.
5. METHOD OF EXERCISE OF OPTION. The Option shall be
exercisable by the delivery to the Corporation of a written
notice stating the number of shares to be purchased pursuant to
the Option and accompanied by payment made in accordance with and
in a form permitted in Section 2.2 of the Plan for the full
purchase price of the shares to be purchased, subject to such
further limitations and rules or procedures as the Committee may
from time to time establish as to any non-cash payment and as to
the tax withholding requirements of Section 3.5 of the Plan.
Shares delivered in payment of the exercise price must have been
owned by the Employee for at least six months prior to the
exercise. In addition, the Employee (or the Employee's
Beneficiary or Personal Representative) shall furnish any written
statements required pursuant to Section 3.4 of the Plan.
6. EFFECT OF TERMINATION OF EMPLOYMENT OR DEATH;
CHANGE IN SUBSIDIARY STATUS. The option and all other
2<PAGE>
<PAGE>
rights hereunder, to the extent not exercised, shall
terminate and become null and void at such time as the
Employee ceases to be employed by either the Corporation
or any Subsidiary, except that
(a) if the Employee terminates by reason other
than by death, Total Disability (as defined in subsection
(b) below) or for Cause (as defined below and as determined
by the Committee in its sole discretion), the Employee may
at any time within a period of three months after such
termination exercise the Option to the extent the Option was
exercisable at the date of such termination;
(b) if the Employee terminates by reason of
becoming Totally Disabled (within the meaning of Code
Section 22(e)(3) or as otherwise defined by the Committee),
or if the Employee becomes Totally Disabled within three
months after a termination described in subsection (a), then
the Option may be exercised within a period of 12 months
after the Employee becomes Totally Disabled (or, if earlier,
the Employee's termination from employment), to the extent
that the Option was exercisable on such date; and
(c) if the Employee dies prior to a termination
of employment, or within three months after a termination of
employment under subsection (a) or (b) above, then the
Option may be exercised within a period of one year after
the Employee's termination from employment, to the extent
that the Option was exercisable on such date;
provided, however, that in no event may the Option be exercised
by anyone under this Section or otherwise after the Expiration
Date. If the Employee is employed by an entity which ceases to
be a Subsidiary, such event shall be deemed for purposes of this
Section 6 to be a termination of employment described in
subsection (a) in respect of the Employee. Absence from work
caused by military service or authorized sick leave shall not be
considered as a termination of employment for purposes of this
Section.
For purposes of this Agreement, "Cause" means that the
Committee, acting in good faith, determines that the Employee
has: (a) committed a material breach of the Employee's duties
and responsibilities (other than as a result of incapacity due to
a Total Disability); or (b) been convicted of a felony, or
entered a plea of guilty or nolo contendere with respect to such
a crime; or (c) violated any fiduciary duty or duty of loyalty
owed to the Corporation; or (d) been generally incompetent or
grossly negligent in the discharge of the Employee's duties and
responsibilities; or (e) engaged or is engaging in immoderate use
of alcoholic beverages or narcotics or other substance abuse; or (f)
3<PAGE>
<PAGE>
violated any of the Corporation's established employment
policies in effect from time to time.
7. TERMINATION OF OPTION UNDER CERTAIN EVENTS. As
permitted by Section 3.2(c) of the Plan, the Committee retains
the right to terminate the Option to the extent not previously
exercised upon an event or transaction which the Corporation does
not survive.
8. NON-TRANSFERABILITY OF OPTION. The Option and any
other rights of the Employee under this Agreement or the Plan are
nontransferable as provided in Section 1.8 of the Plan.
9. NOTICES. Any notice to be given under the terms
of this Agreement shall be in writing and addressed to the
Corporation at its principal office located at 5241 Spring
Mountain Road, P.O. Box 98510, Las Vegas, Nevada 89193-8510, to
the attention of the Corporate Secretary and to the Employee at
the address given beneath the Employee's signature hereto, or at
such other address as either party may hereafter designate in
writing to the other.
10. PLAN. The Option and all rights of the Employee
thereunder are subject to, and the Employee agrees to be bound
by, all of the terms and conditions of Articles 1, 2, 3, and 4 of
the Plan, incorporated herein by this reference, to the extent
such provisions are applicable to options granted to Eligible
Employees. The Employee acknowledges receipt of a copy of the
Plan, which is made a part hereof by this reference, and agrees
to be bound by the terms thereof. Unless otherwise expressly
provided in other Sections of this Agreement, provisions of the
Plan that confer discretionary authority on the Committee do not
(and shall not be deemed to) create any rights in the Employee
unless such rights are expressly set forth herein or are
otherwise in the sole discretion of the Committee so conferred by
appropriate action of the Committee under the Plan after the date
hereof.
11. NOTICE OF DISPOSITION. The Employee agrees to
notify the Corporation of any sale or other disposition of any
shares of Common Stock received upon exercise of the Option, if
such sale or disposition occurs within two years after the Option
Date or within one year after the date of such exercise.
4<PAGE>
<PAGE>
IN WITNESS WHEREOF, the Corporation has caused this
Agreement to be executed on its behalf by a duly authorized
officer and the Employee has hereunto set his or her hand.
SOUTHWEST GAS CORPORATION
(a California corporation)
By_________________________
Title______________________
EMPLOYEE
___________________________
(Signature)
___________________________
(Print Name)
___________________________
(Address)
5<PAGE>
<PAGE>
___________________________
(City, State, Zip Code)
6<PAGE>
<PAGE>
CONSENT OF SPOUSE
------------------
In consideration of the execution of the foregoing Incentive
Stock Option Agreement by Southwest Gas Corporation,
I,___________________________, the spouse of the Employee herein
named, do hereby join with my spouse in executing the foregoing
Incentive Stock Option Agreement and do hereby agree to be bound
by all of the terms and provisions thereof and of the Plan.
DATED: ____________, _____. _____________________________
Signature of Spouse
7
<PAGE>
Exhibit 5.1
July 11, 1997
Southwest Gas Corporation
5241 Spring Mountain Road
Las Vegas, NV 89102
Ladies and Gentlemen:
As counsel for Southwest Gas Corporation (the "Company"), I have examined the
Registration Statement on Form S-8 to be filed by the Company with the
Securities and Exchange Commission, in connection with the registration under
the Securities Act of 1933, as amended, of 1,500,000 shares of the Company's
$1 par value Common Stock (the "Stock") pursuant to the provisions of the
Company's 1996 Stock Incentive Plan. I also have examined the steps taken
by the Company and its Board of Directors in, connection with the authorization
and proposed issuance and sale of the Stock; and I am familiar with resolutions
adopted by the Board of Directors of the Company and the Company's shareholders
in connection therewith. I am also familiar with the application filed by the
Company with the California Public Utilities Commission for authority to issue
the Stock, and the order issued by said Commission authorizing the issuance of
same.
Based on the foregoing and upon such other matters as I deem relevant in the
circumstances, it is my opinion that the Company has received all required
authorizations from state regulatory agencies having jurisdiction over the
issuance of the Stock by the Company. Subject to the actions authorized by the
Company's Board of Directors and shareholders being taken, the Stock, upon
issuance and sale thereof in the manner specified in the Registration Statement,
will be duly authorized, legally and validly issued, fully paid, and
nonassessable outstanding Stock of the Company.
I hereby consent to the filing of this opinion as an exhibit to the Registration
Statement, and I further consent to the use of my name under the caption
"Interests of Named Experts and Counsel" in the Registration Statement and the
Prospectus which forms a part thereof.
Respectfully submitted,
Robert M. Johnson
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this registration statement of our
report dated February 7, 1997, incorporated by reference in
Southwest Gas Corporation's Form 10-K for the year ended
December 31, 1996 and to all references to our Firm included
in this registration statement.
ARTHUR ANDERSEN LLP
Las Vegas, Nevada
July 11, 1997
