AMERICAN RIVERS OIL COMPANY
1995 STOCK OPTION AND STOCK COMPENSATION PLAN
1. Purposes of and Benefits Under the Plan. This 1995 Stock Option and
Stock Compensation Plan (the "Plan") is intended to encourage stock ownership by
employees and officers (whether or not they are employees) of and consultants to
American Rivers Oil Company (the "Corporation"), so that they may acquire or
increase their proprietary interest in the Corporation, and is intended to
facilitate the Corporation's efforts to (i) induce qualified persons to become
employees or officers of or consultants to the Corporation; (ii) compensate
employees, officers and consultants for services to the Corporation; and (iii)
encourage such persons to remain in the employ of or associated with the
Corporation and to put forth maximum efforts for the success of the Corporation.
The Plan also provides the Corporation the opportunity to compensate such
persons through the issuance of shares of its Common Stock, in lieu of cash,
therefore allowing the Corporation to preserve its cash for other purposes.
2. Definitions. As used in this Plan, the following words and phrases shall
have the meanings indicated:
(a) "Board" shall mean the Board of Directors of the Corporation.
(b) "Committee" shall mean the Compensation Committee appointed by the
Board, if one has been appointed. If no Committee has been appointed, the term
"Committee" shall mean the Board.
(c) "Common Stock" shall mean the Corporation's $.01 par value common
(d) "Employee" means any person or entity that renders bona fide
services to the Corporation, including, without limitation: (i) a person
employed by the Company; (ii) an officer or director of the Company, (iii) a
person or company engaged by the Company as a consultant or advisor; (iv) a
lawyer, law firm, accountant or accounting firm, engaged by the Company; or (v)
any other person defined as an "employee" herein.
(e) "Recipient" means any person granted an Option or awarded a Award
(a) The Plan shall be administered by the Committee. The Committee shall
have the authority in its discretion, subject to and not inconsistent with the
express provisions of the Plan, to administer the Plan and to exercise all the
powers and authorities either specifically conferred under the Plan or necessary
or advisable in the administration of the Plan, including the authority: to
grant Options and Awards; to determine the vesting schedule and other
restrictions, if any, relating to Options and Awards; to determine the purchase
price of the shares of Common Stock covered by each Option (the "Option Price");
to determine the persons to whom, and the time or times at which, Options and
Awards shall be granted; to determine the number of shares to be covered by each
Option or Award; to interpret the Plan; to prescribe, amend and rescind rules
and regulations relating to the Plan; to determine the terms and provisions of
the Option agreements (which need not be identical) entered into in connection
with Options granted under the Plan; and to make all other determinations deemed
necessary or advisable for the administration of the Plan. The Committee may
delegate to one or more of its members or to one or more agents such
administrative duties as it may deem advisable, and the Committee or any person
to whom it has delegated duties as aforesaid may employ one or more persons to
render advice with respect to any responsibility the Committee or such person
may have under the Plan.
(b) Options and Awards granted under the Plan shall be evidenced by duly
adopted resolutions of the Committee included in the minutes of the meeting at
which they are adopted or in a unanimous written consent.
(c) The Committee shall endeavor to administer the Plan and grant
Options and Awards hereunder in a manner that is compatible with the obligations
of persons subject to Section 16 of the U.S. Securities Exchange Act of 1934
(the "1934 Act"), although compliance with Section 16 is the obligation of the
Recipient, not the Corporation. Neither the Committee, the Board nor the
Corporation can assume any legal responsibility for a Recipient's compliance
with his obligations under Section 16 of the 1934 Act.
(d) No member of the Committee or the Board shall be liable for any
action taken or determination made in good faith with respect to the Plan or any
Option or Award granted hereunder.
(a) Subject to certain limitations hereinafter set forth, Options and
Awards may be granted to employees and officers (whether or not they are
employees) of and consultants to the Corporation. In determining the persons to
whom Options or Awards shall be granted and the number of shares to be covered
by each Option or Award, the Committee shall take into account the duties of the
respective persons, their present and potential contributions to the success of
the Corporation, and such other factors as the Committee shall deem relevant to
accomplish the purposes of the Plan.
(b) A Recipient shall be eligible to receive more than one grant of
an Option or Award during the term of the Plan, on the terms and subject to the
restrictions herein set forth.
5. Stock Reserved.
(a) The stock subject to Options or Awards hereunder shall be shares of
Common Stock. Such shares, in whole or in part, may be authorized but unissued
shares or shares that shall have been or that may be reacquired by the
Corporation. The aggregate number of shares of Common Stock as to which Options
and Awards may be granted from time to time under the Plan shall not exceed
750,000, subject to adjustment as provided in Section 6(f) hereof.
(b) If any Option outstanding under the Plan for any reason expires or
is terminated without having been exercised in full, or if any Award granted is
forfeited because of vesting or other restrictions imposed at the time of grant,
the shares of Common Stock allocable to the unexercised portion of such Option
or the forfeited portion of the Award shall become available for subsequent
grants of Options and Awards under the Plan.
6. Terms and Conditions of Options. Each Option granted pursuant to the
Plan shall be evidenced by a written Option agreement between the Corporation
and the Recipient, which agreement shall be substantially in the form of Exhibit
A hereto as modified from time to time by the Committee in its discretion, and
which shall comply with and be subject to the following terms and conditions:
(a) Number of Shares. Each Option agreement shall state the number of
shares of Common Stock covered by the Option.
(b) Option Price. Each Option agreement shall state the Option Price,
which shall be determined by the Committee subject only to the following
(1) The Option Price shall be subject to adjustment as provided in
Section 6(f) hereof.
(2) The date on which the Committee adopts a resolution expressly
granting an Option shall be considered the day on which such option is granted,
unless a future date is specified in the resolution.
(c) Term of Option. Each Option agreement shall state the period during
and times at which the Option shall be exercisable, in accordance with the
(1) The date on which the Committee adopts a resolution expressly
granting an Option shall be considered the day on which such Option is granted,
although such grant shall not be effective until the Recipient has executed an
Option agreement with respect to such Option.
(2) The exercise period of any Option shall not exceed five years
from the date of grant of the Option.
(3) The Committee shall have the authority to accelerate or extend
the exercisability of any outstanding Option at such time and under such
circumstances as it, in its sole discretion, deems appropriate. No exercise
period may be so extended to increase the term of the Option beyond five years
from the date of the grant.
(d) Method of Exercise and Medium and Time of Payment.
(1) An Option may be exercised as to any or all whole shares of
Common Stock as to which it then is exercisable, provided, however, that no
Option may be exercised as to less than 100 shares (or such number of shares as
to which the Option is then exercisable if such number of shares is less than
(2) Each exercise of an Option granted hereunder, whether in whole
or in part, shall be effected by written notice to the Secretary of the
Corporation designating the number of shares as to which the Option is being
exercised, and shall be accompanied by payment in full of the Option Price for
the number of shares so designated, together with any written statements
required by, or deemed by the Corporation's counsel to be advisable pursuant to,
any applicable securities laws.
(3) The Option Price shall be paid in cash, or in shares of Common
Stock having a fair market value equal to such Option Price, or in property or
in a combination of cash, shares and property and, subject to approval of the
Committee, may be effected in whole or in part with funds received from the
Corporation at the time of exercise as a compensatory cash payment.
(4) The Committee shall have the sole and absolute discretion to
determine whether or not property other than cash or Common Stock may be used to
purchase the shares of Common Stock hereunder and, if so, to determine the value
of the property received.
(5) The Recipient shall make provision for the withholding of taxes
as required by Paragraph 8 hereof.
(e) Transferability Restriction.
(l)(A) As a condition to the transfer of any shares of Common Stock
issued upon exercise of an Option granted under this Plan, the Corporation may
require an opinion of counsel, satisfactory to the Corporation, to the effect
that such transfer will not be in violation of the Securities Act of 1933, as
amended (the "1933 Act") or any other applicable securities laws or that such
transfer has been registered under federal and all applicable state securities
laws. (B) Further, the Corporation shall be authorized to refrain from
delivering or transferring shares of Common Stock issued under this Plan until
the Committee determines that such delivery or transfer will not violate
applicable securities laws and the Recipient has tendered to the Corporation any
federal, state or local tax owed by the Recipient as a result of exercising the
Option or disposing of any Common Stock when the Corporation has a legal
liability to satisfy such tax. (C) The Corporation shall not be liable for
damages due to delay in the delivery or issuance of any stock certificate for
any reason whatsoever, including, but not limited to, a delay caused by listing
requirements of any securities exchange or any registration requirements under
the 1933 Act, the 1934 Act, or under any other state, federal or provincial law,
rule or regulation. (D) The Corporation is under no obligation to take any
action or incur any expense in order to register or qualify the delivery or
transfer of shares of Common Stock under applicable securities laws or to
perfect any exemption from such registration or qualification unless otherwise
provided in a separate written agreement. (E) Furthermore, the Corporation will
not be liable to any Recipient for failure to deliver or transfer shares of
Common Stock if such failure is based upon the provisions of this paragraph.
(f) Effect of Certain Changes.
(1) If there is any change in the number of shares of outstanding
Common Stock through the declaration of stock dividends, or through a
recapitalization resulting in stock splits or combinations or exchanges of such
shares, the number of shares of Common Stock available for Options and the
number of such shares covered by outstanding Options, and the exercise price per
share of the outstanding Options, shall be proportionately adjusted by the
Committee to reflect any increase or decrease in the number of issued shares of
Common Stock; provided, however, that any fractional shares resulting from such
adjustment shall be eliminated.
(2) In the event of the proposed dissolution or liquidation of the
Corporation, or any corporate separation or division, including, but not limited
to, split-up, split-off or spin-off, or a merger or consolidation of the
Corporation with another corporation, the Committee may provide that the holder
of each Option then exercisable shall have the right to exercise such Option (at
its then current Option Price) solely for the kind and amount of shares of stock
and other securities, property, cash or any combination thereof receivable upon
such dissolution, liquidation, corporate separation or division, or merger or
consolidation by a holder of the number of shares of Common Stock for which such
Option might have been exercised immediately prior to such dissolution,
liquidation, corporate separation or division, or merger or consolidation; or,
in the alternative the Committee may provide that each Option granted under the
Plan shall terminate as of a date fixed by the Committee; provided, however,
that not less than 30 days' written notice of the date so fixed shall be given
to each Recipient, who shall have the right, during the period of 30 days
preceding such termination, to exercise the Option as to all or any part of the
shares of Common Stock covered thereby, including shares as to which such Option
would not otherwise be exercisable.
(3) Paragraph (2) of this Section 6(f) shall not apply to a merger
or consolidation in which the Corporation is the surviving corporation and
shares of Common Stock are not converted into or exchanged for stock, securities
of any other corporation, cash or any other thing of value. Notwithstanding the
preceding sentence, in case of any consolidation or merger of another
corporation into the Corporation in which the Corporation is the surviving
corporation and in which there is a reclassification or change (including a
change to the right to receive cash or other property) of the shares of Common
Stock (excluding a change in par value, or from no par value to par value, or
any change as a result of a subdivision or combination, but including any change
in such shares into two or more classes or series of shares), the Committee may
provide that the holder of each Option then exercisable shall have the right to
exercise such Option solely for the kind and amount of shares of stock and other
securities (including those of any new direct or indirect parent of the
Corporation), property, cash or any combination thereof receivable upon such
reclassification, change, consolidation or merger by the holder of the number of
shares of Common Stock for which such Option might have been exercised.
(4) To the extent that the foregoing adjustments relate to stock or
securities of the Corporation, such adjustments shall be made by the Committee,
whose determination -in that respect shall be final, binding and conclusive.
(5) Except as expressly provided in this Section 6(f) the Recipient
shall have no rights by reason of any subdivision or consolidation of shares of
stock of any class, or the payment of any stock dividend or any other increase
or decrease in the number of shares of stock of any class, or by reason of any
dissolution, liquidation, merger, or consolidation or spin-off.of assets or
stock of.another corporation; .and any issue by the Corporation of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall not affect, and no adjustment by reason thereof shall be made with respect
to, the number or price of shares of Common Stock subject to an Option. The
grant of an Option pursuant to the Plan shall not affect in any way the right or
power of the Corporation to make adjustments, reclassifications, reorganizations
or changes of its capital or business structures, or to merge or consolidate, or
to dissolve, liquidate, or sell or transfer all or any part of its business or
(g) No Rights as Shareholder - Non-Distributive Intent.
(1) Neither a Recipient of an Option nor such Recipient's legal
representative, heir, legatee or distributee, shall be deemed to be the holder
of, or to have any rights of a holder with respect to, any shares subject to
such Option until after the Option is exercised and the shares are issued.
(2) No adjustment shall be made for dividends (ordinary or
extraordinary, whether in cash, securities or other property) or distributions
or other rights for which the record date is prior to the date such stock
certificate is issued, except as provided in Section 6(f) hereof.
(3) Upon exercise of an Option at a time when there is no
registration statement in effect under the 1933 Act relating to the shares
issuable upon exercise, shares may be issued to the Recipient only if the
Recipient represents and warrants in writing to the Corporation that the shares
purchased are being acquired for investment and not with a view to the
distribution thereof and provides the Corporation with sufficient information to
establish an exemption from the registration requirements of the 1933 Act.
(4) No shares shall be issued upon the exercise of an Option unless
and until there shall have been compliance with any then applicable requirements
of the U.S. Securities and Exchange Commission or any other regulatory agencies
having jurisdiction over the Corporation.
(h) Other Provisions. Option Agreements authorized under the Plan may
contain such other provisions as the Committee shall deem advisable, including,
without limitation, the imposition of restrictions upon the vesting and exercise
of an Option.
7. Grant of Stock Awards. In addition to, or in lieu of, the grant of an
Option, the Committee may grant Awards.
(a) At the time of grant of a Award, the Committee may impose a vesting
period of up to five years, and such other restrictions which it deems
appropriate. Unless otherwise directed by the Committee at the time of grant of
a Award, the Recipient shall be considered a shareholder of the Corporation as
to the Award shares which have vested in the grantee at any time regardless of
any forfeiture provisions which have not yet arisen.
(b) The grant of a Award and the issuance and delivery of shares of
Common Stock pursuant thereto shall be subject to approval by the Corporation's
counsel of all legal matters in connection therewith, including compliance with
the requirements of the 1933 Act, the 1934 Act, other applicable securities
laws, rules and regulations, and the requirements of any stock exchanges upon
which the Common Stock then may be listed. Any certificates prepared to evidence
Common Stock issued pursuant to a Award grant shall bear legends as the
Corporation's counsel may seem necessary or advisable.
8. Agreement by Recipient Regarding Withholding Taxes. Each Recipient
agrees that the Corporation, to the extent permitted or required by law, shall
deduct a sufficient number of shares due to the Recipient upon exercise of the
Option or the grant of a Award to allow the Corporation to pay federal,
provincial, state and local taxes of any kind required by law to be withheld
upon the exercise of such Option or payment of such Award from any payment of
any kind otherwise due to the Recipient. The Corporation shall not be obligated
to advise any Recipient of the existence of any tax or the amount which the
Corporation will be so required to withhold.
9. Term of Plan. Options and Awards may be granted under this Plan from
time to time within a period of five years from the date the Plan is adopted by
10. Amendment and Termination of the Plan. The Committee at any time and
from time to time may suspend, terminate, modify or amend the Plan. No
suspension, termination, modification or amendment of the Plan may adversely
affect any Option or Award previously granted, unless the written consent of the
Recipient is obtained.
11. Assumption. Subject to Section 6, the terms and conditions of any
outstanding Options granted pursuant to this Plan shall be assumed by, be
binding upon and shall inure to the benefit of any successor corporation to the
Corporation and shall, to the extent applicable, continue to be governed by the
terms and conditions of this Plan. Such successor corporation may, but shall not
be obligated to, assume this Plan.
12. Termination of Right of Action. Every right of action arising out of or
in connection with the Plan by or on behalf of the Corporation, or by any
shareholder of the Corporation against any past, present or future member of the
Board or the Committee, or against any employee, or by an employee (past,
present or future) against the Corporation, irrespective of the place where an
action may be brought and of the place of residence of any such shareholder,
director or employee, will cease and be barred by the expiration of three years
from the date of the act or omission in respect of which such right of action is
alleged to have arisen or such shorter period as may be provided by law.
13. Tax Litigation. The Corporation shall have the right, but not the
obligation, to contest, at its expense, any tax ruling or decision,
administrative or judicial, on any issue which is related to the Plan and which
the Board believes to be important to holders of Options or Common Stock issued
pursuant to Awards granted under the Plan and to conduct any such contest or any
litigation arising therefrom to a final decision.
14. Adoption. This Plan was approved by the Board of Directors of the
Corporation effective November ---, 1995.
FORM OF STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT made as of this ---------- day of -------- , 199
- - -----, by and between American Rivers Oil Company, a Wyoming (the
"Corporation"), and (the "Recipient").
In accordance with the Corporation's 1995 Stock Option and Stock Award Plan
(the "Plan"), a copy of which is attached hereto and is incorporated herein by
reference, the Corporation desires, in connection with the services of the
Recipient, to provide the Recipient with an opportunity to acquire shares of the
Corporation's $.01 par value common stock ("Common Stock") on favorable terms
and thereby increase the Recipient's proprietary interest in the Corporation and
incentive to put forth maximum efforts for the success of the business of the
Corporation. Capitalized terms used but not defined herein are used as defined
in the Plan.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein set forth and other good and valuable consideration, the Corporation and
the Recipient agree as follows:
1. Confirmation of Grant of Option. Pursuant to a determination of the
Committee or, in the absence of a Committee, by the Board of Directors of the
Corporation made on --------- , 19 ---- (the "Date of Grant"), the Corporation,
subject to the terms of the Plan and of this Agreement, confirms that the
Recipient has been irrevocably granted on the Date of Grant, as a matter of
separate inducement and agreement, a Stock Option (the "Option") exercisable to
purchase an aggregate of shares --------- of Common Stock on the terms and
conditions herein set forth, subject to adjustment as provided in Paragraph 8
2. Option Price. The Option Price of shares of Common Stock covered by the
Option will be -------- per share (the "Option Price") subject to adjustment as
provided in Paragraph 8 hereof.
3. Exercise of Option. Except as otherwise provided herein or in Section 6
of the Plan, the Option may be exercised in whole or in part at any time during
the term of the Option. The Option may not be exercised at any one time as to
fewer than 100 shares (or such number of shares as to which the Option is then
exercisable if such number of shares is less than 100). The Option may be
exercised by written notice to the Secretary of the Corporation accompanied by
payment in full of the Option Price as provided in Section 6(d) of the Plan.
4. Term of Option. The term of the Option will be through ---------- ,
- - -------, subject to earlier termination or cancellation as provided in this
Agreement. The holder of the Option will not have any rights to dividends or any
other rights of a shareholder with respect to any shares of Common Stock subject
to the Option until such shares shall have been issued (as evidenced by the
appropriate transfer agent of the Corporation) upon purchase of such shares
through exercise of the Option.
5. Adjustments. The Option shall be subject to adjustment upon the
occurrence of certain events as set forth in Section 6(f) of the Plan.
6. No Registration Obligation. The Recipient understands that the Option is
not registered under the 1933 Act and, unless by separate written agreement, the
Corporation has no obligation to so register the Option or any of the shares of
Common Stock subject to and issuable upon the exercise of the Option, although
it may from time to time register under the 1933 Act the shares issuable upon
exercise of Options granted pursuant to the Plan. The Recipient represents that
the Option is being acquired for the Recipient's own account and that unless
registered by the Corporation, the shares of Common Stock issued on exercise of
the Option will be acquired by the Recipient for investment. The Recipient
understands that the Option is, and the underlying securities may be, issued to
the Recipient in reliance upon exemptions from the 1933 Act, and acknowledges
and agrees that all certificates for the shares issued upon exercise of the
Option will bear the following legends unless such shares are registered under
the 1933 Act prior to their issuance:
The shares represented by this Certificate have not been registered under
the Securities Act of 1933 (the "1933 Act"), and are "restricted
securities" as that term is defined in Rule 144 under the 1933 Act. The
shares may not be offered for sale, sold or otherwise transferred except
pursuant to an effective registration statement under the 1933 Act or
pursuant to an exemption from registration under the 1933 Act, the
availability of which is to be established to the satisfaction of the
The Recipient further understands and agrees that the Option may be
exercised only if at the time of such exercise the underlying shares are
registered and/or the Recipient and the Corporation are able to establish the
existence of an exemption from registration under the 1933 Act and applicable
state or other laws.
7. Notices. Each notice relating to this Agreement will be in writing and
delivered in person or by certified mail to the proper address. Notices to the
Corporation shall be addressed to the Corporation, attention: President, at
- - ------------------ , or at such other address as may constitute the
Corporation's principal place of business at the time, with a copy to:
- - ---------- , - -------------. Notices to the Recipient or other person or
persons then entitled to exercise the Option shall be addressed to the Recipient
or such other person or persons at the Recipient's address below specified.
Anyone to whom a notice may be given under this Agreement may designate a new
address by notice to that effect given pursuant to this Paragraph 10.
8. Approval of Counsel. The exercise of the Option and the issuance and
delivery of shares of Common Stock pursuant thereto shall be subject to approval
by the Corporation's counsel of all legal matters in connection therewith,
including compliance with the requirements of the 1933 Act, the Securities
Exchange Act of 1934, as amended, applicable state and other securities laws,
the rules and regulations thereunder, and the requirements of any national
securities exchange(s) upon which the Common Stock then may be listed.
9. Benefits of Agreement. This Agreement will inure to the benefit of and
be binding upon each successor and assignee of the Corporation. All obligations
imposed upon the Recipient and all rights granted to the Corporation under this
Agreement will be binding upon the Recipient's heirs, legal representatives and
10. Effect of Governmental and Other Regulations. The exercise of the
Option and the Corporation's obligation to sell and deliver shares upon the
exercise of the Option are subject to all applicable federal and state laws,
rules and regulations, and to such approvals by any regulatory or governmental
agency which may, in the opinion of counsel for the Corporation, be required.
11. Incorporation of the Plan. The Plan is attached hereto and incorporated
herein by reference. In the event that any provision in this Agreement conflicts
with a provision in the Plan, the provisions of the Plan shall govern.
Executed in the name and on behalf of the Corporation by one of its duly
authorized officers and by the Recipient all as of the date first above written.
AMERICAN RIVERS OIL COMPANY
Date , 19 By
---------------- ---- --------------------------------------
The undersigned Recipient has read and understands the terms of this Option
Agreement and the attached Plan and hereby agrees to comply therewith.
Date , 19
------------------- ---- ----------------------------------
Signature of Recipient
Tax ID Number: