STOCK OPTION AGREEMENT
UNDER THE PENNSYLVANIA ENTERPRISES, INC.
STOCK INCENTIVE PLAN
Option No.: _______________
THIS AGREEMENT dated as of _______________ (the "Date of Grant") is
made by and between PENNSYLVANIA ENTERPRISES, INC. (the "Company") and
_______________ (the "Optionee").
WHEREAS, the Company, has adopted the Pennsylvania Enterprises, Inc. Stock
Incentive Plan (the "Plan"); and
WHEREAS, the Company's Board of Directors (the "Board"), has determined
that it would be in the best interests of the Company to enter into this
Agreement.
NOW, THEREFORE, the Company hereby grants an Option (the "Option")
under the Plan to the Optionee on the following terms and conditions:
1. AMOUNT OF STOCK SUBJECT TO OPTION:
The Company hereby grants to the Optionee, subject to the terms and
conditions set forth in this Agreement, the Option to purchase ____________
shares of authorized and unissued common stock of the Company (without nominal
or par value, with a stated value of $5.00 per share) or shares reacquired by
the Company and held in treasury (the "Stock"), which Stock is to be issued by
the Company upon the exercise of the Option as hereinafter set forth.
2. PURCHASE PRICE:
The purchase price per share of Stock subject to the Option shall be
_______________, the fair market value of a share of Stock on the Date of Grant,
as determined by the Board.
3. TYPE OF OPTION:
The Option is intended to be a Non-Qualified Stock Option that is not
an Incentive Stock Option within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended.
Option No.: _______________
4. PERIOD OF OPTION:
The Option is granted as of the Date of Grant. The Option shall expire
at the earliest to occur of (a) three months after termination of the Optionee's
employment or service on the Board for any reason except death, disability, or
retirement; (b) one year after termination of the Optionee's employment with the
Company or service on the Board by reason of death or disability; (c) five years
after termination of the Optionee's Employment by reason of retirement, on or
after age 55, under the Employees' Retirement Plan of Pennsylvania Enterprises,
Inc., or (d) _______________ (ten years after the Date of Grant). In no event
shall the term of the Option be greater than ten years.
5. EXERCISE OF OPTION:
(a) The Option may be exercised with respect to full shares (and no
fractional shares shall be issued) as follows:
(i) no part of the Option may be exercised during the first
year following the Date of Grant;
(ii) thereafter, the Option may be exercised in part or in
full until it expires in accordance with Section 4.
(b) In order to exercise the Option or any part thereof, the Optionee
shall give notice in writing to the Company at its headquarters address (on a
form acceptable to the Company) of the Optionee's intention to purchase all or
part of the shares subject to the Option, and in said notice the Optionee shall
set forth the number of shares as to which he/she desires to exercise his/her
Option. The notice must be accompanied by payment in full of the exercise price
for such shares. Such payment may be made in cash, through the delivery to the
Company of full shares of Stock which have been owned by the Optionee for at
least six months having a value equal to the total exercise price of the portion
of the Option so exercised or through a combination of cash and shares of Stock,
or in any such other manner as may be permitted by the Board. Any shares of
Stock so delivered shall be valued at the average of the high and low trading
prices for the trading date immediately prior to the date on which the Option is
exercised. The Option will be deemed exercised on the date a proper notice of
exercise (accompanied as described above) is hand delivered, or, if mailed,
postmarked.
(c) The Optionee shall, no later than the date of exercise of the
Option, make payment to the Company in cash or its equivalent of any federal,
state, local or other taxes of any kind required by law to be withheld with
respect to the Option. The obligations of the Company under the Plan and this
Option shall be conditional on such payment, and the Company shall, to the
extent permitted by law, have the right to deduct any such taxes from any
payment of any kind otherwise due to the Optionee.
Option No.: _______________
6. NON-TRANSFERABILITY OF OPTION:
The Option is not transferable otherwise than by will or by the laws of
descent and distribution. To the extent the Option is exercisable at the time of
the Optionee's death, it may be exercised by the executor or administrator of
the Optionee's estate or by the person designated by will or entitled by the
laws of descent and distribution, upon such death, to any remaining rights
arising out of the Option.
7. CHANGE OF CONTROL:
Notwithstanding the provisions of Section 4, the Option shall become
fully exercisable upon the occurrence of a Change of Control (as defined in the
Plan).
8. CHANGE IN CAPITAL:
If prior to the expiration of the Option, there shall be any changes in
the Stock structure of the Company by reason of the declaration of stock
dividends, recapitalization resulting in stock split-ups or combinations or
exchanges of shares by reason of merger, consolidation, or by any other means,
then the number of shares subject to the Option and the exercise price per share
of Stock shall be equitably and appropriately adjusted as the Board in its sole
discretion shall deem just and reasonable in light of all the circumstances
pertaining thereto.
9. RIGHT TO TERMINATE SERVICE AS DIRECTOR:
The Option shall not confer upon the Optionee any right to continued
service as a Director of the Company.
10. REGISTRATION AND OTHER REQUIREMENTS:
The Option is subject to the requirement that, if at any time the Board
shall determine that (a) the listing, registration or qualification of the Stock
subject or related to the Option upon any securities exchange or under any state
or federal law, (b) the consent or approval of any governmental regulatory body
or (c) an agreement by the Optionee with respect to the disposition of Stock is
necessary or desirable (in connection with any requirement or interpretation of
any federal or state securities law, rule or regulation) as a condition of, or
in connection with, the issuance, purchase or delivery of Stock under the
Option, the Option shall not be exercised, in whole or in part, unless such
listing, registration, qualification, consent, approval or agreement shall have
been effected or obtained free of any conditions not acceptable to the Board.
11. SUBJECT TO THE PLAN:
The Option evidenced by the Agreement and the exercise thereof are
subject to the terms and conditions of the Plan, which are incorporated herein
by reference and made a part hereof. In addition, the Option is subject to any
rules and regulations promulgated by the Board.
Option No.: _______________
IN WITNESS WHEREOF, this Agreement has been executed and delivered by
the parties hereto:
PENNSYLVANIA ENTERPRISES, INC.
By: ______________________________
Name: Xxxxxx X. Xxxxx
Title: President and CEO
Accepted and agreed to as of the Date of Grant:
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Optionee
