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
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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;
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(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.
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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, X.X. Xxx 00000, Xxx
Xxxxx, Xxxxxx 00000-0000, 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
__________________________
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(Signature)
__________________________
(Print Name)
__________________________
(Address)
__________________________
(City, State, Zip Code)
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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
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