Document:

Exhibit 10.26

 

POLYPORE INTERNATIONAL, INC.

2007 STOCK INCENTIVE PLAN

 

1.             Purpose.

 

The
purpose of the Plan is to assist the Company in attracting, retaining,
motivating and rewarding certain key employees, officers, directors and
consultants of the Company and its Affiliates, and promoting the creation of
long-term value for stockholders of the Company by closely aligning the
interests of such individuals with those of such stockholders. The Plan
authorizes the award of Stock-based incentives to Eligible Persons to encourage
such persons to expend their maximum efforts in the creation of stockholder
value.

 

2.             Definitions.

 

For
purposes of the Plan, the following terms shall be defined as set forth below:

 

(a)           “Affiliate” means, with
respect to any entity, any other entity that, directly or indirectly through
one or more intermediaries, controls, is controlled by or is under common
control with, such entity.

 

(b)           “Award” means any Option,
Restricted Stock or other Stock-based award granted under the Plan.

 

(c)           “Board” means the Board of
Directors of the Company.

 

(d)           “Cause” means, in the absence
of any employment agreement between a Participant and the Employer otherwise
defining Cause, (i) fraud or embezzlement on the part of Participant in the
course of his or her employment or services, (ii) personal dishonesty or
acts of gross negligence or gross misconduct, which, in each case, is
demonstrably and materially injurious to the Company or any of its Affiliates
(iii) a Participant’s intentional engagement in conduct that is materially
injurious to the Company or any of its Affiliates, (iv) a Participant’s
conviction by a court of competent jurisdiction of, or pleading “guilty” or “no
contest” to, (x) a felony or (y) any other criminal charge (other than minor
traffic violations) which could reasonably be expected to have a material
adverse impact on the reputation or business of the Company or any of its
Affiliates; (v) public or consistent drunkenness by a Participant or his or her
illegal use of narcotics which is, or could reasonably be expected to become,
materially injurious to the reputation or business of the Company or any of its
Affiliates or which impairs, or could reasonably be expected to impair, the
performance of a Participant’s duties to the Company or any of its Affiliates;
or (vi) willful failure by a Participant to follow the lawful directions of a
superior officer or the Board, unless such failure did not occur in bad faith
and is cured promptly after written notice of such failure is given to the
Participant by such superior officer or the Board, or such direction otherwise
constitutes Good Reason. In the event there is an employment agreement between
a Participant and the Employer defining Cause, “Cause” shall have the meaning
provided in such agreement.

 

 

(e)           “Change in Control” means:

 

(i)            a change in
ownership or control of the Company effected through a transaction or series of
transactions (other than an offering of Stock to the general public through a
registration statement filed with the Securities and Exchange Commission)
whereby any “person” or related “group” of “persons” (as such terms are used in
Sections 13(d) and 14(d)(2) of the Exchange Act), other than the Company or any
of its Affiliates, or an employee benefit plan maintained by the Company or any
of its Affiliates, directly or indirectly acquires “beneficial ownership”
(within the meaning of Rule 13d-3 under the Exchange Act) of securities of the
Company possessing more than fifty percent (50%) of the total combined voting power
of the Company’s securities outstanding immediately after such acquisition;

 

(ii)           the date upon which
individuals who, as of the Effective Date, constitute the Board (the “Incumbent
Board”), cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a director subsequent to
the date hereof whose election, or nomination for election by the Company’s
stockholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies
or consents by or on behalf of a person other than the Board; or

 

(iii)          the sale or
disposition, in one or a series of related transactions, of all or substantially
all of the assets of the Company to any “person” or “group” (as such terms are
defined in Sections 13(d)(3) and 14(d)(2) of the Exchange Act) other than
the Company’s Affiliates.

 

(f)            “Code” means the Internal
Revenue Code of 1986, as amended from time to time, including regulations
thereunder and successor provisions and regulations thereto.

 

(g)           “Committee” means the Board or
such other committee appointed by the Board consisting of two or more
individuals.

 

(h)           “Company” means Polypore
International, Inc., a Delaware corporation.

 

(i)            “Disability” means, in the
absence of any employment agreement between a Participant and the Employer
otherwise defining Disability, the permanent and total disability of a person
within the meaning of Section 22(e)(3) of the Code. In the event there is
an employment agreement between a Participant and the Employer defining
Disability, “Disability” shall have the meaning provided in such agreement.

 

(j)            “Effective Date” shall mean
the date upon which the Company commences an initial public offering pursuant
to an effective registration statement.

 

(k)           “Eligible Person” means (i)
each employee of the Company or of any of its Affiliates, including each such
person who may also be a director of the Company and/or its

 

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Affiliates; (ii) each
non-employee director of the Company and/or its Affiliates; (iii) each other
person who provides substantial services to the Company and/or its Affiliates
and who is designated as eligible by the Committee; and (iv) any person who has
been offered employment by the Company or its Affiliates; provided, that such
prospective employee may not receive any payment or exercise any right relating
to an Award until such person has commenced employment with the Company or its
Affiliates. An employee on an approved leave of absence may be considered as
still in the employ of the Company or its Affiliates for purposes of
eligibility for participation in the Plan.

 

(l)            “Employer” means either the
Company or an Affiliate of the Company that the Participant (determined without
regard to any transfer of an Award) is principally employed by or provides
services to, as applicable.

 

(m)          “Exchange Act” means the
Securities Exchange Act of 1934, as amended from time to time, including rules
thereunder and successor provisions and rules thereto.

 

(n)           “Expiration Date” means the
date upon which the term of an Option expires, as determined under Section 5(b)
hereof.

 

(o)           “Fair Market Value” means, as
of any date when the Stock is listed on one or more national securities
exchanges, the closing price reported on the principal national securities
exchange on which such Stock is listed and traded on the date of determination.
If the Stock is not listed on an exchange, or representative quotes are not
otherwise available, the Fair Market Value shall mean the amount determined by
the Board in good faith to be the fair market value per share of Stock.

 

(p)           “Option” means a conditional
right, granted to a Participant under Section 5 hereof, to purchase Stock at a
specified price during specified time periods. Certain Options under the Plan
are not intended to qualify as “incentive stock options” meeting the
requirements of Section 422 of the Code.

 

(q)           “Option Agreement” means a
written agreement between the Company and a Participant evidencing the terms
and conditions of an individual Option grant.

 

(r)            “Participant” means an
Eligible Person who has been granted an Award under the Plan, or if applicable,
such other person or entity who holds an Award.

 

(s)           “Plan” means this Polypore
International, Inc. 2007 Stock Incentive Plan.

 

(t)            “Qualified Member” means a
member of the Committee who is a “Non-Employee Director” within the meaning of
Rule 16b-3 and an “outside director” within the meaning of Regulation
1.162-27(c) under Code Section 162(m).

 

(u)           “Restricted Stock” means Stock
granted to a Participant under Section 6 hereof that is subject to certain
restrictions and to a risk of forfeiture.

 

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(v)           “Restricted Stock Agreement”
means a written agreement between the Company and a Participant evidencing the
terms and conditions of an individual Restricted Stock grant.

 

(w)          “Securities Act” means the
Securities Act of 1933, as amended from time to time, including rules
thereunder and successor provisions and rules thereto.

 

(x)            “Stock” means the Company’s
Class B Common Stock, par value $0.01 per share, and such other securities as
may be substituted for such stock pursuant to Section 8 hereof.

 

3.             Administration.

 

(a)           Authority of the Committee.
Except as otherwise provided below, the Plan shall be administered by the
Committee. The Committee shall have full and final authority, in each case
subject to and consistent with the provisions of the Plan, to (i) select
Eligible Persons to become Participants; (ii) grant Awards; (iii) determine the
type, number of shares of Stock subject to, and other terms and conditions of,
and all other matters relating to, Awards; (iv) prescribe Award agreements
(which need not be identical for each Participant) and rules and regulations
for the administration of the Plan; (v) construe and interpret the Plan and
Award agreements and correct defects, supply omissions, or reconcile
inconsistencies therein; (vi) suspend the right to exercise Awards during any
period that the Committee deems appropriate to comply with applicable
securities laws, and thereafter extend the exercise period of an Award by an
equivalent period of time, and (vii) make all other decisions and
determinations as the Committee may deem necessary or advisable for the
administration of the Plan. The foregoing notwithstanding, the Board shall
perform the functions of the Committee for purposes of granting Awards under
the Plan to non-employee directors. In any case in which the Board is
performing a function of the Committee under the Plan, each reference to the
Committee herein shall be deemed to refer to the Board, except where the
context otherwise requires. Any action of the Committee shall be final,
conclusive and binding on all persons, including, without limitation, the
Company, its Affiliates, Eligible Persons, Participants and beneficiaries of
Participants.

 

(b)           Manner of Exercise of Committee
Authority. At any time that a
member of the Committee is not a Qualified Member, (i) any action of the
Committee relating to an Award intended by the Committee to qualify as “performance-based
compensation” within the meaning of Section 162(m) of the Code and regulations
thereunder may be taken by a subcommittee, designated by the Committee or the
Board, composed solely of two or more Qualified Members (a “Qualifying
Committee”); and (ii) any action relating to an Award granted or to be
granted to a Participant who is then subject to Section 16 of the Exchange Act
in respect of the Company may be taken either by such a Qualifying Committee,
or by the Committee but with each such member who is not a Qualified Member
abstaining or recusing himself or herself from such action; provided, that upon
such abstention or recusal, the Committee remains composed of two or more
Qualified Members. Any action authorized by such a Qualifying Committee or by
the Committee upon the abstention or recusal of such non-Qualified Member(s)
shall be deemed to be the action of the Committee for purposes of the Plan. The
express grant of

 

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any specific power to the
Committee, and the taking of any action by the Committee, shall not be
construed as limiting any power or authority of the Committee.

 

(c)           Delegation. To the extent
permitted by applicable law, the Committee may delegate to officers or
employees of the Company or any of its Affiliates, or committees thereof, the
authority, subject to such terms as the Committee shall determine, to perform
such functions, including but not limited to administrative functions, as the
Committee may determine appropriate. The Committee may appoint agents to assist
it in administering the Plan. Notwithstanding the foregoing or any other
provision of the Plan to the contrary, any Award granted under the Plan to any
person or entity who is not an employee of the Company or any of its Affiliates
shall be expressly approved by the Committee.

 

(d)           Section 409A. The Committee
shall take into account compliance with Section 409A of the Code in connection
with any grant of an Award under the Plan, to the extent applicable.

 

4.             Shares
Available Under the Plan.

 

(a)           Number of Shares Available for
Delivery. Subject to adjustment as provided in Section 8 hereof, the
total number of shares of Stock reserved and available for delivery in
connection with Awards under the Plan shall be 1,751,963. Shares of Stock
delivered under the Plan shall consist of authorized and unissued shares or previously
issued shares of Stock reacquired by the Company on the open market or by
private purchase.

 

(b)           Share Counting Rules. The
Committee may adopt reasonable counting procedures to ensure appropriate
counting, avoid double counting (as, for example, in the case of tandem or
substitute awards) and make adjustments if the number of shares of Stock
actually delivered differs from the number of shares previously counted in
connection with an Award. To the extent that an Award expires or is canceled,
forfeited, settled in cash or otherwise terminated without a delivery to the
Participant of the full number of shares to which the Award related, the
undelivered shares will again be available for grant. Shares withheld in
payment of the exercise price or taxes relating to an Award and shares equal to
the number surrendered in payment of any exercise price or taxes relating to an
Award shall be deemed to constitute shares not delivered to the Participant and
shall be deemed to again be available for Awards under the Plan; provided,
however, that, where shares are withheld or surrendered more than ten years
after the date of the most recent stockholder approval of the Plan or any other
transaction occurs that would result in shares becoming available under this
Section 4(b), such shares shall not become available if and to the extent that
it would constitute a material revision of the Plan subject to stockholder
approval under then applicable rules of the national securities exchange on
which the Stock is listed.

 

(c)           162(m) Limitation.
Notwithstanding anything to the contrary herein, during any time that the
Company is subject to Section 162(m) of the Code, the maximum number of shares
of Stock with respect to which Options and stock appreciation rights (to the
extent granted as an Award under the Plan) may be granted to any individual in
any one year shall not exceed the maximum number of shares of Stock available
for issue hereunder, as such number may change from time to time.

 

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5.             Options.

 

(a)           General. Options may be
granted to Eligible Persons in such form and having such terms and conditions
as the Committee shall deem appropriate; provided, however, that Incentive
Stock Options may only be granted to Eligible Persons who are employed by the
Employer. The provisions of separate Options shall be set forth in an Option
Agreement, which agreements need not be identical.

 

(b)           Term. The term of each Option
shall be set by the Committee at the time of grant; provided, however, that no
Option granted hereunder shall be exercisable after the expiration of ten (10)
years from the date it was granted.

 

(c)           Exercise Price. The exercise
price per share of Stock for each Option shall be set by the Committee at the
time of grant; provided, however, that if an Option is intended (i) to not be
considered “nonqualified deferred compensation” within the meaning of Section
409A of the Code, or (ii) to qualify as “performance-based compensation” within
the meaning of Section 162(m) of the Code and regulations thereunder, in either
case, the applicable exercise price shall not be less than the Fair Market
Value.

 

(d)           Payment for Stock. Payment for
shares of Stock acquired pursuant to Options granted hereunder shall be made in
full, upon exercise of the Options: (i) in immediately available funds in
United States dollars, or by certified or bank cashier’s check; (ii) by
delivery of a notice of “net exercise” to the Company, pursuant to which the
Participant shall receive the number of shares of Stock underlying the Options
so exercised reduced by the number of shares of Stock equal to the aggregate
exercise price of the Options divided by the Fair Market Value on the date of
exercise; (iii) by delivery of shares of Stock having a value equal to the
exercise price, or (iv) by any other means approved by the Committee. Anything
herein to the contrary notwithstanding, if the Committee determines that any
form of payment available hereunder would be in violation of Section 402 of the
Sarbanes-Oxley Act of 2002, such form of payment shall not be available.

 

(e)           Vesting. Options shall vest
and become exercisable in such manner, on such date or dates, or upon the
achievement of performance or other conditions, in each case, as may be
determined by the Committee and set forth in the Option Agreement; provided,
however, that notwithstanding any such vesting dates, the Committee may in its
sole discretion accelerate the vesting of any Option, which acceleration shall
not affect the terms and conditions of any such Option other than with respect
to vesting. Unless otherwise specifically determined by the Committee, the
vesting of an Option shall occur only while the Participant is employed or
rendering services to the Employer, and all vesting shall cease upon a
Participant’s termination of employment or services with the Employer for any
reason. If an Option is exercisable in installments, such installments or
portions thereof which become exercisable shall remain exercisable until the
Option expires.

 

(f)            Transferability of Options.
An Option shall not be transferable except by will or by the laws of descent
and distribution and shall be exercisable during the lifetime of the
Participant only by the Participant. Notwithstanding the foregoing, Options
shall be transferable to the extent provided in the Option Agreement or
otherwise determined by the Committee.

 

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(g)           Termination of Employment or
Service. Except as may otherwise be provided by the Committee in the Option
Agreement:

 

(i)            If prior to the
Expiration Date, a Participant’s employment or service, as applicable, with the
Employer terminates for any reason other than (A) by the Employer for Cause, or
(B) by reason of the Participant’s death or Disability, (1) all vesting with
respect to the Options shall cease, (2) any unvested Options shall expire as of
the date of such termination, and (3) any vested Options shall remain
exercisable until the earlier of the Expiration Date or the date that is ninety
(90) days after the date of such termination.

 

(ii)           If prior to the
Expiration Date, a Participant’s employment or service, as applicable, with the
Employer terminates by reason of such Participant’s death or Disability, (A)
all vesting with respect to the Options shall cease, (B) any unvested Options
shall expire as of the date of such termination, and (C) any vested Options
shall expire on the earlier of the Expiration Date or the date that is twelve
(12) months after the date of such termination due to death or Disability of
the Participant. In the event of a Participant’s death, the Options shall
remain exercisable by the person or persons to whom a Participant’s rights
under the Options pass by will or the applicable laws of descent and
distribution until its expiration, but only to the extent the Options were
vested by such Participant at the time of such termination due to death.

 

(iii)          If prior to the
Expiration Date, a Participant’s employment or service, as applicable, with the
Employer is terminated by the Employer for Cause, all Options (whether or not
vested) shall immediately expire as of the date of such termination.

 

6.             Restricted
Stock.

 

(a)           General. Restricted Stock
granted hereunder shall be in such form and shall contain such terms and
conditions as the Committee shall deem appropriate. The terms and conditions of
each Restricted Stock grant shall be evidenced by a Restricted Stock Agreement,
which agreements need not be identical. Subject to the restrictions set forth
in Section 6(b), except as otherwise set forth in the applicable Restricted
Stock Agreement, the Participant shall generally have the rights and privileges
of a stockholder as to such Restricted Stock, including the right to vote such
Restricted Stock. Unless otherwise set forth in a Participant’s Restricted
Stock Agreement, cash dividends and stock dividends, if any, with respect to
the Restricted Stock shall be withheld by the Company for the Participant’s
account, and shall be subject to forfeiture to the same degree as the shares of
Restricted Stock to which such dividends relate. Except as otherwise determined
by the Committee, no interest will accrue or be paid on the amount of any cash
dividends withheld.

 

(b)           Restrictions on Transfer. In
addition to any other restrictions set forth in a Participant’s Restricted
Stock Agreement, until such time that the Restricted Stock has vested pursuant
to the terms of the Restricted Stock Agreement, which vesting the Committee may
in its sole discretion accelerate at any time, the Participant shall not be
permitted to sell, transfer, pledge, or otherwise encumber the Restricted
Stock. Notwithstanding anything contained herein

 

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to the contrary, the
Committee shall have the authority to remove any or all of the restrictions on
the Restricted Stock whenever it may determine that, by reason of changes in
applicable laws or other changes in circumstances arising after the date of the
Restricted Stock Award, such action is appropriate.

 

(c)           Certificates. Restricted Stock
granted under the Plan may be evidenced in such manner as the Committee shall
determine. If certificates representing Restricted Stock are registered in the
name of the Participant, the Committee may require that such certificates bear an
appropriate legend referring to the terms, conditions and restrictions
applicable to such Restricted Stock, that the Company retain physical
possession of the certificates, and that the Participant deliver a stock power
to the Company, endorsed in blank, relating to the Restricted Stock.
Notwithstanding the foregoing, the Committee may determine, in its sole
discretion, that the Restricted Stock shall be held in book entry form rather
than delivered to the Participant pending the release of the applicable
restrictions.

 

(d)           Termination of Employment or
Service. Except as may otherwise be provided by the Committee in the
Restricted Stock Agreement, if, prior to the time that the Restricted Stock has
vested, a Participant’s employment or service, as applicable, terminates for
any reason, (i) all vesting with respect to the Restricted Stock shall cease,
and (ii) as soon as practicable following such termination, the Company shall
repurchase from the Participant, and the Participant shall sell, any unvested shares
of Restricted Stock at a purchase price equal to the original purchase price
paid for the Restricted Stock, or if the original purchase price is equal to
$0, such unvested shares of Restricted Stock shall be forfeited by the
Participant to the Company for no consideration as of the date of such
termination.

 

7.             Other
Stock-Based Awards.

 

The
Committee is authorized, subject to limitations under applicable law, to grant
to Participants such other Awards that may be denominated or payable in, valued
in whole or in part by reference to, or otherwise based on, or related to,
Stock, as deemed by the Committee to be consistent with the purposes of the
Plan.

 

8.             Adjustment
for Recapitalization, Merger, etc.

 

(a)           Capitalization Adjustments.
The aggregate number of shares of Stock that may be granted or purchased
pursuant to Awards (as set forth in Section 4 hereof), the number of shares of
Stock covered by each outstanding Award, and the price per share thereof in
each such Award shall be equitably and proportionally adjusted or substituted,
as determined by the Committee, as to the number, price or kind of a share of
Stock or other consideration subject to such Awards (i) in the event of changes
in the outstanding Stock or in the capital structure of the Company by reason
of stock splits, reverse stock splits, recapitalizations, reorganizations,
mergers, consolidations, combinations, exchanges, or other relevant changes in
capitalization occurring after the date of grant of any such Award (including
any Corporate Event (as defined below)); (ii) in connection with any
extraordinary dividend declared and paid in respect of shares of Stock, whether
payable in the form of cash, stock or any other form of consideration; or  (iii) in the event of any change in
applicable laws or any change in circumstances which results in or

 

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would result in any
substantial dilution or enlargement of the rights granted to, or available for,
Participants in the Plan.

 

(b)           Corporate Events. Notwithstanding
the foregoing, except as may otherwise be provided in an Award agreement, in
the event of (i) a merger or consolidation involving the Company in which the
Company is not the surviving corporation; (ii) a merger or consolidation
involving the Company in which the Company is the surviving corporation but the
holders of shares of Stock receive securities of another corporation and/or
other property, including cash; (iii) a Change in Control; or (iv) the
reorganization or liquidation of the Company (each, a “Corporate Event”),
in lieu of providing the adjustment set forth in subsection above, the
Committee may, in its discretion, cancel any or all vested and/or unvested
Awards as of the consummation of such Corporate Event, and provide that holders
of Awards so cancelled will receive a payment in respect of cancellation of
their Awards based on the amount of the per share consideration being paid for
the Stock in connection with such Corporate Event, less, in the case of Options
and other Awards subject to exercise, the applicable exercise price; provided,
however, that holders of (i) Options shall only be entitled to consideration in
respect of cancellation of such Awards if the per share consideration less the
applicable exercise price is greater than zero, and (ii) “performance vested”
Awards shall only be entitled to consideration in respect of cancellation of
such Awards to the extent that applicable performance criteria are achieved
prior to or as a result of such Corporate Event, and shall not otherwise be
entitled to payment in consideration of cancelled unvested Awards. Payments to
holders pursuant to the preceding sentence shall be made in cash, or, in the
sole discretion of the Committee, in the form of such other consideration
necessary for a holder of an Award to receive property, cash or securities (or
a combination thereof) as such holder would have been entitled to receive upon
the occurrence of the transaction if the holder had been, immediately prior to
such transaction, the holder of the number of shares of Stock covered by the
Award at such time (less any applicable exercise price).

 

(c)           Fractional Shares. Any such
adjustment may provide for the elimination of any fractional share which might
otherwise become subject to an Award.

 

9.             Use
of Proceeds.

 

The
proceeds received from the sale of Stock pursuant to the Plan shall be used for
general corporate purposes.

 

10.           Rights
and Privileges as a Stockholder.

 

Except
as otherwise specifically provided in the Plan, no person shall be entitled to
the rights and privileges of stock ownership in respect of shares of Stock
which are subject to Awards hereunder until such shares have been issued to
that person.

 

11.           Employment
or Service Rights.

 

No
individual shall have any claim or right to be granted an Award under the Plan
or, having been selected for the grant of an Award, to be selected for a grant
of any other Award. Neither the Plan nor any action taken hereunder shall be
construed as giving any individual any right to be retained in the employ or
service of the Company or an Affiliate of the Company.

 

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12.           Compliance
With Laws.

 

The
obligation of the Company to deliver Stock upon vesting and/or exercise of any
Award shall be subject to all applicable laws, rules, and regulations, and to
such approvals by governmental agencies as may be required. Notwithstanding any
terms or conditions of any Award to the contrary, the Company shall be under no
obligation to offer to sell or to sell and shall be prohibited from offering to
sell or selling any shares of Stock pursuant to an Award unless such shares
have been properly registered for sale pursuant to the Securities Act with the
Securities and Exchange Commission or unless the Company has received an
opinion of counsel, satisfactory to the Company, that such shares may be
offered or sold without such registration pursuant to an available exemption
therefrom and the terms and conditions of such exemption have been fully
complied with. The Company shall be under no obligation to register for sale or
resale under the Securities Act any of the shares of Stock to be offered or
sold under the Plan or any shares of Stock issued upon exercise or settlement
of Awards. If the shares of Stock offered for sale or sold under the Plan are
offered or sold pursuant to an exemption from registration under the Securities
Act, the Company may restrict the transfer of such shares and may legend the
Stock certificates representing such shares in such manner as it deems
advisable to ensure the availability of any such exemption.

 

13.           Withholding
Obligations.

 

As
a condition to the vesting and/or exercise of any Award, the Committee may
require that a Participant satisfy, through deduction or withholding from any
payment of any kind otherwise due to the Participant, or through such other
arrangements as are satisfactory to the Committee, the minimum amount of all
Federal, state and local income and other taxes of any kind required or
permitted to be withheld in connection with such vesting and/or exercise. The
Committee, in its discretion, may permit shares of Stock to be used to satisfy
tax withholding requirements and such shares shall be valued at their Fair
Market Value as of the settlement date of the Award; provided, however,
that the aggregate Fair Market Value of the number of shares of Stock that may
be used to satisfy tax withholding requirements may not exceed the minimum
statutorily required withholding amount with respect to such Award.

 

14.           Amendment
of the Plan or Awards.

 

(a)           Amendment of Plan. The Board
at any time, and from time to time, may amend the Plan; provided, however, that
without stockholder approval, the Board shall not make any amendment to the
Plan which would violate the stockholder approval requirements of the national
securities exchange on which the Stock is principally listed.

 

(b)           Amendment of Awards. The Board
or the Committee, at any time, and from time to time, may amend the terms of
any one or more Awards; provided, however, that the rights under any Award
shall not be impaired by any such amendment unless the Participant consents in
writing.

 

15.           Termination
or Suspension of the Plan.

 

The
Board may suspend or terminate the Plan at any time. Unless sooner terminated,
the Plan shall terminate on the day before the tenth (10th)
anniversary of the date the

 

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Plan
is adopted by the Board. No Awards may be granted under the Plan while the Plan
is suspended or after it is terminated.

 

16.           Effective
Date of the Plan.

 

The
Plan is effective as of the Effective Date.

 

17.           Miscellaneous.

 

(a)           Participants Outside of the United
States. The Committee may modify the terms of any Award under the Plan made
to or held by a Participant who is then a resident or primarily employed
outside of the United States in any manner deemed by the Committee to be
necessary or appropriate in order that such Award shall conform to laws,
regulations and customs of the country in which the Participant is then a
resident or primarily employed, or so that the value and other benefits of the
Award to the Participant, as affected by foreign tax laws and other
restrictions applicable as a result of the Participant’s residence or
employment abroad, shall be comparable to the value of such Award to a
Participant who is a resident or primarily employed in the United States. An
Award may be modified under this Section 17(a) in a manner that is inconsistent
with the express terms of the Plan, so long as such modifications will not contravene
any applicable law or regulation or result in actual liability under Section
16(b) of the Exchange Act for the Participant whose Award is modified.

 

(b)           No Liability of Committee Members.
No member of the Committee shall be personally liable by reason of any contract
or other instrument executed by such member or on his or her behalf in his or
her capacity as a member of the Committee nor for any mistake of judgment made
in good faith, and the Company shall indemnify and hold harmless each member of
the Committee and each other employee, officer or director of the Company to
whom any duty or power relating to the administration or interpretation of the
Plan may be allocated or delegated, against any cost or expense (including
counsel fees) or liability (including any sum paid in settlement of a claim)
arising out of any act or omission to act in connection with the Plan unless
arising out of such person’s own fraud or willful bad faith; provided, however,
that approval of the Board shall be required for the payment of any amount in
settlement of a claim against any such person. The foregoing right of
indemnification shall not be exclusive of any other rights of indemnification
to which such persons may be entitled under the Company’s certificate or articles
of incorporation or by-laws, each as may be amended from time to time, as a
matter of law, or otherwise, or any power that the Company may have to
indemnify them or hold them harmless.

 

(c)           Payments Following Accidents or
Illness. If the Committee shall find that any person to whom any amount is
payable under the Plan is unable to care for his or her affairs because of
illness or accident, or is a minor, or has died, then any payment due to such
person or his or her estate (unless a prior claim therefor has been made by a
duly appointed legal representative) may, if the Committee so directs the
Company, be paid to his or her spouse, child, relative, an institution
maintaining or having custody of such person, or any other person deemed by the
Committee to be a proper recipient on behalf of such person otherwise entitled
to payment. Any such payment shall be a complete discharge of the liability of
the Committee and the Company therefor.

 

11

 

(d)           Governing Law. The Plan shall
be governed by and construed in accordance with the internal laws of the State
of Delaware without reference to the principles of conflicts of laws thereof.

 

(e)           Funding. No provision of the
Plan shall require the Company, for the purpose of satisfying any obligations
under the Plan, to purchase assets or place any assets in a trust or other
entity to which contributions are made or otherwise to segregate any assets,
nor shall the Company maintain separate bank accounts, books, records or other
evidence of the existence of a segregated or separately maintained or
administered fund for such purposes. Participants shall have no rights under
the Plan other than as unsecured general creditors of the Company, except that
insofar as they may have become entitled to payment of additional compensation
by performance of services, they shall have the same rights as other employees
under general law.

 

(f)            Reliance on Reports. Each
member of the Committee and each member of the Board shall be fully justified
in relying, acting or failing to act, and shall not be liable for having so
relied, acted or failed to act in good faith, upon any report made by the
independent public accountant of the Company and its Affiliates and upon any
other information furnished in connection with the Plan by any person or
persons other than such member.

 

(g)           Titles and Headings. The
titles and headings of the sections in the Plan are for convenience of
reference only, and in the event of any conflict, the text of the Plan, rather
than such titles or headings, shall control.

 

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Exhibit 4.6    
    

[FRONT]

	CAPITAL STOCK	 	CAPITAL STOCK
	
 PAR VALUE $.01

200,000,000 SHARES AUTHORIZED	
 	

THIS CERTIFICATE IS TRANSFERABLE IN

NEW YORK, NY OR DENVER, CO

	Certificate Number	 	[GRAPHIC DESIGN]	 	Shares
	 [SPECIMEN]	 	 	 	[SPECIMEN]

ST. MARY LAND & EXPLORATION COMPANY

INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE 

	THIS CERTIFIES THAT [SPECIMEN]	 	CUSIP 792228 10 8
	 	 	SEE REVERSE FOR CERTAIN DEFINITIONS
	is the owner of [SPECIMEN]	 	 

FULLY
PAID AND NON-ASSESSABLE SHARES OF THE CAPITAL STOCK OF 

St. Mary Land & Exploration Company, transferable on the books of the Corporation by the holder hereof in person or by duly authorized
Attorney upon surrender of this Certificate properly endorsed. 

In Witness Whereof, the said Corporation has caused this Certificate to be signed by its duly authorized officers and to be sealed with the Seal of the
Corporation. 

	ANTHONY J. BEST	 	 	 	DATED:
	Chief Executive Officer and President	 	 	 	COUNTERSIGNED AND REGISTERED:
	 	 	 	 	COMPUTERSHARE TRUST COMPANY,
	 	 	[CORPORATE SEAL]	 	N.A. (DENVER)
	 	 	 	 	TRANSFER AGENT AND REGISTRAR
	DAVID W. HONEYFIELD	 	 	 	 
	Senior VP-CFO, Secretary, and Treasurer	 	 	 	By
                                         
                 

Authorized Signature

SECURITY
INSTRUCTIONS ON REVERSE 

 
[BACK]

ST. MARY LAND & EXPLORATION COMPANY

The
following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations: 

	TEN COM	—	 	as tenants in common	 	 	 	UNIF GIFT MIN ACT	—	 	Custodian

	TEN ENT	—	 	as tenants by the entireties	 	 	 	 	 	 	(Cust)	 	 	 	(Minor)
	JT TEN	—	 	as joint tenants with right of	 	 	 	 	 	 	    under Uniform Gifts to Minors Act	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 (State)
	

 	

 	
 	

 	
 	

 	
 	

UNIF TRF MIN ACT	

—	
 	

survivorship and not as tenants in common Custodian (until age       )

	 	 	 	 	 	 	 	 	 	 	(Cust)	 	 	 	(Minor)
	 	 	 	 	 	 	 	 	 	 	    under Uniform Transfers to Minors Act	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 (State)

Additional abbreviations may also be used though not in the above list. 

For
value received,
                                     hereby sell, assign
and transfer unto 

PLEASE
INSERT SOCIAL SECURITY OR OTHER

IDENTIFYING NUMBER OF
ASSIGNEE                                        
                                         
 
 

	
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE, OF ASSIGNEE)
	

	

	

Shares of the Common Stock represented by the within Certificate, and do hereby irrevocably constitute and appoint
	

 Attorney to transfer the said stock on the books of the within-named Corporation with full power of substitution in the premises.

	
 Dated:	

    
	
 	

20	

    
	
 	

Signature:	

    

	
 Signature(s) Guaranteed:	
 	

Signature:	

    
 NOTICE: THE SIGNATURE TO THIS
	BY:	    
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (Banks, Stockbrokers, Savings and Loan Associations and Credit Unions) WITH MEMBERSHIP IN AN
APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15.	 	 	ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE, IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT, OR ANY CHANGE WHATEVER.

SECURITY
INSTRUCTIONS 

THIS
IS WATERMARKED PAPER. DO NOT ACCEPT WITHOUT NOTING WATERMARK. HOLD TO LIGHT TO VERIFY WATERMARK. 

2

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Exhibit 4.6

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