-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RJgFOo6nuhPTNW5mLdxj9ne9nRhGmjuK1fRmzayTeMNwQGqfe32GggaDigbuZXIS 1pGKbt1LPLo47W4QxWa/ag== 0000893538-02-000028.txt : 20020522 0000893538-02-000028.hdr.sgml : 20020522 20020521190523 ACCESSION NUMBER: 0000893538-02-000028 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 20020522 EFFECTIVENESS DATE: 20020522 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ST MARY LAND & EXPLORATION CO CENTRAL INDEX KEY: 0000893538 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 410518430 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: 1933 Act SEC FILE NUMBER: 333-88780 FILM NUMBER: 02659234 BUSINESS ADDRESS: STREET 1: 1776 LINCOLN ST STE 1100 CITY: DENVER STATE: CO ZIP: 80203 BUSINESS PHONE: 3038618140 S-8 1 form_s8.htm FORM S-8 Form S-8 05/21/02 

            As filed with the Securities and Exchange Commission on May 21, 2002
                                   Securities Act Registration No. 333-_________
                                                 Exchange Act File No. 000-20872
================================================================================
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    Form S-8

                             REGISTRATION STATEMENT
                        UNDER THE SECURITIES ACT OF 1933

                       St. Mary Land & Exploration Company
             (Exact name of registrant as specified in its charter)

            Delaware                                          41-0518430
(State or other jurisdiction of                             (IRS Employer
 incorporation or organization)                          Identification No.)

                         1776 Lincoln Street, Suite 1100
                             Denver, Colorado 80203
               (Address of Principal Executive Offices) (Zip Code)

                       St. Mary Land & Exploration Company
                                Stock Option Plan
                                       and
                       St. Mary Land & Exploration Company
                           Incentive Stock Option Plan
                            (Full title of the plans)

                               Mark A. Hellerstein
                      President and Chief Executive Officer
                       St. Mary Land & Exploration Company
                         1776 Lincoln Street, Suite 1100
                             Denver, Colorado 80203
                     (Name and address of agent for service)

                                 (303) 861-8140
          (Telephone number, including area code, of agent for service)



                         CALCULATION OF REGISTRATION FEE

     Title of each                                                           Proposed maximum
  class of securities        Amount to be          Proposed maximum         aggregate offering        Amount of
   to be registered           registered       offering price per share           price            registration fee
   ----------------           ----------       ------------------------  -----------------------   ----------------

     Common stock,         1,000,000 shares             $24.21(1)                $24,210,000            $2,227(2)
    $.01 par value

- ------------------

(1) Solely for the purpose of computing the registration fee in accordance with
Rule 457(h), the price shown is based upon the price of $24.21 per share, which
is the average of the high and low selling prices for the registrant's common
stock as reported on the Nasdaq National Market on May 17, 2002.
(2)  Calculated under Section 6(b) of the Securities Act as .000092 of
$24,210,000.


         This registration statement relates to the previously filed
registration statements discussed below and is being filed under General
Instruction E. of Form S-8 in order to register additional shares of the same
class as other securities for which registration statements filed on this form
relating to the same employee benefit plans are effective.

         On June 25, 1997, the registrant filed a registration statement on Form
S-8 (File No. 333-30055) to register 754,614 shares of common stock, which
included 700,000 shares of common stock issuable under the St. Mary Land &
Exploration Company Stock Option Plan and the St. Mary Land & Exploration
Company Incentive Stock Option Plan (the "Plans"). On April 21, 2000, the
registrant filed a registration statement on Form S-8 (File No. 333-35352) to
register an additional 950,000 shares of common stock issuable under the Plans.
The contents of those registration statements are incorporated by reference into
this registration statement. Under Rule 416, those registration statements are
deemed to cover an additional 1,650,000 shares of common stock, or a total of
3,300,000 shares of common stock, as a result of a two shares-for-one share
forward stock split effected in the form of a stock dividend distributed in
September 2000. The registrant is now filing this separate registration
statement to register an additional 1,000,000 shares of common stock which as a
result of amendments to the Plans may be issued thereunder.



Item 8.           Exhibits.

         The following exhibits are furnished as part of this registration
statement:

  Exhibit
    No.                              Description
- -------------    ---------------------------------------------------------------

5.1              Opinion of Ballard Spahr Andrews & Ingersoll, LLP*
23.1             Consent of Arthur Andersen LLP*
23.2             Consent of Ballard Spahr Andrews & Ingersoll, LLP (included
                 in Exhibit 5.1)*
23.3             Consent of Ryder Scott Company, L.P.*
24.1             Power of Attorney (included in signature page hereof)*
99.1             St. Mary Land & Exploration Company Stock Option Plan, as
                 amended on March 25, 1999, January 27, 2000 and March 29, 2001*
99.2             St. Mary Land & Exploration Company Incentive Stock Option
                 Plan, as amended on March 25, 1999, January 27, 2000 and
                 March 29, 2001*
- ----------------------------
* Filed herewith.







Signatures

         The Registrant. 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 Denver, State of Colorado, on May 20, 2002.

                                  ST. MARY LAND & EXPLORATION COMPANY

                                  By: /S/ MARK A. HELLERSTEIN
                                     ---------------------------------
                                     Mark A. Hellerstein,
                                     President and Chief Executive Officer


                                POWER OF ATTORNEY

         Each person whose signature appears below hereby authorizes,
constitutes and appoints Mark A. Hellerstein his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him and in his own name, place and stead, in any and all capacities, to sign
any and all amendments (including post-effective amendments and other amendments
thereto) to this Registration Statement on Form S-8 and to file the same, with
all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing as
he could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent, 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 and on the dates indicated.

         Signature                          Title                       Date
- --------------------------    ----------------------------------   -------------


 /S/ THOMAS E. CONGDON        Chairman of the Board and Director    May 14, 2002
- --------------------------
Thomas E. Congdon


 /S/ MARK A. HELLERSTEIN      President, Chief Executive Officer    May 20, 2002
- --------------------------        and Director
Mark A. Hellerstein


/S/ RONALD D. BOONE           Executive Vice President, Chief       May 13, 2002
- --------------------------        Operating Officer and Director
Ronald D. Boone


/S/ RICHARD C. NORRIS         Vice President - Finance, Secretary   May 13, 2002
- --------------------------        and Treasurer
Richard C. Norris


/S/ GARRY A. WILKENING        Vice President - Administration       May 16, 2002
- --------------------------        and Controller
Garry A. Wilkening


                              Director                             May ___, 2002
- --------------------------
Larry W. Bickle


/S/ DAVID C. DUDLEY           Director                              May 17, 2002
- --------------------------
David C. Dudley


/S/ AREND J. SANDBULTE        Director                              May 13, 2002
- --------------------------
Arend J. Sandbulte


/S/ JOHN M. SEIDL             Director                              May 16, 2002
- --------------------------
John M. Seidl


/S/ ROBERT L. NANCE           Director                              May 16, 2002
- --------------------------
Robert L. Nance


/S/ JACK HUNT                 Director                              May 13, 2002
- --------------------------
Jack Hunt


/S/ WILLIAM J. GARDINER       Director                              May 15, 2002
- --------------------------
William J. Gardiner
EX-5 3 exhibit51.htm BALLARD SPAHR ANDREWS & INGERSOLL, LLP OPINION Exhibit 5.1 05/21/02 Form S-8 
                                                                     EXHIBIT 5.1

             [LETTERHEAD OF BALLARD SPAHR ANDREWS & INGERSOLL, LLP]


                                                                May 17, 2002
St. Mary Land & Exploration Company
1776 Lincoln Street, Suite 1100
Denver, Colorado  80203

         Re:      Registration Statement on Form S-8 for Shares of Common Stock
                  -------------------------------------------------------------
                  Issuable Under Stock Option Plans
                  ---------------------------------

Gentlemen:

         We have acted as counsel to St. Mary Land & Exploration Company, a
Delaware corporation ("St. Mary"), in connection with the filing of a
Registration Statement on Form S-8 (the "Registration Statement") to register
under the Securities Act of 1933, as amended, an additional 1,000,000 shares of
St. Mary common stock, par value $.01 per share (the "Shares"), issuable from
time to time upon the exercise of options ("Options") granted under the St. Mary
Land & Exploration Company Stock Option Plan, as amended, and the St. Mary
Land & Exploration Company Incentive Stock Option Plan, as amended
(collectively, the "Plans").

         In that connection, we have examined, and relied upon the accuracy of
factual matters contained therein, the Plans and originals and copies, certified
or otherwise identified to our satisfaction, of such other agreements,
documents, corporate records and instruments as we have deemed necessary for the
purposes of the opinion expressed below. In giving this opinion, we are assuming
the authenticity of all instruments presented to us as originals, the conformity
with the originals of all instruments presented to us as copies and the
genuineness of all signatures.

         Based upon the foregoing, we are of the opinion that the Shares, when
issued upon exercise of the Options granted under the Plans and upon payment of
the option exercise price in accordance with the terms of the Plans, will be
legally issued, fully paid and nonassessable.

         This opinion is limited to the matters expressly stated herein. No
implied opinion may be inferred to extend this opinion beyond the matters
expressly stated herein. We do not undertake to advise you of any changes in the
opinion expressed herein resulting from changes in law, changes in facts or any
other matters that might occur or be brought to our attention after the date
hereof.

         We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.

                                            Very truly yours,

                   /S/ BALLARD SPAHR ANDREWS & INGERSOLL, LLP
EX-23 4 exhibit231.htm ARTHUR ANDERSEN LLP CONSENT Exhibit 23.1 05/21/02 Form S-8 

                                                                    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 18, 2002 included in St. Mary Land & Exploration Company's Annual
Report on Form 10-K/A for the year ended December 31, 2001 and to all
references to our Firm included in this registration statement.




                                                /S/ ARTHUR ANDERSEN LLP

Denver, Colorado
May 17, 2002
EX-23 5 exhibit233.htm RYDER SCOTT CONSENT Exhibit 23.3 05/21/02 Form S-8 
                                                                    EXHIBIT 23.3


                   CONSENT OF INDEPENDENT PETROLEUM ENGINEERS


         The undersigned hereby consents to the incorporation by reference in
the St. Mary Land & Exploration Company registration statement on Form S-8
(File No. 333-__________) of information contained in our reserve reports as of
January 1, 2000, 2001 and 2002 setting forth estimates of revenues from St. Mary
Land & Exploration Company's oil and gas reserves.


                             /S/ RYDER SCOTT COMPANY, L.P.
                            ------------------------------------
                            Ryder Scott Company, L.P.


Denver, Colorado
May 15, 2002
EX-99 6 exhibit991.htm AMENDED STOCK OPTION PLAN Exhibit 99.1 05/21/02 Form S-8 
                                                               EXHIBIT 99.1

                                                    As Amended on March 29, 2001

                       ST. MARY LAND & EXPLORATION COMPANY
                       -----------------------------------
                                STOCK OPTION PLAN
                                -----------------

                                    ARTICLE I
                            ESTABLISHMENT AND PURPOSE
                            -------------------------

         1.1  Establishment. St. Mary Land & Exploration Company, a Delaware
              -------------
corporation  (the  "Company"),  hereby  establishes  a stock option plan for key
employees,  consultants  and members of the Board of Directors of the Company or
of a subsidiary  of the  Company,  providing  material  services to the Company,
which shall be known as the ST. MARY LAND & EXPLORATION COMPANY STOCK OPTION
PLAN (the "Plan"). The Company shall enter into Option agreements with Optionees
pursuant to the Plan.

         1.2 Purpose. The purpose of the Plan is to enhance shareholder value by
             -------
attracting,  retaining and motivating key employees,  consultants and members of
the Board of  Directors  of the  Company and of a  subsidiary  of the Company by
providing  them with a means to acquire a proprietary  interest in the Company's
success.

                                   ARTICLE II
                          ELIGIBILITY AND PARTICIPATION
                          -----------------------------

         All current and former employees,  consultants and members of the Board
of Directors of the Company (the "Board"), and of any subsidiary of the Company,
are  eligible to  participate  in the Plan and receive  Options  under the Plan.
Optionees under the Plan shall be selected by the Board, in its sole discretion,
from among those current and former  employees,  consultants  and members of the
Board of the Company, and of any subsidiary of the Company,  who, in the opinion
of the  Board,  are or  were  in a  position  to  contribute  materially  to the
Company's continued growth and development and to its long-term success.

                                   ARTICLE III
                                 ADMINISTRATION
                                 --------------
         Administration.  The Board  shall be  responsible for administering the
         --------------
Plan.

                  (a)  The  Board  is  authorized  to  interpret  the  Plan;  to
         prescribe,  amend,  and rescind rules and  regulations  relating to the
         Plan; to provide for  conditions  and  assurances  deemed  necessary or
         advisable  to protect the  interests of the Company with respect to the
         Plan; and to make all other  determinations  necessary or advisable for
         the  administration of the Plan.  Determinations,  interpretations,  or
         other  actions  made or taken by the Board with respect to the Plan and
         Options  granted  under  the  Plan  shall  be  final  and  binding  and
         conclusive for all purposes and upon all persons.

                  (b)  At  the   discretion   of  the  Board  the  Plan  may  be
         administered  by a  Committee  of two or  more  non-employee  Directors
         appointed by the Board (the "Committee").  The members of the Committee
         may be Directors  who are eligible to receive  Options  under the Plan,
         but Options may be granted to such  persons  only by action of the full
         Board and not by action of the Committee. The Committee shall have full
         power and  authority,  subject to the  limitations  of the Plan and any
         limitations imposed by the Board, to construe, interpret and administer
         the Plan and to make  determinations  which shall be final,  conclusive
         and  binding  upon  all  persons,  including  any  persons  having  any
         interests in any Options which may be granted  under the Plan,  and, by
         resolution or  resolutions  to provide for the creation and issuance of
         any  Option,  to fix the terms  upon  which and the time or times at or
         within  which,  and the  price or prices  at which  any  shares  may be
         purchased from the Company upon the exercise of an Option.  Such terms,
         time or times and price or prices shall, in every case, be set forth or
         incorporated  by reference in the instrument or instruments  evidencing
         an Option, and shall be consistent with the provisions of the Plan.

                  (c) Where a Committee  has been created by the Board  pursuant
         to this Article III,  references  in the Plan to actions to be taken by
         the Board  shall be deemed to refer to the  Committee  as well,  except
         where limited by the Plan or by the Board.

                  (d) No member of the  Board or the  Committee  shall be liable
         for any action or determination  made in good faith with respect to the
         Plan or any Option granted under it.

                                   ARTICLE IV
                            STOCK SUBJECT TO THE PLAN
                            -------------------------

         4.1 Number.  The total  number of shares of common stock of the Company
             ------
(the "Stock")  hereby made  available  and reserved for issuance  under the Plan
upon exercise of Options shall be 4,300,000 shares.  Notwithstanding anything to
the contrary  contained in the foregoing,  to the extent that options are issued
under any  Incentive  Stock Option Plan  adopted by the  Company,  the shares of
common stock reserved for issuance  pursuant to Options  granted under this Plan
shall be reduced.  The aggregate  number of shares of Stock  available under the
Plan shall be subject to adjustment as provided in Section 4.3.

         4.2 Unused Stock. If an Option shall expire or terminate for any reason
             ------------
without having been exercised in full, or if an "immaculate  cashless  exercise"
(as  described in Section  5.4)  results in the issuance of a reduced  number of
shares in  satisfaction  of an option  grant,  the  unpurchased  shares of Stock
subject thereto shall (unless the Plan shall have  terminated)  become available
for other Options under the Plan.


         4.3  Adjustment  in  Capitalization.  In the event of any change in the
              ------------------------------
outstanding  shares of Stock of the  Company  by reason of a stock  dividend  or
split, recapitalization,  reclassification, or other similar capital change, the
aggregate  number  of  shares  of  Stock  set  forth  in  Section  4.1  shall be
appropriately adjusted by the Board, whose determination shall be conclusive. In
any such case,  the  number and kind of shares of Stock that are  subject to any
Option and the Option price per share shall be proportionately and appropriately
adjusted  without any change in the  aggregate  Option price to be paid therefor
upon exercise of the Option.

                                       2

                                    ARTICLE V
                             TERMS OF STOCK OPTIONS
                             ----------------------

         5.1 Grant of Options. Subject to Section 4.1, Options may be granted to
             ----------------
current  and  former  employees,  consultants  and  members  of the Board of the
Company and of any  subsidiary  of the Company at any time and from time to time
as  determined  by the  Board.  The Board  shall  have  complete  discretion  in
determining  the terms and  conditions  and  number of  Options  granted to each
Optionee.  In making such  determinations,  the Board may take into  account the
nature of services  rendered by such current and former  employees,  consultants
and members of the Board,  their  present  and  potential  contributions  to the
Company  and such  other  factors  as the  Board in its  discretion  shall  deem
relevant.

         5.2 Option  Agreement;  Terms and Conditions to Apply Unless  Otherwise
             -------------------------------------------------------------------
Specified. As determined by the Board on the date of grant, each Option shall be
- ---------
evidenced by an option agreement (the "Option  Agreement")  that specifies:  the
Option price; the duration of the Option; the number of shares of Stock to which
the Option applies; such vesting or exercisability  restrictions which the Board
may impose;  and any other terms or conditions  which the Board may impose.  All
such terms and conditions  shall be determined by the Board at the time of grant
of the Option.

                  (a) If not  otherwise specified  by the  Board, the  following
         terms and conditions shall apply to Options granted under the Plan:

                           (i)   Term.  The duration of  the Option shall be for
                                 ----
                  ten years from the date of grant.

                           (ii)   Exercise  of  Option.   Unless  an  Option  is
                                  --------------------
                  terminated as provided hereunder,  an Optionee may exercise an
                  Option  pursuant to a vesting and  exercisability  schedule as
                  determined  by the Board,  which  vesting  and  exercisability
                  schedule  shall provide that (A) an Option held by an Optionee
                  who retires from employment with the Company after having both
                  reached the age of sixty and completed twelve years of service
                  with the Company shall continue to vest in accordance with the
                  vesting schedule set forth in the applicable  Option Agreement
                  notwithstanding  the termination of the Optionee's  employment
                  with the Company,  provided  that prior to the exercise of the
                  Option such  Optionee  does not after such  retirement  become
                  employed on a full-time  basis by a competitor  of the Company
                  prior to reaching age sixty-five,  and (B) an Option held by a
                  non-employee  Director of the  Company  who  retires  from the
                  Board after  completing  at least five years of service to the
                  Company shall become fully vested.

                           (iii)    Termination.  Each Option  granted  pursuant
                                    -----------
                  to the Plan shall  expire upon the earliest to occur of:

                                    (A)     The date  set forth in such  Option,
                           not to exceed  ten years  from the date of grant;

                                       3

                                    (B) The completion of the  merger or sale of
                           substantially  all  of  the  Stock  or  assets of the
                           Company with or to  another company  in a transaction
                           in which the  Company is not the survivor, except for
                           the  merger  of  the   Company  into  a  wholly-owned
                           subsidiary  (and the Company shall not be  considered
                           the surviving corporation for purposes  hereof if the
                           Company  is  the  survivor  of  a  reverse triangular
                           merger), provided  that the Company  shall have given
                           the  Optionee  at  least thirty  days' prior  written
                           notice  of  its  intent  to enter into such merger or
                           sale; or

                                    (C) The termination of the  employment of an
                           Optionee for cause by the Company.

                           (iv)  Acceleration.  An  Option  shall  become  fully
                                 ------------
                  vested and exercisable  irrespective  of its other  provisions
                  (A) immediately  prior to the completion of the merger or sale
                  of substantially  all of the stock or assets of the Company in
                  a transaction in which the Company is not the survivor, except
                  for the merger of the Company into a  wholly-owned  subsidiary
                  (and  the  Company  shall  not  be  considered  the  surviving
                  corporation for purposes hereof if the Company is the survivor
                  of a reverse triangular  merger);  (B) upon termination of the
                  Optionee's employment with the Company or a subsidiary thereof
                  because  of  death,   disability  or  normal  retirement  upon
                  reaching the age of  sixty-five;  or (C) in the event that the
                  Optionee is a  non-employee  member of the Company's  Board of
                  Directors,   upon  retirement  from  the  Company's  Board  of
                  Directors after reaching the age of seventy.

                           (v) Transferability. In addition to the Optionee, the
                               ---------------
                  Option  may be  exercised,  to the extent  exercisable  by the
                  Optionee,  by the  person or  persons  to whom the  Optionee's
                  rights  under the  Option  pass by will or the laws of descent
                  and  distribution,  by the  spouse or the  descendants  of the
                  Optionee or by trusts for such  persons,  to whom or which the
                  Optionee  may  have  transferred  the  Option,   or  by  legal
                  representative  of any of the  foregoing.  Any  such  transfer
                  shall be made only in compliance  with the  Securities  Act of
                  1933, as amended,  and the requirements  therefor as set forth
                  by the Company.

                  (b) The Board  shall be free to specify  terms and  conditions
         other than and in addition to those set forth above, in its discretion.

                  (c) All Option  Agreements shall incorporate the provisions of
         the Plan by reference.

         5.3 Option Price. No Option granted  pursuant to the Plan shall have an
             ------------
Option  price that is less than the fair  market  value of Stock on the date the
Option is granted,  as determined by the Board.  The Option exercise price shall
be subject to adjustment as provided in Section 4.3 above.

         5.4 Payment.  Payment for all shares of Stock shall be made at the time
             ------
that an Option, or any part thereof, is exercised, and no shares shall be issued
until full payment therefor has been made. Payment shall be made (i) in cash, or
(ii) if acceptable to the Board, in Stock, by the surrender of Option rights

                                       4

granted prior to May 18, 2000, hereunder valued at the difference between the
Option exercise price plus income taxes to be withheld, if any, and the fair
market value of the common stock (referred to as "immaculate cashless
exercise"), or in some other form.

                                   ARTICLE VI
                        WRITTEN NOTICE, ISSUANCE OF STOCK
                        ---------------------------------
                      CERTIFICATES, SHAREHOLDER PRIVILEGES
                      ------------------------------------

         6.1 Written  Notice.  An Optionee  wishing to exercise an Option  shall
             ---------------
give written  notice to the Company,  in the form and manner  prescribed  by the
Board. Full payment for the shares of Stock acquired pursuant to the Option must
accompany the written notice.

         6.2 Issuance of Stock  Certificates.  As soon as practicable  after the
             -------------------------------
receipt of written notice and payment, the Company shall deliver to the Optionee
a certificate or certificates for the requisite number of shares of Stock.

         6.3  Privileges  of a  Shareholder.  An  Optionee  or any other  person
              -----------------------------
entitled  to  exercise  an Option  under  the  Option  Agreement  shall not have
shareholder privileges with respect to any Stock covered by the Option until the
date of issuance of a stock certificate for such Stock.

                                   ARTICLE VII
                               RIGHTS OF OPTIONEES
                               -------------------

         Nothing in the Plan shall  interfere with or limit in any way the right
of the Company or a  subsidiary  corporation  to  terminate  any  employee's  or
consultant's  employment at any time, nor confer upon any employee or consultant
any right to continue in the employ of the Company or a subsidiary corporation.

                                  ARTICLE VIII
                          AMENDMENT, MODIFICATION, AND
                          ----------------------------
                             TERMINATION OF THE PLAN
                             -----------------------

         The Board may at any time  terminate and from time to time may amend or
modify the Plan. Any amendment or  modification  of the Plan by the Board may be
accomplished without approval of the shareholders of the Company,  except in the
event that shareholder approval of such amendment or modification is required by
any law or regulation governing the Company.

         No amendment, modification, or termination of the Plan shall in any
manner adversely affect any outstanding Option under the Plan without the
consent of the Optionee holding the Option.

                                       5


                                   ARTICLE IX
                       ACQUISITION, MERGER OR LIQUIDATION
                       ----------------------------------

         9.1      Acquisition.
                  -----------

                  (a) In the event that an  acquisition  occurs with  respect to
         the Company, the Company shall have the option, but not the obligation,
         to  cancel  Options  outstanding  as of  the  effective  date  of  such
         acquisition,  whether  or not such  Options  are then  exercisable,  in
         return for payment to the  Optionees of an amount equal to a reasonable
         estimate of an amount  (hereinafter  the  "Spread"),  determined by the
         Board, equal to the difference between the net amount per share payable
         in the acquisition or as a result of the acquisition, less the exercise
         price of the Option. In estimating the Spread,  appropriate adjustments
         to give effect to the existence of the Options  shall be made,  such as
         deeming the Options to have been exercised,  with the Company receiving
         the  exercise  price  payable   thereunder,   and  treating  the  Stock
         receivable  upon  exercise  of the  Options  as  being  outstanding  in
         determining the net amount per share.

                  (b) For purposes of this section,  an "acquisition" shall mean
         any transaction in which  substantially all of the Company's assets are
         acquired or in which a controlling amount of the Company's  outstanding
         shares are  acquired,  in each case by a single  person or entity or an
         affiliated group of persons and entities. For purposes of this section,
         a  controlling  amount shall mean more than fifty percent of the issued
         and outstanding shares of Stock of the Company.  The Company shall have
         the above option to cancel Options regardless of how the acquisition is
         effectuated,  whether by direct  purchase,  through a merger or similar
         corporate  transaction,  or otherwise.  In cases where the  acquisition
         consists of the  acquisition  of assets of the Company,  the net amount
         per share shall be calculated on the basis of the net amount receivable
         with  respect to shares  upon a  distribution  and  liquidation  by the
         Company after giving effect to expenses and charges,  including but not
         limited to taxes,  payable by the Company before the liquidation can be
         completed.

                  (c) Where the Company  does not exercise its option under this
         Section 9.1 the remaining provisions of this Article IX shall apply, to
         the extent applicable.

         9.2 Merger or  Consolidation.  If the  Company  shall be the  surviving
             ------------------------
corporation in any merger or  consolidation,  any Option granted hereunder shall
pertain to and apply to the securities to which a holder of the number of shares
of Stock  subject  to the  Option  would have been  entitled  in such  merger or
consolidation,  provided that the Company shall not be considered  the surviving
corporation  for  purposes  hereof if the  Company is the  survivor of a reverse
triangular merger.

         9.3 Other  Transactions.  A dissolution or a liquidation of the Company
             -------------------
or a  merger  and  consolidation  in  which  the  Company  is not the  surviving
corporation  (the Company shall not be considered the surviving  corporation for
purposes hereof if the Company is the survivor of a reverse  triangular  merger)
shall cause every Option outstanding  hereunder to terminate as of the effective
date of such dissolution,  liquidation,  merger or consolidation.  However,  the
Optionee either (i) shall be offered a firm commitment  whereby the resulting or
surviving  corporation in a merger or consolidation  will tender to the Optionee
an  option  (the  "Substitute  Option")  to  purchase  its  shares  on terms and

                                       6

conditions both as to number of shares and otherwise,  which will  substantially
preserve  to the  Optionee  the rights and  benefits  of the Option  outstanding
hereunder granted by the Company, or (ii) shall have the right immediately prior
to such  dissolution,  liquidation,  merger,  or  consolidation  to exercise any
unexercised Options whether or not then vested,  subject to the other provisions
of the Plan.  The Board  shall have  absolute  and  uncontrolled  discretion  to
determine  whether the Optionee has been offered a firm  commitment  and whether
the tendered  Substitute Option will substantially  preserve to the Optionee the
rights and benefits of the Option outstanding hereunder.

                                    ARTICLE X
                             SECURITIES REGISTRATION
                             -----------------------

         10.1 Securities Registration.  In the event that the Company shall deem
              -----------------------
it  necessary  or desirable to register  under the  Securities  Act of 1933,  as
amended, or any other applicable statute,  any Options or any Stock with respect
to which an Option may be or shall have been granted or exercised, or to qualify
any such Options or Stock under the Securities  Act of 1933, as amended,  or any
other statute,  then the Optionee shall cooperate with the Company and take such
action as is necessary to permit  registration or  qualification of such Options
or Stock.

         10.2  Representations.  Unless  the  Company  has  determined  that the
               ---------------
following representation is unnecessary,  each person exercising an Option under
the Plan may be required by the  Company,  as a condition to the issuance of the
shares of Stock pursuant to exercise of the Option,  to make a representation in
writing (i) that he is acquiring  such shares for his own account for investment
and not with a view to, or for sale in connection  with, the distribution of any
part thereof  within the meaning of the  Securities  Act of 1933,  and (ii) that
before any transfer in connection with the resale of such shares, he will obtain
the written opinion of counsel for the Company,  or other counsel  acceptable to
the Company,  that such shares may be transferred without registration  thereof.
The Company may also  require  that the  certificates  representing  such shares
contain  legends  reflecting  the  foregoing.  To the extent  permitted  by law,
including the Securities Act of 1933, nothing herein shall restrict the right of
a person  exercising  an Option to sell the shares  received  in an open  market
transaction.

                                   ARTICLE XI
                                 TAX WITHHOLDING
                                 ---------------

         Whenever  shares of Stock are to be issued in  satisfaction  of Options
exercised  under the Plan,  the  Company  shall  have the power to  require  the
recipient of the Stock to remit to the Company an amount  sufficient  to satisfy
federal, state, and local withholding tax requirements, if any.

                                       7

                                   ARTICLE XII
                                 INDEMNIFICATION
                                 ---------------

         To the extent permitted by law, each person who is or shall have been a
member of the Board or the Committee  shall be indemnified  and held harmless by
the Company against and from any loss, cost,  liability,  or expense that may be
imposed upon or reasonably  incurred by him in connection with or resulting from
any claim, action, suit, or proceeding to which he may be a party or in which he
may be involved  by reason of any action  taken or failure to act under the Plan
and against and from any and all amounts paid by him in settlement thereof, with
the Company's  approval,  or paid by him in satisfaction of judgment in any such
action,  suit, or proceeding  against him, provided he shall give the Company an
opportunity,  at its own  expense,  to  handle  and  defend  the same  before he
undertakes  to handle and defend it on his own behalf.  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  of
incorporation or bylaws, as a matter of law, or otherwise, or any power that the
Company or a  Subsidiary  Corporation  may have to  indemnify  them or hold them
harmless.

                                  ARTICLE XIII
                               REQUIREMENTS OF LAW
                               -------------------

         13.1  Requirements  of Law. The granting of Options and the issuance of
               --------------------
shares  of  Stock  upon the  exercise  of an  Option  shall  be  subject  to all
applicable  laws,  rules,  and  regulations,   and  to  such  approvals  by  any
governmental agencies or national securities exchanges as may be required.

         13.2 Governing Law. The Plan,  and all agreements  hereunder,  shall be
              -------------
construed in accordance with and governed by the laws of the State of Colorado.

                                   ARTICLE XIV
                             EFFECTIVE DATE OF PLAN
                             ----------------------

         The Plan shall be effective on November 21, 1996.

                                   ARTICLE XV
                        NO OBLIGATION TO EXERCISE OPTION
                        --------------------------------

         The granting of an Option shall  impose no  obligation  upon the holder
thereof to exercise such Option.

                                       8

         THIS STOCK  OPTION  PLAN was adopted by the Board of  Directors  of St.
Mary Land & Exploration company on November 21, 1996,  to be effective  upon
adoption,  and was amended by the Board of  Directors  on January 31,  1997,  on
March 25, 1999 to increase the number of shares  available  for  issuance  under
Article IV to  1,650,000,  on January 27, 2000, on May 18, 2000 and on March 29,
2001 to  increase  the number of shares  available  for  issuance  by  1,000,000
shares.


                                       ST. MARY LAND & EXPLORATION COMPANY



                                       By:  /S/ RICHARD C. NORRIS
                                          ---------------------------------
                                             Richard C. Norris
                                       Title:Vice President-Finance,
                                             Secretary and Treasurer
EX-99 7 exhibit992.htm AMENDED INCENTIVE STOCK OPTION PLAN Exhibit 99.2 05/21/02 Form S-8 
                                                               EXHIBIT 99.2

                                                    As Amended on March 29, 2001

                       ST. MARY LAND & EXPLORATION COMPANY
                       -----------------------------------
                           INCENTIVE STOCK OPTION PLAN
                           ---------------------------

                                    ARTICLE I
                            ESTABLISHMENT AND PURPOSE
                            -------------------------

         1.1  Establishment. St. Mary Land & Exploration Company, a Delaware
              -------------
corporation  (the  "Company"),  hereby  establishes  a stock option plan for key
employees  providing  material  services to the Company or any subsidiary of the
Company as described herein, which  shall be known as the "ST.  MARY  LAND &
EXPLORATION  COMPANY  INCENTIVE STOCK OPTION PLAN" (the "Plan").  It is intended
that the options issued to employees  pursuant to the Plan constitute  incentive
stock  options  within the meaning of Section 422 of the Internal  Revenue Code.
The Company shall enter into stock option  agreements with recipients of options
pursuant to the Plan.

         1.2 Purpose. The purpose of the Plan is to enhance shareholder value by
             -------
attracting,  retaining  and  motivating  key employees of the Company and of any
subsidiary  of  the  Company  by  providing  them  with a  means  to  acquire  a
proprietary interest in the Company's success.

                                   ARTICLE II
                                   DEFINITIONS
                                   -----------

         2.1 Definitions.  Whenever used herein,  the following terms shall have
             -----------
the respective  meanings set forth below,  unless the context  clearly  requires
otherwise, and when such meaning is intended, the term shall be capitalized.

                  (a)      "Board" means the Board of Directors of the Company.
                            -----

                  (b)      "Code" means the Internal  Revenue  Code of  1986, as
                            ----
         amended.

                  (c)      "Committee" shall mean the Committee provided  for by
                            ---------
         Article IV hereof, which may be created at the discretion of the Board.

                  (d)      "Company"  means  St. Mary  Land  &   Exploration
                            -------
         Company, a Delaware corporation.

                  (e) "Date of  Exercise"  means the date the  Company  receives
                       -----------------
         notice,  by an  Optionee,  of the  exercise  of an Option  pursuant  to
         Section  8.1 of the Plan.  Such  notice  shall  indicate  the number of
         shares of Stock the Optionee intends to acquire pursuant to exercise of
         the Option.

                  (f)  "Employee"  means any  person,  including  an  officer or
                        --------
         director of the Company or a Subsidiary Corporation, who is employed by
         the Company or a Subsidiary Corporation.

                  (g) "Fair  Market  Value" means the fair market value of Stock
                       -------------------
         upon which an option is granted under the Plan, determined as follows:

                           (i) If the Stock is listed on a  national  securities
                  exchange or admitted to unlisted  trading  privileges  on such
                  exchange,  the Fair Market  Value  shall be the last  reported
                  sale price of the Stock on the composite tape of such exchange
                  on the date of issuance of this option,  or if such day is not
                  a normal  trading  day, the last trading day prior to the date
                  of  issuance  of this  option,  and if no such sale is made on
                  such day, the Fair Market  Value shall be the average  closing
                  bid and asked  prices  for such day on the  composite  tape of
                  such exchange; or
                           (ii) If the  Stock is not so listed  or  admitted  to
                  unlisted  trading  privileges,  the Fair Market Value shall be
                  the mean of the last reported bid and asked prices reported by
                  the  National  Association  of  Securities  Dealers  Quotation
                  System  (or,  if not so  quoted  on  NASDAQ,  by the  National
                  Quotation  Bureau,  Inc.) on the last trading day prior to the
                  date of issuance of the option.


                  (h) "Incentive Stock Option" means an Option granted under the
                       ----------------------
         Plan which is intended to qualify as an "incentive stock option" within
         the meaning of Section 422 of the Code.

                  (i)  "Option"  means the  right,  granted  under the Plan,  to
                        ------
         purchase  Stock of the  Company  at the  option  price for a  specified
         period of time.

                  (j) "Optionee"  means an Employee  holding an Option under the
                       --------
         Plan.

                  (k) "Parent  Corporation"  shall have the meaning set forth in
                       -------------------
         Section  424(e)  of the Code  with the  Company  being  treated  as the
         employer corporation for purposes of this definition.

                  (l) "Subsidiary  Corporation" shall have the meaning set forth
                       -----------------------
         in Section  424(f) of the Code with the  Company  being  treated as the
         employer corporation for purposes of this definition.

                  (m) "Significant  Shareholder" means an individual who, within
                       ------------------------
         the meaning of Section  422(b)(6)  of the Code,  owns stock  possessing
         more than ten percent of the total combined voting power of all classes
         of stock of the  Company or of any  Parent  Corporation  or  Subsidiary
         Corporation of the Company.  In determining  whether an individual is a
         Significant Shareholder, an individual shall be treated as owning stock
         owned by certain relatives of the individual and certain stock owned by
         corporations in which the individual is a shareholder,  partnerships in
         which the  individual is a partner,  and estates or trusts of which the
         individual is a  beneficiary,  all as provided in Section 424(d) of the
         Code.

                  (n)  "Stock"  means  the $.01 par  value  common  stock of the
                        -----
         Company.

         2.2 Gender and Number.  Except when otherwise indicated by the context,
             -----------------
any masculine  terminology when used in the Plan also shall include the feminine
gender, and the definition of any term herein in the singular also shall include
the plural.

                                   ARTICLE III
                          ELIGIBILITY AND PARTICIPATION
                          -----------------------------

         All  Employees  are  eligible  to  participate  in the Plan and receive
Incentive Stock Options under the Plan.  Optionees in the Plan shall be selected
by the Board,  in its sole  discretion,  from among those  Employees who, in the
opinion  of the  Board,  are  in a  position  to  contribute  materially  to the
Company's  continued  growth  and  development  and to its  long-term  financial
success.

                                   ARTICLE IV
                                 ADMINISTRATION
                                 --------------

         The Board shall be responsible for administering the Plan.

                  (a)  The  Board  is  authorized  to  interpret  the  Plan;  to
         prescribe,  amend,  and rescind rules and  regulations  relating to the
         Plan; to provide for  conditions  and  assurances  deemed  necessary or
         advisable  to protect the  interests  of the  Company;  and to make all
         other  determinations  necessary or advisable for the administration of
         the Plan.  Determinations,  interpretations,  or other  actions made or
         taken by the Board with respect to the Plan and Options  granted  under
         the Plan shall be final and binding and conclusive for all purposes and
         upon all persons.

                  (b)  At  the   discretion   of  the  Board  the  Plan  may  be
         administered  by a  Committee  of two or  more  non-employee  Directors
         appointed by the Board (the "Committee"). The Committee shall have full
         power and  authority,  subject to the  limitations  of the Plan and any
         limitations imposed by the Board, to construe, interpret and administer
         the Plan and to make  determinations  which shall be final,  conclusive
         and  binding  upon  all  persons,  including  any  persons  having  any
         interests in any Options which may be granted  under the Plan,  and, by
         resolution or  resolutions  to provide for the creation and issuance of
         any Option, to fix the terms upon which, the time or times at or within
         which,  and the price or  prices  at which  any  shares of Stock may be

                                       2

         purchased from the Company upon the exercise of an Option.  Such terms,
         time or times and price or prices shall, in every case, be set forth or
         incorporated  by reference in the instrument or instruments  evidencing
         an Option, and shall be consistent with the provisions of the Plan.

                  (c) Where a Committee  has been created by the Board  pursuant
         to this  Article IV,  references  in the Plan to actions to be taken by
         the Board  shall be deemed to refer to the  Committee  as well,  except
         where limited by the Plan or by the Board.

                  (d) No member of the  Board or the  Committee  shall be liable
         for any action or determination  made in good faith with respect to the
         Plan or any Option granted under it.

                                    ARTICLE V
                            STOCK SUBJECT TO THE PLAN
                            -------------------------

         5.1 Number.  The total number of shares of Stock hereby made  available
             ------
and  reserved  for  issuance  under the Plan upon  exercise of Options  shall be
4,300,000  shares.  Notwithstanding  anything to the  contrary  contained in the
foregoing,  to the extent that options are issued under any other  current Stock
Option Plan  adopted by the Company,  the shares of Stock  reserved for issuance
pursuant  to Options  granted  under the Plan shall be  reduced.  The  aggregate
number  of  shares  of Stock  available  under  the Plan  shall  be  subject  to
adjustment as provided in Section 5.3.

         5.2 Unused Stock. If an Option shall expire or terminate for any reason
             ------------
without having been exercised in full, the  unpurchased  shares of Stock subject
thereto shall (unless the Plan shall have terminated) become available for other
Options under the Plan.

         5.3  Adjustment  in  Capitalization.  In the event of any change in the
              ------------------------------
outstanding   shares  of  Stock  by  reason  of  a  stock   dividend  or  split,
recapitalization,   reclassification,  or  other  similar  capital  change,  the
aggregate  number  of  shares  of  Stock  set  forth  in  Section  5.1  shall be
appropriately adjusted by the Board, whose determination shall be conclusive. In
any such case,  the  number and kind of shares of Stock that are  subject to any
Option and the Option price per share shall be proportionately and appropriately
adjusted  without any change in the  aggregate  Option price to be paid therefor
upon exercise of the Option.

                                   ARTICLE VI
                              DURATION OF THE PLAN
                              --------------------

         Subject to  approval of  shareholders,  the Plan shall be in effect for
ten years from the date of its adoption by the Board. Any Options outstanding at
the end of such period  shall remain in effect in  accordance  with their terms.
The Plan shall  terminate  before the end of such period if all Stock subject to
it has been  purchased  pursuant to the  exercise of Options  granted  under the
Plan.

                                   ARTICLE VII
                             TERMS OF STOCK OPTIONS
                             ----------------------

         7.1 Grant of Options. Subject to Section 5.1, Options may be granted to
             ----------------
Employees  at any time and from time to time as  determined  by the  Board.  The
Board shall have complete discretion in determining the terms and conditions and
number of Options granted to each Optionee.  In making such determinations,  the
Board may take into account the nature of services  rendered by such  Employees,
their  present and  potential  contributions  to the Company and its  Subsidiary
Corporations,  and such other factors as the Board in its discretion  shall deem
relevant.  The  Board is  expressly  given the  authority  to issue  amended  or
replacement  Options  with  respect  to  shares  of Stock  subject  to an Option
previously  granted  hereunder.  An amended Option amends the terms of an Option
previously  granted and thereby  supersedes the previous  Option.  A replacement
Option is similar to a new Option granted hereunder except that it provides that
it  shall be  forfeited  to the  extent  that a  previously  granted  Option  is
exercised,  or except that its issuance is conditioned upon the termination of a
previously granted Option.

         7.2 No  Tandem  Options.  Where an  Option  granted  under  the Plan is
             -------------------
intended to be an Incentive  Stock  Option,  the Option shall not contain  terms
pursuant to which the exercise of the Option would affect the  Optionee's  right

                                       3

to exercise another Option,  or vice versa,  such that the Option intended to be
an Incentive  Stock  Option  would be deemed a tandem  stock  option  within the
meaning of the regulations under Section 422 of the Code.

         7.3 Option  Agreement;  Terms and Conditions to Apply Unless  Otherwise
             -------------------------------------------------------------------
Specified. As determined by the Board on the date of grant, each Option shall be
- ---------
evidenced by an Option  agreement  (the "Option  Agreement")  that  includes the
non-transferability   provisions  required  by  Section  10.2  hereof  and  that
specifies: the Option price; the duration of the Option; the number of shares of
Stock to which the Option applies;  such vesting or exercisability  restrictions
which the Board may impose and any other terms or conditions which the Board may
impose.  All such terms and  conditions  shall be determined by the Board at the
time of grant of the Option.

                  (a) If not  otherwise  specified by the Board,  the  following
         terms and conditions shall apply to Options granted under the Plan:

                           (i) Term. The duration of the Option shall be for ten
                               ----
                  years from the date of grant.


                           (ii)   Exercise  of  Option.   Unless  an  Option  is
                                  --------------------
                  terminated as provided hereunder,  an Optionee may exercise an
                  Option  pursuant to a vesting and  exercisability  schedule as
                  determined  by the Board,  which  vesting  and  exercisability
                  schedule  shall provide that an Option held by an Optionee who
                  terminates his  employment  with the Company for reasons other
                  than death, permanent and total disability,  or termination of
                  employment   by  the   Company   for  cause  shall  upon  such
                  termination   become   exercisable   to  the   extent   vested
                  immediately prior to such termination.

                           (iii)  Termination.  Each Option granted  pursuant to
                                  -----------
                  the  Plan  shall   expire  upon  the  earliest  to  occur  of:

                                    (A) The date set forth in such  Option,  not
                           to  exceed  ten  years  from the date of grant  (five
                           years in the case of a Significant Shareholder);

                                    (B) The  completion of the merger or sale of
                           substantially  all  of the  Stock  or  assets  of the
                           Company with or to another  company in a  transaction
                           in which the Company is not the survivor,  except for
                           the  merger  of  the  Company  into  a   wholly-owned
                           subsidiary and,  provided that the Company shall have
                           given  the  Optionee  at  least  thirty  days'  prior
                           written  notice  of its  intent  to enter  into  such
                           merger  or  sale  (and  the  Company   shall  not  be
                           considered  the  surviving  corporation  for purposes
                           hereof if the  Company is the  survivor  of a reverse
                           triangular merger);

                                    (C) Ninety days following the termination of
                           the employment of an Optionee, except for termination
                           for cause by the  Company or  termination  because of
                           the Optionee's death or disability (in which event of
                           termination of employment due to the Optionee's death
                           or  disability,  the  Option  shall  expire  one year
                           following  the   termination   of  employment  of  an
                           Optionee); or

                                    (D) Immediately  upon the termination of the
                           employment of an Optionee by the Company for cause.

                           (iv)  Acceleration.  An  Option  shall  become  fully
                                 ------------
                  vested and exercisable  irrespective  of its other  provisions
                  (A) immediately  prior to the completion of the merger or sale
                  of  substantially  all of the stock or assets of  Company in a
                  transaction  in which the Company is not the survivor,  except
                  for the merger of the Company into a  wholly-owned  subsidiary
                  (and  the  Company  shall  not  be  considered  the  surviving
                  corporation for purposes hereof if the Company is the survivor
                  of a reverse  triangular  merger);  or (B) upon termination of
                  the  Optionee's  employment  with the Company or a  Subsidiary
                  Corporation because of death,  disability or normal retirement
                  upon reaching the age of sixty-five.

                           (v) Nontransferability. All Options granted under the
                               ------------------
                  Plan shall be nontransferable  by the Optionee,  other than by
                  will or the laws of  descent  and  distribution,  and shall be
                  exercisable  during  the  Optionee's   lifetime  only  by  the
                  Optionee.

                                       4

                  (b) The Board  shall be free to specify  terms and  conditions
         other than and in addition to those set forth above, in its discretion.

                  (c) All Option  Agreements shall incorporate the provisions of
         the Plan by reference.

         7.4 Option Price. No Option granted  pursuant to the Plan shall have an
             ------------
Option  price that is less than the Fair  Market  Value of Stock on the date the
Option is granted.  Incentive Stock Options granted to Significant  Shareholders
shall  have an Option  price of not less than 110% of the Fair  Market  Value of
Stock on the date of grant.  The  Option  exercise  price  shall be  subject  to
adjustment as provided in Section 5.3 above.

         7.5 $100,000 Per Year Limitation. To the extent that the aggregate fair
             ----------------------------
market value of Stock (determined as of the time the option with respect to such
Stock is granted) with respect to which  incentive stock options are exercisable
for the first time by any Optionee during any calendar year (under this Plan and
all other plans of the Company and any Parent Company or Subsidiary Corporation)
exceeds  $100,000,  such  options  shall be  treated  as  options  which are not
incentive  stock  options.  The foregoing  provision  shall be applied by taking
options into account in the order in which they were granted.

         7.6 Payment.  Payment for all shares of Stock shall be made at the time
             -------
that an Option, or any part thereof, is exercised, and no shares shall be issued
until full payment therefor has been made. Payment shall be made (i) in cash, or
(ii) if  acceptable  to the  Board,  in Stock or in some other  form;  provided,
however,  in the case of an  Incentive  Stock  Option,  that such  other form of
payment  does not  prevent  the  Option  from  qualifying  for  treatment  as an
"incentive stock option" within the meaning of the Code.

                                  ARTICLE VIII
                        WRITTEN NOTICE, ISSUANCE OF STOCK
                        ---------------------------------
                      CERTIFICATES, SHAREHOLDER PRIVILEGES
                      ------------------------------------

         8.1 Written  Notice.  An Optionee  wishing to exercise an Option  shall
             ---------------
give written  notice to the Company,  in the form and manner  prescribed  by the
Board.  Full  payment  for the shares of Stock to be  acquired  pursuant  to the
exercise of the Option must accompany the written notice.

         8.2 Issuance of Stock  Certificates.  As soon as practicable  after the
             -------------------------------
receipt of written notice and payment, the Company shall deliver to the Optionee
a certificate or certificates for the requisite number of shares of Stock.

         8.3  Privileges  of a  Shareholder.  An  Optionee  or any other  person
              -----------------------------
entitled  to  exercise  an Option  under  the  Option  Agreement  shall not have
shareholder privileges with respect to any Stock covered by the Option until the
date of issuance of a stock certificate for such Stock.

                                   ARTICLE IX
                      TERMINATION OF EMPLOYMENT OR SERVICES
                      -------------------------------------

         9.1 Death or Disability.  Subject to any prior partial  exercise of the
             -------------------
Option, if an Optionee's  employment terminates by reason of Optionee's death or
permanent  and total  disability,  the Option may be exercised up to one hundred
percent of the shares originally  subject to the Option at any time prior to the
expiration  date of the Option or within 12 months  after the date of such death
or  disability,  whichever  period is the  shorter,  by the  person  or  persons
entitled to do so under the  Optionee's  will or, if the Optionee  shall fail to
make a  testamentary  disposition  of an  Option  or shall  die  intestate,  the
Optionee's legal representative or representatives.

         9.2  Termination  other than for Cause or Due to Death. In the event of
              -------------------------------------------------
an  Optionee's  termination  of  employment  other  than by  reason  of death or
permanent  and total  disability,  the Optionee may exercise such portion of his
Option as was vested and exercisable by him at the date of such termination (the
"Termination  Date") at any time within ninety days of the Termination  Date. In
any event,  the Option cannot be exercised  after the  expiration of the term of
the Option.  Options not exercised within the applicable  period specified above
shall terminate.

                                       5

                  (a) In the case of an Employee, a change of duties or position
         within the  Company or an  assignment  of  employment  in a  Subsidiary
         Corporation or Parent Corporation of the Company,  if any, or from such
         a Corporation to the Company,  shall not be considered a termination of
         employment for purposes of the Plan.

                  (b) The Option  Agreements may contain such  provisions as the
         Board shall approve with reference to the effect of approved  leaves of
         absence upon termination of employment.

         9.3 Termination for Cause. In the event of an Optionee's termination of
             ---------------------
employment,  which termination is by the Company or a Subsidiary Corporation for
cause,  any  Option or  Options  held by him under the Plan,  to the  extent not
exercised  before such  termination,  shall terminate upon notice of termination
for cause.

                                    ARTICLE X
                               RIGHTS OF OPTIONEES
                               -------------------

         10.1 Service.  Nothing in the Plan shall interfere with or limit in any
              -------
way the right of the  Company  or a  Subsidiary  Corporation  to  terminate  any
Employee's  employment  at any time,  nor confer upon any  Employee any right to
continue in the employ of the Company or a Subsidiary Corporation.

         10.2  Non-transferability.  All Options granted under the Plan shall be
               -------------------
nontransferable  by the Optionee,  other than by will or the laws of descent and
distribution,  and shall be exercisable  during the Optionee's  lifetime only by
the Optionee.

                                   ARTICLE XI
                          OPTIONEE-EMPLOYEE'S TRANSFER
                          ----------------------------
                               OR LEAVE OF ABSENCE
                               -------------------

         For purposes of the Plan:

                  (a) A transfer  of an  Optionee  who is an  Employee  from the
         Company to a Subsidiary Corporation or Parent Corporation,  or from one
         such Corporation to another, or

                  (b) A leave of absence for such an Optionee  (i) which is duly
         authorized in writing by the Company or a Subsidiary  Corporation,  and
         (ii) if the Optionee holds an Incentive  Stock Option,  which qualifies
         under the applicable regulations under the Code which apply in the case
         of incentive stock options,

         shall not be deemed a  termination  of  employment.  However,  under no
circumstances  may an Optionee  exercise an Option  during any leave of absence,
unless authorized by the Board.

                                   ARTICLE XII
                          AMENDMENT, MODIFICATION, AND
                          ----------------------------
                             TERMINATION OF THE PLAN
                             -----------------------

                  (a) The Board may at any time  terminate and from time to time
         may amend or modify the Plan, provided, however, that no such action of
         the Board, without approval of the shareholders, may:

                           (i)  increase  the total amount of Stock which may be
                  purchased  through Options  granted under the Plan,  except as
                  provided in Article V;

                           (ii)  change  the  class  of  Employees  eligible  to
                  receive Options; or

                           (iii)  otherwise  amend  or  modify  the  Plan  where
                  approval  of  the  shareholders  is  required  by  any  law or
                  regulation governing the Company.

                  (b) No amendment,  modification,  or  termination  of the Plan
         shall in any manner adversely  affect any outstanding  Option under the
         Plan without the consent of the Optionee holding the Option.

                                       6

                                  ARTICLE XIII
                       ACQUISITION, MERGER OR LIQUIDATION
                       ----------------------------------

         13.1     Acquisition.
                  -----------

                  (a) In the event that an  acquisition  occurs with  respect to
         the Company, the Company shall have the option, but not the obligation,
         to  cancel  Options  outstanding  as of  the  effective  date  of  such
         acquisition,  whether  or not such  Options  are then  exercisable,  in
         return for payment to the  Optionees of an amount equal to a reasonable
         estimate of an amount  (hereinafter  the  "Spread"),  determined by the
         Board, equal to the difference between the net amount per share payable
         in the acquisition or as a result of the acquisition, less the exercise
         price of the Option. In estimating the Spread,  appropriate adjustments
         to give effect to the existence of the Options  shall be made,  such as
         deeming the Options to have been exercised,  with the Company receiving
         the  exercise  price  payable  thereunder,   and  treating  the  shares
         receivable  upon  exercise  of the  Options  as  being  outstanding  in
         determining the net amount per share.

                  (b) For purposes of this section,  an "acquisition" shall mean
         any transaction in which  substantially all of the Company's assets are
         acquired or in which a controlling amount of the Company's  outstanding
         shares are  acquired,  in each case by a single  person or entity or an
         affiliated group of persons and entities. For purposes of this section,
         a  controlling  amount  shall  mean  more  than 50% of the  issued  and
         outstanding shares of Stock of the Company.  The Company shall have the
         above option to cancel  Options  regardless of how the  acquisition  is
         effectuated,  whether by direct  purchase,  through a merger or similar
         corporate  transaction,  or otherwise.  In cases where the  acquisition
         consists of the  acquisition  of assets of the Company,  the net amount
         per share shall be calculated on the basis of the net amount receivable
         with  respect to shares  upon a  distribution  and  liquidation  by the
         Company after giving effect to expenses and charges,  including but not
         limited to taxes,  payable by the Company before the liquidation can be
         completed.

                  (c) Where the Company  does not exercise its option under this
         Section 13.1 the remaining provisions of this Article XIII shall apply,
         to the extent applicable.

         13.2 Merger or  Consolidation.  If the Company  shall be the  surviving
              ------------------------
corporation in any merger or  consolidation,  any Option granted hereunder shall
pertain to and apply to the securities to which a holder of the number of shares
of Stock  subject  to the  Option  would have been  entitled  in such  merger or
consolidation,  provided that the Company shall not be considered  the surviving
corporation  for  purposes  hereof if the  Company is the  survivor of a reverse
triangular merger.

         13.3 Other Transactions.  A dissolution or a liquidation of the Company
              ------------------
or a  merger  and  consolidation  in  which  the  Company  is not the  surviving
corporation  (the Company shall not be considered the surviving  corporation for
purposes hereof if the Company is the survivor of a reverse  triangular  merger)
shall cause every Option outstanding  hereunder to terminate as of the effective
date of such dissolution,  liquidation,  merger or consolidation.  However,  the
Optionee either (i) shall be offered a firm commitment  whereby the resulting or
surviving  corporation in a merger or consolidation  will tender to the Optionee
an  option  (the  "Substitute  Option")  to  purchase  its  shares  on terms and
conditions both as to number of shares and otherwise,  which will  substantially
preserve  to the  Optionee  the rights and  benefits  of the Option  outstanding
hereunder granted by the Company, or (ii) shall have the right immediately prior
to such  dissolution,  liquidation,  merger,  or  consolidation  to exercise any
unexercised Options whether or not then vested, subject to the provisions of the
Plan.  The Board shall have  absolute and  uncontrolled  discretion to determine
whether the Optionee has been offered a firm commitment and whether the tendered
Substitute  Option will  substantially  preserve to the  Optionee the rights and
benefits  of the Option  outstanding  hereunder.  In any event,  any  Substitute
Option for an Incentive Stock Option shall comply with the  requirements of Code
Section 424(a).

                                   ARTICLE XIV
                             SECURITIES REGISTRATION
                             -----------------------

         14.1 Securities Registration.  In the event that the Company shall deem
              -----------------------
it  necessary  or desirable to register  under the  Securities  Act of 1933,  as
amended, or any other applicable statute,  any Options or any Stock with respect
to which an Option may be or shall have been granted or exercised, or to qualify
any such Options or Stock under the Securities  Act of 1933, as amended,  or any

                                       7

other statute,  then the Optionee shall cooperate with the Company and take such
action as is necessary to permit  registration or  qualification of such Options
or Stock.

         14.2  Representations.  Unless  the  Company  has  determined  that the
               ---------------
following representation is unnecessary,  each person exercising an Option under
the Plan may be required by the  Company,  as a condition to the issuance of the
shares pursuant to exercise of the Option,  to make a representation  in writing
(i) that he is acquiring  such shares for his own account for investment and not
with a view to, or for sale in connection  with,  the  distribution  of any part
thereof within the meaning of the  Securities Act of 1933,  (ii) that before any
transfer  in  connection  with the  resale of such  shares,  he will  obtain the
written opinion of counsel for the Company,  or other counsel  acceptable to the
Company,  that such shares may be transferred without registration  thereof. The
Company may also require that the certificates  representing such shares contain
legends reflecting the foregoing.  To the extent permitted by law, including the
Securities  Act of 1933,  nothing  herein  shall  restrict the right of a person
exercising an Option to sell the shares received in an open market transaction.

                                   ARTICLE XV
                                 TAX WITHHOLDING
                                 ---------------
         Whenever  shares of Stock are to be issued in  satisfaction  of Options
exercised  under the Plan,  the  Company  shall  have the power to  require  the
recipient of the Stock to remit to the Company an amount  sufficient  to satisfy
federal, state, and local withholding tax requirements, if any.

                                   ARTICLE XVI
                                 INDEMNIFICATION
                                 ---------------

         To the extent permitted by law, each person who is or shall have been a
member of the Board or the Committee  shall be indemnified  and held harmless by
the Company against and from any loss, cost,  liability,  or expense that may be
imposed upon or reasonably  incurred by him in connection with or resulting from
any claim, action, suit, or proceeding to which he may be a party or in which he
may be involved  by reason of any action  taken or failure to act under the Plan
and against and from any and all amounts paid by him in settlement thereof, with
the Company's  approval,  or paid by him in satisfaction of judgment in any such
action,  suit, or proceeding  against him, provided he shall give the Company an
opportunity,  at its own  expense,  to  handle  and  defend  the same  before he
undertakes  to handle and defend it on his own behalf.  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  of
incorporation or bylaws, as a matter of law, or otherwise, or any power that the
Company or any  Subsidiary  Corporation  may have to indemnify them or hold them
harmless.

                                  ARTICLE XVII
                               REQUIREMENTS OF LAW
                               -------------------

         17.1  Requirements  of Law. The granting of Options and the issuance of
               --------------------
shares  of  Stock  upon the  exercise  of an  Option  shall  be  subject  to all
applicable  laws,  rules,  and  regulations,   and  to  such  approvals  by  any
governmental agencies or national securities exchanges as may be required.

         17.2 Governing Law. The Plan,  and all agreements  hereunder,  shall be
              -------------
construed in accordance with and governed by the laws of the State of Colorado.

                                  ARTICLE XVIII
                             EFFECTIVE DATE OF PLAN
                             ----------------------

         The Plan shall be effective on March 27, 1997.

                                       8

                                   ARTICLE XIX
                              COMPLIANCE WITH CODE
                              --------------------

         Incentive  Stock Options  granted  hereunder are intended to qualify as
"incentive  stock  options"  under Code ss. 422. If any provision of the Plan is
susceptible to more than one interpretation,  such interpretation shall be given
thereto as is consistent  with  Incentive  Stock Options  granted under the Plan
being treated as incentive stock options under the Code.

                                   ARTICLE XX
                        NO OBLIGATION TO EXERCISE OPTION
                        --------------------------------

         The granting of an Option shall  impose no  obligation  upon the holder
thereof to exercise such Option.

                                   ARTICLE XXI
                              SHAREHOLDER APPROVAL
                              --------------------

         The Plan was approved by a vote of the majority of the shares of common
stock of the Company on May 21, 1997.

         THIS INCENTIVE  STOCK OPTION PLAN was adopted by the Board of Directors
of St. Mary Land &  ExplorationCompany  on March 27,  1997,  to be effective
upon  adoption,  and was amended by the Board of Directors on July 24, 1997,  on
March 25, 1999 to increase the number of shares  available  for  issuance  under
Article V to 1,650,000,  on January 27, 2000,  and on March 29, 2001 to increase
the number of shares available for issuance under Article V by 1,000,000 shares.

                                   ST. MARY LAND & EXPLORATION COMPANY



                                   By:   /S/ RICHARD C. NORRIS
                                      ------------------------------------------
                                           Richard C. Norris
                                   Title:  Vice President-Finance,
                                           Secretary and Treasurer
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