As filed with the Securities and Exchange Commission on March 31, 1998
Registration No. ___________
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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DOMAIN ENERGY CORPORATION
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 76-0526147
(State or Other Jurisdiction of
Incorporation or Organization) (I.R.S. Employer Identification No.)
16801 GREENSPOINT PARK DRIVE
SUITE 200
HOUSTON, TEXAS 77060
(281) 618-1800
(Address, Including Zip Code, and Telephone Number,
including Area Code, of Registrant's Principal Executive Offices)
THE AMENDED AND RESTATED 1996 STOCK PURCHASE AND
OPTION PLAN FOR KEY EMPLOYEES OF DOMAIN ENERGY CORPORATION
AND AFFILIATES AND THE DOMAIN ENERGY CORPORATION 1997 STOCK
OPTION PLAN FOR NONEMPLOYEE DIRECTORS
(Full Title of Plans)
MICHAEL V. RONCA COPIES TO:
PRESIDENT AND CHIEF EXECUTIVE OFFICER
P.O. BOX 2229 JAMES L. RICE III, ESQ.
HOUSTON, TEXAS 77252-2229 WEIL, GOTSHAL & MANGES LLP
(281) 618-1800 700 LOUISIANA, SUITE 1600
HOUSTON, TEXAS 77002
(713) 546-5000
(NAME AND ADDRESS, INCLUDING ZIP CODE,
AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
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<S> <C> <C> <C> <C>
Proposed Maximum Proposed Maximum
Offering Price Per Aggregate Offering Amount of Registration
Title of Securities to be Registered Amount to be Registered(1) Share Price(3) Fee
- ----------------------------------------------------------------------------------------------------------------------------------
Common Stock, par value $.01 per share 917,101 shares(2) $13.72(3) $2,783,975 $821.27
==================================================================================================================================
</TABLE>
(1) Plus such indeterminate number of shares of Common Stock of the Registrant
as may be issued to prevent dilution resulting from stock dividends, stock
splits or similar transactions in accordance with Rule 416 under the Securities
Act of 1933, as amended.
(2) 867,091 of such shares are issuable upon the exercise of outstanding
options granted or options available for grant under the Amended and Restated
1996 Stock Purchase and Option Plan for Key Employees of Domain Energy
Corporation and Affiliates and 50,010 of such shares are issuable upon the
exercise of outstanding options granted or options available for grant under the
Domain Energy Corporation 1997 Stock Option Plan for Nonemployee Directors.
(3) Of the 917,101 shares to be registered pursuant to this Form S-8, 421,258
are exercisable for $.01 per share, 421,258 are exercisable for $4.18 per share
and 20,010 are exercisable for $13.50 per share. The exercise price for the
remaining shares has been estimated upon the basis of the price of securities of
the same class, using the average of the high and low prices reported by the New
York Stock Exchange for purposes of calculating the registration fee pursuant to
Rule 457(h) of the Securities Act of 1933, as amended.
===============================================================================
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
ITEM 1. PLAN INFORMATION.
The documents containing the information specified in Part I
of this Registration Statement will be sent or given to employees as specified
by Rule 428(b)(1). Such documents are not required to be and are not filed with
the Securities and Exchange Commission (the "Commission") either as part of this
Registration Statement or as prospectuses or prospectus supplements pursuant to
Rule 424. These documents and the documents incorporated by reference in this
Registration Statement pursuant to Item 3 of Part II of this Form S-8, taken
together, constitute a prospectus that meets the requirements of Section 10(a)
of the Securities Act of 1933, as amended (the "Securities Act").
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.
Upon written or oral request, any of the documents
incorporated by reference in Item 3 of Part II of this Registration Statement
(which documents are incorporated by reference in the Section 10(a) Prospectus),
other documents required to be delivered to eligible employees pursuant to Rule
428(b) and additional information about the Amended and Restated 1996 Stock
Purchase and Option Plan for Key Employees of Domain Energy Corporation and
Affiliates and the Domain Energy Corporation 1997 Stock Option Plan for
Nonemployee Directors and their respective administrators is available without
charge by contacting:
Domain Energy Corporation
P.O. Box 2229
Houston, Texas 77252-2229
(281) 618-1800
Attention: Rick G. Lester
Chief Financial Officer
I-1
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed with the Commission by Domain
Energy Corporation (the "Company") are incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1997 filed with the Commission under the Securities
Exchange Act of 1934, as amended (the "Exchange Act");
(b) All reports filed by the Company pursuant to Sections
13(a) or 15(d) of the Exchange Act since December 31, 1997; and
(c) The description of the Company's Common Stock, par value
$.01 per share, contained in Amendment No. 1 to the Company's Registration
Statement on Form 8-A, filed with the Commission on June 23, 1997, and including
any amendments or reports filed for the purpose of updating such description.
All documents subsequently filed by the Company with the
Commission pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act,
prior to the filing of a post-effective amendment to this Registration Statement
which indicates that all securities offered have been sold or which deregisters
all securities then remaining unsold, shall be deemed to be incorporated by
reference in this Registration Statement and to be a part hereof from the
respective date of filing of each such document.
Any statement or information contained herein or in any
document all or part of which is incorporated or deemed to be incorporated by
reference in this Registration Statement shall be deemed to be modified or
superseded for purposes of this Registration Statement to the extent that a
statement or information contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference in this
Registration Statement modifies or supersedes such statement or information. Any
such statement or information so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Registration
Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 102 of the Delaware General Corporation Law (the
"DGCL") allows a corporation to eliminate the personal liability of directors of
a corporation to the corporation or to any of its stockholders for monetary
damage for a breach of his fiduciary duty as a director, except in the case
where the director breached his duty of loyalty, failed to act in good faith,
engaged in intentional misconduct or knowingly violated a law, authorized the
payment of a dividend or approved a stock repurchase in violation of Delaware
corporate law or obtained an improper personal benefit. The Company's Amended
and Restated Certificate of Incorporation contains a provision which, in
substance, eliminates directors' personal liability as set forth above.
II-1
<PAGE>
Section 145 of the DGCL provides that a corporation may
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative, by reason of the fact that he
is or was a director, officer, employee or agent of the corporation or is or was
serving at its request in such capacity in another corporation or business
association against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in connection
with such action, suit or proceeding if he acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the
corporation and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The Company's Amended and
Restated Certificate of Incorporation contains a provision which, in substance,
provides for indemnification as set forth above.
The Company has purchased directors' and officers' liability
insurance, which will indemnify the directors and officers of the Company
against damages arising out of certain kinds of claims that might be made
against them based on their negligent acts or omissions while acting in their
capacity as such.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
4.1 - Amended and Restated Certificate of Incorporation of
the Company (incorporated by reference herein to
Exhibit 3.1 of the Company's Quarterly Report on Form
10-Q for the quarterly period ended June 30, 1997
filed on August 13, 1997).
4.2 - Second Amended and Restated By-laws of the Company
(incorporated by reference herein to Exhibit 3.2 of
the Company's Quarterly Report on Form 10-Q for the
quarterly period ended June 30, 1997 filed on August
13, 1997).
4.3 - Amended and Restated 1996 Stock Purchase and Option
Plan for Key Employees of Domain Energy Corporation
and Affiliates.
4.4 - Domain Energy Corporation 1997 Stock Option Plan for
Nonemployee Directors.
5.1 - Opinion of Weil, Gotshal & Manges LLP regarding
validity of the securities being registered.
23.1 - Consent of Deloitte & Touche LLP.
23.2 - Consent of Weil, Gotshal & Manges LLP. Reference is
made to Exhibit 5.1.
24.1 - Powers of Attorney (set forth on the signature page to
this Registration Statement).
II-2
<PAGE>
ITEM 9. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this
Registration Statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of
the Registration Statement (or the most
recent post-effective amendment thereof)
which, individually or in the aggregate,
represent a fundamental change in the
information set forth in the Registration
Statement (notwithstanding the foregoing,
any increase or decrease in volume of
securities offered (if the total dollar
value of securities offered would not exceed
that which was registered) and any deviation
from the low or high and of the estimated
maximum offering range may be reflected in
the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and
price represent no more than 20 percent
change in the maximum aggregate offering
price set forth in the "Calculation of
Registration Fee" table in the effective
Registration Statement);
(iii) To include any material information with
respect to the plan of distribution not
previously disclosed in the Registration
Statement or any material change to such
information in the Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed with or furnished to the Commission by
the Company pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in the
Registration Statement.
(2) That, for the purpose of determining any liability
under the Securities Act, each such post-effective
amendment shall be deemed to be a new Registration
Statement relating to the securities offered therein,
and the offering of such securities at that time
shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being
registered which remain unsold at the termination of
the offering.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities
Act, each filing of the registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Exchange Act that is
incorporated by reference in the Registration Statement shall
be deemed to be a new Registration Statement relating to the
securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and
controlling persons of the registrant pursuant to the
foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the
Securities Act and is, therefore,
II-3
<PAGE>
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it
is against public policy as expressed in the Securities Act
and will be governed by the final adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, 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 Houston, State of Texas, on this 31st day of
March, 1998.
DOMAIN ENERGY CORPORATION
By: /s/ Rick G. Lester
---------------------------
Name: Rick G. Lester
Title: Vice President, Chief
Financial Officer and
and Treasurer
POWERS OF ATTORNEY
Each person whose signature appears below hereby designates,
constitutes and appoints Michael V. Ronca and Rick G. Lester, and each of them
(with full power to each of them to act alone), as his true and lawful
attorneys-in-fact and agents, with full power of substitution and resubstitution
(the "Attorneys-in- Fact"), for him and in his name, place and stead, in any and
all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement on Form S-8 (the "Registration
Statement"), which amendments may make such changes in the Registration
Statement as either Attorney-in-Fact deems appropriate, and to file the same,
with all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, and hereby grants to such Attorneys-in-Fact,
and each of them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said Attorneys-in-Fact or any of them or his or their substitute or
substitutes may lawfully do or cause to be done by virtue hereof.
P-1
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE Title Date
--------- ----- ----
<S> <C> <C>
/s/ Michael V. Ronca President, Chief Executive Officer March 31, 1998
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Michael V. Ronca and Director (principal executive
officer)
/s/ Rick G. Lester Vice President, Chief Financial March 31, 1998
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Rick G. Lester Officer and Treasurer (principal
financial and accounting officer)
/s/ Michael L. Harvey Executive Vice President and March 31, 1998
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Michael L. Harvey Director
/s/ Jonathan S. Linker Chairman of the Board of March 31, 1998
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Jonathan S. Linker Directors
/s/ Steven H. Pruett Director March 31, 1998
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Steven H. Pruett
</TABLE>
P-2
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ---------- -----------
4.1 - Amended and Restated Certificate of Incorporation of
the Company (incorporated by reference herein to
Exhibit 3.1 of the Company's Quarterly Report on Form
10-Q for the quarterly period ended June 30, 1997
filed on August 13, 1997).
4.2 - Second Amended and Restated By-laws of the Company
(incorporated by reference herein to Exhibit 3.2 of
the Company's Quarterly Report on Form 10-Q for the
quarterly period ended June 30, 1997 filed on August
13, 1997).
4.3 - Amended and Restated 1996 Stock Purchase and Option
Plan for Key Employees of Domain Energy Corporation
and Affiliates.
4.4 - Domain Energy Corporation 1997 Stock Option Plan for
Nonemployee Directors.
5.1 - Opinion of Weil, Gotshal & Manges LLP regarding
validity of the securities being registered.
23.1 - Consent of Deloitte & Touche LLP.
23.2 - Consent of Weil, Gotshal & Manges LLP. Reference is
made to Exhibit 5.1.
24.1 - Powers of Attorney (set forth on the signature page to
this Registration Statement).
P-3
HOFS02...:\72\41872\0001\1612\FRM9197T.31D
EXHIBIT 4.3
AMENDED AND RESTATED
1996 STOCK PURCHASE AND OPTION PLAN
FOR KEY EMPLOYEES OF
DOMAIN ENERGY CORPORATION AND AFFILIATES
1. Purpose of Plan
---------------
The Amended and Restated 1996 Stock Purchase and Option Plan for Key
Employees of Domain Energy Corporation and Affiliates (the "Plan") is designed:
(a) to promote the long term financial interests and growth of Domain
Energy Corporation (the "Corporation") and its affiliates by attracting and
retaining management personnel with the training, experience and ability to
enable them to make a substantial contribution to the success of the
Corporation's business;
(b) to motivate management personnel by means of growth-related
incentives to achieve long range goals; and
(c) to further the alignment of interests of participants with those of
the stockholders of the Corporation through opportunities for increased stock,
or stock-based, ownership in the Corporation.
2. Definitions
-----------
As used in the Plan, the following words shall have the following
meanings:
(a) "Affiliate" means, with respect to the Corporation, any corporation
directly or indirectly controlling, controlled by, or under common control with,
the Corporation or any other entity designated by the Board of Directors of the
Corporation in which the Corporation or an Affiliate has an interest.
(b) "Board of Directors" means the Board of Directors of the
Corporation.
(c) "Change of Control" shall mean the occurrence of either (x) the
purchase or other acquisition by any person, entity or group (within the meaning
of section 13(d) of 14(d) of the Securities Exchange Act of 1934, or any
comparable successor provisions) of persons or entities (a "Group"), other than
the FRC Entities, of (i) ownership of fifty percent (50%)
<PAGE>
or more of the combined voting power of the Corporation's then outstanding
voting securities entitled to vote generally or (ii) all or substantially all of
the direct and indirect assets of the Company and its subsidiaries or (y) any
merger, consolidation, reorganization or other business combination of the
Corporation with or into any other entity which results in a person, entity or
Group other than First Reserve or any of its Affiliates owning fifty percent
(50%) or more of the combined voting power of the surviving or resulting
corporation's then outstanding voting securities entitled to vote generally.
(d) "Committee" means the Compensation Committee of the Board of
Directors.
(e) "Common Stock" or "Share" means common stock of the Corporation
which may be authorized but unissued, or issued and reacquired.
(f) "Employee" means a person, including an officer, in the regular
full-time employment of the Corporation or one of its Affiliates who, in the
opinion of the Committee, is, or is expected to be, primarily responsible for
the management, growth or protection of some part or all of the business of the
Corporation.
(g) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(h) "Fair Market Value" shall mean (A) if on the date as of which Fair
Market Value is being determined the Common Stock is listed on a national
securities exchange or is quoted in the NASDAQ System or the over-the-counter
market, the last sale price, regular way, of such security on the principal
national securities exchange on which such security is at the time listed, or
(B) if there have been no sales on any such exchange on any day, the average of
the highest bid and lowest asked prices on such exchange at the end of such day,
or (C) if on any day the Common Stock is not so listed, the average of the
representative bid and asked prices quoted in the NASDAQ System as of 4:00 P.M.,
New York time, or (D) if on any day the Common Stock is not quoted in the NASDAQ
System, the average of the highest bid and lowest asked prices on such day in
the domestic over-the-counter market as reported by the National Quotation
Bureau, Incorporated, or any similar successor organization, in each such case
of clauses (A)-(D) averaged over a period of 20 days consisting of the day as of
which Fair Market Value is being determined and the latest 19 consecutive
trading days prior to such day, or (E) if the Common Stock is not publicly
traded, then the fair market value of the Common Stock as determined in good
faith by the Committee.
2
<PAGE>
(i) "FRC Entities" shall mean investment funds or other entities for
which First Reserve Corporation acts as a general and/or managing partner or in
respect of which First Reserve Corporation provides investment advice, either
directly or through entities controlled by it.
(j) "Grant" means an award made to a Participant pursuant to the Plan
and described in Paragraph 5, including, without limitation, an award of an
Incentive Stock Option, Stock Option, Stock Appreciation Right, Dividend
Equivalent Right, Restricted Stock, Purchase Stock, Performance Units,
Performance Shares or Other Stock Based Grant or any combination of the
foregoing.
(k) "Grant Agreement" means an agreement between the Corporation and a
Participant that sets forth the terms, conditions and limitations applicable to
a Grant.
(l) "Participant" means an Employee, director or other person having a
unique relationship with the Corporation or one of its Affiliates, to whom one
or more Grants have been made and such Grants have not all been forfeited or
terminated under the Plan.
(m) "Stock-Based Grants" means the collective reference to the grant of
Stock Appreciation Rights, Dividend Equivalent Rights, Restricted Stock,
Performance Units, Performance Shares and Other Stock Based Grants.
(n) "Stock Options" means the collective reference to "Incentive Stock
Options" and "Other Stock Options".
(o) "Subsidiary" shall mean any corporation in an unbroken chain of
corporations beginning with the Corporation if each of the corporations, or
group of commonly controlled corporations, other than the last corporation in
the unbroken chain then owns stock possessing 50% or more of the total combined
voting power of all classes of stock in one of the other corporations in such
chain.
3. Administration of Plan
----------------------
(a) The Plan shall be administered by the Committee. Except as
provided in Section 4, the members of the Committee shall be eligible to be
selected for Grants under the Plan; provided, however, that the members of the
Committee shall qualify to administer the Plan for purposes of Rule 16b-3 (and
any other applicable rule) promulgated under Section 16(b) of the Exchange Act
to the extent that the Corporation is subject to such rule. The
3
<PAGE>
Committee may adopt its own rules of procedure, and action of a majority of the
members of the Committee taken at a meeting, or action taken without a meeting
by unanimous written consent, shall constitute action by the Committee. The
Committee shall have the power and authority to administer, construe and
interpret the Plan, to make rules for carrying it out and to make changes in
such rules. Any such interpretations, rules, and administration shall be
consistent with the basic purposes of the Plan.
(b) The Committee may delegate to the Chief Executive Officer and to
other senior officers of the Corporation its duties under the Plan subject to
such conditions and limitations as the Committee shall prescribe except that
only the Committee may designate and make Grants to Participants who are subject
to Section 16 of the Exchange Act.
(c) The Committee may employ attorneys, consultants, accountants,
appraisers, brokers or other persons. The Committee, the Corporation, and the
officers and directors of the Corporation shall be entitled to rely upon the
advice, opinions or valuations of any such persons. All actions taken and all
interpretations and determinations made by the Committee in good faith shall be
final and binding upon all Participants, the Corporation and all other
interested persons. No member of the Committee shall be personally liable for
any action, determination or interpretation made in good faith with respect to
the Plan or the Grants, and all members of the Committee shall be fully
protected by the Corporation with respect to any such action, determination or
interpretation.
4. Eligibility
-----------
The Committee may from time to time make Grants under the Plan to such
Employees, directors or other persons having a unique relationship with the
Corporation or any of its Affiliates, and in such form and having such terms,
conditions and limitations as the Committee may determine. Grants may be granted
singly, in combination or in tandem. The terms, conditions and limitations of
each Grant under the Plan shall be set forth in a Grant Agreement, in a form
approved by the Committee, consistent, however, with the terms of the Plan;
provided, however, such Grant Agreement shall contain provisions dealing with
the treatment of Grants in the event of the termination, death or disability of
a Participant, and may also include provisions concerning the treatment of
Grants in the event of a Change of Control of Corporation.
4
<PAGE>
5. Grants
------
From time to time, the Committee will determine the forms and amounts
of Grants for Participants. Such Grants may take the following forms in the
Committee's sole discretion:
(a) Incentive Stock Options - These are stock options within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended
("Code"), to purchase Common Stock. In addition to other restrictions contained
in the Plan, an option granted under this Paragraph 5(a), (i) may not be
exercised more than 10 years after the date it is granted, (ii) may not have an
option price less than the Fair Market Value of Common Stock on the date the
option is granted, (iii) must otherwise comply with Code Section 422, and (iv)
must be designated as an "Incentive Stock Option" by the Committee. The maximum
aggregate Fair Market Value of Common Stock (determined at the time of each
Grant) with respect to which Incentive Stock Options are first exercisable with
respect to any Participant under this Plan and any Incentive Stock Options
granted to the Participant for such year under any plans of the Corporation or
any Subsidiary in any calendar year is $100,000. Payment of the option price
shall be made in accordance with the terms of Paragraph 6, the Grant Agreement,
and of any applicable guidelines of the Committee in effect at the time.
(b) Other Stock Options - These are options to purchase Common Stock
which are not designated by the Committee as "Incentive Stock Options". At the
time of the Grant the Committee shall determine, and shall include in the Grant
Agreement or other Plan rules, the option exercise period, the option price, and
such other conditions or restrictions on the grant or exercise of the option as
the Committee deems appropriate, which may include the requirement that the
grant of options is predicated on the acquisition of Purchase Shares under
Paragraph 5(e) by the Optionee. In addition to other restrictions contained in
the Plan, an option granted under this Paragraph 5(b), (i) may not be exercised
more than 10 years after the date it is granted and (ii) may not have an option
exercise price less than 50% of the Fair Market Value of Common Stock on the
date the option is granted, provided that options to purchase up to 575 shares
of Common Stock may be granted with an exercise price of $.01 per share. Payment
of the option price shall be made in accordance with the terms of Paragraph 6,
the Grant Agreement and of any applicable guidelines of the Committee in effect
at the time.
(c) Stock Appreciation Rights - These are rights that on exercise
entitle the holder to receive the excess of (i) the Fair Market Value of a share
of Common Stock on the date of exercise over (ii) the Fair Market Value on the
date of Grant (the "base value") multiplied by
5
<PAGE>
(iii) the number of rights exercised as determined by the Committee. Stock
Appreciation Rights granted under the Plan may, but need not be, granted in
conjunction with an Option under Paragraph 5(a) or 5(b). The Committee, in the
Grant Agreement or by other Plan rules, may impose such conditions or
restrictions on the exercise of Stock Appreciation Rights as it deems
appropriate, and may terminate, amend, or suspend such Stock Appreciation Rights
at any time. No Stock Appreciation Right granted under this Plan may be
exercised less than 6 months or more than 10 years after the date it is granted
except in the event of death or disability of a Participant. To the extent that
any Stock Appreciation Right that shall have become exercisable, but shall not
have been exercised or cancelled or, by reason of any termination of employment,
shall have become non-exercisable, it shall be deemed to have been exercised
automatically, without any notice of exercise, on the last day on which it is
exercisable, provided that any conditions or limitations on its exercise are
satisfied (other than (i) notice of exercise and (ii) exercise or election to
exercise during the period prescribed) and the Stock Appreciation Right shall
then have value. Such exercise shall be deemed to specify that the holder elects
to receive cash and that such exercise of a Stock Appreciation Right shall be
effective as of the time of automatic exercise.
(d) Restricted Stock - Restricted Stock is Common Stock delivered to a
Participant with or without payment of consideration with restrictions or
conditions on the Participant's right to transfer or sell such stock; provided
that the price of any Restricted Stock delivered for consideration and not as
bonus stock may not be less than 50% of the Fair Market Value of Common Stock on
the date such Restricted Stock is granted or the price of such Restricted Stock
may be the par value. If a Participant irrevocably elects in writing in the
calendar year preceding a Grant of Restricted Stock, dividends paid on the
Restricted Stock granted may be paid in shares of Restricted Stock equal to the
cash dividend paid on Common Stock. The number of shares of Restricted Stock and
the restrictions or conditions on such shares shall be as the Committee
determines, in the Grant Agreement or by other Plan rules, and the certificate
for the Restricted Stock shall bear evidence of the restrictions or conditions.
No Restricted Stock may have a restriction period of less than 6 months, other
than in the case of death or disability.
(e) Purchase Stock - Purchase Stock refers to shares of Common Stock
offered to a Participant at such price as determined by the Committee, the
acquisition of which will make him eligible to receive under the Plan,
including, but not limited to, Other Stock Options; provided, however, that the
price of such Purchase Shares may not be less than 50% of the Fair Market Value
of the Common Stock on the date such shares of Purchase Stock are offered.
6
<PAGE>
(f) Dividend Equivalent Rights - These are rights to receive cash
payments from the Corporation at the same time and in the same amount as any
cash dividends paid on an equal number of shares of Common Stock to shareholders
of record during the period such rights are effective. The Committee, in the
Grant Agreement or by other Plan rules, may impose such restrictions and
conditions on the Dividend Equivalent Rights, including the date such rights
will terminate, as it deems appropriate, and may terminate, amend, or suspend
such Dividend Equivalent Rights at any time.
(g) Performance Units - These are rights to receive at a specified
future date payment in cash of an amount equal to all or a portion of the value
of a unit granted by the Committee. At the time of the Grant, in the Grant
Agreement or by other Plan rules, the Committee must determine the base value of
the unit, the performance factors applicable to the determination of the
ultimate payment value of the unit and the period over which the Corporation's
performance will be measured. These factors must include a minimum performance
standard for the Corporation below which no payment will be made and a maximum
performance level above which no increased payment will be made. The term over
which the Corporation's performance will be measured shall be not less than six
months.
(h) Performance Shares - These are rights to receive at a specified
future date payment in cash or Common Stock, as determined by the Committee, of
an amount equal to all or a portion of the average Fair Market Value for all
days that the Common Stock is traded during the last forty-five (45) days of the
specified period of performance of a specified number of shares of Common Stock
at the end of a specified period based on the Corporation's performance during
the period. At the time of the Grant, the Committee, in the Grant Agreement or
by Plan rules, will determine the factors which will govern the portion of the
rights so payable and the period over which the Corporation's performance will
be measured. The factors will be based on the Corporation's performance and must
include a minimum performance standard for the Corporation below which no
payment will be made and a maximum performance level above which no increased
payment will be made. The term over which the Corporation's performance will be
measured shall be not less than six months. Performance Shares will be granted
for no consideration.
(i) Other Stock-Based Grants - The Committee may make other Grants
under the Plan pursuant to which shares of Common Stock (which may, but need
not, be shares of Restricted Stock pursuant to Paragraph 5(d)) or other equity
securities of the Corporation are or may in the future be acquired, or Grants
denominated in stock units, including ones valued using measures other than
market value. Other Stock-Based Grants may be granted
7
<PAGE>
with or without consideration; provided, however, that the price of any such
Grant made for consideration that provides for the acquisition of shares of
Common Stock or other equity securities of the Corporation may not be less than
50% of the Fair Market Value of the Common Stock or such other equity securities
on the date of grant of such Grant. Such Other Stock-Based Grants may be made
alone, in addition to or in tandem with any Grant of any type made under the
Plan and must be consistent with the purposes of the Plan.
6. Payment of Option Price for Stock Options
-----------------------------------------
The payment of the option price for all shares purchased pursuant to
the exercise of Stock Options shall be (w) by cash or check in full on the date
of exercise (such cash or check may be delivered on behalf of a Participant by a
stock broker designated by the Corporation to whom the Participant has submitted
an irrevocable notice of election, on forms approved by the Corporation, to sell
shares of Common Stock deliverable upon exercise of a Stock Option), (x) through
the delivery of shares of Common Stock having a Fair Market Value equal to the
full amount of the exercise price, (y) by the withholding by the Corporation
from the shares of Common Stock issuable upon any exercise of the option that
number of shares having a Fair Market Value equal to such exercise price
pursuant to a written election delivered to the Committee prior to the date of
exercise, or (z) by a combination of such methods. The Committee shall determine
acceptable methods for tendering Common Stock and may impose such limitations
and prohibitions on the use of Common Stock to exercise a Stock Option as it
deems appropriate.
7. Limitations and Conditions
--------------------------
(a) The number of Shares available for Grants under this Plan shall be
1,150 shares of the authorized Common Stock as of the effective date of the
Plan, subject to adjustment in accordance with Section 9 or 10 hereof. The
number of Shares subject to Grants under this Plan to any one Participant shall
not be more than 450 shares, subject to adjustment in accordance with Section 9
or 10 hereof. Unless restricted by applicable law, Shares related to Grants that
are forfeited, terminated, cancelled or expire unexercised, shall immediately
become available for Grants.
(b) No Grants shall be made under the Plan beyond ten years after the
effective date of the Plan, but the terms of Grants made on or before the
expiration of the Plan may extend beyond such expiration. At the time a Grant is
made or amended or the terms or conditions of a Grant are changed, the Committee
may provide for limitations or conditions on such Grant.
8
<PAGE>
(c) Nothing contained herein shall affect the right of the Corporation
to terminate any Participant's employment at any time or for any reason.
(d) Deferrals of Grant payouts may be provided for, at the sole
discretion of the Committee, in the Grant Agreements.
(e) Except as otherwise prescribed by the Committee, the amounts of the
Grants for any employee of a Affiliate, along with interest, dividend, and other
expenses accrued on deferred Grants, shall be charged to the Participant's
employer during the period for which the Grant is made. If the Participant is
employed by more than one Affiliates or by both the Corporation and an Affiliate
during the period for which the Grant is made, the Participant's Grant and
related expenses will be allocated between the companies employing the
Participant in a manner prescribed by the Committee.
(f) Other than as specifically provided with regard to the death of a
Participant, no benefit under the Plan shall be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, or
charge, and any attempt to do so shall be void. No such benefit shall, prior to
receipt thereof by the Participant, be in any manner liable for or subject to
the debts, contracts, liabilities, engagements, or torts of the Participant.
(g) Participants shall not be, and shall not have any of the rights or
privileges of, stockholders of the Corporation in respect of any Shares
purchasable in connection with any Grant unless and until certificates
representing any such Shares have been issued by the Corporation to such
Participants.
(h) No election as to benefits or exercise of Stock Options, Stock
Appreciation Rights, or other rights may be made during a Participant's lifetime
by anyone other than the Participant except by a legal representative appointed
for or by the Participant.
(i) Absent express provisions to the contrary, any grant under this
Plan shall not be deemed compensation for purposes of computing benefits or
contributions under any retirement plan of the Corporation or its Subsidiaries
and shall not affect any benefits under any other benefit plan of any kind now
or subsequently in effect under which the availability or amount of benefits is
related to level of compensation. This Plan is not a "Retirement Plan" or
"Welfare Plan" under the Employee Retirement Income Security Act of 1974, as
amended.
9
<PAGE>
(j) Unless the Committee determines otherwise, no benefit or promise
under the Plan shall be secured by any specific assets of the Corporation or any
of its Subsidiaries, nor shall any assets of the Corporation or any of its
Subsidiaries be designated as attributable or allocated to the satisfaction of
the Corporation's obligations under the Plan.
8. Transfers and Leaves of Absence
-------------------------------
For purposes of the Plan, unless the Committee determines otherwise:
(a) a transfer of a Participant's employment without an intervening period of
separation among the Corporation and any Affiliate shall not be deemed a
termination of employment, and (b) a Participant who is granted in writing a
leave of absence shall be deemed to have remained in the employ of the
Corporation during such leave of absence.
9. Adjustments
-----------
In the event of any change in the outstanding Common Stock by reason of
a stock split, spin-off, stock dividend, stock combination or reclassification,
recapitalization or merger, Change of Control or similar event, or as required
under any Grant Agreement, the Committee may adjust appropriately the number of
Shares subject to the Plan and available for or covered by Grants and Share
prices related to outstanding Grants and make such other revisions to
outstanding Grants as it deems are equitably required.
10. Merger, Consolidation, Exchange,
Acquisition, Liquidation or Dissolution
---------------------------------------
In its absolute discretion, and on such terms and conditions as it
deems appropriate, coincident with or after the grant of any Stock Option or any
Stock-Based Grant, the Committee may provide, with respect to the merger or
consolidation of the Corporation into another corporation, the exchange of all
or substantially all of the assets of the Corporation for the securities of
another corporation, a Change of Control or the recapitalization,
reclassification, liquidation or dissolution of the Corporation, either a) that
such Stock Option or Stock-Based Grant cannot be exercised after such event, in
which case the Committee shall also provide, either by the terms of such Stock
Option or Stock-Based Grant or by a resolution adopted prior to the occurrence
of such event, that for some period of time prior to such event, such Stock
Option or Stock-Based Grant shall be exercisable as to all shares subject
thereto which are exercisable or, by virtue of the event, become exercisable,
notwithstanding anything to the contrary herein (but subject to the provisions
of Paragraph 7(b)) and that, upon the occurrence of such event, such Stock
Option or Stock-Based Grant
10
<PAGE>
shall terminate and be of no further force or effect; or b) that even if the
Stock Option or Stock-Based Grant shall remain exercisable after such event,
from and after such event, any such Stock Option or Stock-Based Grant shall be
exercisable only for the kind and amount of securities and/or other property, or
the cash equivalent thereof, receivable as a result of such event by the holder
of a number of shares of stock for which such Stock Option or Stock- Based Grant
could have been exercised immediately prior to such event.
In addition, in the event of a Change of Control, the
Committee may, in its absolute discretion and on such terms and conditions as it
deems appropriate, provide, either by the terms of such Stock Option or
Stock-Based Grant or by a resolution adopted prior to the occurrence of the
Change of Control, that such Stock Option or Stock-Based Grant shall be
exercisable as to all or any portion of the shares subject thereto,
notwithstanding anything to the contrary herein (but subject to the provisions
of Paragraph 7(b)).
11. Amendment and Termination
-------------------------
The Committee shall have the authority to make such amendments to any
terms and conditions applicable to outstanding Grants as are consistent with
this Plan provided that, except for adjustments under Paragraph 9 or 10 hereof,
no such action shall modify such Grant in a manner adverse to the Participant
without the Participant's consent except as such modification is provided for or
contemplated in the terms of the Grant.
The Board of Directors may amend, suspend or terminate the Plan except
that no such action, other than an action under Paragraph 9 or 10 hereof, may be
taken which would, without shareholder approval (but only if such approval is
necessary for exemption under Section 16(b) of the Exchange Act), increase the
aggregate number of Shares available for Grants under the Plan, decrease the
price of outstanding Options or Stock Appreciation Rights, change the
requirements relating to the Committee or extend the term of the Plan.
12. Withholding Taxes
-----------------
The Corporation shall have the right to deduct from any cash payment
made under the Plan any federal, state or local income or other taxes required
by law to be withheld with respect to such payment. It shall be a condition to
the obligation of the Corporation to deliver shares upon the exercise of a Stock
Option or Stock Appreciation Right, upon payment of Performance units or shares,
upon delivery of Restricted Stock or upon exercise, settlement or payment of any
Other Stock-Based Grant that the Participant pay to the Corporation such amount
as may be requested by the Corporation for the purpose of
11
<PAGE>
satisfying any liability for such withholding taxes. Any Grant Agreement may
provide that the Participant may elect, in accordance with any conditions set
forth in such Grant Agreement, to pay a portion or all of such withholding taxes
in shares of Common Stock.
13. Effective Date and Termination Dates
------------------------------------
The Plan shall be effective on and as of the date of its approval by
the stockholders of the Corporation and shall terminate ten years later, subject
to earlier termination by the Board of Directors pursuant to Paragraph 11;
provided, however, that any payment under the Plan which would constitute a
"parachute payment" under section 280G of the Code must be approved by a vote of
75% of the Corporation's stockholders to be effective.
12
HOFS02...:\72\41872\0003\1612\AGR2197L.12B
EXHIBIT 4.4
DOMAIN ENERGY CORPORATION
1997 STOCK OPTION PLAN FOR NONEMPLOYEE DIRECTORS
1. PURPOSES
Domain Energy Corporation, a Delaware corporation (the
"Company"), desires to attract and retain the services of outstanding
nonemployee directors by affording them an opportunity to acquire a proprietary
interest in the Company through automatic, non-discretionary awards of options
("Options") exercisable to purchase shares of Common Stock (as defined below),
and thus to create in such directors an increased interest in and a greater
concern for the welfare of the Company and its subsidiaries.
The Options offered pursuant to this Domain Energy Corporation
1997 Stock Option Plan for Nonemployee Directors (the "Plan") are a matter of
separate inducement and are not in lieu of any other compensation for the
services of any director.
The Options granted under the Plan are intended to be options
that do not meet the requirements for incentive stock options within the meaning
of Section 422 of the Internal Revenue Code of 1986, as amended (the "Code").
As used in the Plan, the term "subsidiary corporation" shall
mean a corporation coming within the definition of such term contained in
Section 424(f) of the Code.
2. STOCK SUBJECT TO THE PLAN
Options granted under the Plan shall be exercisable for shares
of the Company's common stock, par value $.01 per share ("Common Stock").
The total number of shares of Common Stock authorized for
issuance under the Plan upon the exercise of Options (the "Shares"), shall not
exceed, in the aggregate, 50,010 of the currently authorized shares of Common
Stock of the Company, such number to be subject to adjustment in accordance with
Section 13 of the Plan.
Shares available for issuance under the Plan may be either
authorized but unissued Shares, Shares of issued stock held in the Company's
treasury, or both, at the
<PAGE>
discretion of the Company. If and to the extent that Options granted under the
Plan expire or terminate without having been exercised, the Shares covered by
such expired or terminated Options may again be subject to an Option under the
Plan.
3. EFFECTIVE DATE AND TERM OF THE PLAN
The Plan shall become effective at 10:00 a.m., Houston time,
on June 27, 1997 (the "Effective Date"). The Plan shall terminate at the close
of business on June 27, 2007 (the "Termination Date"), unless sooner terminated
in accordance with its terms.
4. ADMINISTRATION
The Plan shall be administered by the Board of Directors of
the Company (the "Board of Directors"), which may designate from among its
members a committee to exercise all power and authority of the Board of
Directors at any time and from time to time to administer the Plan. (References
herein to the Board of Directors shall be deemed to include references to any
such committee, except as the context otherwise requires.) Subject to the
express provisions of the Plan, the Board of Directors shall have authority to
construe the Plan and the Options granted hereunder, to prescribe, amend and
rescind rules and regulations relating to the Plan and to make all other
ministerial determinations necessary or advisable for administering the Plan.
However, the timing of grants of Options under the Plan and the determination of
the amounts and prices of such Options shall be effected automatically in
accordance with the terms and provisions of the Plan without further action by
the Board of Directors.
The determination of the Board of Directors on matters
referred to in this Section 4 shall be conclusive.
5. ELIGIBILITY
Each member of the Board of Directors who is not an employee
of the Company or any subsidiary corporation of the Company shall be eligible to
be granted Options under the Plan ("Eligible Directors").
2
<PAGE>
6. OPTION GRANTS
On the Effective Date, each Eligible Director then in office
shall automatically be granted an Option to purchase 4,002 Shares (subject to
adjustment as provided in Section 13). Future Eligible Directors shall
automatically be granted an Option to purchase 4,002 Shares (subject to
adjustment as provided in Section 13) upon their initial appointment or election
to the Board of Directors. On the date of the annual meeting of stockholders of
the Company which takes place during the calendar year in which the first
anniversary of the Final Vesting Date (as defined below) of an Option occurs,
the holder of such Option shall automatically be granted an Option to purchase
3,000 Shares (subject to adjustment as provided in Section 13), provided such
holder is an Eligible Director in office immediately following such annual
meeting. Each Option granted to an Eligible Director pursuant to the Plan shall
be evidenced by a written agreement between the Company and such Eligible
Director substantially in the form of Exhibit A hereto (each such agreement, a
"Grant Agreement"). Any Eligible Director entitled to receive an Option grant
pursuant to the Plan may elect to decline the Option.
7. OPTION PRICE AND PAYMENT
The price for each Share purchasable upon exercise of any
Option granted hereunder shall be an amount equal to the fair market value per
Share on the date of grant. For purposes of the Plan, fair market value per
share with respect to any date of determination, means:
(i) if the Shares are listed or admitted to trading
on a national securities exchange in the United States or
reported through the National Association of Securities
Dealers Automated Quotation System-National Market System
("NASDAQ- NMS"), then the closing sale price on such exchange
or NASDAQ-NMS on such date or, if no trading occurred or
quotations were available on such date, then on the closest
preceding date on which the Shares were traded or quoted; or
(ii) if not so listed or reported but a regular,
active public market for the Shares exists (as determined in
the sole discretion of the Board of Directors, whose decision
shall be conclusive and binding), then the average of the
3
<PAGE>
closing bid and ask quotations per Share in the
over-the-counter market for such Shares in the United States
on such date or, if no such quotations are available on such
date, then on the closest date preceding such date. For
purposes of the foregoing, a market in which trading is
sporadic and the ask quotations generally exceed the bid
quotations by more than 15% shall not be deemed to be a
"regular, active public market."
If the Board of Directors determines that a regular, active
public market does not exist for the Shares, the Board of Directors shall
determine the fair market value of the Shares in its good faith judgment based
on the total number of shares of Common Stock then outstanding, taking into
account all outstanding options, warrants, rights or other securities
exercisable or exchangeable for, or convertible into, shares of Common Stock.
The payment of the option price for all Shares purchased
pursuant to the exercise of an Option shall be (w) by cash or check in full on
the date of exercise (such cash or check may be delivered on behalf of a holder
of an option by a stock broker designated by the Company to whom such holder has
submitted an irrevocable notice of election, on forms approved by the Company,
to sell shares of Common Stock deliverable upon exercise of an Option), (x)
through the delivery of shares of Common Stock having a fair market value equal
to the full amount of the exercise price, (y) by the withholding by the Company
from the Shares issuable upon any exercise of the Option that number of Shares
having a fair market value equal to such exercise price pursuant to a written
election delivered to the Board of Directors prior to the date of exercise, or
(z) by a combination of such methods. The Board of Directors shall determine
acceptable methods for tendering Common Stock and may impose such limitations
and prohibitions on the use of Common Stock to exercise an Option as it deems
appropriate. The fair market value per share of shares of Common Stock so
delivered or withheld shall be determined as of the date immediately preceding
the date on which the Option is exercised, or as may be required in order to
comply with or conform to the requirements of any applicable laws or
regulations.
4
<PAGE>
8. TERMS OF OPTIONS AND LIMITATIONS ON THE RIGHT OF
EXERCISE
Any Option granted to an Eligible Director shall be
exercisable, on a cumulative basis, for a period commencing on the date of grant
and ending ten (10) years after the date of grant of such Option as follows:
(a) up to one third of the total number of Shares
subject to an Option may be purchased as of the date of
grant of an Option;
(b) up to an additional one third of the total number of
Shares subject to an Option may be purchased as of the date of the annual
meeting of stockholders of the Company in the year following the year in which
the Option was granted ("Second Vesting Date"), provided that such holder is an
Eligible Director immediately following such annual meeting; and
(c) the balance of the total number of Shares subject to an
Option may be purchased as of the date of the annual meeting of stockholders of
the Company next following the Second Vesting Date (the "Final Vesting Date"),
provided such holder is an Eligible Director immediately following
such annual meeting.
To the extent that an Option is not exercised within the
period of exercisability specified therein, it shall expire as to the then
unexercised part.
In no event shall an Option granted hereunder be exercised for
a fraction of a Share or for less than one hundred (100) Shares (unless the
number purchased is the total balance for which the Option is then exercisable).
A person entitled to receive Shares upon the exercise of an
Option shall not have the rights of a stockholder with respect to such Shares
until the date of issuance of a stock certificate to him or her for such Shares;
provided, however, that until such stock certificate is issued, any holder of an
Option using previously acquired shares of Common Stock in payment of an option
exercise price shall continue to have the rights of a stockholder with respect
to such previously acquired shares of Common Stock.
5
<PAGE>
9. TERMINATION OF DIRECTORSHIP
If an Eligible Director's service as a director of the Company
is terminated, any Option previously granted to such Eligible Director shall, to
the extent not theretofore exercised, terminate and become null and void;
provided, however, that:
(a) if an Eligible Director holding an outstanding
Option dies, including during either the three (3) month or one (1)
year period, whichever is applicable, specified in clause (b)
immediately below, such Option shall, to the extent exercisable on the
date of death and not theretofore exercised, remain exercisable for one
(1) year after such Eligible Director's death, by such Eligible
Director's legatee, distributee, guardian or legal or personal
representative; and
(b) if the service of an Eligible Director holding an
outstanding Option is terminated by reason of (i) such Eligible
Director's disability (as described in Section 22(e)(3) of the Code),
(ii) voluntary retirement from service as a director of the Company or
(iii) failure of the Company to nominate for re-election such Eligible
Director who is otherwise eligible, except if such failure to nominate
for re-election is due to any act of (A) fraud or intentional
misrepresentation or (B) embezzlement, misappropriation or conversion
of assets or opportunities of the Company or any subsidiary corporation
or parent corporation of the Company (in which case, such Option shall
terminate and no longer be exercisable), such Option shall, to the
extent exercisable on the date of such termination and not therefore
exercised, remain exercisable at any time up to and including (X) three
(3) months after the date of such termination of service in the case of
termination by reason of voluntary retirement or failure of the Company
to nominate for re-election such Eligible Director who is otherwise
eligible, subject to the above exceptions thereto stated in this clause
(b), and (Y) one (1) year after the date of termination of service in
the case of termination by reason of disability.
None of the events described above shall extend the period of
exercisability of an Option beyond the expiration date thereof. If an Option
granted hereunder
6
<PAGE>
shall be exercised by the legal representative of a deceased Eligible Director
or former Eligible Director, or by a person who acquired an Option granted
hereunder by bequest or inheritance or by reason of the death of any Eligible
Director or former Eligible Director, written notice of such exercise shall be
accompanied by a certified copy of letters testamentary or equivalent proof of
the right of such legal representative or other person to exercise such Option.
10. EXERCISE OF OPTIONS
Options granted under the Plan, or any exercisable portion
thereof, may be exercised solely by delivering to the Secretary of the Company
all of the following prior to the time when the Option or such portion becomes
unexercisable under Sections 8 or 9:
(a) Notice in writing signed by the optionee or the other
person then entitled to exercise the Option or portion thereof, stating
that the Option or portion thereof is thereby exercised, such notice
complying with all applicable rules established by the Board of
Directors;
(b) Payment for the shares with respect to which such Option
or portion thereof is exercised (i) by cash or check on the date of
exercise (such cash or check may be delivered on behalf of a optionee
by a stock broker designated by the Company to whom the optionee has
submitted an irrevocable notice of election, on forms approved by the
Company, to sell shares of Common Stock deliverable upon exercise of an
Option), (ii) through the delivery of shares of Common Stock having a
fair market value equal to the full amount of the exercise price, (iii)
by the withholding by the Company from the shares of Common Stock
issuable upon any exercise of the Option that number of shares having a
fair market value equal to such exercise price pursuant to a written
election delivered to the Board of Directors prior to the date of
exercise, or (iv) by a combination of such methods;
(c) A written representation and agreement (which may be
included within the applicable Grant Agreement), in a form satisfactory
to the Board of Directors, signed by the optionee or other person then
entitled to exercise such Option or portion thereof, stating that the
shares of stock are being acquired for his own
7
<PAGE>
account, for investment and without any present intention of
distributing or reselling said shares or any of them except as may be
permitted under the Securities Act of 1933, as amended (the "Act"), and
the applicable rules and regulations thereunder, and that the optionee
or other person then entitled to exercise such Option or portion
thereof will indemnify the Company against and hold it free and
harmless from any loss, damage, expense or liability resulting to the
Company if any sale or distribution of the shares by such person is
contrary to the representation and agreement referred to above;
provided, however, that the Board of Directors may, in its absolute
discretion, take whatever additional actions it deems appropriate to
ensure the observance and performance of such representation and
agreement and to effect compliance with the Act and any other federal
or state securities laws or regulations;
(d) Full payment to the Company of all amounts which, under
federal, state or local law, it is required to withhold upon exercise
of the Option, which payment shall be (i) by cash or check or (ii) by
electing, pursuant to a written notice delivered to the Board of
Directors prior to the date of exercise, to have shares of Common Stock
(having an aggregate fair market value on the date of exercise
sufficient to satisfy the applicable tax withholding requirements)
withheld from the shares deliverable upon such exercise; and
(e) In the event the Option or portion thereof shall be
exercised pursuant to Section 9 by any person or persons other than the
optionee, appropriate proof of the right of such person or persons to
exercise the Option.
Without limiting the generality of the foregoing, the Board of Directors may
require an opinion of counsel acceptable to it to the effect that any subsequent
transfer of shares acquired on exercise of an Option does not violate the Act,
and may issue stop-transfer orders covering such shares. Share certificates
evidencing stock issued on exercise of this Option shall bear an appropriate
legend referring to the provisions of subsection (c) above and the agreements
herein. The written representation and agreement referred to in subsection (c)
above shall, however, not be required if the shares to be issued pursuant to
such exercise have
8
<PAGE>
been registered under the Act, and such registration is then effective in
respect of such shares.
11. USE OF PROCEEDS
The cash proceeds of the sale of Shares subject to the Options
granted hereunder are to be added to the general funds of the Company and used
for its general corporate purposes as the Board of Directors shall determine.
12. NON-TRANSFERABILITY OF OPTIONS
An Option granted hereunder shall not be transferable, whether
by operation of law or otherwise, other than by will or the laws of descent and
distribution, and any Option granted hereunder shall be exercisable, during the
lifetime of such holder, only by such holder. Except to the extent provided
above, Options may not be assigned, transferred, pledged, hypothecated or
disposed of in any way (whether by operation of law or otherwise) and shall not
be subject to execution, attachment or similar process.
13. ADJUSTMENTS
In the event of any change in the outstanding Common Stock by
reason of a stock split, spin-off, stock dividend, stock combination or
reclassification, recapitalization or merger, Change of Control (as defined
below) or similar event, or as required under any Grant Agreement, the Board of
Directors may adjust appropriately the number of Shares subject to the Plan and
available for or covered by each outstanding Option and make such other
revisions to outstanding Options as it deems are equitably required.
14. MERGER, CONSOLIDATION, EXCHANGE, ACQUISITION,
LIQUIDATION OR DISSOLUTION
In its absolute discretion, and on such terms and conditions
as it deems appropriate, coincident with or after the grant of any Option, the
Board of Directors may provide, with respect to the merger or consolidation of
the Company into another corporation, the exchange of all or substantially all
of the assets of the Company for the securities of another corporation, a Change
of Control or the recapitalization, reclassification, liquidation or dissolution
of the Company, either (a) that such Option
9
<PAGE>
cannot be exercised after such event, in which case the Board of Directors shall
also provide, either by the terms of such Option or by a resolution adopted
prior to the occurrence of such event, that for some period of time prior to
such event, such Option shall be exercisable as to all Shares subject thereto
which are exercisable or, by virtue of the event, become exercisable,
notwithstanding anything to the contrary herein (but subject to the expiration
thereof pursuant to Sections 8 and 9 hereof) and that, upon the occurrence of
such event, such Option shall terminate and be of no further force or effect; or
(b) that even if the Option shall remain exercisable after such event, from and
after such event, any such Option shall be exercisable only for the kind and
amount of securities and/or other property, or the cash equivalent thereof,
receivable as a result of such event by the holder of a number of shares of
stock for which such Option could have been exercised immediately prior to such
event.
In addition, in the event of a Change of Control, the Board of
Directors may, in its absolute discretion and on such terms and conditions as it
deems appropriate, provide, either by the terms of such Option or by a
resolution adopted prior to the occurrence of the Change of Control, that such
Option shall be exercisable as to all or any portion of the shares subject
thereto, notwithstanding anything to the contrary herein (but subject to the
expiration thereof pursuant to Sections 8 and 9 hereof).
As used in the Plan, the following words shall have the
following meanings:
(a) "Change of Control" shall mean the occurrence of either
(x) the purchase or other acquisition by any person, entity or group (within the
meaning of section 13(d) of 14(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), or any comparable successor provisions) of persons
or entities (a "Group"), other than the FRC Entities, of (i) ownership of fifty
percent (50%) or more of the combined voting power of the Company's then
outstanding voting securities entitled to vote generally or (ii) all or
substantially all of the direct and indirect assets of the Company and its
subsidiaries or (y) any merger, consolidation, reorganization or other business
combination of the Company with or into any other entity which results in a
person, entity or Group other than the FRC Entities owning fifty percent (50%)
or more of the combined voting power of the surviving or resulting
10
<PAGE>
corporation's then outstanding voting securities entitled to
vote generally; and
(b) "FRC Entities" shall mean investment funds or other
entities for which First Reserve Corporation acts as a general and/or managing
partner or in respect of which First Reserve Corporation provides investment
advice, either directly or through entities controlled by it.
15. RIGHT TO TERMINATE SERVICE
The Plan shall not impose any obligation on the Company or on
any subsidiary corporation or parent corporation thereof to continue the service
of any Eligible Director holding Options and shall not impose any obligation on
the part of any Eligible Director holding Options to remain in the service of
the Company or of any subsidiary corporation or parent corporation thereof.
16. ISSUANCE OF STOCK CERTIFICATES; LEGENDS; PAYMENT OF
EXPENSES
Upon any exercise of an Option granted hereunder and payment
of the purchase price therefor, a certificate or certificates representing the
Shares shall be issued by the Company in the name of the person exercising the
Option and shall be delivered to or upon the order of such person.
The Company may endorse such legend or legends upon the
certificates for Shares issued pursuant to the Plan and may issue such "stop
transfer" instructions to its transfer agent in respect of such Shares as the
Board of Directors, in its sole discretion, determines to be necessary or
appropriate to (a) prevent a violation of, or to perfect an exemption from, the
registration requirements of the Securities Act or (b) implement the provisions
of the Plan and any agreement between the Company and the optionee with respect
to such Shares.
The Company shall pay all issue or transfer taxes with respect
to the issuance or transfer of Shares. All Shares issued as provided herein
shall be fully paid and nonassessable to the extent permitted by law.
17. WITHHOLDING TAXES
The Company may require an Eligible Director
exercising an Option to pay to the Company, upon its demand,
11
<PAGE>
such amount as may be requested by the Company for the purpose of satisfying any
liability to withhold federal, state, local or foreign income or other taxes. If
the amount requested is not paid, the Company shall have no obligation to issue,
and the Eligible Director shall have no right to receive, the Shares subject to
such Option.
18. LISTING OF SHARES AND RELATED MATTERS
If at any time the Board of Directors shall determine that the
listing, registration or qualification of the Shares subject to such Option on
any securities exchange or under any applicable law, or the consent or approval
of any governmental regulatory authority, is necessary or desirable as a
condition of, or in connection with, the granting of an Option, or the issuance
of Shares thereunder, such Option may not be exercised in whole or in part
unless such listing, registration, qualification, consent or approval shall have
been effected or obtained free of any conditions not acceptable to the Board of
Directors.
19. AMENDMENT OF THE PLAN
The Board of Directors may, from time to time, amend the Plan;
provided, however, that (i) no amendment shall become effective without the
approval of the stockholders of the Company to the extent that stockholder
approval is required in order to comply with Rule 16b-3 (or any successor
provision) under the Exchange Act and (ii) if required in order to comply with
Rule 16b-3 under the Exchange Act, no provision of the Plan addressing
eligibility to participate in the Plan or the amount, price or timing of Options
to be granted under the Plan may be amended more than once every six months,
other than to comport with changes in the Code, the Employee Retirement Income
Security Act of 1974, as amended, or the rules promulgated thereunder. The
rights and obligations under any Option granted before amendment of the Plan or
any unexercised portion of such Option shall not be adversely affected by
amendment of the Plan or the Option without the consent of the holder of such
Option.
20. TERMINATION OR SUSPENSION OF THE PLAN
The Board of Directors may at any time suspend or terminate
the Plan. Options may not be granted while the Plan is suspended or after it is
terminated. Rights and obligations under any Option granted while the Plan is in
12
<PAGE>
effect shall not be altered or impaired by suspension or termination of the
Plan, except upon the consent of the person to whom the Option was granted. The
ministerial power of the Board of Directors to construe and administer any
Options under Section 4 that are granted prior to the termination or suspension
of the Plan shall continue after such termination or during such suspension.
21. PARTIAL INVALIDITY
The invalidity or illegality of any provision herein shall not
be deemed to affect the validity of any other provision.
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HOFS02...:\72\41872\0003\1612\PLN3207S.35B
EXHIBIT 5.1
[Weil, Gotshal & Manges LLP Letterhead]
March 31, 1998
Domain Energy Corporation
16801 Greenspoint Park Drive
Suite 200
Houston, Texas 77060
Gentlemen:
We have acted as counsel to Domain Energy Corporation, a
Delaware corporation (the "Company"), in connection with the preparation and
filing by the Company of a Registration Statement on Form S-8 (the "Registration
Statement") under the Securities Act of 1933, as amended, relating to the
proposed issuance of up to 917,101 shares (the "Shares") of the common stock,
par value $.01 per share, of the Company pursuant to the Amended and Restated
1996 Stock Purchase and Option Plan for Key Employees of Domain Energy
Corporation and Affiliates (the "1996 Plan") and the Domain Energy Corporation
1997 Stock Option Plan for Nonemployee Directors (the "Director Plan" and,
together with the 1996 Plan, the "Plans").
In so acting, we have examined originals or copies, certified
or otherwise identified to our satisfaction, of the Amended and Restated
Certificate of Incorporation of the Company, the Plans, the form of Amended and
Restated Non-Qualified Stock Option Agreement for the 1996 Plan (the "1996
Agreement"), the form of Letter Agreement for the Director Plan (the "Director
Agreement" and, together with the 1996 Agreement, the "Agreements"), the
resolutions adopted by the Board of Directors of the Company authorizing the
issuance of the Shares pursuant to the Plans (the "Resolutions") and such
corporate records, agreements, documents and other instruments, and such
certificates or comparable documents of public officials and of officers and
representatives of the Company, and have made such inquiries of such officers
and representatives as we have deemed relevant and necessary as a basis for the
opinions hereinafter set forth.
<PAGE>
In such examination, we have assumed the genuineness of all
signatures, the legal capacity of natural persons, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such latter documents. As to all questions of
fact material to this opinion that have not been independently established, we
have relied upon certificates or comparable documents of officers and
representatives of the Company.
Based on the foregoing, and subject to the qualifications
stated herein, we are of the opinion that:
1. The Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware.
2. The Shares have been duly authorized and, when issued and
delivered to the Participants (as defined in the 1996 Plan) and Eligible
Directors (as defined in the Director Plan), in accordance with the terms of the
Plans and the Agreements, will be validly issued, fully paid and non-assessable.
The opinions expressed herein are limited to the corporate
laws of the State of Delaware, and we express no opinion as to the effect on the
matters covered by this letter of the laws of any other jurisdiction. We hereby
consent to the filing of this opinion as an exhibit to the Registration
Statement.
Very truly yours,
Weil, Gotshal & Manges LLP
2
HOFS02...:\72\41872\0001\2166\OPN3038K.47A
Exhibit 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this
Registration Statement of Domain Energy Corporation on Form S-8 of our report
dated February 17, 1998, appearing in the Annual Report on Form 10-K of Domain
Energy Corporation for the year ended December 31, 1997.
Deloitte & Touche LLP
Houston, Texas
March 31, 1998
