<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 6, 1998
Registration No. 333-----
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------------
VISTA ENERGY RESOURCES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 75-2766114
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
550 WEST TEXAS AVENUE, SUITE 700
MIDLAND, TEXAS 79701
(Address of principal executive offices, including zip code)
--------------------
BUSINESS CONSULTANT AGREEMENT
AND
1994 MIDLAND RESOURCES, INC. LONG-TERM INCENTIVE PLAN
AND
1996 MIDLAND RESOURCES, INC. LONG-TERM INCENTIVE PLAN
AND
1995 DIRECTORS' STOCK OPTION PLAN
(Full title of the plans)
C. RANDALL HILL
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
VISTA ENERGY RESOURCES, INC.
550 WEST TEXAS AVENUE, SUITE 700
MIDLAND, TEXAS 79701
(915) 570-5045
(Name, address and telephone number of agent for service)
copy to:
A. WINSTON OXLEY
VINSON & ELKINS L.L.P.
3700 TRAMMELL CROW CENTER
2001 ROSS AVENUE
DALLAS, TEXAS 75201-2975
(214) 220-7700
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==========================================================================================================================
Proposed
Title of securities Amount to be Proposed maximum maximum aggregate Amount of
to be registered registered offering price per unit* offering price* registration fee
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par
value per share(1)................ 318,000(2) $ 3.1875 $1,013,625 $ 282
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Estimated solely for purposes of calculating the registration fee in
accordance with Rule 457(h) under the Securities Act of 1933 and based
upon the average of the high and low prices reported on the American
Stock Exchange on November 4, 1998.
(1) The warrant under the Business Consultant Agreement and the options
under the 1994 Midland Resources, Inc. Long-Term Incentive Plan, the
1996 Midland Resources, Inc. Long-Term Incentive Plan and the 1995
Directors' Stock Option Plan were previously issued by Midland
Resources, Inc. ("Midland"). Pursuant to the terms of a merger
agreement dated as of May 22, 1998 among Midland, Vista Resources
Partners, L.P., Vista Energy Resources, Inc. ("Vista") and Midland
Merger Co., Midland was merged into Vista. Pursuant to the terms of the
merger agreement, the options and the warrant previously issued by
Midland are now exercisable for shares of common stock, par value $.01
per share, of Vista.
(2) If, as a result of stock splits, stock dividends or similar
transactions, the number of securities purported to be registered on
this Registration Statement changes, the provisions of Rule 416 shall
apply to this Registration Statement, and this Registration Statement
shall be deemed to cover the additional securities resulting from the
split of, or dividend on, the securities covered by this Registration
Statement.
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<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents have been filed with the Securities and
Exchange Commission (the "Commission") by the Company, and are incorporated
herein by reference and made a part hereof:
(a) The Company's prospectus dated September 18, 1998, as filed
with the Commission pursuant to Rule 424(b) under the
Securities Act of 1933;
(b) The description of the Company's Common Stock, $.01 par value
per share, contained in Item 1 of the Company's Registration
Statement on Form 8-A filed with the Commission pursuant to
the Securities Exchange Act of 1934 (the "Exchange Act") on
October 26, 1998.
Each document filed by the Company pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date of this registration
statement and prior to the filing of a post-effective amendment 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 date of filing such
documents.
Any statement incorporated by reference herein shall be deemed to be
modified or superseded for purposes of this registration statement to the extent
that a statement contained herein or in any subsequent filed document which also
is or is deemed to be incorporated by reference herein modifies or supersedes
such statement. Any statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this registration.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article Eleven of the Certificate of Incorporation of the Company
provides that the Company shall indemnify its officers and directors to the
maximum extent allowed by the Delaware General Corporation Law. Pursuant to
Section 145 of the Delaware General Corporation Law, the Company generally has
the power to indemnify its present and former directors and officers against
expenses and liabilities incurred by them in connection with any suit to which
they are, or are threatened to be made, a party by reason of their serving in
those positions so long as they acted in good faith and in a manner they
reasonably believed to be in, or not opposed to, the best interests of the
Company, and with respect to any criminal action, so long as they had no
reasonable cause to believe their conduct was unlawful. With respect to suits by
or in the right of the Company, however, indemnification is generally limited to
attorneys' fees and other expenses and is not available if the person is
adjudged to be liable to the Company, unless the court determines that
indemnification is appropriate. The statute expressly provides that the power to
indemnify authorized thereby is not exclusive of any rights granted under any
bylaw, agreement, vote of stockholders or disinterested directors, or otherwise.
The Company also has the power to purchase and maintain insurance for its
directors and officers. Additionally, Article Eleven of the Certificate of
Incorporation provides that, in the event that an officer or director files suit
against the Company seeking indemnification of liabilities or expenses incurred,
the burden will be on the Company to prove that the indemnification would not be
permitted under the Delaware General Corporation Law.
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<PAGE> 3
The preceding discussion of the Company's Certificate of Incorporation
and Section 145 of the Delaware General Corporation Law is not intended to be
exhaustive and is qualified in its entirety by the Certificate of Incorporation
and Section 145 of the Delaware General Corporation Law.
The Company has entered into indemnity agreements with its directors
and officers. Pursuant to such agreements, the Company will, to the extent
permitted by applicable law, indemnify such persons against all expenses,
judgments, fines and penalties incurred in connection with the defense or
settlement of any actions brought against them by reason of the fact that they
were directors or officers of the Company or assumed certain responsibilities at
the direction of the Company.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
Unless otherwise indicated below as being incorporated by reference to
another filing of the Company with the Commission, each of the following
exhibits is filed herewith:
4.1 -- Business Consultant Agreement
4.2 -- 1994 Midland Resources, Inc. Long-Term Incentive
Plan
4.3 -- 1996 Midland Resources, Inc. Long-Term Incentive
Plan
4.4 -- 1995 Directors' Stock Option Plan.
5.1 -- Opinion of Vinson & Elkins L.L.P.
23.1 -- Consent of Vinson & Elkins L.L.P. (set forth in
Exhibit 5.1)
23.2 -- Consent of Arthur Andersen LLP, Independent Public
Accountants
24.1 -- Power of Attorney (included on the signature pages
of this Registration Statement)
ITEM 9. UNDERTAKINGS.
The Company 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; and
3
<PAGE> 4
(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 (1)(i) and (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 by the Company pursuant to
section 13 or section 15(d) of the Exchange Act that are incorporated by
reference in this Registration Statement.
(2) That, for the purposes 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.
(4) That, for purposes of determining any liability under the
Securities Act, each filing of the Company's annual report pursuant to section
13(a) or section 15(d) of the Exchange Act (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to 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.
(5) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Company pursuant to the foregoing provisions, or otherwise, the Company
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,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Company of expenses incurred or paid
by a director, officer or controlling person of the Company 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
Company 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.
4
<PAGE> 5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Company 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 Midland, State of Texas, on the 5th day of
November, 1998.
VISTA ENERGY RESOURCES, INC.
By: /s/ C. Randall Hill
-------------------------------------------
C. Randall Hill
Chairman of the Board and Chief Executive
Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints C. Randall Hill as his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities, to sign any
and all amendments, including pre- and post-effective amendments, to this
Registration Statement, and any registration statement relating to the offering
covered by this Registration Statement and filed pursuant to Rule 462(b) under
the Securities Act, and to file the same, with exhibits thereto and other
documents in connection therewith, with the Commission, granting unto said
attorney-in-fact and agent 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 attorney-in-fact and agent or his substitute 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 date indicated.
<TABLE>
<CAPTION>
Signature Capacity Date
--------- -------- ----
<S> <C> <C>
/s/ C. Randall Hill Chairman of the Board and Chief Executive November 5, 1998
- ------------------------------------------ Officer (principal executive officer,
C. Randall Hill principal financial officer and principal
accounting officer)
/s/ Steven D. Gray President and Director November 5, 1998
- ------------------------------------------
Steven D. Gray
/s/ Kenneth A. Hersh Director November 5, 1998
- ------------------------------------------
Kenneth A. Hersh
/s/ David R. Albin Director November 5, 1998
- ------------------------------------------
David R. Albin
</TABLE>
<PAGE> 6
<TABLE>
<S> <C> <C>
/s/ John S. Foster Director November 5, 1998
- ------------------------------------------
John S. Foster
/s/ John Q. Adams Director November 5, 1998
- ------------------------------------------
John Q. Adams
</TABLE>
<PAGE> 7
INDEX TO EXHIBITS
Unless otherwise indicated below as being incorporated by reference to
another filing of the Company with the Commission, each of the following
exhibits is filed herewith:
4.1 -- Business Consultant Agreement
4.2 -- 1994 Midland Resources, Inc. Long-Term Incentive
Plan
4.3 -- 1996 Midland Resources, Inc. Long-Term Incentive
Plan
4.4 -- 1995 Directors' Stock Option Plan.
5.1 -- Opinion of Vinson & Elkins L.L.P.
23.1 -- Consent of Vinson & Elkins L.L.P. (set forth in
Exhibit 5.1)
23.2 -- Consent of Arthur Andersen LLP, Independent Public
Accountants
24.1 -- Power of Attorney (included on the signature pages
of this Registration Statement)
<PAGE> 1
EXHIBIT 4.1
BUSINESS CONSULTANT AGREEMENT
AGREEMENT made effective the 25th day of February, 1997, at Houston,
Texas, between Midland Resources, Inc., a Texas corporation (the "Company"), and
Edward Kennard Andrew (the "Consultant").
In consideration of the mutual promises contained in this contract, the
parties agree as follows:
RECITALS
WHEREAS, the Company has called upon Consultant in the past for advice on
various matters to which the Consultant has expended a significant amount of
time and effort;
WHEREAS, the Company anticipates that it will call upon Consultant in the future
for similar service which it has found to be of benefit;
WHEREAS, the Company and Consultant realize that the demands upon Consultant to
provide the time and attention to respond to Company's requests will extend
beyond those historically given by Consultant and currently assumed or expected
by the Company to be given without compensation;
WHEREAS, the Company and Consultant wish to formalize a consulting arrangement
providing for reasonable compensation to Consultant;
WHEREAS, the Company and Consultant each believe that compensation in the form
of a warrant to purchase stock will allow each to achieve certain objectives;
WHEREAS, it is the desire of the Company to engage the services of the
Consultant to perform for the Company consulting services, including but not
limited to those regarding general financial advice and consulting, due
diligence services including checking and investigating with respect in
individuals, other consultants and businesses, market and marketing research,
analyzing financial strategies both long term and short term, arranging for
introductions of the Company and its representatives to individuals,
consultants, and companies with respect to which Consultant has contacts, and
providing advice to Company personnel in charge of shareholder relations
("Services");
WHEREAS, it is the intent of the Company and Consultant that Consultant act as
an independent contractor and not as an employee; and
WHEREAS, It is the desire of the Consultant to consult with the Board of
Directors and the officers of the Corporation.
<PAGE> 2
AGREEMENT
Term
1. The respective duties and obligations of the parties to this
agreement shall be for a period of two (2) years, commencing on February 25,
1997 and may be terminated by either party giving ninety (90) days' written
notice to the other party. If Consultant terminates this agreement for any
reason, he shall forfeit 1/24th of the compensation provided for herein for each
whole month remaining in the term hereof. If such compensation in the form of a
warrant to purchase common stock has been exercised, such stock shall be
returned to the Company, or if Consultant has sold such stock then Consultant
shall purchase such number of forfeited shares in the market and deliver those
shares to the Company. Termination of this agreement by Consultant due to
disability or death shall not require the forfeiture of any compensation.
Consultations
2. The Consultant shall make himself available to consult with the
Board of Directors and the officers of the Company, at reasonable times,
concerning matters pertaining to Services.
Employment of Assistants
3. The Consultant may, from time to time, retain the aid of
assistants or the services of other persons, companies, or firms that the
Consultant deems reasonably necessary in order to properly perform his duties
and obligations under this agreement. All costs to the Consultant for such
services shall be born by Consultant and not without prior written agreement
chargeable to the Company.
Limited Liability
4. The Consultant shall not be liable to the Company, or to anyone
who may claim any right due to his relationship with the Company, for any acts
or omissions on the part of the Consultant or the agents or employees of the
Consultant in the performance of the Consultant's services under this agreement,
except when such acts or omissions are due to willful misconduct or culpable
negligence. The Company shall hold the Consultant free and harmless from any
obligations, costs, claims, judgments, attorney's fees, or attachments arising
from or growing out of the services rendered to the Company pursuant to the
terms of this agreement or in any way connected with the rendering of such
services, except when the same shall arise due to the willful misconduct or
culpable negligence of the Consultant and the Consultant is adjudged to be
guilty of or liable due to willful misconduct or culpable negligence by a court
of competent jurisdiction.
2
<PAGE> 3
Compensation
5. For services rendered under this agreement, the Consultant shall
receive a warrant to purchase fifty thousand shares (50,000) of Company common
stock at per share price of $3.00, for four (4) years substantially in the form
of Exhibit A hereto. Consultant shall at all times be an independent contractor
to the Company.
Minimum Amount of Service
6. The Consultant shall not be required to devote a minimum number
of hours per month to the affairs of the Company. The Consultant shall devote
only so much time to the affairs of the Company as he and the Company mutually
determine. By way of guidance and not in limitation or requirement, Consultant
and Company estimate that over the course of this agreement Consultant will
expend approximately six hundred (600) hours. Consultant may, but shall not be
required to maintain a log of hours expended pursuant to this agreement. The
Consultant may represent, perform services for, and be employed by such
additional clients, persons, or companies as the Consultant, in his sole
discretion, sees fit.
Arbitration
7. Any controversy between the parties involving the construction or
application of any of the terms, covenants, or conditions of this agreement
shall, on the written request of one party served on the other, be submitted to
arbitration, which shall comply with and be governed by the provisions of the
Texas General Arbitration Act, Texas Revised Civil Statutes, Articles 224
through 238-6. Each of the parties to this agreement shall appoint one person as
an arbitrator to hear and determine the dispute, and each party shall attempt in
good faith to agree with the other as to a third arbitrator; if the parties
should prove unable to agree in this way, then the two arbitrators already
chosen shall select a third impartial arbitrator whose decision shall be final
and conclusive. The expenses of arbitration shall be borne by the losing party
or in such proportion as the arbitrators shall decide.
Confidentiality
8. Consultant understands the Company has public shareholders and
therefore he shall maintain the confidence of and not disclose to any other
person all information provided to Consultant that is of a non-public,
confidential, or proprietary nature without the express written consent of
Company. Consultant shall undertake to require any agents he may engage or
employ to comply with this provision as though they were a party hereto. Upon
the termination of this agreement Consultant shall return any such information
to Company. Consultant shall not personally trade based upon any material
non-public information that he becomes aware of as a result directly or
indirectly of this agreement.
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<PAGE> 4
Remedies
9. If any action at law or in equity is necessary to enforce or
interpret the terms of this agreement, the prevailing party shall be entitled to
reasonable attorney's fees, costs, and necessary disbursements in addition to
any other relief to which it may be entitled.
Texas Law to Apply
10. This agreement shall be construed under and in accordance with
the laws of the State of Texas, and all obligations of the parties created under
this agreement are performable in Harris County, Texas.
Parties Bound
11. This agreement shall be binding on and inure to the benefit of
the parties to it and their respective heirs, executors, administrators, legal
representatives, successors, and assigns when permitted by this agreement. The
Consultant shall not assign its obligations hereunder without the prior written
consent of the Company, which it may withhold for any reason. The Company's
rights hereunder shall inure to any successor whether by merger, reorganization
or otherwise.
Legal Construction
12. In the event that any one or more of the provisions contained in
this agreement shall for any reason be held to be invalid, illegal, or
unenforceable in any respect, such invalidity, illegality, or unenforceability
shall not affect any other provisions, and the agreement shall be construed as
if such invalid, illegal, or unenforceable provision had never been contained in
it.
Prior Agreements Superseded
13. agreement constitutes the sole and only agreement of the parties
to it and supersedes any prior understandings or written or oral agreements
between the parties respecting this subject matter.
Special Representations by Consultant
14. Consultant understands that the warrant to be given as
compensation and the shares issuable upon the exercise thereof may not be
registered under the federal or state securities laws and therefore may not be
sold or transferred without registration or an available exemption from
registration. Consultant understands that a legend may be placed upon such
warrant and any shares issued upon its exercise evidencing such restrictions and
stop transfer orders may be placed against such shares. Consultant is
sophisticated in business matters and knowledgeable in securities matters and
understands the merits and risks associated with receipt of such warrant and
shares. Consultant is knowledgeable of the Company and has asked such questions
of the Company and received such answers and other information as he deems
necessary to accept the warrant as compensation.
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<PAGE> 5
Special Representation by Company
15. Company will use its best efforts to register the shares issuable
upon the exercise of the Warrant on a Registration Statement on Form S-8,
subject in all respects to the availability of such form for such purpose and
such filing not, in the sole opinion of the Company, being unduly burdensome or
expensive.
Executed at Houston, Texas, on the day and year first above written.
COMPANY:
Midland Resources, Inc.
By:
--------------------------------
Deas H. Warley III, President
CONSULTANT:
Edward Kennard Andrew
- -----------------------------------
(Signature)
5
<PAGE> 6
Exhibit A
WARRANT CERTIFICATE
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND NEITHER THE SECURITIES NOR ANY
INTEREST THEREIN MAY BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF IN
THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION UNDER SUCH ACT AND THE RULES
AND REGULATIONS THEREUNDER; PROVIDED FURTHER, THE SECURITIES REPRESENTED BY THIS
CERTIFICATE ARE NOT TRANSFERABLE BY OR FROM THE WARRANT HOLDER NAMED HEREIN
WITHOUT THE EXPRESS WRITTEN CONSENT OF MIDLAND RESOURCES, INC.
Issue Date: FEBRUARY 25, 1997 50,000 Warrants to
Purchase Common Stock
Void after 5:00 P.M.
FEBRUARY 24, 2001 Certificate No. KA-1
WARRANTS TO PURCHASE COMMON STOCK OF
MIDLAND RESOURCES, INC.
Midland Resources, Inc., a Texas corporation (the "Company"),
hereby certifies that, for value received, EDWARD KENNARD ANDREW, the holder of
these Warrants (the"Warrants," and each right to purchase a share of Common
Stock, a "Warrant" ) is entitled, subject to the terms set forth below, at any
time, or from time to time, to purchase from the Company 50,000 fully paid and
nonassessable shares of Common Stock of the Company. These Warrants and all
rights hereunder, to the extent such rights shall not have been exercised, shall
terminate and become null and void at 5:00 p.m., Houston, Texas time, on
FEBRUARY 24, 2001 (the "Expiration Date"). For purpose of these Warrants, the
term "Common Stock" shall mean the common stock, par value $0.001 per share of
Midland Resources, Inc. having such rights and privileges as exist on the date
hereof.
These Warrants shall be subject to the following terms and
conditions:
SECTION 1. EXERCISE OF WARRANT; RESERVATION OF COMMON STOCK; EXERCISE
PRICE; ADJUSTMENTS RELATIVE TO EXERCISE OF WARRANT.
A. EXERCISE OF WARRANTS. Subject to the conditions set
forth in this Section 1, the holder of any warrant may, at such holder's option,
exercise such holder's rights under all or any part of the Warrants to purchase
one share of Common Stock in exchange for one Warrant ( the "Warrant Shares") at
a price per share (the "Exercise Price") equal to $3.00, payable in cash, at any
time and from time to time prior to the Expiration Date. The Warrant Shares and
the Exercise
A-1
<PAGE> 7
Price are subject to certain adjustments set forth in this Section 1, and the
terms "Warrant Shares" and "Exercise Price" as used herein shall as of any time
be deemed to include all such adjustments to be given effect as of such time in
accordance with the terms hereof.
B. RESERVATION OF COMMON STOCK. The Company covenants
that, while these Warrants are exercisable, it shall reserve from its authorized
and unissued Common Stock a sufficient number of shares to provide for the
delivery of stock pursuant to an exercise of these Warrants. The Company further
covenants that all shares of Common Stock that may be issued upon the exercise
of these Warrants shall, upon issuance, be duly and validly issued, fully paid
and nonassessable, and free from all taxes, liens, and charges with respect to
the purchase and issuance of the shares.
C. RECAPITALIZATION. (1). The existence of these Warrants
shall not affect in any way the right or power of the Company or its
shareholders to make or authorize any or all adjustments, recapitalization,
reorganizations, or other changes in the Company's capital structure or its
business, or any merger or consolidation of the Company or any issue of bonds,
debentures, preferred or prior preference stocks ahead of or affecting the
Common Stock or the rights thereof, or the dissolution or liquidation of the
Company, or any sale or transfer of all or any part of its assets or business,
or any other corporate act or proceeding, whether of a similar character or
otherwise.
(2). The consideration payable per share upon exercise shall
be proportionately adjusted for any increase or decrease in the number of issued
shares of Common Stock resulting from a subdivision or consolidation of shares
or other capital adjustment, or the payment of a stock dividend or other
increase or decrease in such shares, effected without receipt of consideration
by the Company; provided, however, that any fractional shares resulting from any
such adjustment shall be eliminated for the purposes of such adjustments.
(3). Subject to any required action by the shareholders, if
the Company shall be the surviving or resulting corporation in any merger or
consolidation, the Warrant granted hereunder shall pertain to and apply to the
securities or rights to which a holder of the number of shares of Common Stock
subject to the Warrants would have been entitled. In the event of any merger or
consolidation pursuant to which the Company is not the surviving or resulting
corporation, there shall be substituted for the shares of Common Stock subject
to any unexercised portions of the Warrants, an appropriate number of shares of
each class of stock or other securities of the surviving or consolidated
corporation which were distributed to the shareholders of the Company in respect
of such shares of Common Stock. Provided, however, that the Warrants may be
canceled by the Company as of the effective date of any such reorganization,
merger or consolidation or of any dissolution or liquidation of the Company by
giving notice to the holder hereof of its intention to do so and by permitting
the purchase during the thirty (30) day period next preceding such effective
date of all or any portion of the shares subject to the Warrants.
(4). No adjustment of the Exercise Price shall be made in an
amount that is less than 1% of the Exercise Price, but any such lesser
adjustment shall be carried forward and made at the time of and together with
the next subsequent adjustment.
A-2
<PAGE> 8
SECTION 2. METHOD OF EXERCISE OF WARRANTS.
These Warrants may be exercised by the delivery of this
Certificate, along with the Warrant Exercise Form attached hereto as Exhibit "A"
duly executed by the holder, to the Company at its principal office, accompanied
by payment of the Exercise Price for the number of shares of Common Stock
specified. The Warrants may be exercised for less than the full number of shares
of Common Stock called for hereby by delivery of this Certificate in the manner
and at the place provided above, accompanied by payment for the number of shares
of Common Stock being purchased. If the Warrants should be exercised in part
only, the Company shall, upon surrender of this Certificate for cancellation,
execute and deliver a new Certificate evidencing the right of the holder to
purchase the balance of the shares purchasable hereunder. Upon receipt by the
Company of this Certificate at the principal office of the Company, in proper
form for exercise, accompanied by the full Exercise Price in cash or certified
or bank cashier's check, the holder shall be deemed to be the holder of record
of the shares of Common Stock issuable upon such exercise, notwithstanding that
the stock transfer books of the Company shall then be closed or that
certificates representing such Common Stock shall not then be actually delivered
to the holder.
As soon as practicable after the exercise of these Warrants in
whole or in part and, in any event, within ten days thereafter, the Company at
its expense will cause to be issued in the name of and delivered to the holder a
certificate or certificates for the number of fully paid and nonassessable
shares of Common Sock (and a certificate representing the balance of any
unexercised Warrants) to which the holder shall be entitled upon such exercise.
Each certificate for shares of Common Stock so delivered shall be in such
denominations as may be requested by the holder and shall be registered in the
name of the holder or such other name as the holder may designate.
SECTION 3. RIGHTS OF HOLDER.
These Warrants do not entitle the holder to any voting rights,
to any other rights of a stockholder of the Company, or to any other rights
whatsoever, except for the rights specified in this Certificate. No dividends
are or shall be payable, or shall accrue, on or with respect to these Warrants
or any interest represented by these Warrants or on the shares that may be
purchased upon the exercise hereof until or unless, and except to the extent
that, these Warrants are exercised.
SECTION 4. NOTICE.
Any and all notices concerning these Warrants shall be given
to the holder of this Warrant by publication and/or by written notice to the
address of the holder on the warrant register for the Warrants maintained by the
Company. No notice or notices concerning these Warrants are required except as
specified in this Certificate.
SECTION 5. MUTILATED OR MISSING WARRANT CERTIFICATES.
Upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant
Certificate, and (in the case of loss, theft or
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destruction) of reasonably satisfactory indemnification and upon surrender and
cancellation of this Warrant Certificate (if mutilated) the Company will execute
and deliver a new Warrant Certificate of like tenor and date.
SECTION 6. MISCELLANEOUS.
A. GOVERNING LAW. These Warrants shall be performable in,
subject to and construed in accordance with the laws of the State of Texas.
B. RESTRICTIVE LEGEND. The Holder hereof, upon exercise of
these Warrants, understands and agrees that the share(s) certificate(s) to be
issued will bear a restrictive legend similar to the legend contained hereon and
stop transfer restrictions will be placed against such shares until compliance
with the legend is determined to the satisfaction of the Company.
IN WITNESS WHEREOF, the Company has caused this Warrant
Certificate to be duly executed, as of the day and year first above written.
MIDLAND RESOURCES, INC.
By:
-------------------------------------
Deas H. Warley III,
President
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EXHIBIT "A"
WARRANT EXERCISE FORM
DATE: ____________, 19__
TO: MIDLAND RESOURCES, INC.
The undersigned, the holder of the attached Warrants, hereby
irrevocably elects to exercise all or part of the purchase right represented by
such Warrants for, and to purchase thereunder, ____________ shares of Common
Stock, Par Value $0.001 Per Share of Midland Resources, Inc. (the "Company") and
herewith makes payment of $__________ to the Company, evidenced by delivery of
___________________________, and requests that the certificate of such shares be
issued in the name of, and be delivered to, __________________________________,
whose address is _____________________________________________________________.
----------------------------------------
(Name of Holder)
----------------------------------------
(Authorized Signatory)
----------------------------------------
(Address)
----------------------------------------
A-5
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EXHIBIT 4.2
1994 MIDLAND RESOURCES, INC. LONG-TERM INCENTIVE PLAN
ARTICLE 1. - PURPOSE
1.1 PURPOSE. The purpose of the 1994 Midland Resources, Inc.,
Long-Term Incentive Plan (the "Plan") is to further the growth and financial
success of Midland Resources, Inc., a Texas corporation (the "Company") and its
Subsidiaries by aligning the personal interests of key employees, through the
ownership of shares of the Company's Common Stock and through their incentives,
to those of the Company's shareholders. The Plan is further intended to provide
flexibility to the Company in its ability to compensate key employees and to
motivate, attract and retain the services of such key employees. The Plan
permits the granting of Options, Stock Appreciation Rights, Restricted Stock
and other Stock-based Awards.
ARTICLE 2. - DEFINITIONS
2.1 AGREEMENT. Agreement shall mean the agreement as described in
Section 4.4 of the Plan between the Company and the Participant under which
such Participant receives an Award pursuant to this Plan.
2.2 AWARD. Award shall mean an incentive award granted under the
Plan, whether in the form of Options, Stock Appreciation Rights, Restricted
Stock or any other form of Stock-Based consideration (which may provide for
settlement in shares of Stock, cash and/or a combination thereof) determined by
the Committee to be consistent with the purposes of the Plan, including but not
limited to, restricted units, phantom stock, performance awards, performance
units, performance shares, stock appreciation shares, stock acquisition rights,
valuation protection rights or any other type of stock-based award or
combination or derivative of various types of awards.
2.3 BOARD OF DIRECTORS. Board or Board of Directors shall mean the
Board of Directors of the Company.
2.4 CODE. Code shall mean the Internal Revenue Code of 1986, as
amended, unless otherwise specifically provided herein.
2.5 COMMITTEE. Committee shall mean the Compensation Committee of the
Board. No member of the Committee, during the one year prior to which
membership or during such membership, shall be granted or awarded equity
securities pursuant to the Plan or any other plan of the Company or any of its
Subsidiaries, except as permitted by Rule 16b-3 as promulgated under the
Exchange Act.
2.6 COMPANY. Company shall mean Midland Resources, Inc., a Texas
corporation, and any successor thereof.
2.7 COVERED EMPLOYEE. Covered Employee means, for any Plan Year, the
Company's Chief Executive Officer (or any individual acting in such capacity)
and any employee of the
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Company or its Subsidiaries who, in the discretion of the Committee for
purposes of determining those employees who are "covered employees" under
Section 162(m) of the Code, is likely to be among the four other highest
compensated officers of the Company for such plan year.
2.8 EFFECTIVE DATE. Effective Date shall have the meaning assigned to
such term in Section 14.01 hereof.
2.9 EXCHANGE ACT. Exchange Act shall mean the Securities Exchange Act
of 1934, as amended.
2.10 FAIR MARKET VALUE. Fair Market Value of the Stock shall mean the
last sale price at which Stock is traded on any given date, or if no Stock is
traded on such date, the most recent prior date on which Stock was traded, as
reported in The Wall Street Journal for the NASDAQ Small-Cap Issues or such
other reporting system as may be selected by the Committee from time to time.
2.11 INCENTIVE STOCK OPTION. Incentive Stock Option shall have the
meaning given to it by Section 422(b) of the Code and as fur her defined in
Article VI hereof.
2.12 NONSTATUTORY STOCK OPTION. Nonstatutory Stock Option shall mean
any Option granted by the Company pursuant to this Plan which is not an
Incentive Stock Option.
2.13 OPTION. Option shall mean an option granted by the Company to
purchase Stock pursuant to the provisions of this Plan and the Agreement
executed pursuant hereto.
2.14 OPTION PRICE. Option Price shall mean the price per share of
Stock purchasable under an Option. The Option Price shall not be less than the
Fair Market Value on the date of grant.
2.15 PARTICIPANT. Participant shall mean an employee or former
employee of the Company or one of its Subsidiaries (or a member of the Board
under terms permitted under Rule 16b-3 of the Securities & Exchange Act) who
has received an Award granted by the Committee hereunder.
2.16 RESTRICTED STOCK AWARDS. A Restricted Stock Award shall mean a
grant made by the Committee entitling the Participant to acquire, either at no
cost or for a purchase price determined by the Committee at the time of grant,
shares of Stock subject to such restrictions and conditions as the Committee
may determine at the time of grant ("Restricted Stock").
2.17 STOCK. Stock shall mean common stock, par value $.01 per share,
of the Company.
2.18 STOCK APPRECIATION RIGHTS. A Stock Appreciation Right shall mean
a grant entitling the Participant to receive an amount in cash, or shares of
Stock, or a combination thereof, having a value equal to (or if the Committee
shall so determine at the time of grant, less than) the excess of
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the fair Market Value of a share of Stock on the date of exercise over the Fair
Market Value of a share of Stock on the date of grant (or over the Option
Price, if the Stock Appreciation Right was granted in tandem with an Option)
multiplied by the number of shares with respect to which the Stock Appreciation
Right shall have been exercised, with the Committee having sole discretion to
determine the form for payment. A Stock Appreciation Right is further defined
in Article 7 hereof.
2.19 SUBSIDIARY. Subsidiary shall have the same meaning as defined in
Section 424 of the Code.
ARTICLE 3. - PARTICIPATION
3.1 PARTICIPATION. Subject to the provisions of the Plan, the
Committee may grant Awards under this Plan to any officer or other key employee
of the Company or Subsidiary who, in its sole discretion, is expected to
contribute to its success and to members of the Board under terms permitted
under Rule 16b-3 of the Securities Act that do not result in any such grant
preventing a disinterested Director from continuing to be such. Awards may be
granted to the same individual on more than one occasion.
ARTICLE 4. - SHARE SUBJECT TO THE PLAN
4.1 LIMITATIONS.
(a) Subject to adjustments pursuant to the provisions of Section 4.3
hereof, the number of shares of Stock or Stock equivalents which may be granted
to Participants under all forms of Awards shall not exceed 300,000 shares.
These shares may consist in whole or in part of authorized and unissued Stock
or Treasury Stock.
(b) For purposes of this Section 4.1, the shares of Stock that shall
be counted toward such limitation shall include all Stock:
(1) issued or issuable pursuant to Options that have been or
may be exercised;
(2) subject to Stock Appreciation Rights that have been or
may be exercised (other than Stock Appreciation Rights
granted in tandem with outstanding Options);
(3) issued as, or subject to issuance as, Restricted Stock;
(4) used to calculate payments of dividends and dividend
equivalents in conjunction with any outstanding Awards;
and
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(5) to the extent that an Award is settled in cash or any
form other than in Stock, the appropriate shares of
Stock represented by such settlement of the Awards, as
determined by the Committee.
4.2 AVAILABILITY OF SHARES ONCE ISSUED UNDER PLAN. Once grants of
Awards have lapsed, terminated or are forfeited, the Committee shall have the
sole discretion to issue a new grant to any Participant, covering the number of
shares to which such lapsed, terminated or forfeited grant related; provided,
however, that the Participant has received no monetary benefits of ownership
therefrom, such as dividends.
4.3 ANTI-DILUTION ADJUSTMENTS. In the event that the outstanding
shares of Stock are changed into or exchanged for a different number or kind of
share or other securities of the Company or of another corporation by reason of
merger, consolidation, other reorganization, recapitalization,
reclassification, combination of shares, stock split-up, or stock dividend, the
Committee shall make such corresponding adjustment, if any, as is appropriate,
adjusting the number and kind of shares which may be granted under the Plan,
the maximum number and kind of shares which may be granted to any one eligible
Participant, and the number, the Option Price, and the kind of shares or
property subject to each outstanding grant.
4.4 GRANTS AND AGREEMENTS. Each grant of an Award under this Plan
shall be evidenced by a written Agreement dated as of the date of the grant and
executed by the Company and the Participant. This Agreement shall set forth the
terms and conditions of such Award, as may be determined by the Committee
consistent with this Plan, and if such Agreement related to the grant of an
Option, shall indicate whether the Option is intended to be an Incentive Stock
Option or a Nonstatutory Stock Option.
ARTICLE 5. - OPTIONS
5.1 OPTION EXERCISE. Subject to Federal and state statutes then
applicable, the terms and procedures by which an Option may be exercised shall
be set forth in the Participant's Agreement or in procedures established by the
Committee; provided, however, that no Option shall be exercisable later than
ten (10) years (or five (5) years as required by Section 422(b)(6) of the Code)
after date granted if an Incentive Stock Option. The Committee may permit
payment of the Option Price to made through the tender of cash or securities,
the withholding of Stock or cash to be received through Awards, or any other
arrangement satisfactory to the Committee.
5.2 NONSTATUTORY STOCK OPTIONS. The Committee may grant Nonstatutory
Stock Options under this Plan. Such Nonstatutory Stock Options must comply with
all requirements of this Plan except for those contained in Article 6, Article
7, and Article 8 hereof.
5.3 VESTING OF OPTIONS. The Agreement shall specify the date or dates
on which the Participant may begin to exercise all or a portion of his Option.
Notwithstanding the terms of any Agreement, the Committee may, at any time,
accelerate such date or dates and otherwise waive or
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amend any conditions of the Option; provided, however, that with respect to an
Incentive Stock Option, the Committee shall not take any action which would
constitute a modification, extension or renewal (within the meaning of Section
424(h) of the Code) of such Incentive Stock Option.
ARTICLE 6. - INCENTIVE STOCK OPTIONS
6.1 GENERAL. All Incentive Stock Options shall comply with all the
restrictions and limitations set forth in Section 422 of the Code and this
Plan. No Incentive Stock Option shall be granted to an individual if, at the
time the Option is granted, such individual owns stock possessing more than 10%
of the total combined voting power of all classes of stock of the Company or of
its parent or subsidiary corporation, within the meaning of Section 422(b)(6)
of the Code, unless (i) at the time such Incentive Stock Option is granted the
Option Price is at least 110% of the Fair Market Value of the Stock subject to
the Option and (ii) such Incentive Stock Option by its terms is not exercisable
after the expiration of five years from the date of grant. To the extent that
the aggregate Fair Market Value (determined at the time the respective
Incentive Stock Option is granted) of stock with respect to which Incentive
Stock Options are exercisable for the first time by any individual during any
calendar year under all incentive stock option plans of the Company and its
parent and Subsidiaries exceeds $100,000, such excess Incentive Stock Options
shall be treated as Options which do not constitute Incentive Stock Options.
The Committee shall determine, in accordance with applicable provisions of the
Code, Treasury Regulations and other administrative pronouncements, which of an
Optionee's Incentive Stock Options will not constitute Incentive Stock Options
because of such limitation and shall notify the Optionee of such determination
as soon as practicable after such determination.
ARTICLE 7. - STOCK APPRECIATION RIGHTS
7.1 GRANT AND EXERCISE OF STOCK APPRECIATION RIGHTS. Stock
Appreciation Rights may be granted to Participants by the Committee in tandem
with, or independently of, any Option granted pursuant to Article 5 or Article
6 of this Plan. In the case of a Stock Appreciation Right granted in tandem
with a Nonstatutory Stock Option, such Stock Appreciation Right may be granted
either at or after the time of the grant of such Nonstatutory Stock Option. In
the case of a Stock Appreciation Right granted in tandem with an Incentive
Stock Option, such Stock Appreciation Right may be granted only at the time of
the grant of such Incentive Stock Option.
A Stock Appreciation Right, or the applicable portion thereof granted
in tandem with an Option, shall terminate and no longer be exercisable upon the
termination or exercise of the related Option. However, if a Stock Appreciation
Right is granted with respect to less than the full number of shares covered by
a related option, such Stock Appreciation Right shall terminate only if and to
the extent that the number of shares covered by the exercise or termination of
the related Option exceeds the number of shares not covered by such Stock
Appreciation Right.
7.2 TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS. Stock
Appreciation Rights shall be subject to such terms and conditions as shall be
determined from time to time by the
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Committee and embodied in the Agreements and in procedures established by the
Committee. The Committee may, at any time, accelerate the exercisability of any
Stock Appreciation Right and otherwise waive or amend any conditions of the
grant of a Stock Appreciation Right; provided, however, that faith any Stock
Appreciation Right granted in tandem of an Incentive Stock Option, the
Committee shall not take any actions which would constitute a modification,
extension or renewal (within the meaning of Section 424(h) of the Code) of such
Incentive Stock Option.
ARTICLE 8. - RESTRICTED STOCK AWARDS
8.1 AGREEMENT. (a) If the purchase of Restricted Stock is required by
the Agreement, a Participant who is granted a Restricted Stock Award shall have
rights with respect to such grant provided the Participant shall have accepted
the grant within sixty (60) days (or such shorter date as the Committee may
specify) following the date of the grant, by making payment to the Company by
certified bank check or other instrument acceptable to the Committee in an
amount equal to the specified purchase price, if any, of the shares covered by
the grant and by executing and delivering to the Company an Agreement in such
form as the Committee shall determine.
(b) RIGHTS AS A SHAREHOLDER. After the issuance of the Restricted
Stock has been recorded in the stock ledger of the Company and
(1) upon complying with Section 8.1(a) above, if the
purchase of Restricted Stock is required by the
Agreement; or
(2) immediately, if no purchase of Restricted Stock is
required by the Agreement,
a Participant shall have all the rights of a shareholder with respect to such
Restricted Stock including voting and dividend rights, subject to
non-transferability restrictions and Company purchase or forfeiture rights
described in this Section and Section 8.1(c), and subject to such other
conditions (including but not limited to, any conditions on voting and dividend
rights) as are contained in the Agreement. Unless the Committee shall otherwise
determine, certificates evidencing shares of Restricted Stock shall remain in
the possession of the Company until such shares are vested as provided in
Section 8.1(d) below and the Agreement.
(c) RESTRICTIONS. Shares of Restricted Stock may not be sold,
assigned, transferred, pledged, or otherwise encumbered or disposed of except
as specifically provided herein. Restrictions on shares of Restricted Stock
shall be set forth in an Agreement and may include such vesting restrictions as
the Committee shall determine, including but not limited to, restrictions
related to timing, profitability of the Company, and growth of the share price.
In the event of a Participant's termination of employment with the Company and
its Subsidiaries for any reason (including death) prior to the date shares of
Restricted Stock awarded to such Participant become vested, the Company shall
have the right, at the discretion of the Committee, to repurchase such shares
at their purchase price, or to require forfeiture of such shares to the Company
if acquired at no cost, from such Participant or the Participant's legal
representative.
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(d) VESTING OF RESTRICTED STOCK. The Committee at the time of grant
shall specify the date or dates (which may depend upon or be related to the
attainment of performance goals and other conditions) on which the restrictions
imposed upon the Restricted Stock and the Company's right of repurchase or
forfeiture shall lapse. The Committee at any time may accelerate such date or
dates and otherwise waive or amend any conditions of the grant. A Participant
may transfer or dispose of any Restricted Stock that has vested, subject to any
Federal and state laws then applicable, specifically securities laws.
8.2 PERFORMANCE UNITS. A performance unit is a promise by the Company
to make a payment to, or on behalf of, the Participant, which may be contingent
upon the achievement of one or more performance targets specified by the
Committee. A performance unit is a right to receive or be credited with an
amount that may be determined by reference to Common Stock, other securities of
the Company or an Affiliate, or by reference to dollar amounts. Performance
units shall be subject to such conditions with respect to vesting, timing,
amount and payment as the Committee shall determine at the time of the Award.
Performance units shall be payable in cash. Performance unit Awards may be made
without cash payment by, or other out-of-pocket consideration from, the
Participant, either on the date of grant or the date of payment. By way of
example, but not limitation, performance units, called "EPS Units," may be
granted in tandem with Awards of stock options and the credited amount with
respect to an EPS Unit shall be determined with reference to the difference
between (i) the Company's annual earnings per share of Common Stock, as
adjusted to exclude items that the Committee determines to be appropriate for
purposes of the Award, and (ii) an amount specified by the Committee that
reflects the level of such earnings at the time of the Award and the principal
manner of payment shall be by application toward the option price upon the
Participants exercise of the stock option.
8.3 PERFORMANCE SHARES. A performance share is a promise by the
Company to make a payment to the Participant, which may be contingent upon the
achievement of one or more performance targets specified by the Committee at
the time of the award. A performance share is a right to receive an amount that
may be determined by reference to Common Stock, other securities of the Company
or an Affiliate, or by reference to dollar amounts. Performance shares shall be
subject to such conditions with respect to vesting, timing, and amount of
payments as the Committee shall determine at the time of the Award. Performance
shares shall be payable in Common Stock, or other securities of the Company or
an Affiliate. Performance share Awards may be made without cash payment by, or
other out-of-pocket consideration from the Participant, either on the date of
grant or the date of payment.
8.4 DIVIDEND EQUIVALENTS. A dividend equivalent is the right to
receive an amount equal to the dividends paid on a specified number of shares
of Common Stock. A dividend equivalent shall be payable in cash.
8.5 OTHER AWARDS. The Committee may, from time to time, grant such
other Awards as the Committee may determine, provided that no such Award shall
be inconsistent with the terms of this Plan.
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Amounts received pursuant to cash-only Awards granted under Sections
7.1 and 8.2 through 8.5 of this Plan, or any combination thereof, if intending
to comply with Rule 16a-1(c)(3)(1) under the Exchange Act or any successor
provision, for each plan year to any Participant who is subject to Section 16
of the Exchange Act shall be limited to a maximum value of 500% of the
Participant's annual salary at the rate in effect on the first day of such plan
year. For purposes of the preceding sentence, if a Participant who is not a
Covered Employee, but is subject to Section 16 of the Exchange Act, does not
receive a salary, the Participant shall be deemed to have an annual salary of
$250,000.
ARTICLE 9. - STOCK CERTIFICATES
9.1 STOCK CERTIFICATES. The Company shall not be required to issue or
deliver any certificate for shares of Stock under this Plan prior to
fulfillment of all of the following conditions:
(a) the admission of such shares to listing on all stock exchanges on
which the Stock is then listed, if any;
(b) the completion of any registration or other qualification of such
shares under any Federal or state law, under the rules or regulations of the
Securities and Exchange Commission, or under any other governmental regulatory
agency which the Committee shall in its sole discretion determine to be
necessary or advisable;
(c) the obtaining of any approval or other clearance from any Federal
or state governmental agency which the Committee shall in its sole discretion
determine to be necessary or advisable; and
(d) the lapse of such reasonable period of time following the
exercise of the grant as the Committee from time to time may establish for
reasons of administrative convenience
If these conditions are not satisfied, the employee may lose his
rights to such Stock as determined by the Committee.
Separate stock certificates shall be issued by the Company for those
shares acquired pursuant to the exercise of an Incentive Stock Option and for
those shares acquired pursuant to the exercise of a Nonstatutory Stock Option
ARTICLE 10. - DIVIDENDS
10.1 DIVIDENDS. At the time of each grant of an Award (other than an
Option Stock Appreciation Right or Restricted Stock) the Committee may, in its
sole discretion, determine whether the grant shall provide a dividend or a
dividend equivalent and the terms and conditions under which any such dividend
or dividend equivalent is to be provided, including but not limited to,
permitting or requiring immediate payment, deferral or investment of dividends
or dividend equivalents.
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ARTICLE 11. - PLAN ADMINISTRATION
11.1 PLAN ADMINISTRATION. The Plan and all Agreements shall be
administered, and all grants under this Plan shall be awarded, by the
Committee. The Committee shall have full authority and absolute sole discretion
to:
(a) determine, consistent with provisions of the Plan, which of the
employees shall be granted Awards; the form and terms of such Awards; the
timing of such grants; the number of shares subject to each Award and the
Option Price of Stock covered by each Option (if amicable); and the period over
which the Awards shall become and remain exercisable (if applicable);
(b) construe and interpret the Plan and any Agreement or instrument
entered into under the Plan;
(c) determine the terms and provisions of each respective Agreement,
which need not be identical;
(d) make all other determinations and take all other actions deemed
necessary or advisable for the proper administration of the Plan; and
(e) adopt, alter, and repeal such rules, guidelines, and practices
for administration of the Plan and for its own acts and proceedings as it shall
deem advisable; to interpret the terms and provisions of the Plan and any grant
(including related Agreements); to decide all disputes arising in connection
with the Plan; and to otherwise supervise the administration of the Plan.
11.2 PERFORMANCE. The Committee may establish minimum performance
targets with respect to each Award. Performance targets may be based on
financial criteria, such as the Fair Market Value of Common Stock or other
measures of financial performance of the Company, or may be based on the
performance of a division or Subsidiary of the Company, or the performance of
an individual Participant. Notwithstanding anything in this Plan to the
contrary, any Awards of stock options or similar rights, stock appreciation
rights, performance units, or performance shares shall contain the restrictions
on assignability to the extent required by Rule 16b-3 under the Exchange Act or
any successor provision.
11.3 DECISIONS BINDING. All determinations and decisions by the
Committee pursuant to the Plan and all related orders or resolutions of the
Board of Directors shall be final, conclusive and binding on all persons,
including the Company, its Subsidiaries, its shareholders, Participants and
their estates and beneficiaries.
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ARTICLE 12. - MISCELLANEOUS PROVISIONS
12.1 APPLICABLE LAW. To the extent not preempted by any laws of the
United States, the Plan shall be construed, regulated, interpreted and
administered according to the laws of the State of Texas.
12.2 EXPENSES. The cost of Awards and the expenses of administering
the Plan shall be borne by the Company.
12.3 GENDER AND NUMBER. Unless the context clearly requires otherwise,
the masculine pronoun whenever used shall include the feminine and neuter
pronoun, the singular shall include the plural, and vice versa.
12.4 HEADINGS NOT PART OF PLAN. Headings of Articles and Sections are
inserted for convenience of reference only.
12.5 INDEMNIFICATION. No member of the Board of Directors or the
Committee shall be liable for any action or determination taken or made in good
faith with respect to this Plan nor shall any member of the Board of Directors
or the Committee be liable for any Agreement issued pursuant to this Plan or
any grants under it. Each member of the Board of Directors and the Committee
shall be indemnified by the Company against any losses incurred in such
administration of the Plan, unless his action constitutes gross negligence or
willful misconduct.
12.6 LIMITATION OF RIGHTS. Neither the adoption and maintenance of the
Plan or any Agreement nor anything contained herein shall, with respect to any
Participant, be deemed to:
(a) limit the right of the Company or any Subsidiary to discharge or
discipline any such person, or otherwise terminate or modify the terms of his
employment; or
(b) create any contract or other right or interest under the Plan
other than as specifically provided in the Plan and an Agreement.
12.7 NONTRANSFERABILITY. An Award shall not be transferable by the
Participant otherwise than by will or the laws of descent and distribution.
During the lifetime of the Participant, such Award shall be exercisable or
perfected only by the Participant or his guardian or legal representative in
accordance with the terms of this Plan and the Agreement.
12.8 OTHER COMPENSATION PLANS. The adoption of the Plan shall not
affect any other existing or future incentive or compensation plans for
directors, officers or employees of the Company or its Subsidiaries. Moreover,
the adoption of this Plan shall not preclude the Company or its Subsidiaries
from:
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(a) establishing any other forms of incentive or other compensation
for directors, officers or employees of the Company or its Subsidiaries; or
(b) assuming any forms of incentive or other compensation of any
person or entity in connection with the acquisition or the business or assets,
in whole or in part, of any person or entity.
12.9 PLAN BINDING ON SUCCESSORS. This Plan shall be binding upon the
successors of the company.
12.10 TAX WITHHOLDING. Each Participant shall, no later than the date
as of which the value of a grant or of any Stock or other amount received
thereunder first becomes includable in the gross income of the Participant for
Federal income tax purposes, pay to the Company, or make arrangements
satisfactory to the Committee regarding payment of any Federal, state, or local
taxes of any kind required by law to be withheld with respect to such income.
The Committee may permit or require payment of such taxes to be made through
the tender of cash or Stock, the withholding of Stock or cash to be received
through Awards or any other arrangement satisfactory to the Committee. The
Company and its Subsidiaries shall, to the extent permitted by law, have the
right to deduct any such taxes from any payment of any kind otherwise due to
the Participant.
12.11 SECURITIES LAW. Notwithstanding anything to the contrary
expressed in the Plan, any provisions that vary from or conflict with any
applicable Federal or state securities laws (including any regulations
promulgated thereunder) shall be deemed to be modified to conform to and comply
with such laws. Without limiting the generality of the foregoing, it is the
intention of the Company that the Plan shall comply in all respect with Rule
16b-3 under the Exchange Act and, if any Plan provision is later found not to
be in compliance with Section 16 of the Exchange Act, the provision shall be
deemed null and void, and in all events the Plan shall be construed in favor of
its meeting the requirements of Rule 16b-3. Notwithstanding anything in the
Plan to the Contrary, the Board, in its absolute discretion, may bifurcate the
Plan so as to restrict, limit or condition the use of any provision of the Plan
to Participants who are officers subject to Section 16 of the Exchange Act
without so restricting, limiting or conditioning the Plan with respect to other
Participants.
12.12 SEVERABILITY. In the event any provision of the Plan shall be
held illegal or invalid for any reason, the illegality or invalidity shall not
affect the remaining provisions of the Plan, and the Plan shall be construed
and enforced as though the illegal or invalid provision had not been included.
12.13 UNFUNDED STATUS OF THE PLAN. The Plan is intended to be
unfunded. With respect to any payments as to which a Participant has a fixed
and vested interest but which are not yet made to a Participant by the Company,
nothing contained herein shall give any Participant any rights that are greater
than those of a general creditor of the Company. The adoption of this Plan and
any setting aside of amounts by the Company with which to discharge its
obligations hereunder shall not be deemed to create a trust.
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12.14 FRACTIONAL SHARES. No Option may at any time be exercised with
respect to a fractional share. In the event shares of Stock are issued pursuant
to exercise of a Stock Appreciation Right, no fractional shares shall be
issued; however, a fractional Stock Appreciation Right may be exercised for
cash.
12.15 RIGHT OF DISCHARGE RESERVED. Nothing in this Plan or in any
Award shall confer upon any employee or other individual the right to continue
in the employment or service of the Company or any Subsidiary or affect any
right that the Company or any Subsidiary may have to terminate the employment
or service of any such employee or other individual at any time for any reason.
ARTICLE 13. - CHANGE OF CONTROL
13.1 CHANGE IN CONTROL. In the event of a Change in Control of the
Company, all Awards granted under the Plan that are still outstanding and not
yet exercisable or are subject to restrictions, shall, unless otherwise
provided for in the related Agreements, become immediately exercisable, and all
restrictions shall be removed, as of the first date that the Change in Control
has been deemed to have occurred, and shall remain as such for the remaining
life of the Award as provided herein and within the provisions of the related
Agreements.
For purposes of this Section 13.1, a Change in Control of the Company
shall be deemed to have occurred if the conditions set forth in any one or more
of the following shall have been satisfied:
(a) any "persons", other than Deas H. Warley III, as such term is
used in Sections 13(d) and 14(d) of the Exchange Act (other than the Company,
any trustee or other fiduciary holding securities under an employee benefit
plan of the Company or any corporation owned, directly or indirectly, by the
shareholders of the Company in substantially the same proportions as their
ownership of stock of the Company), is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing thirty percent (30%) or more of the
combined voting power of the Company's then outstanding securities;
(b) during any period of two consecutive years (not including any
period prior to the Effective Date of the Plan), individuals who at the
beginning of such period constitute the Board of Directors, and any new
director (other than a director designated by a person who has entered into an
agreement with the Company to effect a transaction described in paragraph (a),
(b) or (c) of this Section 13.01) whose election by the Board of Directors or
nomination for election by the Company's shareholders was approved by a vote of
a least two-thirds (2/3) of the directors then still in office who either were
director, at the beginning of the period or whose election or nomination for
election was previously so approved, cease for any reason to constitute at
least a majority thereof; or
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(c) the shareholders of the Company approve a merger or consolidation
of the Company with any other person, other than (i) a merger or consolidation
which would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities for the surviving
entity) more than fifty percent (50%) of the combined voting power of the
voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation, or (ii) a merger in which no
"person" (as defined above) acquires more than thirty percent (30%) of the
combined voting power of the Company's then outstanding securities; or
(d) the shareholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets (or any transaction
having a similar effect).
ARTICLE 14. - EFFECTIVE DATE AND PLAN AMENDMENTS, TERMINATION
14.1 EFFECTIVE DATE. This Plan shall become effective upon the
approval of the shareholders. The date of such approval is herein called the
"Effective Date". All Awards granted under the Plan shall be granted on or
before the tenth anniversary of the Effective Date.
14.2 TERMINATION, AMENDMENT AND MODIFICATION OF PLAN. The Board of
Directors may at any time terminate or suspend, and may at any time and from
time to time and in any respect amend or modify, the Plan; provided, however,
that no such action of the Board of Directors shall be taken without approval
of the Company's shareholders if such approval is required to comply with Rule
16b-3 under the Exchange Act or Section 422 of the Code, or any successor
provision.
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EXHIBIT 4.3
1996 MIDLAND RESOURCES, INC. LONG-TERM INCENTIVE PLAN
ARTICLE 1. - PURPOSE
1.1 PURPOSE. The purpose of the 1996 Midland Resources, Inc., Long-Term
Incentive Plan (the "Plan") is to further the growth and financial success of
Midland Resources, Inc., a Texas corporation (the "Company") and its
Subsidiaries by aligning the personal interests of key employees, through the
ownership of shares of the Company's Common Stock and through their incentives,
to those of the Company's shareholders. The Plan is further intended to provide
flexibility to the Company in its ability to compensate key employees and to
motivate, attract and retain the services of such key employees. The Plan
permits the granting of Options, Stock Appreciation Rights, Restricted Stock and
other Stock-based Awards.
ARTICLE 2. - DEFINITIONS
2.1 AGREEMENT. Agreement shall mean the agreement as described in
Section 4.4 of the Plan between the Company and the Participant under which such
Participant receives an Award pursuant to this Plan.
2.2 AWARD. Award shall mean an incentive award granted under the Plan,
whether in the form of Options, Stock Appreciation Rights, Restricted Stock or
any other form of Stock-Based consideration (which may provide for settlement in
shares of Stock, cash and/or a combination thereof) determined by the Committee
to be consistent with the purposes of the Plan, including but not limited to,
restricted units, phantom stock, performance awards, performance units,
performance shares, stock appreciation shares, stock acquisition rights,
valuation protection rights or any other type of stock-based award or
combination or derivative of various types of awards.
2.3 BOARD OF DIRECTORS. Board or Board of Directors shall mean the
Board of Directors of the Company.
2.4 CODE. Code shall mean the Internal Revenue Code of 1986, as
amended, unless otherwise specifically provided herein.
2.5 COMMITTEE. Committee shall mean the Compensation Committee of the
Board. No member of the Committee, during the one year prior to which membership
or during such membership, shall be granted or awarded equity securities
pursuant to the Plan or any other plan of the Company or any of its
Subsidiaries, except as permitted by Rule 16b-3 as promulgated under the
Exchange Act.
2.6 COMPANY. Company shall mean Midland Resources, Inc., a Texas
corporation, and any successor thereof.
<PAGE> 2
2.7 COVERED EMPLOYEE. Covered Employee means, for any Plan Year, the
Company's Chief Executive Officer (or any individual acting in such capacity)
and any employee of the Company or its Subsidiaries who, in the discretion of
the Committee for purposes of determining those employees who are "covered
employees" under Section 162(m) of the Code, is likely to be among the four
other highest compensated officers of the Company for such plan year.
2.8 EFFECTIVE DATE. Effective Date shall have the meaning assigned to
such term in Section 14.01 hereof.
2.9 EXCHANGE ACT. Exchange Act shall mean the Securities Exchange Act
of 1934, as amended.
2.10 FAIR MARKET VALUE. Fair Market Value of the Stock shall mean the
last sale price at which Stock is traded on any given date, or if no Stock is
traded on such date, the most recent prior date on which Stock was traded, as
reported in The Wall Street Journal for the NASDAQ Small-Cap Issues or such
other reporting system as may be selected by the Committee from time to time.
2.11 INCENTIVE STOCK OPTION. Incentive Stock Option shall have the
meaning given to it by Section 422(b) of the Code and as further defined in
Article VI hereof.
2.12 NONSTATUTORY STOCK OPTION. Nonstatutory Stock Option shall mean
any Option granted by the Company pursuant to this Plan which is not an
Incentive Stock Option.
2.13 OPTION. Option shall mean an option granted by the Company to
purchase Stock pursuant to the provisions of this Plan and the Agreement
executed pursuant hereto.
2.14 OPTION PRICE. Option Price shall mean the price per share of Stock
purchasable under an Option. The Option Price shall not be less than the Fair
Market Value on the date of grant.
2.15 PARTICIPANT. Participant shall mean an employee or former employee
of the Company or one of its Subsidiaries (or a member of the Board under terms
permitted under Rule 16b-3 of the Securities & Exchange Act) who has received an
Award granted by the Committee hereunder.
2.16 RESTRICTED STOCK AWARDS. A Restricted Stock Award shall mean a
grant made by the Committee entitling the Participant to acquire, either at no
cost or for a purchase price determined by the Committee at the time of grant,
shares of Stock subject to such restrictions and conditions as the Committee may
determine at the time of grant ("Restricted Stock").
2.17 STOCK. Stock shall mean common stock, par value $.001 per share,
of the Company.
2.18 STOCK APPRECIATION RIGHTS. A Stock Appreciation Right shall mean a
grant entitling the Participant to receive an amount in cash, or shares of
Stock, or a combination thereof, having a
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value equal to (or if the Committee shall so determine at the time of grant,
less than) the excess of the fair Market Value of a share of Stock on the date
of exercise over the Fair Market Value of a share of Stock on the date of grant
(or over the Option Price, if the Stock Appreciation Right was granted in tandem
with an Option) multiplied by the number of shares with respect to which the
Stock Appreciation Right shall have been exercised, with the Committee having
sole discretion to determine the form for payment. A Stock Appreciation Right is
further defined in Article 7 hereof.
2.19 SUBSIDIARY. Subsidiary shall have the same meaning as defined in
Section 424 of the Code.
ARTICLE 3. - PARTICIPATION
3.1 PARTICIPATION. Subject to the provisions of the Plan, the Committee
may grant Awards under this Plan to any officer or other key employee of the
Company or Subsidiary who, in its sole discretion, is expected to contribute to
its success and to members of the Board under terms permitted under Rule 16b-3
of the Securities Act that do not result in any such grant preventing a
disinterested Director from continuing to be such. Awards may be granted to the
same individual on more than one occasion.
ARTICLE 4. - SHARES SUBJECT TO THE PLAN
4.1 LIMITATIONS.
4.2 Subject to adjustments pursuant to the provisions of Section 4.3
hereof, the number of shares of Stock or Stock equivalents which may be granted
to Participants under all forms of Awards shall not exceed 400,000 shares. These
shares may consist in whole or in part of authorized and unissued Stock or
Treasury Stock.
(a) For purposes of this Section 4 1, the shares of Stock that shall be
counted toward such limitation shall include all Stock:
4.2.1.1 issued or issuable pursuant to Options that
have been or may be exercised;
4.2.1.2 subject to Stock Appreciation Rights that
have been or may be exercised (other than
Stock Appreciation Rights granted in tandem
with outstanding Options);
4.2.1.3 issued as, or subject to issuance as,
Restricted Stock;
4.2.1.4 used to calculate payments of dividends and
dividend equivalents in conjunction with any
outstanding Awards; and
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4.2.1.5 to the extent that an Award is settled in
cash or any form other than in Stock, the
appropriate shares of Stock represented by
such settlement of the Awards, as determined
by the Committee.
4.3 AVAILABILITY OF SHARES ONCE ISSUED UNDER PLAN. Once grants of
Awards have lapsed, terminated or are forfeited, the Committee shall have the
sole discretion to issue a new grant to any Participant, covering the number of
shares to which such lapsed, terminated or forfeited grant related; provided,
however, that the Participant has received no monetary benefits of ownership
therefrom, such as dividends.
4.4 ANTI-DILUTION ADJUSTMENTS. In the event that the outstanding shares
of Stock are changed into or exchanged for a different number or kind of share
or other securities of the Company or of another corporation by reason of
merger, consolidation, other reorganization, recapitalization, reclassification,
combination of shares, stock split-up, or stock dividend, the Committee shall
make such corresponding adjustment, if any, as is appropriate, adjusting the
number and kind of shares which may be granted under the Plan, the maximum
number and kind of shares which may be granted to any one eligible Participant,
and the number, the Option Price, and the kind of shares or property subject to
each outstanding grant.
4.5 GRANTS AND AGREEMENTS. Each grant of an Award under this Plan shall
be evidenced by a written Agreement dated as of the date of the grant and
executed by the Company and the Participant. This Agreement shall set forth the
terms and conditions of such Award, as may be determined by the Committee
consistent with this Plan, and if such Agreement related to the grant of an
Option, shall indicate whether the Option is intended to be an Incentive Stock
Option or a Nonstatutory Stock Option.
ARTICLE 5. - OPTIONS
5.1 OPTION EXERCISE. Subject to Federal and state statutes then
applicable, the terms and procedures by which an Option may be exercised shall
be set forth in the Participant's Agreement or in procedures established by the
Committee; provided, however, that no Option shall be exercisable later than ten
(10) years (or five (5) years as required by Section 422(b)(6) of the Code)
after date granted if an Incentive Stock Option. The Committee may permit
payment of the Option Price to be made through the tender of cash or securities,
the withholding of Stock or cash to be received through Awards, or any other
arrangement satisfactory to the Committee.
5.2 NONSTATUTORY STOCK OPTIONS. The Committee may grant Nonstatutory
Stock Options under this Plan. Such Nonstatutory Stock Options must comply with
all requirements of this Plan except for those contained in Article 6, Article
7, and Article 8 hereof.
5.3 VESTING OF OPTIONS. The Agreement shall specify the date or dates
on which the Participant may begin to exercise all or a portion of his Option.
Notwithstanding the terms of any Agreement, the Committee may, at any time,
accelerate such date or dates and otherwise waive or amend any conditions of the
Option; provided, however, that with respect to an Incentive Stock
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Option, the Committee shall not take any action which would constitute a
modification, extension or renewal (within the meaning of Section 424(h) of the
Code) of such Incentive Stock Option.
ARTICLE 6. - INCENTIVE STOCK OPTIONS
6.1 GENERAL. All Incentive Stock Options shall comply with all the
restrictions and limitations set forth in Section 422 of the Code and this Plan.
No Incentive Stock Option shall be granted to an individual if, at the time the
Option is granted, such individual owns stock possessing more than 10% of the
total combined voting power of all classes of stock of the Company or of its
parent or subsidiary corporation, within the meaning of Section 422(b)(6) of the
Code, unless (i) at the time such Incentive Stock Option is granted the Option
Price is at least 110% of the Fair Market Value of the Stock subject to the
Option and (ii) such Incentive Stock Option by its terms is not exercisable
after the expiration of five years from the date of grant. To the extent that
the aggregate Fair Market Value (determined at the time the respective Incentive
Stock Option is granted) of stock with respect to which Incentive Stock Options
are exercisable for the first time by any individual during any calendar year
under all incentive stock option plans of the Company and its parent and
Subsidiaries exceeds $100,000, such excess Incentive Stock Options shall be
treated as Options which do not constitute incentive Stock Options. The
Committee shall determine, in accordance with applicable provisions of the Code,
Treasury Regulations and other administrative pronouncements, which of an
Optionee's Incentive Stock Options will not constitute Incentive Stock Options
because of such limitation and shall notify the Optionee of such determination
as soon as practicable after such determination.
ARTICLE 7. - STOCK APPRECIATION RIGHTS
7.1 GRANT AND EXERCISE OF STOCK APPRECIATION RIGHTS. Stock Appreciation
Rights may be granted to Participants by the Committee in tandem with, or
independently of, any Option granted pursuant to Article 5 or Article 6 of this
Plan. In the case of a Stock Appreciation Right granted in tandem with a
Nonstatutory Stock Option, such Stock Appreciation Right may be granted either
at or after the time of the grant of such Nonstatutory Stock Option. In the case
of a Stock Appreciation Right granted in tandem with an Incentive Stock Option,
such Stock Appreciation Right may be granted only at the time of the grant of
such Incentive Stock Option.
A Stock Appreciation Right, or the applicable portion thereof granted
in tandem with an Option, shall terminate and no longer be exercisable upon the
termination or exercise of the related Option. However, if a Stock Appreciation
Right is granted with respect to less than the full number of shares covered by
a related option, such Stock Appreciation Right shall terminate only if and to
the extent that the number of shares covered by the exercise or termination of
the related Option exceeds the number of shares not covered by such Stock
Appreciation Right.
7.2 TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS. Stock
Appreciation Rights shall be subject to such terms and conditions as shall be
determined from time to time by the Committee and embodied in the Agreements and
in procedures established by the Committee. The Committee may, at any time,
accelerate the exercisability of any Stock Appreciation Right and
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otherwise waive or amend any conditions of the grant of a Stock Appreciation
Right; provided, however, that with respect to any Stock Appreciation Right
granted in tandem of an Incentive Stock Option, the Committee shall not take any
action which would constitute a modification, extension or renewal (within the
meaning of Section 424(h) of the Code) of such Incentive Stock Option.
ARTICLE 8. - RESTRICTED STOCK AWARDS
8.1 AGREEMENT. (a) If the purchase of Restricted Stock is required by
the Agreement, a Participant who is granted a Restricted Stock Award shall have
rights with respect to such grant provided the Participant shall have accepted
the grant within sixty (60) days (or such shorter date as the Committee may
specify) following the date of the grant, by making payment to the Company by
certified bank check or other instrument acceptable to the Committee in an
amount equal to the specified purchase price, if any, of the shares covered by
the grant and by executing and delivering to the Company an Agreement in such
form as the Committee shall determine.
(b) RIGHTS AS A SHAREHOLDER. After the issuance of the Restricted Stock
has been recorded in the stock ledger of the Company and
8.1.2.1 upon complying with Section 8.1(a) above, if
the purchase of Restricted Stock is required
by the Agreement, or
8.1.2.2 immediately, if no purchase of Restricted
Stock is required by the Agreement,
a Participant shall have all the rights of a shareholder with respect to such
Restricted Stock including voting and dividend rights, subject to
non-transferability restrictions and Company purchase or forfeiture rights
described in this Section and Section 8.1(c), and subject to such other
conditions (including but not limited to, any conditions on voting and dividend
rights) as are contained in the Agreement. Unless the Committee shall otherwise
determine, certificates evidencing shares of Restricted Stock shall remain in
the possession of the Company until such shares are vested as provided in
Section 8.1(d) below and the Agreement.
(c) RESTRICTIONS. Shares of Restricted Stock may not be sold, assigned,
transferred, pledged, or otherwise encumbered or disposed of except as
specifically provided herein. Restrictions on shares of Restricted Stock shall
be set forth in an Agreement and may include such vesting restrictions as the
Committee shall determine, including but not limited to, restrictions related to
timing, profitability of the Company, and growth of the share price. In the
event of a Participant's termination of employment with the Company and its
Subsidiaries for any reason (including death) prior to the date shares of
Restricted Stock awarded to such Participant become vested, the Company shall
have the right, at the discretion of the Committee, to repurchase such shares at
their purchase price, or to require forfeiture of such shares to the Company if
acquired at no cost, from such Participant or the Participant's legal
representative.
(d) VESTING OF RESTRICTED STOCK. The Committee at the time of grant
shall specify the date or dates (which may depend upon or be related to the
attainment of performance goals and other
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conditions) on which the restrictions imposed upon the Restricted Stock and the
Company's right of repurchase or forfeiture shall lapse. The Committee at any
time may accelerate such date or dates and otherwise waive or amend any
conditions of the grant. A Participant may transfer or dispose of any Restricted
Stock that has vested, subject to any Federal and state laws then applicable,
specifically securities laws.
8.2 PERFORMANCE UNITS. A performance unit is a promise by the Company
to make a payment to, or on behalf of, the Participant, which may be contingent
upon the achievement of one or more performance targets specified by the
Committee. A performance unit is a right to receive or be credited with an
amount that may be determined by reference to Common Stock, other securities of
the Company or an Affiliate, or by reference to dollar amounts. Performance
units shall be subject to such conditions with respect to vesting, timing,
amount and payment as the Committee shall determine at the time of the Award.
Performance units shall be payable in cash. Performance unit Awards may be made
without cash payment by, or other out-of-pocket consideration from, the
Participant, either on the date of grant or the date of payment. By way of
example, but not limitation, performance units, called "EPS Units," may be
granted in tandem with Awards of stock options and the credited amount with
respect to an EPS Unit shall be determined with reference to the difference
between (i) the Company's annual earnings per share of Common Stock, as adjusted
to exclude items that the Committee determines to be appropriate for purposes of
the Award, and (ii) an amount specified by the Committee that reflects the level
of such earnings at the time of the Award and the principal manner of payment
shall be by application toward the option price upon the Participant's exercise
of the stock option.
8.3 PERFORMANCE SHARES. A performance share is a promise by the Company
to make a payment to the Participant, which may be contingent upon the
achievement of one or more performance targets specified by the Committee at the
time of the award. A performance share is a right to receive an amount that may
be determined by reference to Common Stock, other securities of the Company or
an Affiliate, or by reference to dollar amounts. Performance shares shall be
subject to such conditions with respect to vesting, timing, and amount of
payments as the Committee shall determine at the time of the Award. Performance
shares shall be payable in Common Stock, or other securities of the Company or
an Affiliate. Performance share Awards may be made without cash payment by, or
other out-of-pocket consideration from the Participant, either on the date of
grant or the date of payment.
8.4 DIVIDEND EQUIVALENTS. A dividend equivalent is the right to receive
an amount equal to the dividends paid on a specified number of shares of Common
Stock. A dividend equivalent shall be payable in cash.
8.5 OTHER AWARDS. The Committee may, from time to time, grant such
other Awards as the Committee may determine, provided that no such Award shall
be inconsistent with the terms of this Plan.
Amounts received pursuant to cash-only Awards granted under Sections
7.1 and 8.2 through 8.5 of this Plan, or any combination thereof, if intending
to comply with Rule 16a-1(c)(3)(i) under
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the Exchange Act or any successor provision, for each plan year to any
Participant who is subject to Section 16 of the Exchange Act shall be limited to
a maximum value of 500% of the Participant's annual salary at the rate in effect
on the first day of such plan year. For purposes of the preceding sentence, if a
Participant who is not a Covered Employee, but is subject to Section 16 of the
Exchange Act, does not receive a salary, the Participant shall be deemed to have
an annual salary of $250,000.
ARTICLE 9. - STOCK CERTIFICATES
9.1 STOCK CERTIFICATES. The Company shall not be required to issue or
deliver any certificate for shares of Stock under this Plan prior to fulfillment
of all of the following conditions:
(a) the admission of such shares to listing on all stock exchanges on
which the Stock is then listed, if any;
(b) the completion of any registration or other qualification of such
shares under any Federal or state law, under the rules or regulations of the
Securities and Exchange Commission, or under any other governmental regulatory
agency which the Committee shall in its sole discretion determine to be
necessary or advisable;
(c) the obtaining of any approval or other clearance from any Federal
or state governmental agency which the Committee shall in its sole discretion
determine to be necessary or advisable; and
(d) the lapse of such reasonable period of time following the exercise
of the grant as the Committee from time to time may establish for reasons of
administrative convenience.
If these conditions are not satisfied, the employee may lose his rights
to such Stock as determined by the Committee.
Separate stock certificates shall be issued by the Company for those
shares acquired pursuant to the exercise of an Incentive Stock Option and for
those shares acquired pursuant to the exercise of a Nonstatutory Stock Option.
ARTICLE 10. - DIVIDENDS
10.1 DIVIDENDS. At the time of each grant of an Award (other then an
Option Stock Appreciation Right or Restricted Stock) the Committee may, in its
sole discretion, determine whether the grant shall provide a dividend or a
dividend equivalent and the terms and conditions under which any such dividend
or dividend equivalent is to be provided, including but not limited to,
permitting or requiring immediate payment, deferral or investment of dividends
or dividend equivalents.
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ARTICLE 11. - PLAN ADMINISTRATION
11.1 PLAN ADMINISTRATION. The Plan and all Agreements shall be
administered, and all grants under this Plan shall be awarded, by the Committee.
The Committee shall have full authority and absolute sole discretion to:
(a) determine, consistent with provisions of the Plan, which of the
employees shall be granted Awards; the form and terms of such Awards; the timing
of such grants; the number of shares subject to each Award and the Option Price
of Stock covered by each Option (if applicable); and the period over which the
Awards shall become and remain exercisable (if applicable);
(b) construe and interpret the Plan and any Agreement or instrument
entered into under the Plan;
(c) determine the terms and provisions of each respective Agreement,
which need not be identical;
(d) make all other determinations and take all other actions deemed
necessary or advisable for the proper administration of the Plan; and
(e) adopt, alter, and repeal such rules, guidelines, and practices for
administration of the Plan and for its own acts and proceedings as it shall deem
advisable; to interpret the terms and provisions of the Plan and any grant
(including related Agreements); to decide all disputes arising in connection
with the Plan; and to otherwise supervise the administration of the Plan.
11.2 PERFORMANCE. The Committee may establish minimum performance
targets with respect to each Award. Performance targets may be based on
financial criteria, such as the Fair Market Value of Common Stock or other
measures of financial performance of the Company, or may be based on the
performance of a division or Subsidiary of the Company, or the performance of an
individual Participant. Notwithstanding anything in this Plan to the contrary,
any Awards of stock options or similar rights, stock appreciation rights,
performance units, or performance shares shall contain the restrictions on
assignability to the extent required by Rule 16b-3 under the Exchange Act or any
successor provision.
11.3 DECISIONS BINDING. All determinations and decisions by the
Committee pursuant to the Plan and all related orders or resolutions of the
Board of Directors shall be final, conclusive and binding on all persons,
including the Company, its Subsidiaries, its shareholders, Participants and
their estates and beneficiaries.
ARTICLE 12. - MISCELLANEOUS PROVISIONS
12.1 APPLICABLE LAW. To the extent not preempted by any laws of the
United States, the Plan shall be construed, regulated, interpreted and
administered according to the laws of the State of Texas.
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12.2 EXPENSES. The cost of Awards and the expenses of administering the
Plan shall be borne by the Company.
12.3 GENDER AND NUMBER. Unless the context clearly requires otherwise,
the masculine pronoun whenever used shall include the feminine and neuter
pronoun, the singular shall include the plural, and vice versa.
12.4 HEADINGS NOT PART OF PLAN. Headings of Articles and Sections are
inserted for convenience of reference only.
12.5 INDEMNIFICATION. No member of the Board of Directors or the
Committee shall be liable for any action or determination taken or made in good
faith with respect to this Plan nor shall any member of the Board of Directors
or the Committee be liable for any Agreement issued pursuant to this Plan or any
grants under it. Each member of the Board of Directors and the Committee shall
be indemnified by the Company against any losses incurred in such administration
of the Plan, unless his action constitutes gross negligence or willful
misconduct.
12.6 LIMITATION OF RIGHTS. Neither the adoption and maintenance of the
Plan or any Agreement nor anything contained herein shall, with respect to any
Participant, be deemed to:
(a) limit the right of the Company or any Subsidiary to discharge or
discipline any such person, or otherwise terminate or modify the terms of his
employment; or
(b) create any contract or other right or interest under the Plan other
than as specifically provided in the Plan and an Agreement.
12.7 NONTRANSFERABILITY. An Award shall not be transferable by the
Participant otherwise than by will or the laws of descent and distribution.
During the lifetime of the Participant, such Award shall be exercisable or
perfected only by the Participant or his guardian or legal representative in
accordance with the terms of this Plan and the Agreement.
12.8 OTHER COMPENSATION PLANS. The adoption of the Plan shall not
affect any other existing or future incentive or compensation plans for
directors, officers or employees of the Company or its Subsidiaries. Moreover,
the adoption of this Plan shall not preclude the Company or its Subsidiaries
from:
(a) establishing any other forms of incentive or other compensation for
directors, officers or employees of the Company or its Subsidiaries; or
(b) assuming any forms of incentive or other compensation of any person
or entity in connection with the acquisition or the business or assets, in whole
or in part, of any person or entity.
12.9 PLAN BINDING ON SUCCESSORS. This Plan shall be binding upon the
successors of the Company.
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12.10 TAX WITHHOLDING. Each Participant shall, no later than the date
as of which the value of a grant or of any Stock or other amount received
thereunder first becomes includable in the gross income of the Participant for
Federal income tax purposes, pay to the Company, or make arrangements
satisfactory to the Committee regarding payment of any Federal, state, or local
taxes of any kind required by law to be withheld with respect to such income.
The Committee may permit or require payment of such taxes to be made through the
tender of cash or Stock, the withholding of Stock or cash to be received through
Awards or any other arrangement satisfactory to the Committee. The Company and
its Subsidiaries shall, to the extent permitted by law, have the right to deduct
any such taxes from any payment of any kind otherwise due to the Participant.
12.11 SECURITIES LAWS. Notwithstanding anything to the contrary
expressed in the Plan, any provisions that vary from or conflict with any
applicable Federal or state securities laws (including any regulations
promulgated thereunder) shall be deemed to be modified to conform to and comply
with such laws. Without limiting the generality of the foregoing, it is the
intention of the Company that the Plan shall comply in all respect with Rule
16b-3 under the Exchange Act and, if any Plan provision is later found not to be
in compliance with Section 16 of the Exchange Act, the provision shall be deemed
null and void, and in all events the Plan shall be construed in favor of its
meeting the requirements of Rule 16b-3. Notwithstanding anything in the Plan to
the Contrary, the Board, in its absolute discretion, may bifurcate the Plan so
as to restrict, limit or condition the use of any provision of the Plan to
Participants who are officers subject to Section 16 of the Exchange Act without
so restricting, limiting or conditioning the Plan with respect to other
Participants.
12.12 SEVERABILITY. In the event any provision of the Plan shall be
held illegal or invalid for any reason, the illegality or invalidity shall not
affect the remaining provisions of the Plan, and the Plan shall be construed and
enforced as though the illegal or invalid provision had not been included.
12.13 UNFUNDED STATUS OF THE PLAN. The Plan is intended to be unfunded.
With respect to any payments as to which a Participant has a fixed and vested
interest but which are not yet made to a Participant by the Company, nothing
contained herein shall give any Participant any rights that are greater than
those of a general creditor of the Company. The adoption of this Plan and any
setting aside of amounts by the Company with which to discharge its obligations
hereunder shall not be deemed to create a trust.
12.14 FRACTIONAL SHARES. No Option may at any time be exercised with
respect to a fractional share. In the event shares of Stock are issued pursuant
to exercise of a Stock Appreciation Right, no fractional shares shall be issued;
however, a fractional Stock Appreciation Right may be exercised for cash.
12.15 RIGHT OF DISCHARGE RESERVED. Nothing in this Plan or in any Award
shall confer upon any employee or other individual the right to continue in the
employment or service of the Company or any Subsidiary or affect any right that
the Company or any Subsidiary may have to terminate the employment or service of
any such employee or other individual at any time for any reason.
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<PAGE> 12
ARTICLE 13. - CHANGE OF CONTROL
13.1 CHANGE IN CONTROL. In the event of a Change in Control of the
Company, all Awards granted under the Plan that are still outstanding and not
yet exercisable or are subject to restrictions, shall, unless otherwise provided
for in the related Agreements, become immediately exercisable, and all
restrictions shall be removed, as of the first date that the Change in Control
has been deemed to have occurred, and shall remain as such for the remaining
life of the Award as provided herein and within the provisions of the related
Agreements.
For purposes of this Section 13.1, a Change in Control of the Company
shall be deemed to have occurred if the conditions set forth in any one or more
of the following shall have been satisfied:
(a) any "person", other than Deas H. Warley III, as such term is used
in Sections 13(d) and 14(d) of the Exchange Act (other than the Company, any
trustee or other fiduciary holding securities under an employee benefit plan of
the Company or any corporation owned, directly or indirectly, by the
shareholders of the Company in substantially the same proportions as their
ownership of stock of the Company), is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing thirty percent (30%) or more of the
combined voting power of the Company's then outstanding securities;
(b) during any period of two consecutive years (not including any
period prior to the Effective Date of the Plan), individuals who at the
beginning of such period constitute the Board of Directors, and any new director
(other than a director designated by a person who has entered into an agreement
with the Company to effect a transaction described in paragraph (A), (B) or (C)
of this Section 13.01) whose election by the Board of Directors or nomination
for election by the Company's shareholders was approved by a vote of a least
two-thirds (2/3) of the directors then still in office who either were director,
at the beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute at least a majority
thereof; or
(c) the shareholders of the Company approve a merger or consolidation
of the Company with any other person, other than (i) a merger or consolidation
which would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities for the surviving
entity) more than fifty percent (50%) of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation, or (ii) a merger in which no "person" (as defined
above) acquires more than thirty percent (30%) of the combined voting power of
the Company's then outstanding securities; or
(d) the shareholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets (or any transaction
having a similar effect).
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ARTICLE 14. - EFFECTIVE DATE AND PLAN AMENDMENTS TERMINATION
14.1 EFFECTIVE DATE. This Plan shall become effective upon the approval
of the shareholders. The date of such approval is herein called the "Effective
Date". All Awards granted under the Plan shall be granted on or before the tenth
anniversary of the Effective Date.
14.2 TERMINATION, AMENDMENT AND MODIFICATION OF PLAN. The Board of
Directors may at any time terminate or suspend, and may at any time and from
time to time and in any respect amend or modify, the Plan; provided, however,
that no such action of the Board of Directors shall be taken without approval of
the Company's shareholders if such approval is required to comply with Rule
16b-3 under the Exchange Act or Section 422 of the Code, or any successor
provision.
[EFFECTIVE AS OF THE 1996 ANNUAL MEETING OF SHAREHOLDERS OF MIDLAND
RESOURCES, INC., HELD ON MAY 31, 1996.]
MIDLAND RESOURCES, INC.
By: /s/ Deas H. Warley III
------------------------------------
Chairman of the Board of Directors
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<PAGE> 1
EXHIBIT 4.4
MIDLAND RESOURCES, INC.
1995 DIRECTORS' STOCK OPTION PLAN
PREAMBLE. The Board of Directors of Midland Resources, Inc. adopted the
hereinbelow described 1995 Directors' Stock Option Plan effective as of April
10, 1995 and it was approved by the shareholders on May 19, 1995 with an
effective date for all purposes of April 10, 1995.
1. PURPOSE
The purpose of this 1995 Directors' Stock Option Plan (the "Plan") is
to give those members of the Board of Directors of Midland Resources, Inc. (the
"Company") who are not employees of the Company ("Eligible Director") an
opportunity to acquire shares of the common stock of the Company, $.001 par
value ("Common Stock"), to provide an incentive for such directors to continue
to promote the best interests of the Company and enhance growth, success and
long-term performance.
2. ADMINISTRATION.
(a) BOARD OF DIRECTORS. The Plan shall be administered by the
Board of Directors of the Company (the "Board"), which, to the
extent it shall determine, may delegate its powers with
respect to the administration of the Plan (except its powers
under Section 12(c)) to a committee of directors (the
"Committee") appointed by the Board and composed of not less
than two members of the Board, none of whom can be an Eligible
Director. If the Board chooses to appoint a Committee,
references hereinafter to the Board (except in Section 12(c))
shall be deemed to refer to the Committee. Notwithstanding
the preceding provisions of this Section, no member of the
Board may exercise discretion with respect to, or participate
in, the administration of the Plan if, at any time within one
year prior to such exercise or participation, he or she has
received stock, stock options, stock appreciation rights or
any other derivative security pursuant to the Plan.
(b) POWERS. Within the limits of the express provisions of the
Plan, the Board shall determine the limitations, restrictions
and conditions applicable to any such award. In making such
determinations, the Board may take into account the nature of
the services rendered by such directors, their present and
potential contributions to the Company's success and such
other factors as the Board in its discretion shall deem
relevant.
(c) INTERPRETATIONS. Subject to the express provisions of the
Plan, the Board may interpret the Plan, prescribe, amend and
rescind rules and regulations relating to it, determine the
terms and provisions of the respective awards and make all
other determinations it deems necessary or advisable for the
administration of the Plan.
<PAGE> 2
(d) DETERMINATIONS. The determinations of the Board on all
matters regarding the Plan shall be conclusive. A member of
the Board shall only be liable for any action taken or
determination made in bad faith.
3. AWARDS UNDER THE PLAN.
(a) TYPE OF AWARD. Awards under the Plan may be granted as
Nonstatutory Stock Options, as described in Section 4.
Nonstatutory Stock Options shall be referred to herein as
"Stock Options."
(b) MAXIMUM LIMITATIONS. The aggregate number of shares of Common
Stock available for grant under the Plan is 100,000, subject
to adjustment pursuant to Section 8. Shares of Common Stock
issued pursuant to the Plan may be either authorized but
unissued shares or shares now or hereafter held in the
treasury of the Company. In the event that, prior to the end
of the period during which Stock Options may be granted under
the Plan, any Stock Option under the Plan expires unexercised
or is terminated, surrendered or canceled without being
exercised, in whole or in part, for any reason, the number of
shares theretofore subject to such Stock Option or the
unexercised, terminated, forfeited or unearned portion
thereof, shall be added to the remaining number of shares of
Common stock available for grant as a Stock Option under the
Plan, including a grant to a former holder of such Stock
Option, upon such terms and conditions as the Board shall
determine, which terms may be more or less favorable than
those applicable to such former Stock Option.
(c) ANNUAL AWARDS. Eligible Directors shall be entitled to
receive a Stock Option award for 10,000 shares upon their
election or re-election to the Board at the Company's annual
meeting of shareholders, or should any annual meeting of
shareholders not be held in a calendar year, then upon the
election or re-election of an Eligible Director at a special
meeting of Shareholders. Following the grant of the awards in
Section 3(d), the first annual award will not occur until the
annual meeting of shareholders held in 1996.
(d) INITIAL AWARD. Subject to approval of the Plan, an initial
award was made April 10, 1995 of a Stock Option for 15,000
shares to Robert R. Donnelly and a Stock Option for 5,000
shares to Sam R. Brock.
4. STOCK OPTIONS.
(a) CONDITIONS. Stock Options may be granted under the Plan for
the purchase of shares of Common Stock. Stock Options shall
be in such form and upon such terms and conditions as the
Board shall from time to time determine, subject to the
following.
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<PAGE> 3
(i) OPTION PRICE. The price per share of Common Stock
subject to an Option (the "Option Price") shall not
be less than the fair market value of Common Stock.
The Board of Directors also determines the manner in
which the Option Price of an Option may be paid,
which may include the tender of cash or securities or
the withholding of Common Stock or cash to be
received through grants or any other arrangements
satisfactory to the Board of Directors.
(ii) TERM OF OPTIONS. No Stock Option shall be
exercisable after the date ten (10) years and one (1)
day from the date such Stock Option is granted.
(b) FORM. The form of the stock option agreement shall be subject
to paragraph (a) immediately above, be substantially in the
form as Exhibit 1 hereto.
5. PROVISIONS APPLICABLE TO STOCK OPTIONS.
(a) EXERCISE. Stock Options shall be subject to such terms and
conditions, shall be exercisable at such time or times, and
shall be evidenced by such form of written option agreement
between the optionee and the Company, as the Board shall
determine; provided, that such determinations are not
inconsistent with the other provisions of the Plan.
(b) MANNER OF EXERCISE OF OPTIONS AND PAYMENT FOR COMMON STOCK.
Stock Options may be exercised by an optionee by giving
written notice to the Secretary of the Company stating the
number of shares of Common Stock with respect to which the
Stock Option is being exercised and tendering payment
therefor. At the time that a Stock Option granted under the
Plan, or any part thereof, is exercised, payment for the
Common Stock issuable thereupon shall be made in full in cash
or by certified check or, if the Board in its discretion
agrees to accept, in shares of Common Stock of the Company
(the number of such shares paid for each share subject to the
Stock Option, or part thereof, being exercised shall be
determined by dividing the option price by the fair market
value per share of the Common Stock on the date of exercise).
As soon as reasonably possible following such exercise, a
certificate representing shares of Common Stock purchased,
registered in the name of the optionee, shall be delivered to
the optionee.
6. TRANSFERABILITY.
No Stock Option may be transferred, assigned, pledged or hypothecated
(whether by operation of law or otherwise), except as provided by will or the
applicable laws of descent or distribution, and no Stock Option shall be
subject to execution, attachment or similar process. Any attempted assignment,
transfer, pledge, hypothecation or other disposition of a Stock Option, or levy
of attachment or similar process upon the Stock Option not specifically
permitted herein shall be null
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<PAGE> 4
and void and without effect. A Stock Option may be exercised only by an
Eligible Director in his or her lifetime, or pursuant to Section 11(c), by his
or her estate or the person who acquires the right to exercise such Stock
Option upon his or her death by bequest or inheritance.
7. ADJUSTMENT PROVISIONS.
The aggregate number of shares of Common Stock with respect to which
Stock Options may be granted, the aggregate number of shares of Common Stock
subject to each outstanding Stock Option, and the option price per share of
each such Stock Option, may all be appropriately adjusted as the Board may
determine for any increase or decrease in the number of shares of issued Common
Stock resulting from a subdivision or consolidation of shares, whether through
reorganization, recapitalization, stock split-up, stock distribution or
combination of shares, or the payment of a share dividend or other increase or
decrease in the number of such shares outstanding effected without receipt of
consideration by the Company. Adjustments under this Section 7 shall be made
according to the sole discretion of the Board, and its decisions shall be
binding and conclusive.
8. DISSOLUTION, MERGER AND CONSOLIDATION.
Except as otherwise provided in Section 6, upon the dissolution or
liquidation of the Company, or upon a merger or consolidation of the Company in
which the Company is not the surviving corporation, each Stock Option granted
hereunder shall expire as of the effective date of such transaction; provided,
however, that the Board shall give at least 30 days prior written notice of
such event to each optionee during which time he or she shall have a right to
exercise his or her (1) vested or (2) if specifically provided in the option
grant, vested and not vested, wholly or partially unexercised Stock Option
(without regard to installment exercise limitations, if any) and, subject to
prior expiration pursuant to Section 10(b) or (c), each Stock Option shall be
exercisable after receipt of such written notice and prior to the effective
date of such transaction.
9. EFFECTIVE DATE AND CONDITIONS SUBSEQUENT TO EFFECTIVE DATE.
The Plan shall become effective on the date of the approval of the
Plan by the holders of a majority of the shares of Common Stock of the Company,
and the Plan shall be null and void and of no effect if such condition is not
fulfilled, and in such event each Stock Option granted hereunder shall,
notwithstanding any of the preceding provisions of the Plan, be null and void
and of no effect. No grant or award shall be made under the Plan more than ten
(10) years from the date of shareholder approval hereof; provided, however,
that the Plan and all Stock Options granted under the Plan prior to such date
shall remain in effect and subject to adjustment and amendment as herein
provided until they have been satisfied or terminated in accordance with the
terms of the respective grants or awards and the related agreements.
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<PAGE> 5
10. TERMINATION OF DIRECTORSHIP.
(a) Each Stock Option shall, unless sooner expired pursuant to
Section 11(b) or (c) below, expire on the first to occur of
the date one day after the tenth anniversary of the date of
grant thereof or the expiration date set forth in the
applicable option agreement.
(b) A Stock Option shall expire on the first to occur of the
applicable date set forth in paragraph (a) next above or
ninety (90) days after the date that the Eligible Director
ceases to be a director of the Company for any reason other
than death or disability. Notwithstanding the preceding
provisions of this paragraph, the Board, in its sole
discretion, may, be written notice given to a former Eligible
Director, permit the former director to exercise Stock
Options during a period which period shall not exceed ninety
(90) days. In no event, however, may the Board permit a
former director to exercise a Stock Option after the
expiration date contained in the agreement evidencing such
Stock Option.
(c) If an Eligible Director terminates his position by reason of
disability (as determined by the Board) or by reason of death,
his or her Stock Options, if any, shall expire on the first to
occur of the date set forth in paragraph (a) of this Section
10 and the first anniversary of such termination.
11. MISCELLANEOUS.
(a) LEGAL AND OTHER REQUIREMENTS. The obligation of the Company
to sell and deliver Common Stock under the Plan shall be
subject to all applicable laws, regulations, rules and
approvals, including, but not by way of limitation, the
effectiveness of a registration statement under the Securities
Act of 1933 if deemed necessary or appropriate by the Company.
Certificates for shares of Common Stock issued hereunder may
bear such legend as the Board shall deem appropriate.
(b) NO OBLIGATION TO EXERCISE OPTIONS. The granting of a Stock
Option shall impose no obligation upon an optionee to exercise
such Stock Option.
(c) TERMINATION AND AMENDMENT OF PLAN. The Board, without further
action on the part of the shareholders of the Company, may
from time to time alter, amend or suspend the Plan or any
Stock Option granted hereunder or may at any time terminate
the Plan, except that, unless approved by the shareholders in
accordance with Section 9 hereof, it may not (except to the
extent provided in Section 7 hereof): (i) change the total
number of shares of Common Stock available for grant under the
Plan; (ii) extend the duration of the Plan; (iii) increase the
maximum term of Stock Options; or (iv) change the class of
persons eligible to be granted Stock Options under the Plan.
No action taken by the Board under this Section may materially
and
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<PAGE> 6
adversely affect any outstanding Stock Option without the
consent of the holder thereof.
(d) APPLICATION OF FUNDS. The proceeds received by the Company
from the sale of Common Stock pursuant to Stock Options will
be used for general corporate purposes.
(e) WITHHOLDING TAXES. Upon the exercise of any Stock Option, the
Company shall have the right to require the optionee to remit
to the Company an amount sufficient to satisfy an federal,
state and local withholding tax requirements prior to the
delivery of any certificate or certificates for shares of
Common Stock. Whenever under the Plan payments are to be made
by the Company in cash or by check, such payments shall be net
of any amounts sufficient to satisfy all federal, state and
local withholding tax requirements.
(f) RIGHT TO TERMINATE. Nothing in the Plan or any agreement
entered into pursuant to the Plan shall confer upon any
Eligible Director the right to continue in such position or
affect any right which the Company may have to terminate the
position of such Eligible Director.
(g) RIGHTS AS A SHAREHOLDER. No optionee shall have any right or
privileges as a shareholder unless and until certificates for
shares of Common Stock are issued to him or her.
(h) FAIR MARKET VALUE. Whenever the fair market value of Common
Stock is to be determined under the Plan as of a given date,
such fair market value shall be:
(i) If the Common Stock is traded on the over-the-counter
market, the average of the mean between the sale
price for the Common Stock at the close of trading on
the date of grant as reported in The Wall Street
Journal for NASDAQ Small Cap Issues;
(ii) If the Common Stock is listed on a national
securities exchange, the closing price of the Common
Stock on the Composite Tape for the grant date; and
(iii) If the Common Stock is neither traded on the
over-the-counter market nor listed on a national
securities exchange, such value as the Board, in good
faith, shall determine.
(i) NOTICES. Every direction, revocation or notice authorized or
required by the Plan shall be deemed delivered to the Company
(a) on the date it is personally delivered to the Secretary of
the Company at its principal executive offices or (b) three
business days after it is sent by registered or certified
mail, postage prepaid, addressed to the
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<PAGE> 7
Secretary at such offices; and shall be deemed delivered to an
optionee (a) on the date it is personally delivered to him or
her or (b) three business days after it is sent by registered
or certified mail, postage prepaid, addressed to him or her at
the last address shown for him or her on the records of the
Company.
(j) APPLICABLE LAW. All questions pertaining to the validity,
construction and administration of the Plan and Stock Options
and Stock Appreciation Rights granted hereunder shall be
determined in conformity with the laws of the State of Texas.
(k) ELIMINATION OF FRACTIONAL SHARES. If under any provision of
the Plan which requires a computation of the number of shares
of Common Stock subject to a Stock Option, the number so
computed is not a whole number of shares of Common Stock, such
number of shares of Common Stock shall be rounded down to the
next whole number.
This Plan, in accordance with Section 9, is effective as of the
approval of shareholders evidenced in the Preamble hereof.
MIDLAND RESOURCES, INC.
By:
--------------------------------
Its:
-------------------------------
7
<PAGE> 1
EXHIBIT 5.1
[LETTERHEAD OF VINSON & ELKINS L.L.P.]
November 6, 1998
Vista Energy Resources, Inc.
550 West Texas Avenue, Suite 700
Midland, Texas 79701
Ladies and Gentlemen:
We have acted as counsel for Vista Energy Resources, Inc., a Delaware
corporation (the "Company"), in connection with the Company's registration on
Form S-8 under the Securities Act of 1933, as amended (the "Act"), of 380,000
shares (the "Shares") of common stock (the "Common Stock"), par value $0.01 per
share, of the Company, as that number may be adjusted from time to time pursuant
to the provisions of the Business Consultant Agreement, dated February 25, 1997,
between Midland Resources, Inc. and Edward K. Andrew, the 1994 Midland
Resources, Inc. Long-Term Incentive Plan, the 1995 Directors' Stock Option Plan
and the 1996 Midland Resources, Inc. Long-Term Incentive Plan (as amended, the
"Plans"), that may be issued pursuant to the Plans under the Company's
Registration Statement on Form S-8 (the "Registration Statement") filed with the
Securities and Exchange Commission (the "Commission").
In reaching the opinions set forth herein, we have examined and are
familiar with originals or copies, certified or otherwise identified to our
satisfaction, of such documents and records of the Company and such statutes,
regulations and other instruments as we deemed necessary or advisable for
purposes of this opinion, including (i) the Registration Statement on Form S-8,
(ii) the Certificate of Incorporation of the Company, as filed with the
Secretary of State of the State of Delaware, (iii) the Bylaws of the Company,
(iv) certain minutes of meetings of, and resolutions adopted by, the Board of
Directors of the Company relating to the Plans and (v) the Plans.
We have assumed that (i) all information contained in all documents we
reviewed is true, correct and complete, (ii) all signatures on all documents we
reviewed are genuine, (iii) all documents submitted to us as originals are true
and complete, (iv) all documents submitted to us as copies are true and complete
copies of the originals thereof, and (v) all persons executing and delivering
the documents we examined were competent to execute and deliver such documents.
We have also assumed that the Company will receive the full amount and
type of consideration (as specified in the Plans) for each of the Shares upon
issuance, that such consideration will be in cash, personal property, or
services already performed, that such consideration will equal
<PAGE> 2
Vista Energy Resources, Inc.
November 6, 1998
Page 2
or exceed the par value per share of Common Stock, that appropriate certificates
evidencing the Shares will be properly executed upon such issuance, and that
each grant of an award pursuant to the Plans will be duly authorized.
Based on the foregoing, and having due regard for the legal
considerations we deem relevant, we are of the opinion that each share of Common
Stock, when issued in accordance with the terms of the Plans, will be validly
issued, fully paid and nonassessable.
This opinion is limited in all respects to the laws of the State of
Texas, the Delaware General Corporation Law and the federal laws of the United
States of America. You should be aware that we are not admitted to the practice
of law in the State of Delaware.
This opinion letter may be filed as an exhibit to the Registration
Statement. In giving this consent, we do not thereby admit that we come within
the category of persons whose consent is required under Section 7 of the
Securities Act or the rules and regulations of the Securities and Exchange
Commission promulgated thereunder.
Very truly yours,
/s/ VINSON & ELKINS L.L.P.
<PAGE> 1
EXHIBIT 23.2
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 September 16, 1998
included in Vista Energy Resources, Inc. Form S-4 (Registration No. 333-58495)
and to all references to our Firm included in the attached registration
statement.
/s/ ARTHUR ANDERSEN LLP
Dallas, Texas
November 2, 1998
