<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 27, 2000
REGISTRATION NO. 333-
--------
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------
OCEAN ENERGY, INC.
(Exact name of Registrant as specified in its charter)
TEXAS 74-1764876
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
1001 FANNIN, SUITE 1600 77002
HOUSTON, TEXAS (Zip Code)
(Address of Principal Executive Offices)
OCEAN ENERGY, INC. 1999 LONG-TERM INCENTIVE PLAN
(Full title of the plan)
ROBERT K. REEVES
EXECUTIVE VICE PRESIDENT, GENERAL COUNSEL
AND SECRETARY
OCEAN ENERGY, INC.
1001 FANNIN, SUITE 1600
HOUSTON, TEXAS 77002
(Name and address of agent for service)
(713) 265-6000
(Telephone number, including area code, of agent for service)
Copy to:
KEITH FULLENWEIDER
VINSON & ELKINS L.L.P.
2300 FIRST CITY TOWER
1001 FANNIN
HOUSTON, TEXAS 77002-6760
----------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
====================================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING REGISTRATION
TO BE REGISTERED REGISTERED (1) PER SHARE (2) PRICE (2) FEE
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $0.10 par value (3) .. 3,000,000 $ 9.28 $27,843,750 $ 7,351
====================================================================================================================
</TABLE>
(1) The number of shares of common stock registered hereby is subject to
adjustment to prevent dilution resulting from stock splits, stock
dividends or similar transactions.
(2) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457.
(3) Includes associated preferred stock purchase rights. The rights are not
currently separable from the shares of common stock and are not currently
exercisable.
<PAGE> 2
INTRODUCTORY STATEMENT
On May 25, 1999, the shareholders of Ocean Energy, Inc., a Texas
corporation ("Ocean" or the "Company"), approved the Ocean Energy, Inc. 1999
Long-Term Incentive Plan (the "Plan"). This registration statement on Form S-8
relates to up to 3,000,000 shares of Ocean's common stock, par value $.10 per
share (the "Common Stock") that may be issued pursuant to the Plan.
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The documents containing the information specified in Part I of Form
S-8 will be sent or given to participants as specified by Rule 428(b)(1)
promulgated under the Securities Act of 1933, as amended (the "Securities Act").
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed by the Company with the Securities and
Exchange Commission (the "Commission") are incorporated by reference in this
Registration Statement:
(a) The Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1998, as filed with the Commission on February 16, 1999.
(b) The Company's amendment to its Annual Report on Form
10-K/A for the fiscal year ended December 31, 1998, as filed with the Commission
on March 1, 1999.
(c) The Company's Quarterly Reports on Form 10-Q for the
fiscal quarters ended March 31, 1999, June 30, 1999 and September 30, 1999, as
filed with the Commission on May 17, 1999, August 16, 1999 and November 12,
1999, respectively.
(d) The Company's Current Reports on Form 8-K filed with the
Commission on March 12, 1999, April 9, 1999, May 4, 1999, May 21, 1999, June 23,
1999, November 8, 1999 and January 7, 2000.
(e) The description of the Company's Common Stock contained in
the Registration Statement on Form 8-A declared effective by the Commission on
January 30, 1981, together with the amendments on Form 8 filed with the
Commission on January 29, 1981, January 30, 1981 and October 28, 1981.
(f) The description of the Company's Series B Junior
Participating Preferred Stock and related rights contained in the Registration
Statement on Form 8-A/A filed with the Commission on March 12, 1999.
In addition, all documents subsequently filed by the Company pursuant
to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), prior to the filing of a post-effective
amendment to this Registration Statement that indicates that all securities
offered hereby have been sold or that 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 of such documents. Any
statement contained in a document incorporated or deemed to be 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
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Registration Statement.
1
<PAGE> 3
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
J. Evans Attwell serves as a director of Ocean. Mr. Attwell is also an
attorney with Vinson & Elkins L.L.P., counsel to Ocean.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article 2.02-1 of the Texas Business Corporation Act provides that any
director or officer of a Texas corporation may be indemnified against judgments,
penalties (including excise and similar taxes), fines, settlements and
reasonable expenses actually incurred by him in connection with or in defending
any threatened, pending, or completed action, suit or proceeding, whether civil,
criminal, administrative, arbitrative or investigative, any appeal in such an
action suit or proceeding, and any inquiry or investigation that could lead to
such an action, suit or proceeding, in which he is a party or to which he is
subject by reason of his position. With respect to any proceeding arising from
actions taken in his official capacity, as a director or officer, he may be
indemnified so long as it shall be determined that he conducted himself in good
faith and that he reasonably believed that such conduct was in the corporation's
best interest. In cases not concerning conduct in his official capacity as a
director or officer, a director or officer may be indemnified so long as it
shall be determined that he conducted himself in good faith and that he
reasonably believed that his conduct was not opposed to the corporation's best
interest. In the case of any criminal proceeding, a director or officer may be
indemnified if he had no reasonable cause to believe his conduct was unlawful.
If a director or officer is wholly successful, on the merits or otherwise, in
connection with such a proceeding, such indemnification is mandatory. Article VI
of the Company's Bylaws requires the indemnification of officers and directors
to the fullest extent permitted by the Texas Business Corporation Act.
The Company maintains insurance coverage providing its officers and
directors with indemnification against certain liabilities for actions taken in
such capacities, including liabilities under the Securities Act of 1933.
Reference is made to Article Eleven of the Articles of Incorporation of
the Company, which was adopted by the Company's shareholders on May 11, 1988 and
which provides as follows:
"ARTICLE ELEVEN. A director of the corporation shall not be liable to
the corporation or its shareholders for monetary damages for an act or omission
in the director's capacity as a director, except for liability (i) for any
breach of the director's duty of loyalty to the corporation or its shareholders;
(ii) for acts or omissions not in good faith or that involve intentional
misconduct or a knowing violation of law; (iii) for any transaction from which
the director received an improper benefit, whether or not the benefit resulted
from an action taken within the scope of the director's office; (iv) for acts or
omissions for which the liability of a director is expressly provided for by
statute; or (v) for acts related to an unlawful stock repurchase or dividend
payment. Any repeal or amendment of this Article by the shareholders of the
corporation shall be prospective only, and shall not adversely affect any
limitation on the liability of a director of the corporation existing at the
time of such repeal or amendment. In addition to the circumstances in which a
director of the corporation is not liable as set forth in the preceding
sentences, a director shall not be liable to the fullest extent permitted by any
provision of the statutes of Texas hereafter enacted that further limits the
liability of a director."
Effective as of August 28, 1989, Article 7.06.B of the Texas
Miscellaneous Corporation Laws Act was amended to read in its entirety as
follows: "B. The articles of incorporation of a corporation may provide that a
director of the corporation shall not be liable, or shall be liable only to the
extent provided in the articles of incorporation, to the corporation or its
shareholders or members for monetary damages for an act or omission in the
director's capacity as a director, except that this article does not authorize
the elimination or limitation of the liability of a director to the extent the
director is found liable for: (1) a breach of the director's duty of loyalty to
the corporation or its shareholders or members; (2) an act or omission not in
good faith that constitutes a breach of duty of the director to the corporation
or an act or omission that involves intentional misconduct or a knowing
violation of the law; (3) a transaction from which the director received an
improper benefit, whether or not the benefit resulted
2
<PAGE> 4
from an action taken within the scope of the director's office; or (4) an act or
omission for which the liability of a director is expressly provided for by an
applicable statute."
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
4.1 Articles of Incorporation of the Company, as amended,
including Articles of Amendment filed May 12, 1988, May 21,
1991 and May 21, 1993 with the Secretary of State of the State
of Texas, Articles of Merger filed March 30, 1999, with the
Secretary of State of the State of Texas (filed as Exhibit 4.1
to the Company's Post-Effective Amendment No. 1 to Form S-4 on
Form S-8 filed with the Securities and Exchange Commission on
May 11, 1999 and incorporated herein by reference), Articles
of Amendment filed June 2, 1999 with the Secretary of State of
the State of Texas (filed as Exhibit 3.1 to the Company's
Quarterly Report on Form 10-Q for the quarter ended June 30,
1999 and incorporated herein by reference) and that certain
Statement of Resolution Establishing Series of Shares of
Series B Junior Participating Preferred Stock of the Company
filed March 21, 1989 with the Secretary of State of the State
of Texas (filed as Exhibit 3.1 to the Company's Quarterly
Report on Form 10-Q for the quarter ended June 30, 1998 and
incorporated herein by reference).
4.2 Bylaws of the Company, as amended through March 7, 1997 (filed
as Exhibit 4.9 to the Company's Form S-3 filed with the
Securities and Exchange Commission on September 18, 1997 and
incorporated herein by reference).
4.3 Amended and Restated Rights Agreement, dated March 17, 1989,
as amended effective June 13, 1992 and amended and restated as
of December 12, 1997, between the Company and BankBoston, N.A.
(as successor to NCNB Texas National Bank), including Form of
Statement of Resolution Establishing the Series B Junior
Participating Preferred Stock, the Form of Right Certificate
and Form of Summary of Rights to Purchase Preferred Shares
(filed as Exhibit 2 to the Company's Current Report on Form
8-K dated December 15, 1997 and incorporated herein by
reference).
4.4 Amendment No. 1 to Amended and Restated Rights Agreement dated
November 24, 1998, between the Company and BankBoston, N.A.
(filed as Exhibit 4.1 to the Company's Current Report on Form
8-K filed on December 1, 1998 and incorporated herein by
reference).
4.5 Amendment No. 2 to Amended and Restated Rights Agreement dated
March 10, 1999, between the Company and BankBoston, N.A.
(filed as Exhibit 4.1 to the Company's Current Report on Form
8-K filed on March 12, 1999 and incorporated herein by
reference).
4.6* Ocean Energy, Inc. 1999 Long-Term Incentive Plan.
5.1* Opinion of Vinson & Elkins L.L.P. as to the legality of the
shares being registered.
23.1* Consent of KPMG LLP - Company.
23.2* Consent of Arthur Andersen LLP - OEI-Delaware.
23.3* Consent of Netherland, Sewell & Associates, Inc. - Company.
23.4* Consent of Ryder Scott Company Petroleum Engineers - Company.
23.5* Consent of DeGolyer and McNaughton - Company.
3
<PAGE> 5
23.6* Consent of McDaniel & Associates Consultants, Ltd. -
OEI-Delaware.
23.7* Consent of Netherland, Sewell & Associates, Inc. -
OEI-Delaware.
23.8* Consent of Ryder Scott Company Petroleum Engineers -
OEI-Delaware.
23.11 Consent of Vinson & Elkins L.L.P. (included in the opinion
filed as Exhibit 5.1 to this Registration Statement).
24.1 Powers of Attorney (included in the signature page).
----------------
*Filed herewith.
ITEM 9. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement.
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement.
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the registration statement is on Form S-3 or Form S-8, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act, each filing of
the registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (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.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, the
4
<PAGE> 6
registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
5
<PAGE> 7
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Houston, State of Texas on January 27, 2000.
OCEAN ENERGY, INC.
By: /s/ James T. Hackett
--------------------
James T. Hackett
Chairman, President and Chief
Executive Officer
The undersigned directors and officers of Ocean Energy, Inc. hereby
constitute and appoint William L. Transier and Robert K. Reeves and each of
them, with full power to act without the other and with full power of
substitution, our true and lawful attorneys-in-fact with full power to execute
in our name and behalf in the capacities indicated below any and all amendments
(including post-effective amendments and amendments thereto) to this
registration statement on Form S-8 and to file the same, with all exhibits
thereto and other documents in connection therewith with the Commission and
hereby ratify and confirm all that such attorneys-in-fact, or either of them, or
their substitutes shall lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement on Form S-8 has been signed below by the following
persons in the capacities indicated on January 27, 2000.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- --------- -----
<S> <C>
/s/ James T. Hackett Chairman, President and Chief Executive Officer
- ------------------------------------------ (Principal Executive Officer)
James T. Hackett
/s/ William L. Transier Executive Vice President and Chief Financial Officer
- ------------------------------------------ (Principal Financial Officer)
William L. Transier
/s/ Gordon L. McConnell Vice President and Controller
- ------------------------------------------ (Principal Accounting Officer)
Gordon L. McConnell
/s/ John B. Brock Director
- ------------------------------------------
John B. Brock
- ------------------------------------------ Director
Milton Carroll
- ------------------------------------------ Director
Thomas D. Clark, Jr.
</TABLE>
<PAGE> 8
<TABLE>
<CAPTION>
SIGNATURE TITLE
- --------- -----
<S> <C>
/s/ James C. Flores Director
- ------------------------------------------
James C. Flores
/s/ Peter J. Fluor Director
- ------------------------------------------
Peter J. Fluor
/s/ Robert L. Howard Director
- ------------------------------------------
Robert L. Howard
/s/ Charles F. Mitchell, M.D. Director
- ------------------------------------------
Charles F. Mitchell, M.D.
/s/ J. Evans Attwell Director
- ------------------------------------------
J. Evans Attwell
/s/ Barry J. Galt Director
- ------------------------------------------
Barry J. Galt
/s/ Elvis L. Mason Director
- ------------------------------------------
Elvis L. Mason
/s/ David K. Newbigging Director
- ------------------------------------------
David K. Newbigging
/s/ Dee S. Osborne Director
- ------------------------------------------
Dee S. Osborne
Director
- ------------------------------------------
R.A. Walker
</TABLE>
<PAGE> 9
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
No. Description
------- -----------
<S> <C>
4.1 Articles of Incorporation of the Company, as amended,
including Articles of Amendment filed May 12, 1988, May 21,
1991 and May 21, 1993 with the Secretary of State of the State
of Texas, Articles of Merger filed March 30, 1999, with the
Secretary of State of the State of Texas (filed as Exhibit 4.1
to the Company's Post-Effective Amendment No. 1 to Form S-4 on
Form S-8 filed with the Securities and Exchange Commission on
May 11, 1999 and incorporated herein by reference), Articles
of Amendment filed June 2, 1999 with the Secretary of State of
the State of Texas (filed as Exhibit 3.1 to the Company's
Quarterly Report on Form 10-Q for the quarter ended June 30,
1999 and incorporated herein by reference) and that certain
Statement of Resolution Establishing Series of Shares of
Series B Junior Participating Preferred Stock of the Company
filed March 21, 1989 with the Secretary of State of the State
of Texas (filed as Exhibit 3.1 to the Company's Quarterly
Report on Form 10-Q for the quarter ended June 30, 1998 and
incorporated herein by reference).
4.2 Bylaws of the Company, as amended through March 7, 1997 (filed
as Exhibit 4.9 to the Company's Form S-3 filed with the
Securities and Exchange Commission on September 18, 1997 and
incorporated herein by reference).
4.3 Amended and Restated Rights Agreement, dated March 17, 1989,
as amended effective June 13, 1992 and amended and restated as
of December 12, 1997, between the Company and BankBoston, N.A.
(as successor to NCNB Texas National Bank), including Form of
Statement of Resolution Establishing the Series B Junior
Participating Preferred Stock, the Form of Right Certificate
and Form of Summary of Rights to Purchase Preferred Shares
(filed as Exhibit 2 to the Company's Current Report on Form
8-K dated December 15, 1997 and incorporated herein by
reference).
4.4 Amendment No. 1 to Amended and Restated Rights Agreement dated
November 24, 1998, between the Company and BankBoston, N.A.
(filed as Exhibit 4.1 to the Company's Current Report on Form
8-K filed on December 1, 1998 and incorporated herein by
reference).
4.5 Amendment No. 2 to Amended and Restated Rights Agreement dated
March 10, 1999, between the Company and BankBoston, N.A.
(filed as Exhibit 4.1 to the Company's Current Report on Form
8-K filed on March 12, 1999 and incorporated herein by
reference).
4.6* Ocean Energy, Inc. 1999 Long-Term Incentive Plan.
5.1* Opinion of Vinson & Elkins L.L.P. as to the legality of the
shares being registered.
23.1* Consent of KPMG LLP - Company.
23.2* Consent of Arthur Andersen LLP - OEI-Delaware.
23.3* Consent of Netherland, Sewell & Associates, Inc. - Company.
23.4* Consent of Ryder Scott Company Petroleum Engineers - Company.
23.5* Consent of DeGolyer and McNaughton - Company.
23.6* Consent of McDaniel & Associates Consultants, Ltd. -
OEI-Delaware.
23.7* Consent of Netherland, Sewell & Associates, Inc. -
OEI-Delaware.
23.8* Consent of Ryder Scott Company Petroleum Engineers -
OEI-Delaware.
23.11 Consent of Vinson & Elkins L.L.P. (included in the opinion
filed as Exhibit 5.1 to this Registration Statement).
24.1 Powers of Attorney (included in the signature page).
</TABLE>
----------------
*Filed herewith.
<PAGE> 1
EXHIBIT 4.6
OCEAN ENERGY, INC.
1999 LONG-TERM INCENTIVE PLAN
SECTION 1. Purpose of the Plan.
The Ocean Energy, Inc. 1999 Long-Term Incentive Plan (the "Plan") is intended
to promote the interests of Ocean Energy, Inc., a Texas corporation (the
"Company"), by encouraging employees of the Company, its subsidiaries and
affiliated entities and Directors (as defined below) to acquire or increase
their equity interest in the Company and to provide a means whereby employees
may develop a sense of proprietorship and personal involvement in the
development and financial success of the Company, and to encourage them to
remain with and devote their best efforts to the business of the Company
thereby advancing the interests of the Company and its shareholders. The Plan
is also contemplated to enhance the ability of the Company, its subsidiaries
and affiliated entities to attract and retain the services of individuals who
are essential for the growth and profitability of the Company.
SECTION 2. Definitions.
As used in the Plan, the following terms shall have the meanings set forth
below:
"Affiliate" shall mean (i) any entity that, directly or through one or
more intermediaries, is controlled by the Company and (ii) any entity
in which the Company has a significant equity interest, as determined
by the Committee.
"Award" shall mean any Option, Stock Appreciation Right, Restricted
Stock, Performance Award, Phantom Shares, Bonus Shares or Cash Award.
"Award Agreement" shall mean any written agreement, contract, or other
instrument or document evidencing any Award, which may, but need not,
be executed or acknowledged by a Participant.
"Board" shall mean the Board of Directors of the Company.
"Bonus Shares" shall mean an award of Shares granted pursuant to
Section 6(e) of the Plan.
"Cash Award" shall mean an award payable in cash granted pursuant to
Section 6(g) of the Plan.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the rules and regulations thereunder.
1
<PAGE> 2
"Committee" shall mean the Compensation Committee of the Board, which
shall be comprised solely of two or more Directors who are "outside
directors" within the meaning of section 162(m) of the Code and
"Non-Employee Directors" within the meaning of Rule 16b-3.
"Director" shall mean a member of the Board who is not also an
Employee.
"Employee" shall mean any employee of the Company or an Affiliate.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Fair Market Value" shall mean, with respect to Shares, the closing
price of a Share quoted on the New York Stock Exchange Composite Tape,
or if the Shares are not listed on the New York Stock Exchange, on the
principal United States securities exchange registered under the
Exchange Act on which such stock is listed, or if the Shares are not
listed on any such stock exchange, the last sale price, or if none is
reported, the highest closing bid quotation on the National
Association of Securities Dealers, Inc., Automated Quotations System
or any successor system then in use on the Date of Grant, or if none
are available on such day, on the next preceding day on which the
Shares were publicly traded. In the event the Shares are not publicly
traded at the time a determination of its fair market value is
required to be made hereunder, the determination of fair market value
shall be made in good faith by the Committee.
"Incentive Stock Option" or "ISO" shall mean an option granted under
Section 6(a) of the Plan that is intended to qualify as an "incentive
stock option" under Section 422 of the Code or any successor provision
thereto.
"Non-Qualified Stock Option" or "NQO" shall mean an option granted
under Sections 6(a) or 6(h) of the Plan that is not intended to be an
Incentive Stock Option.
"Option" shall mean an Incentive Stock Option or a Non-Qualified Stock
Option.
"Participant" shall mean any individual granted an Award under the
Plan.
"Performance Award" shall mean any right granted under Section 6(d) of
the Plan.
"Person" shall mean individual, corporation, partnership, association,
joint-stock company, trust, unincorporated organization, government or
political subdivision thereof or other entity.
"Phantom Shares" shall mean an Award of the right to receive Shares
issued at the end of a Restricted Period which is granted pursuant to
Section 6(f) of the Plan.
2
<PAGE> 3
"Restricted Period" shall mean the period established by the Committee
with respect to an Award during which the Award either remains subject
to forfeiture or is not exercisable by the Participant.
"Restricted Stock" shall mean any Share, prior to the lapse of
restrictions thereon, granted under Section 6(c) of the Plan.
"Rule 16b-3" shall mean Rule 16b-3 promulgated by the SEC under the
Exchange Act, or any successor rule or regulation thereto as in effect
from time to time.
"SEC" shall mean the Securities and Exchange Commission, or any
successor thereto.
"Shares" or "Common Shares" or "Common Stock" shall mean the common
stock of the Company, $0.10 par value, and such other securities or
property as may become the subject of Awards of the Plan.
"Spread" shall mean, in the case of a Stock Appreciation Right, an
amount equal to the excess, if any, of the Fair Market Value of a
Share on the date such right is exercised over the exercise price of
such Stock Appreciation Right.
"Stock Appreciation Right" or "Right" shall mean any right to receive
the spread of Shares granted under Section 6(b) of the Plan.
"Substitute Award" shall mean Awards granted in assumption of, or in
substitution for, outstanding awards previously granted by (i) a
company acquired by the Company or one or more of its Affiliates, or
(ii) a company with which the Company or one or more of its Affiliates
combines. To the extent reasonably practical, as determined by the
Committee in its sole discretion, Substitute Awards shall contain the
same terms and conditions as the award they replace.
SECTION 3. Administration.
The Plan shall be administered by the Committee. A majority of the Committee
shall constitute a quorum, and the acts of the members of the Committee who are
present at any meeting thereof at which a quorum is present, or acts
unanimously approved by the members of the Committee in writing, shall be the
acts of the Committee. Subject to the terms of the Plan and applicable law, and
in addition to other express powers and authorizations conferred on the
Committee by the Plan, the Committee shall have full power and authority to:
(i) designate Participants; (ii) determine the type or types of Awards to be
granted to an eligible Participant; (iii) determine the number of Shares to be
covered by, or with respect to which payments, rights, or other matters are to
be calculated in connection with, Awards; (iv) determine the terms and
conditions of any Award, including such terms and conditions as shall be
requisite in the judgment of the Committee to cause designated Options to
qualify as Incentive Stock Options; (v) determine whether, to what extent, and
under what circumstances Awards may be settled or exercised in cash, Shares,
other securities, other
3
<PAGE> 4
Awards or other property, or canceled, forfeited, or suspended and the method
or methods by which Awards may be settled, exercised, canceled, forfeited, or
suspended; (vi) determine whether, to what extent, and under what circumstances
cash, Shares, other securities, other Awards, other property, and other amounts
payable with respect to an Award shall be deferred either automatically or at
the election of the holder thereof or of the Committee; (vii) interpret and
administer the Plan and any instrument or agreement relating to, or Award made
under, the Plan; (viii) establish, amend, suspend, or waive such rules and
regulations and appoint such agents as it shall deem appropriate for the proper
administration of the Plan; and (ix) make any other determination and take any
other action that the Committee deems necessary or desirable for the
administration of the Plan. The Committee may correct any defect or supply any
omission or reconcile any inconsistency in the Plan or in any Award Agreement
in the manner and to the extent it shall deem expedient to carry it into
effect. Unless otherwise expressly provided in the Plan, all designations,
determinations, interpretations, and other decisions under or with respect to
the Plan or any Award shall be within the sole discretion of the Committee, may
be made at any time and shall be final, conclusive, and binding upon all
Persons, including the Company, any Affiliate, any Participant, any holder or
beneficiary of any Award, any shareholder, any Employee and any Director.
SECTION 4. Shares Available for Awards.
(a) Shares Available. Subject to adjustment as provided in Section 4(c) and
below, the number of Shares with respect to which Awards may be granted under
the Plan shall be 3,000,000. If any Shares covered by an Award granted under
the Plan, or to which such an Award relates, are forfeited, or if an Award
otherwise terminates or is canceled without the delivery of Shares or of other
consideration, then the Shares covered by such Award, or to which such Award
relates, or the number of Shares otherwise counted against the aggregate number
of Shares with respect to which Awards may be granted, to the extent of any
such forfeiture, termination or cancellation, shall again be, or shall become,
Shares with respect to which Awards may be granted.
(b) Sources of Shares Deliverable Under Awards. Any Shares delivered pursuant
to an Award may consist, in whole or in part, of authorized and unissued Shares
or of treasury Shares. Any of such Shares which remain unissued and which are
not subject to outstanding Awards at the termination of the Plan shall cease to
be subject to the Plan but, until termination of the Plan, the Company shall at
all times make available a sufficient number of shares to meet the requirements
of the Plan.
(c) Adjustments. In the event that the Committee determines that any dividend
or other distribution (whether in the form of cash, Shares, other securities,
or other property), recapitalization, stock split, reverse stock split,
reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, or exchange of Shares or other securities of the Company, issuance
of warrants or other rights to purchase Shares or other securities of the
Company, or other similar corporate transaction or event affects the Shares
such that an adjustment is determined by the Committee in its discretion to be
appropriate in order to
4
<PAGE> 5
prevent dilution or enlargement of the benefits or potential benefits intended
to be made available under the Plan, then the Committee shall, in such manner
as it may deem equitable, adjust any or all of (i) the number and type of
Shares (or other securities or property) with respect to which Awards may be
granted, (ii) the number and type of Shares (or other securities or property)
subject to outstanding Awards, and (iii) the grant or exercise price with
respect to any Award or, if deemed appropriate, make provision for a cash
payment to the holder of an outstanding Award; provided, in each case, that
with respect to Awards of Incentive Stock Options and Awards intended to
qualify as performance based compensation under Section 162(m)(4)(C) of the
Code, no such adjustment shall be authorized to the extent that such authority
would cause the Plan to violate Section 422(b)(1) of the Code or would cause
such Award to fail to so qualify under Section 162(m) of the Code, as the case
may be, or any successor provisions thereto; and provided, further, that the
number of Shares subject to any Award denominated in Shares shall always be a
whole number.
SECTION 5. Eligibility and Award Limits.
Other than Awards granted to Directors pursuant to Section 6(h) of the Plan,
any Employee shall be eligible to be designated a Participant. However, no
Employee may receive Share-denominated Awards during the term of the Plan that,
in the aggregate, are with respect to more than 33-1/3% of all Shares that may
be made subject to Awards under the Plan. The maximum amount of compensation
(including the Fair Market Value of any Shares) that may be paid to any
Participant with respect to any single Performance Award or Cash Award in any
calendar year shall be $1.5 million. With respect to any Restricted Stock
Award, Phantom Stock Award, or Cash Award granted in tandem with, and expressed
as a percentage of, a Share-denominated Award which is intended to qualify as
"performance-based compensation," the maximum payment to any Participant with
respect to such Award in any calendar year shall be an amount (in cash and/or
in Shares) equal to the Fair Market Value of the number of Shares subject to
such Award. The limitations set forth in the preceding sentences shall be
applied in a manner which will permit compensation generated under the Plan to
constitute "performance-based" compensation for purposes of section 162(m) of
the Code, including, without limitation, counting against such maximum number
of Shares, to the extent required under Section 162(m) of the Code and
applicable interpretive authority thereunder, any Shares subject to Options
that are canceled or repriced. Further, Restricted Stock, Performance Awards,
Phantom Shares and Bonus Shares paid in Shares may not, in the aggregate,
exceed 20% of all Shares that may be the subject of Awards under the Plan.
SECTION 6. Awards.
(a) Options. Subject to the provisions of the Plan, the Committee shall have
the authority to determine the Employees to whom Options shall be granted, the
number of Shares to be covered by each Option, the purchase price therefor and
the conditions and limitations applicable to the exercise of the Option,
including the following terms and conditions and such additional terms and
conditions, as the Committee shall determine, that are not inconsistent with
the provisions of the Plan.
5
<PAGE> 6
(i) Exercise Price. The purchase price per Share purchasable under an
Option shall be determined by the Committee at the time each Option is
granted, but shall not be less than the Fair Market Value of a Share
on such date, unless such Option is a Substitute Award.
(ii) Time and Method of Exercise. The Committee shall determine the
time or times at which an Option may be exercised in whole or in part,
and the method or methods by which, and the form or forms (which may
include, without limitation, cash, already-owned Shares, outstanding
Awards, Shares that would otherwise be acquired upon exercise of the
Option, a "cashless-broker" exercise (through procedures approved by
the Company), other securities or other property, or any combination
thereof, having a Fair Market Value on the exercise date equal to the
relevant exercise price) in which payment of the exercise price with
respect thereto may be made or deemed to have been made.
(iii) Special Limitations on Incentive Stock Options. Incentive Stock
Options may be granted only to employees of the Company and its
subsidiaries, within the meaning of Section 424(f) of the Code. To the
extent that the aggregate Fair Market Value (determined at the time
the respective Incentive Stock Option is granted) of Shares with
respect to which Incentive Stock Options granted after 1986 are
exercisable for the first time by an individual during any calendar
year under all incentive stock option plans of the Company and its
parent and subsidiary corporations exceeds $100,000, such 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 a Participant's Incentive
Stock Options will not constitute Incentive Stock Options because of
such limitation and shall notify the Participant of such determination
as soon as practicable after such determination. 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 (1) at the time such Option is granted
the option price is at least 110% of the Fair Market Value of the
Shares subject to the Option and (2) such Option by its terms is not
exercisable after the expiration of five years from the date of grant.
(iv) Expiration. Except as provided in Section 6(a)(iii), each Option
shall expire ten (10) years from the date of grant thereof, and,
unless provided otherwise in the Award Agreement, shall be subject to
earlier termination as follows: Options, to the extent exercisable as
of the date a Participant ceases to be an Employee, must be exercised
within three (3) months of such date unless such event results from
death, disability or retirement, in which case all outstanding Options
held by such Participant may be exercised in full by the optionee, the
optionee's legal representative, heir or devisee, as the case may be,
within two (2) years from the date of the Participant's death,
disability or retirement; provided, however, that no such event shall
extend the
6
<PAGE> 7
expiration date of an Option beyond the 10th anniversary of its date
of grant. Options that are not exercisable on termination of
employment shall be automatically canceled on termination of
employment. For purposes hereof, (x) "disability" means the
Participant is receiving benefits under a long-term disability plan of
the Company or, if the Company does not maintain such a plan, a
determination by the Committee, upon the basis of medical evidence
satisfactory to it, that the Participant is totally disabled, whether
due to a physical or mental condition, such that he is expected to be
unable to continue his employment for a continuous period of 12 or
more months, and (y) "retirement" means a termination of employment on
or after the Participant has reached age 65 or, with the consent of
the Committee, on or after reaching age 55.
(b) Stock Appreciation Rights. Subject to the provisions of the Plan,
the Committee shall have the authority to determine the Employees to
whom Stock Appreciation Rights shall be granted, the number of Shares
to be covered by each Stock Appreciation Right Award, the grant price
thereof and the conditions and limitations applicable to the exercise
thereof. A Stock Appreciation Right may be granted in tandem with
another Award, in addition to another Award, or freestanding and
unrelated to another Award. A Stock Appreciation Right granted in
tandem with or in addition to another Award may be granted either at
the same time as such other Award or at a later time.
(i) Grant Price. The grant price of a Stock Appreciation Right shall
be determined by the Committee on the date of grant, but shall not be
less than the Fair Market Value of a Share on such date (or such
greater exercise price as may be required if such Stock Appreciation
Right is granted in connection with an Incentive Stock Option that
must have an exercise price equal to 110% of the Fair Market Value of
a Share on the date of grant pursuant to Section 6(a)(iii)), unless
such Stock Appreciation Right is a Substitute Award.
(ii) Other Terms and Conditions. Subject to the terms of the Plan and
any applicable Award Agreement, the Committee shall determine, at or
after the grant of a Stock Appreciation Right, the term, methods of
exercise, methods of settlement, and any other terms and conditions of
any Stock Appreciation Right. Any such determination by the Committee
may be changed by the Committee from time to time and may govern the
exercise of Stock Appreciation Rights granted or exercised prior to
such determination as well as Stock Appreciation Rights granted or
exercised thereafter. The Committee may impose such conditions or
restrictions on the exercise of any Stock Appreciation Right as it
shall deem appropriate.
(iii) Expiration. Each Stock Appreciation Right shall expire ten (10)
years from the date of grant thereof, or, if granted in tandem with
another Award, upon the expiration of such tandem Award, if earlier,
and, unless provided otherwise in the Award Agreement, shall be
subject to earlier termination as follows: Stock Appreciation Rights,
to the extent exercisable as of the date a Participant ceases to be an
Employee, must be exercised within three (3) months of such date
unless such event results from death, disability or retirement, in
which case all outstanding Stock Appreciation
7
<PAGE> 8
Rights held by such Participant may be exercised in full by the
Participant, the Participant's legal representative, heir or devisee,
as the case may be, within two (2) years from the date of the
Participant's death, disability or retirement; provided, however, that
no such event shall extend the expiration date of a Stock Appreciation
Right beyond the 10th anniversary of its date of grant. Stock
Appreciation Rights that are not exercisable on termination of
employment shall be automatically canceled on termination of
employment. For purposes hereof, "disability" and "retirement" shall
have their respective meanings as set forth in Section 6(a)(iv).
(c) Restricted Stock. Subject to the provisions of the Plan, the
Committee shall have the authority to determine the Employees to whom
Restricted Stock shall be granted, the number of Shares of Restricted
Stock to be granted to each such Participant, the duration of the
Restricted Period during which, and the conditions, including
performance goals, if any, under which, the Restricted Stock may be
forfeited to the Company, and the other terms and conditions of such
Awards.
(i) Dividends. Dividends paid on Restricted Stock may be paid directly
to the Participant, may be subject to risk of forfeiture and/or
transfer restrictions during any period established by the Committee
or sequestered and held in a bookkeeping cash account (with or without
interest) or reinvested on an immediate or deferred basis in
additional shares of Common Stock, which credit or shares may be
subject to the same restrictions as the underlying Award or such other
restrictions, all as determined by the Committee in its discretion.
(ii) Registration. Any Restricted Stock may be evidenced in such
manner as the Committee shall deem appropriate, including, without
limitation, book-entry registration or issuance of a stock certificate
or certificates. In the event any stock certificate is issued in
respect of Restricted Stock granted under the Plan, such certificate
shall be registered in the name of the Participant and shall bear an
appropriate legend referring to the terms, conditions, and
restrictions applicable to such Restricted Stock.
(iii) Forfeiture and Restrictions Lapse. Except as otherwise
determined by the Committee or the terms of the Award that granted the
Restricted Stock, upon termination of a Participant's employment (as
determined under criteria established by the Committee) for any reason
during the applicable Restricted Period, all Restricted Stock shall be
forfeited by the Participant and re-acquired by the Company. The
Committee may, when it finds that a waiver would be in the best
interests of the Company and not cause such Award, if it is intended
to qualify as performance-based compensation under Section 162(m) of
the Code, to fail to so qualify under Section 162(m) of the Code,
waive in whole or in part any or all remaining restrictions with
respect to such Participant's Restricted Stock. Unrestricted Shares,
evidenced in such manner as the Committee shall deem appropriate,
shall be issued to the holder of Restricted Stock promptly after the
applicable restrictions have lapsed or otherwise been satisfied.
8
<PAGE> 9
(iv) Transfer Restrictions. During the Restricted Period, Restricted
Stock will be subject to the limitations on transfer as provided in
Section 6(i)(iii).
(d) Performance Awards. The Committee shall have the authority to determine the
Employees who shall receive a Performance Award, which shall be denominated as
a cash amount at the time of grant and confer on the Participant the right to
receive payment of such Award, in whole or in part, upon the achievement of
such performance goals during such performance periods as the Committee shall
establish with respect to the Award.
(i) Terms and Conditions. Subject to the terms of the Plan and any
applicable Award Agreement, the Committee shall determine the
performance goals to be achieved during any performance period, the
length of any performance period, the amount of any Performance Award
and the amount of any payment or transfer to be made pursuant to any
Performance Award.
(ii) Payment of Performance Awards. Performance Awards may be paid (in
cash and/or in Shares, in the sole discretion of the Committee) in a
lump sum or in installments following the close of the performance
period, in accordance with procedures established by the Committee
with respect to such Award.
(e) Bonus Shares. The Committee shall have the authority, in its discretion, to
grant Bonus Shares to eligible Employees. Each Bonus Share shall constitute a
transfer of an unrestricted Share to the Participant, without other payment
therefor, as additional compensation for the Participant's services to the
Company.
(f) Phantom Shares. The Committee shall have the authority to grant Awards of
Phantom Shares to eligible Employees upon such terms and conditions as the
Committee may determine.
(i) Terms and Conditions. Each Phantom Share Award shall constitute an
agreement by the Company to issue or transfer a specified number of
Shares or pay an amount of cash equal to the Fair Market Value of a
specified number of Shares, or a combination thereof to the
Participant in the future, subject to the fulfillment during the
Restricted Period of such conditions, including performance goals, if
any, as the Committee may specify at the date of grant. During the
Restricted Period, the Participant shall not have any right to
transfer any rights under the subject Award, shall not have any rights
of ownership in the Phantom Shares and shall not have any right to
vote such shares.
(ii) Dividends. Any Phantom Share award may provide that any or all
dividends or other distributions paid on Shares during the Restricted
Period be credited in a cash bookkeeping account (without interest) or
that equivalent additional Phantom Shares be awarded, which account or
shares may be subject to the same restrictions as the underlying Award
or such other restrictions as the Committee may determine.
9
<PAGE> 10
(g) Cash Awards. The Committee shall have the authority to determine the
Employees to whom Cash Awards shall be granted, the amount, and the terms or
conditions, if any, as additional compensation for the Employee's services to
the Company or its Affiliates. A Cash Award may be granted (simultaneously or
subsequently) separately or in tandem with another Award and may entitle a
Participant to receive a specified amount of cash from the Company upon such
other Award becoming taxable to the Participant, which cash amount may be based
on a formula relating to the anticipated taxable income associated with such
other Award and the payment of the Cash Award.
(h) Granting of Options to Directors. Each individual who serves as a Director
on the date the Plan is approved by the shareholders of the Company (the
"Approval Date") or who is elected or appointed as a Director for the first
time after such date shall receive, as of the Approval Date of the Plan or
the date of his election or appointment, whichever is applicable, and without
the exercise of the discretion of any person or persons, a Non-Qualified
Stock Option (an "Initial Grant") exercisable for 10,000 Shares (subject
to adjustment in the same manner as provided in Section 7 hereof with
respect to Shares subject to Options then outstanding). As of the date of the
annual meeting of the shareholders of the Company ("Annual Meeting") in each
year after 1999 that the Plan is in effect, each Director who is in office
immediately after such meeting and who is not then entitled to receive an
Initial Grant pursuant to the preceding provisions of this Section 6(h) shall
receive, without the exercise of the discretion of any person or persons, a
Non-Qualified Stock Option exercisable for 6,000 Shares (an "Annual Grant")
(subject to adjustment in the same manner as provided in Section 7 hereof with
respect to shares of Stock subject to Options then outstanding).
(i) Other Terms and Conditions. The following provisions are
applicable to Options granted pursuant to this Section 6(h):
A. Subject to the following provisions, (1) an Initial Grant shall
become exercisable for 50% of the Shares covered thereby on the date
of grant, and for the remaining 50% thereof on the first Annual
Meeting following its date of grant and (2) an Annual Grant shall
become exercisable for one-third of the Shares covered thereby on the
first Annual Meeting following the date of grant, and thereafter, for
an additional one-third of the Shares covered thereby on each of the
second and third Annual Meetings following the date of grant.
B. The purchase price of a Share covered under an Option granted under
this Section 6(h) shall be the Fair Market Value of a Share on the
date of grant.
C. To the extent that the right to exercise an Option has accrued and
is in effect, the Option may be exercised in full at one time or in
part from time to time by giving written notice, signed by the
optionee exercising the Option, to the Company, stating the number of
Shares with respect to which the Option is being exercised,
accompanied by payment in full for such Shares, which payment may be
in cash,
10
<PAGE> 11
already-owned Shares, a "cashless-broker" exercise (through procedures
approved by the Company), or any combination thereof, having a Fair
Market Value on the exercise date equal to the relevant exercise price
in which payment of the exercise price with respect thereto may be
made or deemed to have been made; provided however, that (i) no Option
shall be exercisable after ten (10) years from the date on which it
was granted, and (ii) there shall be no such exercise at any one time
for fewer than one hundred (100) Shares or for all of the remaining
Shares then purchasable by the optionee exercising the Option, if
fewer than one hundred (100) Shares.
D. Each Option shall expire ten (10) years from the date of grant
thereof, subject to earlier termination as follows: Options, to the
extent exercisable as of the date a Director optionee ceases to serve
as a director of the Company, must be exercised within three (3)
months of such date unless such event results from death, disability
or retirement, as determined by the Committee, in which case all
outstanding Options held by such Director may be exercised in full by
the optionee, the optionee's legal representative, heir or devisee, as
the case may be, within two (2) years from the date of death,
disability or retirement; provided, however, that no such event shall
extend the normal expiration date of such Options. Options not
exercisable on termination as provided above shall be automatically
canceled on termination.
E. Upon exercise of the Option, delivery of a certificate for fully
paid and nonassessable Shares shall be made at the corporate office of
the Company to the optionee exercising the Option either at such time
during ordinary business hours after fifteen (15) days but not more
than thirty (30) days from the date of receipt of the notice by the
Company as shall be designated in such notice, or at such time, place
and manner as may be agreed upon by the Company and the optionee
exercising the Option.
(ii) Number of Available Shares. In the event that the number of
Shares available for grants under the Plan is insufficient to make all
grants provided for in this Section 6(h) hereby made on the applicable
date, then all Directors who are entitled to a grant on such date
shall share ratably in the number of Shares then available for grant
under the Plan, and shall have no right to receive a grant with
respect to the deficiencies in the number of available Shares and the
grants under this Section 6(h) shall terminate.
(i) General.
(i) Awards May Be Granted Separately or Together. Awards to Employees
may, in the discretion of the Committee, be granted either alone or in
addition to, in tandem with, or in substitution for any other Award
granted under the Plan or any award granted under any other plan of
the Company or any Affiliate. Awards granted in addition to or in
tandem with other Awards or awards granted under any other plan of the
Company or any Affiliate may be granted either at the same time as or
at a different time from the grant of such other Awards or awards.
11
<PAGE> 12
(ii) Forms of Payment by Company Under Awards. Subject to the terms of
the Plan and of any applicable Award Agreement, payments or transfers
to be made by the Company or an Affiliate upon the grant, exercise or
payment of an Award may be made in such form or forms as the Committee
shall determine, including, without limitation, cash, Shares, other
securities, other Awards or other property, or any combination
thereof, and may be made in a single payment or transfer, in
installments, or on a deferred basis, in each case in accordance with
rules and procedures established by the Committee. Such rules and
procedures may include, without limitation, provisions for the payment
or crediting of reasonable interest on installment or deferred
payments.
(iii) Limits on Transfer of Awards.
(A) Except as provided in (C) below, each Award, and each right under
any Award, shall be exercisable only by the Participant during the
Participant's lifetime, or, if permissible under applicable law, by
the Participant's guardian or legal representative or by a transferee
receiving such Award pursuant to a qualified domestic relations order
(a "QDRO") as determined by the Committee.
(B) Except as provided in (C) below, no Award and no right under any
such Award may be assigned, alienated, pledged, attached, sold or
otherwise transferred or encumbered by a Participant otherwise than by
will or by the laws of descent and distribution (or, in the case of
Restricted Stock, to the Company) or, if permissible under applicable
law, pursuant to a QDRO and any such purported assignment, alienation,
pledge, attachment, sale, transfer or encumbrance shall be void and
unenforceable against the Company or any Affiliate.
(C) Notwithstanding anything in the Plan to the contrary, except to
the extent specifically provided otherwise by the Committee in an
Award Agreement, Non-Qualified Stock Options may be transferred by the
optionee to one or more permitted transferees; provided that (i) there
may be no consideration given for such transfer, (ii) the optionee (or
such optionee's estate or representative) shall remain obligated to
satisfy all employment tax and other withholding tax obligations
associated with the exercise of the transferred Options, (iii) the
optionee shall notify the Company in writing that such transfer has
occurred, the identity and address of the permitted transferee and the
relationship of the permitted transferee to the optionee, and (iv)
such transfer shall be effected pursuant to transfer documents
approved from time to time by the Company. Any permitted transferee
may not further assign or transfer the transferred Option otherwise
than by will or the laws of descent and distribution. Following any
permitted transfer, any such Options shall continue to be subject to
the same terms and conditions as were applicable to the Option
immediately prior to the transfer, provided that the term "optionee"
as used in the Plan shall be deemed to refer also to each permitted
transferee where required by the context. A transferred Option may
only be exercised by a transferee to the same
12
<PAGE> 13
extent such Option could, at such time, be exercised by the optionee
"but for" such transfer. The term "permitted transferees" shall mean
one or more of the following: (i) any member of the optionee's
immediate family; (ii) a trust established for the exclusive benefit
of one or more members of such immediate family; (iii) a partnership
in which such immediate family members are the only partners; or
(iv) any other person approved from time to time by the Committee. The
term "immediate family" is defined for such purpose as spouses,
children, stepchildren and grandchildren, including relationships
arising from adoption.
(iv) Term of Awards. The term of each Award (other than pursuant to
Section 6(h)) shall be for such period as may be determined by the
Committee; provided, that in no event shall the term of any Award
exceed a period of ten (10) years from the date of its grant.
(v) Share Certificates. All certificates for Shares or other
securities of the Company or any Affiliate delivered under the Plan
pursuant to any Award or the exercise thereof shall be subject to such
stop transfer orders and other restrictions as the Committee may deem
advisable under the Plan or the rules, regulations, and other
requirements of the SEC, any stock exchange upon which such Shares or
other securities are then listed, and any applicable Federal or state
laws, and the Committee may cause a legend or legends to be put on any
such certificates to make appropriate reference to such restrictions.
(vi) Consideration for Grants. Awards may be granted for no cash
consideration or for such consideration as the Committee determines
including, without limitation, such minimal cash consideration as may
be required by applicable law.
(vii) Delivery of Shares or other Securities and Payment by
Participant of Consideration. No Shares or other securities shall be
delivered pursuant to any Award until payment in full of any amount
required to be paid pursuant to the Plan or the applicable Award
Agreement is received by the Company, including without limitation,
all applicable withholding taxes. Such payment may be made by such
method or methods and in such form or forms as the Committee shall
determine, including, without limitation, cash, Shares, other
securities, other Awards or other property, withholding of Shares,
cashless exercise with simultaneous sale, or any combination thereof;
provided that the combined value, as determined by the Committee, of
all cash and cash equivalents and the Fair Market Value of any such
Shares or other property so tendered to the Company, as of the date of
such tender, is at least equal to the full amount required to be paid
pursuant to the Plan or the applicable Award Agreement to the Company.
(viii) Performance Goals. Where necessary, the Committee shall
establish performance goals applicable to those Awards the payment of
which is intended by the Committee to qualify as "performance-based
compensation" as described in Section 162(m)(4)(C) of the Code. Until
changed by the Committee, the performance
13
<PAGE> 14
goals shall be based upon the attainment of such target levels of
Share price, net income, cash flows, reserve additions or revisions,
acquisitions, total capitalization, total or comparative shareholder
return, assets, exploration successes, production volumes, findings
and development costs, costs reductions and savings, reportable
incidents in safety or environmental matters, return on equity, profit
margin or sales, and/or earnings per share as may be specified by the
Committee. The performance goals may be made subject to adjustment for
specified unusual and nonrecurring events and may be absolute,
relative to one or more other companies, or relative to one or more
indices. Which factor or factors to be used with respect to any grant,
and the weight to be accorded thereto if more than one factor is used,
shall be determined by the Committee at the time of grant.
SECTION 7. Amendment and Termination.
Except to the extent prohibited by applicable law and unless otherwise
expressly provided in an Award Agreement or in the Plan:
(a) Amendments to the Plan. The Board may amend, alter, suspend,
discontinue, or terminate the Plan without the consent of any
shareholder, Participant, other holder or beneficiary of an Award, or
other Person; provided, however, notwithstanding any other provision
of the Plan or any Award Agreement, without the approval of the
shareholders of the Company no such amendment, alteration, suspension,
discontinuation, or termination shall be made that would (i) increase
the total number of Shares available for Awards under the Plan, except
as provided in Section 4(c) of the Plan; (ii) increase the class of
eligible Participants; or (iii) amend the eligibility requirements for
Awards under the Plan.
(b) Amendments to Awards. The Committee may waive any conditions or
rights under, amend any terms of, or alter any Award theretofore
granted (other than Initial Grants or Annual Grants under Section
6(h)), provided no change, other than pursuant to Section 7(c), in any
Award shall reduce the benefit to Participant without the consent of
such Participant. Notwithstanding the foregoing, with respect to any
Award intended to qualify as performance-based compensation under
Section 162(m) of the Code, no adjustment shall be authorized to the
extent such adjustment would cause the Award to fail to so qualify.
(c) Adjustment of Awards Upon the Occurrence of Certain Unusual or
Nonrecurring Events. The Committee is hereby authorized to make
adjustments in the terms and conditions of, and the criteria included
in, Awards in recognition of unusual or nonrecurring events
(including, without limitation, the events described in Section 4(c)
of the Plan) affecting the Company, any Affiliate, or the financial
statements of the Company or any Affiliate, or of changes in
applicable laws, regulations, or accounting principles, whenever the
Committee determines that such adjustments are appropriate in order to
prevent dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan. Notwithstanding
14
<PAGE> 15
the foregoing, with respect to any Award intended to qualify as
performance-based compensation under Section 162(m) of the Code, no
adjustment shall be authorized to the extent such adjustment would
cause the Award to fail to so qualify.
SECTION 8. Change in Control.
Notwithstanding any other provision of this Plan to the contrary, in the event
of a Change in Control of the Company, all outstanding Awards granted prior to
the date of the Change in Control automatically shall become fully vested on
such Change in Control, all restrictions, if any, with respect to such Awards
shall lapse, and all performance goals, if any, with respect to such Awards
shall be deemed to have been met in full (at the maximum performance level).
For purposes of this Plan, a "Change in Control" shall be deemed to occur:
(i) if any person (as such term is used in sections 13(d) and 14(d)(2)
of the Exchange Act), other than the Company, any parent corporation
or subsidiary corporation of the Company or any employee benefit plan
of the Company or any such entity, is or becomes the "beneficial
owner" (as defined in Rule 13d-3 of the Exchange Act), directly or
indirectly, of securities of the Company representing 25% or more of
the combined voting power of the Company's then outstanding
securities,
(ii) upon the first purchase of the Company's common stock pursuant to
a tender or exchange offer (other than a tender or exchange offer made
by the Company),
(iii) on the date of consummation of a merger, consolidation,
recapitalization, reorganization, sale or disposition of all or a
substantial portion of the Company's assets, or the issuance of shares
of stock of the Company in connection with the acquisition of the
stock or assets of another entity, provided, however, that a Change in
Control shall not occur under this clause (iii) if consummation of the
transaction would result in at least two-thirds of the total voting
power represented by the voting securities of the Company (or, if not
the Company, the entity that succeeds to all or substantially all of
the Company's business) outstanding immediately after such transaction
being beneficially owned (within the meaning of Rule 13d-3 promulgated
pursuant to the Exchange Act) by at least two-thirds of the holders of
outstanding voting securities of the Company immediately prior to the
transaction, with the voting power of each such continuing holder
relative to other such continuing holders not substantially altered in
the transaction, or
(iv) if, during any period of two consecutive years, individuals who
at the beginning of such period constitute the Board cease for any
reason to constitute at least a majority thereof, unless the election
or nomination for the election by the Company's shareholders of each
new director was approved by a vote of at least two-thirds of the
directors then still in office who were directors at the beginning of
the period.
15
<PAGE> 16
SECTION 9. Parachute Tax Gross-Up.
To the extent that the grant, payment, or acceleration of vesting or payment,
whether in cash or stock, of any Award made to a Participant under the Plan is
subject to an excise tax under Section 4999(a) of the Code, or any similar or
successor provision (a "Parachute Tax"), the Company shall pay such Participant
an additional amount of cash (the "Gross-up Amount") such that the "net"
after-tax benefit received by the Participant, after paying all applicable
Parachute Taxes with respect to such Awards (including those on the Gross-up
Amount) and any federal or state taxes on the Gross-up Amount, shall be equal
to the net after-tax benefit that such Participant would have received if such
Parachute Tax had not been applicable.
SECTION 10. General Provisions.
(a) No Rights to Awards. No Employee, Participant or other Person shall have
any claim to be granted any Award, and there is no obligation for uniformity of
treatment of Employees, Participants, or holders or beneficiaries of Awards.
The terms and conditions of Awards need not be the same with respect to each
recipient.
(b) Withholding. The Company or any Affiliate is authorized to withhold from
any Award, from any payment due or transfer made under any Award or under the
Plan or from any compensation or other amount owing to a Participant the amount
(in cash, Shares, other securities, Shares that would otherwise be issued
pursuant to such Award, other Awards or other property) of any applicable taxes
payable in respect of an Award, its exercise, the lapse of restrictions
thereon, or any payment or transfer under an Award or under the Plan and to
take such other action as may be necessary in the opinion of the Company to
satisfy all obligations for the payment of such taxes. Any Participant who is
subject to Rule 16b-3 may direct the Company to withhold Shares or may tender
Shares to the Company to satisfy his tax withholding obligations.
(c) No Right to Employment. The grant of an Award shall not be construed as
giving a Participant the right to be retained in the employ of the Company or
any Affiliate. Further, the Company or an Affiliate may at any time dismiss a
Participant from employment, free from any liability or any claim under the
Plan, unless otherwise expressly provided in the Plan or in any Award
Agreement. Nothing contained in the Plan shall confer on any Director any right
with respect to continuation of membership on the Board.
(d) Governing Law. The validity, construction, and effect of the Plan and any
rules and regulations relating to the Plan shall be determined in accordance
with the laws of the State of Texas and applicable Federal law.
(e) Severability. If any provision of the Plan or any Award is or becomes or is
deemed to be invalid, illegal, or unenforceable in any jurisdiction or as to
any Person or Award, or would disqualify the Plan or any Award under any law
deemed applicable by the Committee, such provision shall be construed or deemed
amended to conform to the applicable laws, or if
16
<PAGE> 17
it cannot be construed or deemed amended without, in the determination of the
Committee, materially altering the intent of the Plan or the Award, such
provision shall be stricken as to such jurisdiction, Person or Award and the
remainder of the Plan and any such Award shall remain in full force and effect.
(f) Other Laws. The Committee may refuse to issue or transfer any Shares or
other consideration under an Award if, acting in its sole discretion, it
determines that the issuance or transfer of such Shares or such other
consideration might violate any applicable law or regulation or entitle the
Company to recover the same under Section 16(b) of the Exchange Act, and any
payment tendered to the Company by a Participant, other holder or beneficiary
in connection with the exercise of such Award shall be promptly refunded to the
relevant Participant, holder or beneficiary.
(g) No Trust or Fund Created. Neither the Plan nor the Award shall create or be
construed to create a trust or separate fund of any kind or a fiduciary
relationship between the Company or any Affiliate and a Participant or any
other Person. To the extent that any Person acquires a right to receive
payments from the Company or any Affiliate pursuant to an Award, such right
shall be no greater than the right of any general unsecured creditor of the
Company or any Affiliate.
(h) No Fractional Shares. No fractional Shares shall be issued or delivered
pursuant to the Plan or any Award, and the Committee shall determine whether
cash, other securities, or other property shall be paid or transferred in lieu
of any fractional Shares or whether such fractional Shares or any rights
thereto shall be canceled, terminated, or otherwise eliminated.
(i) Headings. Headings are given to the Sections and subsections of the Plan
solely as a convenience to facilitate reference. Such headings shall not be
deemed in any way material or relevant to the construction or interpretation of
the Plan or any provision thereof.
(j) No Restriction on Corporate Action. Nothing contained in the Plan shall be
construed to prevent the Company or any Affiliate from taking any action that
is deemed by the Company or such Affiliate to be appropriate or in its best
interest, whether or not such action would have an adverse effect on the Plan
or any Award made under the Plan. No Employee, Participant, or other Person
shall have any claim against the Company or any Affiliate as a result of any
such action.
(k) Facsimile Signature. Any Award Agreement or related document may be
executed by facsimile signature. If any officer who shall have signed or whose
facsimile signature shall have been placed upon any such Award Agreement or
related document shall have ceased to be such officer before the related Award
is granted by the Company, such Award may
17
<PAGE> 18
nevertheless be issued by the Company with the same effect as if such person
were such officer at the date of grant.
SECTION 11. Effective Date of the Plan.
The Plan shall be effective as of the date of its approval by the Board,
provided the Plan is subsequently approved by the shareholders of the Company
within 12 months thereafter. Notwithstanding any provision in the Plan or in
any Award Agreement, no Option or Stock Appreciation Right shall be exercisable
and no Award shall vest or become satisfiable prior to such shareholder
approval.
SECTION 12. Term of the Plan.
No Award shall be granted under the Plan after the tenth anniversary of the
date the Plan was adopted by the Board or approved by the shareholders,
whichever is earlier. However, unless otherwise expressly provided in the Plan
or in an applicable Award Agreement, any Award theretofore granted may, and the
authority of the Board or the Committee to amend, alter, adjust, suspend,
discontinue, or terminate any such Award or to waive any conditions or rights
under any such Award shall, extend beyond such date.
18
<PAGE> 1
EXHIBIT 5.1
[VINSON & ELKINS L.L.P. LETTERHEAD]
January 27, 2000
Ocean Energy, Inc.
1001 Fannin, Suite 1700
Houston, Texas 77002
Ladies and Gentlemen:
We have acted as counsel for Ocean Energy, Inc., a Texas corporation
(the "Company"), with respect to certain legal matters in connection with the
registration by the Company under the Securities Act of 1933, as amended (the
"Securities Act"), of the offer and sale of up to 3,000,000 shares of Common
Stock, par value $.10 per share (the "Shares") the may be issued pursuant to the
Ocean Energy, Inc. 1999 Long-Term Incentive Plan (the "1999 Plan").
In connection with the foregoing, we have examined or are familiar with
(i) the Articles of Incorporation of the Company, as amended, (ii) the Bylaws of
the Company, as amended, (iii) the corporate proceedings with respect to the
issuance of the Shares, (iv) the Registration Statement on Form S-8 filed in
connection with the registration of the Shares (the "Registration Statement")
and the exhibits thereto, and (v) such other certificates, instruments and
documents as we have considered necessary or appropriate for purposes of this
opinion.
Based upon the foregoing, we are of the opinion that the Shares have
been duly authorized and, when the Shares are issued in accordance with the
provisions of the Plan, will be validly issued and fully paid and
non-assessable.
The foregoing opinion is limited to the laws of the United States of
America and the State of Texas.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving this consent, we do not admit that we are
within the category of persons whose consent is required under Section 7 of the
Securities Act and the rules and regulations thereunder.
Very truly yours,
/s/ Vinson & Elkins L.L.P.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Ocean Energy, Inc.:
We consent to the incorporation by reference in this registration statement to
be filed on Form S-8 of Ocean Energy, Inc. of our report dated February 9,
1999, relating to the consolidated balance sheets of Seagull Energy Corporation
and Subsidiaries as of December 31, 1998 and 1997 and the related consolidated
statements of operations, shareholders' equity and cash flows for each of the
years in the three-year period ended December 31, 1998, which report is
included in the December 31, 1998 Annual Report on Form 10-K of Seagull Energy
Corporation.
/s/ KPMG LLP
----------------------------------------
KPMG LLP
Houston, Texas
January 25, 2000
<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 February 15,
1999, included in the Ocean Energy Inc. Annual Report on Form 10-K for the
fiscal year ended December 31, 1998, and incorporated by reference in the Ocean
Energy Inc. Form 8-K filed April 9, 1999, and to all references to our Firm
included in this registration statement.
/s/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
January 25, 2000
Houston, Texas
<PAGE> 1
EXHIBIT 23.3
[NEDERLAND, SEWELL & ASSOCIATES INC. LETTERHEAD]
CONSENT OF NETHERLAND, SEWELL & ASSOCIATES, INC.
We hereby consent to the incorporation by reference of our Firm's name in
Annual Report on Form 10-K of Seagull Energy Corporation and subsidiaries for
the year ended December 31, 1998, into the Company's Registration Statement
on Form S-8 of Ocean Energy, Inc. (formerly known as Seagull Energy
Corporation) to which this consent is an exhibit.
NETHERLAND, SEWELL & ASSOCIATES, INC.
By: /s/ DANNY D. SIMMONS
-------------------------------
Danny D. Simmons
Senior Vice President
Houston, Texas
January 25, 2000
<PAGE> 1
EXHIBIT 23.4
[RYDER SCOTT COMPANY LETTERHEAD]
CONSENT OF INDEPENDENT PETROLEUM ENGINEERS AND GEOLOGISTS
We hereby consent to the incorporation by reference of our Firm's name in
the Annual Report on Form 10-K of Seagull Energy Corporation and subsidiaries
for the year ended December 31, 1998, into the Registration Statement on
Form S-8 of Ocean Energy, Inc. (formerly known as Seagull Energy Corporation)
to which this consent is an exhibit.
/s/ RYDER SCOTT COMPANY, L.P.
-----------------------------
Ryder Scott Company, L.P.
Houston, Texas
January 25, 2000
<PAGE> 1
EXHIBIT 23.5
[DeGOLYER AND MacNAUGHTON LETTERHEAD]
CONSENT OF INDEPENDENT PETROLEUM ENGINEERS
We hereby consent to the incorporation by reference to our name in the
Annual Report on Form 10-K of Seagull Energy Corporation and subsidiaries for
the year ended December 31, 1998, into the Registration Statement on Form S-8
of Ocean Energy, Inc. (formerly known as Seagull Energy Corporation) to which
this consent is an exhibit.
/s/ DeGolyer and MacNaughton
----------------------------
DeGOLYER AND MacNAUGHTON
Dallas, Texas
January 25, 2000
<PAGE> 1
EXHIBIT 23.6
[MCDANIEL & ASSOCIATES CONSULTANTS LTD. LETTERHEAD]
CONSENT OF INDEPENDENT PETROLEUM
ENGINEERS AND GEOLOGISTS
We hereby consent to the incorporation by reference of our Firm's name in the
Annual Report on Form 10-K of Ocean Energy, Inc. and subsidiaries for the year
ended December 31, 1998, into the Company's Registration Statement on Form S-8
to which this consent is an exhibit.
Sincerely,
MCDANIEL & ASSOCIATES CONSULTANTS LTD.
/s/ P. A. WELCH
- ---------------------
P. A. Welch, P. Eng.
Senior Vice President
Calgary, Alberta, Canada
Dated: January 25, 2000
<PAGE> 1
EXHIBIT 23.7
[NETHERLAND, SEWELL & ASSOCIATES, INC. LETTERHEAD]
CONSENT OF NETHERLAND, SEWELL & ASSOCIATES, INC.
We hereby consent to the incorporation by reference of our Firm's name in
the Annual Report on Form 10-K of Ocean Energy, Inc. and subsidiaries for the
year ended December 31, 1998, into the Company's Registration Statement on Form
S-8 to which this consent is an exhibit.
NETHERLAND, SEWELL & ASSOCIATES, INC.
By: /s/ DANNY D. SIMMONS
----------------------------------
Danny D. Simmons
Senior Vice President
Houston, Texas
January 25, 2000
<PAGE> 1
EXHIBIT 23.8
[RYDER SCOTT COMPANY PETROLEUM CONSULTANTS LETTERHEAD]
CONSENT OF INDEPENDENT PETROLEUM ENGINEERS AND GEOLOGISTS
We hereby consent to the incorporation by reference of our Firm's name in
the Annual Report on Form 10-K of Ocean Energy, Inc. and subsidiaries for the
year ended December 31, 1998, into the Company's Registration Statement on
Form S-8 to which this consent is an exhibit.
/s/ RYDER SCOTT COMPANY, L.P.
-----------------------------
RYDER SCOTT COMPANY, L.P.
Houston, Texas
January 25, 2000
