<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 18, 1996
Registration No. 33-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
-------------
PLAINS RESOURCES INC.
(Exact name of registrant as specified in its charter)
DELAWARE 13-2898764
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1600 SMITH STREET
HOUSTON, TEXAS 77002
(713) 654-1414
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
-------------
PLAINS RESOURCES INC. 1996 STOCK INCENTIVE PLAN
(full title of the plan)
MICHAEL R. PATTERSON
VICE PRESIDENT AND GENERAL COUNSEL
PLAINS RESOURCES INC.
1600 SMITH STREET
HOUSTON, TEXAS 77002
(713) 654-1414
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
-------------
COPY TO:
JOHN A. WATSON
FULBRIGHT & JAWORSKI L.L.P.
1301 MCKINNEY, SUITE 5100
HOUSTON, TEXAS 77010-3095
(713) 651-5151
-------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===============================================================================================================
PROPOSED PROPOSED
MAXIMUM MAXIMUM
AMOUNT TO OFFERING PRICE AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF BE REGISTERED PER SHARE OFFERING PRICE REGISTRATION
SECURITIES TO BE REGISTERED (1) (2) (2) FEE
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $.10 per share 1,500,000 shares $11.0625 $16,593,750 $5,722
================================================================================================================
</TABLE>
(1) There are also registered hereby such indeterminant number of shares of
common stock as may become issuable by reason of the anti-dilution
provisions of the plan.
(2) Pursuant to Rule 457(h), the proposed maximum offering price is estimated,
solely for the purpose of determining the registration fee, on the basis of
the average high and low sales prices of the Common Stock as reported by
the American Stock Exchange on June 13, 1996, which was $11.0625.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
Plains Resources Inc., a Delaware corporation (the "Company") hereby
incorporates by reference in this Registration Statement the following
documents:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995.
(b) All other reports filed pursuant to Section 13(a) or 15(d) of the
Securities Act of 1934, (the "Exchange Act"), since the fiscal year ended
December 31, 1995.
(c) The description of the Company's common stock, $0.10 par value (the
"Common Stock"), contained in a registration statement on Form 8-A filed
pursuant to the Exchange Act, including any amendment or report filed for the
purpose of updating such description.
All documents subsequently filed by the Company pursuant to Section 13(a),
13(c), 14 and 15(d) of the Exchange Act, 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, is hereby deemed to be
incorporated by reference in this Registration Statement and a part hereof from
the date of the filing of such documents.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The consolidated financial statements and schedules incorporated in this
Registration Statement by reference to the Annual Report on Form 10-K of the
Company for the year ended December 31, 1995, and the audited historical
statement of revenues and direct operating expenses of the Illinois Basin
Properties included on page F-1 of the Company's Amendment No. 1 to Form 8-K/A
dated February 21, 1996, have been so incorporated in reliance on the reports of
Price Waterhouse LLP, independent accountants, given on the authority of said
firms as experts in auditing and accounting. Information relating to the
estimated quantities of proved reserves of oil and gas and the related estimates
of future net revenues and present values thereof for certain periods, included
in the Company's Annual Report on Form 10-K for the year ended December 31,
1995, as well as in the Notes to the Consolidated Financial Statements of the
Company in such Annual Report, have been prepared by Netherland, Sewell &
Associates, Inc., H. J. Gruy and Associates, Inc., and Ryder Scott Company,
independent petroleum engineers, and are incorporated herein in reliance upon
the authority of said firms as experts in petroleum engineering. The validity of
the issuance of the shares of Common Stock registered hereby will be passed upon
by Michael R. Patterson, Esq., Vice President and General Counsel of the
Company. Mr. Patterson beneficially owns 114,437 shares of Common Stock.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article Eleventh of the Company's Certificate of Incorporation provides that
the Company shall indemnify to the full extent authorized or permitted by law
any person made, or threatened to be made, a party to any action, suit or
proceeding (whether civil, criminal or otherwise) by reason of fact that he, his
testator or intestate, is or was a director or officer of the Company or by
reason of the fact that such director or officer, at the request of the Company,
is or was serving any other corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise, in any capacity. The rights to
indemnification set forth above are not exclusive of any other rights to which
such person may be entitled under any statute, provision of the Company's
Certificate of Incorporation or Bylaws, agreements, vote of stockholders or
disinterested directors or otherwise.
II-1
<PAGE>
Additionally, Article VIII of the Company's Bylaws provides for mandatory
indemnification to at least the extent specifically allowed by Section 145 of
the General Corporation Law of the State of Delaware (the "GCL"). The Bylaws
generally follow the language of Section 145 of the GCL, but in addition specify
that any director, officer, employee or agent may apply to any court of
competent jurisdiction in the State of Delaware for indemnification to the
extent otherwise permissible under the Bylaws, notwithstanding any contrary
determination denying indemnification made by the Board, by independent legal
counsel, or by the stockholders, and notwithstanding the absence of any
determination with respect to indemnification. The Bylaws also specify certain
circumstances in which a finding is required that the person seeking
indemnification acted in good faith, for purposes of determining whether
indemnification is available. Under the Bylaws, a person shall be deemed to
have acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Company, or, with respect to any criminal
action or proceeding, to have had no reasonable cause to believe his conduct was
unlawful, if his action is based on the records or books of account of the
Company or another enterprise, or on information supplied to him by the officers
of the Company or another enterprise in the course of their duties, or on the
advise of legal counsel for the Company or another enterprise or on information
or records given or reports made to the Company or another enterprise by an
independent certified public accountant or by an appraiser or other expert
selected with reasonable care by the Company or another enterprise.
Pursuant to Section 145 of the GCL, the Company generally has the power to
indemnify its current and former directors, officers, employees and agents
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 such 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, 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 such 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 bylaws, agreement, vote of
stockholders or disinterested directors, or otherwise. The Company also has the
power to purchase and maintain insurance for such persons.
The above discussion of the Company's Certificate of Incorporation and Bylaws
and Section 145 of the GCL is not intended to be exhaustive and is qualified in
its entirety by each of such documents and such statute.
The Company has entered into employment agreements containing indemnification
provisions with the following officers; Mr. Armstrong, President and Chief
Executive Officer and Mr. Egg its Senior Vice President. Pursuant to such
agreements, the Company has agreed to indemnify and hold each such officer
harmless to the fullest extent permitted by law, from any loss, damage or
liability incurred in the course of his respective employment. The amount paid
by the Company is reducible by the amount of insurance paid to or on behalf of
such officer with respect to any event giving rise to indemnification. Each
such officer's right to indemnification is to survive his respective death or
termination of employment and the termination of his applicable employment
agreement.
II-2
<PAGE>
ITEM 8. EXHIBITS
4 Plains Resources Inc. 1996 Stock Incentive Plan.
5 Opinion of Michael R. Patterson, Esq. regarding legality of securities
being registered.
23(a) Consent of Price Waterhouse, independent accountants.
23(b) Consent of Netherland, Sewell & Associates, Inc., independent
petroleum engineers.
23(c) Consent of H. J. Gruy and Associates, Inc., independent petroleum
engineers.
23(d) Consent of Ryder Scott Company, independent petroleum engineers.
23(e) Consent of Michael R. Patterson, Esq. (contained in Exhibit 5
hereto).
24 Power of attorney (contained on page II-5 hereof).
ITEM 9. UNDERTAKINGS
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 of 1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising after the
effective date of this Registration Statement (or the most recent post-
effective amendment hereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this
Registration Statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement or any
material change to such information in this Registration Statement;
Provided however, that paragraphs (i) and (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
15(d) of the Exchange Act that are incorporated by reference in this
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 herein, 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 that remain unsold at the termination of the
offering.
II-3
<PAGE>
The undersigned registrant hereby undertakes 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 that is
incorporated by reference into this Registration Statement shall be deemed to be
a new registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
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 Securities and Exchange 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 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 of whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
II-4
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints Phillip D. Kramer and Michael R. Patterson, and each of
them, either one of whom may act without joinder of the other, his true and
lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any or all pre- and post-effective amendments to this
Registration Statement, and to file the same, with all exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, and each of them, or the
substitute or substitutes of any or all of them, may lawfully do or cause to be
done by virtue hereof.
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 a 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 June 14, 1996.
PLAINS RESOURCES INC.
By: /s/ Greg L. Armstrong
-------------------------------------
Greg L. Armstrong
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons, in the capacities indicated
on June 14, 1996.
Signature Title
--------- -----
/s/ Greg L. Armstrong President, Chief Executive
- -------------------------------------- Officer and Director
Greg L. Armstrong (Principal Executive Officer)
/s/ Cynthia A. Feeback Controller and Principal
- -------------------------------------- Accounting Officer
Cynthia A. Feeback
/s/ Phillip D. Kramer Vice President, Chief Financial
- -------------------------------------- Officer and Treasurer
Phillip D. Kramer (Principal Financial Officer)
/s/ Robert A. Bezuch Director
- --------------------------------------
Robert A. Bezuch
II-5
<PAGE>
/s/ Tom H. Delimitros Director
- --------------------------------------
Tom H. Delimitros
Director
- --------------------------------------
William M. Hitchcock
/s/ Dan M. Krausse Director
- --------------------------------------
Dan M. Krausse
/s/ John H. Lollar Director
- --------------------------------------
John H. Lollar
/s/ Robert V. Sinnott Director
- --------------------------------------
Robert V. Sinnott
/s/ J. Taft Symonds Director
- --------------------------------------
J. Taft Symonds
II-6
<PAGE>
EXHIBIT 4
PLAINS RESOURCES INC.
1996 STOCK INCENTIVE PLAN
1. Purpose.
-------
The purpose of this 1996 Stock Incentive Plan is to strengthen Plains
Resources Inc. by providing a performance incentive and to encourage stock
ownership by its officers, employees and directors, thereby encouraging them to
devote their abilities and industry to the success of the Company's business
enterprise and encouraging them to remain in the employ or service of the
Company. It is intended that this purpose be achieved by extending to officers,
employees and directors of the Company an added long-term incentive for high
levels of performance and unusual efforts through the grant to officers and
employees of options to purchase shares of the Company's common stock and the
grant to officers, employees and directors of shares of the Company's common
stock under this Plan.
2. Administration.
--------------
2.1 The Plan shall be administered by the Committee which shall hold
meetings at such times as may be necessary for the proper administration of the
Plan. The Committee shall keep minutes of its meetings. A quorum shall consist
of not less than two members of the Committee and a majority of a quorum may
authorize any action. Any decision or determination reduced to writing and
signed by a majority of all of the members shall be as fully effective as if
made by a majority vote at a meeting duly called and held. Each member of the
Committee shall be a Disinterested Director. No member of the Committee shall
be liable for any action, failure to act, determination or interpretation made
in good faith with respect to this Plan or any transaction hereunder, except for
liability arising from his or her own willful misfeasance, gross negligence or
reckless disregard of his or her duties. The Company hereby agrees to indemnify
each member of the Committee for all costs and expenses and, to the full extent
permitted by applicable law, any liability incurred in connection with defending
against, responding to, negotiation for the settlement of or otherwise dealing
with any claim, cause of action or dispute of any kind arising in connection
with any actions in administering this Plan or in authorizing or denying
authorization to any transaction hereunder.
2.2 Subject to the express terms and conditions set forth herein, the
Committee shall have the power from time to time to determine those Eligible
Employees to whom Awards shall be granted under the Plan and the number of
Incentive Stock Options, Nonqualified Stock Options and/or Shares to be granted
to each Eligible Employee; to prescribe the terms and conditions (which need not
be identical) of each Award, including the purchase price per Share subject to
each Option; and to make any amendment or modification to any Agreement
consistent with the terms of the Plan;
2.3 Subject to the express terms and conditions set forth herein, the
Committee shall have the power from time to time:
(a) to construe and interpret the Plan and the Awards granted thereunder
and to establish, amend and revoke rules and regulations for the administration
of the Plan, including, but not limited to, correcting any defect or supplying
any omission, or reconciling any inconsistency in the Plan or in any Agreement,
in the manner and to the extent it shall deem necessary or advisable to make the
Plan fully effective, and all decisions and determinations by the Committee in
the exercise of this power shall be final, binding and conclusive upon the
Company, its Subsidiaries, the Award recipients and all other persons having any
interest therein;
(b) to determine the duration and purposes for leaves of absence which may
be granted to an Award recipient on an individual basis without constituting a
termination of employment or service for purposes of the Plan;
-1-
<PAGE>
(c) to exercise its discretion with respect to the powers and rights
granted to it as set forth in the Plan;
(d) generally, to exercise such powers and to perform such acts as are
deemed necessary or advisable to promote the best interests of the Company with
respect to the Plan.
3. Stock Subject to the Plan and Awards.
------------------------------------
3.1 The maximum number of Shares with respect to which Awards may be
granted under the Plan is 1,500,000 Shares (or the number and kind of shares of
stock or other securities to which such Shares are adjusted upon a Change in
Capitalization pursuant to Section 6 or 7) and the Company shall reserve for the
purposes of the Plan, out of its authorized but unissued Shares or out of Shares
held in the Company's treasury, or partly out of each, such number of Shares as
shall be determined by the Board.
3.2 Whenever any outstanding Award or portion thereof expires, is
cancelled or is otherwise terminated for any reason (other than upon the
surrender of the Option pursuant to Section 5.5 hereof), the Shares allocable to
the cancelled or otherwise terminated Award or portion thereof may again be the
subject of Awards granted hereunder.
4. Option Grants for Eligible Employees.
------------------------------------
4.1 Authority of Committee. The Committee shall have full and final
----------------------
authority to select those Eligible Employees who will receive Options, the terms
and conditions of which shall be set forth in Agreements; provided, however,
-------- -------
that no Eligible Employee shall receive any Incentive Stock Options unless he is
an employee of the Company, a Parent or a Subsidiary at the time the Incentive
Stock Option is granted.
4.2 Purchase Price. The purchase price or the manner in which the
--------------
purchase price is to be determined for Shares under each Option shall be
determined by the Committee and set forth in the Agreement, provided that the
purchase price per Share under each Option shall not be less than 100% of the
Fair Market Value of a Share on the date the Option is granted (110% in the case
of an Incentive Stock Option granted to a Ten-Percent Stockholder).
4.3 Duration. Options granted hereunder shall be for such term as the
--------
Committee shall determine, provided that no Option shall be exercisable after
the expiration of ten (10) years from the date it is granted (five (5) years in
the case of an Incentive Stock Option granted to a Ten-Percent Stockholder).
The Committee may, subsequent to the granting of any Option, extend the term
thereof but in no event shall the term as so extended exceed the maximum term
provided for in the preceding sentence.
4.4 Vesting. Subject to Section 5.5 hereof, each Option shall become
-------
exercisable in such installments (which need not be equal) and at such times as
may be designated by the Committee and set forth in the Agreement. To the
extent not exercised, installments shall accumulate and be exercisable, in whole
or in part, at any time after becoming exercisable, but not later than the date
the Option expires. The Committee may accelerate the exercisability of any
Option or portion thereof at any time.
4.5 Modification or Substitution. The Committee may, in its discretion,
----------------------------
modify outstanding Options or accept the surrender of outstanding Options (to
the extent not exercised) and grant new Options in substitution for them.
Notwithstanding the foregoing, no modification of an Option shall adversely
alter or impair any rights or obligations under the Option without the
Optionee's written consent.
-2-
<PAGE>
4.6 Restriction. With respect to Optionees subject to Section 16(b) of
-----------
the Exchange Act, no Shares acquired upon exercise of an Option may be disposed
of before six (6) months from the date the Option is granted.
4.7 Maximum Value of Stock Subject to Options That are Incentive Stock
------------------------------------------------------------------
Options. To the extent that the aggregate Fair Market Value (determined as of
- -------
the date the Option is granted) of the stock with respect to which Incentive
Stock Options are exercisable for the first time by the Optionee in any calendar
year (under this Plan and any other incentive stock option plan(s) of the
Company and any Parent or Subsidiary) exceeds $100,000, the Options shall be
treated as Nonqualified Stock Options. In making this determination, Options
shall be taken into account in the order in which they were granted.
5. Terms and Conditions Applicable to All Options.
----------------------------------------------
5.1 Non-transferability. No Option granted hereunder shall be
-------------------
transferable by the Optionee to whom granted otherwise than by will or the laws
of descent and distribution, and an Option may be exercised during the lifetime
of such Optionee only by the Optionee or his or her guardian or legal
representative. The terms of such Option shall be final, binding and conclusive
upon the beneficiaries, executors, administrators, heirs and successors of the
Optionee. Any attempted sale, assignment, pledge or emcumbrance of an Option,
other than a transfer by will or the laws of descent and distribution, shall be
void and the Company shall not be bound thereby.
5.2 Method of Exercise. The exercise of an Option shall be made only by a
------------------
written notice delivered in person or by mail to the Secretary of the Company at
the Company's principal executive office, specifying the number of Shares to be
purchased and accompanied by payment therefor and otherwise in accordance with
the Agreement pursuant to which the Option was granted. The purchase price for
any Shares purchased pursuant to the exercise of an Option shall be paid in full
upon such exercise, as determined by the Committee in its discretion, by any one
or a combination of the following: (i) cash or (ii) upon such terms and
conditions as determined by the Committee, transferring to the Company Shares
owned by the Optionee for a period of at least six (6) months prior to the
exercise of the Option. The written notice pursuant to this Section 5.2 may
also provide instructions from the Optionee to the Company that upon receipt of
the purchase price in cash from the Optionee's broker or dealer, designated as
such on the written notice, in payment for any Shares purchased pursuant to the
exercise of an Option, the Company shall issue such Shares directly to the
designated broker or dealer. Any Shares transferred to the Company as payment
of the purchase price under an Option shall be valued at their Fair Market Value
on the date of exercise of such Option. If requested by the Committee, the
Optionee shall deliver the Agreement evidencing the Option to the Secretary of
the Company who shall endorse thereon a notation of such exercise and return
such Agreement to the Optionee. No fractional Shares (or cash in lieu thereof)
shall be issued upon exercise of an Option and the number of Shares that may be
purchased upon exercise shall be rounded to the nearest number of whole Shares.
5.3 Rights of Optionees. No Optionee shall be deemed for any purpose to
-------------------
be the owner of any Shares subject to any Option unless and until (i) the Option
shall have been exercised pursuant to the terms thereof, (ii) the Company shall
have issued and delivered the Shares to the Optionee and (iii) the Optionee's
name shall have been entered as a stockholder of record on the books of the
Company. Thereupon, the Optionee shall have full voting, dividend and other
ownership rights with respect to such Shares.
5.4 Termination of Employment.
-------------------------
(a) If an Optionee's employment terminates for any reason other than Cause,
the Option shall be exercisable following the Optionee's termination of
employment as determined by the Committee and as set forth in the Agreement but
only to the extent that the Option or portion thereof was exercisable on the
date of termination.
-3-
<PAGE>
(b) If an Optionee's employment terminates for Cause, the Option shall
terminate immediately and no rights thereunder may be exercised.
The Committee may, at the time an Option is granted, or at any time
thereafter, in its sole discretion, provide that the exercisability of the
Option shall, in whole or in part, be accelerated to the date of the Optionee's
termination of employment. In no event may any Option be exercised by anyone
after the expiration of the term of the Option, nor may any action taken by the
Committee hereunder decrease the term of any Option to a period less than that
provided for in the Agreement. The decision of the Committee as to the cause of
an Optionee's discharge and the damage done to the Company will be final.
5.5 Effect of Change in Control. Notwithstanding anything contained in
---------------------------
the Plan or an Agreement to the contrary, in the event of a Change in Control,
(i) all Options outstanding on the date of such Change in Control shall become
immediately and fully exercisable and (ii) any Optionee will be permitted to
surrender for cancellation within ninety (90) days after such Change in Control,
any Option or portion of an Option to the extent not yet exercised and the
Optionee will be entitled to receive a cash payment in the amount equal to the
excess, if any, of (x) (A) in the case of a Nonqualified Stock Option, the
greater of (1) the Fair Market Value, on the date of surrender, of the Shares
subject to the Option or portion thereof surrendered or (2) the Adjusted Fair
Market Value of the Shares subject to the Option or portion thereof surrendered
or (B) in the case of an Incentive Stock Option, the Fair Market Value, on the
date of surrender, of the Shares subject to the Option or portion thereof
surrendered, over (y) the aggregate purchase price for such Shares under the
Option or portion thereof surrendered; provided, however, that in the case of an
-------- -------
Option granted within six (6) months prior to the Change in Control to any
Optionee who may be subject to liability under Section 16(b) of the Exchange
Act, such Optionee shall be entitled to surrender for cancellation his or her
Option during the ninety (90) day period commencing upon the expiration of six
(6) months from the date of grant of any such Option and to receive the amount
determined under this Section 5.5.
5.6 Withholding of Taxes.
--------------------
(a) The Company shall have the right to deduct from any distribution of
cash to any Optionee, an amount equal to the federal, state and local income
taxes and other amounts as may be required by law to be withheld (the
"Withholding Taxes") with respect to any Option. If an Optionee is entitled to
receive Shares upon exercise of an Option, the Optionee shall pay the
Withholding Taxes to the Company prior to the issuance of such Shares. In
satisfaction of the Withholding Taxes to the Company, the Optionee may make a
written election (the "Tax Election"), which may be accepted or rejected in the
discretion of the Committee, to have withheld a portion of the Shares issuable
to him or her upon exercise of the Option having an aggregate Fair Market Value,
on the date of exercise, equal to the Withholding Taxes, provided that in
respect of an Optionee who may be subject to liability under Section 16(b) of
the Exchange Act either (i) (A) the Optionee makes the Tax Election at least six
(6) months after the date the Option was granted, (B) the Option is exercised
during the ten (10) day period beginning on the third business day and ending on
the twelfth business day following the release for publication of the Company's
quarterly or annual statements of earnings (a "Window Period") and (C) the Tax
Election is made during the Window Period in which the Option is exercised or
prior to such Window Period and subsequent to the immediately preceding Window
Period or (ii) (A) the Tax Election is made at least six (6) months prior to the
date the Option is exercised and (B) the Tax Election is irrevocable with
respect to the exercise of all Options which are exercised prior to the
expiration of six (6) months following an election to revoke the Tax Election.
Notwithstanding the foregoing, the Committee may, by the adoption of rules or
otherwise, (i) modify the provisions in the preceding sentence or impose such
other restrictions or limitations on Tax Elections as may be necessary to ensure
that the Tax Elections will be exempt transactions under Section 16(b) of the
Exchange Act, and (ii) permit Tax Elections to be made at such other times and
subject to such other conditions as the Committee determines will constitute
exempt transactions under Section 16(b) of the Exchange Act.
-4-
<PAGE>
(b) If an Optionee makes a disposition, within the meaning of Section
424(c) of the Code and regulations promulgated thereunder, of any Share or
Shares issued to such Optionee pursuant to the exercise of an Incentive Stock
Option within the two-year period commencing on the day after the date of the
grant or within the one-year period commencing on the day after the date of
transfer of such Share or Shares to the Optionee pursuant to such exercise, the
Optionee shall, within ten (10) days of such disposition, notify the Company
thereof, by delivery of written notice to the Company at its principal executive
office.
6. Adjustment Upon Changes in Capitalization.
-----------------------------------------
6.1 Subject to Section 7, in the event of a Change in Capitalization which
results in a subdivision or consolidation of Shares or other capital
readjustment, the payment of a stock dividend, or other increase or reduction of
the number of Shares outstanding, without the Company receiving compensation
therefor in money, services or property, the number, class and per share price
of Shares subject to outstanding Options shall be appropriately adjusted in such
a manner as to entitle Optionees to receive, upon exercise of their Options, for
the same aggregate cash consideration, the same total number and class or
classes of Shares as they would have received had they exercised their Option in
full immediately prior to the event requiring the adjustment. In addition, in
the event of any Change in Capitalization (including a Change in Capitalization
described in the preceding sentence), the Committee shall conclusively determine
the appropriate adjustments (in addition to those described in the preceding
sentence), if any, to the maximum number and class of Shares or other stock or
securities with respect to which Awards may be granted under the Plan, the
number and class of Shares or other stock or securities which are subject to
outstanding Options granted under the Plan and the purchase price of Options, if
applicable.
6.2 Any such adjustment in the Shares or other stock or securities subject
to outstanding Incentive Stock Options (including any adjustments in the
purchase price) shall be made in such manner as not to constitute a modification
as defined by Section 424(h)(3) of the Code and only to the extent otherwise
permitted by Sections 422 and 424 of the Code.
6.3 If, by reason of a Change in Capitalization, an Optionee shall be
entitled to exercise an Option with respect to new, additional or different
shares of stock or securities, such new, additional or different shares shall
thereupon be subject to all of the conditions which were applicable to the
Shares subject to the Option, as the case may be, prior to such Change in
Capitalization.
7. Effect of Certain Transactions.
------------------------------
Subject to Section 5.5, in the event of (i) the liquidation or dissolution
or the Company or (ii) a merger or consolidation of the Company (a
"Transaction"), the Plan and the Options issued hereunder shall continue in
effect in accordance with their respective terms and each Optionee shall be
entitled to receive in respect of each Share subject to any outstanding Options,
as the case may be, upon exercise of any Option, the same number and kind of
stock, securities, cash, property or other consideration that each holder of a
Share was entitled to receive in the Transaction in respect of a Share. In the
event that, after a Transaction, there occurs any change of a type described in
Section 16.6 hereof with respect to the shares of the surviving or resulting
corporation, then adjustments similar to, and subject to the same conditions as,
those in Section 6 hereof shall be made by the Committee.
8. Option Grants for Non-employee Directors.
----------------------------------------
8.1 Award. On the date of the Company's annual meeting at which the Non-
-----
employee Director is elected or reelected to serve, each Non-employee Director
shall be granted a Nonqualified Stock Option to purchase 10,000 Shares, provided
that the Plan is in effect on that day.
-5-
<PAGE>
8.2 Restriction. No Shares transferred to a Non-employee Director
-----------
pursuant to the exercise of a Nonqualified Stock Option granted under Section
8.1 may be disposed of by him before six (6) months after the date the Option is
granted.
8.3 Purchase Price. The purchase price per Share under a Nonqualified
--------------
Stock Option granted pursuant to Section 8.1 shall be 100% of the Fair Market
Value of a Share on the date the Option is granted.
8.4 Duration. Each Nonqualified Stock Option granted pursuant to Section
--------
8.1 shall expire five (5) years from the date it is granted.
8.5 Other Terms and Conditions. The provisions of Section 5 shall apply
--------------------------
to all Options granted pursuant to Section 8.1.
8.6 Amendment. Notwithstanding the provisions of Section 10 hereof, the
---------
terms of this Section 8 shall not be amended more than once every six months,
other than to comport with the changes in the Code, or the rules under the Code.
9. Restricted Stock Awards.
-----------------------
9.1 Authority of Committee. Subject to the provisions of the Plan, the
----------------------
Committee shall have full and final authority to select those Eligible Employees
who will receive Restricted Stock Awards, the terms and conditions of which
shall be set forth in Agreements.
9.2 Transferability Restrictions and Stockholder Rights With Respect to
-------------------------------------------------------------------
Restricted Stock. Except as provided herein, Restricted Stock may not be sold,
- ----------------
assigned, transferred, pledged or otherwise encumbered during a Restricted
Period. Any attempted sale, assignment, transfer, pledge or encumbrance of
Restricted Stock in violation of this Plan shall be void and the Company shall
not be bound thereby. During the Restricted Period, certificates representing
the Restricted Stock and any Retained Distributions shall be registered in the
recipient's name and bear a restrictive legend to the effect that ownership of
such Restricted Stock (and any such Retained Distributions) and the enjoyment of
all rights appurtenant thereto are subject to the restrictions, terms and
conditions provided in this Plan and the applicable Agreement. Such
certificates shall be deposited by the recipient with the Company, together with
stock powers or other instruments of assignment, each endorsed in blank, which
will permit transfer to the Company of all or any portion of the Restricted
Stock and any securities constituting Retained Distributions that are forfeited
in accordance with this Plan and the applicable Agreement. Restricted Stock
shall constitute issued and outstanding shares of Common Stock for all corporate
purposes. Subject to the terms of this Plan and the Agreement with respect to
the Award, the recipient shall have the right to vote the Restricted Stock
awarded to such recipient and to receive and retain all regular cash dividends,
and to exercise all other rights, powers and privileges of a holder of Common
Stock, with respect to such Restricted Stock, with the exception that (i) the
recipient shall not be entitled to delivery of the stock certificate or
certificates representing such Restricted Stock until the restrictions
applicable thereto shall have expired, (ii) the Company shall retain custody of
all Retained Distributions made or declared with respect to the Restricted Stock
(and such Retained Distributions shall be subject to the same restrictions,
terms and conditions as are applicable to the Restricted Stock) until such time,
if ever, as the Restricted Stock with respect to which such Retained
Distributions shall have been made, paid or declared shall have become vested,
and such Retained Distributions shall not bear interest or be segregated in
separate accounts and (iii) the recipient may not sell, assign, transfer,
pledge, exchange, encumber or dispose of the Restricted Stock or any Retained
Distributions during the Restricted Period. Nothing in this Section shall
prevent transfers by will or by the applicable laws of descent and distribution.
9.3 Vesting of Restricted Stock. Restricted Stock Awards shall be subject
---------------------------
to such vesting restrictions, if any, as the Committee shall determine in its
sole discretion; provided that any Restricted Stock
-6-
<PAGE>
Award that is granted to an Employee who is then subject to the reporting and
short-swing profit provisions of Section 16 of the Exchange Act and the rules
thereunder shall vest no earlier than six months following the date on which the
Restricted Stock is deemed awarded for purposes of such provisions.
9.4 Effect of Change in Control. Notwithstanding anything contained in
---------------------------
the Plan or an Agreement to the contrary, in the event of a Change in Control,
all Restricted Stock Awards outstanding on the date of such Change in Control
shall become immediately and fully vested.
9.5 Consequence of Vesting. Subject to Section 13.5, when shares of
----------------------
Restricted Stock become vested, the Restricted Period shall be terminated as to
those shares, and the Company shall deliver to the Restricted Stock Award
recipient (or his estate, if applicable) a certificate representing those Shares
and all Retained Distributions made or declared with respect to those Shares,
reduced as necessary to satisfy the Company's tax withholding obligation.
9.6 Forfeiture for Cause. Notwithstanding any other provision of this
--------------------
Plan, if the Committee finds that the Restricted Stock Award recipient's
employment terminated for Cause, any of his Restricted Stock Awards that are not
then vested will be forfeited. The decision of the Committee as to the cause of
an Award recipient's discharge and the damage done to the Company will be final.
9.7 Withholding of Taxes. The Company shall meet its tax withholding
--------------------
obligations under the Code and applicable state or local law arising upon the
vesting of Restricted Stock by delivering to the Restricted Stock recipient (or
his estate, if applicable) a reduced number of Shares in the manner specified
herein. At the time of vesting of shares of Restricted Stock, the Company shall
(i) calculate the amount of withholding tax due on the assumption that all such
vested shares of Restricted Stock are made available for delivery, (ii) reduce
the number of such Shares made available for delivery so that the Fair Market
Value of the Shares withheld on the vesting date approximates the amount of tax
the Company is obliged to withhold and (iii) in lieu of the withheld shares,
remit cash to the United States Treasury and other applicable governmental
authorities, on behalf of the Award recipient, in the amount of the withholding
tax due. The Company shall withhold only whole Shares to satisfy its
withholding obligation. Where the Fair Market Value of the withheld Shares does
not equal the Company's withholding tax obligation, the Company shall withhold
Shares with a Fair Market Value slightly in excess of the amount of its
withholding obligation and shall remit the excess cash to the Restricted Stock
Award recipient (or his estate, if applicable) with the Shares of Common Stock
made available for delivery. The withheld Shares of Restricted Stock not made
available for delivery by the Company shall be retained as treasury stock or
will be cancelled and, in either case, the recipient's right, title and interest
in such Restricted Stock shall terminate.
10. Termination and Amendment of the Plan.
-------------------------------------
10.1 The Plan shall terminate on May 23, 2001, and no Awards may be
granted thereafter. The Board may sooner terminate or, except as otherwise
-------------------
provided, amend the Plan at any time and from time to time; provided, however,
- -------- -------- -------
that to the extent necessary under Section 16(b) of the Exchange Act and the
rules and regulations promulgated thereunder or other applicable law, no
amendment shall be effective unless approved by the stockholders of the Company
in accordance with applicable law and regulations at an annual or special
meeting held within twelve (12) months after the date of adoption of such
amendment.
10.2 Except as provided in Sections 6 and 7 hereof, rights and obligations
under any Award granted before any amendment or termination of the Plan shall
not be adversely altered or impaired by such amendment or termination, except
with the consent of the Award recipient, nor shall any amendment or termination
deprive any Award recipient of any Shares which he may have acquired through or
as a result of the Plan.
-7-
<PAGE>
11. Non-Exclusivity of the Plan.
---------------------------
The adoption of the Plan by the Board shall not be construed as amending,
modifying or rescinding any previously approved incentive arrangement or as
creating any limitations on the power of the Board to adopt such other incentive
arrangements as it may deem desirable, including, without limitation, the
granting of stock options and shares otherwise than under the Plan, and such
arrangements may be either applicable generally or only in specific cases.
12. Limitation of Liability.
-----------------------
As illustrative of the limitations of liability of the Company, but not
intended to be exhaustive thereof, nothing in the Plan shall be construed to:
(i) give any person any right to be granted an Award other than at the sole
discretion of the Committee;
(ii) give any person any rights whatsoever with respect to Shares except as
specifically provided in the Plan or any Agreement;
(iii) limit in any way the right of the Company to terminate the
employment of any person at any time; or
(iv) be evidence of any agreement or understanding, expressed or implied,
that the Company will employ any person at any particular rate of compensation
or for any particular period of time.
13. Regulations and Other Approvals; Governing Law.
----------------------------------------------
13.1 This Plan and the rights of all persons claiming hereunder shall be
construed and determined in accordance with the laws of the State of Delaware.
13.2 The obligation of the Company to sell or deliver Shares with respect
to Awards granted under the Plan shall be subject to all applicable laws, rules
and regulations, including all applicable federal and state securities laws, and
the obtaining of all such approvals by governmental agencies as may be deemed
necessary or appropriate by the Committee.
13.3 The Plan is intended to comply with Rule 16b-3 promulgated under the
Exchange Act and the Committee shall interpret and administer the provisions of
the Plan or any Agreement in a manner consistent therewith. Any provisions
inconsistent with such Rule shall be inoperative and shall not affect the
validity of the Plan.
13.4 The Board may make such changes as may be necessary or appropriate to
comply with the rules and regulations of any government authority, or to obtain
for Eligible Employees granted Incentive Stock Options the tax benefits under
the applicable provisions of the Code and regulations promulgated thereunder.
13.5 Each Award is subject to the requirement that, if at any time the
Committee determines, in its good faith discretion, the listing, registration or
qualification of Shares issuable pursuant to the Plan is required by any
securities exchange or under any state or federal law, or the consent or
approval of any governmental or regulatory body is necessary or desirable as a
condition of, or in connection with, the grant of an Award or the issuance of
Shares, no Awards shall be granted or payment made or Shares issued, in whole or
in part, unless such listing, registration, qualification, consent or approval
has been effected or obtained free of any conditions as acceptable to the
Committee. Notwithstanding any other provision herein to the contrary, if
within ten (10) days
-8-
<PAGE>
preceding the expiration date of an Option, the Company is unable to issue
Shares thereunder, the expiration date of said Option shall be extended and
written notice given to the Optionee (at least seven (7) days prior to the
expiration date) of such extension so as to provide a reasonable opportunity for
the Optionee to exercise the Option; provided, however, in no event shall such
extension exceed the period during which the Company was unable to issue Shares
under the Option plus ten (10) days.
13.6 The Company will use its best efforts to effect and maintain the
registration under the Securities Act of 1933, as amended (the "Securities
Act"), of all Shares which may be awarded pursuant to the Plan and all Shares
issuable upon the exercise of an Option granted pursuant to the Plan.
13.7 Notwithstanding anything contained in the Plan to the contrary, in
the event that the disposition of Shares acquired pursuant to the Plan is not
covered by a then current registration statement under the Securities Act and is
not otherwise exempt from such registration, such Shares shall be restricted
against transfer to the extent required by the Securities Act and Rule 144 or
other regulations thereunder. The Committee may require any individual
receiving Shares pursuant to the Plan, as a condition precedent to receipt of
such Shares upon exercise of an Option or upon the awarding of Shares, to
represent and warrant to the Company in writing that the Shares acquired by such
individual are acquired without a view to any distribution thereof and will not
be sold or transferred other than pursuant to an effective registration thereof
under said Act or pursuant to an exemption applicable under the Securities Act
of 1933, as amended, or the rules and regulations promulgated thereunder. The
certificates evidencing any of such Shares shall be appropriately amended to
reflect their status as restricted securities as aforesaid.
14. Miscellaneous.
-------------
14.1 Multiple Agreements. The terms of each Award may differ from other
-------------------
Awards granted under the Plan at the same time, or at some other time. The
Committee may also grant more than one Award to a given Eligible Employee during
the term of the Plan, either in addition to, or in substitution for, one or more
Awards previously granted to that Eligible Employee.
14.2 Section 83(b) Elections. No Eligible Employee shall exercise the
-----------------------
election permitted under Section 83(b) of the Code with respect to an Award
without written approval of the Treasurer of the Company. If the Treasurer
permits such an election with respect to any Award, the Company shall require
the Award recipient to pay the Company an amount necessary to satisfy the
Company's tax withholding obligation.
15. Effective Date.
--------------
The effective date of the Plan shall be the date of its adoption by the
Board, subject only to the approval by the affirmative votes of the holders of a
majority of the Company's Common Stock present, or represented, and entitled to
vote at a meeting of stockholders duly held in accordance with the applicable
laws of the State of Delaware within twelve (12) months of such adoption.
16. Definitions. For purposes of the Plan:
-----------
16.1 "Adjusted Fair Market Value" means, in the event of a Change in
Control, the greater of (i) the highest price per Share paid to holders of the
Shares in any transaction (or series of transactions) constituting or resulting
in a Change in Control or (ii) the highest Fair Market Value of a Share during
the ninety (90) day period ending on the date of a Change in Control.
16.2 "Agreement" means the written agreement between the Company and an
Award recipient evidencing the grant of an Award and setting forth the terms and
conditions thereof.
-9-
<PAGE>
16.3 "Award" shall mean an Option (which may be designated as an Incentive
Stock Option or a Nonqualified Stock Option) or a Restricted Stock Award granted
under this Plan.
16.4 "Board" means the Board of Directors of the Company.
16.5 "Cause" means (i) the willful engaging by the Award recipient in
gross misconduct resulting in demonstrable material injury to the Company, or
(ii) the nonappealable conviction of the Award recipient of a felony involving
moral turpitude. For purposes of this definition, no act or failure to act on
the Award recipient's part shall be considered "willful" unless done, or omitted
to be done, by him not in good faith and without reasonable belief that his act
or omission was in the best interest of the Company or otherwise likely to
result in no material injury thereto.
16.6 "Change in Capitalization" means any increase or reduction in the
number of Shares, or any change (including, but not limited to, a change in
value) in the Shares or exchange of Shares for a different number or kind of
shares or other securities of the Company, by reason of a reclassification,
recapitalization, merger, consolidation, reorganization, spin-off, split-up,
issuance of warrants or rights or debentures, stock dividend, stock split or
reverse stock split, cash dividend, property dividend, combination or exchange
of shares, repurchase of shares, public offering, private placement, change in
corporate structure or otherwise.
16.7 A "Change in Control" means the occurrence during the term of the
Plan of:
(i) The "acquisition" by any "Person" (as the term person is used for
purposes of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as
amended (the "1934 Act")) of "Beneficial Ownership" (within the meaning of Rule
13d-3 promulgated under the 1934 Act) of any securities of the Company which
generally entitles the holder thereof to vote for the election of directors of
the Company (the "Voting Securities") which, when added to the Voting Securities
then "Beneficially Owned" by such person, would result in such Person
"Beneficially Owning" twenty percent (20%) or more of the combined voting power
of the Company's then outstanding Voting Securities; provided, however, that for
-------- -------
purposes of this paragraph (i), a Person shall not be deemed to have made an
acquisition of Voting Securities if such Person: (a) acquires Voting Securities
as a result of a stock split, stock dividend or other corporate restructuring in
which all stockholders of the class of such Voting Securities are treated on a
pro rata basis; (b) acquires the Voting Securities directly from the Company;
(c) becomes the Beneficial Owner of more than the permitted percentage of Voting
Securities solely as a result of the acquisition of Voting Securities by the
Company which, by reducing the number of Voting Securities outstanding,
increases the proportional number of shares Beneficially Owned by such Person;
(d) is the Company or any corporation or other Person of which a majority of its
voting power or its equity securities or equity interest is owned directly or
indirectly by the Company (a "Controlled Entity"); (e) acquires Voting
Securities in connection with a "Non-Control Transaction" (as defined in
paragraph (iii)(a) below); or (f) becomes the Beneficial Owner of more than the
permitted percentage of Voting Securities as a result of a transaction approved
by a majority of the Incumbent Board (as defined in paragraph (ii) below); or
(ii) The individuals who, as of February 8, 1996, are members of the Board
of Directors of the Company (the "Incumbent Board"), cease for any reason to
constitute at least two-thirds of the Board of Directors of the Company;
provided, however, that if either the election of any new director or the
- -------- -------
nomination for election of any new director by the Company's stockholders was
approved by a vote of at least two-thirds of the Incumbent Board, such new
director shall be considered as a member of the Incumbent Board; provided
--------
further, however, that no individual shall be considered a member of the
- ------- -------
Incumbent Board if such individual initially assumed office as a result of
either an actual or threatened "Election Contest" (as described in Rule 14a-11
promulgated under the 1934 Act) or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than the Board of
Directors (a "Proxy Contest") including by reason of any agreement intended to
avoid or settle any Election Contest or Proxy Contest; or
-10-
<PAGE>
(iii) Approval by stockholders of the Company of:
(a) A merger, consolidation or reorganization involving the Company (a
"Business Combination"), unless
(1) the stockholders of the Company, immediately before the Business
Combination, own, directly or indirectly immediately following the Business
Combination, at least seventy-five percent (75%) of the combined voting power of
the outstanding voting securities of the corporation resulting from the Business
Combination (the "Surviving Corporation") in substantially the same proportion
as their ownership of the Voting Securities immediately before the Business
Combination, and
(2) the individuals who were members of the Incumbent Board immediately
prior to the execution of the agreement providing for the Business Combination
constitute at least two-thirds of the members of the Board of Directors of the
Surviving Corporation, and
(3) no Person (other than (x) the Company or any Controlled Entity, (y) a
trustee or other fiduciary holding securities under one or more employee benefit
plans or arrangements (or any trust forming a part thereof) maintained by the
Company, the Surviving Corporation or any Controlled Entity, or (z) any Person
who, immediately prior to the Business Combination, had Beneficial Ownership of
twenty percent (20%) or more of the then outstanding Voting Securities) has
Beneficial Ownership of twenty percent (20%) or more of the combined voting
power of the Surviving Corporation's then outstanding voting securities (a
transaction described in this subparagraph (a) (1), (2) or (3) shall be referred
to as a "Non-Control Transaction");
(b) A complete liquidation or dissolution of the Company; or
(c) An agreement for the sale or other disposition of all or substantially
all of the assets of the Company to any Person (other than a transfer to a
Controlled Entity).
Notwithstanding the foregoing, if an Eligible Employee's employment is
terminated and the employee reasonably demonstrates that such termination (x)
was at the request of a third party who has indicated an intention or taken
steps reasonably calculated to effect a Change in Control and who effectuates a
Change in Control or (y) otherwise occurred in connection with, or in
anticipation of, a Change in Control which actually occurs, then for all
purposes hereof, the date of a Change in Control with respect to the Eligible
Employee shall mean the date immediately prior to the date of such termination
of employment.
A Change in Control shall not be deemed to occur solely because twenty
percent (20%) or more of the then outstanding Voting Securities is Beneficially
Owned by (x) a trustee or other fiduciary holding securities under one or more
employee benefit plans or arrangements (or any trust forming a part thereof)
maintained by the Company or any Controlled Entity or (y) any corporation which,
immediately prior to its acquisition of such interest, is owned directly or
indirectly by the stockholders of the Company in the same proportion as their
ownership of stock in the Company immediately prior to such acquisition.
16.8 "Code" means the Internal Revenue Code of 1986, as amended.
16.9 "Committee" means a committee consisting of at least two (2)
Disinterested Directors appointed by the Board to administer the Plan and to
perform the functions set forth herein.
16.10 "Company" means Plains Resources Inc.
-11-
<PAGE>
16.11 "Disability" means a physical or mental infirmity which impairs the
Optionee's ability to perform substantially his or her duties for a period of
one hundred eighty (180) consecutive days or which the Committee determines
constitutes a Disability.
16.12 "Disinterested Director" means a director of the Company who is
"disinterested" within the meaning of Rule 16b-3 under the Exchange Act.
16.13 "Eligible Employee" means any officer, the Chairman of the Board, or
any employee of the Company or a Subsidiary.
16.14 "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
16.15 "Fair Market Value" on any date means the closing sale price per
Share on the day before such date on the principal national securities exchange
on which such Shares are listed or admitted to trading, or if such Shares are
not so listed or admitted to trading, the arithmetic mean of the per Share
closing bid price and per Share closing asked price on the day before such date
as quoted on the National Association of Securities Dealers Automated Quotation
System or such other market in which such prices are regularly quoted, or, if
there have been no published bid or asked quotations with respect to Shares on
the day before such date, the Fair Market Value shall be the value established
by the Board in good faith and in accordance with Section 422 of the Code.
16.16 "Incentive Stock Option" means an Option satisfying the requirements
of Section 422 of the Code and designated by the Committee as an Incentive Stock
Option.
16.17 "Nonqualified Stock Option" means an Option which is not an
Incentive Stock Option.
16.18 "Non-employee Director" means a director of the Company who is not
an employee of the Company or any Subsidiary.
16.19 "Option" means an Incentive Stock Option, a Nonqualified Stock
Option, or either or both of them.
16.20 "Optionee" means a person to whom an Option has been granted under
the Plan.
16.21 "Parent" means any corporation which is a parent corporation (within
the meaning of Section 424(e) of the Code) with respect to the Company.
16.22 "Plan" means the Plains Resources Inc. 1996 Stock Incentive Plan.
16.23 "Restricted Period" shall mean the period designated by the
Committee during which Restricted Stock may not be sold, assigned, transferred,
pledged, or otherwise encumbered.
16.24 "Restricted Stock" shall mean those Shares issued pursuant to a
Restricted Stock Award that are subject to the restrictions, terms, and
conditions set forth in this Plan and any related Agreement.
16.25 "Restricted Stock Award" shall mean an award of Restricted Stock
pursuant to Section 9 hereof.
16.26 "Retained Distributions" shall mean any securities or other property
(other than regular cash dividends) distributed by the Company in respect of
Restricted Stock during any Restricted Period.
16.27 "Shares" means the common stock, par value $.10 per share, of the
Company.
-12-
<PAGE>
16.28 "Subsidiary" means any corporation which is a subsidiary corporation
(within the meaning of Section 424(f) of the Code) with respect to the Company.
16.29 "Successor Corporation" means a corporation, or a parent or
subsidiary thereof within the meaning of Section 424(a) of the Code, which
issues or assumes a stock option in a transaction to which Section 424(a) of the
Code applies.
16.30 "Ten-Percent Stockholder" means an Eligible Employee, who, at the
time an Incentive Stock Option is to be granted to him or her, owns (within the
meaning of Section 422(b)(6) of the Code) stock possessing more than ten percent
(10%) of the total combined voting power of all classes of stock of the Company,
or of a Parent or a Subsidiary.
-13-
<PAGE>
EXHIBIT 5
June 14, 1996
Board of Directors of
Plains Resources Inc.
1600 Smith, Suite 1500
Houston, TX 77002
Gentlemen:
I am General Counsel of Plains Resources Inc., a Delaware corporation (the
"Company"), and have acted in such capacity in connection with the registration
under the Securities Act of 1933, as amended (the "Act"), of 1,500,000 shares of
the Company's common stock, $0.10 par value (the "Common Stock"), to be offered
upon the terms and subject to the conditions set forth in the Company's 1996
Stock Incentive Plan (the "Plan"). The Company is filing a Registration
Statement on Form S-8 (the "Registration Statement") relating thereto with the
Securities and Exchange Commission.
In connection therewith, I have examined originals or copies, certified or
otherwise identified to my satisfaction, of the Second Restated Certificate of
Incorporation of the Company as presently in effect, the Bylaws of the Company,
the corporate proceedings with respect to the offering of shares and such other
documents and records as I have deemed necessary or appropriate for the
expression of the opinions contained herein.
I have assumed the authenticity and completeness of all records,
certificates and other instruments submitted to me as originals, the conformity
to original documents of all records, certificates and other instruments
submitted to me as copies and the correctness of all statements of fact
contained in all records, certificates and other instruments that I have
examined.
Based upon the foregoing, and having regard for such legal considerations
as I have deemed relevant, I am of the opinion that:
1) The Company is duly incorporated, validly existing and in good standing
under the laws of the State of Delaware.
2) The 1,500,000 shares of Common Stock proposed to be sold by the Company
pursuant to the Plan have been duly and validly authorized for issuance and,
when issued in accordance with the terms of the Plan, and subject to compliance
with any applicable Blue Sky laws, will be duly and validly issued, fully paid
and nonassessable.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Sincerely,
/s/ Michael R. Patterson
Michael R. Patterson
General Counsel
<PAGE>
EXHIBIT 23(a)
CONSENT OF INDEPENDENT ACCOUNTANT
---------------------------------
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated February 22, 1996, which appears on
page F-2 of Plains Resources Inc.'s Annual Report on Form 10-K for the year
ended December 31, 1995. We also consent to the incorporation by reference of
our report dated February 20, 1996, which appears on Page F-1 of Amendment No. 1
on Form 8-K/A dated February 21, 1996. We also consent to the incorporation by
reference to us under the heading "Interests of Named Experts and Counsel" in
such Registration Statement.
/s/ PRICE WATERHOUSE LLP
- --------------------------------
Houston, Texas
June 17, 1996
<PAGE>
EXHIBIT 23(b)
CONSENT OF INDEPENDENT PETROLEUM ENGINEERS AND GEOLOGISTS
---------------------------------------------------------
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our reserve report to the interest of Plains Resources
Inc. and Subsidiary (collectively the Company) dated March 7, 1996, relating to
the estimated quantities of certain of the Company's proved reserves of oil and
gas and the related estimates of future net revenue and present values thereof
for certain periods, included in the Company's Annual Report on Form 10-K for
the year ended December 31, 1995, as well as in the Notes to the Consolidated
Financial Statements of the Company in such annual report. We also consent to
the reference to us under the heading "Interests of Named Experts and Counsel"
in such Registration Statement.
NETHERLAND, SEWELL & ASSOCIATES, INC.
/s/ FREDERIC D. SEWELL
------------------------------------------
PRESIDENT
Dallas, Texas
June 14, 1996
<PAGE>
EXHIBIT 23(c)
CONSENT OF INDEPENDENT PETROLEUM ENGINEERS
------------------------------------------
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our reserve report to the interest of Plains Resources
Inc. (the Company) dated March 4, 1996, relating to the estimated quantities of
certain of the Company's proved reserves of oil and gas and the related
estimates of future net revenue and present values thereof for certain periods,
included in the Company's Annual Report on Form 10-K for the year ended December
31, 1995, as well as in the Notes to the Consolidated Financial Statements of
the Company in such annual report. We also consent to the reference to us
under the heading "Interests of Named Experts and Counsel" in such Registration
Statement.
H. J. GRUY AND ASSOCIATES, INC.
/s/ H. J. GRUY AND ASSOCIATES, INC.
--------------------------------------------
Houston, Texas
June 13, 1996
<PAGE>
EXHIBIT 23(d)
CONSENT OF INDEPENDENT PETROLEUM ENGINEERS
------------------------------------------
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our reserve report to the interest of Plains Resources
Inc. (the Company) dated February 29, 1996, relating to the estimated quantities
of certain of the Company's proved reserves of oil and gas and the related
estimates of future net revenue and present values thereof for certain periods,
included in the Company's Annual Report on Form 10-K for the year ended December
31, 1995, as well as in the Notes to the Consolidated Financial Statements of
the Company in such annual report. We also consent to the reference to us
under the heading "Interests of Named Experts and Counsel" in such Registration
Statement.
RYDER SCOTT COMPANY PETROLEUM ENGINEERS
/s/ RYDER SCOTT COMPANY PETROLEUM ENGINEERS
-------------------------------------------
Houston, Texas
June 14, 1996
