<PAGE>
------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------------
EVERGREEN RESOURCES, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
COLORADO 84-0834147
- ------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation of organization) Identification Number)
1401 17TH STREET, SUITE 1200
DENVER, COLORADO 80202
------------------------------------------------------------
(Address of principal executive offices, including zip code)
EVERGREEN RESOURCES, INC.
INITIAL STOCK OPTION PLAN
(Full title of the plan)
--------------------------
Mark S. Sexton
Chief Executive Officer
Evergreen Resources, Inc.
1401 17th Street, Suite 1200
Denver, Colorado 80202
(303) 298-8100
------------------------------------------------------
(Name, address and telephone number, including area code,
of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
PROPOSED PROPOSED
TITLE OF MAXIMUM MAXIMUM
SECURITIES AMOUNT OFFERING AGGREGATE AMOUNT OF
TO BE TO BE PRICE OFFERING REGISTRATION
REGISTERED REGISTERED PER SHARE (1) PRICE (1) FEE (1)
- ---------- ----------- -------------- ------------- -----------------
<S> <C> <C> <C> <C>
Common Stock,
no par value 500,000 shares $16.1875 per share $8,093,750 $2136.75
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Pursuant to Rule 457(c) and (h)(1), based on the option price for shares
available for issuance upon exercise of options granted under the
Evergreen Resources, Inc. Initial Stock Option Plan and the average of
the high ($16.50) and low ($15.875) sale prices of the Company's common
stock on December 14, 1999, as reported on the Nasdaq National Market
with respect to shares available for issuance upon the future grant of
options under the Evergreen Resources, Inc. Initial Stock Option Plan.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed by Evergreen Resources, Inc.
(the "Company") with the Securities and Exchange Commission (the "Commission")
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), are
incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K for the
year ended December 31, 1998;
(b) The Company's Quarterly Reports on Form 10-Q for the
quarters ended March 31, 1999, June 30, 1999 and September 30, 1999;
(c) The Company's Amendment to Quarterly Report on
Form 10-Q/A for the quarter ended June 30, 1999;
(d) The Company's Current Reports on Form 8-K filed with
the Commission on May 28, 1999 and June 18, 1999 (amended on
Form 8-K/A filed on June 21, 1999);
(e) The description of the common stock that is contained
in the Company's registration statement on Form 8-A filed with the
Commission on or about December 21, 1981, including any amendment or
report filed for the purposes of updating the description;
(f) The description of the Company's Shareholders Rights
Agreement that is contained in the Company's registration statement on
Form 8-A filed with the Commission on July 7, 1997; and
(g) All other reports filed pursuant to Section 13(a)
or 15(d) of the Exchange Act since the end of the fiscal year referred
to in (a) above.
All documents subsequently filed by the Company pursuant to
Sections 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 hereby
have been sold or which deregisters all securities remaining unsold, shall be
deemed to be incorporated by reference herein and to be a part hereof from the
date of the filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The legality of the securities offered hereby has been passed
upon by the law firm of Berenbaum, Weinshienk & Eason, P.C.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 7-108-402 of the Colorado Business Corporation Act
(the "Act") provides, generally, that the articles of incorporation of a
Colorado corporation may contain a provision eliminating or limiting the
personal liability of a director to the corporation or its shareholders for
monetary damages for breach of fiduciary duty as a director; except that any
such provision may not eliminate or limit the liability of a director (i) for
any breach of the director's duty of loyalty to the corporation or its
shareholders, (ii) acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) acts specified in
Section 7-108-403 (concerning unlawful distributions), or (iv) any transaction
from which a director directly or indirectly derived an improper
II-1
<PAGE>
personal benefit. Such provision may not eliminate or limit the liability of
a director for any act or omission occurring prior to the date on which such
provision becomes effective. The Company's articles of incorporation contain
a provision eliminating liability as permitted by the statute. The Company's
articles of incorporation further provide that directors and officers of the
Company will not be held personally liable for any injury to persons or
property caused by the wrongful act of any employee of the Company unless
either (i) the director or officer was personally involved in the situation
leading to litigation or (ii) the director or officer committed a criminal
offense in connection with such litigation.
Section 7-109-103 of the Act provides that a Colorado
corporation must indemnify a person (i) who is or was a director of the
corporation or an individual who, while serving as a director of the
corporation, is or was serving at the corporation's request as a director,
officer, partner, trustee, employee or fiduciary or agent of another
corporation or other entity or of any employee benefit plan (a "Director") or
officer of the corporation and (ii) who was wholly successful, on the merits
or otherwise, in defense of any threatened, pending, or completed action,
suit, or proceeding, whether civil, criminal, administrative, or
investigative and whether formal or informal (a "Proceeding"), in which he
was a party, against reasonable expenses incurred by him in connection with
the Proceeding, unless such indemnity is limited by the corporation's
articles of incorporation. The Company's articles of incorporation do not
contain any such limitation.
Section 7-109-102 of the Act provides, generally, that a
Colorado corporation may indemnify a person made a party to a Proceeding
because the person is or was a Director against any obligation incurred with
respect to a Proceeding to pay a judgment, settlement, penalty, fine
(including an excise tax assessed with respect to an employee benefit plan)
or reasonable expenses incurred in the Proceeding if the person conducted
himself or herself in good faith and the person reasonably believed, in the
case of conduct in an official capacity with the corporation, that the
person's conduct was in the corporation's best interests and, in all other
cases, his conduct was at least not opposed to the corporation's best
interests and, with respect to any criminal proceedings, the person had no
reasonable cause to believe that his conduct was unlawful. The Company's
articles of incorporation and its bylaws provide for such indemnification. A
corporation may not indemnify a Director in connection with any Proceeding by
or in the right of the corporation in which the Director was adjudged liable
to the corporation or, in connection with any other Proceeding charging the
Director derived an improper personal benefit, whether or not involving
actions in an official capacity, in which Proceeding the Director was judged
liable on the basis that he derived an improper personal benefit. Any
indemnification permitted in connection with a Proceeding by or in the right
of the corporation is limited to reasonable expenses incurred in connection
with such Proceeding.
Under Section 7-109-107 of the Act, unless otherwise
provided in the articles of incorporation, a Colorado corporation may
indemnify an officer, employee, fiduciary, or agent of the corporation to the
same extent as a Director and may indemnify such a person who is not a
Director to a greater extent, if not inconsistent with public policy and if
provided for by its bylaws, general or specific action of its board of
directors or shareholders, or contract. The Company's articles of
incorporation and bylaws provide for indemnification of officers, employees
and agents of the Company to the same extent as its directors.
The Company's articles of incorporation and bylaws permit
the Company to pay expenses incurred in defending a Proceeding in advance of
the final disposition of the Proceeding if the person undertakes to repay the
amount unless it is ultimately determined that he is entitled to such
expenses.
The Company's articles of incorporation also provide that
the Company may purchase and maintain insurance covering any person serving
on behalf of, or at the request of, the Company against any liability
incurred by him in such capacity or arising out of his status as such,
whether or not the Company would have the power to indemnify him against such
liability. The Company has obtained a policy of directors' and officers'
liability insurance that insures the Company's directors and officers against
the cost of defense, settlement or payment of a judgment under certain
circumstances.
In addition, the Plan provides that each person who serves
as a member of the Board of Directors or Compensation Committee of the Board
of the Company shall be indemnified and held harmless by the Company against
and from (i) any loss, cost, liability or expense imposed on or reasonably
incurred by such person in connection with any claim, action, suit or
proceeding to which such person may be a party or otherwise involved by
II-2
<PAGE>
reason of any action or failure to act under the Plan; and (ii) any and all
amounts paid by such person in satisfaction of judgment in any such action
related to the Plan.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
The following exhibits are filed as a part of this
Registration Statement:
<TABLE>
<CAPTION>
NUMBER DESCRIPTION
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<S> <C>
4.1 Articles of incorporation of the Company, as amended,
which are incorporated by reference to Exhibit 3.1 of
the Company's Registration Statement on Form S-1
(Commission File No. 33-273035), by reference to Exhibit
I of the Company's Current Report on Form 8-K dated
December 9, 1994, and by reference to Exhibit 3.1 to the
Company's Current Report on Form 8-K dated June 1, 1998.
4.2 Bylaws of the Company, which are incorporated by
reference to Exhibit 3.2 to the Company's Current Report
on Form 8-K dated June 1, 1998.
4.3 Shareholders' Rights Agreement, which is incorporated by
reference to Exhibit 1 to the Company's Current Report
on Form 8-K dated July 7, 1997.
5 Opinion of Berenbaum, Weinshienk & Eason, P.C.
23.1 Consent of Berenbaum, Weinshienk & Eason, P.C. (included
in Exhibit 5)
23.2 Consent of BDO Seidman, LLP
23.3 Consent of Resource Services International, Inc.
23.4 Consent of Netherland, Sewell & Associates, Inc.
24 Power of Attorney of Directors and Officers of the
Company (included in the signature page)
99 Evergreen Resources, Inc. Initial Stock Option Plan
</TABLE>
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 of 1933, as amended
(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;
provided, however, that 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
II-3
<PAGE>
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
a 20% change in the maximum aggregate offering price
set forth in the "Calculation of Registration Fee"
table in the effective Registration Statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in
the Registration Statement or any material change to
such information in the Registration Statement;
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed with or furnished to the Commission by
the Company pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in the
Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) The Company 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
(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 Company pursuant to the foregoing provisions, or otherwise, the
Company has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Company of expenses incurred or paid by a director, officer or
controlling person of the Company in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered,
the Company will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
II-4
<PAGE>
SIGNATURES
THE REGISTRANT
Pursuant to the requirements of the Securities Act of 1933, Evergreen
Resources, Inc. certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Denver, State of Colorado, on this 10th day of
December, 1999.
EVERGREEN RESOURCES, INC.
By: /s/ Mark S. Sexton
-------------------------------------
Mark S. Sexton
President and Chief Executive Officer
(Principal Executive Officer)
POWER OF ATTORNEY
Each of the undersigned, being a director and/or officer of Evergreen
Resources, Inc. (the "Company"), hereby nominates, constitutes and appoints Mark
S. Sexton and Kevin R. Collins, or any one of them severally, to be his or her
true and lawful attorney-in-fact and agent and to sign in his or her name and on
his or her behalf in any and all capacities stated below, and to file with the
Securities and Exchange Commission (the "Commission"), a Registration Statement
on Form S-8 (the "Registration Statement") relating to the issuance of certain
shares of the common stock, no par value, of the Company (the "Common Stock") in
connection with the Evergreen Resources, Inc. Initial Stock Option Plan, and to
file any and all amendments, including post-effective amendments, to the
Registration Statement, making such changes in the Registration Statement as
such attorney-in-fact and agent deems appropriate, and generally to do all such
things on his or her behalf in any and all capacities stated below to enable the
Company to comply with the provisions of the Securities Act of 1933, as amended,
and all requirements of the Commission.
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 December 10, 1999.
<TABLE>
<S> <C>
/s/ Mark S. Sexton /s/ Kevin R. Collins
- ---------------------------------------------------- ----------------------------------------------------
Name: Mark S. Sexton, President, Chief Executive Name: Kevin R. Collins, Vice President - Finance,
Officer and Director (Principal Executive Chief Financial Officer and Treasurer
Officer) (Principal Financial and Accounting Officer)
/s/ Alain G. Blanchard /s/ Dennis R. Carlton
- ---------------------------------------------------- ----------------------------------------------------
Name: Alain G. Blanchard, Director Name: Dennis R. Carlton, Director
/s/ Larry D. Estridge /s/ John J. Ryan III
- ---------------------------------------------------- ----------------------------------------------------
Name: Larry D. Estridge, Director Name: John J. Ryan III, Director
/s/ Scott D. Sheffield
- ----------------------------------------------------
Name: Scott D. Sheffield, Director
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
TO
REGISTRATION STATEMENT ON FORM S-8 OF
EVERGREEN RESOURCES, INC.
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<S> <C>
4.1 Articles of incorporation of the Company, as amended, which
are incorporated by reference to Exhibit 3.1 of the Company's
Registration Statement on Form S-1 (Commission File No.
33-273035), by reference to Exhibit I of the Company's Current
Report on Form 8-K dated December 9, 1994, and by reference to
Exhibit 3.1 to the Company's Current Report on Form 8-K dated
June 1, 1998.*
4.2 Bylaws of the Company, which are incorporated by reference to
Exhibit 3.2 to the Company's Current Report on Form 8-K dated
June 1, 1998.*
4.3 Shareholders' Rights Agreement, which is incorporated by
reference to Exhibit 1 to the Company's Current Report on Form
8-K dated July 7, 1997.*
5 Opinion of Berenbaum, Weinshienk & Eason, P.C.
23.1 Consent of Berenbaum, Weinshienk & Eason, P.C. (included in
Exhibit 5)
23.2 Consent of BDO Seidman, LLP
23.3 Consent of Resource Services International, Inc.
23.4 Consent of Netherland, Sewell & Associates, Inc.
24 Power of Attorney of Directors and Officers of the Company
(included in the signature page)
99 Evergreen Resources, Inc. Initial Stock Option Plan
</TABLE>
- --------------
*Incorporated by reference.
<PAGE>
EXHIBIT 5
[LETTERHEAD OF BERENBAUM, WEINSHIENK & EASON, P.C.]
December 10, 1999
Evergreen Resources, Inc.
1401 17th Street, Suite 1200
Denver, Colorado 80202
Re: REGISTRATION STATEMENT ON FORM S-8 RELATING TO EVERGREEN
RESOURCES, INC. INITIAL STOCK OPTION PLAN
Gentlemen:
We have acted as counsel for Evergreen Resources, Inc., a Colorado
corporation (the "Company"), in connection with the registration by the
Company under the Securities Act of 1933, as amended, of the offer and sale
of 500,000 shares of the Company's common stock, no par value (the "Shares"),
which are proposed to be offered and sold pursuant to the Evergreen
Resources, Inc. Initial Stock Option Plan (the "Plan"), and pursuant to the
Company's Registration Statement on Form S-8 (the "Registration Statement")
to be filed with the Securities and Exchange Commission (the "Commission")
with respect to the Shares.
We have reviewed the Plan and the Registration Statement, and we have
examined and are familiar with the records relating to the organization of
the Company, including its Articles of Incorporation, Bylaws, and all
amendments thereto, and the records of all proceedings taken by the Board of
Directors of the Company pertinent to the rendering of this opinion.
Based on the foregoing, and having regard for such legal
considerations as we have deemed relevant, we are of the opinion that the
Shares have been duly authorized and, upon issuance of the Shares and receipt
by the Company of the consideration therefor in accordance with the terms of
the Plan, the Shares will be validly issued, fully paid, and non-assessable.
This opinion is delivered solely for your benefit in accordance with
the Plan and may not be quoted in whole or in part, referred to, filed with
any governmental agency, or otherwise used or relied upon by any other person
or for any other purpose without the prior written consent of the
undersigned, except as provided herein.
This opinion is limited to the laws of the United States of America
and the State of Colorado. This opinion is rendered as of the date hereof,
and we undertake no obligation to advise you of any changes in applicable law
or any other matters that may come to our attention after the date hereof.
<PAGE>
We hereby consent to the filing of this opinion with the Commission 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 by
Section 7 of the Securities Act, or other rules and regulations of the
Commission thereunder.
Sincerely,
BERENBAUM, WEINSHIENK & EASON, P.C.
By: /s/John B. Wills
----------------
John B. Wills
JBW/clg
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Evergreen Resources, Inc.
1401 17th Street, Suite 1200
Denver, Colorado 80202
We hereby consent to the incorporation by reference in the Prospectus
constituting a part of this Registration Statement of our report dated February
18, 1999, relating to the consolidated financial statements of Evergreen
Resources, Inc. appearing in the Company's Annual Report on Form 10-K for the
year ended December 31, 1998.
/s/BDO Seidman, LLP
- -------------------
Denver, Colorado
December 14, 1999
<PAGE>
EXHIBIT 23.3
[Firm Letterhead]
CONSENT OF INDEPENDENT PETROLEUM ENGINEERING CONSULTANTS
December 9, 1999
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 of Evergreen Resources, Inc. (the "Company"), of our
audit, dated February 12, 1999, of the estimates of the net proved oil and gas
reserves of the Company and their present values, as of December 31, 1998,
included as Exhibit 22.0 to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31,1998, and all references to our firm therein.
RESOURCE SERVICES INTERNATIONAL, INC.
By: /s/Roland E. Blauer
-------------------
Name: Roland E. Blauer
Title: President
<PAGE>
EXHIBIT 23.4
[Firm Leterhead]
CONSENT OF NETHERLAND, SEWELL & ASSOCIATES, INC.
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 of Evergreen Resources, Inc. (the "Company"), of our audit
report, dated February 16, 1999, of the estimates of the net proved oil and gas
reserves of the Company and their present values, as of December 31, 1998,
included as Exhibit 22.0 to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31,1998, and all references to our firm therein.
NETHERLAND, SEWELL & ASSOCIATES, INC.
By: /s/ Danny D. Simmons
--------------------
Name: Danny D. Simmons
Title: President
Houston, Texas
December 9, 1999
<PAGE>
EXHIBIT 99
<PAGE>
EVERGREEN RESOURCES, INC.
INITIAL STOCK OPTION PLAN
ARTICLE I - PURPOSE OF PLAN
1.1 PURPOSE OF PLAN. The purpose of the Evergreen Resources, Inc. Initial
Stock Option Plan is to serve as a performance incentive and to encourage
the ownership of Evergreen Resources, Inc. common stock by officers and
other key employees of the Company so that the person to whom the option
is granted may acquire a proprietary interest in the success of the
Company, and to encourage such person to remain in the employ of the
Company. This Plan shall consist of grants of incentive stock options,
which are intended to qualify under Section 422 of the Internal Revenue
Code of 1986, as amended, and of options which are intended not to so
qualify.
ARTICLE II - DEFINITIONS
2.1 "Award" means an Option granted hereunder.
2.2 "Board" means the Board of Directors of Evergreen Resources, Inc.
2.3 "Code" means the Internal Revenue Code of 1986, as amended. Reference in
this Plan to any section of the Code shall be deemed to include any
amendments or successor provisions to such section and any regulations
promulgated thereunder.
2.4 "Committee" means the Compensation Committee of the Board, which shall
consist of not less than two (2) members of the Board.
2.5 "Company" means Evergreen Resources, Inc or any successors as described
in Article XI and any subsidiary of the Company of which the Company
owns, directly or indirectly, greater than fifty percent (50%) of its
voting capital stock.
2.6 "Date of Disability" means the date on which a Participant is classified
as Disabled.
2.7 "Disability" or "Disabled" means the classification of a Participant as
"Disabled" pursuant to a long-term disability plan of the Company, if
any, or successor to such plan (or, if there is no such plan, as
determined by the Committee), provided that the Participant meets the
requirements of Section 22(e)(3) of the Code.
2.8 "Effective Date" means May 27, 1997.
2.9 "Eligible Employee" means any person employed by the Company on a
full-time, salaried basis who satisfies all of the requirements of
Article VI.
2.10 "Fair Market Value" means the fair market value of the Stock, as
determined by the Committee; provided, however, that (i) if the Stock is
admitted to trading on a national securities exchange on the date the
Option is granted, Fair Market Value shall not be less than the last sale
price reported for the Stock on such exchange on such date or, if no
sales are reported on the date the Option is granted, on the date next
preceding such date on which a sale was reported, or (ii) if the Stock is
not admitted to trading on a national securities exchange on the date the
Option is granted but the Stock is admitted to quotation on the National
Association of Securities Dealers Automated Quotation system on the date
the Option is granted, Fair Market Value shall not be less than the
average of the highest bid and lowest asked prices of the stock on such
system on such date.
2.11 "Incentive Stock Option" means an Option which is an "incentive stock
option" within the meaning of Section 422 of the Code and which is
granted under Article VII.
2.12 "Insider" means an "officer" or "director" of the Company within the
meaning of Section 16 of the Securities Exchange Act of 1934, as amended.
2.13 "Nonqualified Stock Option" means an Option which is not an Incentive
Stock Option and which is granted under Article VII.
<PAGE>
2.14 "Option" means either a Nonqualified Stock Option or an Incentive Stock
Option granted under Article VII.
2.15 "Participant" means an Eligible Employee who has been granted an Award
under this Plan.
2.16 "Plan" means this Evergreen Resources, Inc. Initial Stock Option Plan.
2.17 "Retirement" means the normal retirement by an employee from the Company
under a pension or retirement plan maintained by the Company.
2.18 "Retirement Date" is the employee's date of Retirement from the Company.
2.19 "Stock" means common stock of Evergreen Resources, Inc., no par value per
share.
2.20 "Stock Option Agreement" means an agreement with respect to an Option, as
described in Article VIII.
2.21 "Termination" means resignation or discharge from employment with the
Company, except in the event of death, Disability, or Retirement.
2.22 "Termination Date" is the employee's date of Termination from the
Company.
2.23 "Vested Option" means, at any date, any portion of an Option which a
Participant is then entitled to exercise pursuant to the terms of the
Plan and an applicable Stock Option Agreement.
ARTICLE III - EFFECTIVE DATE AND DURATION
3.1 EFFECTIVE DATE. Subject to the approval by a majority of the holders of
Stock voted, in person or by proxy, at the 1998 Annual Meeting of
Stockholders of the Company, this Plan shall be effective as of May 27,
1997.
3.2 PERIOD FOR GRANTS OF AWARDS. Awards may be made as provided herein for a
period of ten (10) years after the Effective Date.
3.3 TERMINATION. This Plan may be terminated as provided in Article XII, but
shall continue in effect until all matters relating to the payment of
Awards and the administration of the Plan have been settled.
ARTICLE IV - ADMINISTRATION
4.1 ADMINISTRATION. Except where this Plan expressly reserves administrative
or other powers to the Company or the Board, this Plan shall be
administered by the Committee. All questions of interpretation and
application of this Plan, or of the terms and conditions pursuant to
which Awards are granted, exercised, or forfeited under the provisions
hereof, shall be subject to the determination of the Committee. Such
determination shall be final and binding upon all parties affected
thereby.
It is contemplated that Awards granted hereunder will be recommended by the
management of the Company or the Board to the Committee, and that the
Committee will determine whether to accept such recommendations.
ARTICLE V - GRANT OF AWARDS AND
LIMITATION OF NUMBER OF SHARES OF STOCK AWARDED
5.1 GRANTS OF AWARDS; NUMBER OF SHARES. The Committee may, from time to
time, grant Awards of Options to one or more Eligible Employees in its
discretion; provided, however, that:
(i) Subject to any adjustment pursuant to Article X or Article XI, the
aggregate number of shares of Stock subject to Awards under this
Plan may not exceed 500,000 shares of Stock;
(ii) To the extent that an Award lapses or the rights of the
Participant to whom it was granted terminate, or to the extent
that the Award is canceled by mutual agreement of the Committee
and the Participant (which cancellation opportunities may be
offered by the Committee to Participants from
2
<PAGE>
time to time), any shares of Stock subject to such Award shall
again be available for the grant of an Award hereunder; and
(iii) Shares of Stock ceasing to be subject to an Award because of the
exercise of an Option shall no longer be available for the grant
of an Award hereunder.
In determining the size of Awards, the Committee may take into account
recommendations by the Board or the Company's management, a
Participant's responsibility level, performance, potential, and cash
compensation level, the Fair Market Value of the Stock at the time of
Awards, and such other considerations as it deems appropriate.
ARTICLE VI - ELIGIBILITY
6.1 ELIGIBLE INDIVIDUALS. All employees of the Company (including salaried
officers or employees who are members of the Board, but excluding
directors who are not officers or employees of the Company) shall be
eligible to receive Awards hereunder. Subject to the provisions of this
Plan, the Committee shall from time to time select from such Eligible
Employees those to whom Awards shall be granted and determine the size of
the Awards. A Participant may hold more than one Option at any one time.
No officer or employee of the Company shall have any right to be granted
an Award under this Plan, as all Awards granted hereunder are granted in
the sole and absolute discretion of the Committee, as provided herein.
ARTICLE VII - OPTIONS
7.1 GRANTS OF OPTIONS. An Award shall be granted to Participants in the form
of an Option to purchase Stock.
7.2 TYPE OF OPTION. The Committee may choose to grant a Participant who is
an Eligible Employee either an Incentive Stock Option or a Nonqualified
Stock Option or both, subject to the limitations contained herein.
7.3 INCENTIVE STOCK OPTION DOLLAR LIMITATIONS. If the Committee grants an
Incentive Stock Option, the aggregate Fair Market Value (determined as of
the date the Option is granted) of any such Option plus any incentive
stock options granted under any other plans of the Company which shall be
first exercisable by any one Participant during any one calendar year
shall not exceed $100,000, or such other dollar limitation as may be
provided in the Code.
ARTICLE VIII - TERMS AND CONDITIONS OF STOCK OPTION AGREEMENTS
8.1 STOCK OPTION AGREEMENTS. Awards shall be evidenced by Stock Option
Agreements in such form as the Committee shall, from time to time,
approve. Such Stock Option Agreements, which need not be identical,
shall comply with and be subject to the following terms and conditions:
(a) Medium of Payment. Upon exercise of the Option, the Option price
shall be payable either (i) in United States dollars in cash or by
certified check, bank draft, or money order payable to the order
of the Company, or (ii) in the discretion of the Committee,
through the delivery of shares of Stock with a Fair Market Value
equal to the total Option price, or (iii) by a combination of the
methods described in (i) and (ii); provided, however, that in the
case of an Option price which is paid by an Insider in whole or in
part by the delivery of shares of Stock, the Stock acquired in the
exercise of such Option shall not be disposed of by the Insider
for a six (6) month period commencing on the date on which the
Insider last purchased Stock (including the Stock tendered in
connection with such exercise).
(b) Number of Shares. The Stock Option Agreement shall state the
total number of shares to which it pertains.
(c) Option Price. With respect to a Nonqualified Stock Option, the
Option price shall be not less than the Fair Market Value of such
shares on the date of the granting of the Option. With respect to
an Incentive Stock Option, the option price shall be not less than
the Fair Market Value of such shares on the date of the granting
of the Option (or one hundred ten percent (110%) of such amount if
the
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Option is granted to an individual owning stock possessing more
than ten percent (10%) of the total combined voting power of all
classes of stock of the Company).
(d) Term of Options. Each Nonqualified Stock Option and Incentive
Stock Option granted under this Plan shall expire not more than
ten (10) years from the date the Option is granted, except that
each Incentive Stock Option granted under the Plan to an
individual owning stock possessing more than ten percent (10%) of
the total combined voting power of all classes of stock of the
Company shall expire not more than five (5) years from the date
the Option is granted.
(e) Date of Exercise. Subject to subsection (d) of this Section, any
Option which becomes a Vested Option may be exercised in whole or
in part at any time thereafter. Each Option awarded hereunder
shall become exercisable as a Vested Option, as follows:
(i) The aggregate number of shares of Stock subject to an Award
shall be divided into four (4) equal installments. The
first installment shall become a Vested Option one (1) year
from the date of such award, the second installment shall
become a Vested Option two (2) years from the date of such
Award, the third installment shall become a Vested Option
three (3) years from the date of such Award, and the fourth
installment shall become a Vested Option four (4) years
from the date of such Award.
(ii) Except as otherwise provided hereunder, the Committee may
in its discretion accelerate the time at which an Option
granted hereunder may be exercised; provided, however, that
in the event of any such acceleration with respect to an
Option held by an Insider, at least six (6) months shall
elapse from the date of such acceleration to the later of
the date of exercise of the Option or the disposition of
the Stock acquired by exercising the Option.
(iii) Notwithstanding the preceding, all Options which are
awarded to a Participant hereunder shall become Vested
Options upon the Participant's Retirement, Disability, or
death.
(f) Forfeiture or Exercise of Option. If a Participant ceases
employment with the Company, each Option held by him or her which
is not a Vested Option shall terminate. If a Participant
terminates employment with the Company or a subsidiary prior to
exercise of the Participant's Vested Option, such Vested Option
shall be exercised, as follows:
(i) Termination. In the event of a Participant's Termination,
the Participant shall have the right to exercise his or her
Vested Option within three (3) months (or such shorter
period as the Code or the terms of the particular Stock
Option Agreement may require) of the Participant's
Termination Date.
(ii) Retirement. In the event of a Participant's Retirement,
the Participant shall have the right to exercise his or her
Vested Option within three (3) months (or such shorter
period as the Code or the terms of the particular Stock
Option Agreement may require) of the Participant's
Retirement Date.
(iii) Disability. Upon the Disability of a Participant, the
Participant's Vested Option shall be exercisable within
twelve (12) months (or such shorter period as the Code or
the terms of the particular Stock Option Agreement may
require) of the Participant's Date of Disability.
(iv) Death. If the Participant dies while in the employment of
the Company or within the period of time after Retirement
during which the Participant would have been entitled to
exercise his or her Vested Option rights, the Participant's
estate, personal representative, or beneficiary (as
applicable) shall have the right to exercise such Vested
Option within one (1) year from the date of the
Participant's death (or such shorter period as the Code or
the terms of the particular Stock Option Agreement may
require).
(g) Agreement as to Sale of Securities. If, at the time of the
exercise of any Option, in the opinion of counsel for the Company,
it is necessary or desirable, in order to comply with any
applicable laws or regulations relating to the sale of securities,
that the Participant exercising the Option shall agree to purchase
the shares that are subject to the Option for investment only and
not with any present intention to resell the same and that the
Participant will dispose of such shares only in compliance
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with such laws and regulations, the Participant will, upon the
request of the Company, execute and deliver to the Company an
agreement to such effect.
(h) Minimum Number of Shares. The minimum number of shares of Stock
with respect to which an Option may be exercised at any one time
shall be ten (10) shares, unless the number is the total number at
the time available for exercise under the Award.
(i) Required Amendments. Each Award shall be subject to any provision
necessary to assure compliance with federal and state securities
laws.
(j) Limitation of Participant Rights. A Participant shall not be
deemed to be the holder of, or to have any of the rights of a
holder with respect to, any shares of Stock subject to an Option
unless and until the Option shall have been exercised pursuant to
the terms thereof, the Company shall have issued and delivered the
shares to the Participant, and the Participant's name shall have
been entered as a stockholder of record on the books of the
Company. Thereafter, the Participant shall have full voting,
dividend, and other ownership rights with respect to such shares
of stock.
ARTICLE IX - GRANTS IN SUBSTITUTION
FOR OPTIONS GRANTED BY OTHER CORPORATIONS
9.1 SUBSTITUTE AWARDS. Awards may be granted under this Plan from time to
time in substitution for similar awards held by employees of corporations
who become or are about to become employees of the Company as the result
of a merger or consolidation of the employing corporation with the
Company, or the acquisition by the Company of the assets of the employing
corporation, or the acquisition by the Company of fifty percent (50%) or
more of the stock of the employing corporation causing it to become a
subsidiary of the Company. Subject to the procurement of the approval of
the stockholders of the Company as may be required for the Plan to
satisfy the requirements of Rule 16b-3 under the Securities Exchange Act
of 1934, as amended, the terms and conditions of the substitute Awards so
granted may vary from the terms and conditions set forth in this Plan to
such extent as the Committee at the time of the grant may deem
appropriate to conform, in whole or in part, to the provisions of the
options in substitution for which they are granted.
ARTICLE X - CHANGES IN CAPITAL STRUCTURE
10.1 CAPITAL STRUCTURE CHANGES.
(a) If the outstanding shares of the Company's Stock as a whole are
increased, decreased, changed into, or exchanged for a different
number or kind of shares or securities of the Company, whether
through merger, consolidation, reorganization, recapitalization,
reclassification, stock dividend, stock split, combination of
shares, exchange of shares, change in corporate structure, or the
like, an appropriate and proportionate adjustment shall be made in
the number and kinds of shares subject to the Plan and in the
number, kinds, and per share exercise price of shares subject to
unexercised Options or portions thereof granted prior to any such
change. Any such adjustment in an outstanding Option, however,
shall be made without a change in the total price applicable to
the unexercised portion of the Option but with a corresponding
adjustment in the price for each share of Stock covered by the
Option.
(b) Upon dissolution or liquidation of the Company, or upon a
reorganization, merger, or consolidation in which the Company is
not the surviving corporation, or upon the sale of substantially
all of the assets of the Company to another corporation, the Plan
and the Options issued thereunder shall terminate, unless
provision is made in connection with such transaction for the
assumption of Options theretofore granted, or the substitution for
such Options of new options of the successor employer corporation
or a parent or subsidiary thereof, with appropriate adjustment as
to the number and kinds of shares and the per share exercise
prices. In the event of such termination, all outstanding Options
shall be exercisable in full for at least thirty (30) days prior
to the termination date whether or not otherwise exercisable
during such period.
(c) In the event of a change in the Stock which is limited to a change
in the designation thereof to "capital stock" or other similar
designation, or in no par value to par value, without increase or
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decrease in the number of issued shares, the shares resulting from
any such change shall be deemed to be Stock within the meaning of
this Plan.
(d) Adjustments under this Section shall be made by the Committee,
whose determination as to what adjustment shall be made, and the
extent thereof, shall be conclusive. The Committee shall have the
discretion and power in any such event to determine and to make
effective provision for the acceleration of time during which the
Option may be exercised, notwithstanding the provisions of the
Option setting forth the date or dates on which all or any part of
it may be exercised. No fractional shares of Stock shall be
issued under the Plan on account of any adjustment specified
above.
ARTICLE XI - COMPANY SUCCESSORS
11.1 IN GENERAL
(a) If the Company shall be the surviving or resulting corporation in
any merger, sale of assets or sale of stock, consolidation, or
corporate reorganization (including a reorganization in which the
holders of Stock receive securities of another corporation), any
Award granted hereunder shall pertain to and apply to the
securities to which a holder of Stock would have been entitled.
The Committee shall make such appropriate determinations and
adjustments as it deems necessary so as to preserve substantially
the rights and benefits, both as to number of shares and
otherwise, of Participants under this Plan.
(b) If the Company shall not be the surviving corporation in any
merger, sale of assets or sale of stock, consolidation, or
corporate reorganization (including a reorganization in which the
holders of Stock receive securities of another corporation)
involving the Company, the successor corporation may, but shall
not be required to, issue substitute options so as to preserve
substantially the rights and benefits of the Participants under
this Plan.
ARTICLE XII - AMENDMENT OR TERMINATION OF PLAN
12.1 AMENDMENTS AND TERMINATION. The Plan shall terminate on the tenth (10th)
anniversary of the Effective Date of the Plan. The Board may at any time
and from time to time alter, amend, suspend, or terminate this Plan in
whole or in part, except (i) without such stockholder approval as may be
required by law and the Company's by-laws, no such action may be taken
which changes the minimum option price, increases the maximum term of
Options, materially increases the benefits accruing to Participants
hereunder, materially increases the number of securities which may be
issued pursuant to this Plan (except as provided in Section 10.1 and
11.1), extends the period for granting Awards hereunder, or materially
modifies the requirements as to eligibility for participation hereunder,
and (ii) without the consent of the Participant to whom any Award shall
theretofore have been granted, no such action may be taken which
adversely affects the rights of such Participant concerning such Award,
except as such termination or amendment of this Plan is required by
statute, or rules and regulations promulgated thereunder, or as otherwise
permitted hereunder.
ARTICLE XIII - MISCELLANEOUS PROVISIONS
13.1 NONTRANSFERABILITY. Except by the laws of descent and distribution, no
benefit provided hereunder shall be subject to alienation, assignment, or
transfer by a Participant (or by any person entitled to such benefit
pursuant to the terms of this Plan), nor shall it be subject to
attachment or other legal process of whatever nature, and any attempted
alienation, assignment, attachment, or transfer shall be void and of no
effect whatsoever and, upon any such attempt, the benefit shall terminate
and be of no force or effect. During a Participant's lifetime, Options
granted to the Participant shall be exercisable only by the Participant.
Shares of Stock shall be delivered only into the hands of the Participant
or death beneficiary entitled to receive the same or into the hands of
the Participant's authorized legal representative.
13.2 NO EMPLOYMENT RIGHT. Neither this Plan nor any action taken hereunder
shall be construed as giving any right to any individual to be retained
as an officer or employee of the Company.
13.3 TAX WITHHOLDING. The Company shall have the right to deduct from all
Awards paid any federal, state, local, or employment taxes which it deems
are required by law to be withheld with respect to such payments. The
Participant receiving Stock pursuant to the exercise of an Option may be
required to pay to
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the Company an amount required to be withheld with respect to such
Stock. At the request of a Participant, or as required by law, such
sums as may be required for the payment of any estimated or accrued
income tax liability may be withheld and paid over to the governmental
entity entitled to receive the same.
13.4 FRACTIONAL SHARES. Any fractional shares concerning Awards shall be
eliminated at the time of payment or payout by rounding down for
fractions of less than one-half (1/2) and rounding up for fractions of
equal to or greater than one-half (1/2). No cash settlements shall be
made with respect to fractional shares eliminated by rounding.
13.5 GOVERNMENT AND OTHER REGULATIONS. The obligation of the Company to make
payment of Awards in Stock or otherwise shall be subject to all
applicable laws, rules, and regulations, and to such approvals by any
government agencies as may be deemed necessary or appropriate by the
Committee. If Stock awarded hereunder may in certain circumstances be
exempt from registration under the Securities Act of 1933, the Company
may restrict its transfer in such manner as it deems advisable to ensure
such exempt status. The Plan is intended to comply with Rule 16b-3 under
the Securities Exchange Act of 1934, as amended. Any provision
inconsistent with such Rule shall be inoperative and shall not affect the
validity of the Plan. The Plan shall be subject to any provision
necessary to assure compliance with federal and state securities laws.
13.6 INDEMNIFICATION. Each person who is or at any time serves as a member of
the Board or the Committee shall be indemnified and held harmless by
Evergreen Resources, Inc. against and from (i) any loss, cost, liability,
or expense that may be imposed on or reasonably incurred by such person
in connection with or resulting from any claim, action, suit, or
proceeding to which such person may be a party or in which such person
may be involved by reason of any action or failure to act under this
Plan; and (ii) any and all amounts paid by such person in satisfaction of
judgment in any such action, suit, or proceeding relating to this Plan.
Each person covered by this indemnification shall give the Company an
opportunity, at its own expense, to handle and defend the same before
such person undertakes to handle and defend the same on such person's own
behalf. The foregoing right of indemnification shall not be exclusive of
any other rights of indemnification to which such persons may be entitled
under the charter or by-laws of the Company, as a matter of law, or
otherwise, or any power that the Company may have to indemnify such
person or hold such person harmless.
13.7 RELIANCE ON REPORTS. Each member of the Board or the Committee shall be
fully justified in relying or acting in good faith upon any report made
by the independent public accountants of the Company, and upon any other
information furnished in connection with this Plan. In no event shall
any person who is or shall have been a member of the Board or the
Committee be liable for any determination made or other action taken or
any omission to act in reliance upon any such report or information, or
for any action taken, including the furnishing of information, or failure
to act, if in good faith.
13.8 GOVERNING LAW. All matters relating to this plan or to Awards granted
hereunder shall be governed by the laws of the State of Colorado, without
regard to the principles of conflict of laws thereof, except to the
extent preempted by the laws of the United States.
13.9 RELATIONSHIP TO OTHER BENEFITS. No payment under this Plan shall be take
into account in determining any benefits under any pension, retirement,
profit sharing, or group insurance plan of the Company.
13.10 EXPENSES. The expenses of implementing and administering this Plan shall
be borne by the Company.
13.11 TITLES AND HEADINGS. The titles and headings of the Articles and
Sections in this Plan are for convenience of reference only, and in the
event of any conflict, the text of this Plan, rather than such titles or
headings, shall control
13.12 USE OF PROCEEDS. Proceeds from the sale of Stock pursuant to Options
granted under the Plan shall constitute general funds of the Company.
13.13 NONEXCLUSIVITY OF PLAN. Neither the adoption of the Plan by the Board
nor the submission of the Plan to the stockholders of the Company for
approval shall be construed as creating any limitations on the power of
the Board to adopt such other incentive arrangements as it may deem
desirable, including, without
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limitation, the granting of stock options other than under the Plan,
and such arrangements may be applicable either generally or only in
specific cases.
IN WITNESS WHEREOF, the Company has caused this Plan to be executed by
its duly authorized officers and its seal to be affixed hereto, effective,
except as specified to the contrary herein, as of February 5, 1998.
ATTEST/WITNESS EVERGREEN RESOURCES, INC.
By: /s/ J. Keither Martin By: /s/ Mark S. Sexton
-------------------------------- ---------------------------
J. Keither Martin Mark S. Sexton
Secretary President
[SEAL]
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