<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 2, 1994
Registration No. 33-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
HADSON CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 31-0679954
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2777 STEMMONS FREEWAY, SUITE 700
DALLAS, TEXAS 75207
(Address of principal executive offices, including zip code)
____________________
HADSON CORPORATION 1992 EQUITY INCENTIVE PLAN
HADSON CORPORATION CHAIRMANSHIP FEE PLAN
(Full title of the plans)
ROBERT P. CAPPS
EXECUTIVE VICE PRESIDENT, CHIEF
FINANCIAL OFFICER AND TREASURER
2777 STEMMONS FREEWAY
DALLAS, TEXAS 75207
(Name and address of agent for service)
(214) 640-6800
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==============================================================================================================
Title of Proposed maximum Proposed maximum
securities to be Amount to be offering price aggregate Amount of
registered registered(1) per share offering price registration fee
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, 33,335(2) $2.34 $ 78,004 $ 27.00(3)
$.01 par value 10,000(2) $2.38 $ 23,800 $ 9.00(3)
50,000(2) $2.50 $ 125,600 $ 44.00(3)
151,332(2) $2.63 $ 398,004 $ 138.00(3)
987,500(2) $2.75 $2,681,250 $ 925.00(3)
95,274(2) $3.45 $ 328,694 $ 114.00(3)
22,671(2) $4.20 $ 95,219 $ 33.00(3)
2,549,888(2)(4) $2.3125 $5,896,616 $ 2,034.00(5)
10,000(6) $2.3125 $ 23,125 $ 8.00(5)
--------- ----------
Total: 3,910,000 $ 3,332.00
==============================================================================================================
</TABLE>
(1) There is also being registered hereunder such additional
undeterminable number of shares of Common Stock which may be issued
from time to time as a result of stock dividends and stock splits with
respect to the Common Stock.
(2) Shares issuable pursuant to awards granted or to be granted under the
1992 Equity Incentive Plan.
(3) Calculated pursuant to Rule 457(h) under the Securities Act of 1933,
as amended (the "Securities Act"), on the basis of the price at which
the options are exercisable.
(4) Includes 24,000 shares being offered pursuant to the reoffer
prospectus included herein.
(5) Estimated pursuant to Rule 457(h) and (c) under the Securities Act
solely for the purpose of calculating the registration fee on the
basis of the average price of the Common Stock on November 28, 1994.
(6) Shares issuable pursuant to the Chairmanship Fee Plan. Includes 1,332
shares being offered pursuant to the reoffer prospectus included
herein.
================================================================================
<PAGE> 2
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
The document(s) containing the information called for in Part I of
Form S-8 will be provided to participants in the Hadson Corporation 1992 Equity
Incentive Plan, as amended and restated as of March 9, 1994 (the "Equity
Incentive Plan"), adopted by Hadson Corporation, a Delaware corporation (the
"Company"), or the Hadson Corporation Chairmanship Fee Plan (the "Chairmanship
Fee Plan"), as applicable. Such information is not being filed with or included
in this registration statement in accordance with the rules and regulations of
the Securities and Exchange Commission (the "Commission").
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed with the Commission, and the information
included therein, are incorporated herein by reference:
(1) The Company's Annual Report on Form 10-K for the year ended
December 31, 1993.
(2) The Company's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1994, June 30, 1994 and September 30, 1994.
(3) Amendment No. 1 to the Company's Registration Statement on
Form 8-A/A (File No. 1-9891) filed with the Commission on
March 28, 1994.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), prior to the filing of a post-effective amendment which
indicates that all securities offered hereby have been sold or which
deregisters all such securities then remaining unsold, shall be deemed to be
incorporated by reference herein and to be a part hereof from the date of
filing such documents. Any statement contained in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this registration statement to the extent that a
statement contained herein or in any subsequently filed document which also is
or is deemed to be incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this registration
statement. Upon the written or oral request of any person to whom a copy of
this registration statement has been delivered, the Company will provide
without charge to such person a copy of any and all documents (excluding
exhibits thereto unless such exhibits are specifically incorporated by
reference into such documents) that have been incorporated by reference into
this registration statement but not delivered herewith. Requests for such
documents should be addressed to:
Hadson Corporation
Attention: Secretary
2777 Stemmons Freeway
Dallas, Texas 75207
(214) 640-6800
-2-
<PAGE> 3
ITEM 4. DESCRIPTION OF SECURITIES. Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL. Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Pursuant to Section 102(b)(7) of the Delaware General Corporation Law
(the "DGCL"), the Restated Certificate of Incorporation of the Company (the
"Restated Certificate") includes a provision that eliminates the personal
liability of a director to the Company or its stockholders for monetary damages
for breach of such person's fiduciary duty as a director except for (i) any
breach of the duty of loyalty to the Company or its stockholders, (ii) acts or
omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) payment of an improper dividend or improper
repurchase of the Company's stock under Section 174 of the DGCL, or (iv) any
transaction from which the director derived an improper personal benefit. The
Restated Certificate further provides that in the event the DGCL is amended to
allow the further elimination or limitation of the personal liability of
directors, then the liability of the Company's directors shall be eliminated or
limited to the fullest extent permitted by the DGCL, as so amended.
Section 145 of the DGCL permits a corporation to indemnify certain
persons, including officers and directors, who are (or are threatened to be
made) parties to any threatened, pending or completed legal action, suit or
proceeding, whether civil, criminal, administrative or investigative (other
than an action by or in the right of the corporation) by reason of the fact
that such person was an officer, director, employee or agent of such
corporation, or is or was serving at the request of such corporation as a
director, officer, employee or agent of another corporation or enterprise. The
indemnity may include expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by such person
in connection with such suit or proceeding, provided such officer, director,
employee or agent acted in good faith and in a manner such person reasonably
believed to be in or not opposed to the corporation's best interests and, for
criminal proceedings, provided such person had no reasonable cause to believe
that his or her conduct was unlawful.
The DGCL further permits a corporation to indemnify certain persons,
including officers and directors, who are (or are threatened to be made)
parties to any threatened, pending or completed action or suit by or in the
right of the corporation to procure a judgment in its favor by reason of their
being officers or directors of the corporation. The indemnity may include
expenses (including attorneys' fees) actually and reasonably incurred by the
director or officer, provided the officer or director acted in good faith and
in a manner he or she reasonably believed to be in or not opposed to the
corporation's best interests. However, no such person will be indemnified as
to matters for which such person is found to be liable to the corporation
unless, and only to the extent that, indemnification is ordered by a court.
The Restated Certificate provides that the Company shall, to the
fullest extent permitted by Section 145 of the DGCL, as amended from time to
time, indemnify all persons whom it may indemnify pursuant thereto. In
addition, the Company has entered into an indemnity agreement (the "Indemnity
Agreement") with one of its officers providing for indemnification of such
person in such person's capacity as an officer of the Company and as an officer
or director of any corporation or other enterprise of which such person is
serving as such at the request of the Company or an affiliate of the Company
(as defined in the Indemnity Agreement), in the interest of such entities or
for the convenience of such entities. The Indemnity Agreement, among other
things, provides for indemnification for expenses actually and reasonably
incurred in connection with the investigation, defense or appeal of an action,
proceeding or suit where the person indemnified maintained certain standards of
due care in the performance of such person's duties; prohibits indemnification
of deceased individuals where a court of competent jurisdiction has determined
that such person defrauded, stole or converted to such person's personal use
and benefit business or properties of the Company or such other corporation or
enterprise or was guilty of gross negligence or willful misconduct of a
culpable nature with respect to the Company or such other corporation or
enterprise; provides, under certain circumstances, for partial indemnification;
and provides for advance payments of judgments, fines or amounts paid in
settlement of actions, suits and proceedings covered by the Indemnity
Agreement.
-3-
<PAGE> 4
Delaware corporations also are authorized to obtain insurance to
protect directors and officers from certain liabilities, including liabilities
against which the corporation cannot indemnify its directors and officers. The
Company currently has in effect a directors' and officers' liability insurance
policy providing aggregate coverage in the amount of $10 million.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED. The restricted securities to be
reoffered or resold hereby were acquired by certain directors of the Company
pursuant to the Equity Incentive Plan and the Chairmanship Fee Plan in
transactions not involving a public offering that were exempt from the
registration requirements of the Securities Act pursuant to Section 4(2)
thereof.
ITEM 8. EXHIBITS. The following exhibits are filed herewith:
Exhibit
Number Description
------ -----------
4.1 Restated Certificate of Incorporation of the Company
(filed as Exhibit 4.1 to the Company's Registration
Statement on Form S-3, File No. 33-51373, and incorporated
herein by reference)
4.2 Certificate of Amendment to Restated Certificate of
Incorporation of the Company
4.3 Amended and Restated Bylaws of the Company (filed as
Exhibit 4.2 to the Company's Registration Statement on
Form S-3, File No. 33-51373, and incorporated herein
by reference)
4.4 Specimen certificate of the Common Stock of the Company
(filed as Exhibit 4.3 to the Company's Registration
Statement on Form S-3, File No. 33-51373, and incorporated
herein by reference)
5.1 Opinion of Vinson & Elkins L.L.P. with respect to the
legality of the shares of Common Stock registered hereby
23.1 Consent of Price Waterhouse
23.2 Consent of Vinson & Elkins L.L.P. (contained in Exhibit 5.1
hereto)
24.1 Power of Attorney
99.1 Hadson Corporation 1992 Equity Incentive Plan as amended and
restated as of March 9, 1994
99.2 Hadson Corporation Chairmanship Fee Plan
99.3 Reoffer Prospectus
ITEM 9. UNDERTAKINGS.
(1) The undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or sales
are being made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of the registration
statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the
registration statement;
-4-
<PAGE> 5
(iii) To include any material information with
respect to the plan of distribution not previously disclosed
in the registration statement or any material change to such
information in the registration statement;
provided, however, that paragraphs (1)(a)(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 with or
furnished to the Commission by the registrant pursuant to Section 13
or Section 15(d) of the Exchange Act that are incorporated by
reference in the registration statement.
(b) 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.
(c) 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.
(2) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act, each filing of
the registrant's annual report pursuant to Section 13(a) or Section 15(d) of
the Exchange Act that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
-5-
<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Dallas, State of Texas, on the 30th day of November,
1994.
HADSON CORPORATION
By: /s/ ROBERT P. CAPPS
______________________________
Robert P. Capps
Executive Vice President, Chief
Financial Officer and Treasurer
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ GREG G. JENKINS President, Chief Executive Officer
_____________________________ and Director November 30, 1994
Greg G. Jenkins (Principal Executive Officer)
/s/ ROBERT P. CAPPS Executive Vice President, Chief
_____________________________ Financial Officer and Treasurer November 30, 1994
Robert P. Capps (Principal Financial Officer)
/s/ RICHARD N. COFFMAN Controller
_____________________________ (Principal Accounting Officer) November 30, 1994
Richard N. Coffman
J.E. CANNON* Chairman of the Board of Directors
_____________________________ November 30, 1994
J.E. Cannon
J. MICHAEL ADCOCK* Director
_____________________________ November 30, 1994
J. Michael Adcock
R.A. WALKER* Director
_____________________________ November 30, 1994
R.A. Walker
J. FRANK HAASBEEK* Director
_____________________________ November 30, 1994
J. Frank Haasbeek
JAMES L. PAYNE* Director
_____________________________ November 30, 1994
James L. Payne
MICHAEL J. ROSINSKI* Director
_____________________________ November 30, 1994
Michael J. Rosinski
</TABLE>
-6-
<PAGE> 7
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
B.M. THOMPSON* Director November 30, 1994
___________________________
B.M. Thompson
</TABLE>
*By /s/ Robert P. Capps
___________________________
Robert P. Capps
Attorney-in-Fact
-7-
<PAGE> 8
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
------ -----------
<S> <C>
4.1 Restated Certificate of Incorporation of the Company
(filed as Exhibit 4.1 to the Company's Registration
Statement on Form S-3, File No. 33-51373, and incorporated
herein by reference)
4.2 Certificate of Amendment to Restated Certificate of
Incorporation of the Company
4.3 Amended and Restated Bylaws of the Company (filed as
Exhibit 4.2 to the Company's Registration Statement on
Form S-3, File No. 33-51373, and incorporated herein by
reference)
4.4 Specimen certificate of the Common Stock of the Company
(filed as Exhibit 4.3 to the Company's Registration
Statement on Form S-3, File No. 33-51373, and incorporated
herein by reference)
5.1 Opinion of Vinson & Elkins L.L.P. with respect to the
legality of the shares of Common Stock registered hereby
23.1 Consent of Price Waterhouse
23.2 Consent of Vinson & Elkins L.L.P. (contained in Exhibit 5.1
hereto)
24.1 Power of Attorney
99.1 Hadson Corporation 1992 Equity Incentive Plan as amended
and restated as of March 9, 1994
99.2 Hadson Corporation Chairmanship Fee Plan
99.3 Reoffer Prospectus
</TABLE>
<PAGE> 1
EXHIBIT 5.1
<TABLE>
<S> <C> <C>
VINSON & ELKINS
L.L.P.
ATTORNEYS AT LAW
2500 FIRST CITY TOWER THE WILLARD OFFICE BUILDING
1001 FANNIN 1455 PENNSYLVANIA AVE., N.W.
HOUSTON, TEXAS 77002-6760 WASHINGTON, D.C. 20004-1008
TELEPHONE (713) 758-2222 3700 TRAMMELL CROW CENTER TELEPHONE (202) 639-6500
FAX (713) 758-2346 2001 ROSS AVENUE FAX (202) 639-6604
DALLAS, TEXAS 75201-2975
HUNGARIAN EXPORT BUILDING TELEPHONE (214) 220-7700 ONE AMERICAN CENTER
UL.POVARSKAYA (FORMERLY VOROVSKOGO),21 FAX (214) 220-7716 600 CONGRESS AVENUE
121069 MOSCOW, RUSSIAN FEDERATION AUSTIN, TEXAS 78701-3200
TELEPHONE 011 (70-95) 202-8416 TELEPHONE (512) 495-8400
FAX 011 (70-95) 202-0295 FAX (512) 495-8612
WRITER'S DIRECT DIAL 47 CHARLES ST., BERKELEY SQUARE
(214) 220-7713 LONDON W1X 7PB, ENGLAND
TELEPHONE 011 (44-71) 491-7236
FAX 011 (44-71) 499-5320
</TABLE>
December 2, 1994
Hadson Corporation
2777 Stemmons Freeway
Dallas, Texas 75207
Ladies and Gentlemen:
We are acting as counsel for Hadson Corporation, a Delaware corporation
(the "Company"), in connection with the filing, pursuant to the Securities Act
of 1933, as amended (the "Securities Act"), of a registration statement on Form
S-8 (the "Registration Statement") relating to the periodic offering and sale
(i) by the Company of up to an aggregate 3,876,000 shares of the Company's
common stock, par value $.01 per share (the "Common Stock"), which may be issued
pursuant to the Hadson Corporation 1992 Equity Incentive Plan as amended and
restated as of March 9, 1994 (the "Equity Incentive Plan"), (ii) by the Company
of up to an aggregate 8,668 shares of Common Stock which may be issued pursuant
to the Hadson Corporation Chairmanship Fee Plan (the "Chairmanship Fee Plan";
together with the Equity Incentive Plan, the "Plans") and (iii) by the selling
stockholders named in the prospectus included as Exhibit 99.3 to the
Registration Statement (the "Prospectus") of up to an aggregate 24,000 shares of
Common Stock issued to such persons pursuant to the Equity Incentive Plan and of
up to an aggregate 1,332 shares of Common Stock issued to certain of such
persons pursuant to the Chairmanship Fee Plan (the shares of Common Stock
described in the foregoing clauses (i), (ii) and (iii) are collectively
referred to herein as the "Shares").
In connection with this opinion, we have examined the corporate
records of the Company, including its Restated Certificate of Incorporation,
its bylaws, as amended, and certain resolutions of the Board of Directors of
the Company. We have also examined the Registration Statement, together with
the exhibits thereto, and such originals or photostatic or certified copies of
all those corporate records of the Company and of all those agreements,
communications and other instruments, certificates of public officials,
certificates of corporate officials and such other documents as we have deemed
relevant and necessary as a basis for the opinions hereinafter set forth. As
to factual matters, information with respect to which is in the possession of
the Company, relevant to the opinions herein stated, we have relied without
investigation, to the extent
<PAGE> 2
Hadson Corporation
December 2, 1994
Page 2
we deem such reliance proper, upon certificates or representations made by its
duly authorized representatives.
In rendering the opinions set forth below, we have assumed, with your
approval and without independent investigation, the genuineness of all
signatures, the authenticity of all documents submitted to us as originals and
the conformity to original documents of all documents submitted to us as
certified or photostatic copies.
Based upon the foregoing and subject to the qualifications hereinafter
set forth, we are of the opinion that the Shares have been validly authorized
for issuance and, when the Shares are issued and paid for in accordance with
the terms of the Plans, the Shares so issued will be validly issued, fully paid
and nonassessable.
We are counsel admitted to practice law in the State of Texas and this
opinion is limited to the laws of the State of Texas, the General Corporation
Law of the State of Delaware and the federal law of the United States of
America.
We express no opinion as to any matter other than as expressly set
forth above, and no opinion is to or may be inferred or implied herefrom. This
opinion is given as of the date hereof, and we undertake no, and hereby
disclaim any, obligation to advise the Company or any other party of any change
in any matter set forth herein.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to us under the heading "Legal
Matters" in the Prospectus. In giving this consent, we do not thereby admit
that we are within the category of persons whose consent is required under the
provisions of the Securities Act or the rules and regulations of the Securities
and Exchange Commission promulgated thereunder.
Very truly yours,
Vinson & Elkins L.L.P.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of Hadson Corporation, the related prospectus with
respect to the Hadson Corporation 1992 Equity Incentive Plan, the related
prospectus with respect to the Hadson Corporation Chairmanship Fee Plan, and
the related reoffer prospectus the form of which is included as Exhibit 99.3 to
such Registration Statement, of our report dated February 18, 1994 appearing on
page F-2 of Hadson Corporation's Annual Report on Form 10-K for the year ended
December 31, 1993. We also consent to the reference to us under the heading
"Experts" in such reoffer prospectus.
/s/ PRICE WATERHOUSE LLP
Oklahoma City, Oklahoma
December 2, 1994
<PAGE> 1
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned Directors
of Hadson Corporation, a Delaware corporation (the "Company"), hereby
constitutes and appoints Greg G. Jenkins and Robert P. Capps, or either of them
(with full power to each of them to act alone), his true and lawful
attorney-in-fact and agent, with full power of substitution, for him and on his
behalf and in his name, place and stead, to execute and file any and all
instruments which said attorneys-in-fact and agents, or either of them, may
deem necessary or advisable or which may be required to enable the Company to
comply with the Securities Act of 1933, as amended (the "Act"), and the
Securities Act of 1934, as amended, and any rules, regulations or requirements
of the Securities and Exchange Commission in respect of either thereof, as well
as any rules, regulations and requirements of any other regulatory authority,
in connection with (i) the issuance by the Company of the shares of the Common
Stock, $.01 par value of the Company ("Common Stock") issuable pursuant to the
Company's 1992 Equity Incentive Plan and the Company's Chairmanship Fee Plan,
in each case as the same may be amended from time to time, and (ii) the
offering and sale by each of Messrs. J. Michael Adcock, J. Frank Haasbeek,
James L. Payne, Michael J. Rosinski and B. M. Thompson of the aggregate 24,000
shares of Common Stock automatically granted to such persons pursuant to the
Equity Incentive Plan on May 20, 1994, pursuant to filings under the Act of one
or more registration statements by the Company on Form S-8 or any other
appropriate form, including any and all amendments (including, without
limitation, any amendment or amendments increasing the number or types of
securities for which registration is sought) and post-effective amendments
thereto or supplements to the prospectuses contained therein (collectively, the
"Registration Statement"), with all exhibits and any and all documents required
to be filed as a part of or in connection therewith, with the Securities and
Exchange Commission or any other regulatory authority, until this Power of
Attorney is superseded or revoked, including specifically, but without limiting
the generality of the foregoing, full power and authority to sign the names of
the undersigned Directors of the Company in their capacity as Directors thereof
to the Registration statement and to any instruments or documents filed as part
of or in connection with the Registration Statement, 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 to
effectuate the same, as fully as he himself might or could do if personally
present; and each of the undersigned hereby ratifies and confirms all that said
attorneys-in-fact and agents, or either of them, or their substitute or
substitutes, shall do or cause to be done by virtue hereof.
<PAGE> 2
IN WITNESS WHEREOF, the undersigned have subscribed these presents on this 10th
of November, 1994.
/s/ J. MICHAEL ADCOCK /s/ JAMES L. PAYNE
_____________________________ _____________________________
J. MICHAEL ADCOCK JAMES L. PAYNE
/s/ J. E. CANNON /s/ MICHAEL J. ROSINSKI
_____________________________ _____________________________
J. E. CANNON MICHAEL J. ROSINSKI
/s/ J. FRANK HAASBEEK /s/ B. M. THOMPSON
_____________________________ _____________________________
J. FRANK HAASBEEK B. M. THOMPSON
/s/ GREG G. JENKINS /s/ R. A. WALKER
_____________________________ _____________________________
GREG G. JENKINS R. A. WALKER
<PAGE> 1
EXHIBIT 99.1
HADSON CORPORATION 1992 EQUITY INCENTIVE PLAN
(as amended and restated as of March 9, 1994)
SECTION 1.
PURPOSE
The purposes of this Hadson Corporation 1992 Equity Incentive Plan
(this "Plan") are to attract and retain the best available employees and
directors of Hadson Corporation (the "Company") and any Parent or Subsidiary of
the Company (each as hereinafter defined), to provide additional incentive to
such persons and to promote the success of the business of the Company. This
Plan is intended to comply with Rule 16b-3 under Section 16 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or any successor
provision ("Rule 16b-3"), and this Plan shall be construed, interpreted and
administered to so comply.
SECTION 2.
OTHER DEFINITIONS
As used in this Plan:
"Board" means the Board of Directors of the Company.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time.
"Committee" means the Compensation Committee or other committee
appointed by the Board, which shall consist of two or more directors, each of
whom shall be a "disinterested person" within the meaning of Rule 16b-3(c)
under the Exchange Act, or any successor provision.
"Common Stock" means the Common Stock, $.01 par value, of the Company.
"Effective Date" means December 16, 1992.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Fair Market Value" means, with respect to the Common Stock and at any
date, (i) the reported closing price of such stock on the New York Stock
Exchange or other established stock exchange or the NASDAQ National Market
System on such date, or if no sale of such stock shall have been made on such
an exchange or the NASDAQ National Market System on that date, on the preceding
date on which there was such a sale, (ii) if such stock is not then listed on
such an exchange or quoted on the NASDAQ National Market System, the average of
the closing bid and asked prices per share for such stock in the
over-the-counter market as quoted on the National Association of Securities
Dealers, Inc. Automated Quotation System ("NASDAQ") on such date, or (iii) if
such stock is not then listed on such an exchange or quoted on NASDAQ or the
NASDAQ National Market System, an amount determined in good faith by the
Committee in its sole discretion.
"Incentive Stock Option" means an option to purchase shares of Common
Stock awarded to a Participant under this Plan which is intended to meet the
requirements of Section 422 of the Code or any successor provision.
"Non-Employee Director" means a director of the Company who is not an
employee of the Company or any Parent or Subsidiary of the Company.
"Non-Qualified Stock Option" means an option to purchase shares of
Common Stock awarded to a Participant under this Plan which is not intended to
be an Incentive Stock Option.
<PAGE> 2
"Option" means an Incentive Stock Option or a Non-Qualified Stock
Option.
"Parent" means a "parent corporation," whether now or hereafter
existing, as defined in Section 424(e) of the Code.
"Participant" means a person selected by the Committee to receive an
award under this Plan and Non-Employee Directors.
"Restricted Stock" means Common Stock awarded to a Participant subject
to restrictions pursuant to this Plan.
"Restricted Stock Grant" means an award of shares of Restricted Stock.
"Section 16 Participant" means a Participant subject to Section 16 of
the Exchange Act.
"Securities Act" means the Securities Act of 1933, as amended from
time to time.
"Subsidiary" means a "subsidiary corporation," whether now or
hereafter existing, as defined in Section 424(f) of the Code.
SECTION 3.
ADMINISTRATION
(a) Committee Authority; Delegation. This Plan shall be
administered by the Committee. Among other things, the Committee shall have
authority, subject to the terms of this Plan (including, without limitation,
the provisions governing participation in this Plan by Non-Employee Directors),
to grant awards under this Plan and to determine the individuals to whom and
the time or times at which awards may be granted, the type(s) of award(s) to be
granted to such individuals pursuant to this Plan and the terms and conditions
of such awards; provided, however, that the maximum number of shares which may
be subject to all Options and Restricted Stock Grants awarded to a Participant
during any calendar year may not exceed 500,000 (subject to adjustment pursuant
to Section 5(b) hereof). All administrative powers may be delegated by the
Committee, except where (i) such powers with respect to the selection of and
determination of awards for Section 16 Participants are required to be
exercised by the Committee in order to enable this Plan to qualify for the
exemption provided by Rule 16b-3 or (ii) such delegation would cause the
benefits under this Plan to "covered employees" within the meaning of Section
162(m) of the Code to not qualify as performance-based compensation within the
meaning of Section 162(m) of the Code and applicable interpretive authority
thereunder.
(b) Actions of Committee. Subject to the provisions of Section
10(e) hereof, the Committee shall have authority to adopt, alter and repeal
such administrative rules, guidelines and practices governing the operation of
this Plan as it shall from time to time consider advisable, to interpret the
provisions of this Plan and any Option Agreement or Restricted Stock Agreement
(each as hereinafter defined), and to decide all disputes arising in connection
with this Plan. The Committee's decisions and interpretations shall be final
and binding. Any action of the Committee with respect to the administration of
this Plan shall be taken pursuant to a majority vote or by the unanimous
written consent of its members.
(c) Indemnification. The Company shall indemnify and hold
harmless each director of the Company and each Committee member for any action
or determination made in good faith with respect to this Plan or any Option
Agreement or Restricted Stock Agreement.
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SECTION 4.
ELIGIBILITY
The following individuals shall be eligible to receive awards pursuant
to this Plan as follows:
(a) Any employee (including any officer or director who is an
employee) of the Company or any Parent or Subsidiary of the Company shall be
eligible to receive Incentive Stock Options under this Plan. Any employee
(including any officer or director who is an employee) of the Company or any
Parent, Subsidiary or other affiliate of the Company shall be eligible to
receive Non- Qualified Stock Options and Restricted Stock Grants under this
Plan. Eligible employees may receive more than one Option or Restricted Stock
Grant under this Plan.
(b) Any Non-Employee Director of the Company shall be eligible to
receive Options and Restricted Stock Grants only as set forth in Section 8
hereof.
SECTION 5.
STOCK AVAILABLE UNDER THIS PLAN
(a) Number of Shares Available. Subject to any adjustments made
pursuant to Section 5(b) hereof, the aggregate number of shares of Common Stock
that may be delivered pursuant to the exercise of all Options granted and
pursuant to all Restricted Stock Grants awarded under this Plan shall be
3,900,000, of which no more than 1,000,000 shares may be delivered pursuant to
Restricted Stock Grants and the exercise of Options awarded to Non-Employee
Directors in accordance with the provisions of Section 8 hereof. If any Option
expires or is terminated before exercise or if any portion of any Restricted
Stock Grant is forfeited for any reason, the shares of Common Stock which were
subject to but were either forfeited to the Company or not delivered under such
Option or Restricted Stock Grant, and any other shares of Common Stock that for
any other reason are not issued to a Participant, shall again be available for
award under this Plan as if no Option or Restricted Stock Grant had been
awarded with respect to such shares. Awards under this Plan may be fulfilled
with either authorized and unissued shares of Common Stock or issued and
reacquired shares of Common Stock.
(b) Adjustment. In the event of a stock dividend, stock split or
combination of shares of Common Stock, recapitalization or other increase or
decrease in the number of issued shares of Common Stock effected without
receipt of consideration by the Company, appropriate and proportionate
adjustment shall be made in (i) the number and kind of shares of stock in
respect of which Options or Restricted Stock Grants may be awarded under this
Plan, (ii) the number and kind of shares of stock or other property subject to
outstanding Options and Restricted Stock Grants and (iii) the award, exercise
or conversion price with respect to any of the foregoing. In the event that
the Committee determines in its sole discretion that any extraordinary cash
dividend, creation of a class of equity securities, recapitalization,
reclassification, reorganization, merger, consolidation, split-up, spin-off,
combination, exchange of shares, warrants or rights offering to purchase Common
Stock at a price substantially below fair market value, or other similar
transaction, affects the Common Stock such that an adjustment is required in
order to preserve the benefits or potential benefits intended to be made
available under this Plan to Participants other than Non-Employee Directors,
the Committee shall have the right to adjust equitably any or all of (i) the
number and kind of shares of stock in respect of which Options or Restricted
Stock Grants may be awarded under this Plan to Participants other than
Non-Employee Directors, (ii) the number and kind of shares of stock or other
property subject to outstanding Options and Restricted Stock Grants held by
Participants other than Non-Employee Directors and (iii) the award, exercise or
conversion price with respect to any of the foregoing held by Participants
other than Non-Employee Directors.
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SECTION 6.
TERMS AND CONDITIONS OF OPTIONS
(a) Grants of Options. Subject to the provisions of this Plan,
the Committee may award Incentive Stock Options and Non-Qualified Stock Options
and determine the number of shares to be covered by each Option, the option
price therefor, the term of the Option, and the other conditions and
limitations applicable to the exercise of the Option. The terms and conditions
of Incentive Stock Options shall be subject to and comply with Section 422 of
the Code, or any successor provision, and any regulations thereunder. Anything
in this Plan to the contrary notwithstanding, no term of this Plan relating to
Incentive Stock Options shall be interpreted, amended or altered, nor shall any
discretion or authority granted to the Committee under this Plan be so
exercised, so as to disqualify this Plan or, without the consent of the
Participant, any Incentive Stock Option granted under this Plan, under Section
422 of the Code. Each grant of an Option may be made alone or in combination
with, in addition to or in relation to any other award authorized by this Plan.
The terms of each Option need not be identical, and the Committee need not
treat Participants uniformly. Except as otherwise provided by this Plan or a
particular Option Agreement, any determination with respect to an Option may
be made by the Committee at the time of award or at any time thereafter.
(b) Agreement in Writing; Provisions. Each Option under this Plan
shall be evidenced by a written agreement (each, an "Option Agreement")
delivered to the Participant specifying the terms and conditions thereof and
containing such other terms and conditions not inconsistent with the provisions
of this Plan as the Committee considers necessary or advisable to achieve the
purposes of this Plan or comply with applicable tax and regulatory laws and
accounting principles. Each Option Agreement shall specify whether the
Option(s) granted thereby are Incentive Stock Options or Non-Qualified Stock
Options. Each Option Agreement may incorporate all or any of the terms hereof
by reference and shall comply with and be subject to the following terms and
conditions:
(i) Shares Granted. Each Option Agreement shall specify
the number of Incentive Stock Options and/or Non- Qualified Stock
Options being granted; one Option shall be deemed granted for each
share of stock. In addition, each Option Agreement shall specify the
option price and the exercisability and/or vesting schedule of such
Options, if any.
(ii) Other Terms. Each Option Agreement may contain such
other terms, provisions and conditions not inconsistent with this Plan
as may be determined by the Committee, including, without limitation,
discretionary performance standards, tax withholding provisions, or
other forfeiture provisions regarding competition and confidential
information.
(c) Option Price. The option price per share of Common Stock
purchasable under an Option shall be 100% of the Fair Market Value of the
Common Stock on the date of award. If the Participant owns or is deemed to own
(by reason of the attribution rules applicable under Section 424(d) of the
Code) more than 10% of the combined voting power of all classes of stock of the
Company or any Subsidiary or Parent of the Company and an Incentive Stock
Option is granted to such Participant, the option price shall be 110% of Fair
Market Value of the Common Stock on the date of award.
(d) Method of Payment. The purchase price for any share purchased
pursuant to the exercise of any Option granted under this Plan shall be paid in
full upon exercise of the Option by any of the following methods, to the extent
permitted under the particular Option Agreement: (i) by cash, (ii) by check or
(iii) by transferring to the Company shares of Common Stock at their Fair
Market Value as of the date of exercise of the Option. Notwithstanding the
foregoing, the Company may arrange for or cooperate in permitting cashless
exercise procedures and may extend and maintain, or arrange for the extension
and maintenance of, credit to a Participant to finance the Participant's
purchase of shares pursuant to the exercise of Options, on such terms as may be
approved by the Committee, subject to applicable regulations of the Federal
Reserve Board and any other applicable laws or regulations in effect at the
time such credit is extended.
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<PAGE> 5
(e) Termination. No Option shall be exercisable more than ten
years after the date the Option is awarded. If a Participant owns or is deemed
to own (by reason of the attribution rules of Section 424(d) of the Code) more
than 10% of the total combined voting power of all classes of stock of the
Company or any Subsidiary or Parent of the Company and an Incentive Stock
Option is awarded to such Participant, such Option shall not be exercisable
after the expiration of five years from the date of award.
(f) Exercise. No Option shall be exercisable during the lifetime
of a Participant by any person other than the Participant or his or her
guardian or legal representative. The Committee shall have the power to set
the time or times within which each Option shall be exercisable and to
accelerate the time or times of exercise of each Option, other than, in each
case, Options awarded or to be awarded to Non-Employee Directors. To the
extent that a Participant has the right to exercise one or more Options and
purchase shares pursuant thereto, the Option(s) may be exercised from time to
time by written notice to the Company stating the number of shares being
purchased and accompanied by payment in full of the option price for such
shares. Any certificate for shares of outstanding Common Stock used to pay the
option price shall be accompanied by a stock power duly endorsed in blank by
the registered owner of the certificate (with the signature thereon
guaranteed). In the event the certificate tendered by the Participant in such
payment covers more shares than are required for such payment, the certificate
shall also be accompanied by instructions from the Participant to the Company's
transfer agent with respect to the disposition of the balance of the shares
covered thereby.
(g) Disability, Death, Retirement or Other Termination. The
Committee shall determine the effect on an Option (other than an Option awarded
or to be awarded to a Non-Employee Director) of the disability, death,
retirement or other termination of employment of a Participant and the extent
to which, and the period during which, the Participant's legal representative,
guardian or designated beneficiary may exercise rights thereunder.
(h) No Deemed Termination. For purposes of this Section 6, the
following events shall not be deemed a termination of employment of a
Participant:
(i) a transfer to the employment of the Company from a
Subsidiary of the Company or from the Company to a Subsidiary of the
Company, or from one Subsidiary of the Company to another; or
(ii) an approved leave of absence for military service or
sickness, or for any other purpose approved by the Company, if the
Participant's right to reemployment is guaranteed either by a statute
or by contract or under the policy pursuant to which the leave of
absence was granted or if the Committee otherwise so provides in
writing.
For purposes of this Plan, employees of a Subsidiary of the Company shall be
deemed to have terminated their employment on the date on which such Subsidiary
ceases to be a Subsidiary of the Company.
(i) Nontransferability. No Option or interest therein or right
thereunder shall be transferable by a Participant otherwise than by will or the
laws of descent and distribution.
(j) Fractional Shares. The Company shall not be required to issue
fractional shares upon the exercise of an Option. The value of any fractional
share subject to an Option shall be paid in cash in connection with the
exercise that results in all full shares subject to the grant having been
exercised, based on the Fair Market Value of the Common Stock on the date of
such exercise.
(k) $100,000 Limit for Incentive Stock Options. If required by
applicable tax rules regarding a particular grant, to the extent that the
aggregate Fair Market Value (determined as of the date an Incentive Stock
Option is granted) of the shares with respect to which an Incentive Stock
Option grant under this Plan (when aggregated, if appropriate, with shares
subject to other Incentive Stock Option grants made before said grant under
this Plan or any other plan maintained by the Company or any Parent or
Subsidiary of the
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<PAGE> 6
Company) is exercisable for the first time by a Participant during any
calendar year exceeds $100,000 (or such other limit as is prescribed by the
Code), such Option grant shall be treated as a grant of Non-Qualified Stock
Options pursuant to Code Section 422(d).
(l) Disposition of Incentive Stock Options. A Participant shall
notify the Committee in the event that he or she disposes of Common Stock
acquired upon exercise of an Incentive Stock Option within the two-year period
following the date the Incentive Stock Option was granted or within the
one-year period following the date he or she received Common Stock upon the
exercise of an Incentive Stock Option.
(m) Option Modification. The Committee may amend, modify or
terminate any outstanding Option held by a Participant other than a
Non-Employee Director, including substituting therefor another Option of the
same or a different type, changing the date of exercise or vesting and
converting an Incentive Stock Option to a Non-Qualified Stock Option, provided
that the Participant's consent to such action shall be required unless the
Committee determines in its sole discretion that the action, taking into
account any related action, would not materially and adversely affect the
Participant (subject to Section 6(a) hereof or unless such change is required
in order to cause the benefits under this Plan to qualify as performance-based
compensation within the meaning of Section 162(m) of the Code and applicable
interpretive authority thereunder).
SECTION 7.
TERMS AND CONDITIONS OF RESTRICTED STOCK GRANTS
(a) Restricted Stock Grants. Subject to the provisions of this
Plan, the Committee may award Restricted Stock Grants and determine the number
of shares of Restricted Stock covered by such Grant, the restrictions thereon
(which may include, without limitation, restrictions on the transfer of such
shares, restrictions on the right to vote such shares and restrictions on the
right to receive dividends on such shares), the time or times at which and the
conditions upon which such restrictions shall lapse, and the other terms and
conditions applicable to such Grant. Each Restricted Stock Grant may be made
alone or in combination with, in addition to or in relation to any other award
authorized by this Plan. The terms of each Restricted Stock Grant need not be
identical, and the Committee need not treat Participants uniformly. Except as
otherwise provided by this Plan or a particular Restricted Stock Agreement, any
determination with respect to a Restricted Stock Grant may be made by the
Committee at the time of award or at any time thereafter. The Committee may,
but shall not be required to, award Restricted Stock Grants based upon the
attainment of one or more "performance goals" within the meaning of Section
162(m) of the Code and applicable interpretive authority thereunder.
(b) Agreement in Writing; Provisions. Each Restricted Stock Grant
shall be evidenced by a written agreement (each, a "Restricted Stock
Agreement") delivered to the Participant specifying the terms and conditions
thereof and containing such other terms and conditions not inconsistent with
the provisions of this Plan as the Committee considers necessary or advisable
to achieve the purposes of this Plan or comply with applicable tax and
regulatory laws and accounting principles. Each Restricted Stock Agreement may
incorporate all or any of the terms hereof by reference and shall comply with
and be subject to the following terms and conditions:
(i) Shares Awarded. Each Restricted Stock Agreement
shall specify the number of shares of Restricted Stock being awarded
pursuant to the applicable Grant and the schedule for the lapse of the
restrictions on the shares subject to such Restricted Stock Grant.
(ii) Other Terms. Each Restricted Stock Agreement may
contain such other terms, provisions and conditions not inconsistent
with this Plan as may be determined by the Committee, including,
without limitation, discretionary performance standards, tax
withholding provisions, or other forfeiture provisions regarding
competition and confidential information.
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<PAGE> 7
(c) Delivery of Shares. Each share of Restricted Stock, when
issued, shall be issued in the name of the Participant and the certificate
evidencing such share shall be deposited with the Company, together with a
stock power duly endorsed in blank, upon such issuance and continuing until all
applicable restrictions on such share shall have lapsed.
(d) Disability, Death, Retirement or Other Termination. The
Committee shall determine the effect on a Restricted Stock Grant (other than a
Restricted Stock Grant awarded or to be awarded to a Non-Employee Director) of
the disability, death, retirement or other termination of employment of a
Participant. For purposes of this Section 7, (i) the events described in
Section 6(h) shall not be deemed a termination of employment of a Participant
and (ii) employees of a Subsidiary of the Company shall be deemed to have
terminated their employment on the date on which such Subsidiary ceases to be a
Subsidiary of the Company.
(e) Nontransferability. Prior to the lapse of all restrictions
thereon, no share of Restricted Stock or interest therein or right thereunder
shall be transferable by a Participant otherwise than by will or the laws of
descent and distribution.
(f) Restricted Stock Grant Modification. The Committee may amend,
modify or terminate any outstanding Restricted Stock Grant held by a
Participant other than a Non-Employee Director, including substituting therefor
another Restricted Stock Grant of the same or a different type and changing the
time or times at which any restrictions shall lapse, provided that the
Participant's consent to such action shall be required unless the Committee
determines in its sole discretion that the action, taking into account any
related action, would not materially and adversely affect the Participant
(unless such change is required in order to cause the benefits under this Plan
to qualify as performance-based compensation within the meaning of Section
162(m) of the Code and applicable interpretive authority thereunder).
SECTION 8.
NONDISCRETIONARY AWARDS
TO NON-EMPLOYEE DIRECTORS
Notwithstanding any other provision of this Plan, Non-Employee
Directors shall participate in this Plan only to the extent set forth in this
Section 8. The provisions of this Plan applicable to awards granted or to be
granted to Non-Employee Directors are intended to comply with the provisions of
Rule 16b-3(c)(2)(ii) under the Exchange Act, or any successor provision, and
such provisions shall be construed, interpreted and administered to so comply.
The Committee shall have no authority to take any action, and shall not take
any action, if the authority to take such action, or the taking of such action,
would result in noncompliance with such provisions.
(a) Automatic Grant of Options.
(i) Date of Grant; Number of Shares. On the date upon
which a Non-Employee Director is first elected or appointed a member of the
Board, he or she shall receive the grant of a Non-Qualified Stock Option to
purchase 6,667 shares of Common Stock. For the purpose of this Section 8(a),
each Non-Employee Director in office on the Effective Date shall be deemed to
have been first elected at such date. Non-Employee Directors subsequently
re-elected at any meeting of stockholders shall receive as of the date of each
such meeting, commencing with the annual meeting of stockholders to be held in
1994, the grant of a Non- Qualified Stock Option to purchase 666 shares of
Common Stock. Options granted to Non-Employee Directors shall be immediately
exercisable.
(ii) Term. The term of each Option granted to a
Non-Employee Director shall be ten years from its date of grant, unless sooner
terminated or extended in accordance with Section 8(e) below.
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<PAGE> 8
(iii) Option Price. The option price of the shares of
Common Stock subject to each Option granted to a Non- Employee Director shall
be the Fair Market Value of such shares on the date the Option is granted.
(iv) Exercise after Death or Other Termination. If a
Non-Employee Director ceases to be a director of the Company, such Non-Employee
Director's Options shall be exercisable by him only during the 36 months
following the date such person ceases to be a director, except that:
(A) if a Non-Employee Director dies while serving
as a director, such Non-Employee Director's Options shall be
exercisable by his or her executor or administrator or, if not so
exercised, by the legatees or the distributees of his or her estate,
only during the 36 months following his or her death; and
(B) notwithstanding the foregoing, a Non-Employee
Director's Options shall terminate immediately on the date that such
person is removed as a director for cause. For purposes of this
Section 8, a Non-Employee Director shall be considered to have been
dismissed "for cause" in the event he or she is dismissed on account
of any act of (x) fraud or intentional misrepresentation or (y)
embezzlement, misappropriation, or conversion of assets or
opportunities of the Company or any Subsidiary of the Company.
(b) Automatic Award of Restricted Stock Grants.
(i) Date of Award; Number of Shares. Beginning on the
date of the annual meeting of stockholders of the Company to be held in 1994
and on the date of each annual meeting of stockholders thereafter, each
Non-Employee Director shall receive 50% of the value of his or her annual
retainer fee for serving as a director of the Company for the year commencing
on such date in the form of an award of a Restricted Stock Grant. The total
number of shares of Common Stock included in each such Restricted Stock Grant
shall be determined by dividing the amount of the director's annual retainer
fee that is to be paid in the form of a Restricted Stock Grant by the Fair
Market Value of one share of Common Stock on the date of award. In no event
shall the Company be required to issue fractional shares under this Section
8(b). Whenever under the terms of this Section 8(b) a fractional share of
Common Stock would otherwise be required to be issued, an amount in cash shall
be paid in lieu thereof based on the Fair Market Value of the Common Stock on
the applicable award date.
(ii) Restrictions. Except as otherwise provided in this
Plan, shares of Common Stock received pursuant to a Restricted Stock Grant may
not be sold, assigned, pledged, hypothecated or otherwise disposed of until at
least six months and one day after the date of award of such Restricted Stock
Grant (the "Restriction Lapse Date"). Except as set forth in the preceding
sentence, with respect to all shares subject to a Restricted Stock Grant, a
Non-Employee Director shall have all voting, dividend, liquidation and other
rights of a holder of Common Stock.
(iii) Forfeiture. If a Non-Employee Director is removed as
a director of the Company for cause (as defined in Section 8(a) hereof) prior
to the Restriction Lapse Date applicable to a Restricted Stock Grant, such
person shall forfeit all shares subject to such Restricted Stock Grant.
(c) Adjustments. The number and nature of shares subject to any
Option or Restricted Stock Grant held by a Non- Employee Director shall be
subject to adjustment only to the extent set forth in the first sentence of
Section 5(b) hereof.
(d) Agreement in Writing. Each Option and each Restricted Stock
Grant awarded to a Non-Employee Director shall be evidenced by a writing signed
by him or her specifying the terms and conditions thereof in accordance with
this Section 8.
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SECTION 9.
ACCELERATION OF EXERCISABILITY AND
VESTING UNDER CERTAIN CIRCUMSTANCES
(a) Change of Control. In order to preserve the rights of a
Participant (other than a Non-Employee Director) under an Option or Restricted
Stock Grant in the event of a change of control of the Company, the Committee
in its discretion may, with respect to any Option or Restricted Stock Grant
(other than an Option or Restricted Stock Grant awarded to a Non-Employee
Director), at the time the Option or Restricted Stock Grant is awarded or at
any time thereafter, take one or more of the following actions with respect to
any such change of control: (i) provide for the acceleration of any time period
relating to the exercise or vesting of the Option or the lapse of any
restrictions on shares of Restricted Stock; (ii) provide for the purchase of
the Option upon the Participant's request for an amount of cash or other
property that could have been received upon the exercise of the Option had the
Option been currently exercisable; (iii) adjust the terms of the Option or
Restricted Stock Grant in such manner as may be determined by the Committee;
(iv) cause the Option or Restricted Stock Grant to be assumed, or new rights
substituted therefor, by another entity; or (v) make such other provision as
the Committee may consider equitable and in the best interests of the Company.
(b) Certain Other Occurrences. Notwithstanding any provision in
this Plan to the contrary, with regard to any Option or Restricted Stock Grant
awarded to any executive officer or director of the Company, unless the
particular Option or Restricted Stock Agreement provides otherwise, the Option
will become immediately exercisable and vested in full, and all restrictions on
any shares of Restricted Stock subject to a Restricted Stock Grant shall
immediately lapse, upon the occurrence, before the expiration or termination of
such Option or forfeiture of such shares, of any of the events listed below:
(i) the delivery of written notice to the stockholders of
the Company announcing a stockholders' meeting at which the
stockholders will consider a proposed merger of the Company, a
proposed sale by the Company of substantially all of its assets or any
similar proposed reorganization of the Company; or
(ii) the acquisition of beneficial ownership (as such term
is defined in Rule 13d-3 promulgated under the Exchange Act) by any
"person" (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act), other than (A) the Company or (B) The Prudential
Insurance Company of America and its affiliates, directly or
indirectly, of securities representing 25% or more of the total number
of votes that may be cast for the election of directors of the
Company; or
(iii) the commencement (within the meaning of Rule 14d-2
promulgated under the Exchange Act) of a "tender offer" for stock of
the Company subject to Section 14(d)(2) of the Exchange Act; or
(iv) the failure, at any annual or special meeting of the
Company's stockholders following an "election contest" subject to Rule
14a-11 promulgated under the Exchange Act, of any of the persons
nominated by the Company in the proxy material mailed to stockholders
by the management of the Company to win election to seats on the
Board, excluding only those who die, retire voluntarily, are disabled
or are otherwise disqualified in the interim between their nomination
and the date of the meeting.
SECTION 10.
MISCELLANEOUS
(a) No Right of Employment. No person shall have any claim or
right to be awarded an Option or Restricted Stock Grant, and the award of an
Option or Restricted Stock Grant shall not be construed as giving a Participant
the right to continued employment. The Company expressly reserves the right at
any time
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<PAGE> 10
to dismiss a Participant free from any liability or claim under this
Plan, except as expressly provided in the applicable Option or Restricted Stock
Agreement.
(b) Plan Not Exclusive. Nothing contained in this Plan shall
prevent the Company from adopting other or additional compensation arrangements
for its employees or directors.
(c) No Rights as Stockholders. Subject to the provisions of the
applicable Option or Restricted Stock Agreement, no Participant shall have any
rights as a stockholder with respect to any shares of Common Stock to be
distributed under this Plan until he or she becomes the record holder thereof.
(d) Investment Representation. The Committee may require, as a
condition of receiving shares of Common Stock (including shares of Restricted
Stock) issued pursuant to any Option or Restricted Stock Grant, that a
Participant furnish to the Company such written representations and information
as the Committee deems appropriate to permit the Company, in light of the
existence or nonexistence of an effective Registration Statement under the
Securities Act, to deliver such shares in compliance with the provisions of the
Securities Act.
(e) Section 16 Participants. Notwithstanding any other provision
of this Plan, in order to qualify for the exemption provided by Rule 16b-3, (i)
any shares of Restricted Stock or other equity security received by a Section
16 Participant pursuant to a Restricted Stock Grant and any Common Stock or
other equity security acquired by a Section 16 Participant upon exercise of an
Option may not be sold for six months and one day after the date of award of
the Restricted Stock Grant or Option and (ii) any Option or other right related
to an equity security issued under this Plan that constitutes a "derivative
security" within the meaning of Rule 16b-3(a)(2) under the Exchange Act, or any
successor provision, shall not be transferable other than by will or the laws
of descent and distribution. The Committee shall have no authority to take any
action, and shall not take any action, if the authority to take such action, or
the taking of such action, would disqualify this Plan from the exemption
provided by Rule 16b-3.
(f) Effectiveness. This Plan amendment and restatement shall
become effective upon its approval by the Board, subject to approval by the
stockholders of the Company. Prior to such stockholder approval, awards may be
granted under this Plan amendment and restatement subject to such stockholder
approval.
(g) Amendment; Termination. The Board may amend, suspend or
terminate this Plan or any portion thereof at any time, provided that (i) no
amendment shall be made without stockholder approval if such approval is
necessary to comply with any applicable tax or regulatory requirement,
including any requirements for exemptive relief under Section 16(b) of the
Exchange Act or any successor provision, and (ii) Section 8 hereof and, as it
relates to awards granted or to be granted to Non-Employee Directors, Section
9(b) hereof may not be amended more than once every six months other than to
comport with changes in the Code or ERISA or the rules and regulations under
either thereof. If any amendment, suspension or termination of this Plan shall
materially and adversely affect the rights of the holder of any award then
outstanding, such amendment, suspension or termination shall not be deemed to
alter such rights unless the holder shall consent thereto.
(h) Term. Options and Restricted Stock Grants may not be awarded
under this Plan after ten years from the Effective Date, but then outstanding
Options and Restricted Stock Grants may extend beyond such date. Unless sooner
terminated, this Plan shall terminate on the tenth anniversary of the Effective
Date, provided that such termination shall not terminate or affect any Option
or Restricted Stock Grant then outstanding.
10
<PAGE> 1
EXHIBIT 99.2
HADSON CORPORATION
CHAIRMANSHIP FEE PLAN
RESOLVED, that, beginning with the year commencing on the date of the
1994 annual meeting of stockholders of the Company and for each year
thereafter, each director of the Company who is elected or re-elected by this
Board of Directors to serve as a chairman of any committee of this Board of
Directors (a "Chairman") shall receive a stipend of $2,000.00 per year;
FURTHER RESOLVED, that one-half of such stipend shall be awarded in
the form of cash and the remaining one-half of such stipend shall be awarded in
the form of a grant of shares of the common stock, par value $.01 per share, of
the Company ("Common Stock") subject to the restrictions described below (a
"Restricted Stock Grant");
FURTHER RESOLVED, that such stipend shall be awarded on the date of
each annual meeting of stockholders of the Company on which such director is
elected or re-elected to serve as a Chairman, provided that the portion of the
stipend to be awarded in the form of a Restricted Stock Grant for the year
commencing on the date of the 1994 annual meeting of stockholders of the
Company shall be awarded on November 16, 1994;
FURTHER RESOLVED, that the total number of shares of Common Stock
included in each such Restricted Stock Grant shall be determined by dividing
$1,000 by the Fair Market Value, determined in accordance with the provisions
of the Company's 1992 Equity Incentive Plan as amended and restated as of March
9, 1994 (the "Equity Incentive Plan"), of the Common Stock on the date of award
of such Restricted Stock Grant; provided, that in no event shall the Company be
required to issue fractional shares in connection with any such award, and if
any fractional share of Common Stock would otherwise be required to be issued,
an amount in cash shall be paid in lieu thereof based on the Fair Market Value
of the Common Stock on the applicable award date;
FURTHER RESOLVED, that shares of Common Stock issued pursuant to a
Restricted Stock Grant may not be sold, assigned, pledged, hypothecated or
otherwise disposed of until at least six months and one day after the date of
award of such Restricted Stock Grant (the "Restriction Lapse Date");
FURTHER RESOLVED, that if any Chairman is removed as a director of the
Company "for cause," as defined in the Equity Incentive Plan, prior to the
Restriction Lapse Date applicable to a Restricted Stock Grant, such person
shall forfeit all shares subject to such Restricted Stock Grant;
FURTHER RESOLVED, that this Board of Directors may amend, suspend or
terminate the compensation arrangement authorized and approved pursuant to the
foregoing resolutions or any portion thereof at any time, provided, that (i)
the foregoing resolutions shall not be amended more than once every six months
other than to comport with changes in the Internal Revenue Code of 1986, as
amended, or the Employee Retirement Income Security Act of 1974, as amended, or
the rules and regulations under either thereof, and (ii) if any such amendment,
suspension or termination shall materially
<PAGE> 2
and adversely affect the rights of the holder of any Restricted Stock Grant,
such amendment, suspension or termination shall not be deemed to alter such
rights unless the holder shall consent thereto;
FURTHER RESOLVED, that the compensation arrangement authorized and
approved pursuant to the foregoing resolutions shall be known as the Hadson
Corporation Chairmanship Fee Plan (the "Chairmanship Fee Plan"); and
FURTHER RESOLVED, that the Chairmanship Fee Plan is intended to comply
with Rule 16b-3(c)(2)(ii) promulgated under the Securities Exchange Act of
1934, as amended, and shall be construed and interpreted to so comply.
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<PAGE> 1
EXHIBIT 99.3
PROSPECTUS
HADSON CORPORATION
25,332 SHARES OF COMMON STOCK
______________________________
This Prospectus relates to the periodic offer and sale by each of the
Selling Stockholders named herein (collectively, the "Selling Stockholders") of
up to an aggregate of 24,000 shares (collectively, the "Equity Incentive Plan
Shares") of the common stock, par value $.01 per share ("Common Stock"), of
Hadson Corporation, a Delaware corporation (the "Company"), which were acquired
pursuant to the Hadson Corporation 1992 Equity Incentive Plan as amended and
restated as of March 9, 1994 (the "Equity Incentive Plan"), and the periodic
offer and sale by certain of the Selling Stockholders of up to an aggregate of
1,332 shares (collectively, the "Chairmanship Fee Plan Shares"; together with
the Equity Incentive Plan Shares, the "Shares") of Common Stock which were
acquired pursuant to the Hadson Corporation Chairmanship Fee Plan (the
"Chairmanship Fee Plan").
The Selling Stockholders may offer the Shares from time to time to
purchasers directly or through underwriters, dealers or agents. The Shares may
be sold at market prices prevailing at the time of sale or at negotiated
prices.
The Common Stock, including the Shares, is listed on the New York
Stock Exchange (the "NYSE"). The Company will not receive any of the proceeds
from the sale of the Shares by the Selling Stockholders. The address of the
principal executive offices of the Company is 2777 Stemmons Freeway, Dallas,
Texas 75207, and its telephone number at that address is (214) 640-6800.
SEE "RISK FACTORS" FOR A DISCUSSION OF CERTAIN RISK FACTORS THAT
SHOULD BE CONSIDERED PRIOR TO PURCHASING ANY OF THE SHARES.
______________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
______________________
The date of this Prospectus is December 2, 1994.
<PAGE> 2
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS
PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY
SECURITIES OTHER THAN THE SHARES OFFERED BY THIS PROSPECTUS OR AN OFFER TO SELL
OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SHARES IN ANY JURISDICTION
WHERE, OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE OR
DISTRIBUTION OF SECURITIES MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES,
CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE
COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION HEREIN IS CORRECT AS OF
ANY TIME SUBSEQUENT TO ITS DATE.
AVAILABLE INFORMATION
Pursuant to the Securities Act of 1933, as amended (the "Securities
Act"), the Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-8 (together with all
amendments and exhibits thereto, the "Registration Statement") of which this
Prospectus is a part. This Prospectus does not contain all the information set
forth in the Registration Statement, to which reference is hereby made for
further information. Statements made in this Prospectus as to the contents of
any contract, agreement or other document referred to are not necessarily
complete. With respect to each such contract, agreement or other document
filed as an exhibit to the Registration Statement, reference is hereby made to
the exhibit for a more complete description of the matter involved, and each
such statement shall be deemed qualified in its entirety by such reference.
The Company is subject to the informational and reporting requirements
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files periodic reports, proxy and information statements
and other information with the Commission. The Registration Statement, as well
as such reports, proxy and information statements and other information filed
by the Company with the Commission, may be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the regional
offices of the Commission located at 7 World Trade Center, 13th Floor, New
York, New York 10048, and at CitiCorp Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661-2511. Copies of such material, when filed, may
also be obtained from the Public Reference Section of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. The Common
Stock is listed on the NYSE and such reports, proxy statements and other
information concerning the Company may be inspected and copied at the offices
of the NYSE located at 20 Broad Street, New York, New York 10005. Copies of
the various documents referred to herein may also be obtained from the Company,
without charge, upon request to the Company at its principal executive offices.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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<S> <C>
AVAILABLE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
DOCUMENTS INCORPORATED BY REFERENCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
PLAN OF DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SELLING STOCKHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
LEGAL OPINION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
</TABLE>
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<PAGE> 3
DOCUMENTS INCORPORATED BY REFERENCE
The following documents filed with the Commission, and the information
included therein, are hereby incorporated by reference in this Prospectus:
(i) the Company's Annual Report on Form 10-K for the year ended
December 31, 1993;
(ii) the Company's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1994, June 30, 1994 and September 30, 1994;
and
(iii) Amendment No. 1 to the Company's Registration Statement on
Form 8-A/A (File No. 1-9891) filed with the Commission on
March 28, 1994.
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 termination of the
offering of the Shares made hereby, shall be deemed to be incorporated by
reference herein and to be part hereof from the date of filing such documents.
Any statement contained in a document incorporated or deemed to be incorporated
by reference herein shall be deemed to be modified or superseded for purposes
of this Prospectus to the extent that a statement contained herein or in any
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Prospectus. Upon the written or oral
request of any person to whom a copy of this Prospectus has been delivered, the
Company will provide without charge to such person a copy of any and all
documents (excluding exhibits thereto unless such exhibits are specifically
incorporated by reference into such documents) that have been incorporated by
reference into this Prospectus but not delivered herewith. Requests for such
documents should be addressed to:
Hadson Corporation
Attention: Secretary
2777 Stemmons Freeway
Dallas, Texas 75207
(214) 640-6800
RISK FACTORS
PROSPECTIVE PURCHASERS OF THE SHARES OFFERED HEREBY SHOULD CONSIDER
CAREFULLY THE SPECIFIC FACTORS SET FORTH BELOW AS WELL AS THE OTHER INFORMATION
SET FORTH OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS.
DEBT AND OTHER FINANCIAL OBLIGATIONS
The Company has significant debt and other financial obligations. In
connection with the December 1993 merger (the "Merger") of Adobe Gas Pipeline
Company ("AGPC"), a wholly-owned subsidiary of Santa Fe Energy Resources, Inc.
("Santa Fe"), with and into the Company, the Company issued to The Prudential
Insurance Company of America and certain of its affiliates (collectively,
"Prudential") an aggregate $56.4 million principal amount of its 8% Senior
Secured Notes Due 2003 (the "Senior Secured Notes"). The Senior Secured Notes
have initial interest obligations of approximately $4.3 million annually. The
Company made principal prepayments on such notes in the aggregate amount of
$2.5 million and $1 million upon the closing date of the Merger and on August
1, 1994, respectively, and is required to make additional principal prepayments
on such notes in aggregate principal amounts ranging from $2.5 million to $8
million annually beginning in 1996. If the Company's cash flow from operations
proves to be insufficient to meet its financial obligations in respect of the
Senior Secured Notes, the Company may be required to seek to raise funds
therefor through the sale of additional assets, the issuance of additional
equity securities or the incurrence of additional debt. However, covenants in
the Securities Purchase Agreement between the Company and Prudential governing
the Senior Secured Notes (the "Securities Purchase Agreement") and in the
Company's
-3-
<PAGE> 4
credit agreement restrict the Company's ability to sell assets and incur
additional debt. Even if such covenants permit such sale or incurrence (or are
amended or waived so as to permit such sale or incurrence), there can be no
assurance that the Company would be able to raise funds through any such means.
If the Company were successful in raising such funds through the incurrence of
additional debt or the issuance of additional equity securities, such actions
would or could result, respectively, in the issuance of obligations that rank
senior to its equity securities, including the Common Stock. If the Company
were not successful in raising any additional required funds, it is possible
that the Company could be forced to seek restructuring of its financial
obligations, which could impair the positions of holders of its equity
securities, including holders of Common Stock. In addition, the Company is
required to pay cash dividends on the shares of the Company's Senior Cumulative
Preferred Stock, Series A, par value $.01 per share ("Senior Preferred Stock"),
which were issued to Santa Fe pursuant to the Merger, in the aggregate amount
of approximately $7 million annually beginning in 1996.
VOTING AGREEMENT; ELECTION OF DIRECTORS
Pursuant to a Voting Agreement entered into between Santa Fe and
Prudential in connection with the Merger (the "Voting Agreement"), each such
entity has agreed to vote the shares of Common Stock beneficially owned by it
following the Merger in favor of (i) the persons nominated from time to time by
Santa Fe for election as directors of the Company, provided that the number of
directors of the Company holding office at any time (assuming the election of
such designees) who have been nominated by Santa Fe shall not be greater than
50% of the total number of directors of the Company, (ii) any one person
designated from time to time by Prudential for election as a Class I director
of the Company and (iii) any one person jointly designated from time to time by
Santa Fe and Prudential for election as a Class III director of the Company.
The Voting Agreement will terminate upon the earlier to occur of (i) December
14, 2003 and (ii) such time as Prudential no longer beneficially owns at least
756,100 shares of Common Stock. As of September 30, 1994, Santa Fe and
Prudential owned, directly or beneficially, approximately 40% and 25%,
respectively, of the outstanding shares of Common Stock. Consequently, until
the termination of such agreement, so long as such parties own or have the
right to direct the voting of a majority of the outstanding shares of Common
Stock, Santa Fe will have the power to exert significant influence over the
Company through the election of directors.
CLASS VOTING RIGHTS OF SENIOR PREFERRED STOCK
Holders of the Senior Preferred Stock have class voting rights
(effectively creating a veto right) in connection with certain fundamental
corporate transactions, including amendments to the Company's certificate of
incorporation which would alter or change the powers, preferences or special
rights of such stock so as to affect them adversely, certain mergers and
consolidations involving the Company which may have a material adverse effect
on such powers, preferences or special rights and the creation of senior or
pari passu securities. As of September 30, 1994, Santa Fe owned all of the
outstanding shares of Senior Preferred Stock.
MARKET FOR COMMON STOCK; FAILURE TO MEET NYSE LISTING CRITERIA; MARGIN ACCOUNTS
The Common Stock is listed for trading on the NYSE. However, as of
the date of this Prospectus, the Company does not meet certain of the NYSE's
continued listing criteria as a result of the Company's recent financial
results, and the NYSE has advised the Company that careful consideration will
continue to be given to the appropriateness of continued listing of the
Company's securities. Accordingly, there can be no assurance that the NYSE
will not delist the Common Stock in the future if the Company continues not to
meet the NYSE's requirements for continued listing. If the Common Stock is
delisted from trading on the NYSE, the Company will seek to have the Common
Stock listed on another national securities exchange or to have quotations of
market prices of such stock reported on a national quotations system. There is
no assurance that such listing or reporting of the Common Stock could be
achieved, and failure to obtain such listing or reporting could adversely
affect the market value and liquidity of such stock. In addition, the Company
cannot predict at what price levels the Common Stock will trade.
-4-
<PAGE> 5
Between December 14, 1993, the closing date of the Merger and the
approximate one-for-15 reverse split of the Company's common stock effected as
part of the Merger, and September 30, 1994 the closing sales price of the
Common Stock on the NYSE has ranged from a high of $3 3/4 to a low of $2.
Equity securities having a market price less than $5 per share generally are
not eligible for initial inclusion in margin accounts set up by brokerage firms
for their clients, and equity securities having a market price less than
approximately $3 per share generally are not eligible for continued inclusion
in such margin accounts. Accordingly, purchasers of the Shares offered hereby
may hold equity securities not generally eligible for inclusion in brokerage
firm margin accounts.
COMMODITY AND PERFORMANCE RISKS
Generally speaking, the profitability of the Company's natural gas
marketing operations is somewhat insensitive to the price of natural gas as the
majority of its purchase and sales contracts provide for market responsive
pricing. However, in some cases the Company's natural gas purchase and sales
contracts provide for fixed prices, generally for periods of up to one year.
In such cases, the Company attempts to manage the risks associated with market
price fluctuations by arranging for offsetting purchase and sale commitments,
by utilizing physical storage and by the use of financial instruments such as
futures contracts, swaps and options. The use of such risk management tools is
subject to inefficiencies in the operation of such tools as well as to
management's judgment in the design and execution of risk management
strategies. Accordingly, the Company is exposed from time to time to risks
from commodity price fluctuations. In late 1992 and 1993, the Company
experienced operating losses resulting from certain fixed price sales contracts
with wholesale and retail customers. Management has taken steps to reduce the
number of such fixed-price contracts as well as to improve the risk management
techniques used in conjunction with any remaining contracts of this nature.
While such losses have not been repeated in the first three fiscal quarters of
1994, no assurance can be given that such efforts will continue to prove
successful.
The profitability of the Company's natural gas processing operations
is subject to fluctuations in the prices of natural gas and natural gas liquids
("NGLs"). The Company does from time to time utilize financial instruments
such as futures contracts and options to hedge the risks associated with
fluctuations in the prices of these commodities; however, such techniques, when
utilized, do not remove all risks from changing prices.
The Company aggregates supplies of natural gas from a variety of
sources for resale to a variety of markets. While prices paid or received are
generally market responsive, performance obligations under the Company's
purchase and sale contracts vary from "interruptible" to "firm" and provide for
varying levels of penalties for non-performance. As a result, pricing
fluctuations within any given month could be so significant as to create
situations where the economic penalties for non-performance that are contained
in the Company's contracts are not sufficient to prevent a contracting partner
from failing to perform under the contract. Generally speaking, performance
obligations under the Company's sales contracts are stricter than under its
purchase contracts; however, the industry in general and the Company in
particular are moving towards stricter performance obligations in purchase
contracts. The Company attempts to manage the risks associated with this
situation by maintaining diverse markets and sources of supply. However, these
efforts do not eliminate all such risks.
COMPETITION AND FINANCIAL CONSTRAINTS
The Company faces intense competition in marketing gas to end-user
customers and local distribution companies. Its competitors include the major
integrated oil companies, interstate pipelines and their affiliated marketing
companies, and regional gas gatherers, brokers and marketers of widely varying
sizes, financial resources and experience. Some of these competitors, such as
the major integrated oil companies, have capital resources many times greater
than the Company's and control substantially greater supplies of natural gas.
In some cases, local utilities and gas distribution companies (some of which
are customers of the Company or its operating units) also engage, directly and
through affiliates, in marketing activities that compete with those of the
Company's subsidiaries. In addition, the Company believes that the marketing
affiliates of some of the interstate pipelines and local utilities, because of
their close relationships with their pipeline affiliates,
-5-
<PAGE> 6
have at times enjoyed some competitive advantages over other participants in
the gas marketing industry. Certain recent regulatory actions of the Federal
Energy Regulatory Commission, designed to substantially alter the nature of the
regulation of the interstate gas industry, have increased, and are expected to
result in a continued increase in, competition in the gas marketing industry
from companies that previously did not market gas.
Control of supplies of natural gas and NGLs is critical to enable the
Company to serve its markets for such products. The Company obtains control
over supplies of natural gas and NGLs through the ownership of natural gas
gathering and processing facilities and through contractual arrangements with
producers and other suppliers. The Company's ability to acquire facilities has
been restricted by a lack of capital resources. While the consummation of the
Merger in December 1993 has provided the Company with certain such facilities
and is expected to result in an improvement in the Company's access to new
capital, the Company's access to new capital will continue to be subject to
restrictions and there is no assurance that the Company will be able to acquire
any additional facilities.
The ability of the Company to obtain contractual commitments for
natural gas and NGLs is dependent in large part on its ability to obtain trade
credit, either with or without credit enhancements such as letters of credit.
The failure during 1992 and 1993 of several gas marketing companies resulted in
a heightened awareness within the industry as to credit exposure. While the
Company has enjoyed some success in obtaining expanded trade credit since the
successful completion of its 1992 pre-packaged bankruptcy and the Merger, in
certain cases the demands of suppliers for letters of credit to secure the
Company's obligations under its purchase contracts have increased. While
management believes the Merger has had a positive effect on the Company's
ability to obtain unsecured trade credit in addition to increasing its ability
to issue letters of credit, there can be no assurance that this will continue
to be the case.
GAS CONTRACT -- TERMINABILITY; RELEASE OF PRODUCTION
The Company (through a wholly-owned subsidiary), Santa Fe and Santa Fe
Energy Operating Partners, L.P. ("SFEOP") are parties to a gas contract (the
"Gas Contract") which provides for the purchase by the Company of essentially
all of Santa Fe's and SFEOP's existing domestic natural gas production as well
as natural gas production that either Santa Fe or SFEOP has the right to
market. However, either the Company or Santa Fe and SFEOP have the right to
terminate the contract upon a material breach of the contract or the occurrence
of certain governmental actions. In addition, Santa Fe and SFEOP have the
right to terminate the contract upon the occurrence of certain other events,
including (i) the failure of the Company to purchase specified percentages of
available production from Santa Fe and SFEOP (other than as a result of force
majeure), including the failure to purchase at least 90% of available gas in
any period of six consecutive months, and (ii) the occurrence of an event of
default under any debt or credit agreement of the Company for borrowed money if
such event results in the acceleration of any obligation in excess of $10
million. The Gas Contract terminates on March 31, 2001. For the six months
ended June 30, 1994, purchases by the Company of natural gas under the Gas
Contract totalled approximately $56.4 million.
The Company is required to release production dedicated under the Gas
Contract under certain circumstances, including (i) if Santa Fe or SFEOP
reasonably believe such production should be released to avoid any penalties
and costs that would otherwise be incurred by Santa Fe or SFEOP related to
production attributable to third parties, (ii) upon the sale or exchange of
wells by Santa Fe or SFEOP, as the case may be, if the average consideration to
be received by Santa Fe or SFEOP attributable to its interests in such wells is
less than $250,000 per well and (iii) if pipeline transportation imbalance
penalties incurred by Santa Fe or SFEOP as a result of sales under the Gas
Contract for gas produced from non-operated wells become excessive in the
reasonable opinion of Santa Fe and SFEOP. Santa Fe and SFEOP may also have gas
released from the Gas Contract if the Company's financial condition changes
materially and adversely and the Company does not provide financial assurances
(such as letters of credit) acceptable to Santa Fe and SFEOP for the value of
such gas. In addition, Santa Fe and SFEOP will retain the right to limit,
curtail or shut-in dedicated production for any reason (including inadequate
price or unacceptable market conditions), subject to certain notice
requirements and certain other parameters.
-6-
<PAGE> 7
DIVIDEND RESTRICTIONS ON COMMON STOCK
The Company has never paid cash dividends on the Common Stock and will
not do so in the foreseeable future. The Company's ability to pay cash
dividends on the Common Stock is dependent upon its financial condition. The
Company is currently prohibited from paying cash dividends on the Common Stock
under the Securities Purchase Agreement; the payment of such dividends is also
restricted under the Company's credit agreement. Moreover, the terms of the
Senior Preferred Stock prohibit the Company from paying dividends on all
classes of stock "junior" to such stock (including the Common Stock) if the
Company is not then current in the payment of dividends on such stock.
PLAN OF DISTRIBUTION
The Equity Incentive Plan Shares were acquired by the Selling
Stockholders pursuant to the Equity Incentive Plan and, pursuant to the terms
thereof, may not be transferred by such holders until November 27, 1994. The
Chairmanship Fee Plan Shares were acquired by certain of the Selling
Stockholders pursuant to the Chairmanship Fee Plan and, pursuant to the terms
thereof, may not be transferred by such holders until May 17, 1995. The Shares
may be sold from time to time to purchasers directly by any of the Selling
Stockholders. Alternatively, each of the Selling Stockholders may from time to
time offer his Shares through underwriters, dealers or agents, who may receive
compensation in the form of underwriting discounts, concessions or commissions
from the Selling Stockholder and/or purchasers of the Shares for whom they may
act as agent. The Selling Stockholders and any underwriters, dealers or agents
that participate in the distribution of the Shares might be deemed to be
underwriters, and any profit on the sale of such Shares by them and any
discounts, commissions or concessions received by any such underwriters,
dealers or agents might be deemed to be underwriting discounts and commissions
under the Securities Act. At the time a particular offer of any of the Shares
is made by a Selling Stockholder, to the extent required pursuant to the
Securities Act, a supplement to this Prospectus will be distributed which will
set forth the aggregate principal amount of stock being offered and the terms
of the offering, including the name or names of any underwriters, dealers and
agents, any discounts, commissions and other items constituting compensation
from the Selling Stockholder and any discounts, commissions or concessions
allowed or reallowed or paid to dealers. The Company will not bear any
expenses incurred by any of the Selling Stockholders in connection with the
sale of the Shares offered hereby other than expenses relating to the
registration of the offer and sale of the Shares under the Securities Act.
The Shares may be sold from time to time in one or more transactions
on the NYSE. Any such sales will be made at prices prevailing on the date of
the sale.
Each Selling Stockholder will be subject to applicable provisions of
the Exchange Act and the rules and regulations thereunder, including, without
limitation, Rules 10b-2, 10b-6 and 10b-7, which provisions may limit the timing
of purchases and sales of any of the Shares by the Selling Stockholder. The
number of Shares to be reoffered or resold by each Selling Stockholder and each
person with whom such Selling Stockholder is acting in concert for the purpose
of selling securities of the Company will not exceed, during any three month
period, the amount specified in Rule 144. Each of the Selling Stockholders
also may sell some or all of his Shares from time to time pursuant to Rule 144
under the Securities Act.
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<PAGE> 8
SELLING STOCKHOLDERS
The following table sets forth certain information with respect to
beneficial ownership of the Common Stock by each of the Selling Stockholders as
of September 30, 1994. Unless otherwise indicated, each person named below has
sole voting and investment power with respect to all shares of Common Stock
shown as beneficially owned by such person, subject to community property laws
where applicable and the information set forth in the footnotes to the table
below.
<TABLE>
<CAPTION>
Beneficial Ownership Beneficial Ownership
Prior to Offering After Offering
-------------------------- -----------------------
Number of
Number of Shares Being Number of
Name and Position with Company Shares Percent Offered Shares Percent
------------------------------ ------ ------- ------- ------ -------
<S> <C> <C> <C> <C> <C>
J. Michael Adcock (1)
Director . . . . . . . . . . 38,663 * 4,444 34,219 *
J. Frank Haasbeek (2)
Director . . . . . . . . . . 11,777 * 4,444 7,333 *
James L. Payne (3)(4)
Director . . . . . . . . . 11,111 * 4,444 6,667 *
Michael J. Rosinski (4)(5)
Director . . . . . . . . . 16,333 * 4,000 12,333 *
B.M. Thompson (6)
Director . . . . . . . . . . 14,667 * 4,000 10,667 *
</TABLE>
____________________
*Less than 1%
(1) Mr. Adcock served as President and Chief Operating Officer of the
Company from March 9, 1990 until December 15, 1993 and as Chief
Executive Officer of the Company from September 8, 1992 until December
15, 1993. Mr. Adcock has served as a director of the Company since
1981. The number of shares of Common Stock beneficially owned
includes: 4,406 shares owned directly (including 4,000 Equity
Incentive Plan Shares); 101 shares issuable upon the exercise of shares
of the Company's Junior Exercisable Automatically Convertible
Preferred Stock, Series B, par value $.01 per share ("Junior Preferred
Stock"), owned directly; 2,856 shares held for his account under the
Hadson Corporation Employee 401(k) Savings Plan (the "401(k) Plan");
649 shares issuable upon the exercise of shares of Junior Preferred
Stock held for his account under the 401(k) Plan; 2,141 shares held by
Mr. Adcock's wife; 1,399 shares issuable upon the exercise of shares
of Junior Preferred Stock held by Mr. Adcock's wife; 27,333 shares
subject to stock options granted under the Equity Incentive Plan; and
444 Chairmanship Fee Plan Shares, which were issued on November 16,
1994 and are held directly.
(2) Includes 4,000 Equity Incentive Plan Shares, which are held
directly, and 7,333 shares subject to stock options granted under the
Equity Incentive Plan. Also includes 444 Chairmanship Fee
Plan Shares, which were issued on November 16, 1994 and are held
directly. Mr. Haasbeek has served as a director of the Company since
December 14, 1993.
(3) Includes 4,000 Equity Incentive Plan Shares, which are held directly,
and 6,667 shares subject to stock options granted under the Equity
Incentive Plan. Also includes 444 Chairmanship Fee Plan Shares, which
were issued on November 16, 1994 and are held directly.
(4) Mr. Payne is the Chairman of the Board, President and Chief Executive
Officer of Santa Fe and Mr. Rosinski is a Vice President and the Chief
Financial Officer of Santa Fe. Based on Amendment No. 1 to Schedule
13D dated March 17, 1994 and filed with the Commission, as of September
30, 1994, Santa Fe owned approximately 40.47% of the Company's
outstanding Common Stock and all of the outstanding shares of the
Senior Preferred Stock. Mr. Payne and Mr. Rosinski have served as
directors of the Company since December 14, 1993.
(5) Includes 9,000 shares (including 4,000 Equity Incentive Plan Shares)
held directly and 7,333 shares subject to stock options granted under
the Equity Incentive Plan.
(6) Includes 8,000 shares (including 4,000 Equity Incentive Plan Shares)
held directly and 6,667 shares subject to stock options granted under
the Equity Incentive Plan. Mr. Thompson has served as a director of
the Company since December 14, 1993.
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<PAGE> 9
USE OF PROCEEDS
Each Selling Stockholder will receive all of the net proceeds from the
sale of the Shares owned by such Selling Stockholder and offered hereby. The
Company will not receive any of the proceeds from the sale of such Shares.
LEGAL MATTERS
The legality of the Shares offered hereby has been passed upon for the
Company by Vinson & Elkins L.L.P., Dallas, Texas.
EXPERTS
The consolidated financial statements and related supplemental
schedules incorporated by reference from the Company's Annual Report on Form
10-K for the year ended December 31, 1993 have been so incorporated herein in
reliance on the report of Price Waterhouse, independent accountants,
incorporated herein by reference, given on the authority of said firm as
experts in auditing and accounting.
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