As filed with the Securities and Exchange Commission on June 2,
1995
Registration No. 33-______________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
------------------
XCL LTD.
(Exact name of Registrant as Specified in its Charter)
Delaware 51-0305643
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
110 Rue Jean Lafitte
Lafayette, Louisiana 70508
(Address of Principal Executive Offices) (Zip Code)
LONG TERM STOCK INCENTIVE PLAN
(Full Title of Plan)
David A. Melman, Esq.,
Executive Vice President and Secretary
XCL Ltd.
110 Rue Jean Lafitte
Lafayette, Louisiana 70508
(Name and Address of Agent for Service)
Telephone Number, Including Area Code, of Agent for Service:
(318) 237-0325
Copy to:
Peter A. Basilevsky, Esq.
Satterlee Stephens Burke & Burke
230 Park Avenue
New York, New York 10169-0079
(212) 818-9200
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
Proposed Maximum Proposed Maximum Amount of
Title of Securities Amount to be Offering Price Aggregate Registration
to be Registered Registered <F1> Per Share <F2> Offering Price <F2> Fee
<C> <C> <C> <C> <C>
Common Stock,
$.01 par value 1,500,000 Shares $0.75 $1,125,000.00 $378.93
<FN>
<F1>
The registration statement also includes an indeterminable
number of additional shares that may become issuable as a result
of the antidilution adjustment provisions of the Plan.
<F2>
Estimated solely for the purpose of determining the
registration fee pursuant to Rule 457(c) and (h) and based upon
the average of the high and low prices of the Company's Common
Stock on May 30, 1995, as reported on the American Stock
Exchange.
</FN>
</TABLE>
PURSUANT TO RULE 429 UNDER THE SECURITIES ACT OF 1933, THE
PROSPECTUS RELATED TO THIS REGISTRATION STATEMENT ALSO COVERS
15,000,000 SHARES OF COMMON STOCK REGISTERED UNDER REGISTRATION
STATEMENT NO. 33-62956 ON FORM S-8.
SUMMARY PLAN DESCRIPTION
XCL LTD.
LONG TERM STOCK INCENTIVE PLAN
-------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
--------------------
No person has been authorized to give any information or to
make any representation not contained in this Summary Plan
Description and, if given or made, such information or
representation must not be relied upon as having been authorized.
The date of this part of the prospectus is
June 2, 1995.
This document constitutes part of a prospectus covering
securities that have been registered under the
Securities Act of 1933.
PURPOSE OF SUMMARY PLAN DESCRIPTION
The purpose of this Summary Plan Description is to give you
a brief summary of the main provisions of the Long Term Stock
Incentive Plan (the "Plan") of XCL Ltd. (the "Company"). It does
not contain the official text of the Plans. The complete terms
of the Plan are set forth in the official text of the Plan, which
is available for examination upon request. In the event of any
difference between this Summary Plan Description and the
provisions of the Plan itself, the official text of the Plan will
govern. Matters of the interpretation and application of the
plan are determined by the Compensation Advisory Committee of the
Board of Directors (the "Committee").
This Summary Plan Description describes the provisions of
the Plan in effect as of June 2, 1995. You will be notified of
any material changes in the terms of the Plan.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and in accordance therewith files reports, proxy
statements and other information with the Securities and Exchange
Commission (the "Commission") which can 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, as well as the following regional offices
of the Commission: 7 World Trade Center, Suite 1300, New York,
NY 10048; 1401 Brickell Avenue, Suite 200, Miami, FL 33131;
Citicorp Center, Suite 1400, 500 West Madison Street, Chicago,
Illinois 60661-2511; 1801 California Street, Suite 4800, Denver,
CO 80202-2648; and 5670 Wilshire Boulevard, 11th Floor, Los
Angeles, CA 90036-3648. Copies of such material also can be
obtained from the Public Reference Section of the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. In addition, the Company's Common Stock is listed on The
American Stock Exchange ("AMEX"), and such material may also be
inspected at 86 Trinity Place, New York, New York 10006. Updated
information with respect to the securities and the Plan covered
herein may be provided in the future to participants in the Plan
by means of supplements or appendices to this Summary Plan
Description.
This Summary Plan Description does not contain all the
information set forth in the Registration Statement on Form S-8
(herein, together with all amendments and exhibits, referred to
as the "Registration Statement") under the Securities Act of
1933, as amended, (the "Securities Act") filed with the
Commission in Washington, D.C., of which this Summary Plan
Description is a part. For further information with respect to
the Company and the securities covered hereby, reference is made
to the Registration Statement. Items of information omitted from
this Summary Plan Description but contained in the Registration
Statement may be inspected and copied at the public reference
facilities maintained by the Commission identified above.
INFORMATION INCORPORATED BY REFERENCE AND
OBTAINMENT OF COPIES
The Company will provide without charge to each person to
whom a Summary Plan Description is delivered, upon written or
oral request, a copy of any and all of the information that has
been incorporated by reference in the Registration Statement of
which this Summary Plan Description is a part, including the
following documents which are incorporated herein by reference:
(a) Annual Report on Form 10-K for the fiscal year ended
December 31, 1994, as amended;
(b) Quarterly Report on Form 10-Q for the quarter ended
March 31, 1995;
(c) Proxy Statement dated May 15, 1995;
(d) Current Report on Form 8-K dated May 18, 1995;
(e) The description of the Company's Common Stock
contained in "Item 4. Description of Registrant's Securities to
be Registered" in the Company's Registration Statement on Form 8-
B, dated July 26, 1988 filed under Section 12(g) of the Exchange
Act, including any amendment or reports filed for the purpose of
updating such description; and
(f) All reports and other documents filed by the Company
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange
Act after the date hereof and prior to a filing of a post-
effective amendment, which indicates that all securities offered
under the Plan have been sold or which de-registers all
securities by reference herein, as a part hereof from the date of
the filing of such reports and documents. Any statement
contained herein or any document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified
or superseded for purposes of this Summary Plan Description to
the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be
incorporated by reference herein modified or superseded such
statement. Any such statement so modified or superseded shall
not be deemed to constitute a part of this Summary Plan
Description, except as so modified or superseded.
The Company will not provide copies of exhibits unless such
exhibits are specifically incorporated by reference into the
information that the Registration Statement incorporates.
Requests should be addressed to Secretary, XCL Ltd., 110 Rue Jean
Lafitte, Lafayette, LA 70508 (Telephone Number (318) 237-0325).
THE COMPANY
The Company has previously filed a Registration Statement
with the Commission under the Securities Act of 1933, as amended
(the "Securities Act"), for the registration of 16,500,000 shares
of its common stock, $.01 par value ("Common Stock"), which may
hereafter be purchased by the exercise of options which have been
and which may be granted pursuant to the Company's Long Term
Stock Incentive Plan (the "Plan").
The Company was formed in 1981 as a Louisiana corporation,
and redomesticated as a Delaware corporation in March 1988. It
has its principal executive office at 110 Rue Jean Lafitte,
Lafayette, Louisiana 70508. The Company is a Delaware holding
company, engaged through subsidiaries in oil and gas exploration
and production.
THE LONG TERM STOCK INCENTIVE PLAN
Nature and Purpose. At the Annual Meeting of the
Shareholders of the Company held on June 2, 1992, the
shareholders adopted the Long Term Stock Incentive Plan, under
which 15,000,000 shares of Common Stock were reserved for
issuance upon exercise of options to be granted thereunder
("Unissued Options") and for issuance upon exercise of options
issued under the Plan in exchange for options previously granted
under existing employee benefit plans of the Company (registered
with the Commission on Form S-8 (File No. 33-21891)) under the
Securities Act ("Prior Options"). Prior Options and Unissued
Options are collectively referred to as "Options". The purpose
of the Plan is to assist the Company in employing and retaining
qualified and competent personnel and to encourage valuable
contributions by such personnel to the success of the Company by
providing additional incentive to those employees and others who
contribute significantly to the successful and profitable
operations of the Company and its affiliates. The Board of
Directors may modify or terminate the provisions of the Plan at
any time, subject to certain limitations. See "Termination and
Amendment" below.
Options authorized under the Plan include: incentive stock
options ("ISOs") which are intended to satisfy the requirements
of Section 422 of the Internal Revenue Code of 1986, as amended
(the "Code"); stock options which are "non-qualified" for federal
income tax purposes ("NQOs"); reload options ("ROs") which allow
the granting of additional options when an employee pays the
option exercise price with previously owned stock; restricted
stock awards ("RSAs") which are awards of stock that are subject
to forfeiture in the event of premature termination of
employment, failure of the Company to meet certain performance
objectives, or other conditions; performance units ("PUs") which
are share-denominated units credited to the employee's account
for delivery or cash-out at some future date based upon
performance criteria to be determined by the Committee; and "tax
withholding" which provides the employee with the option of
having the Company withhold shares on exercise of an award under
the Plan to satisfy any applicable withholding requirements.
ISOs, NQOs, PUs, and RSAs are collectively referred to as
"Awards".
The Plan is not subject to any provisions of the Employee
Retirement Income Security Act of 1974, as amended. Additional
Information regarding the Plan may be obtained by writing to the
Company at its principal office. Inquiries should be addressed
to: Secretary c/o XCL Ltd., 110 Rue Jean Lafitte, Lafayette,
Louisiana 70508.
Recent Amendments to the Plan. On July 1, 1994,
shareholders approved amendments to the Plan to increase the
number of shares reserved for issuance under the Plan by an
additional 1,500,000 shares to 16,500,000 shares and to increase
the limitation on the total number of shares subject to options
that could be granted to directors under such Plan to 13,200,000
shares of which 3,300,000 shares could be granted to non-employee
directors.
Administration. The Plan will be administered by the
Committee, which shall consist of at least two (2) directors,
appointed by the Board, who are "disinterested persons" within
the meaning of Rule 16b-3(c)(2)(i) promulgated under the Exchange
Act, as such Rule or any other comparable Rule may be in effect
from time to time. During the one-year period prior to becoming
a member of such Committee, and during such service as a
Committee member, respectively, each disinterested person may not
have been granted and will not be granted an Award under the Plan
or other equity securities of the Company under any other plan of
the Company, except pursuant to a "formula plan" as defined in
Rule 16b-3(c)(2)(ii) promulgated under the Exchange Act, as such
Rule or any other comparable Rule may be in effect from time to
time (including, for this purpose, an Award made to non-employee
directors). The Board may from time to time remove members from
or add members to the Committee. Vacancies in the Committee,
however caused, shall be filled by the Board.
Subject to the express terms and conditions of the Plan, the
Committee shall have full power to make Awards, to construe or
interpret the Plan, to prescribe, amend and rescind rules and
regulations relating to it and to make all other determinations
necessary or advisable for its administration.
Except as otherwise provided in the Plan, the Committee may
determine which persons shall be granted Awards and the number of
shares subject to Awards and the time at which Awards shall be
made.
The Committee shall report to the Board the names of persons
granted Awards, the number of shares involved, and the terms and
conditions of each Award.
No member of the Board or of the Committee will be liable
for any action or determination made in good faith with respect
to the Plan or any option or award and service on the Committee
shall constitute service as a director, entitling such Committee
member to indemnification and reimbursement for such service to
the same extent as for service rendered as a director.
Stock Available under Plan. The stock subject to an Award
is Common Stock. Subject to adjustment in the event of a
recapitalization or reorganization, the total number of shares of
Common Stock with respect to which Awards may be granted is
16,500,000 shares; provided, however, that the maximum number of
shares that may be available for Awards to directors of the
Company under this Plan is limited to 13,200,000 and the maximum
number of shares that shall be available for Awards to non-
employee directors is limited to 3,300,000. Any shares
represented by Awards which are canceled, forfeited, terminated
or expire unexercised shall again be available for grants and
issuance under the Plan.
Eligibility. Persons eligible for Awards under the Plan
shall be limited to such key employees of the Company (including
directors of the Company) who have substantial responsibility in
the direction and management of the Company and certain other
individuals who, while not employees of the Company, are
identified by the Committee or the Board as persons who can
render a valuable contribution to the direction and success of
the Company's efforts. Except in the case of non-employee
directors, the Committee shall have the sole discretion to select
those persons eligible for Awards. Options granted under the
Plan will be evidenced by a written stock option agreement (the
"Agreement") in a form determined by the Committee.
Option Price. The Committee shall determine the option
price of all NQOs and all ISOs; provided however, in the case of
ISOs, the option price shall not be less than the fair market
value of the Common Stock on the date the option is granted and,
provided, further, that in the case of an employee who owns more
than 10% of the total combined voting power of all classes of
stock of the Company or any of its affiliates ("Stockholder
Employee") on the date of grant, the option price of an ISO shall
be at least 110% of the then fair market value of the Common
Stock.
Option Term. The Committee shall determine the expiration
date of an Option; provided, however, in the case of ISOs, the
term shall expire no later than one day prior to the end of ten
years from the date the option was granted, and, provided,
further, that ISOs granted to employees who are Stockholder
Employees on the date of grant shall expire no later than one day
prior to the end of five years from the date of grant. Options
may terminate earlier as provided herein.
Exercise of Options. The Committee shall determine when
Options are exercisable, in whole or in part, provided, however,
that under no circumstances will an option be exercisable within
6 months (or such greater or lesser period prescribed or
permitted by any applicable rule promulgated under the Exchange
Act, including without limitation Rule 16(b)-3, as in effect from
time to time) from its date of grant. Options may be exercised
at an earlier date upon the occurrence of an event which
constitutes "change in control" (as defined herein) of the
Company or termination of employment due to retirement, death or
disability.
In the event an optionee exercises a NQO by payment of all
or a portion of the exercise price with shares of Common Stock
which the optionee has owned for at least six months, the
optionee may receive a RO in the form a new NQO to purchase a
number of shares of Common Stock equal to the number of shares of
Common Stock used in payment of the exercise price of the
original option. The award of a RO will be made in the sole
discretion of the Committee.
Manner of Exercise. Options may be exercised by written
notice to the Company in the manner provided in the applicable
Agreement. Upon exercise of Options and payment of the exercise
price, shares will be issued by the Company out of the amount so
authorized under the Plan. In the event the Common Stock
issuable upon exercise of an option is not registered under the
Securities Act, the Company will require that the registered
owner deliver an investment representation in the form acceptable
to the Company and its counsel, and the Company will place a
legend on the certificate for such Common Stock restricting the
transfer of the same. The amount of proceeds to be received by
the Company upon the exercise of options will depend on the
number of options exercised and the option price paid. The
exercise price of an Option shall be paid for in full with (i)
cash (including a certified or official bank check or the
equivalent which is acceptable to the Company), (ii) the
equivalent fair market value of shares of Common Stock, properly
endorsed, (iii) the equivalent fair market value of any other
property acceptable to the Company, or (iv) any combination of
(i), (ii), and (iii). In the case of an NQO, a separate check in
the amount of the Federal withholding tax due as a result of the
exercise must accompany the payment for the shares unless the
Committee permits the employee to satisfy such obligation, in
whole or in part, by directing the Company to withhold shares of
Common Stock that would otherwise be received by such individual,
pursuant to such rules as the Committee may determine from time
to time in compliance with the provisions of Rule 16b-3(e)
promulgated under the Exchange Act. The Committee may require any
person entitled to receive payment in respect of an Award to
remit to the Company, prior to such payment, an amount sufficient
to satisfy any Federal, state or local tax withholding
requirements.
Termination of Employment. In the case of NQOs, the
Committee shall determine the applicable provisions for death,
disability and termination of employment. In the case of ISOs,
(i) on termination of an optionee's employment with the Company
other than by reason of death or disability, the optionee shall
have the right to exercise his then outstanding ISOs within three
months of such termination to the extent he was entitled to
exercise the same immediately prior to termination; and (ii) on
termination of employment by reason of death or disability, the
optionee, his estate, personal representative, or beneficiary
shall have the right to exercise his then outstanding ISOs at any
time within twelve months from the date of death or termination
of employment by reason of disability for the full number of
shares subject to ISOs at the date of termination of employment
by reason of death or disability, irrespective of any vesting
provisions except that, pursuant to Rule 16(b)-3 of the Exchange
Act, no option will be exercisable within six months from its
date of grant. For this purpose, disability means permanent and
total disability which prevents an optionee from engaging in any
substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected
to result in death or which has lasted or can be expected to last
for a continuous period of at least twelve months.
Merger, Consolidation, Recapitalization or Reorganization.
In the event that the outstanding shares of Common Stock of the
Company are increased, decreased or changed or converted into
other securities of the Company or of another corporation by
reason of merger, consolidation, recapitalization,
reclassification, stock split, combination of shares or a
dividend on all the outstanding shares of Common Stock payable in
stock, the number and kind of shares for the purchase of which
options may be granted under the Plan shall be automatically
adjusted to reflect the change and, in addition, outstanding
unexercised options shall be similarly adjusted, to the end that
the optionee's proportionate interest in the Company will remain
unchanged. Any such adjustment shall be made without change of
the total price applicable to outstanding unexercised options,
but with a corresponding adjustment in the Option price per
share.
Restrictions on Transferability. All Options granted under
this Plan shall be non-assignable and non-transferable otherwise
than by will or by the laws of descent and distribution. During
the lifetime of the optionee, the Option is exercisable only by
him, or, in the case of his incapacity, by his legal
representative.
Resale of Shares. Shares of the Company's Common Stock
purchased upon the exercise of Options granted under the Plan may
be resold freely except that any optionee deemed to be an
"affiliate" of the Company within the meaning of Rule 405 under
the Securities Act may not sell such shares unless they have been
registered by the Company for resale by such optionee or unless
the shares are sold pursuant to an exemption from registration
under the Securities Act, such as that provided by Rule 144,
which contains limitations on the manner of sale and the amount
of shares that may be sold during any three month period.
Restricted Stock Awards. Except as otherwise provided in
the Plan, the Committee has the sole discretion to determine the
restrictions that apply to each RSA (including, without
limitation, the time and manner of vesting, provisions applicable
on death, disability or other termination of employment,
conditions of forfeiture and whether any consideration should be
paid by the grantee). Any such restrictions will be embodied in
the applicable Agreement and in a legend placed on the
certificate for the RSA. As soon as practicable following a
grant of a RSA, the Company will transfer to the name of the
grantee the awarded shares. A certificate or certificates for
all shares of Restricted Stock registered in the name of a
grantee will be promptly drawn and held for the grantee by the
Company. The grantee will thereupon be a stockholder and have
all the rights of a stockholder with respect to such shares,
including the right to vote and receive all dividends or other
distributions made or paid with respect to such shares. As the
restrictions described above are released, a certificate, without
the legend described above, for the number of shares with respect
to which restrictions have been released will be delivered to the
grantee as soon as practicable. Any new, additional or different
securities, cash or other property the grantee may become
entitled to receive shall be subject to the same restrictions
applicable to the RSA with respect to which such new, additional
or different securities or property are received. Shares of
Restricted Stock may not be sold, exchanged, transferred,
pledged, hypothecated, or otherwise disposed of until such time
as the stated restrictions lapse.
Performance Units. The Committee may grant PUs entitling
the holder to receive a fixed or variable number of share-
denominated units subject to such conditions of vesting and time
of payment as the Committee may determine and as set forth in the
applicable Agreement. PUs may be paid in cash or in a
combination of cash and shares of Common Stock, as the Committee
determines. PUs represent an unsecured and unfunded promise to
pay the fair market value of the shares of Common Stock
represented by the Units and the holder shall have no rights
other than as a general creditor of the Company. PUs may not be
sold, exchanged, transferred, pledged, hypothecated or otherwise
disposed of except as provided in the applicable Agreement.
Change in Control. Notwithstanding any provision in the
Plan to the contrary, (i) each Option granted under the Plan
shall become immediately exercisable, in whole or in part, at the
election of the Optionee; (ii) the restrictions applicable to
each share of Restricted Stock shall immediately lapse; and (iii)
payment of Performance Units shall be immediately due upon the
occurrence of an event which constitutes a change of control of
the Company, provided that under no circumstances shall an option
be exercisable within six months (or such greater or lesser
period prescribed or permitted by any applicable rule promulgated
under the Exchange Act, including, without limitation, Rule 16(b)-
3) from its grant date. For purposes of this clause, a "change
in control" of the Company shall mean a change in control of a
nature that would be required to be reported in response to Item
5(f) of Schedule 14A of Regulation 14A promulgated under the
Exchange Act; provided that, without limitation, such a change in
control shall be deemed to have occurred if (Y) any "person" (as
such term is used in Sections 13(d) and 14(d) of the Exchange
Act), other than the Company or any person who on the date the
Plan is amended is a director or officer of the Company is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the
Company representing 30% or more of the combined voting power of
the Company's then outstanding securities, unless such person
owns, directly or indirectly, as of the date the Plan is amended,
more than 25% of the combined voting power of the Company's then
outstanding securities, in which case, if any such person (a
"Major Stockholder") becomes the beneficial owner, directly or
indirectly, of 33-1/3% or more of the combined voting power of
the Company's then outstanding securities, and (2) either (i) to
the extent any such increase in a Major Stockholder's beneficial
ownership results from a redemption or purchase by the Company of
its securities, or (ii) if the Board, by vote of two-thirds (2/3)
of the full Board, in good faith, determines (hereinafter
referred to as a "Determination") both (A) that such acquisition
does not constitute, in fact, a change in the control of the
Company and (B) that such Major Stockholder does not and cannot
then control the Company or (Z) during any period of two
consecutive years prior to the date of such Determination,
individuals who at the beginning of such period constituted the
Board cease for any reason to constitute at least a majority
thereof, unless the election of each director who was not a
director at the beginning of such period has been approved in
advance by directors representing at least two-thirds of the
directors then in office who were directors at the beginning of
the period.
Termination and Amendment. The Plan will expire on June 1,
2002, but the Board of Directors may terminate the Plan at any
time prior thereto. Termination of the Plan will not alter or
impair, without the consent of the optionee or grantee, any of
the rights or obligations of any Award made under the Plan. The
Board may from time to time alter, amend, suspend or discontinue
the Plan; provided, however, that no such action of the Board may
alter the provisions of the Plan so as to alter any outstanding
Awards to the detriment of the optionee or grantee without his
consent, and, no amendment to the Plan may be made without
stockholder approval if such amendment would (i) increase (except
in the event of a recapitalization or reorganization) the total
number of shares reserved for issuance pursuant to the Plan; (ii)
change the class of individuals entitled to participate under the
Plan; or (iii) withdraw the administration of the Plan from a
committee consisting of at least two "disinterested persons".
The Committee may, from time to time, alter, amend, cancel or
terminate any outstanding Award, in any manner not inconsistent
with the Plan; provided, however, that no such action of the
Committee may alter, amend, cancel or terminate an Award to the
detriment of the optionee or grantee without his consent,
including, (i) to change the date or dates as of which an Award
becomes exercisable, is deemed earned, or becomes nonforfeitable;
or (ii) to cancel and reissue an Award under such different terms
and conditions as the Committee determines appropriate. The
provisions of the Plan regarding non-employee director option
grants may not be amended more than once every six months except
to comport with changes to the Code, the Employee Retirement
Income Security Act, or the rules thereunder. Notwithstanding
anything in the Plan to the contrary, the Board shall have the
power to amend the Plan to conform the Plan to all applicable
requirements of the law.
Prior Options. Any individual who, on June 2, 1992, held an
unexpired and unexercised option under the Company's 1983, 1985,
1986, or 1987 (qualified) Incentive Stock Option and
(nonqualified) Stock Option Plans (a "Prior Option"), may replace
his Prior Option with a new ISO or NQO for an equivalent number
of shares; provided, however, subject to the above provisions
under the heading "Option Price", the exercise price of such new
ISOs shall not be less than the Fair Market Value of the Common
Stock on the date of grant, which shall be deemed to be the date
on which the optionee executes and delivers a new Agreement.
Subject to the provisions governing holding period requirements
under Rule 16(b)-3 of the Exchange Act, each new option will be
vested to the same extent that the Prior Option was vested (with
the optionee getting credit for any prior service to the
Company). Any optionee surrendering a Prior Option which
qualified as an ISO under Section 422 of the Code will receive
the number of NQOs for the balance of any such qualified Prior
Options which are not available for grant on a one-to-one basis
because the $100,000 limitation set forth in Section 422(d) of
the Code would be exceeded.
Options for an aggregate of 12,585,173 shares were
outstanding at May 15, 1994, of which options for 9,979,000
shares were held by executive officers. Of the total options
outstanding, options for 4,908,773 shares are ISOs and options
for 7,676,400 shares are NQOs.
Federal Income Tax Consequences
The following discussion is a summary of the Federal income
tax consequences to optionees and to the Company with respect to
Awards of Options, Restricted Stock, and Performance Units under
the Plan. SINCE THE APPLICATION OF THE GENERAL TAX CONSEQUENCES
DESCRIBED HEREIN MAY VARY DEPENDING UPON AN OPTIONEE'S INDIVIDUAL
CIRCUMSTANCES, OPTIONEES ARE URGED TO CONSULT THEIR OWN TAX
ADVISORS REGARDING THE FEDERAL, STATE AND LOCAL TAX CONSEQUENCES
ARISING FROM THE GRANT OR EXERCISE OF SUCH OPTIONS.
Incentive Stock Options (ISOs). No income is generally
recognized by an optionee when an ISO is granted or exercised.
If the stock obtained upon exercise of an ISO is sold more than
one year after exercise and two years after grant, the difference
between the option price and the amount realized on the sale will
be treated as long-term capital gain, which presently is subject
to tax at a maximum rate of 28%. The Company is not entitled to
a deduction as a result of the grant or exercise of an ISO or the
sale of the stock acquired upon exercise thereof if the stock is
held by the optionee for the requisite periods.
If, however, the stock acquired upon exercise of an ISO is
sold less than one year after the exercise or less than two years
after grant, the lesser of (i) the difference between the fair
market value on the date of exercise and the option price or (ii)
the difference between the amount realized on the sale and the
option price will be treated as ordinary income, which presently
is subject to tax at a maximum rate of 39.6%, and the Company
will be entitled to a corresponding deduction. The excess of the
amount realized on the sale over the fair market value on the
date of exercise, if any, will be treated as long-term or short-
term capital gain, depending on the length of time the stock is
held.
The excess of the fair market value of the stock over the
option price on the date of exercise of an ISO will constitute an
adjustment for alternative minimum tax purposes which may result
in the optionee being subject to the alternative minimum tax.
Nonqualified Stock Options (NQOs). No income is recognized
by an optionee when an NQO (including a Reload Option) is
granted. Except as described below, upon exercise of an NQO an
optionee is treated as having received ordinary income at the
time of exercise in the amount equal to the difference between
the option price paid and the then fair market value of the
Common Stock acquired. The Company will be required to withhold
tax thereon and will be entitled to a deduction at the same time
an in an amount corresponding to such difference. The Company
may permit an optionee to satisfy the withholding tax obligation,
in whole or in part, by withholding shares of Common Stock that
would otherwise be received by the optionee upon exercise of an
NQO. The optionee's basis in the Common Stock acquired upon
exercise of an NQO will be equal to the option price plus the
amount of ordinary income recognized, and any gain or loss
thereafter recognized upon disposition of the Common Stock is
generally treated as capital gain or loss.
Stock acquired by "Insiders" (i.e., officers, directors or
persons holding 10% of the stock of the Company who are subject
to the restrictions on short-swing trading imposed by Section
16(b) of the Exchange Act) upon exercise of NQOs within six (6)
months of the date of grant constitutes "restricted property"
and, unless the optionee elects otherwise, the recognition of
income upon exercise is deferred to the date upon which the stock
acquired upon exercise may first be sold without incurring
Section 16(b) liability (generally six months after the date of
grant of the option) and he will realize ordinary income in an
amount equal to the difference between the option price and the
fair market value of the stock on that date.
$100,000 Exercise Limitation for ISOs. If the aggregate
fair market value of stock (determined at date of grant) with
respect to which ISOs granted under any Plan after December 31,
1986 becomes exercisable for the first time (whether by passing
of an anniversary date, acceleration or otherwise) during any one
calendar year exceeds $100,000, the excess will be treated for
tax purposes as NQOs, with options being taken into account
therefor in the order of grant.
Payment with Common Stock. The Plan allows an optionee to
deliver Common Stock of the Company he already owns in payment of
the option price for either an ISO or an NQO. For any shares of
Common Stock so exchanged, an amount equal to the fair market
value thereof on the date tendered will be credited against the
option price.
In the event Common Stock is used to pay the option price
for an NQO, gain or loss will not be recognized in connection
with such exchange to the extent that the number of shares of
stock received on exercise does not exceed the number of shares
of stock surrendered. The optionee's basis in the new shares
will be equal to the basis of the stock surrendered and the
holding period thereof will include the holding period of the
shares exchanged. The fair market value of any additional shares
received upon exercise of an NQO in exchange for stock (less any
cash or other property paid in connection with the exercise) will
constitute compensation to the optionee taxable as ordinary
income. The optionee's basis in these additional shares will be
equal to the amount of compensation included in income plus any
cash or value of other property paid upon exercise, and the
holding period therefor will begin on the date of the exchange.
In the event Common Stock is used to pay the option price
for an ISO, gain or loss normally will not be recognized in
connection with such exchange. To the extent that the number of
shares of stock received on exercise does not exceed the number
of shares surrendered, proposed Treasury Regulations provide that
the optionee's basis in these shares will be equal to the basis
of the stock surrendered and, except as provided below, has the
same holding period as the stock surrendered. To the extent that
the optionee receives a number of shares in excess of the number
of shares surrendered, the optionee's basis in such additional
shares is zero (plus any cash paid in connection with the
exercise) and the holding period for such additional shares will
begin on the date of such exchange.
If Common Stock acquired upon the exercise of an ISO is
delivered in payment of the option price upon the exercise of a
second ISO before the stock was held for the requisite holding
period, then the stock so delivered will not be eligible for tax-
free treatment in the exchange, but instead the optionee
generally will be required to recognize ordinary income at the
time such stock is delivered in an amount equal to the difference
between the fair market value of the stock on the date of
exercise of the first ISO and the option price of the first ISO.
If the fair market value of such stock on the date of delivery is
lower than the fair market value on the date of exercise of the
first ISO, then the ordinary income generally will be measured by
the difference between the fair market value of such stock on the
date of delivery and the option price of the first ISO.
There are special complex rules pertaining to the
disposition of shares within one year of exercise or two years
from the date of grant of an ISO where, upon exercise of such
ISO, outstanding shares of Common Stock were used in full or
partial payment of the option price. Under these rules a
substantial portion of the proceeds of disposition could be
treated as ordinary compensation income and not capital gains as
might otherwise be expected.
Restricted Stock. Restricted Stock awarded to an employee
may be subject to any number of restrictions (including deferred
vesting, limitations on transfer, and forfeitability) imposed by
the Committee. In general, the receipt of Restricted Stock will
not result in the recognition of income by an employee until such
time as the shares are either not forfeitable or are
transferable. Upon the lapse of such restrictions, the employee
will be required to include as ordinary income the difference
between the amount paid for the Restricted Stock, if any, and the
fair market value of such stock on the date the restrictions
lapse, and the Company will be entitled to a corresponding
deduction. Employees receiving Restricted Stock Awards may elect
to include the value of such stock (less any amounts paid for
such stock) as ordinary income at the time the Award is made. In
this event, the Company would receive a corresponding deduction.
Employees making this election would treat any gain or loss
realized on a sale of the Restricted Stock as capital gain or
loss, but would not be entitled to any loss deduction if they
forfeited the Restricted Stock pursuant to the restrictions
imposed by the Committee.
Performance Units. An Award of Performance Units will not
be included in income by the employee or deducted by the Company
because it represents only an unsecured promise by the Company to
make a future payment, the amount of which is contingent upon the
value of the Company's Common Stock. Upon payment of the cash or
shares of Common Stock to the employee pursuant to the
Performance Unit, the employee will be required to include as
ordinary income the full value of such cash or shares, and the
Company will be entitled to a corresponding deduction.
In view of the complexity of the tax aspects of transactions
involving the exercise of Options and dispositions of shares of
Common Stock acquired upon or delivered as payment upon exercise
of Options, and since the impact of taxes will vary, each
optionee should consult his own advisor to determine the tax
consequences in his particular circumstances.
LEGAL MATTERS
The validity of the shares of Common Stock of the Company
offered hereby have been passed upon by Messrs. Satterlee
Stephens Burke & Burke LLP, 230 Park Avenue, New York, New York
10169-0079, as counsel for the Company.
ADDITIONAL INFORMATION
Participants may obtain additional information about the
Plan and the Committee by writing or calling the Secretary, XCL
Ltd., 110 Rue Jean Lafitte, Lafayette, LA 70508 (Telephone
Number (318) 237-0325).
PART II
Item 3. Incorporation of Documents by Reference.
The following documents filed with the Securities and
Exchange Commission are hereby incorporated by reference:
(a) Annual Report on Form 10-K for the fiscal year ended
December 31, 1994, as amended; (b) Quarterly Report on Form 10-Q
for the quarter ended March 31, 1995 (c) Proxy Statement dated
May 15, 1995; (d) Current Report on Form 8-K dated May 18, 1995;
and (e) the description of the Registrant's Common Stock
contained in "Item 4. Description of Registrant's Securities to
be Registered" in the Company's Registration Statement on Form 8-
B, dated July 26, 1988 filed under Section 12(g) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
including any amendments or reports filed for the purpose of
updating such description.
All documents subsequently filed by the Registrant pursuant
to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act after
the filing hereof and prior to a filing of a post-effective
amendment which indicates that all securities offered hereby have
been sold or which deregisters all securities remaining unsold,
shall be deemed to be incorporated by reference herein and to be
a part hereof from the date of the filing of such reports and
documents. Any statement contained herein or in any 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 other subsequent filed document which also is or
is deemed to be incorporated by reference herein modified or
superseded such statement. Any such statement so modified or
superseded shall not be deemed to constitute a part of this
Registration Statement, except as so modified or superseded.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
Section 102(b)(7) of the General Corporation Law of the
State of Delaware permits a corporation to provide in its
certificate of incorporation that directors shall have no
personal liability for monetary damages for breach of fiduciary
duty, while Section 145 permits the indemnification of officers
and directors under stated circumstances as provided therein.
Article NINTH of the Company's Certificate of Incorporation
contains provisions relieving directors of such personal
liability for breach of fiduciary duty, except for (i) liability
for breach of the duty of loyalty to the Company, (ii) acts or
omissions not in good faith or involving intentional misconduct
or knowing violation of law, (iii) wrongful payment of dividends
or (iv) acts from which an improper personal benefit is derived.
Article NINTH also contains provisions requiring indemnification
by the Company of its directors and officers to the full extent
permitted by law, which provisions extend to expenses reasonably
incurred by directors or officers in defense or settlement of
actions or proceedings. The Company has entered into specific
indemnity agreements with its officers and directors
complementing the indemnity and protection afforded under Article
NINTH and by any insurance policies the Company may maintain. The
Company currently maintains policies of insurance under which the
directors and officers of the Company are insured, within the
limits and subject to the limitations of the policies, against
certain expenses in connection with defense of actions, suits or
proceedings, to which they are parties by reason of being or
having been such directors or officers.
Article VIII of the Company's By-laws also provide for the
indemnification of officers and directors to the fullest extent
permitted by the laws of the State of Delaware.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
Exhibit No. Description
Sequential
Page No.
4 Long Term Stock Incentive Plan, as amended.
5 Opinion of Satterlee Stephens Burke & Burke LLP
as to legality of the securities being registered
15 Not Applicable
23(a) Consent of Coopers & Lybrand L.L.P.
23(b) Consent of Satterlee Stephens Burke & Burke LLP
(included in opinion filed as Exhibit 5)
24 Power of Attorney (included on the signature page
to this Registration Statement)
27 Not Applicable
28 Not Applicable
29 Not Applicable
Item 9. Undertakings.
The undersigned Registrant hereby undertakes as follows:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933 (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 aggregate, represent a fundamental
change in the information set forth in this registration
statement;
(iii) To include any material information with
respect to the plan of distribution not previously disclosed in
this registration statement or any material change to such
information in this registration statement; provided, however,
that the undertakings set forth in paragraphs (i) and (ii) above
shall not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed by the Registrant pursuant to Section 13
or Section 15(d) of the Exchange Act that are incorporated by
reference in this registration statement.
(2) That, for the 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 the time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-
effective amendment any of the securities being registered which
remain unsold at the termination of the offering.
(4) That, for purposes of determining any liability under
the Securities Act each filing of the Registrant's annual report
pursuant to Section 13(a) or Section 15(d) of the Exchange Act
(and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that
is incorporated by reference in this registration statement shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(5) To deliver or cause to be delivered with the
prospectus, to each person to whom the prospectus is sent or
given, the latest annual report to security holders that is
incorporated by reference in the prospectus and furnished
pursuant to and meeting the requirements of Rule 14a-3 or Rule
14c-3 under the Exchange Act; and, where interim financial
information required to be presented by Article 3 of Regulation S-
X is not set forth in the prospectus, to deliver, or cause to be
delivered to each person to whom the prospectus or cause to be
delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by
reference in the prospectus to provide such interim financial
information.
(6) 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 Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such
liabilities (other than the payment by the 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.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form
S-8 and has duly caused this registration statement or amendment
thereto to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Lafayette, State of Louisiana, on
this the 31st day of May, 1995.
XCL LTD.
/s/ Marsden W. Miller, Jr.
By:______________________________
Marsden W. Miller, Jr.
Chairman
POWER OF ATTORNEY
Each of the undersigned hereby appoints Marsden W. Miller,
Jr. and David A. Melman and each of them (with full power in each
to act alone), as attorneys and agents for the undersigned, with
full power of substitution for and in the name, place and stead
of the undersigned, to sign and file with the Securities and
Exchange Commission under the Securities Act of 1933 any and all
amendments, post-effective amendments and exhibits to this
Registration Statement and any and all applications, instruments,
and other documents to be filed with the Securities and Exchange
Commission pertaining to the registration of the securities
covered hereby, with full power and authority to do and perform
any and all acts and things whatsoever requisite or desirable.
Pursuant to the requirements of the Securities Act of 1933,
this registration statement has been signed below by the
following persons in the capacities and on the dates indicated.
Signature Title Date
/s/ Marsden W. Miller, Jr.
- --------------------------
Marsden W. Miller, Jr. Chairman and Director May 31, 1995
/s/ John T. Chandler
- -------------------------- Chief Executive Officer
John T. Chandler President and Director May 31, 1995
/s/ Pamela G. Shanks
- --------------------------
Pamela G. Shanks Vice President-Finance May 31, 1995
and Chief Financial
Officer (principal
financial and accounting
officer)
/s/ David A. Melman
- --------------------------
David A. Melman Executive Vice President,May 31, 1995
General Counsel, Secretary
and Director
/s/ Edmund McIlhenny, Jr.
- --------------------------
Edmund McIlhenny, Jr. Director May 31, 1995
/s/ Arthur W. Hummel, Jr.
- --------------------------
Arthur W. Hummel, Jr. Director May 31, 1995
/s/ Fred Hofheinz
- --------------------------
Fred Hofheinz Director May 31, 1995
/s/ Michael Palliser
- --------------------------
Michael Palliser Director May 31, 1995
/s/ Francis J. Reinhardt, Jr.
- ---------------------------
Francis J. Reinhardt, Jr. Director May 31, 1995
XCL LTD.
LONG-TERM STOCK INCENTIVE PLAN
1. Purpose. The purpose of the XCL Ltd. Long-Term Stock
Incentive Plan (the "Plan") is to promote the interests of XCL
Ltd. ("XCL") and its shareholders by strengthening the ability of
the Company (as hereinafter defined) to attract and retain
directors, officers and key employees, and certain other
individuals who the Company deems can render a valuable
contribution to the direction and success of the Company's
efforts by helping create an entrepreneurial environment in which
such individuals are encouraged to maximize shareholder value.
The Plan permits the granting of Incentive Stock Options,
Nonqualified Stock Options, Reload Options, Restricted Stock and
Performance Units, all as hereinafter defined.
2. Definitions; Construction. (a) As used in the Plan the
defined terms "Plan" and "XCL" shall have the meanings ascribed
to them above and the following defined terms shall have the
following meanings:
(i) "Affiliates" shall mean any parent
corporation or subsidiary corporation of XCL
as defined in Sections 425(e) and (f) of the
Code, as the same may be in effect from time
to time.
(ii) "Agreement" shall mean an agreement
between the Company and a participant setting
forth the terms and conditions of an Award.
(iii) "Award" shall mean an Incentive
Stock Option, Nonqualified Stock Option,
Reload Option, Restricted Stock or
Performance Unit as described in and granted
under the Plan.
(iv)"Board" shall mean the Board of
Directors of XCL.
(v) "Code" shall mean the Internal
Revenue Code of 1986, as amended.
(vi) "Committee" shall mean the
Compensation Advisory Committee of the Board,
as the same may be
constituted from time to time.
(vii) "Common Stock" shall mean shares
of capital stock of XCL designated as "Common
Stock" pursuant to XCL's Certificate of
Incorporation.
(viii) "Company" shall mean XCL and its
Affiliates.
(ix) "Fair Market Value" shall mean the
average of the highest and lowest quoted
selling price of a share of Common Stock as
reported on the composite tape for securities
listed on the American Stock Exchange, or
such other national securities exchange as
may be designated by the Committee, or, in
the event that the Common Stock is not listed
for trading on a national securities exchange
but is quoted on an automated quotation
system, on such automated quotation system,
in any such case on the valuation date (or,
if there were no sales on the valuation date,
the average of the highest and the lowest
quoted selling prices as reported on said
composite tape or automated quotation system
for the most recent day during which a sale
occurred).
(x) "Incentive Stock Option" shall mean
an option granted pursuant to the provisions
of this Plan which meets the requirements of
Section 422 of the Code, as the same may be
in effect from time to time.
(xi) "Non-employee Director" shall mean
any member of the Board of Directors of the
Company who is not also an employee of the
Company.
(xii) "Nonqualified Stock Option" shall
mean any option granted pursuant to the
provisions of the Plan which is not an
Incentive Stock Option.
(xiii) "Performance Unit" shall mean a
grant described in Section 8.
(xiv) "Reload Option" shall mean any
Nonqualified Stock Option granted pursuant to
the provisions of Section 6(i).
(xv) "Restricted Stock" shall mean any
stock delivered subject to the restrictions
set forth in Section 7.
(xvi) "Stockholder Employee" shall mean
any employee owning stock (using the
attribution rules of Section 425(d) of the
Code, as the same may be in effect from time
to time) possessing more than 10% of the
total combined voting power of all classes of
stock of XCL or any of its Affiliates.
(b) References in the Plan to Sections are to Sections
of the Plan unless otherwise indicated. The words "hereof",
"herein", "hereunder" and comparable terms refer to the entirety
of the Plan and not to any particular Section or other
subdivision hereof. Words in the singular include the plural and
vice versa. Words in the masculine gender shall include the
feminine and neuter and vice versa. The word "or" is not
exclusive. The word "including" shall be deemed to mean
"including, without limitation". The Section headings contained
herein are for reference purposes only and shall not affect in
any way the meaning or interpretation of the Plan.
3. Stock Available under Plan. The stock subject to Awards
shall be Common Stock. Subject to adjustment as provided in
Section 9, the total number of shares of Common Stock with
respect to which Awards may be granted may equal but shall not
exceed 16.5 million shares; provided, however, that the maximum
number of shares that may be available for Awards to directors of
the Company under this Plan shall be limited to 13,200,000; and,
provided, further, that the maximum number of shares that shall
be available for Awards to Non-employee Directors is limited to
3,300,000. For purposes of computing the number of shares of
Common Stock available for Awards at any time, there shall be
debited against the total number of shares (i) the number of
shares of Common Stock issuable upon exercise of any options,
(ii) the number of shares of Restricted Stock awarded, and (iii)
and the maximum number of shares of Common Stock that may be
issued under Performance Unit Awards. Any shares represented by
Awards which are cancelled, forfeited, terminated or expire
unexercised shall again be available for grants and issuance
under the Plan.
4. Participants. Persons eligible for Awards under the Plan
shall be limited to such key employees of the Company (including
directors of the Company) who have substantial responsibility in
the direction and management of the Company and certain other
individuals who, while not employees of the Company, are
identified by the Committee or the Board as persons who can
render a valuable contribution to the direction and success of
the Company's efforts. Except in the case of Non- employee
Directors, the Committee shall have the sole discretion to select
those persons eligible for Awards. Non-employee Directors shall
be eligible to participate in the Plan only to the extent
provided in Section 5.
5. Non-employee Directors Award. (a) Upon assuming his
office, each Non-employee Director shall be granted a
Nonqualified Stock Option to acquire 100,000 shares of Common
Stock at an exercise price equal to 135% of the Fair Market Value
of such Common Stock on the date of grant.
(b) The Nonqualified Stock Options to be granted to
all Non-employee Directors upon assuming office shall become
exercisable upon completion of one year of service as a director
after such Option is granted (subject to the provisions of
Section 10) and shall expire ten years from the date the Option
is granted (the "Option Period"), unless ended sooner due to
termination of service or death or disability of the optionee, or
if fully exercised prior to the end of such Option Period. If
the directorship of an optionee is terminated within the Option
Period for any reason other than (i) death or disability or (ii)
on account of any act of (1) fraud or intentional
misrepresentation, or (2) embezzlement, misappropriation or
conversion of assets or opportunities of the Company (any such
act resulting in the automatic termination of the Option), the
Option may be exercised, to the extent the optionee was able to
do so at the date of termination of the directorship, within
three months (or such longer period as the Board may determine,
but not to exceed one year) after such termination (if otherwise
within the Option Period). If an optionee dies or becomes
disabled while a director of the Company, the Option may be
exercised, to the extent the optionee was entitled to exercise
such Option at the date of his death or disability, within one
year after such death or disability (if otherwise within the
Option Period), whether or not one year of service as a director
has elapsed, by the executor or administrator of the estate of
the optionee, or by the legal representative of an incapacitated
director, or by the person or persons who shall have acquired the
Option directly from the optionee by a bequest or pursuant to the
laws of descent or distribution.
(c) The Nonqualified Stock Options granted to Non-
employee Directors shall be exercisable in the manner provided in
Section 6(d); shall be non-transferable except as provided in
Section 6(f); shall not confer any rights as a stockholder as
provided in Section 6(j); and shall not give rise to any right to
receive fractional shares as provided in Section 6(k).
6. Terms and Conditions of Options. Options granted
pursuant to the Plan shall be evidenced by Agreements in such
form, not inconsistent with the Plan, as the Committee shall
determine. The following terms and conditions shall apply to all
Incentive Stock Options, Nonqualified Stock Options and Reload
Options:
(a) Option Price. The Committee shall determine the
option price of all Nonqualified Stock Options and all Incentive
Stock Options; provided, however, in the case of Incentive Stock
Options, the option price shall not be less than the Fair Market
Value of the Common Stock on the date the option is granted and,
provided, further, that in the case of an individual who is a
Stockholder Employee on the date of grant, the option price of an
Incentive Stock Option shall be at least 110% of the then Fair
Market Value of the Common Stock.
(b) Option Term. The Committee shall determine the
expiration date of a Nonqualified Stock Option and an Incentive
Stock Option; provided, however, in the case of Incentive Stock
Options, the term shall expire no later than one day prior to the
end of ten years from the date the option was granted, and,
provided, further, that Incentive Stock Options granted to
employees who are Stockholder Employees on the date of grant
shall expire no later than one day prior to the end of five years
from the date of grant. Options may terminate earlier as
provided herein.
(c) Exercise of Options. The Committee shall determine
when Incentive Stock Options and Nonqualified Stock Options are
exercisable, in whole or in part, provided, however, that under
no circumstances will an option be exercisable within 6 months
(or such greater or lesser period prescribed or permitted by any
applicable rule promulgated under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), including without
limitation Rule 16(b)-3, as in effect from time to time), from
its date of grant. Options may be exercised at an earlier date
as provided herein.
(d) Manner of Exercise. Upon exercise of options,
shares of Common Stock shall be paid for in full with (i) cash
(including a certified or official bank check or the equivalent
acceptable to XCL), (ii) the equivalent Fair Market Value of
shares of Common Stock, properly endorsed, (iii) the equivalent
fair market value of any other property acceptable to XCL, or
(iv) any combination of (i), (ii), or (iii). Options may be
exercised by written notice to XCL in the manner provided in the
applicable Agreement. In the event the Common Stock issuable
upon exercise of an option is not registered under the Securities
Act of 1933, as amended (the "Securities Act"), then XCL will
require that the registered owner deliver an investment
representation in the form acceptable to XCL and its counsel and
XCL will place a legend on the certificate for such Common Stock
restricting the transfer of the same.
(e) Limitation on Amount. In the case of Incentive
Stock Options only, no employee may be granted Incentive Stock
Options to the extent the aggregate Fair Market Value (as of the
date of grant) of the Common Stock subject to Incentive Stock
Options that are first exercisable during any calendar year
exceeds $100,000.
(f) Non-Transferability. All options granted under
this Plan shall be non-assignable and non-transferable otherwise
that by will or by the laws of descent and distribution. During
the lifetime of the optionee, the option is exercisable only by
him, or, in the case of his incapacity, by his legal
representative.
(g) Termination of Employment. In the case of
Nonqualified Stock Options, the Committee shall determine the
applicable provisions for death, disability and termination of
employment. In the case of Incentive Stock Options, (i) on
termination of an optionee's employment with the Company other
than by reason of death or disability, the optionee shall have
the right to exercise his then outstanding Incentive Stock
Options within three months of such termination to the extent he
was entitled to exercise the same immediately prior to
termination; and (ii) on termination of employment by reason of
death or disability (within the meaning of Section 22(e)(3) of
the Code, as the same may be in effect from time to time), the
optionee, his estate, personal representative, or beneficiary
shall have the right to exercise his then outstanding Incentive
Stock Options at any time within twelve months from the date of
death or termination of employment by reason of disability for
the full number of shares subject to Incentive Stock Options at
the date of termination of employment by reason of death or
disability, irrespective of any vesting provisions except as
provided in the first sentence of Section 6(c) above.
(h) Time of Grant. The grant of an option shall occur
only when a written Agreement shall have been duly executed and
delivered by or on behalf of XCL and the employee to whom the
option is granted.
(i) Reload Options. In the event an optionee exercises
a Nonqualified Stock Option by payment of all or a portion of the
exercise price with shares of Common Stock which the optionee has
owned for at least six months, the optionee may receive a Reload
Option in the form a new Nonqualified Stock Option to purchase a
number of shares of Common Stock equal to the number of shares of
Common Stock used in payment of the exercise price of the
original option.
(j) No Stockholder Rights. Nothing contained in the
Plan or in any Agreement shall be construed to confer upon the
holder of an option the right to vote or to receive dividends or
subscription rights, or to consent or to receive notice as a
stockholder in respect of the meetings of stockholders of XCL or
the election of directors of XCL or any other matter, or any
other rights whatsoever as a stockholder of XCL.
(k) No Fractional Shares. XCL shall not be required
to issue fractional shares of Common Stock upon exercise of any
options.
7. Restricted Stock. Except as otherwise provided herein,
the Committee shall have the sole discretion to determine the
restrictions that shall apply to each award of Restricted Stock
hereunder (including, without limitation, the time and manner of
vesting, provisions applicable on death, disability or other
termination of employment, conditions of forfeiture and whether
any consideration should be paid by the grantee). Any such
restrictions shall be embodied in the applicable Agreement and in
a legend placed on the certificate for Restricted Stock. As soon
as practicable following a grant of Restricted Stock, XCL shall
transfer to the name of the grantee any and all awarded shares.
A certificate or certificates for all shares of Restricted Stock
registered in the name of a grantee shall be promptly drawn and
held for the grantee by XCL. The grantee shall thereupon be a
stockholder and shall have all the rights of a stockholder with
respect to such shares, including the right to vote and receive
all dividends or other distributions made or paid with respect to
such shares. As the restrictions described below are released, a
certificate (without the legend described above) for the number
of shares with respect to which restrictions have been released
will be delivered to the grantee as soon as practicable. Any
new, additional or different securities, cash or other property
the grantee may become entitled to receive shall be subject to
the same restrictions applicable to the Restricted Stock with
respect to which such new, additional or different securities or
property are received. Shares of Restricted Stock may not be
sold, exchanged, transferred, pledged, hypothecated, or otherwise
disposed of until such time as the stated restrictions lapse.
8. Performance Units. The Committee may grant Performance
Units entitling the holder to receive a fixed or variable number
of share-denominated units subject to such conditions of vesting
and time of payment as the Committee may determine and as set
forth in the applicable Agreement. Performance Units may be paid
in cash or in a combination of cash and shares of Common Stock,
as the Committee shall determine. Such Performance Units shall
represent an unsecured and unfunded promise to pay the Fair
Market Value of the shares of Common Stock represented by the
Units and the holder shall have no rights other than as a general
creditor of the Company. Performance Units may not be sold,
exchanged, transferred, pledged, hypothecated or otherwise
disposed of except as provided in the applicable Agreement.
9. Recapitalization or Reorganization. (a) The aggregate
number of shares of Common Stock for which Awards may be granted
under the Plan, the number of shares covered by outstanding
Awards and the exercise price per share for each outstanding
option, shall be proportionately adjusted for any increase or
decrease in the number of issued shares of Common Stock resulting
from the subdivision or consolidation of shares, or the payment
of a stock dividend on Common Stock after the effective date of
the Plan, or other increase or decrease in such shares effected
without receipt of consideration by XCL; provided, however, that
any adjustment to Awards resulting in the right to receive
fractional shares shall be eliminated.
(b) If XCL shall at any time merge or consolidate with
or into another corporation, the holder of each Award will
thereafter receive, upon exercise or transfer of shares, the
securities or property to which a holder of an equivalent number
of shares of Common Stock would have been entitled upon such
merger or consolidation, and XCL shall take such steps in
connection with such merger or consolidation as may be necessary
to assure that the provisions of this Plan shall thereafter be
applicable, as nearly as reasonably may be, in relation to any
securities or property thereafter deliverable. A sale of all or
substantially all of the assets of XCL for a consideration (apart
from the assumption of obligations) consisting primarily of
securities shall be deemed a merger or consolidation for the
foregoing purposes.
10. Change in Control. Notwithstanding any provision in the
Plan to the contrary, but subject to the first sentence of
Section 6(c) hereof, (i) each option granted under the Plan shall
become immediately exercisable in whole or in part, at the
election of the optionee, (ii) the restrictions applicable to
each share of Restricted Stock shall immediately lapse, and (iii)
payment of Performance Units shall be immediately due upon the
occurrence of an event which constitutes a change in control of
XCL. For purposes of this Section 10, a "change in control of
XCL" shall mean a change in control of a nature that would be
required to be reported in response to Item 5(f) of Schedule 14A
of Regulation 14A promulgated under the Exchange Act; provided
that, without limitation, such a change in control shall be
deemed to have occurred if:
(A) any "person" (as such term is used
in Sections 13(d) and 14(d) of the Exchange
Act), other than XCL or any person who on the
effective date the Plan (as hereinafter
provided in Section 13) is an officer or
director of XCL, is or becomes the
"beneficial owner" (as defined in Rule 13d-3
under the Exchange Act, as such Rule is in
effect from time to time), directly or
indirectly, of securities of XCL representing
30% or more of the combined voting power of
XCL's then outstanding securities, unless
such person owns, directly or indirectly, as
of such effective date of the Plan, more than
25% of the combined voting power of XCL's
then outstanding securities, in which case,
if any such person (a "Major Stockholder")
becomes the beneficial owner, directly or
indirectly, of 33-1/3% or more of the
combined voting power of XCL's then
outstanding securities; provided, further,
however, that acquisition of 33-1/3% or more
of such combined voting power shall not
constitute a "change in control of XCL" if
(1) such combined voting power does not
exceed 37-1/2% or more of the combined voting
power of the XCL's then outstanding
securities, and (2) either (i) to the extent
any such increase in a Major Stockholder's
beneficial ownership results from a
redemption of purchase by XCL of its
securities, or (ii) if the Board, by vote of
two-thirds (2/3) of the full Board, in good
faith, determines (hereinafter referred to as
a "Determination") both (X) that such
acquisition does not constitute, in fact, a
change in control of XCL, and (Y) that such
Major Stockholder does not and cannot then
control XCL; and
(B) during any period of two consecutive
years prior to the date of such
Determination, individuals who at the
beginning of such period constituted the
Board cease for any reason to constitute at
least a majority thereof, unless the election
of each director who was not a director at
the beginning of such period has been
approved in advance by directors representing
at least two-thirds (2/3) of the directors
then in office who were directors at the
beginning of the period.
11. Administration. (a) The Plan shall be administered by
the Committee. The Committee shall consist of at least two (2)
directors, appointed by the Board, who are "disinterested
persons" within the meaning of Rule 16b-3(c)(2)(i) promulgated
under the Exchange Act, as such Rule or any other comparable Rule
may be in effect from time to time, such that during the one year
period prior to becoming a member of such Committee, and during
such service as a Committee member, respectively, he will not
have been granted and will not be granted options, Restricted
Stock, Performance Units or other equity securities of the
Company under any other plan of the Company, except pursuant to a
"formula plan" as defined in Rule 16b-3(c)(2)(ii) promulgated
under the Exchange Act, as such Rule or any other comparable Rule
may be in effect from time to time (including, for this purpose,
an Award pursuant to Section 5). The Board may from time to time
remove members from or add members to the Committee. Vacancies
in the Committee, however caused, shall be filled by the Board.
The Committee shall select one of its members chairman and shall
hold meetings at such time and places as it may determine. The
Committee may appoint a secretary and, subject to the provisions
of the Plan and to policies determined by the Board, may make
such rules and regulations for the conduct of its business as it
shall deem advisable. A majority of the Committee shall
constitute a quorum. All action of the Committee shall be taken
by a majority of its members. Any action may be taken by a
written instrument signed by at least a majority of the members
or at a meeting conducted by means of telephone or similar
communications equipment pursuant to which all persons
participating in the meeting can hear each other, and action so
taken shall be as fully effective as if it had been taken at a
meeting duly called and held.
(b) Subject to the express terms and conditions of the
Plan, the Committee shall have full power to make Awards, to
construe or interpret the Plan, to prescribe, amend and rescind
rules and regulations relating to it and to make all other
determinations necessary or advisable for its administration.
(c) Except as otherwise provided herein, the Committee
may determine which persons shall be granted Awards and the
number of shares subject to Awards and the time at which Awards
shall be made.
(d) The Committee shall report to the Board the names
of persons granted Awards, the number of shares involved, and the
terms and conditions of each Award.
(e) No member of the Board or of the Committee shall be
liable for any action or determination made in good faith with
respect to the Plan or any option or award and service on the
Committee shall constitute service as a director, entitling such
Committee member to indemnification and reimbursement for such
service to the same extent as for service rendered as a director.
12. Tax Withholding. The Committee may require any person
entitled to receive payment in respect of an Award to remit to
the Company, prior to such payment, an amount sufficient to
satisfy any Federal, state or local tax withholding requirements.
The Committee shall also have the exclusive right to permit an
individual to satisfy, in whole or in part, such obligation to
remit taxes by directing the Company to withhold shares of Common
Stock that would otherwise be received by such individual,
pursuant to such rules as the Committee may determine from time
to time in compliance with the provisions of Rule 16b-3(e)
promulgated under the Exchange Act, as such Rule or any other
comparable Rule may be in effect from time to time.
13. Effective Date and Termination. Subject to the receipt
of approval of the Plan by the shareholders of XCL, the effective
date of this Plan shall be June 2, 1992. This Plan shall
terminate on June 1, 2002, but the Board of Directors may
terminate the Plan at any time prior thereto. Termination of the
Plan shall not alter or impair, without the consent of the
optionee or grantee, any of his rights or obligations and any
Award made under the Plan.
14. Amendments. The Board may from time to time alter,
amend, suspend or discontinue the Plan; provided, however, that
no such action of the Board may alter the provisions of the Plan
so as to alter any outstanding Awards to the detriment of the
optionee or grantee without his consent, and, no amendment to the
Plan shall be made without stockholder approval which shall (i)
increase (except as provided in Section 9) the total number of
shares reserved for issuance pursuant to the Plan; (ii) change
the class of individuals entitled to participate under the Plan;
or (iii) withdraw the administration of the Plan from a committee
consisting of at least two "disinterested persons" (as defined in
Section 11(a)). The Committee may, from time to time, alter,
amend, cancel or terminate any outstanding Award, in any manner
not inconsistent with the Plan; provided, however, that no such
action of the Committee may alter, amend, cancel or terminate an
Award to the detriment of the optionee or grantee without his
consent, including, (i) to change the date or dates as of which
an Award becomes exercisable, is deemed earned, or becomes
nonforfeitable; or (ii) to cancel and reissue an Award under such
different terms and conditions as the Committee determines
appropriate. The provisions of Section 5 of the Plan may not be
amended more than once every six months except to comport with
changes to the Code, the Employee Retirement Income Security Act,
or the rules and regulations thereunder. Notwithstanding anything
in the Plan to the contrary, the Board shall have the power to
amend the Plan to conform the Plan to all applicable requirements
of law.
15. No Right to Employment. No person shall have any claim
or right to receive grants of Awards under the Plan. Neither the
Plan, the grant of Awards under the Plan, nor any action taken or
omitted to be taken under the Plan shall be deemed to create or
confer on any employee any right to be retained in the employ of
the Company or to interfere with or to limit in any way the right
of the Company to terminate the employment of such individual at
any time.
16. Registration. There shall be no obligation or duty
for XCL to register under the Securities Act or any state
securities law at any time the Awards that may be granted
hereunder or the Common Stock that may be issuable upon grant or
exercise of such Awards. XCL shall not be required to issue or
deliver any shares of stock prior to completion of such
registration or other qualification of such shares under any
state or Federal law, rule or regulation as XCL shall determine
to be necessary or desirable.
17. Prior Options. Any individual who, on the effective
date of the Plan, holds an unexpired and unexercised option under
XCL's 1983, 1985, 1986 or 1987 (qualified) Incentive Stock Option
and (nonqualified) Stock Option Plans (a "Prior Option"), shall
be entitled to replace his Prior Option with a new Incentive
Stock Option or Nonqualified Stock Option for an equivalent
number of shares; provided, however, subject to the provisions of
Section 6(a), the exercise price of such new Incentive Stock
Options shall not be less than the Fair Market Value of the
Common Stock on the date of grant which shall be deemed to have
occurred on the date the optionee executes and delivers a new
Agreement; subject to the provisions of Section 6(c), each new
option shall be vested to the same extent that the Prior Option
has vested (with the optionee getting credit for any prior
service to the Company); and any optionee surrendering a Prior
Option which qualified as an incentive stock option under Section
422 of the Code shall receive the number of Nonqualified Stock
Options for the balance of any such qualified Prior Options
which, because of the limitation of Section 6(e), are not
available for grant on a one-to-one basis because the $100,000
limitation set forth in such Section will be exceeded.
SATTERLEE STEPHENS BURKE & BURKE LLP
230 PARK AVENUE
NEW YORK. N.Y. 10169-0079
47 MAPLE STREET (212) 818-9200 TELEX NO. 233437
SUMMIT. N.J. 07901 CABLE "SATERFIELD" NEW YORK
(908) 277-2221 TELECOPIER (212) 818-9606, 9607
May 25, 1995
XCL Ltd.
110 Rue Jean Lafitte
Lafayette, Louisiana 70508
Dear Sirs:
You have asked for our opinion in connection with a
Registration Statement on Form S-8 (the "Registration Statement")
to be filed with the Securities and Exchange Commission (the
"Commission") for registration pursuant to the Securities Act of
1933, as amended, of an aggregate of 1,500,000 shares (the
"Shares") of common stock, $.01 par value per share, of XCL Ltd.,
a Delaware corporation (the "Company") reserved for issuance
pursuant to the Company's Long Term Stock Incentive Plan (the
"Plan").
As counsel to the Company, we are familiar with the Plan, as
amended to the date hereof; the Company's Certificate of
Incorporation and By-Laws, each as amended to the date
hereof; the corporate proceedings adopting the Plan and reserving
the Shares for issuance thereunder and with the Registration
Statement. As to questions of fact material to our opinion
which have not been independently investigated by us, we have
relied upon the information contained in the copy of the
Registration Statement furnished to us for examination (which we
assume will be executed and filed with the Commission) and in
certificates of an appropriate Company Officer, who we deem responsible,
and public officials. Based thereon, it is our opinion that the
Shares will, upon issuance under the Plan as a restricted stock award
or as a share denominated performance unit or on exercise in accordance
with the provisions of the stock option agreements evidencing options
granted thereunder, and the receipt of the consideration provided
therefor, be validly issued, fully paid and non-assessable.
We understand that a copy of this opinion will be filed as
an exhibit to the Registration Statement and we hereby consent to
such filing and to the use of our name in the section entitled
"Legal Matters" in the prospectus included therein.
Very truly yours,
/s/ SATTERLEE STEPHENS BURKE & BURKE LLP
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this
registration statement of XCL Ltd. on Form S-8 of our
report dated April 13, 1995, on our audits of the
consolidated financial statements and financial statement
schedules of XCL Ltd. as of December 31, 1994 and 1993,
and for the years ended December 31, 1994, 1993 and 1992,
which report is included in the Company's Annual Report on
Form 10-K, as amended.
/s/COOPERS & LYBRAND L.L.P.
New Orleans, Louisiana
May 30, 1995
