SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 14, 1997
HOWELL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 1-8704 74-1223027
(State or other (Commission (IRS Employer
jurisdiction File Number) Identification No.)
of incorporation)
1111 Fannin, Suite 1500
Houston, Texas 77002
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (713) 658-4000
<PAGE>
Item 5. Other Events.
Paul N. Howell, who founded Howell Corporation in 1955 and served as its
Chief Executive Officer and President, announced his retirement from those
positions effective May 14, 1997. Mr. Howell will remain a member of the
Corporation's Board of Directors. In conjunction with Mr. Howell's retirement,
Ronald E. Hall, Chairman of the Corporation's Board of Directors, resigned the
Chairmanship, but also will remain a member of the Board of Directors.
On May 14, 1997, the Board of Directors of the Corporation elected Donald
W. Clayton to serve as Chairman and Chief Executive Officer of the Corporation
and Richard K. Hebert to serve as President and Chief Operating Officer of the
Corporation. Messrs. Clayton and Hebert are co-founders of Voyager Energy
Corp., a privately-held exploration and production company based in Houston,
Texas. Mr. Clayton previously served as President and a Director of Burlington
Resources, President and Chief Executive Officer of Meridian Oil, and a senior
executive with The Superior Oil Company. Mr. Hebert, who currently serves as a
director of the Corporation, was formerly Executive Vice President and Chief
Operating Officer of Meridian Oil. Also joining the Corporation as its Vice
President - Corporate Planning and Development is John W. Brewster.
Mr. Brewster has over two decades of management experience with Santa Fe
Minerals, Odyssey Energy and Trafalgar House Oil and Gas, where he served as
President and Chief Executive Officer.
In order to assist the new management team, Mr. Howell has agreed at the
request of the Board of Directors to consult with the Corporation during a
transition period to be determined by the Board. During the transition period,
Mr. Howell will provide advice and assistance as requested by the Corporation
and will be paid a consulting fee of $5,000 per month.
Messrs Clayton, Hebert and Brewster will receive annual salaries of
$200,000, $200,000 and $115,000, respectively, and will participate in other
benefits made available to employees of the Corporation generally. Each of such
individuals entered into an indemnity agreement with the Corporation in the form
currently used by the Corporation for its officers and directors. The indemnity
agreement provides, among other things, that the Corporation shall indemnify an
officer or director when he is a party or threatened to be a party to an action,
suit or proceeding by reason of the fact that he is or was a director or officer
of the Corporation. The Corporation shall indemnify such director or officer
against expenses, judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with the action or proceeding. In no
event, however, shall indemnification be made if the officer or director is
adjudged liable to the Company.
In connection with the engagement of Messrs. Clayton and Hebert, the Board
of Directors adopted the Howell Corporation 1997 Nonqualified Stock Option Plan
(the "1997 Plan"), a new stock option plan for employees and directors, and
approved one-time grants of an aggregate of 538,800 shares of the Corporation's
common stock under the 1997 Plan to Messrs. Clayton, Hebert and Brewster and to
Robert T. Moffett, the Corporation's Vice President, General Counsel and
Secretary. The purposes of the 1997 Plan is to encourage ownership of the
common stock by the employees and directors of the Corporation, to provide
increased incentive for such employees and directors to render services to, and
to exert maximum effort for the business success of, the Corporation, and to
strengthen the identification of employees and directors with the stockholders
of the Corporation. Options with respect to all shares of common stock reserved
for issuance under the 1997 Plan have been issued, and options which are
forfeited or otherwise not exercised cease to be available for grants of
additional options under the 1997 Plan. Accordingly, no additional grants of
options are expected under the 1997 Plan.
Messrs. Clayton, Hebert, Brewster and Moffett were granted nonqualified
options to purchase 265,000, 255,000, 13,800 and 5,000 shares of the
Corporation's common stock, respectively. The options have a ten year term, and
shares of common stock become purchasable thereunder at the rate of 25% per year
commencing on the first anniversary of the date of the grants. These options
have an exercise price of $13.125 per share, which was the closing price per
share of the shares of the Corporation's common stock on the New York Stock
Exchange on May 13, 1997. The options become fully exercisable on the
occurrence of a change of control, as defined in the 1997 Plan. Upon
termination of employment, the optionee may exercise the vested portion of his
unexercised options for the shorter of six months or the stated expiration date
of the option, although the 1997 Plan gives the Board of Directors discretion to
extend the six month period (but not longer than the stated term of the option).
To the extent not vested, the options expire upon termination of employment,
although the 1997 Plan gives the Board of Directors the discretion to accelerate
the exercisability of such options. The options are not transferable by the
optionees and during their lifetimes are exercisable only by the optionees.
In addition, on May 14, 1997 the Stock Option Committee of the Board of
Directors approved the one-time grant of nonqualified options to purchase an
aggregate of 105,500 shares of common stock under the Corporation's 1988 Stock
Option Plan (the "1988 Plan") to all remaining employees working in the
Corporation's oil and gas operations. The options granted pursuant to the 1988
Plan have ten year terms, become exercisable at the rate of 25% per year
commencing on the first anniversary date of the grants, have an exercise price
of $13.125 per share and otherwise were made on substantially the same terms as
the grants of the options under the 1997 Plan. The purpose of these grants was
to retain the Corporation's employees, to motivate them to exert maximum effort
for the future success of the Corporation and to more closely align the
interests of the Corporation's employees with the interest of the Corporation's
stockholders. Finally, in recognition of Mr. Howell's service to the
Corporation since 1955, on May 14, 1997 the Stock Option Committee waived the
six month expiration period with respect to all of his nonqualified options
(120,830 shares) to purchase common stock previously granted to Mr. Howell under
the 1988 Plan, and accelerated the vesting of the unvested portion of such
options (aggregating 35,125 shares) so that all of such options are now
exercisable.
Also on May 14, 1997, the Corporation entered into a letter of intent to
acquire Voyager Energy Corp., the company founded by Messrs. Clayton and Hebert,
in a tax-free reorganization for approximately 340,000 shares of common stock of
the Corporation. The securities to be issued by the Corporation in the merger
would represent in the aggregate approximately 7% of the Corporation's common
stock currently outstanding, and the Corporation would assume approximately
$1.3 million in Voyager indebtedness as a result of the merger. Consummation of
the transaction is subject to the execution of a mutually satisfactory
definitive agreement, as well as the approval of the Board of Directors
(including the Audit Committee thereof) of the Corporation and the Corporation's
stockholders.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
The following is filed as an exhibit to this Current Report on Form
8-K.
Exhibit
Number Description
10.1 Howell Corporation 1997 Nonqualified Stock
Option Plan.
10.2 Form of option for use under Howell
Corporation 1997 Nonqualified Stock Option Plan.
10.3 Form of indemnity agreement entered into
between the Corporation and each of Messrs. Clayton, Hebert
and Brewster.
99.1 Letter of intent dated May 14, 1997 by and
between Howell Corporation and Voyager Energy Corp.
S I G N A T U R E
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
HOWELL CORPORATION
Date: May 19, 1997 By: /s/ ROBERT T. MOFFETT
_________________________
Robert T. Moffett
Vice President, General Counsel
and Secretary
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
10.1 Howell Corporation 1997 Nonqualified Stock
Option Plan.
10.2 Form of option for use under Howell
Corporation 1997 Nonqualified Stock Option Plan.
10.3 Form of indemnity agreement entered into between the
Corporation and each of Messrs. Clayton, Hebert
and Brewster.
99.1 Letter of intent dated May 14, 1997 by and
between Howell Corporation and Voyager Energy Corp.
EXHIBIT 10.1
HOWELL CORPORATION
1997 NONQUALIFIED STOCK OPTION PLAN
SECTION 1. Purpose of the Plan. The purpose of this Howell Corporation
1997 Nonqualified Stock Option Plan ("Plan") is to encourage ownership of common
stock, $1.00 par value ("Common Stock"), of Howell Corporation, a Delaware
corporation (the "Company"), by employees and directors of the Company and its
Affiliates (as defined below) and to provide increased incentive for such
employees and directors to render services and to exert maximum effort for the
business success of the Company. In addition, the Company expects that the Plan
will further strengthen the identification of employees and directors with the
stockholders. The options granted under this Plan shall be nonqualified options
which are not intended to qualify as incentive stock options pursuant to Section
422 of the Internal Revenue Code of 1986, as amended ("Code") (the options shall
hereinafter be referred to as "Nonqualified Options"), as provided in the
agreements evidencing the Nonqualified Options as provided in Section 6 hereof.
As used in this Plan, the term "Affiliates" means any "parent corporation" of
the Company and any "subsidiary corporation" of the Company within the meaning
of Code Sections 424(e) and (f), respectively.
SECTION 2. Administration of the Plan.
(a) Composition of Committee. The Plan shall be administered by the Board
of Directors of the Company (the "Board") or, if the Board shall so direct by
resolutions thereof, the Stock Option Committee of the Board. The Board while
administering the Plan and the Stock Option Committee shall hereinafter be
referred to as the "Committee." If the Company is subject to Section 16 of the
Securities Exchange Act of 1934, as amended ("Exchange Act"), no director shall
serve as a member of the Stock Option Committee unless he is a Non-Employee
Director within the meaning of Rule 16b-3 promulgated by the Securities and
Exchange Commission ("Commission") under the Exchange Act ("Rule 16b-3").
(b) Committee Action. The Committee shall hold its meetings at such times
and places as it may determine. A majority of its members shall constitute a
quorum, and all determinations of the Committee shall be made by not less than a
majority of its members. Any decision or determination reduced to writing and
signed by a majority of the members shall be fully effective as if it had been
made by a majority vote of its members at a meeting duly called and held. The
Committee may designate the Secretary of the Company or other Company employees
to assist the Committee in the administration of the Plan, and may grant
authority to such persons to execute award agreements or other documents on
behalf of the Committee and the Company. Any duly constituted committee of the
Board satisfying the qualifications of this Section 2 may be appointed as the
Committee.
(c) Committee Expenses. All expenses and liabilities incurred by the
Committee in the administration of the Plan shall be borne by the Company. The
Committee may employ attorneys, consultants, accountants or other persons.
SECTION 3. Stock Reserved for the Plan. Subject to adjustment as
provided in Sections 6(g) and 8 hereof, the aggregate number of shares of Common
Stock that may be optioned under the Plan is 538,800. The shares subject to the
Plan shall consist of authorized but unissued shares of Common Stock and such
number of shares shall be and is hereby reserved for sale for such purpose. Any
of such shares which may remain unsold and which are not subject to outstanding
Nonqualified Options at the termination of the Plan shall cease to be reserved
for the purpose of the Plan, but until termination of the Plan or the
termination of the last of the Nonqualified Options granted under the Plan,
whichever last occurs, the Company shall at all times reserve a sufficient
number of shares to meet the requirements of the Plan. Should any Nonqualified
Option lapse, expire or be canceled prior to its exercise in full, the shares
theretofor subject to such Nonqualified Option may not be made subject to
another Nonqualified Option under the Plan.
SECTION 4. Eligibility. The persons eligible to participate in the Plan
as a recipient of Nonqualified Options ("Optionee") shall include only employees
and directors of the Company or its Affiliates at the time the Nonqualified
Option is granted. An employee who has been granted a Nonqualified Option here
under may be granted an additional Nonqualified Option or Nonqualified Options,
if the Committee shall so determine.
SECTION 5. Grant of Nonqualified Options. Except where the Committee has
explicitly given the authority to some other individual, the Committee shall
have sole and absolute discretionary authority (i) to determine, authorize, and
designate those employees and directors of the Company or its Affiliates who
are to receive Nonqualified Options under the Plan, and (ii) to determine the
number of shares of Common Stock to be covered by such Nonqualified Options and
the terms thereof. If the Company is subject to Section 16 of the Exchange Act,
the Committee shall specifically pre-approve each grant to each Optionee subject
to Section 16(b) of the Exchange Act in accordance with Rule 16b-3 as amended,
unless such grant is or will be otherwise exempt from Section 16(b) of the
Exchange Act. The Committee shall thereupon grant Nonqualified Options in
accordance with such determinations as evidenced by a written Nonqualified
Option agreement. Subject to the express provisions of the Plan, the Committee
shall have discretionary authority to prescribe, amend and rescind rules and
regulations relating to the Plan, to interpret the Plan, to prescribe and amend
the terms of the Nonqualified Option agreements (which need not be identical)
and to make all other determinations deemed necessary or advisable for the
administration of the Plan.
SECTION 6. Terms and Conditions. Each Nonqualified Option granted under
the Plan shall be evidenced by an agreement, in a form approved by the
Committee, which shall be subject to the following express terms and conditions
and to such other terms and conditions as the Committee may deem appropriate.
(a) Option Period. The Committee shall promptly notify the Optionee of
the Nonqualified Option grant and a written agreement shall promptly be executed
and delivered by and on behalf of the Company and the Optionee, provided that
the Nonqualified Option grant shall expire if a written agreement is not signed
by said Optionee (or his agent or attorney) and returned to the Company within
60 days from date of receipt by the Optionee of such agreement. The date of
grant shall be the date the Nonqualified Option is actually granted by the
Committee, even though the written agreement may be executed and delivered by
the Company and the Optionee after that date. Each Nonqualified Option
agreement shall specify the period for which the Nonqualified Option thereunder
is granted (which in no event shall exceed ten years from the date of grant) and
shall provide that the Nonqualified Option shall expire at the end of such
period. If the original term of an option is less than ten years from the date
of grant, the Nonqualified Option may be amended prior to its expiration, with
the approval of the Committee and the Optionee, to extend the term so that the
term as amended is not more than ten years from the date of grant.
(b) Option Price. The purchase price of each share of Common Stock
subject to each Nonqualified Option granted pursuant to the Plan shall be
determined by the Committee at the time the Nonqualified Option is granted. The
Committee shall set the purchase price for each share subject to a Nonqualified
Option at such price as the Committee in its sole discretion shall determine,
provided that the purchase price of each share of Common Stock subject to a
Nonqualified Option shall not be less than 50% of the fair market value of a
share of Common Stock on the day immediately preceeding the date on which the
option is granted.
For all purposes under the Plan, the fair market value of a share of Common
Stock on a particular date shall be equal to the mean of the reported high and
low sales prices of the Common Stock as reported in The Wall Street Journal's
NYSE - Composite Transactions listing for such day (corrected for obvious
typographical errors) on that date, or if no prices are reported in such listing
on that date, then the mean of the reported high and low sales prices on the
largest national securities exchange (based on the aggregate dollar value of
securities listed) on which such shares are listed or traded, or if such shares
are not listed or traded on any national securities exchange, then the mean of
the reported high and low sales prices for such shares in the over-the-counter
market, as reported on the National Association of Securities Dealers Automated
Quotations System, or, if such prices shall not be reported thereon, the mean
between the closing bid and asked prices so reported, or, if such prices shall
not be reported, then the mean closing bid and asked prices reported by the
National Quotation Bureau Incorporated, or, in all other cases, the value
established by the Committee in good faith.
(c) Procedure for Exercise. Nonqualified Options shall be exercised by
the delivery of written notice to the Secretary of the Company setting forth the
number of shares with respect to which the Nonqualified Option is being exer-
cised. Such notice shall be accompanied by cash or cashier's check, bank draft,
postal or express money order payable to the order of the Company, or at the
option of the Committee, in Common Stock theretofore owned by such Optionee (or
any combination of cash and Common Stock). Notice may also be delivered by fax
or telecopy provided that the purchase price of such shares is delivered to the
Company via wire transfer on the same day the fax is received by the Company.
The notice shall specify the address to which the certificates for such shares
are to be mailed. An Optionee shall be deemed to be a stockholder with respect
to shares covered by a Nonqualified Option on the date the Company receives such
written notice and such option payment. The Committee may, in its discretion
and to the extent permitted by the laws of the State of Delaware, determine to
permit an Optionee to satisfy the purchase price of the shares as to which a
Nonqualified Option is exercised by delivery of the Optionee's promissory note,
such note to be subject to such terms and conditions as the Committee may
determine. The Committee may, in its discretion and to the extent permitted by
the laws of the State of Delaware, determine to cause the Company to loan to an
Optionee funds, on such terms and conditions as the Committee may determine to
be appropriate, sufficient for the Optionee to pay the purchase price of the
shares as to which a Nonqualified Option is to be exercised.
As promptly as practicable after receipt of such written notification and
payment, the Company shall deliver to the Optionee certificates for the number
of shares with respect to which such Nonqualified Option has been so exercised,
however, that such delivery shall be deemed effected for all purposes when a
stock transfer agent of the Company shall have deposited such certificates in
the United States mail, addressed to the Optionee at the address specified
pursuant to this Section 6(c).
(d) Termination of Employment. If an employee to whom a Nonqualified
Option is granted ceases to be employed by the Company for any reason or if a
director to whom a Nonqualified Option is granted ceases to serve on the Board
for any reason, any Nonqualified Option which is exercisable on the date of such
termination of employment or cessation from the Board may be exercised for
period not to exceed the shorter of (i) six months from the date of the
Optionee's termination of employment or cessation from the Board or (ii) the
remaining option period established for the Nonqualified Option pursuant to
Section 6(a) above.
(e) Assignability. A Nonqualified Option shall not be assignable or
otherwise transferable except by will or by the laws of descent and
distribution. During the lifetime of an Optionee, a Nonqualified Option shall
be exercisable only by him.
(f) No Rights as Stockholder. No Optionee shall have any rights as a
stockholder with respect to shares covered by a Nonqualified Option until the
option is exercised by the written notice and accompanied by payment as provided
in Section (c) above.
(g) Changes in Company's Capital Structure. If the outstanding shares of
Common Stock or other securities of the Company, or both, for which the
Nonqualified Option is then exercisable shall at any time be changed or
exchanged by a subdivision or consolidation of shares of Common Stock or other
capital readjustment, a declaration of a stock dividend, stock split, or combi
nation of shares, the number and kind of shares of Common Stock or other
securities which are subject to the Plan or subject to any Nonqualified Options
theretofore granted, and the option prices, shall be appropriately and equitably
adjusted so as to maintain the proportionate number of shares or other
securities without changing the aggregate option price.
(h) Acceleration of Nonqualified Options. Except as hereinbefore
expressly provided, (i) the issuance by the Company of shares of stock of any
class of securities convertible into shares of stock of any class, for cash,
property, labor or services, upon direct sale, upon the exercise of rights or
warrants to subscribe therefor, or upon conversion of shares or obligations of
the Company convertible into such shares or other securities, (ii) the payment
of a dividend in property other than Common Stock or (iii) the occurrence of any
similar transaction, and in any case whether or not for fair value, shall not
affect, and no adjustment by reason thereof shall be made with respect to, the
number of shares of Common Stock subject to Nonqualified Options theretofore
granted or the purchase price per share, unless the Committee shall determine in
its sole discretion that an adjustment is necessary to provide equitable
treatment to Optionee. Notwithstanding anything to the contrary contained in
this Plan, the Committee may in its sole discretion accelerate the time at which
any Nonqualified Option may be exercised, including, but not limited to, upon
the occurrence of the events specified in this Section 6, and is authorized at
any time (with the consent of the Optionee) to purchase Nonqualified Options
pursuant to Section 7.
SECTION 7. Relinquishment of Nonqualified Options.
(a) The Committee, in granting Nonqualified Options hereunder, shall have
discretion to determine whether or not Nonqualified Options shall include a
right of relinquishment as hereinafter provided by this Section 7. The
Committee shall also have discretion to determine whether a Nonqualified Option
agreement evidencing a Nonqualified Option initially granted by the Committee
without a right of relinquishment shall be amended or supplemented to include
such a right of relinquishment. Neither the Committee nor the Company shall be
under any obligation or incur any liability to any person by reason of the
Committee's refusal to grant or include a right of relinquishment in any
Nonqualified Option granted hereunder or in any Nonqualified Option agreement
evidencing the same. Subject to the Committee's determination in any case that
the grant by it of a right of relinquishment is consistent with clause (i)
hereof, any Nonqualified Option granted under this Plan, and the Nonqualified
Option agreement evidencing such Nonqualified Option, may provide:
(i) That the Optionee, or his heirs or other legal representatives to
the extent entitled to exercise the Nonqualified Option under the terms
thereof, in lieu of purchasing the entire number of shares subject to
purchase thereunder, shall have the right to relinquish all or any part of
the then unexercised portion of the Nonqualified Option (to the extent then
exercisable) for a number of shares of Common Stock, for an amount of cash
or for a combination of Common Stock and cash to be determined in
accordance with the following provisions of this clause (i):
(A) The written notice of exercise of such right of
relinquishment shall state the percentage, if any, of the Appreciated
Value (as defined below) that the Optionee elects to receive in cash
("Cash Percentage"), such Cash Percentage to be in increments of 10%
of such Appreciated Value up to 100% thereof;
(B) The number of shares of Common Stock, if any, issuable
pursuant to such relinquishment shall be the number of such shares,
rounded to the next greater number of full shares, as shall be equal
to the quotient obtained by dividing (A) the difference between (I)
the Appreciated Value and (II) the result obtained by multiplying the
Appreciated Value and the Cash Percentage by (B) the then current
market value per share of Common Stock;
(C) The amount of cash payable pursuant to such relinquishment
shall be an amount equal to the Appreciated Value less the aggregate
current market value of the Common Stock issued pursuant to such
relinquishment, if any, which cash shall be paid by the Company
subject to such conditions as are deemed advisable by the Committee to
permit compliance by the Company with the withholding provisions
applicable to employers under the Code and any applicable state income
tax laws;
(D) For the purpose of this clause (i), "Appreciated Value"
means the excess of (x) the aggregate current market value of the
shares of Common Stock covered by the Nonqualified Option or the
portion thereof to be relinquished over (y) the aggregate purchase
price for such shares specified in such Nonqualified Option;
(ii) That such right of relinquishment may be exercised only upon
receipt by the Company of a written notice of such relinquishment which
shall be dated the date of election to make such relinquishment; and that,
for the purposes of this Plan, such date of election shall be deemed to be
the date when such notice is sent by registered or certified mail, or when
receipt is acknowledged by the Company, if mailed by other than registered
or certified mail or if delivered by hand or by any telegraphic
communications equipment of the sender or otherwise delivered;
(iii) That the "current market value" of a share of Common Stock
on a particular date shall be deemed to be its fair market value on that
date as determined in accordance with Section 6(b); and
(iv) That the Nonqualified Option, or any portion thereof, may be
relinquished only to the extent that (A) it is exercisable on the date
written notice of relinquishment is received by the Company, (B) the
Committee shall consent to the election of the holder to relinquish such
Nonqualified Option in whole or in part for cash as set forth in such
written notice of relinquishment and (C) the holder of such Nonqualified
Option pays, or makes provision satisfactory to the Company for the payment
of, any taxes which the Company is obligated to collect with respect to
such relinquishment.
(b) The Committee, in granting Nonqualified Options hereunder, shall have
discretion to determine the terms upon which such Nonqualified Options shall be
relinquishable, subject to the applicable provisions of this Plan, and including
such provisions as are deemed advisable to permit the exemption from the
operation from Section 16(b) of the Exchange Act of any such relinquishment
transaction, and Nonqualified Options outstanding, and option agreements
evidencing such Nonqualified Options, may be amended, if necessary, to permit
such exemption. If a Nonqualified Option is relinquished, such Nonqualified
Option shall be deemed to have been exercised to the extent of the number of
shares of Common Stock covered by the Nonqualified Option or part thereof which
is relinquished, and no further Nonqualified Option may be granted covering such
shares of Common Stock.
(c) Neither any Nonqualified Option nor any right to relinquish the same
to the Company as contemplated by this Section 7 shall be assignable or
otherwise transferable except by will or the laws of descent and distribution.
SECTION 8. Corporate Transactions.
(a) The existence of outstanding Nonqualified Options shall not affect in
any way the right or power of the Company or its stockholders to make or
authorize any or all adjustments, recapitalizations, reorganizations, exchanges,
or other changes in the Company's capital structure or its business, or any
merger or consolidation of the Company, or any issuance of Common Stock or other
securities or subscription rights thereto, or any issuance of bonds, debentures,
preferred or prior preference stock ahead of or affecting the Common Stock or
the rights thereof, or the dissolution or liquidation of the Company, or any
sale or transfer of all or any part of its assets or business, or any other
corporate act or proceeding, whether of a similar character or otherwise.
(b) If the Company is reorganized, merged or consolidated or is otherwise
a party to a plan of exchange with another corporation pursuant to which
reorganization, merger, consolidation or plan of exchange, shareholders of the
Company receive any shares of Common Stock or other securities or if the Company
shall distribute ("Spin Off") securities of another corporation to its
shareholders, there shall be substituted for the shares subject to the
unexercised portions of outstanding Nonqualified Options an appropriate number
of shares of (i) each class of stock or other securities which were distributed
to the shareholders of the Company in respect of such shares in the case of a
reorganization, merger, consolidation or plan of exchange, or (ii) in the case
of a Spin Off, the securities distributed to shareholders of the Company
together with shares of Common Stock, such number of shares or securities to be
determined in accordance with the provisions of Section 425 of the Code (or
other applicable provisions of the Code or regulations issued thereunder which
may from time to time govern the treatment of incentive stock options in such a
transaction); provided, however, that all such Nonqualified Options may be
canceled by the Company as of the effective date of (x) a reorganization,
merger, consolidation, plan of exchange or Spin Off or (y) any dissolution or
liquidation of the Company, by giving notice to each Optionee or his personal
representative of its intention to do so and by permitting the purchase for a
period of at least thirty days during the sixty days next preceding such
effective date of all of the shares subject to such outstanding Nonqualified
Options, without regard to the installment provisions set forth in the
Nonqualified Option agreements; and provided further that in the event of a Spin
Off, the Company may, in lieu of substituting securities or accelerating and
canceling Nonqualified Options as contemplated above, elect (i) to reduce the
purchase price for each share of Common Stock subject to an outstanding
Nonqualified Option by an amount equal to the fair market value, as determined
in accordance with the provisions of Section 6(b), of the securities distributed
in respect of each outstanding share of Common Stock in the Spin Off or (ii) to
reduce proportionately the purchase price per share and to increase
proportionately the number of shares of Common Stock subject to each
Nonqualified Option in order to reflect the economic benefits inuring to the
shareholders of the Company as a result of the Spin Off.
(c) The Committee may, in its sole discretion, provide that a Nonqualified
Option shall become fully exercisable upon a Change in Control of the Company
(as defined in the next sentence). "Change in Control" of the Company shall be
conclusively deemed to have occurred if (and only if) any of the following shall
have taken place: (i) a change in control is reported by the Company in response
to either Item 5(f) of Schedule 14A of Regulation 14A promulgated under the
Exchange Act; (ii) any "person" (as such term is used in Sections 13(d) and
14(d)(2) of the Exchange Act) 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 forty percent or more of the combined voting power of
the Company's then outstanding securities; or (iii) following the election or
removal of directors, a majority of the Board consists of individuals who were
not members of the Board two years before such election or removal, unless the
election of each director who was not a director at the beginning of such two-
year period has been approved in advance by directors representing at least a
majority of the directors then in office who were directors at the beginning of
the two-year period.
(d) Except as hereinbefore expressly provided, the issue by the Company of
shares of stock of any class, or securities convertible into or exchangeable for
shares of stock of any class, for cash or property, or for labor or services,
either upon direct sale or upon the exercise of rights or warrants to subscribe
therefor, or upon conversion of shares or obligations of the Company convertible
into or exchangeable for shares of stock of any class shall not affect, and no
adjustment by reason thereof shall be made with respect to, the number of shares
of Common Stock subject to Nonqualified Options granted hereunder.
SECTION 9. Amendments or Termination. The Board may amend, alter or
discontinue the Plan, but no amendment or alteration shall be made which would
impair the rights of any Optionee, without his consent, under any Nonqualified
Option theretofore granted.
SECTION 10. Compliance With Other Laws and Regulations. The Plan, the
grant and exercise of Nonqualified Options thereunder, and the obligation of the
Company to sell and deliver shares under such Nonqualified Options, shall be
subject to all applicable federal and state laws, rules and regulations and to
such approvals by any governmental or regulatory agency as may be required. The
Company shall not be required to issue or deliver any certificates for shares of
Common Stock prior to the completion of any registration or qualification of
such shares under any federal or state law or issuance of any ruling or
regulation of any government body which the Company shall, in its sole
discretion, determine to be necessary or advisable.
SECTION 11. Purchase for Investment. Unless the Nonqualified Options and
shares of Common Stock issuable upon the exercise of the Nonqualified Options
issued pursuant to this Plan have been registered under the Securities Act of
1933, as amended, or the Company has determined that such registration is
unnecessary, each person exercising a Nonqualified Option under this Plan may be
required by the Company to give a representation in writing that he is acquiring
such shares for his own account for investment and not with a view to, or for
sale in connection with, the distribution of any part thereof.
SECTION 12. Taxes.
(a) The Company may make such provisions as it may deem appropriate for
the withholding of any taxes which it determines is required in connection with
any Nonqualified Options granted under this Plan.
(b) Notwithstanding the terms of Section 12(a), any Optionee may pay all
or any portion of the taxes required to be withheld by the Company or paid by
him in connection with the exercise of a Nonqualified Option by electing to have
the Company withhold shares of Common Stock, or by delivering previously owned
shares of Common Stock, having a fair market value, determined in accordance
with Section 6(b), equal to the amount required to be withheld or paid; provided
that such tax withholding or stock delivery right was specifically pre-approved
by the Committee as a feature of the Nonqualified Option or is otherwise
approved in accordance with Rule 16b-3. An Optionee must make the foregoing
election on or before the date that the amount of tax to be withheld is
determined ("Tax Date"). All such elections are irrevocable and subject to
disapproval by the Committee.
SECTION 13. Replacement of Nonqualified Options . The Committee from time
to time may permit an Optionee under the Plan to surrender for cancellation any
unexercised outstanding Nonqualified Option and receive from the Company in
exchange a Nonqualified Option for such number of shares of Common Stock as may
be designated by the Committee. The Committee may, with the consent of the
person entitled to exercise any outstanding Nonqualified Option, amend such
option, including reducing the exercise price of any option to not less than the
fair market value of the Common Stock at the time of the amendment and extending
the term thereof.
SECTION 14. No Right to Company Employment. Nothing in this Plan or as a
result of any Nonqualified Option granted pursuant to this Plan shall confer on
any individual any right to continue in the employ of the Company or interfere
in any way with the right of the Company to terminate an individual's employment
at any time. The Nonqualified Option agreements may contain such provisions as
the Committee may approve with reference to the effect of approved leaves of
absence.
SECTION 15. Liability of Company. The Company and any Affiliate which is
in existence or hereafter comes into existence shall not be liable to an
Optionee or other persons as to:
(a) The Non-Issuance of Shares. The non-issuance or sale of shares as to
which the Company has been unable to obtain from any regulatory body having
the lawful issuance and sale of any shares hereunder; and
(b) Tax Consequences. Any tax consequence expected, but not realized, by
any Optionee or other person due to the exercise of any Nonqualified Option
granted hereunder.
SECTION 16. Effectiveness and Expiration of Plan. The Plan shall be
effective on the date the Board approves the Plan and shall expire ten years
after such date. Thereafter, no Nonqualified Option shall be granted pursuant
to the Plan.
SECTION 17. Non-Exclusivity of the Plan. The adoption by the Board shall
not be construed as creating any limitations on the power of the Board to adopt
such other incentive arrangements as it may deem desirable, including without
limitation, the granting of restricted stock or stock nonqualified options
otherwise than under the Plan, and such arrangements may be either generally
applicable or applicable only in specific cases.
SECTION 18. Governing Law. This Plan and any agreements hereunder shall
be interpreted and construed in accordance with the laws of the State of
Delaware and applicable federal law.
IN WITNESS WHEREOF, and as conclusive evidence of the adoption of the
foregoing by the Board on May 14, 1997 (the "Date of Adoption"), Howell
Corporation has caused this document to be duly executed in its name and behalf
by an officer thereunto duly authorized as of the Date of Adoption.
HOWELL CORPORATION
By: /s/ ROBERT T. MOFFETT
_______________________
Name: Robert T. Moffett
Title: Vice President, General Counsel
and Secretary
EXHIBIT 10.2
NONQUALIFIED STOCK OPTION AGREEMENT
This Nonqualified Stock Option Agreement ("Option Agreement") is between
Howell Corporation, a Delaware corporation (the "Company") and
___________________ (the "Optionee").
W I T N E S S E T H:
WHEREAS, to carry out the purposes of the Howell Corporation 1997
Nonqualified Stock Option Plan (the "Plan") by providing for the acquisition of
proprietary interests in the Company through the award of a nonqualified stock
option providing for acquisition rights in the common stock of the Company, to
retain and attract personnel of outstanding ability, and to provide additional
motivation to the Employee to continue to exert Employee's best efforts for the
success and welfare of the Company and the benefit of the Company's
stockholders, the Committee (as defined in the Plan) has determined that the
Company's interests will be advanced by the issuance to Optionee of a
nonqualified stock option under the Plan.
NOW THEREFORE, for and in consideration of these premises it is agreed as
follows:
1. Option. Subject to the terms and conditions contained herein, the
Company hereby irrevocably grants to Optionee the right and option ("Option") to
purchase from the Company _____________________ (_________) shares of the
Company's common stock, $1.00 par value ("Common Stock"), at a price of
$__________ per share.
2. Option Period. The Option herein granted may be exercised by Optionee
in whole or in part at any time during a ten (10) year period (the "Option
Period") beginning on ________________, 1997 (the "Grant Date"), subject to the
limitation that said Option shall not be exercisable for more than a percentage
of the aggregate number of shares offered by this Option determined by the
number of full years of employment with the Company or its Affiliates beginning
on the Grant Date in accordance with the following schedule:
Number of Percentage of
Full Years Shares Purchasable
Less than one 0%
One 25%
Two 50%
Three 75%
Four or more 100%
Notwithstanding anything in this Agreement to the contrary, the Committee, in
its sole discretion may waive the foregoing schedule of vesting and upon written
notice to the Optionee, accelerate the earliest date or dates on which any of
the Options granted hereunder are exercisable.
3. Procedure for Exercise. The Option herein granted may be exercised by
written notice by Optionee to the Secretary of the Company setting forth the
number of shares of Common Stock with respect to which the Option is to be exer-
cised accompanied by payment for the shares to be purchased, and specifying the
address to which the certificate for such shares is to be mailed. The notice
shall be accompanied by (i) cash, cashier's check, bank draft, postal or express
money order payable to the order of the Company, or other immediately available
funds, or (ii) at the election of the Optionee and agreed to by the Committee,
certificates representing shares of Common Stock theretofore owned by Optionee
duly endorsed for transfer to the Company, or (iii) any combination of the
preceding, equal in value to the aggregate exercise price. Notice may also be
delivered by fax or telecopy provided that the exercise price of such shares is
received by the Company via wire transfer on the same day the fax or telecopy
transmission is received by the Company. An option to purchase shares of Common
Stock in accordance with this Plan, shall be deemed to have been exercised
immediately prior to the close of business on the date (i) written notice of
such exercise and (ii) payment in full of the exercise price for the number of
shares for which Options are being exercised, are both received by the Company
and Optionee shall be treated for all purposes as the record holder of such
shares of Common Stock as of such date.
As promptly as practicable after receipt of such written notice and
payment, the Company shall deliver to Optionee certificates for the number of
shares with respect to which such Option has been so exercised, issued in
Optionee's name or such other name as Optionee directs; provided, however, that
such delivery shall be deemed effected for all purposes when a stock transfer
agent of the Company shall have deposited such certificates in the United States
mail, addressed to Optionee at the address specified pursuant to this Section 3.
4. Termination of Employment or Cessation from the Board of Directors.
If Optionee's employment with the Company or its Affiliates is terminated during
the Option Period for any reason or if the Optionee ceases to serve on the Board
of the Company or its Affiliates during the Option Period for any reason,
Options which are exercisable by the Optionee pursuant to Section 2 on the date
of such termination of employment or cessation from the Board of the Company
shall expire on the earlier of (i) six months from the date of the Optionee's
termination of employment or cessation from the Board of the Company or (ii) the
remaining Option Period established for the Option pursuant to Section 2. Any
Options which are not exercisable by the Optionee pursuant to Section 2 on the
date of the Optionee's termination of employment or cessation from the Board of
the Company shall expire on the date of such termination of employment or
cessation from the Board of the Company.
5. Transferability. This Option shall not be transferable by Optionee
otherwise than by Optionee's will or by the laws of descent and distribution.
During the lifetime of Optionee, the Option shall be exercisable only by him.
Any heir or legatee of Optionee shall take rights herein granted subject to the
terms and conditions hereof. No such transfer of this Option Agreement to heirs
or legatees of Optionee shall be effective to bind the Company unless the
Company shall have been furnished with written notice thereof and a copy of such
evidence as the Committee may deem necessary to establish the validity of the
transfer and the acceptance by the transferee or transferees of the terms and
conditions hereof.
6. No Rights as Stockholder. Optionee shall have no rights as a
stockholder with respect to any shares of Common Stock covered by this Option
Agreement until the Option is exercised by written notice and accompanied by
payment as provided in Section 3 above. Until such time, Optionee shall not be
entitled to dividends attributable to such shares or to vote such shares at
meetings of the stockholders of the Company. Except as provided in Section 8
hereof, no adjustment shall be made for dividends (ordinary or extraordinary,
whether in cash or securities or other property) paid or distributions or other
rights granted in respect of any share of Common Stock for which the record date
for such payment, distribution or grant is prior to the date upon which the
Optionee shall have exercised said Option by written notice and payment to the
Company, as provided hereinabove.
7. Corporate Transactions.
a. If the Company is reorganized, merged or consolidated or is
otherwise a party to a plan of exchange with another corporation pursuant to
which reorganization, merger, consolidation or plan of exchange, shareholders of
the Company receive any shares of Common Stock or other securities or if the
Company shall distribute ("Spin Off") securities of another corporation to its
shareholders, there shall be substituted for the shares subject to the
unexercised portion of the Option an appropriate number of shares of (i) each
class of stock or other securities which were distributed to the shareholders of
the Company in respect of such shares in the case of a reorganization, merger,
consolidation or plan of exchange, or (ii) in the case of a Spin Off, the
securities distributed to shareholders of the Company together with shares of
Common Stock, such number of shares or securities to be determined in accordance
with the provisions of Section 425 of the Code (or other applicable provisions
of the Code or regulations issued thereunder which may from time to time govern
the treatment of incentive stock options in such a transaction); provided,
however, that the Option may be canceled by the Company as of the effective date
of (x) a reorganization, merger, consolidation, plan of exchange or Spin Off or
(y) any dissolution or liquidation of the Company, by giving notice to the
Optionee or his personal representative of its intention to do so and by
permitting the purchase for a period of at least thirty days during the sixty
days next preceding such effective date of all of the shares subject to the
Option; and provided further that in the event of a Spin Off, the Company may,
in lieu of substituting securities or accelerating and canceling the Option as
contemplated above, elect (i) to reduce the purchase price for each share of
Common Stock subject to the Option by an amount equal to the fair market value,
as determined in accordance with the provisions of Section 6(b), of the
securities distributed in respect of each outstanding share of Common Stock in
the Spin Off or (ii) to reduce proportionately the purchase price per share and
to increase proportionately the number of shares of Common Stock subject to the
Option in order to reflect the economic benefits inuring to the shareholders of
the Company as a result of the Spin Off.
b. The Option shall become fully exercisable upon a Change in
Control of the Company (as defined in the next sentence). "Change in Control"
of the Company shall be conclusively deemed to have occurred if (and only if)
any of the following shall have taken place: (i) a change in control is reported
by the Company in response to either Item 5(f) of Schedule 14A of Regulation 14A
promulgated under the Exchange Act; (ii) any "person" (as such term is used in
Sections 13(d) and 14(d)(2) of the Exchange Act) 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 forty percent or more of
the combined voting power of the Company's then outstanding securities; or (iii)
following the election or removal of directors, a majority of the Board consists
of individuals who were not members of the Board two years before such election
or removal, unless the election of each director who was not a director at the
beginning of such two-year period has been approved in advance by directors
representing at least a majority of the directors then in office who were
directors at the beginning of the two-year period.
c. Except as hereinbefore expressly provided, the issue by the
Company of shares of stock of any class, or securities convertible into or
exchangeable for shares of stock of any class, for cash or property, or for
labor or services, either upon direct sale or upon the exercise of rights or
warrants to subscribe therefor, or upon conversion of shares or obligations of
the Company convertible into or exchangeable for shares of stock of any class
shall not affect, and no adjustment by reason thereof shall be made with respect
to, the number of shares of Common Stock subject to the Option granted
hereunder.
8. Changes in Capital Structure. The existence of outstanding Options
shall not affect in any way the right or power of the Company or its
shareholders to make or authorize any or all adjustments, recapitalizations,
reorganizations or other changes in the Company's capital structure or its
business, or any merger or consolidation of the Company, or any issuance of
Common Stock or subscription rights thereto, or any issuance of bonds,
debentures, preferred or prior preference stock ahead of or affecting the Common
Stock or the rights thereof, or the dissolution or liquidation of the Company,
or any sale or transfer of all or any part of its assets or business, or any
other corporate act or proceedings, whether of a similar character or otherwise.
If the outstanding shares of Common Stock of the Company shall at any time be
changed or exchanged by a subdivision or consolidation of shares of Common Stock
or other capital readjustment, a declaration of a stock dividend, stock split,
combination of shares, or recapitalization, the number and kind of shares
subject to the Plan or subject to any Options theretofore granted, and the
Option prices, shall be appropriately and equitably adjusted so as to maintain
the proportionate number of shares without changing the aggregate Option price.
9. Compliance With Securities Laws. Upon the acquisition of any shares
pursuant to the exercise of the Option herein granted, Optionee (or any person
acting under Section 5) will enter into such written representations, warranties
and agreements as the Company may reasonably request in order to comply with
applicable securities laws or with this Option Agreement.
10. Compliance With Laws. Notwithstanding any of the other provisions
hereof, Optionee agrees that he will not exercise the Option(s) granted hereby,
and that the Company will not be obligated to issue any shares pursuant to this
Option Agreement, if the exercise of the Option(s) or the issuance of such
shares of Common Stock would constitute a violation by the Optionee or by the
Company of any provision of any law or regulation of any governmental authority.
11. Withholding of Tax. To the extent that the exercise of this Option or
the disposition of shares of Common Stock acquired by exercise of this Option
results in compensation income to the Optionee for federal or state income tax
purposes, the Optionee shall pay to the Company at the time of such exercise or
disposition (or such other time as the law permits if the Optionee is subject to
Section 16(b) of the Securities Exchange Act of 1934, as amended) such amount of
money as the Company may require to meet its obligation under applicable tax
laws or regulations; and, if the Optionee fails to do so, the Company is
authorized to withhold from any cash remuneration then or thereafter payable to
the Optionee, any tax required to be withheld by reason of such resulting
compensation income or Company may otherwise refuse to issue or transfer any
shares otherwise required to be issued or transferred pursuant to the terms
hereof. Payment of the withholding tax by the Optionee shall be made in
accordance with Section 12 of the Plan.
12. Resolution of Disputes. As a condition of the granting of the Option
hereby, the Optionee and his heirs and successors agree that any dispute or
disagreement which may arise hereunder shall be determined by the Committee in
its sole discretion and judgment, and that any such determination and any inter-
pretation by the Committee of the terms of this Option Agreement shall be final
and shall be binding and conclusive, for all purposes, upon the Company,
Optionee, his heirs and personal representatives.
13. Legends on Certificate. The certificates representing the shares of
Common Stock purchased by exercise of an Option will be stamped or otherwise
imprinted with legends in such form as the Company or its counsel may require
with respect to any applicable restrictions on sale or transfer and the stock
transfer records of the Company will reflect stop-transfer instructions with
respect to such shares.
14. Notices. Every notice hereunder shall be in writing and shall be
given by registered or certified mail. All notices of the exercise of any
Option hereunder shall be directed to Howell Corporation, 1500 Howell Building,
1111 Fannin, Houston, Texas 77002-6923, Attention: Secretary. Any notice given
by the Company to Optionee directed to him at his address on file with the
Company shall be effective to bind him and any other person who shall acquire
rights hereunder. The Company shall be under no obligation whatsoever to advise
Optionee of the existence, maturity or termination of any of Optionee's rights
hereunder and Optionee shall be deemed to have familiarized himself with all
matters contained herein and in the Plan which may affect any of Optionee's
rights or privileges hereunder.
15. Construction and Interpretation. Whenever the term "Optionee" is used
herein under circumstances applicable to any other person or persons to whom
this award, in accordance with the provisions of Section 5 hereof, may be
transferred, the word "Optionee" shall be deemed to include such person or
persons. References to the masculine gender herein also include the feminine
gender for all purposes.
16. Agreement Subject to Plan. This Option Agreement is subject to the
Plan. The terms and provisions of the Plan (including any subsequent amendments
thereto) are hereby incorporated herein by reference thereto. In the event of a
conflict between any term or provision contained herein and a term or provision
of the Plan, the applicable terms and provisions of the Plan will govern and
prevail. All definitions of words and terms contained in the Plan shall be
applicable to this Option Agreement.
17. Employment Relationship. Employees shall be considered to be in the
employment of the Company as long as they remain employees of the Company or a
parent or subsidiary corporation (as defined in Section 424 of the Internal
Revenue Code of 1986, as amended). Any questions as to whether and when there
has been a termination of such employment and the cause of such termination,
shall be determined by the Committee, and its determination shall be final.
Nothing contained herein shall be construed as conferring upon the Optionee the
right to continue in the employ of the Company, nor shall anything contained
herein be construed or interpreted to limit the "employment at will"
relationship between the Optionee and the Company.
18. Binding Effect. This Option Agreement shall be binding upon and inure
to the benefit of any successors to the Company and all persons lawfully
claiming under Optionee.
IN WITNESS WHEREOF, this Option Agreement has been executed as of the
day of _______________________, 19____.
ATTEST: HOWELL CORPORATION
______________________________ By:_________________________________
OPTIONEE
____________________________________
EXHIBIT 10.3
INDEMNITY AGREEMENT
THIS AGREEMENT made this _________________ between Howell Corporation, a
Delaware corporation ("Company"), and _________________________ ("Indemnitee").
The Company and Indemnitee desire that Indemnitee serve or continue to
serve as a director or officer of the Company, and the Company desires and
intends hereby to provide indemnification (including advancement of expenses)
against any and all liabilities asserted against Indemnitee to the fullest
extent permitted by the General Corporation Law of the State of Delaware. For
and in consideration of the premises and the covenants contained herein, the
Company and Indemnitee do hereby covenant and agree as follows:
1. Continued Service. Indemnitee will serve or continue to serve, at the
will of the Company or under separate contract, if such exists, as a director
and/or officer so long as he is duly elected and qualified in accordance with
the By-Laws of the Company or until he tenders his resignation.
2. Indemnification. The Company shall indemnify Indemnitee as follows:
(a) The Company shall indemnify Indemnitee when he is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Company) by reason of the fact
that he is or was a director, officer, employee or agent of the Company, or is
or was serving at the request of the Company as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorney's fees), judgments, fines and
amounts paid in settlements actually and reasonably incurred by him or on his
behalf in connection with such action, suit or proceeding if he acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the Company, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful.
(b) The Company shall indemnify Indemnitee when he is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit brought by or in the right of the Company to procure a judgment in its
favor by reason of the fact that he is or was a director, officer, employee or
agent of the Company, or is or was serving at the request of the Company as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorneys' fees)
actually and reasonably incurred by him or on his behalf in connection with the
defense or settlement of such action or suit if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
the Company and except that no indemnification shall be made in respect of any
claim, issue or matter as to which Indemnitee shall have been adjudged to be
liable to the Company unless and only to the extent that the Court of Chancery
or the court in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view of all the
circumstances of the case, Indemnitee is fairly and reasonably entitled to
indemnification for such expenses which the Court of Chancery or such other
court shall deem proper.
(c) Any indemnification under paragraphs (a) and (b) of this Section
2 (unless ordered by a court) shall be made by the Company only as authorized in
the specific case upon a determination (in accordance with Section 3 hereof)
that indemnification of Indemnitee is proper in the circumstances because he has
met the applicable standard of conduct set forth in paragraphs (a) and (b) of
this Section 2. Such determination shall be made (1) by the board of directors
by a majority vote of a quorum consisting of directors who were not parties to
such action, suit or proceeding, or (2) if such a quorum is not obtainable, or,
even if obtainable a quorum of disinterested directors so directs, by
independent legal counsel in a written opinion, or (3) by the stockholders. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that Indemnitee failed to act in good faith and in
a manner which he reasonably believed to be in or not opposed to the best
interests of the Company, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
(d) Expenses (including attorneys' fees) incurred by Indemnitee in
defending a civil or criminal action, suit or proceeding by reason of the fact
that he is or was a director or officer of the Company shall be paid by the
Company in advance of the final disposition of such action, suit or proceeding
within 14 days of the receipt by the Company of a sworn statement of request for
advancement of expenses substantially in the form of Exhibit I attached hereto
and made a part hereof ("Undertaking"), averring that (i) he had reasonably
incurred or will reasonably incur actual expenses in defending a civil or
criminal action, suit or proceeding, and (ii) he undertakes to repay such amount
if it is ultimately determined that he is not entitled to be indemnified by the
Company under this Agreement or otherwise.
(e) The right to indemnification and advancement of expenses provided by
this Agreement shall not be deemed exclusive of any other rights to which
Indemnitee may be entitled under any statute, by-law, insurance policy,
agreement, vote of stockholders or disinterested directors or otherwise, both as
to action in his official capacity and as to action in another capacity while
holding such office, and shall continue after Indemnitee has ceased to be a
director, officer, employee or agent and shall inure to the benefit of his
heirs, executors and administrators.
3. Determination of Right to Indemnification. For the purposes of making
the determination in a specific case under paragraph (c) of Section 2 hereof
whether to make indemnification, the board of directors, independent legal
counsel, or stockholders, as the case may be, shall make such determination in
accordance with the following procedure:
(a) Indemnitee may submit to the board of directors a sworn statement of
request for indemnification substantially in the form of Exhibit 2 attached
hereto and made a part hereof ("Indemnification Statement") averring that he has
met the applicable standard of conduct set forth in paragraphs (a) and (b) of
Section 2 hereof; and
(b) Submission of the Indemnification Statement to the board of directors
shall create a rebuttable presumption that Indemnitee is entitled to
indemnification under this Agreement, and the board of directors, independent
legal counsel, or stockholders, as the case may be, shall within 60 days after
submission of the Indemnification Statement specifically determine that
Indemnitee is so entitled, unless it or they shall possess sufficient evidence
to rebut the presumption that Indemnitee has met the applicable standard of
conduct set forth in paragraph (a) and (b) of Section 2 hereof, which evidence
shall be disclosed to Indemnitee with particularity in a sworn written statement
signed by all persons who participated in the determination and voted to deny
indemnification.
4. Merger, Consolidation or Change in Control. In the event that the
Company shall be a constituent corporation in a consolidation or merger, whether
the Company is the resulting or surviving corporation or is absorbed, or if
there is a change in control of the Company as defined in Section 5 hereof,
Indemnitee shall stand in the same position under this Agreement with respect to
the resulting, surviving or changed corporation as he would have with respect to
the Company if its separate existence had continued or if there had been no
change in the control of the Company.
5. Certain Definitions. For purposes of this Agreement, the following
definitions apply herein:
"other enterprises" shall include employee benefit plans, and civic, non-
profit, or charitable organizations, whether or not incorporated.
"fines" shall include any excise taxes assessed on Indemnitee with respect
to any employee benefit plan;
"serving at the request of the Company" shall include any service at the
request or with the express or implied authorization of the Company, as a
director, officer, employee or agent of the Company which imposes duties on, or
involves services by, Indemnitee with respect to a corporation or "other
enterprises," its participants or beneficiaries; and if Indemnitee acted in good
faith and in a manner he reasonably believed to be in the interest of the
participants and beneficiaries of such "other enterprises," he shall be deemed
to have acted in a manner "not opposed to the best interests of the Company" as
referred to in this Agreement; and
"change of control" shall include any change in the ownership of a majority
of the capital stock of the Company or in the composition of a majority of the
members of the board of directors of the Company.
6. Attorneys' Fees. In the event that Indemnitee institutes any legal
action to enforce his rights under, or to recover damages for breach of this
Agreement, Indemnitee, if he prevails in whole or in part, shall be entitled to
recover from the Company all attorneys' fees and disbursements incurred by him.
7. Severability. If any provision of this Agreement or the application
of any provision hereof to any person or circumstances is held invalid, the
remainder of this Agreement and the application of such provision to other
persons or circumstances shall not be affected.
8. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware without regard to its conflict
of laws rules.
9. Modification; Survival. This Agreement contains the entire agreement
of the parties relating to the subject matter hereof. This Agreement may be
modified only by an instrument in writing signed by both parties hereof. The
provisions of this Agreement shall survive the termination of Indemnitee's
service as a director or officer of the Company.
10. Deposit of Funds In Trust. In the event that the Company decides to
voluntarily dissolve or to file a voluntary petition for relief under applicable
bankruptcy, moratorium or similar laws, then not later than ten days prior to
such dissolution or filing, the Company shall deposit in trust for the exclusive
benefit of Indemnitee a cash amount equal to all amounts previously authorized
to be paid to Indemnitee hereunder, such amounts to be used to discharge the
Company's obligations to Indemnitee hereunder. Any amounts in such trust not
required for such purpose shall be returned to the Company. This Section 10
shall not apply to dissolution of the Company in connection with a transaction
as to which Section 4 hereof applies.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
and set their seals as of the date first above written.
HOWELL CORPORATION
Attest:____________________________ By: _________________________________
______________________ Name: __________________
______________________ Title: __________________
(Corporate Seal) INDEMNITEE
_____________________________________
_________________________
<PAGE>
EXHIBIT 1
STATEMENT OF UNDERTAKING
STATE OF
COUNTY OF
I,________________________, being first duly sworn do depose and say as follows:
1. This Statement is submitted pursuant to the Indemnity Agreement dated
____________________, 19__, between Howell Corporation, a Delaware corporation
(Company), and the undersigned.
2. I am requesting advancement of certain actual expenses which have
reasonably been incurred or will be reasonably incurred by me or on my behalf in
defending a civil or criminal action, suit or proceeding by reason of the fact
that I am or was a director or officer of the Company.
3. I hereby undertake to repay this advancement of expenses if it is
ultimately determined that I am not entitled to be indemnified by the Company.
4. The expenses for which advancement is requested have been or will be
incurred in connection with the following action, suit or proceeding:
___________________________
Name:______________________
Subscribed and sworn to before me this _______ day of ___________________,19__.
____________________________________________
Notary Public in and for
said state and county
<PAGE>
EXHIBIT 2
STATEMENT OF REQUEST FOR INDEMNIFICATION
STATE OF
COUNTY OF
I,___________________________, being first duly sworn do depose and say as
follows:
1. This Statement is submitted pursuant to the Indemnity Agreement dated
____________________, 19__, between Howell Corporation, a Delaware corporation
(Company), and the undersigned.
2. I am requesting indemnification against expenses (including attorneys'
fees) and, with respect to any action not by or in the right of the Company,
judgments, fines and amounts paid in settlement, all of which have been actually
and reasonably incurred by me or on my behalf in connection with a certain
action, suit or proceeding to which I am a party or am threatened to be made a
party by reason of the fact that I am or was a director or officer of the
Company.
3. With respect to all matters related to any such action, suit or
proceeding, I acted in good faith and in a manner I reasonably believed to be in
or not opposed to the best interests of the Company, and, with respect to any
criminal action or proceeding, I had no reason to believe that my conduct was
unlawful.
4. I am requesting indemnification in connection with the following suit,
action or proceeding:
____________________________
Name:
Subscribed and sworn to before me this __________ day of _______________, 19__.
___________________________________________
Notary Public in and for
said state and county
EXHIBIT 99.1
May 14, 1997
Voyager Energy Corp.
Two Chasewood Park
20405 State Highway 249, Ste. 140
Houston, TX 77070
Attention: Richard K. Hebert
Donald W. Clayton
Gentlemen:
This letter will establish the basic terms of the proposed acquisition
("Acquisition") of Voyager Energy Corp. ("Seller") by Buyer Corporation
("Buyer"), pursuant to which it is contemplated that (i) the outstanding capital
stock of Seller will be converted into common shares of Buyer and (ii) Seller
will become a wholly-owned direct or indirect subsidiary of Buyer. Buyer is
prepared to commence immediately the negotiation of a definitive agreement
pursuant to which the acquisition would be effected.
The definitive agreement will, among other things, provide:
1. The Acquisition will constitute a reorganization under
Section 368(a)(2)(E) of the Internal Revenue Code of 1986, as amended. Based on
the assumptions and subject to the conditions set forth below, in the
Acquisition the aggregate outstanding shares of common stock of Seller shall be
converted into approximately 340,000 shares of the common stock of Buyer (the
"Merger Consideration").
2. This letter is based on the assumptions that (i) Seller owns certain
interests in oil and gas leases, royalty interests, overriding royalty interests
and mineral interests, as well as being the sole general partner of Partnership,
which owns certain working interests in oil and gas leases, (ii) the principal
amount of the indebtedness of Seller to financial institutions, which shall be
assumed by Buyer in the Acquisition, shall not exceed $752,600, (iii) the
principal amount of the indebtedness of Seller to investors in the Partnership,
which shall be assumed by Buyer in the Acquisition, will not exceed $800,000,
and (iv) there are no outstanding options, warrants or other rights to acquire
common stock of Seller corporation, or receive cash payments in lieu thereof.
3. For representations, warranties, covenants, conditions and indemnities
acceptable to Buyer and Seller and customary in transactions of this nature.
4. That the closing of the Acquisition shall be subject to, among other
things: (a) satisfactory completion of Buyer's due diligence examination of
Seller and its properties, (b) approval of the final terms of the Agreement and
Plan of Reorganization by Buyer's Board of Directors, (c) approval by the
stockholders of Buyer and (d) the obtaining of all other necessary governmental
and third party consents and approvals.
Please confirm that this letter accurately sets forth our mutual
understanding by executing two copies of this letter and returning a fully
executed copy to Buyer. It is recognized that the definitive agreement will
include terms, provisions, conditions, representations and warranties in
addition to those discussed above. It is our expectation that the parties would
enter into a definitive agreement as promptly as practicable after completion of
due diligence, and that the stockholders' meeting of Buyer will be held as soon
as practicable thereafter. The closing would take place as soon as practicable
after approval of the stockholders.
This letter shall be void and of no force or effect if not executed and
delivered by both parties on or before 5:00 p.m. Houston, Texas time on May 14,
1997.
If the foregoing is in accordance with your understanding, kindly execute
and return the enclosed copy of this letter as provided above.
Very truly yours,
HOWELL CORPORATION
By:/s/ ROBERT T. MOFFETT
_______________________
Name: Robert T. Moffett
Title: Vice President, General Counsel and
Secretary
Confirmed:
VOYAGER ENERGY CORP.
By: /s/ RICHARD K. HEBERT
_________________________
Name: Richard K. Hebert
Title: CEO
_________________
and
By: /s/ DONALD W. CLAYTON
________________________
Name: Donald W. Clayton
Title: President
_________________
