<PAGE> 1
As filed with the Securities and Exchange Commission on May 10, 1995
Registration No. 33-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
UNION TEXAS PETROLEUM HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
Delaware 76-0040040
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1330 Post Oak Boulevard
Houston, Texas 77056
(Address of Principal Executive Offices) (Zip Code)
UNION TEXAS PETROLEUM HOLDINGS, INC.
1994 INCENTIVE PLAN
(Full title of the plan)
Newton W. Wilson, III
General Counsel, Vice President -- Administration and Secretary
Union Texas Petroleum Holdings, Inc.
1330 Post Oak Boulevard
Houston, Texas 77056
(713) 623-6544
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
====================================================================================================================================
Proposed
Maximum Proposed Maximum
Amount to be Offering Price Aggregate Offering Amount of
Title of Securities to be Registered Registered Per Share Price Registration Fee
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $0.05 Par Value Per
Share 4,000,000 Shares $22.4375(1) $89,750,000(1) $30,949(1)
====================================================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee,
based upon the average of the high and low prices of a share of the
Company's Common Stock on the New York Stock Exchange on May 3, 1995
pursuant to Rule 457(c).
================================================================================
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.
The Company incorporates herein by reference the following documents as of
their respective dates as filed with the Securities and Exchange Commission
(the "Commission"):
(1) The Annual Report of Union Texas Petroleum Holdings, Inc.
(the "Company") on Form 10-K for the fiscal year ended December 31, 1994;
(2) The Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1995;
(3) The Company's Current Reports on Form 8-K dated January 20,
1995, February 7, 1995, February 22, 1995, March 16, 1995, March 17, 1995,
April 10, 1995, April 28, 1995 and May 4, 1995; and
(4) The description of the Company's Common Stock, $0.05 par value
per share (the "Common Stock") contained in the Company's Registration
Statement on Form 8-A (File No. 1-9019) filed with the Commission on August 6,
1987, as amended by Forms 8 filed with the Commission on September 16, 1987
(Amendment No. 1), September 21, 1987 (Amendment No. 2) and September 24, 1987
(Amendment No. 3) pursuant to Section 12 of the Securities Exchange Act of
1934, as amended (the "Exchange Act").
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Exchange Act after the date of this Registration Statement and
prior to the filing of a post effective amendment, which indicates that all
securities offered hereby have been sold or which deregisters all such
securities then remaining unsold, shall be deemed to be incorporated by
reference in this Registration Statement and to be a part hereof from the date
of filing such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
The information required by Item 4 is not applicable to this Registration
Statement since the class of securities to be offered is registered under
Section 12 of the Exchange Act.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Newton W. Wilson, III, General Counsel, Vice President -- Administration
and Secretary of the Company, has given his opinion that the shares of Common
Stock of the Company offered hereby, when issued and sold in accordance with
the Company's 1994 Incentive Plan, will be validly issued, fully paid and
nonassessable. Such opinion has been filed as an exhibit to this Registration
Statement. As of the date of this Registration Statement, Mr. Wilson owned
approximately 6,400 shares of Common Stock of the Company (excludes shares held
indirectly by Mr. Wilson in the Company's Savings Plan for Salaried Employees)
and owned directly options to purchase 157,653 shares of Common Stock (includes
options to purchase Common Stock which are not yet vested).
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law, inter alia, empowers
a Delaware corporation to indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding (other than an action by or in the right of the corporation)
by reason of the fact that such person is or was a director, officer, employee
or agent of the corporation or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation or
other enterprise, against expenses (including attorneys' fees),
II-1
<PAGE> 3
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him 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 corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. Similar
indemnity is authorized for such persons against expenses (including attorneys'
fees) actually and reasonably incurred in connection with the defense or
settlement of any such threatened, pending or completed action or suit if such
person acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the corporation, and provided further that
(unless a court of competent jurisdiction otherwise provides) such person shall
not have been adjudged liable to the corporation. Any such indemnification may
be made only as authorized in each specific case upon a determination by the
stockholders or disinterested directors or by independent legal counsel in a
written opinion that indemnification is proper because the indemnitee has met
the applicable standard of conduct.
Section 145 further authorizes a corporation to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee
or agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation or
enterprise, against any liability asserted against him and incurred by him in
any such capacity, or arising out of his status as such, whether or not the
corporation would otherwise have the power to indemnify him under Section 145.
The Company maintains policies insuring its and its subsidiaries' officers and
directors against certain liabilities for actions taken in such capacities,
including liabilities under the Securities Act of 1933.
Article VI of the Bylaws of the Company provides for indemnification of
the directors and officers of the Company to the full extent permitted by law,
as now in effect or later amended. In addition, the Bylaws provide for
indemnification against expenses incurred by a director or officer to be paid
by the Company at reasonable intervals in advance of the final disposition of
such action, suit or proceeding upon receipt of an undertaking by or on behalf
of the director or officer to repay such amount if it shall be ultimately
determined that he is not entitled to be indemnified by the Company. The
Bylaws further provide for a contractual cause of action on the part of
directors and officers of the Company for indemnification claims which have not
been paid by the Company.
Article VIII of the Company's Restated Certificate of Incorporation limits
under certain circumstances the liability of the Company's directors for a
breach of their fiduciary duty as directors. These provisions do not eliminate
the liability of a director (i) for a breach of the director's duty of loyalty
to the Company or its stockholders, (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law,
(iii) under Section 174 of the Delaware General Corporation Law (relating to
the declaration of dividends and purchase or redemption of shares in violation
of the Delaware General Corporation Law) or (iv) for any transaction from which
the director derived an improper personal benefit.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
The information required by Item 7 is not applicable to this
Registration Statement.
ITEM 8. EXHIBITS.
<TABLE>
<CAPTION>
Exhibit
Number Description
-------- -----------
<S> <C>
4.1 Restated Certificate of Incorporation of Union Texas Petroleum Holdings, Inc.
(filed as Exhibit 3.1 to Post Effective Amendment No. 1 to the Company's
Registration Statement No. 33-12800 and incorporated herein by reference)
4.2 Bylaws of Union Texas Petroleum Holdings, Inc. (filed as Exhibit 3.2 to the
Company's Form 10-Q for the quarter ended June 30, 1994 (Commission File No.
1-9019) and incorporated herein by reference)
</TABLE>
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<PAGE> 4
<TABLE>
<S> <C>
4.3* The Union Texas Petroleum Holdings, Inc. 1994 Incentive Plan
5.1* Opinion of Mr. Newton W. Wilson, III, General Counsel, Vice President--
Administration and Secretary of Union Texas Petroleum Holdings, Inc.
15* Independent Accountants' Awareness Letter
23.1* The consent of Mr. Newton W. Wilson, III is included in such opinion filed as
Exhibit 5.1 to this Registration Statement
23.2* Consent of Price Waterhouse LLP
24.1* Power of Attorney (set forth on the signature page contained in Part II of this
Registration Statement)
</TABLE>
- -----------
* Filed with this Registration Statement.
ITEM 9. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or
the most recent post effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
information set forth in this Registration Statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the registration
statement or any material change to such information in this
Registration Statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be included in a post effective amendment
by those paragraphs is contained in periodic reports filed by the registrant
pursuant to Section 13 or Section 15 (d) of the Securities Exchange Act of 1934
that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933, each
filing of the registrant's annual report pursuant to Section 13(a) or 15(d) of
the Securities Exchange Act of 1934 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.
II-3
<PAGE> 5
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 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 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 Act and
will be governed by the final adjudication of such issue.
II-4
<PAGE> 6
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 to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Houston, State of Texas, on May 10, 1995.
UNION TEXAS PETROLEUM HOLDINGS. INC.
By: /s/ A. CLARK JOHNSON
-----------------------------------
A. Clark Johnson
Chairman of the Board and
Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned officers
and directors of Union Texas Petroleum Holdings, Inc. (the "Company") hereby
constitutes and appoints A. Clark Johnson, Newton W. Wilson, III and Larry D.
Kalmbach, or each of them (with full power to each of them to act alone), his
true and lawful attorney-in-fact and agent, with full power of substitution,
for him and on his behalf and in his name, place and stead, in any and all
capacities, to sign, execute and file this registration statement under the
Securities Act of 1933, as amended, and any or all amendments (including,
without limitation, post effective amendments), with all exhibits and any and
all documents required to be filed with respect thereto, with the Securities
and Exchange Commission or any regulatory authority, granting unto such
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
order to effectuate the same, as fully to all intents and purposes as he
himself might or could do if personally present, hereby ratifying and
confirming all that such attorneys-in-fact and agents, or any of them, or their
substitute or substitutes, may lawfully do or cause to be done.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ A. CLARK JOHNSON Chairman of the Board and May 10, 1995
- ----------------------------------- Chief Executive Officer
(A. Clark Johnson) (Principal Executive Officer)
/s/ LARRY D. KALMBACH Vice President and Chief Financial May 10, 1995
- ----------------------------------- Officer (Principal Financial
(Larry D. Kalmbach) Officer)
/s/ DONALD M. MCMULLAN Vice President and Controller May 10, 1995
- ----------------------------------- (Principal Accounting Officer)
(Donald M. McMullan)
/s/ GLENN A. COX Director May 10, 1995
- -----------------------------------
(Glenn A. Cox)
/s/ SAUL A. FOX Director May 10, 1995
- -----------------------------------
(Saul A. Fox)
</TABLE>
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<PAGE> 7
<TABLE>
<S> <C> <C>
/s/ EDWARD A. GILHULY Director May 10, 1995
- -----------------------------------
(Edward A. Gilhuly)
/s/ JAMES H. GREENE, JR. Director May 10, 1995
- -----------------------------------
(James H. Greene, Jr.)
/s/ HENRY R. KRAVIS Director May 10, 1995
- -----------------------------------
(Henry R. Kravis)
/s/ MICHAEL W. MICHELSON Director May 10, 1995
- -----------------------------------
(Michael W. Michelson)
/s/ STANLEY P. PORTER Director May 10, 1995
- -----------------------------------
(Stanley P. Porter)
/s/ GEORGE R. ROBERTS Director May 10, 1995
- -----------------------------------
(George R. Roberts)
/s/ RICHARD R. SHINN Director May 10, 1995
- -----------------------------------
(Richard R. Shinn)
/s/ SELLERS STOUGH Director May 10, 1995
- -----------------------------------
(Sellers Stough)
</TABLE>
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<PAGE> 8
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Description
------- -----------
<S> <C>
4.1 -- Restated Certificate of Incorporation of Union Texas Petroleum Holdings, Inc.
(filed as Exhibit 3.1 to Post Effective Amendment No. 1 to the Company's
Registration Statement No. 33-12800 and incorporated herein by reference)
4.2 -- Bylaws of Union Texas Petroleum Holdings, Inc. (filed as Exhibit 3.1 to the
Company's Form 8-K dated February 4,1993 (Commission File No. 19019) and
incorporated herein by reference)
4.3* -- The Union Texas Petroleum Holdings, Inc. 1994 Incentive Plan
5.1* -- Opinion of Mr. Newton W. Wilson, III, General Counsel, Vice President--
Administration and Secretary of Union Texas Petroleum Holdings, Inc.
15* -- Independent Accountants' Awareness Letter
23.1* -- The consent of Mr. Newton W. Wilson, III is included in such opinion filed as
Exhibit 5.1 to this Registration Statement
23.2* -- Consent of Price Waterhouse LLP
24.1* -- Power of Attorney (set forth on the signature page contained in Part II of this
Registration Statement)
</TABLE>
- ----------
* Filed with this Registration Statement.
II-7
<PAGE> 1
EXHIBIT 4.3
UNION TEXAS PETROLEUM HOLDINGS, INC.
1994 INCENTIVE PLAN
SECTION 1. PURPOSE OF THE PLAN
The Union Texas Petroleum Holdings, Inc. 1994 Incentive Plan (the "Plan")
is intended to promote the interests of Union Texas Petroleum Holdings, Inc., a
Delaware corporation (the "Company"), by encouraging employees of the Company,
its subsidiaries and affiliated entities, and non-employee directors of the
Company to acquire or increase their equity interest in the Company and to
provide a means whereby employees may develop a sense of proprietorship and
personal involvement in the development and financial success of the Company,
and to encourage them to remain with and devote their best efforts to the
business of the Company thereby advancing the interests of the Company and its
shareholders. The Plan is also contemplated to enhance the ability of the
Company, its subsidiaries and affiliated entities to attract and retain the
services of individuals who are essential for the program, growth and
profitability of the Company.
SECTION 2. DEFINITIONS
As used in the Plan, the following terms shall have the meanings set forth
below:
"Affiliate" shall mean (i) any entity that, directly or through one or
more intermediaries, is controlled by the Company and (ii) any entity in
which the Company has a significant equity interest, as determined by the
Committee.
"Award" shall mean any Option, Stock Appreciation Right, Restricted
Stock, Performance Award, Stock Compensation Award, Deferred Shares, Bonus
Shares, Other Stock-Based or Cash Award.
"Award Agreement" shall mean any written agreement, contract, or other
instrument or document evidencing any Award, which may, but need not, be
executed or acknowledged by a participant.
"Board" shall mean the Board of Directors of the Company.
"Bonus Shares" shall mean an award of Shares granted pursuant to
Section 6(e) of the Plan.
"Cash Award" shall mean an award payable in cash granted pursuant to
Section 6(g) of the Plan.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the rules and regulations thereunder.
"Committee" shall mean the Organization and Compensation Committee of
the Board.
"Covered Employees" shall have the meaning specified in Section
162(m)(3) of the Code.
"Deferred Shares" shall mean an Award of the right to receive Shares
issued at the end of a Restricted Period which is granted pursuant to
Section 6(f) of the Plan.
"Disability" shall mean (i) with respect to an Employee of the Company
or of any Affiliate, becoming permanently disabled under the standards of
the Company's disability program as determined by the Committee or (ii)
with respect to a non-employee Director, inability to perform duties and
services as a director of the Company by reason of a medically determinable
physical or mental impairment supported by medical evidence which in the
opinion of the Committee can be expected to result in death or which can be
expected to last for a continuous period of not less than twelve (12)
months.
"Employee" shall mean any employee of the Company or of any Affiliate.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Fair Market Value" shall mean the fair market value of the property
or other item being valued, as determined by the Committee. With respect to
Shares, if the Shares are traded on a national stock
1
<PAGE> 2
exchange, the fair market value of a Share on a particular date shall be
equal to the average of the reported high and low sales prices of the Share
on such exchange on that date, or if no prices are reported on that date,
on the last preceding date on which such prices of the Share are so
reported. If the Shares are publicly traded but are not traded on a
national stock exchange at the time a determination of its fair market
value is required to be made hereunder, its fair market value shall be
deemed to be equal to the average between the closing bid and asked price
of the Share on the most recent date the Shares were publicly traded. In
the event the Shares are not publicly traded at the time a determination of
its fair market value is required to be made hereunder, the determination
of fair market value shall be made in good faith by the Committee.
"Incentive Stock Option" or "ISO" shall mean an option granted under
Section 6(a) of the Plan that is intended to qualify as an "incentive stock
option" under Section 422 of the Code or any successor provision thereto.
"non-employee Director" shall mean a director of the Company who is
not (i) otherwise an employee of the Company or any Affiliate or (ii) a
general partner, limited partner or employee of Kohlberg Kravis Roberts &
Co.
"Non-Qualified Stock Option" or "NQO" shall mean an option granted
under Sections 6(a) or 6(h) of the Plan that is not intended to be an
Incentive Stock Option.
"Option" shall mean an Incentive Stock Option or a Non-Qualified Stock
Option.
"Other Stock-Based Award" shall mean any right granted under Section
6(g) of the Plan.
"Participant" shall mean any individual granted an Award under the
Plan. Any other provisions hereof to the contrary notwithstanding, no
non-employee Director may receive benefits under this Plan except for
Non-Qualified Stock Options as provided in Section 6(h).
"Performance Award" shall mean any right granted under Section 6(d) of
the Plan.
"Person" shall mean individual, corporation, partnership, association,
joint-stock company, trust, unincorporated organization, government or
political subdivision thereof or other entity.
"Restricted Period" shall mean the period established by the Committee
with respect to an Award during which the Award either remains subject to
forfeiture or is not exercisable by the Participant.
"Restricted Stock" shall mean any Share, prior to the lapse of
restrictions thereon, granted under Section 6(c) of the Plan.
"Retirement" shall mean (i) with respect to an employee of the Company
or one of its Affiliates, retirement as determined by the Committee, and
(ii) with respect to a non-employee Director of the Company, termination of
service as a director or honorary director, after at least five (5) years
of continuous service.
"Rule 16b-3" shall mean Rule 16b-3 promulgated by the SEC under the
Exchange Act, or any successor rule or regulation thereto as in effect from
time to time.
"SEC" shall mean the Securities and Exchange Commission, or any
successor thereto.
"Shares" or "Common Shares" or "Common Stock" shall mean the common
stock of the Company, $0.05 par value, and such other securities or
property as may become the subject of Awards or become subject to Awards
pursuant to an adjustment made under Section 4(c) of the Plan.
"Stock Appreciation Right" or "Right" shall mean any right to receive
the appreciation of Shares granted under Section 6(b) of the Plan.
"Stock Compensation" shall mean any right granted under Section 6(e)
of the Plan.
2
<PAGE> 3
"Substitute Award" shall mean Awards granted in assumption of, or in
substitution for, outstanding awards previously granted by (i) a company
acquired by the Company or one or more of its Affiliates, or (ii) a company
with which the Company or one or more of its Affiliates combines.
SECTION 3. ADMINISTRATION
The Plan shall be administered by the Committee, which Committee shall
consist of at least two members. Members of the Committee shall be
"disinterested persons" within the meaning of Rule 16b-3 which has been adopted
by the SEC under the Exchange Act as such Rule or its equivalent is then in
effect. A majority of the Committee shall constitute a quorum, and the acts of
the members of the Committee who are present at any meeting thereof at which a
quorum is present, or acts unanimously approved by the members of the Committee
in writing, shall be the acts of the Committee. Subject to the terms of the Plan
and applicable law, and in addition to other express powers and authorizations
conferred on the Committee by the Plan, the Committee shall have full power and
authority to: (i) designate Participants; (ii) determine the type or types of
Awards to be granted to an eligible Employee; (iii) determine the number of
Shares to be covered by, or with respect to which payments, rights, or other
matters are to be calculated in connection with, Awards; (iv) determine the
terms and conditions of any Award; (v) determine whether, to what extent, and
under what circumstances Awards may be settled or exercised in cash, Shares,
other securities, other Awards or other property, or cancelled, forfeited, or
suspended and the method or methods by which Awards may be settled, exercised,
cancelled, forfeited, or suspended; (vi) determine whether, to what extent, and
under what circumstances cash, Shares, other securities, other Awards, other
property, and other amounts payable with respect to an Award shall be deferred
either automatically or at the election of the holder thereof or of the
Committee; (vii) interpret and administer the Plan and any instrument or
agreement relating to, or Award made under, the Plan; (viii) establish, amend,
suspend, or waive such rules and regulations and appoint such agents as it shall
deem appropriate for the proper administration of the Plan; and (ix) make any
other determination and take any other action that the Committee deems necessary
or desirable for the administration of the Plan. Unless otherwise expressly
provided in the Plan, all designations, determinations, interpretations, and
other decisions under or with respect to the Plan or any Award shall be within
the sole discretion of the Committee, may be made at any time and shall be
final, conclusive, and binding upon all Persons, including the Company, any
Affiliate, any Participant, any holder or beneficiary of any Award, any
stockholder and any Employee. The provisions of this Section 3 with respect to
decisions made by, and authority of, the Committee shall be subject to the
controlling provisions of Section 6(h).
SECTION 4. SHARES AVAILABLE FOR AWARDS
(a) Shares Available
Subject to Section 4(d) and to adjustment as provided in Section 4(c), the
number of Shares with respect to which Awards may be granted under the Plan
shall be 4,000,000. If, after the effective date of the Plan, any Shares covered
by an Award granted under the Plan, or to which such an Award relates, are
forfeited, or if an Award otherwise terminates or is cancelled without the
delivery of Shares or of other consideration, then the Shares covered by such
Award, or to which such Award relates, or the number of Shares otherwise counted
against the aggregate number of Shares with respect to which Awards may be
granted, to the extent of any such forfeiture, termination or cancellation,
shall again be, or shall become, to the extent permissible under Rule 16b-3,
Shares with respect to which Awards may be granted. In the event that any Option
or other Award granted hereunder is exercised through the delivery of Shares,
the number of Shares available for Awards (other than an Incentive Stock Option)
under the Plan shall be increased by the number of Shares surrendered, to the
extent permissible under Rule 16b-3. Notwithstanding the foregoing, no more than
1,200,000 Shares available for Awards shall be issued as Restricted Stock.
(b) Sources of Shares Deliverable Under Awards
Any Shares delivered pursuant to an Award may consist, in whole or in part,
of authorized and unissued Shares or of treasury Shares.
3
<PAGE> 4
(c) Adjustments
In the event that the Committee determines that any dividend or other
distribution (whether in the form of cash, Shares, other securities, or other
property), recapitalization, stock split, reverse stock split, reorganization,
merger, consolidation, split-up, spin-off, combination, repurchase, or exchange
of Shares or other securities of the Company, issuance of warrants or other
rights to purchase Shares or other securities of the Company, or other similar
corporate transaction or event affects the Shares such that an adjustment is
determined by the Committee to be appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under the Plan, then the Committee shall, in such manner as it may deem
equitable, adjust any or all of (i) the number and type of Shares (or other
securities or property) with respect to which Awards may be granted, (ii) the
number and type of Shares (or other securities or property) subject to
outstanding Awards, and (iii) the grant or exercise price with respect to any
Award or, if deemed appropriate, make provision for a cash payment to the holder
of an outstanding Award; provided, in each case, that with respect to Awards of
Incentive Stock Options and Awards intended to qualify as performance based
compensation under Section 162(m)(4)(C) of the Code, no such adjustment shall be
authorized to the extent that such authority would cause the Plan to violate
Section 422(b)(1) of the Code or would cause such Award to fail to so qualify
under Section 162(m) of the Code, as the case may be, or any successor
provisions thereto; and provided, further, that the number of Shares subject to
any Award denominated in Shares shall always be a whole number.
(d) Substitute Awards
Any Shares underlying Substitute Awards shall not, except in the case of
Shares with respect to which Substitute Awards are granted with respect to
Incentive Stock Options or, if not permissible under Rule 16b-3, to Employees
who are officers or directors of the Company for purposes of Section 16 of the
Exchange Act or any successor section thereto, be counted against the Shares
available for Awards other than Incentive Stock Options under the Plan.
SECTION 5. ELIGIBILITY
Other than Awards granted to non-employee Directors pursuant to Section
6(h) of the Plan, any Employee who is not a member of the Committee, including
any officer or employee-director of the Company or any Affiliate, shall be
eligible to be designated a Participant. All Employees shall be eligible for
Awards under the Plan. However, no Employee under this Plan may receive in any
calendar year Stock Options and/or Rights that, in the aggregate, are with
respect to more than 500,000 Shares (tandem Awards shall be deemed to be one
Award for this purpose).
SECTION 6. AWARDS
(a) Options
Subject to the provisions of the Plan, the Committee shall have authority
to determine the Employees to whom Options shall be granted, the number of
Shares to be covered by each Option, the purchase price therefor and the
conditions and limitations applicable to the exercise of the option including
the following terms and conditions and such additional terms and conditions, as
the Committee shall determine are not inconsistent with the provisions of the
Plan.
(i) Exercise Price. The purchase price per Share purchasable under an
Option shall be determined by the Committee at the time each Option is
granted; provided, however, that the purchase price per Share shall not be
less than 100% of the Fair Market Value on the date of grant, except in the
case of Options that are Substitute Awards.
(ii) Time and Method of Exercise. The Committee shall determine the
time or times at which an Option may be exercised in whole or in part, and
the method or methods by which, and the form or forms (which may include,
without limitation, cash, Shares, outstanding Awards, Shares that would
otherwise be acquired upon exercise of the Option, other securities or
other property, or any combination thereof,
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having a Fair Market Value on the exercise date equal to the relevant
exercise price) in which payment of the exercise price with respect thereto
may be made or deemed to have been made. Pursuant to Section 7(b) of the
Plan, the Committee may, at its discretion, accelerate the time at which
Options may be exercised and otherwise modify the time or methods of
exercise of the Options.
(iii) Incentive Stock Options. The terms of any Incentive Stock Option
granted under the Plan shall comply in all respects with the provisions of
Section 422 of the Code, or any successor provision, and any regulations
promulgated thereunder. Incentive Stock Options may be granted only to
Employees of the Company and its "subsidiaries" within the meaning of
Section 424(f) of the Code.
(b) Stock Appreciation Rights
Subject to the provisions of the Plan, the Committee shall have authority
to determine the Employees to whom Stock Appreciation Rights shall be granted,
the number of Shares to be covered by each Stock Appreciation Right Award, the
grant price thereof and the conditions and limitations applicable to the
exercise thereof. A Stock Appreciation Right may be granted in tandem with
another Award, in addition to another Award, or freestanding and unrelated to
another Award. A Stock Appreciation Right granted in tandem with or in addition
to another Award may be granted either at the same time as such other Award or
at a later time.
(i) Grant Price. The grant price of a Stock Appreciation Right shall
be determined by the Committee; provided, however, that the grant price
shall not be less than 100% of the Fair Market Value on the date of grant
or on the date of original grant of any related Award.
(ii) Other Terms and Conditions. Subject to the terms of the Plan and
any applicable Award Agreement, the Committee shall determine, at or after
the grant of a Stock Appreciation Right, the term, methods of exercise,
methods of settlement, and any other terms and conditions of any Stock
Appreciation Right. Any such determination by the Committee may be changed
by the Committee from time to time and may govern the exercise of Stock
Appreciation Rights granted or exercised prior to such determination as
well as Stock Appreciation Rights granted or exercised thereafter. The
Committee may impose such conditions or restrictions on the exercise of any
Stock Appreciation Right as it shall deem appropriate.
(c) Restricted Stock
Subject to the provisions of the Plan, the Committee shall have authority
to determine the Employees to whom Restricted Stock shall be granted, the number
of Shares of Restricted Stock to be granted to each such Participant, the
duration of the Restricted Period during which, and the conditions under which,
the Restricted Stock may be forfeited to the Company, and the other terms and
conditions of such Awards.
(i) Dividends. Unless otherwise determined by the Committee,
Restricted Stock Awards shall provide for the payment of dividends during
the Restricted Period. Any Restricted Stock Award may require that any or
all dividends or other distributions paid on the Restricted Stock during
the Restricted Period be automatically sequestered and held in a
bookkeeping cash account (with or without interest) or reinvested on an
immediate or deferred basis in additional shares of Common Stock, which
credit or shares may be subject to the same restrictions as the underlying
Award or such other restrictions as the Committee may determine. Dividends
paid on Restricted Stock may be paid directly to the Participant, may be
subject to risk of forfeiture and/or transfer restrictions during any
period established by the Committee, all as determined by the Committee in
its discretion.
(ii) Registration. Any Restricted Stock may be evidenced in such
manner as the Committee shall deem appropriate, including, without
limitation, book-entry registration or issuance of a stock certificate or
certificates. In the event any stock certificate is issued in respect of
Restricted Stock granted under the Plan, such certificate shall be
registered in the name of the Participant and shall bear an appropriate
legend referring to the terms, conditions, and restrictions applicable to
such Restricted Stock.
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(iii) Forfeiture and Restrictions Lapse. Except as otherwise
determined by the Committee or the terms of the Award that granted the
Restricted Stock, upon termination of a Participant's employment (as
determined under criteria established by the Committee, including, without
limitation, in the Committee's discretion, goals described under Section
6(d)(i)) for any reason during the applicable Restricted Period, all
Restricted Stock shall be forfeited by the Participant and re-acquired by
the Company. The Committee may, when it finds that a waiver would be in the
best interests of the Company and not cause such Award, if it is intended
to qualify as performance based compensation under Section 162(m) of the
Code, to fail to so qualify under Section 162(m) of the Code, waive in
whole or in part any or all remaining restrictions with respect to such
Participant's Restricted Stock. Unrestricted Shares, evidenced in such
manner as the Committee shall deem appropriate, shall be issued to the
holder of Restricted Stock promptly after the applicable restrictions have
lapsed or otherwise been satisfied.
(iv) Transfer Restrictions. During the Restricted Period, Restricted
Stock will be subject to the limitations on transfer as provided in Section
6(i)(iii).
(d) Performance Awards
The Committee shall have authority to determine the Employees who shall
receive a Performance Award, which shall (A) consist of a right, denominated or
payable in cash, Shares, Deferred Shares, other securities or other property
(including, without limitation, Restricted Stock, or any combination thereof),
and (B) confer on the holder thereof rights valued as determined by the
Committee and payable to, or exercisable by, such holder, in whole or in part,
upon the achievement of such performance goals during such performance periods
as the Committee shall establish.
(i) Terms and Conditions. Subject to the terms of the Plan and any
applicable Award Agreement, the Committee shall determine the performance
goals to be achieved during any performance period, the length of any
performance period, the amount of any Performance Award and the amount of
any payment or transfer to be made pursuant to any Performance Award.
Without limiting the generality of the foregoing, it is intended that the
Committee may establish performance goals applicable to Performance Awards
granted to Participants who, in the judgment of the Committee, may be
Covered Employees in such a manner as shall permit payments with respect
thereto to qualify as "performance-based compensation" as described in
Section 162(m)(4)(C) of the Code. It is specifically provided that the
material terms of such performance goals for Participants who, in the
judgment of the Committee, may be Covered Employees, shall, until changed
by the Committee with the approval of the stockholders, if such stockholder
approval is required by the Code, be as follows: (x) the business criteria
on which the performance goals shall be based shall be the attainment of
such target levels of either net income, cash flows, reserve additions or
revisions, total capitalization, total shareholder return, assets,
exploration successes, production volumes, finding and development costs,
costs reductions and savings, reportable incidents in safety or
environmental matters, return on sales, profit margin, earnings per share
or personal objectives tied to operational studies, implementing policies
and plans, negotiating transactions and sales, developing long-term
business goals, managerial responsibilities and assessments as may be
specified by the Committee; and (y) the maximum amount of compensation that
may be paid to any one Participant with respect to any one year shall be
$1.5 million under an annual performance bonus Award and $1.5 million under
a long-term Award with a performance period longer than one fiscal year.
(ii) Payment of Performance Awards. Performance Awards may be paid in
a lump sum or in installments following the close of the performance period
or, in accordance with procedures established by the Committee, on a
deferred basis.
(e) Stock Compensation and Bonus Shares
(i) Stock Compensation. The Committee shall have the authority, in its
discretion, to pay in Shares all, or such portion as it shall determine, of
amounts payable (x) under any Award of the Plan, other than Performance Awards
payable in cash as a short term annual incentive or Cash Awards granted in
tandem with Restricted Stock or (y) if requested by an Employee, under any
compensation program of the Company. The
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number and type of Shares to be distributed in lieu of the cash compensation to
which an Employee would otherwise be entitled, as well as the terms and
conditions of any such bonus awards, shall be determined by the Committee.
(ii) Bonus Shares. The Committee may also grant Bonus Shares to eligible
Employees. Each Bonus Share shall constitute a transfer of Common Shares to the
Participant, without other payment therefor, as additional compensation for the
Participant's services to the Company.
(f) Deferred Shares
The Committee may also grant Awards of Deferred Shares to eligible
Employees upon such terms and conditions as the Committee may determine.
(i) Terms and Conditions. Each Deferred Share award shall constitute
an agreement by the Company to issue or transfer a specified number of
Shares to the Participant in the future, subject to the fulfillment during
the Restricted Period of such conditions, including performance objectives
or, as described in Section 6(d)(i), performance goals, if any, as the
Committee may specify at the date of grant. During the Restricted Period,
the Participant shall not have any right to transfer any rights under the
subject Award, shall not have any rights of ownership in the Deferred
Shares and shall not have any right to vote such shares.
(ii) Dividends. Any Deferred Share award may provide that any or all
dividends or other distributions paid on Shares during the Restricted
Period be credited in a cash bookkeeping account (without interest) or that
equivalent additional Deferred Shares be awarded, which account or shares
may be subject to the same restrictions as the underlying Award or such
other restrictions as the Committee may determine.
(g) Other Stock-Based and Cash Awards
(i) Other Stock Based Awards. The Committee is hereby authorized to grant
to eligible Employees an "Other Stock-Based Award," which shall consist of a
right (i) which is not an Award or right described in Section 6(a), (b), (c),
(d), (e) or (f) above and (ii) which is denominated or payable in, valued in
whole or in part by reference to, or otherwise based on or related to, Shares
(including, without limitation, securities convertible into Shares) as are
deemed by the Committee to be consistent with the purposes of the Plan;
provided, that any such rights must comply, to the extent deemed desirable by
the Committee, with Rule 16b-3 and applicable law. Subject to the terms of the
Plan and any applicable Award Agreement, the Committee shall determine the terms
and conditions of any such Other Stock-Based Award.
(ii) Cash Awards. Subject to the provisions of the Plan, the Committee
shall have authority to determine the Employees to whom Cash Awards shall be
granted, the amount, and the terms or conditions, if any, as additional
compensation for the Employee's services to the Company or its Affiliates. A
Cash Award may be granted (simultaneously or subsequently) in tandem with
another Award and may entitle a Participant to receive a specified amount of
cash from the Company upon such other Award becoming taxable to the Participant,
which cash amount may be based on a formula relating to the anticipated taxable
income associated with such other Award and the payment of the Cash Award or
other terms determined by the Committee.
(h) Awards to Non-employee Directors
(i) Initial Granting of Options. Subject to stockholder approval of the
Plan pursuant to Section 10, and to the limitation of the number of shares of
Stock set forth in Section 4(a), each non-employee Director who serves in such
capacity on the date of the approval of the Plan by the Board (the "Current
non-employee Directors") shall receive, as of such date and without the exercise
of the discretion of any person or persons, a Non-Qualified Stock Option
exercisable for 5,000 shares of Stock. Subject to stockholder approval of the
Plan pursuant to Section 10, and to the limitation of the number of shares of
Stock set forth in Section 4(a), each non-employee Director who is elected or
appointed to the Board for the first time after the effective date of the
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Plan (excluding the Current non-employee Directors) shall receive, as of the
date of his or her election or appointment and without the exercise of the
discretion of any person or persons, a Non-Qualified Stock Option exercisable
for 5,000 shares of Stock (subject to adjustment in the same manner as provided
in Section 7 hereof with respect to shares of Stock subject to Options then
outstanding). Any nominee non-employee Director may make an irrevocable election
in advance of election not to receive an option pursuant to this Section
6(h)(i).
(ii) Annual Granting of Options. Subject to stockholder approval of the
Plan pursuant to Section 10, and to the limitation of the number of shares of
Stock set forth in Section 4(a), as of the date of the annual meeting of the
stockholders of the Company in each year that the Plan is in effect as provided
in Section 11 hereof (commencing with the 1995 annual meeting of stockholders),
each non-employee Director who is in office immediately after such meeting and
who is not then entitled to receive an Option pursuant to the preceding
provisions of this Section 6(h) shall receive, without the exercise of the
discretion of any person or persons, a Non-Qualified Stock Option exercisable
for 3,000 shares of Stock (subject to adjustment in the same manner as provided
in Section 7 hereof with respect to shares of Stock subject to Options then
outstanding). Any non-employee Director may make an irrevocable election in
advance not to receive an option pursuant to this Section 6(h)(ii).
(iii) Other Terms and Conditions. The following provisions are applicable
to Options granted pursuant to Sections 6(h)(i) and (ii):
A. Options shall be exercisable on the day following the date of
grant.
B. The purchase price of a Share covered under an Option granted under
this Section 6(h) shall be the Fair Market Value of a Share on the date of
grant.
C. The Option may be exercised in full at one time or in part from
time to time by giving written notice, signed by the optionee exercising
the Option, to the Company, stating the number of Shares with respect to
which the Option is being exercised, accompanied by payment in full for
such Shares, which payment may be in whole or in part in Shares of the
Company already owned by said optionee, valued at Fair Market Value;
provided, however, that (i) no Option shall be exercisable after ten (10)
years from the date on which it was granted, and (ii) there shall be no
such exercise at any one time for fewer than one hundred (100) Shares or
for all of the remaining Shares then purchasable by the optionee exercising
the Option, if fewer than one hundred (100) Shares.
D. Each Option shall expire ten (10) years from the date of grant
thereof, but shall be subject to earlier termination as follows. Options,
to the extent exercisable as of the date a non-employee Director optionee
ceases to serve as a director of the Company, must be exercised within six
months of such date unless such event results from death, Disability or
Retirement, in which case Options may be exercised by the optionee, the
optionee's legal representative, heir or devisee, as the case may be,
within two (2) years from the date of death or Disability and within three
(3) years from the date of Retirement; provided, however, that no such
event shall extend the normal expiration date of such Options.
E. Upon exercise of the Option, subject to paragraph F below, delivery
of a certificate for fully paid and nonassessable Shares shall be made
either at the corporate office of the Company in Houston, Texas to the
optionee exercising the Option at such time during ordinary business hours
after fifteen (15) days but not more than thirty (30) days from the date of
receipt of the notice by the Company as shall be designated in such notice,
or at such time, place and manner as may be agreed upon by the Company and
the optionee exercising the Option.
F. Until the earlier to occur of the following events (i) the
non-employee Director no longer serves as a Director of the Company for any
reason, (ii) a Change in Control, (iii) the approval by the Company's
stockholders of a merger or consolidation or (iv) a tender offer for the
Common Stock of the Company ("Termination of Restriction"), the Shares
received by the non-employee Director upon the exercise of an Option
granted pursuant to Section 6(h)(i) and (ii) shall not be subject to
disposition by the non-employee Director, by sale, transfer, alienation,
anticipation, pledge, encumbrance, assignment or any other means whether
such disposition be voluntary or involuntary or by operation of law by
judgment,
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levy, attachment, garnishment or any other legal or equitable proceeds
(including bankruptcy), and any attempted disposition thereof, shall be
null and void and of no effect; provided, however, that nothing in this
Section 6(h)(iii)F shall prevent transfer by will, the applicable laws of
descent and distribution or pursuant to a qualified domestic relations
order. The certificates evidencing the Shares may bear a legend restricting
or incorporating the restrictions, and the Company may cause the
certificates to be delivered upon issuance to the Secretary of the Company
or such other depositary as may be designated by the Company as a
depositary for safe-keeping until Termination of Restriction. Upon
Termination of Restriction, the Company will cause a new certificate or
certificates to be issued without legend in the name of such former
director.
(iv) Notwithstanding anything in the Plan to the contrary, a non-employee
Director shall be ineligible to receive a grant provided for in Section 6(h) if
as of the date of such grant the Director (i) is an employee of the Company or
any Affiliate or (ii) has been an employee of the Company or any Affiliate for
any part of the calendar year preceding the calendar year in which such a grant
is to be made.
(v) In the event that the number of Shares available for grants under the
Plan is insufficient to make all grants provided for in this Section 6(h) hereby
made on the applicable date, then all non-employee Directors who are entitled to
a grant on such date shall share ratably in the number of Shares then available
for grant under the Plan, and shall have no right to receive a grant with
respect to the deficiencies in the number of available Shares and the grants
under this Section 6(h) shall terminate.
(vi) Except as expressly provided in this Section 6(h) grants made pursuant
to this Section 6(h) shall be subject to the terms and conditions of the Plan;
however, if there is a conflict between the terms and conditions of the Plan and
this Section 6(h) then the terms and conditions of this Section 6(h) shall
control. The Committee may not exercise any discretion with respect to this
Section 6(h) which would be inconsistent with the intent expressed in Section
6(h)(vii).
(vii) It is intended that the Plan meet the requirements of Rule 16b-3 and
that any non-employee Director who is eligible to receive a grant or to whom a
grant is made pursuant to this Section 6 will not for such reason cease to be a
"disinterested person" within the meaning of Rule 16b-3 with respect to the Plan
and other stock related plans of the Company.
(viii) All Options under this Section 6(h) shall be evidenced by Award
Agreements.
(i) General
(i) Awards May Be Granted Separately or Together. Awards may, in the
discretion of the Committee, be granted either alone or in addition to, in
tandem with, or in substitution for any other Award granted under the Plan or
any award granted under any other plan of the Company or any Affiliate. Awards
granted in addition to or in tandem with other Awards or awards granted under
any other plan of the Company or any Affiliate may be granted either at the same
time as or at a different time from the grant of such other Awards or awards.
(ii) Forms of Payment by Company Under Awards. Subject to the terms of the
Plan and of any applicable Award Agreement, payments or transfers to be made by
the Company or an Affiliate upon the grant, exercise or payment of an Award may
be made in such form or forms as the Committee shall determine, including,
without limitation, cash, Shares, other securities, other Awards or other
property, or any combination thereof, and may be made in a single payment or
transfer, in installments, or on a deferred basis, in each case in accordance
with rules and procedures established by the Committee. Such rules and
procedures may include, without limitation, provisions for the payment or
crediting of reasonable interest on installment or deferred payments.
(iii) Limits on Transfer of Awards
(A) Each Award, and each right under any Award, shall be exercisable
only by the Participant during the Participant's lifetime, or, if
permissible under applicable law, by the Participant's guardian or
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legal representative or by a transferee receiving such Award pursuant to a
qualified domestic relations order (a "QDRO") as determined by the
Committee.
(B) No Award and no right under any such Award may be assigned,
alienated, pledged, attached, sold or otherwise transferred or encumbered
by a Participant otherwise than by will or by the laws of descent and
distribution (or, in the case of Restricted Stock, to the Company) or
pursuant to a QDRO and any such purported assignment, alienation, pledge,
attachment, sale, transfer or encumbrance shall be void and unenforceable
against the Company or any Affiliate.
(C) To the extent approved by the Committee and in compliance with
Rule 16b-3 and the Securities Act of 1933, as amended, a Non-Qualified
Stock Option may be transferred to immediate family members.
(iv) Term of Awards. The term of each Award (other than pursuant to Section
6(h)) shall be for such period as may be determined by the Committee; provided,
that in no event shall the term of any Incentive Stock Option Award exceed a
period of ten years from the date of its grant.
(v) Share Certificates. All certificates for Shares or other securities of
the Company or any Affiliate delivered under the Plan pursuant to any Award or
the exercise thereof shall be subject to such stop transfer orders and other
restrictions as the Committee may deem advisable under the Plan or the rules,
regulations, and other requirements of the SEC, any stock exchange upon which
such Shares or other securities are then listed, and any applicable Federal or
state laws, and the Committee may cause a legend or legends to be put on any
such certificates to make appropriate reference to such restrictions.
(vi) Consideration for Grants. Awards may be granted for no cash
consideration or for such consideration as the Committee determines including,
without limitation, such minimal cash consideration as may be required by
applicable law.
(vii) Delivery of Shares or other Securities and Payment by Participant of
Consideration. No Shares or other securities shall be delivered pursuant to any
Award until payment in full of any amount required to be paid pursuant to the
Plan or the applicable Award Agreement is received by the Company. Such payment
may be made by such method or methods and in such form or forms as the Committee
shall determine, including, without limitation, cash, Shares, other securities,
other Awards or other property, withholding of Shares, cashless exercise with
simultaneous sale, or any combination thereof; provided, that the combined
value, as determined by the Committee, of all cash and cash equivalents and the
Fair Market Value of any such Shares or other property so tendered to the
Company, as of the date of such tender, is at least equal to the full amount
required to be paid pursuant to the Plan or the applicable Award Agreement to
the Company.
SECTION 7. AMENDMENT AND TERMINATION
Except to the extent prohibited by applicable law and unless otherwise
expressly provided in an Award Agreement or in the Plan:
(a) Amendments to the Plan
The Board may amend, alter, suspend, discontinue, or terminate the Plan
without the consent of any shareholder, Participant, other holder or beneficiary
of an Award, or other Person; provided, however, that the provisions of Section
6(h) may not be amended more than once every six months other than to comport
with changes in the Code, the Employee Retirement Income Security Act of 1974,
as amended, or the rules thereunder and; provided, further, that notwithstanding
any other provision of the Plan or any Award Agreement, without the approval of
the stockholders of the Company no such amendment, alteration, suspension,
discontinuation, or termination shall be made that would:
(i) increase the total number of Shares available for Awards under the
Plan, except as provided in Section 4(c) of the Plan;
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(ii) permit Incentive Stock Options to be granted with per Share
grant, exercise or purchase prices of less than the Fair Market Value of a
Share on the date of grant thereof; or
(iii) result in this Plan no longer satisfying the requirements of
Rule 16b-3.
(b) Amendments to Awards
The Committee may waive any conditions or rights under, amend any terms of,
or alter any Award theretofore granted (other than Awards granted pursuant to
Section 6(h)), provided no change in any Award, other than pursuant to Section
7(c), shall reduce the benefit to Participant without the consent of such
Participant. Notwithstanding the foregoing, with respect to any Award intended
to qualify as performance-based compensation under Section 162(m) of the Code,
no adjustment shall be authorized to the extent such adjustment would cause the
Award to fail to so qualify.
(c) Adjustment of Awards Upon the Occurrence of Certain Unusual or
Nonrecurring Events
The Committee is hereby authorized to make adjustments in the terms and
conditions of, and the criteria included in, Awards in recognition of unusual or
nonrecurring events (including, without limitation, the events described in
Section 4(c) of the Plan) affecting the Company, any Affiliate, or the financial
statements of the Company or any Affiliate, or of changes in applicable laws,
regulations, or accounting principles, whenever the Committee determines that
such adjustments are appropriate in order to prevent dilution or enlargement of
the benefits or potential benefits intended to be made available under the Plan.
Notwithstanding the foregoing, with respect to any Award intended to qualify as
performance-based compensation under Section 162(m) of the Code, no adjustment
shall be authorized to the extent such adjustment would cause the Award to fail
to so qualify.
SECTION 8. CHANGE IN CONTROL
(a) In addition to the Committee's authority set forth in Section 7(c) of
the Plan, in order to maintain the Participants' rights in the event of any
Change in Control, as hereinafter defined, the Committee, as constituted before
such Change in Control, is hereby authorized and directed to provide for the
acceleration of any time periods relating to the exercise or realization of all
Awards so that such Award may be exercised or realized in full, and has sole
discretion, as to any Award, either at the time such Award is made hereunder or
any time thereafter, to take any one or more of the following actions: (i)
provide for the purchase of any such Award, either automatically or upon the
Participant's request, for an amount of cash equal to the amount that could have
been attained upon the exercise of such Award or realization of the
Participant's rights had such Award been currently exercisable or payable; (ii)
make such adjustment to any such Award then outstanding as the Committee deems
appropriate to reflect such Change in Control; or (iii) if equitable and in the
best interests of the Company and its stockholders, cause (x) any such Award
then outstanding to be assumed, or new rights substituted therefor, by the
acquiring or surviving corporation after such Change in Control or (y) the
exercise period for any such Award then outstanding to terminate on a fixed date
following such Change in Control provided the Participant receives written
notice of such event and the fixed date at least twenty days prior to the
effective date of such Change in Control. The Committee may, in its discretion,
include such further provisions and limitations in any Award Agreement as it may
deem equitable and in the best interests of the Company and its stockholders.
(b) A "Change in Control" shall be deemed to occur (i) if any person or
persons or entity or entities (other than Petroleum Associates, L.P., KKR
Partners II, L.P. and any entity controlling, controlled by or under common
control with any such entities, separately or in the aggregate ("KKR")) acquires
75% or more of the assets of the Company or a successor of the Company or such
successor's parent corporation (based upon the then current fair market value
thereof) or 50% or more of the Company's then outstanding voting stock or a
successor's or such successor's parent corporation's then outstanding voting
securities, and, if there shall be more than one class of voting securities
thereof, then of the combined voting power held by all classes of voting
securities of the Company, a successor corporation or its parent corporation
(whether such acquisition of stock or assets occurs pursuant to a single
transaction or several related transactions or series of
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transactions), (ii) upon the approval by the Company's stockholders of a plan of
liquidation or dissolution of the Company or a successor of the Company or such
successor's parent corporation, or (iii) upon the approval by the Company's
stockholders of a merger or consolidation and such transaction was determined to
be a Change in Control, which transaction and determination was approved by a
majority of the Company's Board of Directors in actions taken prior to, and with
respect to such transaction.
SECTION 9. GENERAL PROVISIONS
(a) No Rights to Awards
No Employee, Participant or other Person shall have any claim to be granted
any Award, and there is no obligation for uniformity of treatment of Employees,
Participants, or holders or beneficiaries of Awards. The terms and conditions of
Awards need not be the same with respect to each recipient.
(b) Delegation
Subject to the terms of the Plan and applicable law, the Committee may
delegate to one or more officers or managers of the Company or any Affiliate, or
to a committee of such officers or managers, the authority, subject to such
terms and limitations as the Committee shall determine, to grant Awards to, or
to cancel, modify or waive rights with respect to, or to alter, discontinue,
suspend, or terminate Awards held by, Employees who are not officers or
directors of the Company for purposes of Section 16 of the Exchange Act, or any
successor Section thereto, or who are otherwise not subject to such Section.
(c) Withholding
The Company or any Affiliate is hereby authorized to withhold from any
Award, from any payment due or transfer made under any Award or under the Plan
or from any compensation or other amount owing to a Participant the amount (in
cash, Shares, other securities, Shares that would otherwise be issued pursuant
to such Award (including automatic withholding), other Awards or other property)
of any applicable taxes payable in respect of an Award, its exercise, the lapse
of restrictions thereon, or any payment or transfer under an Award or under the
Plan and to take such other action as may be necessary in the opinion of the
Company to satisfy all obligations for the payment of such taxes.
(d) No Limit on Other Compensation Arrangements
Nothing contained in the Plan shall prevent the Company or any Affiliate
from adopting or continuing in effect other compensation arrangements (subject
to shareholder approval of such other arrangement, if such approval is
required), and such arrangements may be either generally applicable or
applicable only in specific cases.
(e) No Right to Employment
The grant of an Award shall not be construed as giving a Participant the
right to be retained in the employ of the Company or any Affiliate. Further, the
Company or an Affiliate may at any time dismiss a Participant from employment,
free from any liability or any claim under the Plan, unless otherwise expressly
provided in the Plan or in any Award Agreement.
(f) Governing Law
The validity, construction, and effect of the Plan and any rules and
regulations relating to the Plan shall be determined in accordance with the laws
of the State of Delaware and applicable Federal law.
(g) Severability
If any provision of the Plan or any Award is or becomes or is deemed to be
invalid, illegal, or unenforceable in any jurisdiction or as to any Person or
Award, or would disqualify the Plan or any Award under any law deemed applicable
by the Committee, such provision shall be construed or deemed amended to
12
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conform to the applicable laws, or if it cannot be construed or deemed amended
without, in the determination of the Committee, materially altering the intent
of the Plan or the Award, such provision shall be stricken as to such
jurisdiction, Person or Award and the remainder of the Plan and any such Award
shall remain in full force and effect.
(h) Other Laws
The Committee may refuse to issue or transfer any Shares or other
consideration under an Award if, acting in its sole discretion, it determines
that the issuance of transfer or such Shares or such other consideration might
violate any applicable law or regulation or entitle the Company to recover the
same under Section 16(b) of the Exchange Act, and any payment tendered to the
Company by a Participant, other holder or beneficiary in connection with the
exercise of such Award shall be promptly refunded to the relevant Participant,
holder or beneficiary. It is intended that the Plan and any grant of an Award
made to a person subject to Section 16 of the Exchange Act meet all of the
requirements of Rule 16b-3. If any provision of the Plan or any such Award would
disqualify the Plan or such Award under, or would otherwise not comply with,
Rule 16b-3, such provision or Award shall be construed or deemed amended to
conform to Rule 16b-3.
(i) No Trust or Fund Created
Neither the Plan nor any Award shall create or be construed to create a
trust or separate fund of any kind or a fiduciary relationship between the
Company or any Affiliate and a Participant or any other Person. To the extent
that any Person acquires a right to receive payments from the Company or any
Affiliate pursuant to an Award, such right shall be no greater than the right of
any unsecured general creditor of the Company or any Affiliate.
(j) No Fractional Shares
No fractional Shares shall be issued or delivered pursuant to the Plan or
any Award, and the Committee shall determine whether cash, other securities, or
other property shall be paid or transferred in lieu of any fractional Shares or
whether such fractional Shares or any rights thereto shall be cancelled,
terminated, or otherwise eliminated.
(k) Headings
Headings are given to the Sections and subsections of the Plan solely as a
convenience to facilitate reference. Such headings shall not be deemed in any
way material or relevant to the construction or interpretation of the Plan or
any provision thereof.
SECTION 10. EFFECTIVE DATE OF THE PLAN
The Plan shall be effective as of November 28, 1994, provided the Plan is
subsequently approved by the stockholders of the Company within 12 months
thereafter.
SECTION 11. TERM OF THE PLAN
No Award shall be granted under the Plan after November 27, 2004. However,
unless otherwise expressly provided in the Plan or in an applicable Award
Agreement, any Award theretofore granted may, and the authority of the Board or
the Committee to amend, alter, adjust, suspend, discontinue, or terminate any
such Award or to waive any conditions or rights under any such Award shall,
extend beyond such date.
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EXHIBIT 5.1
May 10, 1995
Board of Directors
Union Texas Petroleum
Holdings, Inc.
1330 Post Oak Boulevard
Houston, Texas 77056
Gentlemen:
As General Counsel of Union Texas Petroleum Holdings, Inc., a
Delaware corporation (the "Company"), I have acted as counsel in connection
with the Company's Registration Statement on Form S-8 (the "Registration
Statement"), relating to the registration under the Securities Act of 1933, as
amended, of the issuance of 4,000,000 shares of Common Stock, par value $0.05
per share ("Common Stock"), of the Company (the "Shares") issuable upon the
exercise of options granted pursuant to the Union Texas Petroleum Holdings,
Inc. 1994 Incentive Plan (the "Plan").
As the basis for the opinions hereinafter expressed, I have examined,
or caused attorneys under my supervision to examine, such corporate records and
documents, certificates of corporate and public officials and such other
instruments as I have deemed necessary for the purposes of the opinions
contained herein. As to all matters of fact material to such opinions, I have
relied upon the representations of officers of the Company. I have assumed the
genuineness of all signatures, the authenticity of all documents submitted to
us as originals, and the conformity with the original documents of all
documents submitted to me as copies.
Based upon the foregoing and having due regard for such legal
considerations as I deem relevant, I am of the opinion that the Shares to be
offered under the Plan have been duly authorized, and that the Shares,
when properly issued under the Plan, will be validly issued, fully paid and
nonassessable.
I hereby consent to the inclusion of this opinion as an exhibit to the
Registration Statement and to the reference to my name under Item 5 of the
Registration Statement.
Very truly yours,
Newton W. Wilson, III
<PAGE> 1
EXHIBIT 15
INDEPENDENT ACCOUNTANTS' AWARENESS LETTER
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Dear Sirs:
We are aware that Union Texas Petroleum Holdings, Inc. has incorporated by
reference our report dated April 20, 1995 (issued pursuant to the provisions of
Statement on Auditing Standards No. 71) in this Registration Statement on Form
S-8 to be filed on or about May 10, 1995. We are also aware of our
responsibilities under the Securities Act of 1933.
Yours very truly,
Price Waterhouse LLP
Houston, Texas
May 10, 1995
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated January 25, 1995 appearing on page 33
of Union Texas Petroleum Holdings, Inc.'s Annual Report on Form 10-K for the
year ended December 31, 1994.
Price Waterhouse LLP
Houston, Texas
May 10, 1995
