<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D/A
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 2)*
DOMAIN ENERGY CORPORATION
- --------------------------------------------------------------------------------
(Name of Issuer)
COMMON STOCK, PAR VALUE $.01 PER SHARE
- --------------------------------------------------------------------------------
(Title of Class of Securities)
257-027-102
- --------------------------------------------------------------------------------
(CUSIP Number)
FIRST RESERVE CORPORATION
475 STEAMBOAT ROAD
GREENWICH, CONNECTICUT 06930
(203) 661-6601
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
JULY 3, 1998
- --------------------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box / /.
Check the following box if a fee is being paid with the statement / /. (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
PAGE 1 OF 8 PAGES
<PAGE> 2
SCHEDULE 13D
- ---------------------
CUSIP NO. 257-027-102
- ---------------------
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
First Reserve Fund VII, Limited Partnership
I.R.S. Identification No.: 06-1457408
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [X]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
Not Applicable
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
SHARES 4,570,718
BENEFICIALLY -----------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH
REPORTING 0
PERSON -----------------------------------------------------------------
WITH 9 SOLE DISPOSITIVE POWER
4,570,718
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,570,718
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
30.2
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
Page 2 of 8
<PAGE> 3
SCHEDULE 13D
- ---------------------
CUSIP NO. 257-027-102
- ---------------------
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
First Reserve GP VII, L.P.
I.R.S. Identification No.: 06-1520256
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [X]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
Not Applicable
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
SHARES 4,570,718
BENEFICIALLY -----------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH
REPORTING 0
PERSON -----------------------------------------------------------------
WITH 9 SOLE DISPOSITIVE POWER
4,570,718
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,570,718
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
30.2
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
Page 3 of 8
<PAGE> 4
SCHEDULE 13D
- ---------------------
CUSIP NO. 257-027-102
- ---------------------
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
First Reserve Corporation
I.R.S. Identification No.: 06-1210123
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [X]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
Not Applicable
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
SHARES 4,570,718
BENEFICIALLY -----------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH
REPORTING 0
PERSON -----------------------------------------------------------------
WITH 9 SOLE DISPOSITIVE POWER
4,570,718
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,570,718
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
30.2
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
Page 4 of 8
<PAGE> 5
SCHEDULE 13D
- ---------------------
CUSIP NO. 257-027-102
- ---------------------
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
William E. Macaulay
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [X]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
Not Applicable
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
SHARES 2,668
BENEFICIALLY -----------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH
REPORTING 0
PERSON -----------------------------------------------------------------
WITH 9 SOLE DISPOSITIVE POWER
2,668
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,668
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [X]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
Page 5 of 8
<PAGE> 6
SCHEDULE 13D
- ---------------------
CUSIP NO. 257-027-102
- ---------------------
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
John A. Hill
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [X]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
Not Applicable
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
SHARES 0
BENEFICIALLY -----------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH
REPORTING 0
PERSON -----------------------------------------------------------------
WITH 9 SOLE DISPOSITIVE POWER
0
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
0
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [X]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
Page 6 of 8
<PAGE> 7
This Amendment to the statement on Schedule 13D (the "Statement") originally
filed on July 7, 1997 pursuant to Rule 13d-1 of the Securities Exchange Act of
1934, is filed by First Reserve Fund VII, Limited Partnership ("Fund VII"),
First Reserve GP VII, L.P. ("GPVII") First Reserve Corporation ("First
Reserve"), William E. Macaulay and John A. Hill (together with Mr. Macaulay,
Fund VII, GPVII and First Reserve, the "Reporting Persons") relating to the
shares of Common Stock, $.01 par value per share (the "Common Stock") of Domain
Energy Corporation, a Delaware corporation (the "issuer" or "Domain"). The
Statement is hereby supplemented and amended as set forth below.
Item 2. IDENTITY AND BACKGROUND
Item 2 is hereby amended by adding the following after the fourth paragraph:
GPVII is a Delaware limited partnership. On July 6, 1998, First Reserve
assigned all of its interest in Fund VII as its general partner to GPVII in
consideration of the assumption by GPVII of all of First Reserve's obligations
relating to Fund VII. GPVII's principal purpose is to manage the investments of
Fund VII. First Reserve is the sole general partner of GPVII, a special purpose
entity formed to hold First Reserve's interest in Fund VII and to be the general
partner of Fund VII. GPVII's principal business and office address is the same
as that of Fund VII and First Reserve.
As a managing entity inserted between Fund VII and First Reserve,
GPVII will now be reporting jointly with Fund VII and First Reserve, as well as
Messrs. Macaulay and Hill, and this amendment is filed on behalf of all the
foregoing persons and entities. The agreement among the reporting persons is
attached as Exhibit 8 hereto.
Item 5. INTEREST IN SECURITIES OF THE ISSUER
Item 5 is hereby amended by deleting the second paragraph thereof and replacing
it with the following:
On July 3, 1998, Fund VII sold 3,250,000 shares of common stock of the
Issuer at a price of $13.50 per share in accordance with a stock purchase
agreement entered into on May 12, 1998 by and between Lomak Petroleum, Inc. and
Fund VII. Thereafter, Fund VII owned 4,570,718 shares of Common Stock (the "Fund
VII Shares"), which constitutes approximately 30.2% of the 15,107,719 shares of
Common Stock reported as outstanding on Domain's latest 10-Q report filed May
15, 1998.
GPVII, as the general partner of Fund VII, and First Reserve, as the
general partner of GPVII, both have the power to direct the voting and
disposition of any shares of Common Stock beneficially owned by Fund VII. As a
result, under the definition of beneficial ownership set forth in Rule 13d-3 of
the Exchange Act, GPVII and First Reserve may be deemed to beneficially own the
Fund VII Shares.
Mr. Macaulay owns options to purchase 2,668 shares of the Common Stock
at an exercise price of $13.50 per share.
Item 6. CONTRACTS, ARRANGEMENTS OR UNDERSTANDINGS WITH RESPECT TO SECURITIES
OF THE ISSUER.
Item 6 is hereby amended by adding the following immediately prior to the last
paragraph thereof:
Under the Assignment and Assumption Agreement executed by and between
First Reserve and GPVII and attached hereto as Exhibit 9, First Reserve assigned
all of its interest in Fund VII as its general partner in consideration of the
assumption by GPVII of all of First Reserve's obligations relating to Fund VII.
Mr. Macaulay owns options to purchase 2,668 shares of the Common Stock
at an exercise price of $13.50 per share.
Page 7 of 8
<PAGE> 8
Item 7. Material to be Filed as Exhibits.
Item 7 is hereby amended by adding the following:
8. Joint Filing Agreement, dated July 6, 1998, between First Reserve Fund VII,
Limited Partnership, First Reserve GP VII, L.P., First Reserve Corporation, and
Messrs. Macaulay and Hill relating to the filing of a joint statement on
Schedule 13D.
9. Assignment and Assumption Agreement dated July 6, 1998 by and between First
Reserve Corporation and First Reserve GP VII, L.P. whereunder First Reserve
assigned all of its interest in Fund VII as its general partner in consideration
of the assumption by GPVII of all of First Reserve's obligations relating to
Fund VII.
10. Option Agreement dated June 27, 1997, between the issuer and Mr. Macaulay.
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
FIRST RESERVE CORPORATION
By: /s/ Thomas R. Denison
--------------------------------------
Thomas R. Denison
Managing Director
FIRST RESERVE GP VII, L.P.
By First Reserve Corporation
as General Partner
By: /s/ Thomas R. Denison
--------------------------------------
Thomas R. Denison
Managing Director
FIRST RESERVE FUND VII, LIMITED PARTNERSHIP
By First Reserve GP VII, L.P.,
as General Partner
By First Reserve Corporation,
as General Partner
By: /s/ Thomas R. Denison
--------------------------------------
Thomas R. Denison
Managing Director
/s/ William E. Macaulay
--------------------------------------
William E. Macaulay
/s/ John A. Hill
--------------------------------------
John A. Hill
Dated July 9, 1998 Page 8 of 8
<PAGE> 9
INDEX TO EXHIBITS
The Index to Exhibits is hereby amended by adding the following:
8. Joint Filing Agreement, dated July 6, 1998, between First Reserve Fund VII,
Limited Partnership, First Reserve GP VII, L.P. and First Reserve Corporation
relating to the filing of a joint statement on Schedule 13D.
9. Assignment and Assumption Agreement dated July 6, 1998 by and between First
Reserve Corporation and First Reserve GP VII, L.P.
10. Option Agreement dated June 27, 1997, between the issuer and Mr. Macaulay.
<PAGE> 1
Exhibit 8
JOINT FILING AGREEMENT
We, the signatories of the statement on Schedule 13D to which this
Agreement is attached, hereby agree that such statement is, and any amendments
thereto filed by any of us will be, filed on behalf of each of us.
FIRST RESERVE CORPORATION
By: /s/ Thomas R. Denison
------------------------------------
Thomas R. Denison
Managing Director
FIRST RESERVE GP VII, L.P.
By First Reserve Corporation
as General Partner
By: /s/ Thomas R. Denison
--------------------------------------
Thomas R. Denison
Managing Director
FIRST RESERVE FUND VII, LIMITED PARTNERSHIP
By First Reserve GP VII, L.P.,
as General Partner
By First Reserve Corporation,
as General Partner
By: /s/ David H. Kennedy
------------------------------------
David H. Kennedy
Managing Director
/s/ William E. Macaulay
------------------------------------
William E. Macaulay
/s/ John A. Hill
------------------------------------
John A. Hill
<PAGE> 1
Exhibit 9
ASSIGNMENT AND ASSUMPTION AGREEMENT
ASSIGNMENT AND ASSUMPTION AGREEMENT dated as of July 6, 1998, between
First Reserve Corporation, a Delaware corporation (the "Assignor") and First
Reserve GP VII, L.P., a Delaware limited partnership (the "Assignee").
WHEREAS, the Assignor is the general partner of First Reserve Fund VII,
Limited Partnership, a Delaware limited partnership (the "Partnership"),
pursuant to the Amended and Restated Limited partnership Agreement of the
Partnership dated as of February 28, 1997, by and among the Assignor and the
parties listed therein as limited partners of the Partnership (the "Partnership
Agreement");
WHEREAS, the Assignor desires to transfer and assign to the Assignee
all of Assignor's interest in the Partnership as the General Partner thereof
(the "Transferred Interest") in consideration of the assumption by the Assignee
of all the Assignor's obligations relating to the Transferred Interest; and
WHEREAS, the Assignee has agreed to acquire the Transferred Interest
for such consideration, to become a party to and be bound by the terms of the
Partnership Agreement and to be admitted to the Partnership as a substituted
general partner with respect to the Transferred Interest as provided in the
Partnership Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein made and intending to be legally bound, the parties hereto hereby agree
as follows:
1. Capitalized terms used herein which are not defined herein
shall have their respective meanings set forth in the Partnership Agreement.
2. The Assignor hereby assigns to the Assignee all of its
right, title and interest as the General Partner in the Partnership represented
by the Transferred Interest, including all amounts due and to become due to the
Assignor with respect to the Transferred Interest, in exchange for the
assumption by the Assignee of the obligations referred to in Section 3 below.
3. The Assignee hereby assumes, and agrees to pay and perform,
all unperformed obligations of the Assignor under and pursuant to the
Partnership Agreement relating to the Transferred Interest. By virtue of the
parties' execution and delivery of this Agreement the Assignee shall become a
party to the Partnership Agreement (and shall be deemed to have executed and
delivered a counterpart thereof), and the Assignee hereby accepts and agrees to
be bound by all of the terms and provisions of the Partnership Agreement as the
General Partner of the Partnership.
<PAGE> 2
4. All the parties hereto agree that as a result of the
execution and delivery of this Agreement, for purposes of the Partnership
Agreement the Assignee shall be substituted as General Partner of the
Partnership in the stead of the Assignor, and the Assignor shall withdraw as a
general partner of the Partnership immediately thereafter.
5. This Agreement may be executed in several counterparts, all
of which will together constitute a single agreement among the parties. This
Agreement will be governed by, and interpreted in accordance with, the laws of
the State of Delaware.
IN WITNESS WHEREOF, the undersigned have executed this Agreement with
effect as of July 6, 1998.
ASSIGNOR:
FIRST RESERVE CORPORATION
By: /s/ William Macaulay
-------------------------------
William Macaulay
Managing Director
ASSIGNEE:
FIRST RESERVE GP VII, L.P.
By: First Reserve Corporation,
its General Partner
By: /s/ William Macaulay
-------------------------------
William Macaulay
Managing Director
<PAGE> 1
EXHIBIT 10
June 27, 1997
Mr. William E. Macaulay
First Reserve Corporation
475 Steamboat Road
Greenwich, CT 06830
RE: Automatic Grant of Stock Option
Dear Mr. Macaulay:
On June 26, 1997, the Board of Directors of Domain Energy
Corporation (the "Company") authorized and approved the 1997 Stock Option Plan
for Nonemployee Directors (the "Plan"), which Plan became effective on June 27,
1997. The Plan provides for the automatic grant of options to the nonemployee
directors of the Company. A copy of the Plan is annexed hereto and shall be
deemed a part hereof as if fully set forth herein. Unless the context
otherwise requires, all terms defined in the Plan shall have the same meaning
when used herein.
The Company hereby grants to you the option (the "Option") to
purchase, in accordance with the terms and conditions set forth in the Plan,
but subject to the limitations set forth herein and in the Plan, an aggregate
of 4,002 shares of Common Stock, $.01 par value per share, of the Company at a
price of $13.50 per share, such option price being, in the judgment of the
Board of Directors, not less than one hundred percent (100%) of the fair market
value of such share at the close of business on the date hereof (i.e., June 27,
1997). The Option is not intended to qualify as an "incentive stock option"
within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended.
Subject to the provisions and limitations of Sections 8 and 10
of the Plan, this Option may be exercised by you, on a cumulative basis, during
a period of ten (10) years commencing on the date hereof and terminating at the
close of business on June 27, 2007 as follows:
up to 1,334 of the total number of shares subject to this
Option may be purchased by you as of the date hereof;
<PAGE> 2
Page 2
up to an additional 1,334 of the total number of shares
subject to this Option may be purchased by you as of the date of the annual
meeting of stockholders of the Company during 1998, provided that you are an
Eligible Director immediately following such annual meeting; and
the balance of the total number of shares subject to this
Option may be purchased by you as of the date of the annual meeting of
stockholders of the Company during 1999, provided that you are an Eligible
Director immediately following such annual meeting.
The unexercised portion of the Option granted herein will
automatically and without notice terminate and become null and void upon the
expiration of ten (10) years from the date hereof. If, however, prior to the
expiration of ten (10) years from the date hereof, your service as a director
of the Company terminates, this Option will terminate on the applicable date
set forth in Section 9 of the Plan.
In no event shall you exercise this Option for a fraction of a
share or for less than one hundred (100) Shares (unless the number purchased is
the total balance for which the Option is then exercisable).
This Option is not transferable by you otherwise than by will
or the laws of descent and distribution, and is exercisable, during your
lifetime, only by you. This Option may not be assigned, transferred (except by
will or the laws of descent and distribution), pledged, hypothecated or
disposed of in any way (whether by operation of law or otherwise) and shall not
be subject to execution, attachment or similar process. Any attempted
assignment, transfer, pledge, hypothecation or other disposition of this Option
contrary to the provisions hereof, and the levy of any attachment or similar
proceeding upon the Option, shall be null and void and without effect.
Any exercise of this Option shall be in writing addressed to
the Secretary of the Company at the principal place of business of the Company,
and shall comply with the requirements of the Plan.
If the Company, in its sole discretion, shall determine that
it is necessary, to comply with applicable securities laws, the certificate or
certificates representing the shares purchased pursuant to the exercise of this
Option shall bear an appropriate legend in form and substance, as determined by
the Company, giving notice of applicable restrictions on transfer under or in
respect of such laws.
You hereby covenant and agree with the Company that if, at the
time of exercise of this Option, there does not exist a
<PAGE> 3
Page 3
Registration Statement on an appropriate form under the Securities Act of 1933,
as amended (the "Act"), which Registration Statement shall have become
effective and shall include a prospectus which is current with respect to the
shares subject to this Option, (i) you are purchasing the shares for your own
account, for investment and not with a view to the resale or distribution
thereof and (ii) any subsequent offer for sale or sale of any such shares shall
be made either pursuant to (x) a Registration Statement on an appropriate form
under the Act, which Registration Statement shall have become effective and
shall be current with respect to the shares being offered and sold, or (y) a
specific exemption from the registration requirements of the Act, but in
claiming such exemption, you shall, prior to any offer for sale or sale of such
shares, obtain a favorable written opinion from counsel for or approved by the
Company as to the applicability of such exemption. You further covenant and
agree to indemnify the Company against and hold it free and harmless from any
loss, damage, expense or liability resulting to the Company if any sale or
distribution of the shares by you is contrary to the representation and
agreement referred to above.
As provided in the Plan, the Company may require you to pay to
the Company, upon its demand, such amount as may be requested by the Company
for the purpose of satisfying any liability to withhold federal, state, local
or foreign income or other taxes. If the amount requested is not paid either
(i) by cash or check or (ii) by electing, pursuant to a written notice
delivered to the Board of Directors prior to the date of exercise, to have
shares of Common Stock (having an aggregate fair market value on the date of
exercise sufficient to satisfy the applicable tax withholding requirements)
withheld from the shares deliverable upon such exercise, the Company shall have
no obligation to issue, and you shall have no right to receive, any shares
subject to this Option.
This agreement is subject to all terms, conditions,
limitations and restrictions contained in the Plan, which shall be controlling
in the event of any conflicting or inconsistent provisions.
<PAGE> 4
Page 4
Please indicate your acceptance of all the terms and
conditions of this Option and the Plan by signing and returning a copy of this
letter.
Very truly yours,
DOMAIN ENERGY CORPORATION
By: /s/ Michael V. Ronca
-----------------------
ACCEPTED:
/s/ William E. Macaulay
- ------------------------------
Signature of Director
William E. Macaulay
- ------------------------------
Name of Director
Date:
-------------------------
