As filed with the Securities and Exchange Commission on February 14, 2000
File No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
GREKA ENERGY CORPORATION
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(Exact name of registrant as specified in its charter)
Colorado 84-1091986
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
630 Fifth Avenue, Suite 1501, New York, New York 10111
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(Address of Principal Executive Offices) (Zip Code)
Greka Energy Corporation 1997 Non-Qualified Stock Option Plan
(f/k/a Petro Union, Inc. Stock Option Plan)
Greka Energy Corporation 1999 Omnibus Stock Option Plan
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(Full title of the plan)
Randeep S. Grewal
Greka Energy Corporation
630 Fifth Avenue, Suite 1501
New York, New York 10111
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(Name and address of agent for service)
(212) 218-4680
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(Telephone number, including area code, of agent for service)
Copy to:
Roger V. Davidson, Esq.
Ballard Spahr Andrews & Ingersoll, LLP
1225 17th Street, Suite 2300
Denver, Colorado 80202-5596
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<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Title of Maximum Maximum
Securities Offering Aggregate Amount of
to be Amount to be Price Offering Registration
Registered Registered(1) Per Share (2) Price Fee (2)
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Common Stock,
<S> <C> <C> <C> <C>
no par value ............ 150,000 $ 5.00 $ 750,000 $ 198
Common Stock,
no par value ......... 225,000 $ 8.25 $ 1,856,250 $ 490
Common Stock,
no par value ......... 1,025,000 $ 8.625 $ 8,840,625 $ 2,334
TOTALS ............ 1, 400,000 -- $11,446,875 $ 3,022
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</TABLE>
(1) The number of shares of common stock represents the maximum number of
shares available for issuance under the Greka Energy Corporation 1997
Non-Qualified Stock Option Plan and 1999 Omnibus Stock Option Plan. This
registration statement also covers an indeterminate number of additional
shares of common stock as may be issuable under the stock option plans by
reason of adjustments in the number of shares covered thereby as described
in the stock option plans and prospectus relating to the stock option
plans.
(2) The offering price and the registration fee for the securities indicated
were calculated in accordance with Rule 457(h).
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PART I
INFORMATION REQUIRED IN SECTION 10(a) PROSPECTUS
The document(s) containing the information specified in Part I of Form
S-8 will be sent or given to participants of the 1997 Non-Qualified Stock Option
Plan and 1999 Omnibus Stock Option Plan of Greka Energy Corporation (the
"Registrant") as specified by Rule 428(b)(1) of the Securities Act of 1933, as
amended (the "Securities Act"). Those documents and the documents incorporated
herein by reference to Item 3 of Part II of this registration statement, taken
together, constitute a prospectus that meets the requirements of Section 10(a)
of the Securities Act.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
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The following documents are deemed to be incorporated by reference in
this registration statement and to be a part hereof.
1. The Registrant's annual report on Form 10-KSB and all amendments
thereto for the year ended December 31, 1998.
2. The Registrant's quarterly reports on Form 10-Q for the quarters
ended March 31, 1999, June 30, 1999 and September 30, 1999.
3. The Registrant's current reports on Form 8-K and all amendments
thereto reporting events dated each of February 18, 1999, March 15, 1999 and
June 30, 1999.
4. The Registrant's proxy statement for the Registrant's annual meeting
of shareholders held December 22, 1999.
5. The joint proxy statement for the Registrant and Saba Petroleum
Company's special meetings of shareholders held March 19, 1999.
6. The description of the Registrant's no par value common stock which
is contained in the Registrant's amendment to the registration statement on Form
8-A filed with the Securities and Exchange Commission (the "Commission") on
September 12, 1997.
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All documents subsequently filed by the Registrant with the Commission
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), prior to the filing of a
post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold, shall be deemed
to be incorporated by reference into this registration statement and to be a
part hereof from the date of filing of such documents.
Item 4. Description of Securities.
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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.
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Inapplicable.
Item 6. Indemnification of Directors and Officers.
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The Registrant's Articles of Incorporation eliminate the personal
liability of directors to the Registrant or its shareholders for monetary
damages for breach of fiduciary duty to the extent permitted by Colorado law.
The Registrant's Articles of Incorporation and By-Laws provide that the
Registrant shall indemnify its officers and directors to the extent permitted by
Colorado law, which authorizes a corporation to indemnify directors, officers,
employees or agents of the corporation in non-derivative suits if such party
acted in good faith and in a manner such party 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 or her
conduct was unlawful. The Colorado Business Corporation Act further provides
that indemnification shall be provided if the party in question is successful on
the merits or otherwise.
Item 7. Exemption From Registration Claimed.
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Inapplicable.
Item 8. Exhibits.
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4.1 Non-Qualified Stock Option Plan of the Registrant (f/k/a Petro
Union, Inc. Stock Option Plan).
4.2 1999 Omnibus Stock Option Plan (incorporated by reference from
Annex A to the Registrant's definitive proxy statement for its
annual meeting of shareholders held December 22, 1999).
4.3 Rights Agreement dated November 3, 1999 (incorporated by
reference from Exhibit 10.4 of the Registrant's Form 10-Q for the
quarter ended September 30, 1999).
5.1 Opinion of Ballard Spahr Andrews & Ingersoll, LLP concerning the
legality of the Common Stock offered hereby.
2
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23.1 Consent of Ballard Spahr Andrews & Ingersoll, LLP (included in
Exhibit 5.1 to this registration statement).
23.2 Consent of Arthur Andersen LLP, independent public accountants.
23.3 Consent of Bateman & Co., Inc., P.C., independent certified
public accountants.
23.4 Consent of PricewaterhouseCoopers, LLP, independent certified
public accountants.
23.5 Consent of Netherland, Sewell & Associates, Inc.
23.6 Consent of Sproule Associates Limited.
Item 9. Undertakings.
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(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which it offers or sells
securities, a post-effective amendment to this registration statement to:
(i) Include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the
information set forth in the registration statement; and
notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than a 20
percent change in the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table in the effective
registration statement;
(iii) Include any additional or changed material information
on the plan of distribution.
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the registration statement is on Form S-3 or Form S-8 and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Section 13 or Section 15(d) of the Exchange Act that are incorporated by
reference in the registration statement.
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(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 the 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 Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(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.
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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 New York and State of New York on the 9th day of
February 2000.
GREKA ENERGY CORPORATION
By: /s/ Randeep S. Grewal
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Randeep S. Grewal, Chief Executive
Officer and Chairman of the Board of
Directors (Principal Executive Officer
and Financial Officer)
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.
Signature Title Date
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/s/ Randeep S. Grewal
Randeep S. Grewal Chairman of the February 9, 2000
Board of Directors
/s/ Dr. Jan F. Holtrop Director February 10, 2000
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Dr. Jan F. Holtrop
/s/ Susan M. Whalen Director February 9, 2000
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Susan M. Whalen
/s/ George Andrews Director February 9, 2000
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George Andrews
/s/ Dai Vaughn Director February 9, 2000
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Dai Vaughan
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EXHIBIT INDEX
Exhibit No.
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4.1 Non-Qualified Stock Option Plan of the Registrant (f/k/a Petro
Union, Inc. Stock Option Plan).
4.2 1999 Omnibus Stock Option Plan (incorporated by reference from
Annex A to the Registrant's definitive proxy statement for its
annual meeting of shareholders held December 22, 1999).
4.3 Rights Agreement dated November 3, 1999 (incorporated by
reference from Exhibit 10.4 of the Registrant's Form 10-Q for the
quarter ended September 30, 1999).
5.1 Opinion of Ballard Spahr Andrews & Ingersoll, LLP concerning the
legality of the Common Stock offered hereby.
23.1 Consent of Ballard Spahr Andrews & Ingersoll, LLP (included in
Exhibit 5.1 to this registration statement).
23.2 Consent of Arthur Andersen LLP, independent public accountants.
23.3 Consent of Bateman & Co., Inc., P.C., independent certified
public accountants.
23.4 Consent of PricewaterhouseCoopers, LLP, independent certified
public accountants.
23.5 Consent of Netherland, Sewell & Associates, Inc.
23.6 Consent of Sproule Associates Limited.
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Exhibit 4.1
PETRO UNION, INC.
STOCK OPTION PLAN
ARTICLE I
ESTABLISHMENT AND PURPOSE
1.1 Establishment. Petro Union, Inc., a Colorado corporation (the
"Company"), hereby establishes a stock option plan for key employees,
consultants and members of the Board of Directors of the Company or of a
subsidiary of the Company, providing material services to the Company, which
shall be known as the PETRO UNION, INC. STOCK OPTION PLAN (the "Plan"). The
Company shall enter into Option agreements with Optionees pursuant to the Plan.
1.2 Purpose. The purpose of the Plan is to enhance shareholder value by
attracting, retaining and motivating key employees, consultants and members of
the Board of Directors of the Company and of a subsidiary of the Company by
providing them with a means to acquire a proprietary interest in the Company's
success.
ARTICLE II
ELIGIBILITY AND PARTICIPATION
All current and former employees, consultants and members of the Board
of Directors of the Company (the "Board"), and of any subsidiary of the Company,
are eligible to participate in the Plan and receive Options under the Plan.
Optionees under the Plan shall be selected by the Board, in its sole discretion,
from among those current and former employees, consultants and members of the
Board of the Company, and of any subsidiary of the Company, who, in the opinion
of the Board, are or were in a position to contribute materially to the
Company's continued growth and development and to its long-term success.
ARTICLE III
ADMINISTRATION
Administration. The Board shall be responsible for administering the
Plan.
(a) The Board is authorized to interpret the Plan; to
prescribe, amend, and rescind rules and regulations relating to the
Plan; to provide for conditions and assurances deemed necessary or
advisable to protect the interests of the Company with respect to the
Plan; and to make all other determinations necessary or advisable for
the administration of the Plan. Determinations, interpretations, or
other actions made or taken by the Board with respect to the Plan and
Options granted under the Plan shall be final and binding and
conclusive for all purposes and upon all persons.
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(b) At the discretion of the Board the Plan may be
administered by a Committee of two or more non-employee Directors
appointed by the Board (the "Committee"). The members of the Committee
may be Directors who are eligible to receive Options under the Plan,
but Options may be granted to such persons only by action of the full
Board and not by action of the Committee. The Committee shall have full
power and authority, subject to the limitations of the Plan and any
limitations imposed by the Board, to construe, interpret and administer
the Plan and to make determinations which shall be final, conclusive
and binding upon all persons, including any persons having any
interests in any Options which may be granted under the Plan, and, by
resolution or resolutions to provide for the creation and issuance of
any Option, to fix the terms upon which and the time or times at or
within which, and the price or prices at which any shares may be
purchased from the Company upon the exercise of an Option. Such terms,
time or times and price or prices shall, in every case, be set forth or
incorporated by reference in the instrument or instruments evidencing
an Option, and shall be consistent with the provisions of the Plan.
(c) Where a Committee has been created by the Board pursuant
to this Article III, references in the Plan to actions to be taken by
the Board shall be deemed to refer to the Committee as well, except
where limited by the Plan or by the Board.
(d) No member of the Board or the Committee shall be liable
for any action or determination made in good faith with respect to the
Plan or any Option granted under it.
ARTICLE IV
STOCK SUBJECT TO THE PLAN
4.1 Number. The total number of shares of common stock of the Company
(the "Stock") hereby made available and reserved for issuance under the Plan
upon exercise of Options shall be 400,000 shares. The aggregate number of shares
of Stock available under the Plan shall be subject to adjustment as provided in
Section 4.3.
4.2 Unused Stock. If an Option shall expire or terminate for any reason
without having been exercised in full, or if an "immaculate cashless exercise"
(as described in Section 5.4) results in the issuance of a reduced number of
shares in satisfaction of an option grant, the unpurchased shares of Stock
subject thereto shall (unless the Plan shall have terminated) become available
for other Options under the Plan.
4.3 Adjustment in Capitalization. In the event of any change in the
outstanding shares of Stock of the Company by reason of a stock dividend or
split, recapitalization, reclassification, or other similar capital change, the
aggregate number of shares of Stock set forth in Section 4.1 shall be
appropriately adjusted by the Board, whose determination shall be conclusive. In
any such case, the number and kind of shares of Stock that are subject to any
Option and the Option price per share shall be proportionately and appropriately
adjusted without any change in the aggregate Option price to be paid therefor
upon exercise of the Option.
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ARTICLE V
TERMS OF STOCK OPTIONS
5.1 Grant of Options. Subject to Section 4.1, Options may be granted to
current and former employees, consultants and members of the Board of the
Company and of any subsidiary of the Company at any time and from time to time
as determined by the Board. The Board shall have complete discretion in
determining the terms and conditions and number of Options granted to each
Optionee. In making such determinations, the Board may take into account the
nature of services rendered by such current and former employees, consultants
and members of the Board, their present and potential contributions to the
Company and such other factors as the Board in its discretion shall deem
relevant.
5.2 Option Agreement; Terms and Conditions to Apply Unless Otherwise
Specified. As determined by the Board on the date of grant, each Option shall be
evidenced by an option agreement (the "Option Agreement") that specifies: the
Option price; the duration of the Option; the number of shares of Stock to which
the Option applies; such vesting or exercisability restrictions which the Board
may impose; and any other terms or conditions which the Board may impose. All
such terms and conditions shall be determined by the Board at the time of grant
of the Option.
(a) If not otherwise specified by the Board, the following
terms and conditions shall apply to Options granted under the Plan:
(i) Term. The duration of the Option shall be for ten
years from the date of grant.
(ii) Exercise of Option. Unless an Option is
terminated as provided hereunder, an Optionee may exercise an
Option pursuant to a vesting schedule as determined by the
Board.
(iii) Termination. Each Option granted pursuant to
the Plan shall expire upon the
earliest to occur of:
(A) The date set forth in such Option, not
to exceed ten years from the date of grant;
(B) The completion of the merger or sale of
substantially all of the Stock or assets of the
Company with or to another company in a transaction
in which the Company is not the survivor, except for
the merger of the Company into a wholly-owned
subsidiary (and the Company shall not be considered
the surviving corporation for purposes hereof if the
Company is the survivor of a reverse triangular
merger), provided that the Company shall have given
the Optionee at least thirty days' prior written
notice of its intent to enter into such merger or
sale; or
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(C) The termination of the employment of an
Optionee for cause by the Company.
(iv) Acceleration. The Option shall become fully
exercisable irrespective of its other provisions (i)
immediately prior to the completion of the merger or sale of
substantially all of the stock or assets of the Company in a
transaction in which the Company is not the survivor, except
for the merger of the Company into a wholly-owned subsidiary
(and the Company shall not be considered the surviving
corporation for purposes hereof if the Company is the survivor
of a reverse triangular merger); or (ii) upon termination of
the Optionee's employment with the Company or a subsidiary
thereof because of death, disability or normal retirement.
(v) Transferability. In addition to the Optionee, the
Option may be exercised, to the extent exercisable by the
Optionee, by the person or persons to whom the Optionee's
rights under the Option pass by will or the laws of descent
and distribution, by the spouse or the descendants of the
Optionee or by trusts for such persons, to whom or which the
Optionee may have transferred the Option, or by legal
representative of any of the foregoing. Any such transfer
shall be made only in compliance with the Securities Act of
1933, as amended, and the requirements therefor as set forth
by the Company.
(b) The Board shall be free to specify terms and conditions
other than and in addition to those set forth above, in its
discretion.
(c) All Option Agreements shall incorporate the provisions of
the Plan by reference.
5.3 Option Price. No Option granted pursuant to the Plan shall have an
Option price that is less than the fair market value of Stock on the date the
Option is granted, as determined by the Board. The Option exercise price shall
be subject to adjustment as provided in Section 4.3 above.
5.4 Payment. Payment for all shares of Stock shall be made at the time
that an Option, or any part thereof, is exercised, and no shares shall be issued
until full payment therefor has been made. Payment shall be made (i) in cash, or
(ii) if acceptable to the Board, in Stock, by the surrender of Option rights
hereunder valued at the difference between the Option exercise price plus income
taxes to be withheld, if any, and the fair market value of the common stock
(referred to as "immaculate cashless exercise"), or in some other form.
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ARTICLE VI
STOCK APPRECIATION RIGHTS
The Board may, upon recommendation of the Committee, grant Stock
Appreciation Rights to Participants at the same time as such Participants are
awarded Options under the Plan. Such Stock appreciation Rights shall be
evidenced by agreements in such form as the Board shall from time to time
approve. Such agreements shall comply with, and be subject to, the following
terms and conditions:
6.1 Employment Agreement. The Board may, in its discretion, include in
any Stock Appreciation Rights granted under the Plan a condition that the
Participant shall agree to remain in the employ of, and to render services to,
the Company or any of its Subsidiaries for a period of time (specified in the
agreement) from the date the Stock Appreciation Rights are granted. No such
agreement shall impose upon the Company or any of its Subsidiaries, however, any
obligation to employ the Participant for any period of time.
6.2 Grant. Each Stock Appreciation Right shall relate to a specific
Option under the Plan, and shall be awarded to a Participant concurrently with
the grant of such Option. The number of Stock Appreciation Rights granted to a
Participant shall be equal to the number of shares that the Participant is
entitled to receive pursuant to the related Option. The number of Stock
Appreciation Rights held by a Participant shall be reduced by:
(a) the number of Stock Appreciation Rights exercised for
Stock or cash under the Stock Appreciation Rights agreement,
and
(b) the number of shares of Stock purchased by such
Participant pursuant to the related Option.
6.3 Manner of Exercise. A Participant shall exercise Stock Appreciation
Rights by giving written notice of such exercise to the Company. The date upon
which such written notice is received by the Company shall be the exercise date
for the Stock Appreciation Rights.
6.4 Appreciation Available. Each Stock Appreciation Right shall entitle
a Participant to the following amount of appreciation -- the excess of the fair
market value of a share of Stock on the exercise date over the option price of
the related Option. The total appreciation available to a Participant from any
exercise of Stock Appreciation Rights shall be equal to the number of Stock
Appreciation Rights being exercised, multiplied by the amount of appreciation
per Right determined under the preceding sentence.
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6.5 Payment of Appreciation. In the discretion of the Committee, the
total appreciation available to a Participant from an exercise of Stock
Appreciation Rights may be paid to the Participant either in Stock or in cash.
If paid in cash, the amount thereof shall be the amount of appreciation
determined under Paragraph 6.4, above. If paid in Stock, the number of shares of
Stock that shall be issued pursuant to the exercise of Stock Appreciation Rights
shall be determined by dividing the amount of appreciation determined under
Paragraph 6.4, above, by the fair market value of a share of Stock on the
exercise date of the Stock Appreciation Rights; provided, however, that no
fractional shares shall be issued upon the exercise of Stock Appreciation
Rights.
6.6 Limitations Upon Exercise of Stock Appreciation Rights. A
Participant may exercise a Stock Appreciation Right for cash only in conjunction
with the exercise of the Option to which the Stock Appreciation Right relates.
Stock Appreciation Rights may be exercised only at such times and by such
persons as may exercise Options under the Plan. Adjustment to the number of
shares in the Plan and the price per share pursuant to Section 4.3 shall also be
made to any Stock Appreciation Rights held by each Participant. Any termination,
amendment, or revision of the Plan pursuant to Article IX shall be deemed a
termination, amendment, or revision of Stock Appreciation Rights to the same
extent.
ARTICLE VII
WRITTEN NOTICE, ISSUANCE OF STOCK
CERTIFICATES, SHAREHOLDER PRIVILEGES
7.1 Written Notice. An Optionee wishing to exercise an Option shall
give written notice to the Company, in the form and manner prescribed by the
Board. Full payment for the shares of Stock acquired pursuant to the Option must
accompany the written notice.
7.2 Issuance of Stock Certificates. As soon as practicable after the
receipt of written notice and payment, the Company shall deliver to the Optionee
a certificate or certificates for the requisite number of shares of Stock.
7.3 Privileges of a Shareholder. An Optionee or any other person
entitled to exercise an Option under the Option Agreement shall not have
shareholder privileges with respect to any Stock covered by the Option until the
date of issuance of a stock certificate for such Stock.
ARTICLE VIII
RIGHTS OF OPTIONEES
Nothing in the Plan shall interfere with or limit in any way the right
of the Company or a subsidiary corporation to terminate any employee's or
consultant's employment at any time, nor confer upon any employee or consultant
any right to continue in the employ of the Company or a subsidiary corporation.
ARTICLE IX
AMENDMENT, MODIFICATION, AND
TERMINATION OF THE PLAN
The Board may at any time terminate and from time to time may amend or
modify the Plan.
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No amendment, modification, or termination of the Plan shall in any
manner adversely affect any outstanding Option under the Plan without the
consent of the Optionee holding the Option.
ARTICLE X
ACQUISITION, MERGER OR LIQUIDATION
10.1 Acquisition.
(a) In the event that an acquisition occurs with respect to
the Company, the Company shall have the option, but not the obligation,
to cancel Options outstanding as of the effective date of such
acquisition, whether or not such Options are then exercisable, in
return for payment to the Optionees of an amount equal to a reasonable
estimate of an amount (hereinafter the "Spread"), determined by the
Board, equal to the difference between the net amount per share payable
in the acquisition or as a result of the acquisition, less the exercise
price of the Option. In estimating the Spread, appropriate adjustments
to give effect to the existence of the Options shall be made, such as
deeming the Options to have been exercised, with the Company receiving
the exercise price payable thereunder, and treating the Stock
receivable upon exercise of the Options as being outstanding in
determining the net amount per share.
(b) For purposes of this section, an "acquisition" shall mean
any transaction in which substantially all of the Company's assets are
acquired or in which a controlling amount of the Company's outstanding
shares are acquired, in each case by a single person or entity or an
affiliated group of persons and entities. For purposes of this section,
a controlling amount shall mean more than fifty percent of the issued
and outstanding shares of Stock of the Company. The Company shall have
the above option to cancel Options regardless of how the acquisition is
effectuated, whether by direct purchase, through a merger or similar
corporate transaction, or otherwise. In cases where the acquisition
consists of the acquisition of assets of the Company, the net amount
per share shall be calculated on the basis of the net amount receivable
with respect to shares upon a distribution and liquidation by the
Company after giving effect to expenses and charges, including but not
limited to taxes, payable by the Company before the liquidation can be
completed.
(c) Where the Company does not exercise its option under this
Section 9.1 the remaining provisions of this Article IX shall apply, to
the extent applicable.
10.2 Merger or Consolidation. If the Company shall be the surviving
corporation in any merger or consolidation, any Option granted hereunder shall
pertain to and apply to the securities to which a holder of the number of shares
of Stock subject to the Option would have been entitled in such merger or
consolidation, provided that the Company shall not be considered the surviving
corporation for purposes hereof if the Company is the survivor of a reverse
triangular merger.
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10.3 Other Transactions. A dissolution or a liquidation of the Company
or a merger and consolidation in which the Company is not the surviving
corporation (the Company shall not be considered the surviving corporation for
purposes hereof if the Company is the survivor of a reverse triangular merger)
shall cause every Option outstanding hereunder to terminate as of the effective
date of such dissolution, liquidation, merger or consolidation. However, the
Optionee either (i) shall be offered a firm commitment whereby the resulting or
surviving corporation in a merger or consolidation will tender to the Optionee
an option (the "Substitute Option") to purchase its shares on terms and
conditions both as to number of shares and otherwise, which will substantially
preserve to the Optionee the rights and benefits of the Option outstanding
hereunder granted by the Company, or (ii) shall have the right immediately prior
to such dissolution, liquidation, merger, or consolidation to exercise any
unexercised Options whether or not then vested, subject to the other provisions
of the Plan. The Board shall have absolute and uncontrolled discretion to
determine whether the Optionee has been offered a firm commitment and whether
the tendered Substitute Option will substantially preserve to the Optionee the
rights and benefits of the Option outstanding hereunder.
ARTICLE XI
SECURITIES REGISTRATION
11.1 Securities Registration. In the event that the Company shall deem
it necessary or desirable to register under the Securities Act of 1933, as
amended, or any other applicable statute, any Options or any Stock with respect
to which an Option may be or shall have been granted or exercised, or to qualify
any such Options or Stock under the Securities Act of 1933, as amended, or any
other statute, then the Optionee shall cooperate with the Company and take such
action as is necessary to permit registration or qualification of such Options
or Stock.
11.2 Representations. Unless the Company has determined that the
following representation is unnecessary, each person exercising an Option under
the Plan may be required by the Company, as a condition to the issuance of the
shares of Stock pursuant to exercise of the Option, to make a representation in
writing (i) that he is acquiring such shares for his own account for investment
and not with a view to, or for sale in connection with, the distribution of any
part thereof within the meaning of the Securities Act of 1933, and (ii) that
before any transfer in connection with the resale of such shares, he will obtain
the written opinion of counsel for the Company, or other counsel acceptable to
the Company, that such shares may be transferred without registration thereof.
The Company may also require that the certificates representing such shares
contain legends reflecting the foregoing. To the extent permitted by law,
including the Securities Act of 1933, nothing herein shall restrict the right of
a person exercising an Option to sell the shares received in an open market
transaction.
ARTICLE XII
TAX WITHHOLDING
Whenever shares of Stock are to be issued in satisfaction of Options
exercised under the Plan, the Company shall have the power to require the
recipient of the Stock to remit to the Company an amount sufficient to satisfy
federal, state, and local withholding tax requirements, if any.
8
<PAGE>
ARTICLE XIII
INDEMNIFICATION
To the extent permitted by law, each person who is or shall have been a
member of the Board or the Committee shall be indemnified and held harmless by
the Company against and from any loss, cost, liability, or expense that may be
imposed upon or reasonably incurred by him in connection with or resulting from
any claim, action, suit, or proceeding to which he may be a party or in which he
may be involved by reason of any action taken or failure to act under the Plan
and against and from any and all amounts paid by him in settlement thereof, with
the Company's approval, or paid by him in satisfaction of judgment in any such
action, suit, or proceeding against him, provided he shall give the Company an
opportunity, at its own expense, to handle and defend the same before he
undertakes to handle and defend it on his own behalf. The foregoing right of
indemnification shall not be exclusive of any other rights of indemnification to
which such persons may be entitled under the Company's certificate of
incorporation or bylaws, as a matter of law, or otherwise, or any power that the
Company or a Subsidiary Corporation may have to indemnify them or hold them
harmless.
ARTICLE XIV
REQUIREMENTS OF LAW
14.1 Requirements of Law. The granting of Options and the issuance of
shares of Stock upon the exercise of an Option shall be subject to all
applicable laws, rules, and regulations, and to such approvals by any
governmental agencies or national securities exchanges as may be required.
14.2 Governing Law. The Plan, and all agreements hereunder, shall be
construed in accordance with and governed by the laws of the State of Colorado.
ARTICLE XV
EFFECTIVE DATE OF PLAN
The Plan shall be effective on August 28, 1997. (The date of
Confirmation of the Petro Plan of Reorganization.)
ARTICLE XVI
NO OBLIGATION TO EXERCISE OPTION
The granting of an Option shall impose no obligation upon the holder
thereof to exercise such Option.
9
<PAGE>
THIS STOCK OPTION PLAN was adopted by the Board of Directors of Petro
Union, Inc. on June 13, 1997 to be effective upon the effective date set forth
above.
PETRO UNION, INC.
By:
---------------------------------
Title:
------------------------------
Law Offices
BALLARD SPAHR ANDREWS & INGERSOLL, LLP
1225 17TH STREET, SUITE 2300 PHILADELPHIA, PA
DENVER, COLORADO 80202-5596 BALTIMORE, MD
303-292-2400 CAMDEN, NJ
FAX: 303-296-3956 SALT LAKE CITY, UT
[email protected] VOORHEES, NJ
WASHINGTON, DC
Ballard Spahr Andrews & Ingersoll, llp
February 11, 2000
Greka Energy Corporation
630 Fifth Avenue, Suite 1501
New York, New York 10111
Re: Greka Energy Corporation
Registration Statement on Form S-8
Ladies and Gentlemen:
We have acted as counsel to Greka Energy Corporation, a Colorado
corporation (the "Company"), in connection with the registration under the
Securities Act of 1933, as amended, of 1,400,000 shares of common stock of the
Company, no par value per share (the "Shares"), issuable upon the exercise of
options (the "Options") granted under Company's Non-Qualified Stock Option Plan
and 1999 Omnibus Stock Option Plan (collectively, the "Plans").
In rendering our opinion, we have reviewed the Plans and such
certificates, documents, corporate records and other instruments and matters of
law as in our judgment are necessary or appropriate to enable us to render the
opinion expressed below. In giving this opinion, we are assuming the
authenticity of all instruments presented to us as originals, the conformity
with the originals of all instruments presented to us as copies and the
genuineness of all signatures.
Based upon the foregoing, we are of the opinion that the Shares, when
issued upon exercise of the Options granted under the Plans and upon payment of
the option exercise price, in accordance with the terms of the Plans, will be
legally issued, fully paid and non-assessable.
This opinion is limited to the matters expressly stated herein. No
implied opinion may be inferred to extend this opinion beyond the matters
expressly stated herein. We do not undertake to advise you or anyone else of any
changes in the opinions expressed herein resulting from changes in law, changes
in facts or any other matters that hereafter might occur or be brought to our
attention.
We express no opinion concerning the laws of any jurisdiction other
than the federal law of the United States of America and the law of the State of
Colorado. We consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement on Form S-8 being filed with respect to the offering of
the Shares.
Very truly yours,
/s/ Ballard Spahr Andrews & Ingersoll, LLP
Exhibit 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference of our reports dated April 15, 1999 (except for the
matter discussed in Note 14 for which the date is September 16, 1999) included
in the amended Form 10-KSB of Greka Energy Corporation for the year ended
December 31, 1998 into this registration statement on Form S-8 and to all
references to our firm included in or made a part of this registration
statement.
/s/ Arthur Andersen LLP
-------------------------
Arthur Andersen LLP
New York, New York
February 9, 2000
Exhibit 23.3
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the incorporation by reference into this registration
statement on Form S-8 of our report dated April 14, 1998 on our audits of the
consolidated financial statements of Greka Energy Corporation, formerly known as
Petro Union, Inc. doing business as Horizontal Ventures Inc., as of December 31,
1997 and for each of the two years in the period ended December 31, 1997, which
report is included in the Annual Report on Form 10-KSB of Greka Energy
Corporation and all amendments thereto for the year ended December 31, 1998.
/s/ Bateman & Co., Inc., P.C.
------------------------------
BATEMAN & CO., INC., P.C.
Houston, Texas
February 8, 2000
Exhibit 23.4
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of Greka Energy Corporation of our report, which contained
an explanatory paragraph regarding Saba Petroleum Company's ability to continue
as a going concern, dated April 15, 1998 relating to the financial statements of
Saba Petroleum Company, which appears in Greka Energy Corporation's Annual
Report on Form 10-KSB for the year ended December 31, 1998.
/s/ PricewaterhouseCoopers LLP
Los Angeles, California
February 9, 2000
Exhibit 23.5
CONSENT OF INDEPENDENT PETROLEUM ENGINEERS AND GEOLOGISTS
We hereby consent to the incorporation by reference into this
registration statement on Form S-8 of Greka Energy Corporation of references to
our firm in the form and context in which they appear in the Annual Report on
Form 10-KSB of Greka Energy Corporation and all amendments thereto for the year
ended December 31, 1998. We hereby further consent to the use of information
contained in our reports, as of January 1, 1997, 1998 and 1999, setting forth
the Saba Petroleum Company oil and gas reserves and revenue estimates for the
United States and Colombia and to the use of information from our report dated
April 5, 1999, setting forth the Horizontal Ventures, Inc. oil and gas reserves
and revenue estimates, as of January 1, 1999, for Cat Canyon Field in
California. We understand that oil and gas assets owned by Saba Petroleum
Company and Horizontal Ventures, Inc. were merged on March 24, 1999 to form
Greka Energy Corporation.
Netherland, Sewell & Associates, Inc.
By: /s/ Frederic D. Sewell
----------------------
Frederic D. Sewell
President
Dallas, Texas
February 9, 2000
Exhibit 23.6
Sproule Associates Limited
February 14, 2000
Greka Energy Corporation
630 Fifth Avenue, Suite 1501
New York, New York 10111
Re: Evaluation of the P&NG Reserves of Beaver Lake
Reserves Corporation, as of January 1, 1999
Dear Sirs:
Sproule Associates Limited hereby consents to the incorporation by
reference into this registration statement on Form S-8 of Greka Energy
Corporation of references to our firm in the form and context in which they
appear in the Annual Report on Form 10-KSB of Greka Energy Corporation and all
amendments thereto for the year ended December 31, 1998.
Sincerely,
/s/ Keith MacLeod
---------------------------
R. K. MacLeod, Eng.
Vice-President, Engineering
U.S. and International
