<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 7, 1998
REGISTRATION NO. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------
FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
-------------------
UNITED STATES EXPLORATION, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
COLORADO 1380 84-1120323
(STATE OR OTHER (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
JURISDICTION OF CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
INCORPORATION OR
ORGANIZATION)
1560 BROADWAY, SUITE 1900
DENVER, COLORADO 80202
(303) 863-3500
(ADDRESS, INCLUDING ZIP CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
AMENDED AND RESTATED 1989 INCENTIVE STOCK OPTION PLAN
AMENDED AND RESTATED 1990 NONQUALIFIED STOCK OPTION PLAN
DIRECTORS' FEE STOCK PLAN
EMPLOYMENT AGREEMENT WITH BRUCE D. BENSON
(FULL TITLE OF THE PLAN)
-------------------
F. MICHAEL MURPHY
UNITED STATES EXPLORATION, INC.
1560 BROADWAY, SUITE 1900
DENVER, COLORADO 80202
(303) 863-3500
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
-------------------
COPY TO:
LESLIE A. NICHOLS, ESQ.
SHERMAN & HOWARD L.L.C.
3000 FIRST INTERSTATE TOWER NORTH
633 SEVENTEENTH STREET
DENVER, COLORADO 80202
(303) 297-2900
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==========================================================================================================================
Proposed Maximum Proposed Maximum
Amount to be Offering Price Per Aggregate Offering Amount of
Title of Securities to be Registered Registered Share(1) Price Registration Fee(1)
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $0.0001 per 7,940,000 Shares $ 5.4622 $ 43,369,875 $ 12,795
share
==========================================================================================================================
</TABLE>
(1) Determined pursuant to Rule 457(h)(1) of the Securities Act of 1933, based
on the exercise prices of outstanding options and the average high and low
prices of the Common Stock on the American Stock Exchange on July 31, 1998
as to all other shares.
================================================================================
<PAGE> 2
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
Information required by Item 1 of this Form is included in documents
sent or given to participants as specified by Rule 428(b)(1) under the
Securities Act of 1933, as amended (the "Securities Act"). In accordance with
Rule 428(a) and the requirements of Part I of Form S-8, such documents are not
being filed with the Securities and Exchange Commission (the "Commission")
either as part of this Registration Statement or as prospectuses or prospectus
supplements pursuant to Rule 424 under the Securities Act.
This Registration Statement also contains a Prospectus, prepared in
accordance with the requirements of Part I of Form S-3 (in accordance with
Section C of the General Instructions to Form S-8), which covers re-offers and
re-sales by directors and executive officers of the Registrant of shares of the
Common Stock that have been or may be issued under the Amended and Restated 1989
Incentive Stock Option Plan, the Amended and Restated 1990 Nonqualified Stock
Option Plan, the Directors' Fee Stock Plan and the Employment Agreement with
Bruce D. Benson (the "Plans"), including options previously granted under the
Plans.
<PAGE> 3
Prospectus
UNITED STATES EXPLORATION, INC.
COMMON STOCK
(Par Value $.0001 Per share)
----------
This Prospectus may be used in connection with the offering, from time
to time, by certain shareholders (the "Selling Shareholders") of United States
Exploration, Inc. (the "Company"), of up to 7,940,000 shares (the "Shares") of
common stock, par value $.0001 per share (the "Common Stock"), of the Company,
which have been or may be acquired pursuant to (i) the exercise of options (the
"Options") granted to certain directors and executive officers of the Company
under the Company's Amended and Restated 1989 Incentive Stock Option Plan or
Amended and Restated 1990 Nonqualified Stock Option Plan or pursuant to its
Employment Agreement with Bruce D. Benson or (ii) the Company's Directors' Fee
Stock Plan (collectively, the "Plans").
The Company has been advised that the Shares may be sold through
underwriters or dealers, through brokers or other agents, or directly to one or
more purchasers, at market prices prevailing at the time of sale or at prices
otherwise negotiated. The aggregate proceeds to the Selling Shareholders from
the sale of the Shares so offered will be the purchase price of the Shares sold
less the aggregate commissions, discounts and other compensation, if any, paid
to broker-dealers and other expenses of the offering and sale of the Shares. The
Company knows of no selling arrangement between any broker-dealer and the
Selling Shareholders. The Company will not receive any of the proceeds from the
sale of the Shares but will bear all of the expenses of registering the Shares
under the Securities Act of 1933, as amended (the "Securities Act"). See "Plan
of Distribution."
The shares of the Company's Common Stock are listed on the American
Stock Exchange under the symbol UXP. On August 5, 1998 the closing sale price of
the Common Stock as reported on the American Stock Exchange was $ 2.75 per
share.
The Selling Shareholders and any broker-dealers that participate with
the Selling Shareholders in the offering and sale of any of the Shares may be
deemed to be "underwriters" within the meaning of the Securities Act, and any
discount or commission received by them and any profit on the resale of the
Shares purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act. See "Plan of Distribution."
----------
THE SECURITIES OFFERED BY THIS PROSPECTUS INVOLVE A HIGH DEGREE OF RISK.
SEE "RISK FACTORS," PAGE 4.
----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION,
NOR HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
----------
The date of this Prospectus is August 7, 1998.
<PAGE> 4
No person has been authorized to give any information or to make any
representation not contained in this Prospectus, and, if given or made, such
information or representation must not be relied upon as having been authorized
by the Company. This Prospectus does not constitute an offer to sell or a
solicitation of an offer to buy any securities offered in any jurisdiction to
any person to whom it is unlawful to make such offer or solicitation, or in any
jurisdiction where such solicitation is not authorized, or in which the person
making such offer or solicitation is not qualified to do so. Neither the
delivery of this Prospectus nor any sale made hereunder shall, under any
circumstances, create any implication that there has been no change in the
affairs of the Company or that the information contained or incorporated by
reference herein is correct as of any time subsequent to its date.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Section Page
- ------- ----
<S> <C>
Available Information ................................................3
Incorporation of Certain Documents by Reference.......................3
Special Note Regarding Forward-Looking Statements.....................4
Risk Factors..........................................................4
The Company...........................................................6
Selling Shareholders..................................................6
Plan of Distribution..................................................7
Experts...............................................................8
Legal Matters.........................................................8
</TABLE>
2
<PAGE> 5
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files reports, proxy statements, and other information
with the Securities and Exchange Commission (the "Commission"). Such reports,
proxy statements, and other information may be inspected and copied at the
public reference facilities maintained by the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the following Regional Offices: the
Northeast Regional Office, 7 World Trade Center, Suite 1300, New York, New York
10048, and the Midwest Regional Office, Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of such material can be
obtained by written request from the Public Reference Section of the Commission
at 450 Fifth Street, N.W., Washington, D.C. 20549. In addition, the Commission
maintains a World Wide Web site at http://www.sec.gov that contains reports,
proxy and information statements and other information regarding registrants
that file electronically with the Commission. Such reports, proxy statements and
other information concerning the Company may also be inspected at the offices of
the American Stock Exchange.
The Company has filed with the Commission a Registration Statement on
Form S-8 (the "Registration Statement") under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the securities included in this
Prospectus. For further information concerning the Company and the shares
offered hereby, reference is made to the Registration Statement and the exhibits
thereto. Any interested party may inspect the Registration Statement, and the
exhibits thereto, without charge, at the public reference facilities of the
Commission and may obtain copies of all or any portion of the Registration
Statement from the Commission upon payment of the prescribed fees.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission
pursuant to the Exchange Act are incorporated by reference in this Prospectus:
(a) The Company's Annual Report on Form 10-KSB for the transition
period ended December 31, 1997 (File No. 1-13513);
(b) The Company's Quarterly Report on Form 10-QSB for the quarter ended
March 31, 1998 (File No. 1-13513); and
(c) The Company's Current Reports on Form 8-K dated April 17, 1998, May
27, 1998 (as amended June 19, 1998) and May 29, 1998 (as amended July 29, 1998).
(d) The description of the Common Stock contained in the Company's Form
8-A dated October 17, 1997.
3
<PAGE> 6
All documents filed by the Company pursuant to Sections 13(a), 13(c),
or 15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering of the shares described in this Prospectus shall be
deemed to be incorporated by reference in this Prospectus and to be a part
hereof from the date of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any subsequently filed document
that also is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any statements so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus is delivered, upon the
written or oral request of such person, copies of any or all of the documents
which are incorporated by reference herein (other than exhibits to such
documents, unless such exhibits are specifically incorporated by reference into
such documents). Requests for such documents should be directed to United States
Exploration, Inc., 1560 Broadway, Suite 1900, Denver, Colorado, telephone: (303)
863-3500, Attention: F. Michael Murphy, Vice President, Secretary and Chief
Financial Officer.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Prospectus (including the documents incorporated herein by
reference) contains "forward-looking statements" within the meaning of the
federal securities laws. Such forward-looking statements include, without
limitation, statements regarding the Company's need for working capital, future
revenues and results of operations and are identified by words such as
"anticipates," "plans," "expects" and "estimates." A variety of factors could
cause the Company's actual results to differ materially from those contemplated
by these forward-looking statements, including, without limitation, those
discussed under "Risk Factors" below. Most of these factors are beyond the
control of the Company. Investors are cautioned not to put undue reliance on
forward-looking statements.
RISK FACTORS
THE SECURITIES OFFERED BY THIS PROSPECTUS INVOLVE A HIGH DEGREE OF
RISK. EACH PROSPECTIVE PURCHASER OF THE SHARES OFFERED HEREBY SHOULD CAREFULLY
READ THE ENTIRE PROSPECTUS BUT SHOULD GIVE SPECIAL CONSIDERATION TO THE RISK
FACTORS DESCRIBED BELOW.
Reserve Estimates. The Company's estimates of proved reserves of oil
and gas and future net cash flows therefrom are based on various assumptions
and, therefore, are inherently imprecise. Actual future production, revenue,
taxes, development expenditures, operating expenses and quantities of
recoverable oil and gas reserves may be subject to revision based upon
production history, results and timing of future exploration and development,
prevailing oil and gas prices, operating costs and other factors.
Reliance on Key Personnel. The Company is dependent upon its executive
officers and key employees, particularly Bruce D. Benson, its Chief Executive
Officer. The unexpected loss of the
4
<PAGE> 7
services of one or more of these individuals could have a detrimental effect on
the Company. The Company does not have key person life insurance on any of its
officers.
Management of Growth. The Company's acquisition in May, 1998 of
producing oil and gas properties in the Denver-Julesberg Basin in Northern
Colorado from Union Pacific Resources Company ("UPR") resulted in a substantial
change in the size and extent of the Company's assets and operations. In order
to accommodate this growth, the Company will have to expand its staffing, office
space and management information systems. The Company could experience temporary
difficulties in the course of assimilating the new properties and managing the
growth within the Company. Any such difficulties could adversely affect the
Company's business, financial condition or results of operations until resolved.
Availability of Services and Materials. The Company's expanded
operations will require significantly higher levels of third-party services and
materials. Such services and materials have at times been scarce and the
unavailability of a sufficient number of drilling rigs or other goods or
services could impede the Company's ability to achieve its objectives and
significantly increase the costs of its operations.
Increased Debt. In connection with its acquisition of producing
properties from UPR, the Company incurred approximately $29 million in debt. The
Company's ability to service this debt is in part dependent upon increasing its
cash flows from the UPR properties through further development work. There can
be no assurance that such development work will be successfully completed or
will produce adequate additional cash flow. The higher levels of debt also may
adversely affect the Company's ability to obtain additional financing for
working capital, capital expenditures and other purposes, should it need to do
so, or to acquire additional oil and gas properties utilizing new borrowings.
Oil and Gas Prices and Markets. The Company's revenues are dependent
upon prevailing prices for oil and gas. Oil and gas prices can be extremely
volatile. Prevailing prices are also affected by the actions of foreign
governments, international cartels and the United States government. Any
significant decline in oil and gas prices would adversely affect the Company's
revenues and operating income and could result in a reduction in the estimated
proved reserves attributable to the Company's properties, with a resulting
decrease in the Company's borrowing ability. In addition, the Company's revenues
depend upon the marketability of production, which is influenced by the
availability and capacity of gas gathering systems and pipelines, as well as the
effects of federal and state regulation and general economic conditions.
Government Regulation. The production and sale of oil and gas are
subject to various federal, state and local governmental regulations, which may
be changed from time to time in response to economic or political conditions.
Matters subject to regulation include discharge permits for drilling operations,
drilling bonds, reports concerning operations, the spacing of wells, unitization
and pooling of properties, taxation and environmental protection. From time to
time, regulatory agencies have imposed price controls and limitations on
production by restricting the rate of flow of oil and gas wells below actual
production capacity in order to conserve supplies of oil and gas. Changes in
these regulations could have a material adverse effect on the Company and its
ability to achieve its objectives.
5
<PAGE> 8
THE COMPANY
The Company is an independent producer of oil and natural gas. The
Company also operates natural gas gathering systems located within the
geographic areas of certain of its oil and gas leases. All of the Company's
operations are located in the states of Colorado, Kansas and Oklahoma. The
principal executive offices of the Company are located at 1560 Broadway, Suite
1900, Denver, Colorado 80202 and its telephone number is (303) 863-3500.
SELLING SHAREHOLDERS
The Selling Shareholders consist of all persons to whom shares may be
issued under the Plans who are directors or executive officers of the Company
and are therefore deemed to be affiliates of the Company for purposes of Rule
144 promulgated pursuant to the Securities Act. The following table sets forth,
as of June 30, 1998: (i) the name of each Selling Shareholder, (ii) his or her
position(s) with the Company and its predecessor or affiliates, over the last
three years, (iii) the number of shares of Common Stock beneficially owned by
each Selling Shareholder as of that date, (iv) the number of shares of Common
Stock issued or issuable under the Plans to each Selling Shareholder based on
Options or grants at that date, which is also the number of shares covered by
this Prospectus that may be sold for the account of such Selling Shareholder,
and (v) the number of Shares and percentage of class that would be owned by each
Selling Shareholder if all such registered shares were issued to and sold by the
Selling Shareholder. If Options or shares are granted to additional Selling
Shareholders in the future, a Prospectus Supplement will be filed amending the
table. None of the Selling Shareholders named in the table has had any position,
office or other material relationship within the past three years with the
Company or any of its predecessors or affiliates, other than as described below.
<TABLE>
<CAPTION>
SHARES THAT WOULD BE OWNED
IF ALL SHARES COVERED BY THIS
PROSPECTUS WERE SOLD
NUMBER OF NUMBER OF -----------------------------
SHARES SHARES
BENEFICIALLY COVERED BY THIS PERCENT
NAME AND POSITION OWNED PROSPECTUS NUMBER OF CLASS
- -------------------------------------- ------------- --------------- -------- --------
<S> <C> <C> <C> <C>
BRUCE D. BENSON 4,220,100 (1) 4,000,000 (2) 220,100 1.57%
CHAIRMAN OF THE BOARD,
CHIEF EXECUTIVE OFFICER
AND PRESIDENT
F. MICHAEL MURPHY -- 150,000 (3) -- (8)
VICE PRESIDENT, CHIEF
FINANCIAL OFFICER AND
SECRETARY
RANDALL L. ROGERS -- 25,200 (3) -- (8)
TREASURER AND CHIEF ACCOUNTING OFFICER
</TABLE>
6
<PAGE> 9
<TABLE>
<S> <C> <C> <C> <C>
THOMAS W. GAMEL 388,788 (4) 179,000 (5) 209,788 1.50%
DIRECTOR
ROBERT J. MALONE 311,600 (6) 179,000 (5) 132,600 (8)
DIRECTOR
RICHARD L. ROBINSON 305,100 (7) 179,000 (5) 126,100 (8)
DIRECTOR
</TABLE>
- ----------
(1) Includes 220,100 shares currently owned and 4,000,000 shares issuable
upon exercise of Options that are currently exercisable or become
exercisable within 60 days after June 30, 1998.
(2) Consists of shares issuable upon exercise of Options granted pursuant
to Mr. Benson's employment contract, all of which are issuable upon
exercise of Options that are currently exercisable or become
exercisable within 60 days after June 30, 1998.
(3) Consists of shares issuable upon exercise of Options granted pursuant
to the Amended and Restated 1989 Incentive Stock Option Plan, none of
which are currently exercisable.
(4) Consists of 209,788 currently owned and 179,000 shares issuable upon
exercise of Options granted pursuant to the amended and Restated 1990
Nonqualified Stock Option Plan, all of which are currently exercisable.
(5) Consists of shares issuable upon exercise of Options granted pursuant
to the Amended and Restated 1990 Nonqualified Stock Option Plan, all of
which are currently exercisable.
(6) Includes 132,600 shares currently owned and 179,000 shares issuable
upon exercise of Options granted pursuant to the Amended and Restated
1990 Nonqualified Stock Option Plan, all of which are currently
exercisable.
(7) Includes 126,100 shares currently owned and 179,000 shares issuable
upon exercise of Options granted pursuant to the Amended and Restated
1990 Nonqualified Stock Option Plan, all of which are currently
exercisable.
(8) Less than one percent.
PLAN OF DISTRIBUTION
All of the Shares offered hereby would be sold for the accounts of the
Selling Shareholders. The Company would not receive any of the proceeds from the
sale of the Shares.
The Company has been advised that the Shares may be sold from time to
time by the Selling Shareholders, or by any pledgee or other successor in
interest to the Selling Shareholders, in regular brokerage transactions on a
national securities exchange or in the over-the-counter market, in transactions
directly with market makers, in privately negotiated transactions, or through a
combination of such methods at fixed prices (which may be changed), at market
prices prevailing at the time of sale, or at negotiated prices.
The Selling Shareholders, or any pledgee or other successor in
interest, may effect such transactions by selling Shares to or through
broker-dealers, and such broker-dealers may receive
7
<PAGE> 10
compensation in the form of discounts, concessions or commissions from the
Selling Shareholders, any pledgee or other successor in interest, or the
purchasers of Shares for whom such broker-dealers may act as agent, or to whom
they sell as principal, or both which compensation, as to a particular
broker dealer, may be in excess of customary commissions). The Selling
Shareholders and any such underwriters, dealers or agents that participate in
the distribution of the Shares may be deemed to be underwriters within the
meaning of the Securities Act, and any profit on the sale of the Shares by them
and any discounts, commissions or concessions received by them may be deemed to
be underwriting discounts and commissions under the Securities Act. Any such
underwriters, dealers and agents may engage in transactions with, and perform
services for, the Company.
Certain expenses in connection with the registration of the Shares
under the Securities Act, including fees and expenses of the Company's counsel
and accountants, filing fees and printing expenses, will be borne by the
Company. Each Selling Shareholder will bear his or her own legal and accounting
expenses, if any, as well as all transfer taxes, discounts, concessions,
commissions or other compensation paid to broker-dealers.
Any Shares that qualify for resale pursuant to Rule 144 promulgated
under the Securities Act may be sold under the Rule rather than pursuant to this
Prospectus.
There can be no assurance that the Selling Shareholders will sell any
or all of the Shares covered by this Prospectus.
EXPERTS
The Consolidated Balance Sheets of the Company as of March 31, 1997 and
December 31, 1997 and the related Consolidated Statements of Operations, Changes
in Stockholders' Equity and Cash Flows for the fiscal year ended March 31, 1997
and the nine-month transition period ended December 31, 1997 included in the
Company's Annual Report on Form 10-KSB for that transition period, incorporated
by reference in the Registration Statement and this Prospectus, have been
incorporated herein in reliance on the report of Grant Thornton LLP, independent
certified public accountants, given on the authority of that firm as experts in
accounting and auditing. The Statements of Combined Oil and Gas Revenues and
Direct Operating Expenses for Certain Oil and Gas Properties Acquired from Union
Pacific Resources Company by United States Exploration, Inc., for the Years
Ended December 31, 1997 and 1996 included in the Company's Form 8-K/A filed
July 29, 1998, incorporated by reference in the Registration Statement and this
Prospectus, have been audited by Ernst & Young LLP as set forth in their report
included therein and have been incorporated herein in reliance on the report of
Ernst & Young LLP, independent certified public accountants, given on the
authority of that firm as experts in accounting and auditing.
LEGAL MATTERS
The validity of the Common Stock offered hereby has been passed upon
for the Company by Sherman & Howard L.L.C., Denver, Colorado.
8
<PAGE> 11
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed by United States Exploration, Inc. (the
"Company" or the "Registrant") with the Commission pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), are incorporated herein
by reference:
(a) The Company's Annual Report on Form 10-KSB for the transition
period ended December 31, 1997 (File No. 1-13513);
(b) The Company's Quarterly Report on Form 10-QSB for the quarter ended
March 31, 1998 (File No. 1-13513); and
(c) The Company's Current Reports on Form 8-K dated April 17, 1998, May
27, 1998 (as amended June 19, 1998) and May 29, 1998 (as amended July 29, 1998).
(d) The description of the Common Stock contained in the Company's Form
8-A dated October 17, 1997.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 and 15(d) of the Exchange Act, as amended, subsequent to the date of this
Registration Statement and prior to the filing of a post-effective amendment
which indicates that all securities offered have been sold or which deregisters
all securities remaining unsold, shall be deemed to be incorporated by reference
in this Registration Statement and to be a part thereof from the date of the
filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
All of the securities being registered are registered under Section 12
of the Exchange Act.
ITEM 5. INTEREST OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 7-109-103 of the Colorado Business Corporation Act (the "Act")
provides that a corporation organized under Colorado law shall be required to
indemnify a person who is or was a director of the corporation or an individual
who, while serving as a director of the corporation, is or was serving at the
corporation's request as a director, officer, partner, trustee, employee or
fiduciary or agent of another corporation or other entity or of any employee
benefit plan (a "Director") or officer of the corporation and who was wholly
successful, on the merits or otherwise, in defense of any threatened, pending,
or completed action, suit, or proceeding, whether civil,
9
<PAGE> 12
criminal, administrative, or investigative and whether formal or informal (a
"Proceeding"), in which he was a party, against reasonable expenses incurred by
him in connection with the Proceeding, unless such indemnity is limited by the
corporation's articles of incorporation.
Section 7-109-102 of the Act provides, generally, that a corporation
may indemnify a person made a party to a Proceeding because the person is or
was a Director against any obligation incurred with respect to a Proceeding to
pay a judgment, settlement, penalty, fine (including an excise tax assessed
with respect to an employee benefit plan) or reasonable expenses incurred in
the Proceeding if the person conducted himself or herself in good faith and the
person reasonably believed, in the case of conduct in an official capacity with
the corporation, the person's conduct was in the corporation's best interests
and, in all other cases, his or her conduct was at least not opposed to the
corporation's best interests and, with respect to any criminal proceedings, the
person had no reasonable cause to believe that his or her conduct was unlawful.
A corporation may not indemnify a Director in connection with any Proceeding by
or in the right of the corporation in which the Director was adjudged liable to
the corporation or, in connection with any other Proceeding charging the
Director derived an improper personal benefit, whether or not involving actions
in an official capacity, in which Proceeding the Director was judged liable on
the basis that he or she derived an improper personal benefit. Any
indemnification permitted in connection with a Proceeding by or in the right of
the corporation is limited to reasonable expenses incurred in connection with
such Proceeding. Under Section 7-109-107 of the Act, unless otherwise provided
in the articles of incorporation, a corporation may indemnify an officer,
employee, fiduciary, or agent of the corporation to the same extent as a
Director and may indemnify an officer, employee, fiduciary, or agent who is not
a Director to a greater extent, if not inconsistent with public policy and if
provided for by its bylaws, general or specific action of its board of
directors or shareholders, or contract.
The Company's bylaws provide for indemnification of directors and
officers to the full extent permitted under Colorado law. The Company may also,
but is not obligated to, indemnify any person who is or was an officer, agent or
employee of the Company to a greater extent than a director.
Section 7-108-402 of the Act provides, generally, that the articles
of incorporation may contain a provision eliminating or limiting the personal
liability of a director to the corporation or its shareholders for monetary
damages for breach of fiduciary duty as a director; except that any such
provision may not eliminate or limit the liability of a director (i) for any
breach of the director's duty of loyalty to the corporation or its
shareholders, (ii) acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) acts specified in
ss. 7-108-403, or (iv) any transaction from which a director directly or
indirectly derived an improper personal benefit. Such provision may not
eliminate or limit the liability of a director for any act or omission
occurring prior to the date on which such provision becomes effective.
The Company's articles of incorporation limit Director's liability to
the Company or its stockholders for monetary damages for breach of fiduciary
duty as a director to the fullest extent permitted by Colorado law. The Company
also enters into Indemnification Agreements with its directors and executive
officers in which it undertakes to indemnify them to the full extent allowed by
law. The form of Indemnification Agreement used by the Company is included
herewith as Exhibit 10.
10
<PAGE> 13
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
See Exhibit Index and Exhibits at the end of this Registration
Statement.
ITEM 9. UNDERTAKINGS.
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 to include any
additional or changed material information with respect to the plan of
distribution not previously disclosed in the registration statement;
(2) For the purpose of determining any liability under the Securities
Act of 1933, to treat each such post-effective amendment as 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; and
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(4) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the Registrant's annual report pursuant
to Section 13(a) or Section 15(d) and each filing of the annual report of the
Plan pursuant to Section 15(d) of the Securities Exchange Act of 1934 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.
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
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
11
<PAGE> 14
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
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 on Form S-8 to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City and County of Denver, State
of Colorado, on August 7, 1998.
UNITED STATES EXPLORATION, INC.
By:/s/ Bruce D. Benson
--------------------------------------
Bruce D. Benson
Chairman of the Board, Chief Executive
Officer and President
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<PAGE> 15
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Bruce D. Benson and F. Michael Murphy,
and each of them, his true and lawful attorneys-in-fact and agents, each with
full power of substitution and resubstitution, for him and in his name, place
and stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite or necessary to be done in and about the premises,
as fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or either
of them, or their or his substitute or substitutes, may lawfully do or cause to
be done by virtue hereof.
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/ Bruce D. Benson Chairman of the Board, Chief August 7, 1998
- ------------------------------ Executive Officer and President
Bruce D. Benson (Chief Executive Officer)
/s/ F. Michael Murphy Vice President, Chief Financial August 7, 1998
- ------------------------------ Officer and Secretary
F. Michael Murphy (Chief Financial Officer)
/s/ Randall L. Rogers Treasurer and Chief Accounting August 7, 1998
- ------------------------------ Officer
Randall L. Rogers (Chief Accounting Officer)
/s/ Thomas W. Gamel Director August 7, 1998
- ------------------------------
Thomas W. Gamel
/s/ Robert J. Malone Director August 7, 1998
- ------------------------------
Robert J. Malone
/s/ Richard L. Robinson Director August 7, 1998
- ------------------------------
Richard L. Robinson
</TABLE>
13
<PAGE> 16
EXHIBITS
<TABLE>
<CAPTION>
Exhibit No.
- -----------
<S> <C>
4 Amended and Restated By-Laws
5 Opinion of Sherman & Howard L.L.C.
10 Form of Indemnification Agreement entered into with each
Executive Officer and Director of the Company
23(a) Consent of Independent Public Accountants - Grant Thornton LLP
23(b) Consent of Independent Public Accountants - Ernst & Young LLP
23(c) Consent of Sherman & Howard L.L.C. (included in Exhibit 5)
24 Powers of Attorney (included on the signature page to the Registration
Statement)
</TABLE>
14
<PAGE> 1
Exhibit 4
AMENDED AND RESTATED
BYLAWS
OF
UNITED STATES EXPLORATION, INC.
ARTICLE I
OFFICES
Section 1. BUSINESS OFFICES. The principal office of the corporation
shall be designated from time to time by the board of directors and may be
within or outside of Colorado. The corporation may have such other offices,
either within or outside Colorado, as the board of directors may designate or as
the business of the corporation may require from time to time.
Section 2. REGISTERED OFFICE. The registered office of the corporation
required by the Colorado Business Corporation Act to be maintained in Colorado
may be, but need not be, identical with the principal office, and the address of
the registered office may be changed from time to time by the board of
directors.
ARTICLE II
SHAREHOLDERS
Section 1. ANNUAL MEETING. The annual meeting of the shareholders shall
be held during the first four months of each year on a date and at a time fixed
by the board of directors of the corporation (or by the president in the absence
of action by the board of directors), for the purpose of electing directors and
for the transaction of such other business as may come before the meeting.
Section 2. SPECIAL MEETINGS. Special meetings of the shareholders may
be called for any purpose by the president or by the board of directors. The
president shall call a special meeting of the shareholders if the corporation
receives one or more written demands for the meeting, stating the purpose or
purposes for which it is to be held, signed and dated by holders of shares
representing at least ten percent of all the votes entitled to be cast on any
issue proposed to be considered at the meeting.
Section 3. PLACE OF MEETING. The board of directors may designate any
place, either within or outside Colorado, as the place for any annual meeting or
any special meeting, whether called by the board of directors or otherwise. If
no designation is made by the board of directors, the place of meeting shall be
the principal office of the corporation.
<PAGE> 2
Section 4. NOTICE OF MEETING.
(a) Written notice stating the place, date, and hour of the
meeting shall be given not less than ten nor more than sixty days before the
date of the meeting, except that (i) if the number of authorized shares is to be
increased, at least thirty days' notice shall be given, and (ii) if the Colorado
Business Corporation Act requires that notice be given a specified number of
days in advance of a particular meeting, that requirement shall control. Notice
of a special meeting shall include a description of the purpose or purposes of
the meeting. Notice of an annual meeting need not include a description of the
purpose or purposes of the meeting except with respect to (1) an amendment to
the articles of incorporation of the corporation, (2) a merger or share exchange
in which the corporation is a party and, with respect to a share exchange, in
which the corporation's shares will be acquired, (3) a sale, lease, exchange or
other disposition, other than in the usual and regular course of business, of
all or substantially all of the property of the corporation or of another entity
which this corporation controls, in each case with or without the goodwill, (4)
a dissolution of the corporation, or (5) any other purpose for which a statement
of purpose is required by the Colorado Business Corporation Act. Notice shall be
given personally or by mail, private carrier, telegraph, teletype,
electronically transmitted facsimile or other form of wire or wireless
communication by or at the direction of the president, the secretary, or the
officer or persons calling the meeting, to each shareholder of record entitled
to vote at such meeting. If mailed and if in a comprehensible form, such notice
shall be deemed to be given and effective when deposited in the United States
mail, addressed to the shareholder at his address as it appears in the
corporation's current record of shareholders, with postage prepaid. If notice is
given other than by mail, and provided that such notice is in a comprehensible
form, the notice is given and effective on the date received by the shareholder.
(b) If requested by the person or persons lawfully calling such
meeting, the secretary shall give notice of the meeting at corporate expense. No
notice need be sent to any shareholder if three successive notices mailed to the
last known address of such shareholder have been returned as undeliverable until
such time as another address for such shareholder is made known to the
corporation by such shareholder.
(c) When a meeting is adjourned to another date, time or place,
notice need not be given of the new date, time or place if the new date, time or
place of such meeting is announced before adjournment at the meeting at which
the adjournment is taken; provided, however, that if the adjournment is for more
than 120 days, or if a new record date is fixed for the adjourned meeting, a new
notice of the adjourned meeting shall be given to each shareholder of record
entitled to vote at the meeting. At the adjourned meeting the corporation may
transact any business which could have been transacted at the original meeting.
(d) A shareholder may waive notice of a meeting before or after
the time and date of the meeting by a writing signed by such shareholder. By
attending a meeting either in person or by proxy, a shareholder waives objection
to lack of notice or defective notice of the meeting unless the shareholder
objects at the beginning of the meeting to the holding of the meeting or the
transaction of business at the meeting because of lack of notice or defective
notice. By attending the meeting, the shareholder also waives any objection to
consideration at the meeting of a particular
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<PAGE> 3
matter not within the purpose or purposes described in the meeting notice unless
the shareholder objects to considering the matter when it is presented.
Section 5. FIXING OF RECORD DATE.
(a) For the purpose of determining shareholders entitled to be
given notice of a meeting of shareholders, to demand a special meeting, to vote,
to receive distributions (other than distributions involving a purchase,
redemption or other acquisition of the corporation's shares) or share dividends
or to make a determination of shareholders for any other proper purpose, the
board of directors may fix a future date as the record date for any such
determination of shareholders, such date in any case to be not more than seventy
days prior to the date on which the particular action requiring such
determination of shareholders is to be taken. If no record date is fixed by the
directors, (i) the record date for a meeting of shareholders shall be the day
before the date on which notice of the meeting is first given to shareholders,
(ii) the record date for a distribution shall be the date on which the
resolution of the board of directors providing for the distribution is adopted,
and (iii) the record date for determining shareholders entitled to demand a
special meeting shall be the date of the earliest of any of the demands pursuant
to which the meeting is called. When a determination of shareholders entitled to
vote at any meeting of shareholders is made as provided in this Section, such
determination shall apply to any adjournment of such meeting unless the board of
directors fixes a new record date, which it must do if the meeting is adjourned
to a date more than 120 days after the date fixed for the original meeting.
(b) Notwithstanding (a) above, when action of the shareholders is
taken without a meeting, the record date for determining the shareholders
entitled to take such action or entitled to be given notice of the action so
taken shall be the date when the corporation first receives a writing pursuant
to which the action is taken.
Section 6. VOTING LISTS.
(a) After the record date for a shareholders' meeting has been
fixed, the secretary shall make a complete list of the shareholders entitled to
be given notice of such meeting. The list shall be arranged by voting groups and
within each voting group by class or series of shares, shall be in alphabetical
order within each class or series, and shall show the address of and the number
of shares of each class or series held by each shareholder. For the period
beginning the earlier of ten days prior to the meeting or two business days
after notice of the meeting is given and continuing through the meeting and any
adjournment of such meeting, the list shall be kept on file at the principal
office of the corporation, or at a place (which shall be identified in the
notice) in the city where the meeting will be held and shall be available for
inspection on written demand by any shareholder (including for the purpose of
this Section 6 any holder of voting trust certificates) or his agent or attorney
during regular business hours.
(b) Any shareholder, his agent or attorney may copy the list of
shareholders during regular business hours and during the period it is available
for inspection, if (i) the shareholder has been a shareholder for at least three
months immediately preceding the demand or holds at least five percent of all
outstanding shares of any class of shares as of the date of the demand, (ii) the
demand is made in good faith and for a purpose reasonably related to the
demanding
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<PAGE> 4
shareholder's interest as a shareholder, (iii) the shareholder describes with
reasonable particularity the purpose and the records the shareholder desires to
inspect, (iv) the records are directly connected with the described purpose, and
(v) the shareholder pays a reasonable charge covering the costs of labor and
material for such copies, not to exceed the estimated cost of production and
reproduction.
(c) The shareholders list shall be available at the meeting and
any shareholder or his agent or attorney shall be entitled to inspect the list
at any time during the meeting or any adjournment.
Section 7. RECOGNITION PROCEDURE FOR BENEFICIAL OWNERS. The board of
directors may adopt by resolution a procedure by which a shareholder of the
corporation may certify in writing to the corporation that all or a portion of
the shares registered in the name of such shareholder are held for the account
of a specified person or persons. The resolution may set forth (i) the types of
nominees to which it applies, (ii) the rights or privileges that the corporation
will recognize in a beneficial owner, which may include rights and privileges
other than voting, (iii) the form of certification and the information to be
contained therein, (iv) if the certification is with respect to a record date,
the time within which the certification must be received by the corporation, (v)
the period for which the nominee's use of the procedure is effective, and (vi)
such other provisions with respect to the procedure as the board deems necessary
or desirable. Upon receipt by the corporation of a certificate complying with
the procedure established by the board of directors, the persons specified in
the certification shall be deemed, for the purpose or purposes set forth in the
certification, to be the registered holders of the number of shares specified in
place of the shareholder making the certification.
Section 8. QUORUM AND MANNER OF ACTING.
(a) A majority of the votes entitled to be cast on a matter by a
voting group shall constitute a quorum of that voting group for action on the
matter. If less than a majority of such votes are represented at a meeting, a
majority of the votes so represented may adjourn the meeting from time to time.
If a quorum is present at such adjourned meeting, any business may be transacted
which might have been transacted at the meeting as originally noticed. The
shareholders present at a duly organized meeting may continue to transact
business until adjournment, notwithstanding the withdrawal of enough
shareholders to leave less than a quorum.
(b) If a quorum exists, (i) action on a matter other than the
election of directors by a voting group is approved if the votes cast within the
voting group favoring the action exceed the votes cast within the voting group
opposing the action, unless the vote of a greater number or voting by classes is
required by law or the articles of incorporation and (ii) in the election of
directors, the number of candidates equaling the number of directors to be
elected having the highest number of votes cast in favor of their election are
elected to the board of directors.
Section 9. PROXIES.
(a) At all meetings of shareholders, a shareholder may vote by
proxy by signing an appointment form or similar writing, either personally or by
his duly authorized attorney-in-fact.
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<PAGE> 5
A shareholder may also appoint a proxy by transmitting or authorizing the
transmission of a telegram, teletype, or other electronic transmission providing
a written statement of the appointment to the proxy, a proxy solicitor, proxy
support service organization, or other person duly authorized by the proxy to
receive appointments as agent for the proxy, or to the corporation. The
transmitted appointment shall set forth or be transmitted with written evidence
from which it can be determined that the shareholder transmitted or authorized
the transmission of the appointment. The proxy appointment form or similar
writing shall be filed with the secretary of the corporation before or at the
time of the meeting. The appointment of a proxy is effective when received by
the corporation and is valid for eleven months unless a different period is
expressly provided in the appointment form or similar writing.
(b) Any complete copy, including an electronically transmitted
facsimile, of an appointment of a proxy may be substituted for or used in lieu
of the original appointment for any purpose for which the original appointment
could be used.
(c) The death or incapacity of the shareholder appointing a proxy
does not affect the right of the corporation to accept the proxy's authority
unless notice of the death or incapacity is received by the secretary or other
officer or agent authorized to tabulate votes before the proxy exercises his
authority under the appointment.
(d) Subject to Section 11 and any express limitation on the
proxy's authority appearing on the appointment form, the corporation is entitled
to accept the proxy's vote or other action as that of the shareholder making the
appointment.
Section 10. VOTING OF SHARES.
(a) Each outstanding share, regardless of class, shall be
entitled to one vote, and each fractional share shall be entitled to a
corresponding fractional vote, on each matter submitted to a vote at a meeting
of shareholders, except to the extent that the voting rights of the shares of
any class or classes are limited or denied by the articles of incorporation as
permitted by the Colorado Business Corporation Act. Cumulative voting shall not
be permitted. In the election of directors, each shareholder entitled to vote
shall have the right to cast all of his votes for as many persons as there are
directors to be elected and for whose election he has the right to vote.
(b) Shares of this corporation owned, directly or indirectly, by
a second corporation, domestic or foreign, of which this corporation owns,
directly or indirectly, a majority of the shares entitled to vote for directors
of the second corporation shall not be entitled to vote, except to the extent
the second corporation holds the shares in a fiduciary capacity.
(c) Redeemable shares are not entitled to be voted after notice
of redemption is mailed to the holders and a sum sufficient to redeem the shares
has been deposited with a bank, trust company or other financial institution
under an irrevocable obligation to pay the holders the redemption price on
surrender of the shares.
5
<PAGE> 6
Section 11. CORPORATION'S ACCEPTANCE OF VOTES.
(a) If the name signed on a vote, consent, waiver, proxy
appointment, or proxy appointment revocation corresponds to the name of a
shareholder, the corporation, if acting in good faith, is entitled to accept the
vote, consent, waiver, proxy appointment or proxy appointment revocation and
give it effect as the act of the shareholder. If the name signed on a vote,
consent, waiver, proxy appointment or proxy appointment revocation does not
correspond to the name of a shareholder, the corporation, if acting in good
faith, is nevertheless entitled to accept the vote, consent, waiver, proxy
appointment or proxy appointment revocation and to give it effect as the act of
the shareholder if:
(i) the shareholder is an entity and the name signed purports
to be that of an officer or agent of the entity;
(ii) the name signed purports to be that of an administrator,
executor, guardian or conservator representing the shareholder and, if the
corporation requests, evidence of fiduciary status acceptable to the corporation
has been presented with respect to the vote, consent, waiver, proxy appointment
or proxy appointment revocation;
(iii) the name signed purports to be that of a receiver or
trustee in bankruptcy of the shareholder and, if the corporation requests,
evidence of this status acceptable to the corporation has been presented with
respect to the vote, consent, waiver, proxy appointment or proxy appointment
revocation;
(iv) the name signed purports to be that of a pledgee,
beneficial owner or attorney-in-fact of the shareholder and, if the corporation
requests, evidence acceptable to the corporation of the signatory's authority to
sign for the shareholder has been presented with respect to the vote, consent,
waiver, proxy appointment or proxy appointment revocation;
(v) two or more persons are the shareholder as co-tenants or
fiduciaries and the name signed purports to be the name of at least one of the
co-tenants or fiduciaries, and the person signing appears to be acting on behalf
of all the co-tenants or fiduciaries; or
(vi) the acceptance of the vote, consent, waiver, proxy
appointment or proxy appointment revocation is otherwise proper under rules
established by the corporation that are not inconsistent with this Section 11.
(b) The corporation is entitled to reject a vote, consent,
waiver, proxy appointment or proxy appointment revocation if the secretary or
other officer or agent authorized to tabulate votes, acting in good faith, has
reasonable basis for doubt about the validity of the signature on it or about
the signatory's authority to sign for the shareholder.
(c) Neither the corporation nor its officers nor any agent who
accepts or rejects a vote, consent, waiver, proxy appointment or proxy
appointment revocation in good faith and in
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<PAGE> 7
accordance with the standards of this Section is liable in damages for the
consequences of the acceptance or rejection.
Section 12. INFORMAL ACTION BY SHAREHOLDERS.
(a) Any action required or permitted to be taken at a meeting of
the shareholders may be taken without a meeting if a written consent (or
counterparts of such consent) that sets forth the action so taken is signed by
all of the shareholders entitled to vote with respect to the subject matter of
such consent and received by the corporation. Such consent shall have the same
force and effect as a unanimous vote of the shareholders and may be stated as
such in any document. Action taken under this Section 12 is effective as of the
date the last writing necessary to effect the action is received by the
corporation, unless all of the writings specify a different effective date, in
which case such specified date shall be the effective date for such action.
(b) Any shareholder who has signed a writing describing and
consenting to action taken pursuant to this Section 12 may revoke such consent
by a writing signed by the shareholder describing the action and stating that
the shareholder's prior consent thereto is revoked, if such writing is received
by the corporation before the effectiveness of the action.
Section 13. MEETINGS BY TELECOMMUNICATION. Any or all of the
shareholders may participate in an annual or special shareholders' meeting by,
or the meeting may be conducted through the use of, any means of communication
by which all persons participating in the meeting may hear each other during the
meeting. A shareholder participating in a meeting by this means is deemed to be
present in person at the meeting.
ARTICLE III
BOARD OF DIRECTORS
Section 1. GENERAL POWERS. All corporate powers shall be exercised by
or under the authority of, and the business and affairs of the corporation shall
be managed under the direction of its board of directors, except as otherwise
provided in the Colorado Business Corporation Act or the articles of
incorporation.
Section 2. NUMBER, QUALIFICATIONS AND TENURE.
(a) The number of directors of the corporation shall be fixed
from time to time by the board of directors. A director shall be a natural
person who is eighteen years of age or older. A director need not be a resident
of Colorado or a shareholder of the corporation.
(b) Directors shall be elected at each annual meeting of
shareholders. Each director shall hold office until the next annual meeting of
shareholders following his election and thereafter until his successor shall
have been elected and qualified. Directors may be removed in the manner provided
by the Colorado Business Corporation Act.
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<PAGE> 8
Section 3. VACANCIES. Any director may resign at any time by giving
written notice to the corporation. Such resignation shall take effect at the
time the notice is received by the corporation unless the notice specifies a
later effective date. Unless otherwise specified in the notice of resignation,
the corporation's acceptance of such resignation shall not be necessary to make
it effective. Any vacancy on the board of directors may be filled by the
affirmative vote of a majority of the shareholders or the board of directors. If
the directors remaining in office constitute fewer than a quorum of the board,
the directors may fill the vacancy by the affirmative vote of a majority of all
the directors remaining in office. If elected by the directors, the director
shall hold office until the next annual shareholders' meeting at which directors
are elected. If elected by the shareholders, the director shall hold office for
the unexpired term of his predecessor in office; except that, if the director's
predecessor was elected by the directors to fill a vacancy, the director elected
by the shareholders shall hold office for the unexpired term of the last
predecessor elected by the shareholders.
Section 4. REGULAR MEETINGS. A regular meeting of the board of
directors shall be held without notice immediately after and at the same place
as the annual meeting of shareholders. The board of directors may provide by
resolution the time and place, either within or outside Colorado, for the
holding of additional regular meetings without other notice.
Section 5. SPECIAL MEETINGS. Special meetings of the board of
directors may be called by or at the request of the president or any director.
The person or persons authorized to call special meetings of the board of
directors may fix any place, either within or outside Colorado, as the place for
holding any special meeting of the board of directors called by them, provided
that no meeting shall be called outside the State of Colorado unless a majority
of the board of directors has so authorized.
Section 6. NOTICE.
(a) Notice of any special meeting shall be given at least two
days prior to the meeting by written notice either personally delivered or
mailed to each director at his business address, or by notice transmitted by
telegraph, telex, electronically transmitted facsimile or other form of wire or
wireless communication. If mailed, such notice shall be deemed to be given and
to be effective on the earlier of (i) three days after such notice is deposited
in the United States mail, properly addressed, with postage prepaid, or (ii) the
date shown on the return receipt, if mailed by registered or certified mail
return receipt requested. If notice is given by telex, electronically
transmitted facsimile or other similar form of wire or wireless communication,
such notice shall be deemed to be given and to be effective when sent, and with
respect to a telegram, such notice shall be deemed to be given and to be
effective when the telegram is delivered to the telegraph company. If a director
has designated in writing one or more reasonable addresses or facsimile numbers
for delivery of notice to him, notice sent by mail, telegraph, telex,
electronically transmitted facsimile or other form of wire or wireless
communication shall not be deemed to have been given or to be effective unless
sent to such addresses or facsimile numbers, as the case may be.
(b) A director may waive notice of a meeting before or after the
time and date of the meeting by a writing signed by such director. Such waiver
shall be delivered to the corporation for filing with the corporate records.
Further, a director's attendance at or participation
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<PAGE> 9
in a meeting waives any required notice to him of the meeting unless at the
beginning of the meeting, or promptly upon his later arrival, the director
objects to holding the meeting or transacting business at the meeting because of
lack of notice or defective notice and does not thereafter vote for or assent to
action taken at the meeting. Neither the business to be transacted at, nor the
purpose of, any regular or special meeting of the board of directors need be
specified in the notice or waive of notice of such meeting.
Section 7. QUORUM. A majority of the number of directors fixed by the
board of directors pursuant to Section 2 shall constitute a quorum for the
transaction of business at any meeting of the board of directors. If less than
such majority is present at a meeting, a majority of the directors present may
adjourn the meeting from time to time without further notice, for a period not
to exceed sixty days at any one adjournment.
Section 8. MANNER OF ACTING. The act of the majority of the
directors present at a meeting at which a quorum is present shall be the act of
the board of directors.
Section 9. COMPENSATION. By resolution of the board of directors, any
director may be paid any one or more of the following: his expenses, if any, of
attendance at meetings, a fixed sum for attendance at each meeting, a stated
salary as director, or such other compensation as the corporation and the
director may reasonably agree upon. Compensation may be paid in cash, stock or
other property. No such payment shall preclude any director from serving the
corporation in any other capacity and receiving compensation therefor.
Section 10. PRESUMPTION OF ASSENT. A director of the corporation who
is present at a meeting of the board of directors or committee of the board at
which action on any corporate matter is taken shall be presumed to have assented
to the action taken unless (i) the director objects at the beginning of the
meeting, or promptly upon his arrival, to the holding of the meeting or the
transaction of business at the meeting and does not thereafter vote for or
assent to any action taken at the meeting, (ii) the director contemporaneously
requests that his dissent or abstention as to any specific action taken be
entered in the minutes of the meeting, or (iii) the director causes written
notice of his dissent or abstention as to any specific action to be received by
the presiding officer of the meeting before its adjournment or by the
corporation promptly after the adjournment of the meeting. A director may
dissent to a specific action at a meeting, while assenting to others. The right
to dissent to a specific action taken at a meeting of the board of directors or
a committee of the board shall not be available to a director who voted in favor
of such action.
Section 11. COMMITTEES.
(a) By resolution adopted by a majority of all the directors in
office when the action is taken, the board of directors may designate from among
its members an executive committee and one or more other committees, and appoint
one or more members of the board of directors to serve on them. To the extent
provided in the resolution, each committee shall have all the authority of the
board of directors, except that no such committee shall have the authority to
(i) authorize distributions, (ii) approve or propose to shareholders actions or
proposals required by the Colorado Business Corporation Act to be approved by
shareholders, (iii) fill vacancies on the board of directors or any committee of
the board, (iv) amend articles of incorporation, (v) adopt,
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amend or repeal the bylaws, (vi) approve a plan of merger not requiring
shareholder approval, (vii) authorize or approve the reacquisition of shares
unless pursuant to a formula or method prescribed by the board of directors, or
(viii) authorize or approve the issuance or sale of shares, or contract for the
sale of shares or determine the designations and relative rights, preferences
and limitations of a class or series of shares, except that the board of
directors may authorize a committee or officer to do so within limits
specifically prescribed by the board of directors.
(b) Sections 4, 5, 6, 7, 8 and 12 of Article III, which govern
meetings, notice, waiver of notice, quorum, voting requirements and action
without a meeting of the board of directors, shall apply to committees and their
members appointed under this Section 11.
Section 12. INFORMAL ACTION BY DIRECTORS. Any action required or
permitted to be taken at a meeting of the directors or any committee designated
by the board of directors may be taken without a meeting if a written consent
(or counterparts thereof) that sets forth the action so taken is signed by all
of the directors entitled to vote with respect to the action taken. Such consent
shall have the same force and effect as a unanimous vote of the directors or
committee members and may be stated as such in any document. Unless the consent
specifies a different effective date, action taken under this Section 12 is
effective at the time the last director signs a writing describing the action
taken. Any director may revoke his consent by a writing signed by the director
and received by the president or the secretary of the corporation before the
effectiveness of the action.
Section 13. TELEPHONIC MEETINGS. Any director (or any member of a
committee designated by the board) may participate in a regular or special
meeting of the board of directors or a committee of the board through the use of
any means of communication by which all directors participating in the meeting
can hear each other during the meeting. A director or committee member
participating in a meeting in this manner is deemed to be present in person at
the meeting.
ARTICLE IV
OFFICERS AND AGENTS
Section 1. GENERAL. The officers of the corporation shall be a
president, one or more vice presidents, a secretary and a treasurer, each of
whom shall be a natural person eighteen years of age or older. The board of
directors or an officer or officers authorized by the board may appoint such
other officers, assistant officers, committees and agents, including a chairman
of the board, assistant secretaries and assistant treasurers, as they may
consider necessary. The board of directors or the officer or officers authorized
by the board shall from time to time determine the procedure for the appointment
of officers, their term of office, their authority and duties and their
compensation. One person may hold more than one office. In all cases where the
duties of any officer, agent or employee are not prescribed by the bylaws or by
the board of directors, such officer, agent or employee shall follow the orders
and instructions of the president of the corporation.
Section 2. APPOINTMENT AND TERM OF OFFICE. The officers of the
corporation shall be appointed by the board of directors at each annual meeting
of the board held after each annual meeting of the shareholders. If the
appointment of officers is not made at such meeting or if an
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officer or officers are to be appointed by another officer or officers of the
corporation, such appointments shall be made as soon thereafter as conveniently
may be. Each officer shall hold office until the first of the following occurs:
his successor shall have been duly appointed and qualified, his death, or his
resignation or removal in the manner provided in Section 3.
Section 3. RESIGNATION AND REMOVAL.
(a) An officer may resign at any time by giving written notice of
resignation to the corporation. The resignation is effective when the notice is
received by the corporation unless the notice specifies a later effective date.
(b) Any officer or agent may be removed at any time with or
without cause by the board of directors or an officer or officers authorized by
the board. Such removal does not affect the contract rights, if any, of the
corporation or of the person so removed. The appointment of an officer or agent
shall not in itself create contract rights.
Section 4. VACANCIES. A vacancy in any office, however occurring, may
be filled by the board of directors, or by the officer or officers authorized by
the board, for the unexpired portion of the officer's term. If an officer
resigns and his resignation is made effective at a later date, the board of
directors, or officer or officers authorized by the board, may permit the
officer to remain in office until the effective date and may fill the pending
vacancy before the effective date if the board of directors or officer or
officers authorized by the board provide that the successor shall not take
office until the effective date. In the alternative, the board of directors, or
officer or officers authorized by the board of directors, may remove the officer
at any time before the effective date and may fill the resulting vacancy.
Section 5. PRESIDENT. Subject to the direction and supervision of the
board of directors, the president shall be the chief executive officer of the
corporation, and shall have general and active control of its affairs and
business and general supervision of its officers, agents and employees. Unless
otherwise directed by the board of directors, the president shall attend in
person or by substitute appointed by him, or shall execute on behalf of the
corporation written instruments appointing a proxy or proxies to represent the
corporation, at all meetings of the stockholders of any other corporation in
which the corporation holds any stock. On behalf of the corporation, the
president may in person or by substitute or by proxy execute written waivers of
notice and consents with respect to any such meetings. At all such meetings and
otherwise, the president, in person or by substitute or proxy, may vote the
stock held by the corporation, execute written consents and other instruments
with respect to such stock, and exercise any and all rights and powers incident
to the ownership thereof, subject to the instructions, if any, of the board of
directors. The president shall have custody of the treasurer's bond, if any.
Section 6. VICE PRESIDENTS. The vice presidents shall assist the
president and shall perform such duties as may be assigned to them by the
president or by the board of directors. In the absence of the president, the
vice president, if any (or, if more than one, the vice presidents in the order
designated by the board of directors, or if the board makes no such designation,
then the vice president designated by the president, or if neither the board nor
the president makes any such
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designation, the senior vice president as determined by first election to that
office), shall have the powers and perform the duties of the president.
Section 7. SECRETARY.
(a) The secretary shall (i) prepare and maintain as permanent
records the minutes of the proceedings of the shareholders and the board of
directors, a record of all actions taken by the shareholders or board of
directors without a meeting, a record of all actions taken by a committee of the
board of directors in place of the board of directors on behalf of the
corporation, and a record of all waivers of notice of meetings of shareholders
and of the board of directors or any committee of the board, (ii) see that all
notices are duly given in accordance with the provisions of these bylaws and as
required by law, (iii) serve as custodian of the corporate records and of the
seal of the corporation and affix the seal to all documents when authorized by
the board of directors, (iv) keep at the corporation's registered office or
principal place of business a record containing the names and addresses of all
shareholders in a form that permits preparation of a list of shareholders
arranged by voting group and by class or series of shares within each voting
group, that is alphabetical within each class or series and that shows the
address of, and the number of shares of each class or series held by, each
shareholder, unless such a record shall be kept at the office of the
corporation's transfer agent or registrar, (v) maintain at the corporation's
principal office the originals or copies of the corporation's articles of
incorporation, bylaws, minutes of all shareholders' meetings and records of all
action taken by shareholders without a meeting for the past three years, all
written communications within the past three years to shareholders as a group or
to the holders of any class or series of shares as a group, a list of the names
and business addresses of the current directors and officers, a copy of the
corporation's most recent corporate report filed with the Secretary of State,
and financial statements showing in reasonable detail the corporation's assets
and liabilities and results of operations for the last three years, (vi) have
general charge of the stock transfer books of the corporation, unless the
corporation has a transfer agent, (vii) authenticate records of the corporation,
and (viii) in general, perform all duties incident to the office of secretary
and such other duties as from time to time may be assigned to him by the
president or by the board of directors. Assistant secretaries, if any, shall
have the same duties and powers, subject to supervision by the secretary. The
directors or shareholders may designate a person other than the secretary or
assistant secretary to keep the minutes of their respective meetings.
(b) Any books, records, or minutes of the corporation may be in
written form or in any form capable of being converted into written form within
a reasonable time.
Section 8. PRINCIPAL FINANCING AND ACCOUNTING OFFICERS.
(a) There shall be a principal financial officer of the
corporation and a principal accounting officer, either of whom may also be known
as the treasurer.
(b) The principal financial officer shall have the care and
custody of all funds, securities, evidences of indebtedness and other intangible
personal property of the corporation and shall deposit the same in accordance
with the instructions of the board of directors. He shall receive and give
receipts and acquittances for money paid in on account of the corporation, and
shall pay out of the corporation's funds on hand all bills, payrolls and other
just debts of the corporation of
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whatever nature upon maturity. He shall perform all other duties incident to the
office of the principal financial officer and, upon request of the board, shall
make such reports to it as may be required at any time. He shall, if required by
the board, give the corporation a bond in such sums and with such sureties as
shall be satisfactory to the board, conditioned upon the faithful performance of
his duties and for the restoration to the corporation of all books, papers,
vouchers, money and other property of whatever kind in his possession or under
his control belonging to the corporation. He shall have such other powers and
perform such other duties as may from time to time be prescribed by the board of
directors or the president.
(c) The principal accounting officer of the corporation shall
prescribe and maintain the methods and systems of accounting to be followed,
keep complete books and records of account as required by the Colorado Business
Corporation Act, prepare and file all local, state and federal tax returns,
prescribe and maintain an adequate system of internal audit and prepare and
furnish to the president and the board of directors statements of account
showing the financial position of the corporation and the results of its
operations.
ARTICLE V
STOCK
Section 1. CERTIFICATES. The board of directors shall be authorized to
issue any of its classes of shares with or without certificates. The fact that
the shares are not represented by certificates shall have no effect on the
rights and obligations of shareholders. If the shares are represented by
certificates, such shares shall be represented by consecutively numbered
certificates signed, either manually or by facsimile, in the name of the
corporation by one or more persons designated by the board of directors. In case
any officer who has signed or whose facsimile signature has been placed upon
such certificate shall have ceased to be such officer before such certificate is
issued, such certificate may nonetheless be issued by the corporation with the
same effect as if he were such officer at the date of its issue. Certificates of
stock shall be in such form and shall contain such information consistent with
law as shall be prescribed by the board of directors. If shares are not
represented by certificates, within a reasonable time following the issue or
transfer of such shares, the corporation shall send the shareholder a complete
written statement of all of the information required to be provided to holders
of uncertificated shares by the Colorado Business Corporation Act.
Section 2. CONSIDERATION FOR SHARES. Certificated or uncertificated
shares shall not be issued until the shares represented thereby are fully paid.
The board of directors may authorize the issuance of shares for consideration
consisting of any tangible or intangible property or benefit to the corporation,
including cash, promissory notes, services performed or other securities of the
corporation. Future services shall not constitute payment or partial payment for
shares of the corporation. The promissory note of a subscriber or an affiliate
of a subscriber shall not constitute payment or partial payment for shares of
the corporation unless the note is negotiable and is secured by collateral,
other than the shares being purchased, having a fair market value at least equal
to the principal amount of the note. For purposes of this Section 2, "promissory
note" means a negotiable instrument on which there is an obligation to pay
independent of collateral and does not include a non-recourse note.
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Section 3. LOST CERTIFICATES. In case of the alleged loss, destruction
or mutilation of a certificate of stock, the board of directors may direct the
issuance of a new certificate in lieu of such lost, destroyed or mutilated
certificate upon such terms and conditions in conformity with law as the board
may prescribe. The board of directors may in its discretion require an affidavit
of lost certificate and/or a bond in such form and amount and with such surety
as it may determine before issuing a new certificate.
Section 4. TRANSFER OF SHARES.
(a) Upon surrender to the corporation or to a transfer agent of
the corporation of a certificate of stock duly endorsed or accompanied by proper
evidence of succession, assignment or authority to transfer, and receipt of such
documentary stamps as may be required by law and evidence of compliance with all
applicable securities laws and other restrictions, the corporation shall issue a
new certificate to the person entitled thereto, and cancel the old certificate.
Every such transfer of stock shall be entered on the stock books of the
corporation which shall be kept at its principal office or by the person and the
place designated by the board of directors.
(b) Except as otherwise expressly provided in Article II,
Sections 7 and 11, and except for the assertion of dissenters' rights to the
extent provided in Article 113 of the Colorado Business Corporation Act, the
corporation shall be entitled to treat the registered holder of any shares of
the corporation as the owner thereof for all purposes, and the corporation shall
not be bound to recognize any equitable or other claim to, or interest in, such
shares or rights deriving from such shares on the part of any person other than
the registered holder, including without limitation any purchaser, assignee or
transferee of such shares or rights deriving from such shares, unless and until
such other person becomes the registered holder of such shares, whether or not
the corporation shall have either actual or constructive notice of the claimed
interest of such other person.
Section 5. TRANSFER AGENT, REGISTRARS AND PAYING AGENTS. The board may
at its discretion appoint one or more transfer agents, registrars and agents for
making payment upon any class of stock, bond, debenture or other security of the
corporation. Such agents and registrars may be located either within or outside
Colorado. They shall have such rights and duties and shall be entitled to such
compensation as may be agreed.
ARTICLE VI
INDEMNIFICATION
Section 1. DIRECTORS. The corporation shall indemnify and advance
expenses to any person who is or was a director of the corporation to the
maximum extent now or hereafter permitted by the Colorado Business Corporation
Act or any successor law.
Section 2. OFFICERS. The corporation shall indemnify and advance
expenses to any person who is or was an officer of the corporation to the same
extent as a director.
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Section 3. ADDITIONAL INDEMNIFICATION. The corporation may, but shall
not be obligated to, indemnify any person who is or was an officer, agent or
employee of the corporation to a greater extent than a director. Indemnification
under this Section 3 may be provided for in a contract or by resolution of the
board of directors either before or after the act or omission to which the
indemnity relates.
Section 4. EFFECT OF AMENDMENT OR REPEAL. No amendment to or repeal of
this Article VI shall adversely affect the rights of any person in respect of
any act or omission occurring before the effectiveness of the amendment or
repeal.
ARTICLE VII
PROVISION OF INSURANCE
By action of the board of directors, notwithstanding any interest of
the directors in the action, the corporation may purchase and maintain
insurance, in such scope and amounts as the board of directors deems
appropriate, on behalf of any person who is or was a director, officer,
employee, fiduciary or agent of the corporation, or who, while a director,
officer, employee, fiduciary or agent of the corporation, is or was serving at
the request of the corporation as a director, officer, partner, trustee,
employee, fiduciary or agent of any other foreign or domestic corporation or of
any partnership, joint venture, trust, profit or nonprofit unincorporated
association, limited liability company or other enterprise or employee benefit
plan, against any liability asserted against, or incurred by, him in that
capacity or arising out of his status as such, whether or not the corporation
would have the power to indemnify him against such liability under the
provisions of Article VI or applicable law. Any such insurance may be procured
from any insurance company designated by the board of directors of the
corporation, whether such insurance company is formed under the laws of Colorado
or any other jurisdiction of the United States or elsewhere, including any
insurance company in which the corporation has an equity interest or any other
interest, through stock ownership or otherwise.
ARTICLE VIII
MISCELLANEOUS
Section 1. SEAL. The corporate seal of the corporation shall be
circular in form and shall contain the name of the corporation and the words
"Seal" and "Colorado."
Section 2. FISCAL YEAR. The fiscal year of the corporation shall be as
established by the board of directors.
Section 3. AMENDMENTS. The board of directors shall have power, to the
maximum extent permitted by the Colorado Business Corporation Act, to make,
amend and repeal the bylaws of the corporation at any regular or special meeting
of the board unless the shareholders, in making, amending or repealing a
particular bylaw, expressly provide that the directors may not amend or
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repeal such bylaw. The shareholders also shall have the power to make, amend or
repeal the bylaws of the corporation at any annual meeting or at any special
meeting called for that purpose.
Section 4. GENDER. The masculine gender is used in these bylaws as a
matter of convenience only and shall be interpreted to include the feminine and
neuter genders as the circumstances indicate.
Section 5. CONFLICTS. In the event of any irreconcilable conflict
between these bylaws and either the corporation's articles of incorporation or
applicable law, the latter shall control.
Section 6. DEFINITIONS. Except as otherwise specifically provided in
these bylaws, all terms used in these bylaws shall have the same definition as
in the Colorado Business Corporation Act.
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Exhibit 5
August 7, 1998
Board of Directors
United States Exploration, Inc.
1560 Broadway, Suite 1900
Denver, Colorado 80202
Gentlemen:
We have acted as counsel for United States Exploration, Inc. (the "Company") in
connection with the preparation, execution and filing of a Registration
Statement under the Securities Act of 1933 on Form S-8 relating to the
registration of 7,940,000 shares of the Company's Common Stock, $.0001 par value
("Common Stock"), which may be purchased upon exercise of options granted
pursuant to the Amended and Restated 1989 Incentive Stock Option Plan, the
Amended and Restated 1990 Nonqualified Stock Option Plan, and the Company's
Employment Agreement with Bruce D. Benson or which may be issued pursuant to the
Company's Directors' Fee Stock Plan (collectively, the "Plans").
In connection with the opinion expressed below, we have made such factual
inquiries and have examined or caused to be examined such questions of law as we
have considered necessary or appropriate for the purpose of such opinion. On the
basis of such inquiries and examinations, it is our opinion that any shares of
Common Stock issued pursuant to the Plans have been duly authorized and, when
issued and, if applicable, paid for, as provided in the Plans will be validly
issued, fully paid and nonassessable and no personal liability will attach to
the ownership thereof.
We consent to the filing of this opinion as an exhibit to the Registration
Statement referred to above and to the reference to our firm under the heading
"Legal Matters" in the re-offer and re-sale Prospectus included in the
Registration Statement. By so consenting, we do not admit that we are experts
with respect to any portion of the Registration Statement so as to require such
consent.
Very truly yours,
/s/ SHERMAN & HOWARD L.L.C.
Sherman & Howard L.L.C.
<PAGE> 1
Exhibit 10
INDEMNIFICATION AGREEMENT
This Agreement is made as of the __________ day of
______________________ _______, 199 __, by and between United States
Exploration, Inc., a Colorado Corporation ("the Company"), and the undersigned
director and/or officer of the Company (the "Indemnitee") with reference to the
following facts:
The Indemnitee is currently serving as a director and/or officer of the
Company and the Company wishes the Indemnitee to continue in such capacity,
and, if requested in the future, to serve in such other positions with the
Company and its subsidiaries as the Company may determine. The Indemnitee is
willing, under certain circumstances, to continue serving as a director and/or
officer of the Company.
The Indemnitee does not regard the indemnities available under the
Company's Articles of Incorporation (the "Articles of Incorporation") and
Bylaws (the "Bylaws") as adequate to protect the Indemnitee against the risks
of personal liability associated with the Indemnitee's service to the Company.
In this connection the Company and the Indemnitee now agree they should enter
into this Indemnification Agreement in order to provide greater protection to
Indemnitee against such risks of service to the Company.
In order to induce the Indemnitee to continue to serve as a director
and/or officer of the Company and in consideration of the Indemnitee's
continued service, the Company hereby agrees to indemnify the Indemnitee as
follows:
1. INDEMNITY. The Company will indemnify the Indemnitee, his
executors, administrators or assigns, for any Expenses (as defined below) which
the Indemnitee is or becomes legally obligated to pay in connection with any
Proceeding. As used in this Agreement the term "Proceeding" includes any
threatened, pending or completed claim, action, suit or proceeding, whether
brought by or in the right of the Company or otherwise and whether of a civil,
criminal, administrative or investigative nature, in which the Indemnitee may
be or may have been involved as a party or otherwise, by reason of the fact
that Indemnitee is or was a director or officer of the Company, by reason of
any actual or alleged error or misstatement or misleading statement made or
suffered by the Indemnitee, by reason of any action taken by him or of any
inaction on his part while acting as such director or officer, or by reason of
the fact that he was serving at the request of the Company as a director,
trustee, officer, fiduciary, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise; provided, that in each
such case Indemnitee acted in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the Company, and, in
the case of a criminal proceeding, had no reasonable cause to believe that his
conduct was unlawful. As used in this Agreement, the term "other enterprise"
includes (without limitation) employee benefit plans and administrative
committees thereof, and the term "fines" includes (without limitations) any
excise tax assessed with respect to any employee benefit plan.
<PAGE> 2
2. EXPENSES. As used in this Agreement, the term "Expenses"
includes, without limitation, damages, judgments, fines, penalties, settlements
and costs, reasonable attorneys' fees and disbursements and costs of attachment
or similar bonds, and investigations in connection with investigating,
defending, being a witness or participating in any Proceeding, and any expenses
of establishing a right to indemnification under this Agreement.
3. ENFORCEMENT. If a claim or request under this Agreement is not
paid by the Company, or on its behalf, within thirty days after a written claim
or request has been received by the Company, the Indemnitee may at any time
thereafter bring suit against the Company to recover the unpaid amount of the
claim or request and if successful in whole or in part, the Indemnitee shall be
entitled to be paid also the Expenses of prosecuting such suit.
4. SUBROGATION. In the event of payment under this Agreement, the
Company shall be subrogated to the extent of such payment to all of the rights
of recovery of the Indemnitee, who shall execute all papers required and shall
do everything that may be necessary to secure such rights, including the
execution of such documents necessary to enable the Company effectively to
bring suit to enforce such rights; provided, however, that neither this right
of subrogation nor the exclusion set forth in Section 5(b) below shall apply to
any right of recovery of the Indemnitee or any payment received by the
Indemnitee from an entity that is the primary employer of the Indemnitee or on
whose behalf the Indemnitee serves as a director and/or officer of the Company
or an affiliate of any such entity.
5. EXCLUSIONS. The Company shall not be liable under this Agreement
to make any payment in connection with any claim made against the Indemnitee:
(a) to the extent that payment is actually made to the
Indemnitee under a valid, enforceable and collectible insurance policy;
(b) to the extent that the Indemnitee is indemnified
and actually paid otherwise than pursuant to this Agreement, subject to Section
4;
(c) in connection with a judicial action by or in the
right of the Company, in respect of any claim, issue or matter as to which the
Indemnitee shall have been adjudged to be liable for negligence or misconduct
in the performance of his duty to the Company unless, and only to the extent
that, any court in which such action was brought shall determine upon
application that, despite the adjudication of liability but in view of all the
circumstances of the case, the Indemnitee is fairly and reasonably entitled to
indemnity for such expenses as such court shall deem proper;
(d) if it is proved by final judgment in a court of law
or other final adjudication to have been based upon or attributable to the
Indemnitee's having gained any personal profit or advantage to which he was not
legally entitled;
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<PAGE> 3
(e) for a disgorgement of profits made from the
purchase and sale by the Indemnitee of securities pursuant to Section 16(b) of
the Securities Exchange Act of 1934 and amendments thereto or similar
provisions of any state statutory law or common law;
(f) brought about or contributed to by the dishonesty
of the Indemnitee; provided, however, notwithstanding the foregoing, the
Indemnitee shall be protected under this Agreement as to any claims upon which
suit may be brought against him by reason of any alleged dishonesty on his
part, unless a judgment or other final adjudication thereof adverse to the
Indemnitee shall establish that he committed (i) acts of active and deliberate
dishonesty, (ii) with actual dishonest purpose and intent, (iii) which acts
were material to the cause of action so adjudicated; or
(g) for any judgment, fine or penalty which the Company
is prohibited by applicable law from paying as indemnity or for any other
reason.
6. INDEMNIFICATION OF EXPENSES OF SUCCESSFUL PARTY.
Notwithstanding any other provision of this Agreement, to the extent that the
Indemnitee has been successful on the merits or otherwise in defense of any
Proceeding or in defense of any claim, issue or matter therein, including
dismissal without prejudice, Indemnitee shall be indemnified against any and
all Expenses incurred in connection therewith.
7. PARTIAL INDEMNIFICATION. If the Indemnitee is entitled
under any provision of this Agreement to indemnification by the Company for a
portion of any Expenses, but not for the total amount thereof, the Company
shall indemnify the Indemnitee for the portion of such Expenses to which the
Indemnitee is entitled.
8. ADVANCE OF EXPENSES. Expenses reasonably and necessarily
incurred by the Indemnitee in connection with any Proceeding, except the amount
of any settlement, shall be paid by the Company in advance upon request of the
Indemnitee that the Company pay such Expenses. The Indemnitee hereby
undertakes to repay to the Company the amount of any Expenses theretofore paid
by the Company to the extent that it is ultimately determined that such
Expenses were not reasonable or that the Indemnitee is not entitled to
indemnification in respect thereof.
Such advances shall be made by the Company unless: (a) the Board
of Directors determines, by a majority vote of a quorum of disinterested
directors based on clear and convincing evidence known to the Board of
Directors at the time such determination is made, that the Indemnitee would not
be entitled to indemnification under applicable law, or (b) if such a quorum is
not obtainable or a quorum of disinterested directors so directs, independent
legal counsel determines, based on clear and convincing evidence known to the
counsel at the time such determination is made, that Indemnitee would not be
entitled to indemnification under applicable law.
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<PAGE> 4
9. NOTICE AND DEFENSE OF CLAIM. The Indemnitee, as a
condition precedent to his right to be indemnified under this Agreement, shall
give to the Company notice in writing as soon as practicable of any claim made
against him for which indemnity will or could be sought under this Agreement.
Notice to the Company shall be given at its principal office, shall be directed
to the Corporate Secretary (or such other address as the Company shall
designate in writing to the Indemnitee) and shall be effective only upon actual
receipt. In addition, the Indemnitee shall give the Company such information
and cooperation as it may reasonably require and as shall be within the
Indemnitee's power.
With respect to any such Proceeding: (a) the Company will be
entitled to participate therein at its own expense; and (b) except as otherwise
provided below, to the extent that it may wish, the Company jointly with any
other indemnifying party similarly notified will be entitled to assume the
defense thereof, with counsel reasonably satisfactory to Indemnitee. After
notice from the Company to Indemnitee, given within a reasonable time, of its
election so to assume the defense thereof, the Company will not be liable to
Indemnitee under this Agreement for any legal or other expenses subsequently
incurred by Indemnitee in connection with the defense of such Proceeding except
as otherwise provided below. Indemnitee shall have the right to employ his own
counsel in such Proceeding but the fees and expenses of such counsel incurred
after notice from the Company of its assumption of the defense thereof shall be
at the expense of Indemnitee unless (i) the employment of counsel by Indemnitee
has been authorized by the Company, or (ii) Indemnitee shall have obtained the
written opinion of reputable counsel with expertise in such matters (such
counsel to be reasonably satisfactory to a majority of disinterested directors)
that there may be one or more defenses available to Indemnitee that could
reasonably be expected to result in a conflict of interest between the Company
and Indemnitee in the conduct of the defense of such action, in each of which
cases the reasonable fees and expenses of Indemnitee's counsel shall be at the
expense of the Company. The Company shall not be entitled to assume the
defense of any Proceeding brought by or on behalf of the Company or that is the
subject of the opinion provided by Indemnitee under clause (ii) above.
The Company shall not be liable to indemnify Indemnitee under
this Agreement for any amounts paid in settlement of any Proceeding effected
without its prior written consent. Indemnitee shall execute and deliver such
agreements, releases and other documents as the Company may reasonably request
to effect a settlement of any Proceeding. Without Indemnitee's consent, the
Company shall not enter into any settlement that provides for any action by
Indemnitee other than the payment of amounts against which Indemnitee is
entitled to indemnification hereunder. In the event that the Company proposes
to settle any Proceeding by the payment of damages against which Indemnitee is
entitled to indemnification hereunder and in an amount that the plaintiff has
indicated would be acceptable, and the Indemnitee refuses to enter into a
reasonable settlement agreement, the Company shall not thereafter be
responsible for any costs of defense or the amount by which any judgement or
settlement thereafter paid exceeds the damages that the Company proposed to pay
in settlement. Neither the Company nor Indemnitee will unreasonably withhold
their consent to any proposed settlement.
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<PAGE> 5
10. NO EMPLOYMENT AGREEMENT. Nothing contained herein shall
be deemed to create a contract of employment between the Company and
Indemnitee.
11. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one
instrument.
12. INDEMNIFICATION HEREUNDER NOT EXCLUSIVE. Nothing herein
shall be deemed to diminish or otherwise restrict the Indemnitee's right to
indemnification under any provision of the Articles of Incorporation or Bylaws
of the Company and amendments thereto or under law.
13. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with Colorado law without giving effect to the
principles of conflicts of laws.
14. COVERAGE. The provisions of this Agreement shall apply
with respect to the Indemnitee's service in any of the capacities described in
Section 1 above prior to as well as after the date of this Agreement. The
right of Indemnitee to be indemnified hereunder shall continue after the
termination of Indemnitee's service as an officer and/or director of the
Company with respect to all periods prior to such termination.
15. AMENDMENTS; WAIVERS. No supplement, modification or
amendment of this Agreement shall be binding unless executed in writing by both
of the parties hereto. No waiver of any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of any other provision hereof
(whether or not similar) nor shall such waiver constitute a continuing waiver.
16. BINDING EFFECT. This Agreement shall be binding upon and
inure to the benefit of and be enforceable by both of the parties hereto and
their respective successors, assignees (including any direct or indirect
successor by purchase, merger, consolidation or otherwise to all or
substantially all of the business and/or assets of the Company), heirs,
executors and personal and legal representatives.
17. SEVERABILITY. If any provision of this Agreement
(including any provision within a single section, paragraph or sentence) is
held by a court of competent jurisdiction to be invalid, void or otherwise
unenforceable in any respect, the validity and enforceability of any such
provision in every other respect and of the remaining provisions of this
Agreement shall not be in any way impaired and shall remain enforceable to the
full extent permitted by law.
18. NOTICES. All notices, requests, demands and other
communications which are required or may be given under this Agreement shall be
in writing and shall be deemed to have been duly given when delivered in person
(by express courier or otherwise), by telecopier or three days after being
deposited in the United States mail, certified mail, return receipt requested,
first class postage prepaid, as follows:
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<PAGE> 6
If to the Company: United States Exploration, Inc.
6623 E. 117th Street
Bixby, Oklahoma 74008
Attention:
------------------------
Telecopier:
-----------------------
If to Indemnitee:
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and signed as of the day and year first above written.
UNITED STATES EXPLORATION, INC.
By
-----------------------------------
-------------------------------------
(Signature of Director/Officer)
-------------------------------------
(Name of Director/Officer)
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<PAGE> 1
Exhibit 23(a)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We have issued our reports dated March 6, 1998, accompanying the consolidated
financial statements included in the Form 10-KSB annual report of United States
Exploration, Inc. for the transition period ended December 31, 1997 which are
incorporated by reference in this Form S-8 Registration Statement. We consent to
the incorporation by reference in the Registration Statement of the
aforementioned reports and to the use of our name as it appears under the
caption "Experts."
/s/ Grant Thornton LLP
GRANT THORNTON LLP
Wichita, Kansas
August 7, 1998
<PAGE> 1
Exhibit 23(b)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement on Form S-8 and related prospectus pertaining to the
Amended and Restated 1989 Incentive Stock Option Plan, Amended and Restated 1990
Nonqualified Stock Option Plan, Directors' Fee Stock Plan and Employment
Agreement with Bruce D. Benson of United States Exploration, Inc. and to the
incorporation by reference therein of our report dated July 9, 1998, with
respect to the Statements of Combined Oil and Gas Revenues and Direct
Operating Expenses for Certain Oil and Gas Producing Properties Acquired from
Union Pacific Resources Company by United States Exploration, Inc. for the
years ended December 31, 1997 and 1996, filed with the Securities and Exchange
Commission on Form 8-K.
/s/ ERNST & YOUNG LLP
Ernst & Young LLP
August 7, 1998
Fort Worth, Texas
