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As filed with the Securities and Exchange Commission on January 24, 2000
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________________
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
_____________________________
WESTERN GAS RESOURCES, INC.
(Exact name of registrant as specified in its charter)
Delaware 84-1127613
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
12200 North Pecos Street
Denver, Colorado 80234-3439
(303) 452-5603
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
_____________________________
1999 Stock Option Plan
(Full title of plan)
_____________________________
John C. Walter, Esq.
General Counsel
Western Gas Resources, Inc.
12200 North Pecos Street
Denver, Colorado 80234-3439
(303) 452-5603
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
_____________________________
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<CAPTION>
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------------------------------------
TITLE OF SECURITIES TO BE AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
REGISTERED REGISTERED (1) OFFERING PRICE PER AGGREGATE OFFERING REGISTRATION
SHARE (2) PRICE FEE
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<S> <C> <C> <C> <C>
Common Stock, par value
$.10 per share 750,000 shares $ 12.1875 $ 9,140.625 $ 2,413.13
- --------------------------------------------------------------------------------------------------------------
</TABLE>
(1) This Registration Statement, pursuant to Rule 416, covers any
additional shares of $.10 par value common stock (the "Common Stock")
which becomes issuable under the 1999 Stock Option Plan ("Plan") set
forth herein by reason of any stock dividend, stock split,
recapitalization or any other similar transaction without receipt of
consideration which results in an increase in the number of shares of
Common stock outstanding.
(2) The proposed maximum offering price per share was estimated solely for
the purpose of calculating the registration fee in accordance with
Rule 457(h) and is based on the average of the high and low prices for
the Common Stock on The New York Stock Exchange on January 19, 2000 of
$12.1875 per share.
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EXPLANATORY NOTE
Western Gas Resources, Inc. ("Western") has prepared this Registration
Statement in accordance with the requirements of Form S-8 under the Securities
Act of 1933, as amended (the "1933 Act"), to register shares of its common
stock, $0.10 par value per share. Under cover of this Form S-8 is a Reoffer
Prospectus that Western prepared in accordance with Part I of Form S-3 under the
1933 Act. The Reoffer Prospectus may be utilized for reofferings and resales of
up to 750,000 shares of common stock acquired by prospective selling
stockholders under the Western Gas Resources, Inc. 1999 Stock Option Plan (the
"Plan"). It does not contain all the information set forth in the Registration
Statement, certain items of which are contained in schedules and exhibits to the
Registration Statement as permitted by the rules and regulations of the
Securities and Exchange Commission (the "Commission"). Statements contained in
this Reoffer Prospectus as to the contents of any agreement, instrument or other
document referred to are not necessarily complete. With respect to each such
agreement, instrument or other document filed as an exhibit to the Registration
Statement, reference is made to the exhibit for a more complete description of
the matter involved, and each such statement shall be deemed qualified in its
entirety by such reference.
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PART I
WESTERN GAS RESOURCES, INC.
FORM S-8 CROSS REFERENCE SHEET SHOWING LOCATION OF INFORMATION
REQUIRED BY PART I OF FORM S-3
Form S-3 Item Number Location/Heading in Prospectus
- -------------------- ------------------------------
1. Forepart of Registration Cover page
Statement and Outside Front Cover
page of Prospectus
2. Inside Front and Outside Back Cover Table of Contents
Page of Prospectus
3. Summary Information, Risk Factors The Company; Risk Factors
and Ratio of Earnings to Fixed
Charges
4. Use of Proceeds Use of Proceeds
5. Determination of Offering Price Not applicable
6. Dilution Not applicable
7. Selling Security Holders Selling Securityholders
8. Plan of Distribution Plan of Distribution
9. Description of Securities to be Not Applicable
Registered
10. Interests of Named Experts and Legal Matters
Counsel
11. Material Changes Not Applicable
12. Incorporation of Certain Documents Incorporated by Reference
Information
13. Disclosure of Commission Position Indemnification
on Indemnification for Securities
Act Liabilities
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750,000 Shares of
Common Stock
Western Gas Resources, Inc.
1999 Stock Option Plan
This Reoffer Prospectus relates to 750,000 shares of the Common Stock, par
value $0.10 (the "Common Stock"), of Western, which may be offered from time to
time by certain key employees named herein and certain employees who are not
named herein (the "Selling Securityholders"). It is anticipated that the Selling
Securityholders will offer shares for sale at prevailing prices on the New York
Stock Exchange on the date of sale. The Company will receive no part of the
proceeds of sale made hereunder. All expenses of registration incurred in
connection with this offering are being borne by the Company, but all selling
and other expenses incurred by each of the Selling Securityholders will be borne
by each such Selling Securityholder.
The Common Stock is traded on the New York Stock Exchange under the symbol
"WGR". The Selling Securityholders and any broker executing selling orders on
behalf of the Selling Securityholders may be deemed to be "underwriters" within
the meaning of the 1933 Act, in which event commissions received by such broker
may be deemed to be underwriting commissions under the 1933 Act.
THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK AND SHOULD BE CONSIDERED
ONLY BY PERSONS WHO CAN AFFORD THE LOSS OF THEIR ENTIRE INVESTMENT.
SEE "RISK FACTORS" BEGINNING ON PAGE 3.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
No person is authorized to give any information or to make any
representations, other than those contained in this Prospectus, in connection
with the offering described herein, and, if given or made, such information or
representations must not be relied upon as having been authorized by Western or
any Selling Securityholder. This Prospectus does not constitute an offer to
sell, or a solicitation of an offer to buy, nor shall there be any sale of these
securities by any person in any jurisdiction in which it is unlawful for such
person to make such offer, solicitation or sale. Neither the delivery of this
Prospectus nor any sale made hereunder shall under any circumstances create an
implication that the information contained herein is correct as of any time
subsequent to the date hereof.
The date of this Prospectus is January 24, 2000.
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THE COMPANY............................................................. 1
RISK FACTORS............................................................ 1
USE OF PROCEEDS......................................................... 3
SELLING SECURITYHOLDERS................................................. 3
PLAN OF DISTRIBUTION.................................................... 4
LEGAL MATTERS........................................................... 4
EXPERTS................................................................. 4
DOCUMENTS INCORPORATED BY REFERENCE..................................... 5
INDEMNIFICATION......................................................... 5
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THE COMPANY
Western Gas Resources, Inc. is an independent gas gatherer and processor
and an energy marketer providing a full range of services to its customers from
the wellhead to the delivery point. We design, construct, own and operate
natural gas gathering, processing, treating and storage facilities in major gas-
producing basins in the Rocky Mountain, Mid-Continent, Gulf Coast and
Southwestern regions of the United States. We connect producers' wells to our
gathering systems for delivery to our processing or treating plants, process the
natural gas to extract natural gas liquids ("NGLs") and treat the natural gas in
order to meet pipeline specifications. We are a nationwide marketer of natural
gas, NGLs and wholesale electric power, providing a full range of services
including risk management, storage, transportation, scheduling and peaking
services to a variety of customers. We were incorporated in Delaware in 1989.
Our principal offices are located at 12200 North Pecos Street, Denver, Colorado
80234-3439, and our telephone number is (303) 452-5603.
RISK FACTORS
Prospective investors should carefully review the following factors
together with the other information contained in this Prospectus and any
accompanying Prospectus Supplement prior to making an investment decision.
Risks Related to Our Business
Our future finanical condition and results of operations are affected by
volatile product prices and hedging transactions.
Our future financial condition and results of operations will depend
significantly upon the prices received for our natural gas and NGLs. Prices for
natural gas and NGLs are subject to fluctuations in response to changes in
supply, market uncertainty and a variety of additional factors that are beyond
our control. These factors include the level of domestic production, the
availability of imported oil and gas, actions taken by foreign oil and gas
producing nations, the availability of transportation systems with adequate
capacity, the availability of competitive fuels, fluctuating and seasonal demand
for oil, gas and NGLs, conservation and the extent of governmental regulation of
production and the overall economic environment. A substantial or extended
decline in gas and/or NGL prices would have a material adverse effect on our
financial position, results of operations and access to capital.
Our risk management policy is to enter into futures, swaps and option
contracts primarily to reduce risk and lock-in profit margins on our marketing
and storage activities. Over-the-counter derivatives, with creditworthy
counterparties, also permit us to offer our gas customers alternate pricing and
delivery mechanisms meeting their specific needs. To ensure a known price for
future equity production and a fixed margin between gas injected into storage
and gas withdrawn from storage, we typically will sell a futures contract and
related basis swap and thereafter, either (i) make physical delivery of our
product to comply with such futures contract and settle our basis swap or (ii)
buy matching futures and basis position contracts to unwind our position and
sell our production to a customer in the cash market. We also may contract to
sell future production to a customer at a fixed price and then purchase futures
contracts to lock-in a margin. These same techniques also may be utilized to
manage price risk for product purchased from marketing customers. Such contracts
may expose us to the risk of financial loss in certain circumstances, including
instances where production is less than expected, our customers fail to purchase
or deliver the contracted quantities of natural gas or NGLs or credit risk with
derivatives counterparties. Furthermore, to the extent that we engage in hedging
activities, we may be prevented from realizing the benefits of price increases
above the levels of such hedges.
The uncertainties of gas supply may affect our ability to replace dedicated
reserves.
We must continually connect new wells to our gathering systems in order to
maintain or increase throughput levels to offset natural declines in dedicated
volumes. Historically, while certain individual plants have experienced declines
in dedicated reserves, we have been successful in connecting additional reserves
to more than offset the natural declines and reserves dedicated to existing
facilities. There is no assurance that we will continue to be successful in
replacing the dedicated reserves processed at our facilities.
Our estimates of oil and gas reserves are subject to numerous
uncertainties.
Our reserve estimates are subject to numerous uncertainties inherent in the
estimation of quantities of proved reserves and in the projection of future
rates of production and the timing of development expenditures. The accuracy
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of such estimates is a function of the quality of available data and of
engineering and geological interpretation and judgement. Reserve estimates are
imprecise and should be expected to change as additional information becomes
available. Results of subsequent drilling, testing and production may cause
either upward or downward revisions of previous estimates. In addition, the
estimates of future net revenues from our proved reserves and the present value
thereof are based upon certain assumptions about production levels, prices and
costs, which may not be correct. Further, the volumes considered to be
commercially recoverable fluctuate with changes in prices and operating costs.
The meaningfulness of such estimates is highly dependent upon the accuracy of
the assumptions upon which they were based. Actual results may differ materially
from the results estimated. Our estimates of reserves dedicated to our gathering
and processing facilities are calculated by our reservoir engineering staff and
are based on publicly available data. These estimates may be less reliable than
the reserve estimates made for our own producing properties since the data
available for estimates of our own producing properties also includes our
proprietary data.
Our ability to pay fixed charges and common stock dividends depends on many
factors.
Our financial and operational performance depends in part on prevailing
economic conditions and on various financial, business and other factors beyond
our control. We cannot assure you that our cash flows and capital resources
will be sufficient to pay our fixed charges, including interest expense and
common stock dividends.
Opportunities for expansion and availability of related financing are
uncertain.
In order for us to expand our business through either the purchase or
construction of new gathering and processing facilities, we will be required to
identify expansion opportunities and to finance such activities, using cash
flow, equity or debt financing or a combination thereof. No assurance can be
given that appropriate opportunities for expansion at levels of profitability
which satisfy our target rates can be obtained or that financing on terms
acceptable to us can be obtained. Natural gas and NGL price volatility make it
difficult to estimate the value of acquisitions and to budget and forecast the
return on our projects. In addition, unusually volatile prices often disrupt the
market for gas and NGL properties, as buyers and sellers have more difficulty
agreeing on the purchase price of properties.
The natural gas gathering, processing, treating and marketing businesses
are highly competitive and there can be no assurance that we can compete
successfully with other companies in the industry.
We compete with other companies in the gathering, processing, treating and
marketing business both for supplies of natural gas and for customers for our
natural gas and NGLs. Competition for natural gas supplies is primarily based on
efficiency, reliability, availability of transportation and ability to obtain a
satisfactory price for the producers' natural gas. Competition for sales
customers is primarily based upon reliability and price of deliverable natural
gas and NGLs. Our competitors for obtaining additional gas supplies, for
gathering and processing gas and for marketing gas and NGLs include national and
local gas gatherers, brokers, marketers and distributors of various size,
financial resources and experience. For marketing customers that have the
capability of using alternative fuels, such as oil and coal, we also compete
based primarily on price against companies capable of providing such alternative
fuels. We have experienced narrowing margins related to third- party sales due
to the increasing availability of pricing information in the natural gas
industry. Counterparties in our gas marketing transactions may require
additional security such as letters of credit that are not required of certain
of our competitors. If the additional security is required, our marketing
margins and volumes may be adversely impacted.
The construction and operation of our gathering lines, plants and other
facilities are subject to environmental laws and regulations that could affect
our financial position or results of operations.
The construction and operation of our gathering lines, plants and other
facilities used for the gathering, transporting, processing, treating or storing
of natural gas and NGLs are subject to federal, state and local environmental
laws and regulations, including those that can impose obligations to clean-up
hazardous substances at our facilities or at facilities to which the we send
wastes for disposal. In most instances, the applicable regulatory requirements
relate to water and air pollution control or waste management. We believe that
we are in substantial compliance with applicable material environmental laws and
regulations. Environmental regulation can increase the cost of planning,
designing, constructing and operating our facilities or well sites.
Under the Clean Air Act, as amended, individual states are required to
adopt regulations to implement the operating permit program. We do not believe
that compliance with the Clean Air Act will require any material capital
expenditures, although it will cause increased permitting costs in future years
and will increase certain operating costs, such as emissions fees, on an on-
going basis. We do not believe that such cost increases will have a material
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effect on our financial position or results of operations.
We believe that it is reasonably likely that the trend in environmental
legislation and regulation will continue to be towards stricter standards. We
are unaware of future environmental standards that are reasonably likely to be
adopted that will have a material effect on our financial position or results of
operations, but cannot rule out that possibility.
Our business is subject to numerous other operational risks.
Numerous risks affect drilling activities, including the risk of drilling
non-productive wells or dry holes. The cost of drilling, completing and
operating wells and of installing production facilities and pipelines is often
uncertain. Also, our drilling operations could diminish or cease because of any
of the following:
. title problems;
. weather conditions;
. noncompliance with or changes in governmental requirements or
regulations;
. shortage or delays in the delivery or availability of equipment; and
. failure to obtain permits from regulatory agencies, such as those
issued by the Bureau of Land Management, for our operations in a
timely manner.
Regulations may have a significant impact upon our overall operations.
Many aspects of our gathering, processing, marketing and transportation of
natural gas and NGLs are subject to federal, state and local laws and
regulations which can have a significant impact upon our overall operations. As
a processor and marketer of natural gas and NGLs, we depend on the
transportation and storage services offered by various interstate and intrastate
pipeline companies for the delivery and sale of our own gas supplies as well as
those we process and/or market for others. Both the performance of
transportation and storage services by interstate pipelines and the rates
charged for such services are subject to the jurisdiction of the Federal Energy
Regulatory Commission or state regulatory agencies. An inability to obtain
transportation and/or storage services at competitive rates can hinder our
processing and marketing operations and/or affect our sales margins.
Insurance and operational risks may result in curtailment or suspension of
operations.
We are subject to various hazards which are inherent in the industry in
which we operate such as explosions, product spills, leaks and fires, each of
which could cause personal injury and loss of life, severe damage to and
destruction of property and equipment, and pollution or other environmental
damage, and may result in curtailment or suspension of operations at the
affected facility. We maintain physical damage, comprehensive general liability,
workers' compensation and business interruption insurance. Such insurance is
subject to deductibles that we consider reasonable. We are not fully insured
against all risks in our business, however, we believe that the coverage we
maintain is adequate and consistent with other companies in the industry.
Consistent with insurance coverage typically available to the natural gas
industry, our insurance policies do not provide coverage for losses or
liabilities relating to pollution, except for sudden and accidental occurrences.
USE OF PROCEEDS
We will not receive any of the proceeds from the offering hereunder. All
expenses of registration incurred in connection with this offering are being
borne by us, but all selling and other expenses incurred by the individual
Selling Securityholders will be borne by such Selling Securityholders.
SELLING SECURITYHOLDERS
This Prospectus covers possible sales by our officers, directors and
affiliates of shares they acquire through exercise of stock options granted
under the Plan. The names of such individuals who may be selling stockholders
from time to time are listed below, along with the number of shares of common
stock currently owned by them and the number of shares offered for sale. Non-
affiliates which are not named in this Prospectus holding the lesser of
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1,000 shares or one percent of the shares issuable under the Plan may use this
Prospectus to sell up to the lesser of 1000 shares or one percent of the shares
issuable under the Plan. The number of shares offered for sale may be updated in
supplements to this prospectus, which will be filed with the Securities and
Exchange Commission in accordance with Rule 424(b) under the Securities Act of
1933, as amended. The address of each individual is in our care of us at 12200
North Pecos Street, Denver, Colorado 80234-3439.
Number of
Name of Selling Shareholdings Shares Offered
Stockholder Number(1) Percent(1) For Sale
- ----------- --------- ---------- --------
(1) Includes all stock options exercisable within 60 days from the date hereof,
including stock options issued under the Plan.
PLAN OF DISTRIBUTION
The shares of Common Stock covered by this Reoffer Prospectus are being
registered by us for the account of the Selling Securityholders.
The Selling Securityholder(s) may sell the shares in one or more
transactions (which may involve one or more block transactions) on the New York
Stock Exchange in sales occurring in the public market off such system, in
privately negotiated transactions or in a combination of such transactions. Each
such sale may be made either at market prices prevailing at the time of such
sale or at negotiated prices. The Selling Securityholder(s) may sell some or
all of the shares in transactions involving broker-dealers, who may act as agent
or acquire the shares as principal. Any broker-dealer participating in such
transactions as agent may receive commissions from the Selling Securityholder(s)
(and, if they act as agent for the purchaser of such shares, from such
purchaser). The Registered Stockholder(s) will pay usual and customary
brokerage fees. Broker-dealers may agree with the Registered Stockholder(s) to
sell a specified number of shares at a stipulated price per share and, to the
extent such a broker-dealer is unable to do so acting as agent for the Selling
Securityholder(s), to purchase as principals any unsold shares at the price
required to fulfill the respective broker-dealer's commitment to the Selling
Securityholder(s). Broker-dealers who acquire shares as principals may
thereafter resell such shares from time to time in transactions (which may
involve cross and block transactions and which may involve sales to and through
other broker-dealers, including transactions of the nature described above) in
the over-the-counter market, negotiated transactions or otherwise, at market
prices prevailing at the time of sale or at negotiated prices, and in connection
with such resales may pay to or receive from the purchasers of such shares
commissions.
To our knowledge, there is currently no agreement with any broker or dealer
respecting the sale of the shares offered hereby. Upon the sale of any such
shares, the Selling Securityholder(s) or anyone effecting sales on behalf of the
Selling Securityholder(s) may be deemed an underwriter, as that term is defined
under the 1933 Act. We will pay all expenses of preparing and reproducing this
Reoffer Prospectus, but will not receive the proceeds from sales by the Selling
Securityholders. Sales will be made at prices prevailing at the time of such
sales.
We are bearing all costs relating to the registration of the shares. Any
commissions or other fees payable to broker-dealers in connection with any sale
of the shares will be borne by the Registered Stockholder(s) or other party
selling such shares. In order to comply with certain states' securities laws,
if applicable, the shares will be sold in such jurisdictions only through
registered or licensed brokers or dealers. In certain states the shares may not
be sold unless the shares have been registered or qualified for sale in such
state, or unless an exemption form registration or qualification is available
and is obtained.
LEGAL MATTERS
John C. Walter, who is giving an opinion regarding the legality of the
securities registered hereby, is Executive Vice President-General Counsel and
Secretary of Western. In addition, Mr. Walter will be eligible to be granted
options to purchase the securities registered hereby. As of January 24, 2000,
Mr. Walter owned 29,625 shares of Common Stock and options to purchase 68,000
shares of Common Stock.
INDEPENDENT ACCOUNTANTS
The financial statements incorporated in this Prospectus by reference to
the Annual Report on Form 10-K of
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the Company for the year ended December 31, 1998, have been so incorporated in
reliance on the report of PricewaterhouseCoopers LLP, independent accountants.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents are incorporated by reference in the registration
statement:
(a) The latest annual report of Western on Form 10-K filed pursuant to
Sections 13(a) or 15(d) of the Securities Exchange Act of 1934 (the "Exchange
Act").
(b) All other reports filed by Western pursuant to Sections 13(a) or 15(d)
of the Exchange Act since the end of the fiscal year covered by the annual
report referred to in (a) above.
(c) The description of Western's Common Stock which is contained in
Western's registration statement filed under section 12 of the Exchange Act,
including any amendment or report filed for the purpose of updating such
description.
All documents subsequently filed by Western pursuant to Section 13(a),
13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a post-effective
amendment hereto which indicates that all securities offered hereby have been
sold or which deregisters all securities then remaining unsold, shall be deemed
to be incorporated by reference herein and to be a part hereof from the date of
filing of such documents.
We will provide without charge to each person to whom a copy of this
Prospectus has been delivered, upon the written or oral request of such person,
a copy of any or all of the documents referred to above which have been or may
be incorporated by reference herein (other than exhibits to such documents
unless such exhibits are specifically incorporated by reference in such
documents). Requests for such copies should be directed to John C. Walter,
Executive Vice President, Western Gas Resources, Inc., 12200 North Pecos Street,
Denver, Colorado 80234-3439 (telephone (303) 452-5603).
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Exchange
Act, and in accordance therewith files reports, proxy and information statements
and other information with the Commission. Such reports, proxy statements and
other information can be inspected and copied at the public reference facilities
maintained by the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the following Regional Offices of the Commission:
Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago, IL
60661 and 7 World Trade Center, 13th Floor, New York, NY 10048 and through the
Commission's Internet site at www.sec.gov. Copies of such material can also be
obtained from the Public Reference Section of the Commission at Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. In
addition, such material can be inspected at the offices of the New York Stock
Exchange, 20 Broad Street, New York, New York 10005.
INDEMNIFICATION
Our Bylaws incorporate substantially the provisions of the General
Corporation Law of the State of Delaware providing for indemnification of our
directors, officers, employees, and agents against expense, judgments, fines,
settlements and other amounts actually and reasonably incurred in connection
with any proceeding arising by reason of the fact that such person is or was an
officer, director, employee, agent or controlling stockholder of Western. In
addition, we are authorized to enter into indemnification agreements with its
directors and officers providing mandatory indemnification to them to the
maximum extent permissible under Delaware law.
As permitted under Delaware law, our Certificate of Incorporation provides
for the elimination of the personal liability of a director to the corporation
and its stockholders for monetary damages arising from a breach of the
directors' fiduciary duty of care. The provision is limited to monetary damages,
applies only to a director's actions while acting within his capacity as a
director, and does not entitle Western to limit director liability for any
judgment resulting from (a) any breach of the director's duty of loyalty to
Western or its stockholders; (b) acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of the law; (c) paying an
illegal dividend or approving an illegal stock repurchase; or (d) any
transaction from which the director derived an improper benefit. In addition,
Section 145 of the General Corporation Law of the State of Delaware provides
generally that
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a person sued as a director, officer, employee or agent of a corporation may be
indemnified by the corporation for reasonable expenses, including counsel fees,
if in the case of other than derivative suits, he has acted in good faith and in
a manner he reasonably believed to be in or not opposed to the best interests of
the corporation (and in the case of a criminal proceeding, had no reasonable
cause to believe that his conduct was unlawful). In the case of a derivative
suit, an officer, employee or agent of the corporation who is not protected by
the Certificate of Incorporation, may be indemnified by the corporation for
reasonable expenses, including attorneys' fees, if he has acted in good faith
and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation, except that no indemnification shall be made in
the case of a derivative suit in respect of any claim as to which an officer,
employee or agent has been adjudged to be liable to the corporation unless the
Delaware Court of Chancery or the court in which such action or suit was brought
shall determine that such person is fairly and reasonably entitled to indemnity
for proper expenses. Indemnification is mandatory in the case of a director,
officer, employee, agent or controlling stockholder who is successful on the
merits in defense of a suit against him.
Insofar as indemnification for liabilities arising under the 1933 Act may
be permitted to directors, officers and controlling persons of Western pursuant
to the foregoing provisions, or otherwise, Western has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by Western of expenses incurred or paid by a director, officer
or controlling person of Western 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, Western will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference.
The following documents are incorporated by reference in the registration
statement:
(a) The latest annual report of Western Gas Resources, Inc. (the
"Registrant") on Form 10-K filed pursuant to sections 13(a) or 15(d) of the
Securities Exchange Act of 1934 (the "Exchange Act").
(b) All other reports filed by the Registrant pursuant to sections 13(a)
or 15(d) of the Exchange Act since the end of the fiscal year covered by the
annual report referred to in (a) above.
(c) The description of the Registrant's Common Stock which is contained in
the Registrant's registration statement filed under section 12 of the Exchange
Act, including any amendment or report filed for the purpose of updating such
description.
All documents subsequently filed by the Registrant pursuant to
Section 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment hereto which indicates that all securities offered
hereby have been sold or which deregisters all securities then remaining unsold,
shall be deemed to be incorporated by reference herein and to be a part hereof
from the date of filing of such documents.
Item 4. Description of Securities.
Not applicable.
Item 5. Interest of Named Experts and Counsel.
John C. Walter, who is giving an opinion regarding the legality of the
securities registered hereby, is Executive Vice President-General Counsel and
Secretary of the Registrant. In addition, Mr. Walter will be eligible to be
granted options to purchase the securities registered hereby. As of January 24,
2000, Mr. Walter owned 29,625 shares of Common Stock and options to purchase
68,000 shares of Common Stock, none of which were granted under this Plan.
<PAGE>
Item 6. Indemnification of Directors and Officers.
The Registrant's Bylaws incorporate substantially the provisions of the
General Corporation Law of the State of Delaware providing for indemnification
of directors, officers, employees, and agents of the Registrant against expense,
judgments, fines, settlements and other amounts actually and reasonably incurred
in connection with any proceeding arising by reason of the fact that such person
is or was an officer, director, employee, agent or controlling stockholder of
the Registrant. In addition, the Registrant is authorized to enter into
indemnification agreements with its directors and officers providing mandatory
indemnification to them to the maximum extent permissible under Delaware law.
As permitted under Delaware law, the Registrant's Certificate of
Incorporation provides for the elimination of the personal liability of a
director to the corporation and its stockholders for monetary damages arising
from a breach of the directors's fiduciary duty of care. The provision is
limited to monetary damages, applies only to a director's actions while acting
within his capacity as a director, and does not entitle the Registrant to limit
director liability for any judgment resulting from (a) any breach of the
director's duty of loyalty to the Registrant or its stockholders; (b) acts or
omission not in good faith or which involve intentional misconduct or a knowing
violation of the law; (c) paying an illegal dividend or approving an illegal
stock repurchase; or (d) any transaction from which the director derived an
improper benefit. In addition, Section 145 of the General Corporation Law of the
State of Delaware provides generally that a person sued as a director, officer,
employee or agent of the corporation may be indemnified by the corporation for
reasonable expenses, including counsel fees, if in the case of other than
derivative suits, he has acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the corporation (and
in the case of criminal proceeding, had no reasonable cause to believe that his
conduct was unlawful). In the case of a derivative suit, an officer, employee or
agent of the corporation who is not protected by the Certificate of
Incorporation, may be indemnified by the corporation for reasonable expenses,
including attorneys' fees, if he has acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interest of the
corporation, except that no indemnification shall be made in the case of a
derivative suit in respect of any claim as to which an officer, employee or
agent has been adjudged to liable to the corporation unless the Delaware Court
of Chancery of the court in which such action or suit was brought shall
determine that such person is fairly and reasonably entitled to indemnity for
proper expenses. Indemnification is mandatory in the case of a director,
officer, employee, agent or controlling stockholder who is successful on the
merits in defense of a suit against him.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
Exhibits Description
-------- -----------
4.1 The Certificate of Incorporation of Western Gas Resources, Inc.
(filed as exhibit 3.1 to Western Gas Resources, Inc.'s
Registration Statement on Form S-1, Registration No. 33-31604,
and incorporated herein by reference).
4.2 Certificate of Amendment to the Certificate of Incorporation of
Western Gas Resources, Inc (Filed as exhibit 3.2 to Western Gas
Resources, Inc.'s Registration Statement on Form S-1,
Registration No. 33-31604, as incorporated herein by reference).
4.3 Certificate of Designation of 7.25% Cumulative Senior Perpetual
Convertible Preferred Stock of the Company (filed as exhibit 3.5
to Western Gas Resources, Inc.'s Registration Statement on
Form S-1, Registration No. 33-43077, and incorporated herein by
reference).
4.4 Certificate of Designation of to Western Gas Resources, Inc's
incorporated herein by $2.28 Cumulative Preferred Stock
Registration Statement of Form reference). of the Company (filed
as exhibit S-1, Registration No. 33-53786, 3.6 and incorporated
herein by reference).
4.5 Certificate of Designation of the $2.625 Cumulative Convertible
Preferred Stock of the Company (filed under cover of Form 8-K
dated February 24, 1994 and incorporated herein by reference).
4.6 The Amended and Restated Bylaws of the Registrant, adopted on
February 12, 1999 and in effect on the date hereof, (filed with
the
<PAGE>
SEC as an Exhibit to the Registrant's 10-K for the year ended
December 31, 1998 and incorporated by reference.
4.7 1999 Stock Option Plan
5.1 Opinion of John C. Walter, General Counsel of the Registrant, as
to the legality of the securities offered hereby.
23.1 Consent of John C. Walter, General Counsel of the Registrant
(included in Exhibit 5.1)
23.2 Consent of PriceWaterhouseCoopers, LLP, Independent Accountants
24.1 Power of Attorney (included in signature page)
Item 9. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to the registration statement;
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
Provided, however, that paragraph (a)(1)(i) and (a) (1) (ii) shall not
apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed by the
Registrant pursuant to section 13 or section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each
filing of the Registrant's annual report pursuant to section 13(a) or
section 15(d) of the Securities Exchange Act of 1934, (and, where
applicable, each filing of an employee benefit plan's annual report
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 herein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the provisions
described in Item 6, or otherwise, the Registrant has been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and
is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any
action, suit of proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered,
the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Denver, State of Colorado, on January 24, 2000.
WESTERN GAS RESOURCES, INC.
By: /s/ Lanny F. Outlaw
_________________________________________
Lanny F. Outlaw, Chief Executive Officer
President and Director
<PAGE>
KNOWN ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below, constitutes and appoints and hereby authorizes Lanny F. Outlaw,
John C. Walter, William J. Krysiak, severally, such person's true and lawful
attorneys-in-fact, with full power of substitution and resubstitution, for such
person's name, place and stead, in any and all capacities, in connection with
the Registrant's registration statement, in the name and on behalf of the
Registrant or on behalf of the undersigned as a director or officer of the
Registrant, on Form S-8 under the Securities Act of 1933, as amended, including,
without limiting the generality of the foregoing, to sign the registration
statement and any and all amendments (including post-effective amendments) to
the registration statement, and any subsequent registration statement filed
pursuant to Rule 462(b) under the Securities Act of 1933, as amended, 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 full power and authority to do and perform each and every act
and thing requisite and necessary to be done in connection therewith, as fully
to all intents and purposes as such person might or could do in person, thereby
ratifying and confirming all that said attorneys-in-fact or their 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 date indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ Lanny F. Outlaw Chief Executive Officer, President and
_________________________ Director January 24, 2000
Lanny F. Outlaw
/s/ Brion G. Wise Chairman of the Board and Director January 24, 2000
_________________________
Brion G. Wise
/s/ Walter L. Stonehocker Vice Chairman of the Board and
_________________________ Director January 24, 2000
Walter L. Stonehocker
/s/ Bill M. Sanderson Director January 24, 2000
_________________________
Bill M. Sanderson
/s/ Richard B. Robinson Director January 24, 2000
_________________________
Richard B. Robinson
/s/ Dean Phillips Director January 24, 2000
_________________________
Dean Phillips
/s/ Ward Sauvage Director January 24, 2000
_________________________
Ward Sauvage
/s/ James Senty Director January 24, 2000
_________________________
James Senty
/s/ Joseph E. Reid Director January 24, 2000
_________________________
Joseph E. Reid
By: /s/ William J. Krysiak
___________________________________________________
William J. Krysiak
Attorney-in-fact pursuant to power of attorney
</TABLE>
<PAGE>
EXHIBIT 4.7
This document constitutes part of a prospectus covering securities that have
been registered under the Securities Act of 1933.
WESTERN GAS RESOURCES, INC.
1999 STOCK OPTION PLAN
This Plan is established by Western Gas Resources, Inc., a Delaware
corporation, for certain employees of the Corporation who qualify as
participants, and shall be known as the Western Gas Resources, Inc. 1999 Stock
Option Plan. The Plan provides stock options for employees of the Corporation.
It is intended that options granted under the Plan constitute "incentive stock
options" within the meaning of (S) 422 of the Code and the Plan and any options
granted hereunder shall be construed accordingly.
1. Purpose. The purpose of the Plan is to enable certain of the
-------
Corporation's employees to participate in the growth and profitability of the
Corporation by providing a method whereby such employees may be encouraged to
invest in the Corporation's common stock on reasonable terms, to increase
incentives to contribute to the Corporation's future success and prosperity, and
to allow them to acquire a proprietary interest in the Corporation's business.
Further, the availability and offering of stock options under the Plan supports
and encourages employees to remain in the employ of the Corporation.
2. Definitions. The terms used herein shall have the following meanings:
-----------
(a) "Board" shall mean the Board of Directors of the Corporation.
(b) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(c) "Common Stock" shall mean the $0.10 par value common stock of the
Corporation which shall be authorized and unissued stock or treasury stock.
(d) "Corporation" shall mean Western Gas Resources, Inc., a Delaware
corporation, and any subsidiary thereof.
(e) "Disabled" shall mean an employee of the Corporation found to be
unable to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death, or which has lasted, or can be expected to last, for a continuous period
of not less than twelve (12) months.
(f) "Disqualified Employee" shall mean an employee of the Corporation
who, either directly or indirectly at the time an option is granted, owns more
than ten percent (10%) of the total combined voting power of all classes of
stock of the Corporation or any subsidiary or parent of the Corporation. For
purposes of this determination, the employee shall be considered as owning the
stock owned, directly or indirectly, by or for his spouse, brothers and sisters
(whether by whole or half-blood), ancestors, and lineal descendants; and stock
owned, directly or indirectly, by or for a corporation, partnership, estate, or
trust shall be considered as being owned proportionally by or for a shareholder.
1
<PAGE>
(g) "Fair Market Value" of stock shall mean the New York Stock
Exchange Composite Transactions average closing price for the Common Stock
reflected in The Wall Street Journal or another publication selected by the
Board for the ten (10) days preceding the day the Option is granted to each
eligible employee. If Shares of Common Stock have not been traded on the New
York Stock Exchange for more than 10 days immediately preceding the granting of
an Option, or if deemed appropriate by the Board for any other reason, the fair
market value of shares of Common Stock shall be as determined by the Board in
such other manner as it may deem appropriate.
(h) "Incentive Stock Option" shall mean any option which is intended
to meet and comply with the term "incentive stock option" as set forth in (S)422
of the Code.
(i) "Option" shall mean an incentive stock option granted by the
Corporation under this Plan.
(j) "Optionee" shall mean an eligible employee of the Corporation who
has been granted an Option under this Plan.
(k) "Plan" shall mean the 1999 Stock Option Plan set forth in and by
this document and all subsequent amendments thereto.
(l) "Regulations" or "Regs." shall mean the Treasury Regulations
promulgated under the Code.
(m) "Stock Option Agreement" shall mean an agreement between an
Optionee and the Corporation which evidences the Optionee's right to acquire
Common Stock under the Plan and which contains terms and conditions consistent
with this Plan as approved by the Board.
3. Eligibility. Employees of the Corporation who have been employed by
-----------
the Corporation for at least one (1) year shall be eligible for selection to
participate in the Plan as determined from time to time by the Board. No Option
shall be granted to a Disqualified Employee.
4. Administration of Plan.
----------------------
(a) The Board of Directors of the Corporation shall administer the
Plan. The Board shall have the authority to: (i) construe and interpret the
Plan; (ii) define the terms used herein; (iii) determine the duration and
purpose of leaves of absence which may be granted to Optionees without
constituting a termination of their employment for the purposes of the Plan;
(iv) make all other determinations necessary or advisable for the administration
of the Plan; and (v) appoint a Committee to administer the Plan and to delegate
to that Committee all of the authority to administer the Plan in accordance with
the provisions of this Agreement. The determination of the Board in the matters
referred to in this paragraph shall be conclusive.
(b) The Board shall have power, subject to the limitations contained
herein, to fix the price, terms, and conditions for the grant or exercise of any
Option under the Plan.
2
<PAGE>
(c) The Board may at any time cancel any unexercised stock options
awarded under the Plan, whether or not vested, if an Optionee engages in conduct
which the Board determines to be detrimental to the best interests of the
Corporation.
(d) The Board may at any time and from time to time amend, suspend,
or terminate the Plan and may amend the form of the Stock Option Agreement, in
such respects as it shall deem advisable; provided that such modification shall
not change: (1) the maximum number of shares for which Options may be granted;
(2) the Option price; (3) the period during which Options may be granted or
exercised; (4) the provisions relating to the class of persons eligible to
receive Options granted under the Plan; or (5) the provisions relating to
adjustments to be made upon changes in capitalization of the Corporation. Such
modification in the Plan shall not, without the consent of an Optionee, affect
such Optionee's rights under an Option previously granted to him.
(e) If the provisions of the Code or Regulations relating to
Incentive Stock Options are changed during the term of the Plan, the Board shall
have the power to alter the Plan to conform to such changes. The Board shall
have such authority without the necessity of obtaining further stockholder
approval unless such changes in the Code or Regulations require such approval.
5. Participants and Allotments. The Board may, from time to time, select
---------------------------
Optionees from the eligible class of employees and determine the terms and
provisions of the respective Stock Option Agreements (which need not be
identical), the times at which such Options shall be granted, and the number of
shares subject to each Option.
6. Shares Subject to Plan. The maximum number of shares from which
----------------------
Options may be granted under the Plan are Seven Hundred Fifty Thousand (750,000)
shares of the Corporation's authorized and unissued Common Stock. If any Option
granted under the Plan shall terminate or expire prior to exercise, in whole or
in part, the shares so released from the Option may be made the subject of
additional options granted under the Plan. The Corporation shall reserve and
keep available such number of shares of stock as will satisfy the requirements
of all outstanding options and grants under this Plan.
7. Option Price. The purchase price of the stock under each Option shall
------------
be the Fair Market Value of the stock subject to the Option at the time the
Option is granted.
8. Conditions for Exercise of Option.
---------------------------------
(a) Notwithstanding anything to the contrary, no Option or portion
thereof granted under this Plan may be exercised after the earlier of (1) five
(5) years from the date the Optionee has the right to exercise such Option or
portion thereof as provided in Paragraph 8(b), below; or (2) ten (10) years from
the date the Option is granted.
(b) Except as expressly provided in Section 8(e) below, an Optionee
shall become entitled to exercise that portion of the Option to purchase the
percentage of the Common
3
<PAGE>
Stock subject to the Option in accordance with one of the following vesting
schedules which will be set forth in the Optionee's Stock Option Agreement:
Five-Year Vesting Schedule:
--------------------------
(1) Commencing one year from the date of the grant, the Optionee
shall have the right to exercise twenty percent (20%) of the Option and to
purchase twenty percent (20%) of the Common Stock subject to the Option.
(2) Commencing two years from the date of the grant, the
Optionee shall have the right to exercise an additional twenty percent (20%) of
the Option and to purchase an additional twenty percent (20%) of the Common
Stock subject to the Option.
(3) Commencing three years from the date of the grant, the
Optionee shall have the right to exercise an additional twenty percent (20%) of
the Option and to purchase an additional twenty percent (20%) of the Common
Stock subject to the Option.
(4) Commencing four years from the date of the grant, the
Optionee shall have the right to exercise an additional twenty percent (20%) of
the Option and to purchase an additional twenty percent (20%) of the Common
Stock subject to the Option.
(5) Commencing five years from the date of the grant, the
Optionee shall have the right to exercise an additional twenty percent (20%) of
the Option and to purchase an additional twenty percent (20%) of the Common
Stock subject to the Option.
Four-Year Vesting Schedule:
--------------------------
(1) Commencing one year from the date of the grant, the Optionee
shall have the right to exercise twenty-five percent (25%) of the Option and to
purchase twenty-five percent (25%) of the Common Stock subject to the Option.
(2) Commencing two years from the date of the grant, the
Optionee shall have the right to exercise an additional twenty-five percent
(25%) of the Option and to purchase an additional twenty-five percent (25%) of
the Common Stock subject to the Option.
(3) Commencing three years from the date of the grant, the
Optionee shall have the right to exercise an additional twenty-five percent
(25%) of the Option and to purchase an additional twenty-five percent (25%) of
the Common Stock subject to the Option.
(4) Commencing four years from the date of the grant, the
Optionee shall have the right to exercise an additional twenty-five percent
(25%) of the Option and to purchase an additional twenty-five percent (25%) of
the Common Stock subject to the Option.
4
<PAGE>
Three-Year Vesting Schedule:
---------------------------
(1) Commencing one year from the date of the grant, the Optionee
shall have the right to exercise thirty-three and one-third percent (33 1/3%) of
the Option and to purchase thirty-three and one-third percent (33 1/3%) of the
Common Stock subject to the Option.
(2) Commencing two years from the date of the grant, the
Optionee shall have the right to exercise an additional thirty-three and one-
third percent (33 1/3%) of the Option and to purchase an additional thirty-three
and one-third percent (33 1/3%) of the Common Stock subject to the Option.
(3) Commencing three years from the date of the grant, the
Optionee shall have the right to exercise an additional thirty-three and one-
third percent (33 1/3%) of the Option and to purchase an additional thirty-three
and one-third percent (33 1/3%) of the Common Stock subject to the Option.
The Optionee's right to purchase the Common Stock subject to the Option, shall
be cumulative, so that as of the end of the vesting period, the Optionee shall
be entitled to exercise one hundred percent (100%) of the Option and to purchase
all of the Common Stock covered by the Option, subject to all of the provisions
of this Plan.
(c) Except as provided in Sections 8(d) and (e), an Optionee may
exercise an Option only if, at the time such Option is exercised, such Optionee
is an employee of and has continuously since the grant of the Option been an
employee of the Corporation.
(d) If an Optionee's employment with the Corporation is terminated
for any reason other than (i) his or her death or disability or (ii) his or her
discharge for dishonesty or commission of a crime, the Optionee may, within
sixty (60) days thereafter and subject to the provisions of Sections 8(a), (b)
and (c), exercise the Option or portion thereof to the extent it was exercisable
as of the date of termination of his or her employment. All unexercised Options,
or portions thereof, shall terminate, be forfeited, and shall lapse upon
expiration of said sixty (60) day period, or immediately if the Optionee's
employment is terminated for any of the reasons set forth in (ii) above.
(e) If an Optionee dies or becomes Disabled while employed by the
Corporation, all of the Options granted to such employee shall become one
hundred percent (100%) exercisable, without regard to the provisions of Section
8(b), above. In such event, the Options may be exercised by the Disabled
employee, or the person or persons to whom the deceased employee's rights under
the Option shall pass by will, or by the applicable laws of descent and
distribution; provided, however, that no such Option may be exercised after one
hundred eighty days (180) days from such employee's date of death, or
termination of employment as a result of Disability, whichever is applicable.
Upon expiration of said period, all unexercised Options, or portions thereof,
shall terminate, be forfeited, and shall lapse.
5
<PAGE>
9. Method of Exercise.
------------------
(a) To exercise an Option, the Optionee, or his or her successors,
shall give written notice to the Corporation's Treasurer at the Corporation's
principal office accompanied by full payment of the Common Stock being purchased
and a written statement that the shares are purchased for investment and not
with a view to distribution. However, this statement shall not be required in
the event the Common Stock subject to the Option is registered with the
Securities and Exchange Commission. If the Option is exercised by the successor
of the Optionee, following his or her death, proof shall be submitted,
satisfactory to the Board, of the right of the successor to exercise the Option.
(b) Common Stock issued pursuant to this Plan which has not been
registered with the Securities and Exchange Commission shall bear the following
legend:
"The securities represented by this Stock Certificate have not
been registered under the Securities act of 1933 (the "Act") or
applicable state securities laws (the "State Acts"), and shall
not be sold, pledged, hypothecated, donated or otherwise
transferred (whether or not for consideration) by the holder,
except upon the issuance to the Corporation of a favorable
opinion of its counsel and submission to the Corporation of such
other evidence as may be satisfactory to the Corporation to the
effect that any such transfer shall not be in violation of the
Act and the State Acts."
(c) The Corporation shall not be required to transfer and deliver any
stock certificate or certificates for shares purchased upon exercise of said
Options until after compliance with all then applicable requirements of law. In
no event shall the Corporation be required to issue fractional shares to the
Optionee.
(d) If the Corporation shall be advised by counsel that shares of
stock deliverable upon exercise of an Option are required to be registered under
the Securities Act of 1933, or that the consent of any other authority is
required for the issuance of same, the Corporation may effect registration or
obtain consent, and delivery of shares by the Corporation may be deferred until
registration is effected or consent obtained.
10. The following is a brief summary of the principal United States
federal income tax consequences under current federal income tax laws relating
to the Options. This summary is not intended to be exhaustive and does not
describe, among other things, state, local or foreign income and other tax
consequences. As indicated above, it is suggested that you consult your tax
and/or financial advisor before deciding to exercise any Option.
Options granted pursuant to the 1999 Plan are entitled to special tax
treatment under Section 421 of the Internal Revenue Code of 1986 as amended. In
general, you will not recognize income for federal income tax purposes upon the
grant or the exercise of an Option. In certain circumstances, however, the
exercise of an Option may constitute taxable income to you for purposes of the
alternative minimum tax. In addition, to the extent that the fair market value
of the shares of Common Stock underlying the Option exceeds $100,000 in the
calendar year in
6
<PAGE>
which that portion of the Option first becomes exercisable, you shall not be
able to treat such excess as an incentive stock option.
If you hold the Common Stock you receive upon exercise of you Option for
least one year after the exercise and two years after the grant of the Option,
you will recognize, upon the sale of such shares, a capital gain or loss equal
to the difference between the amount realized on such sale and the exercise
price.
If the shares are not held for the required periods, you will recognize
upon your sale of Common Stock: (i) compensation in an amount equal to the
difference between the fair market value of the shares on the date of exercise
and the exercise price; and (ii) capital gains to the extent that the proceeds
you receive in the sale exceed your basis in such shares; provided however that
-------- -------
in the event that the sale price does not exceed the fair market value of the
shares on the date of exercise, then you will recognize compensation upon your
sale of Common Stock in an amount equal to the difference between the sale
proceeds and the exercise price. The Corporation is obligated to report such
income on your Form W-2 as "other compensation" (or if you are no longer an
employee and the amount of the gain exceeds Six hundred Dollars, on a Form
1099).
11. Rights To Terminate Employment. Nothing in this Plan or in any Stock
------------------------------
Option Agreement shall confer upon any participant the right to continue in the
employment of the Corporation or affect any right which the Corporation may have
to terminate the employment of such participant.
12. Amendments and Termination. The Board of Directors may amend,
--------------------------
suspend, discontinue or terminate the Plan, but no such action may, without the
consent of the Optionee, alter or impair his or her Option, except as provided
in Paragraph 8.
13. Rights As Stockholders. No stock shall be issued until full payment
----------------------
for such stock has been made. The Optionee shall have no rights as a
stockholder with respect to optioned shares until the date of the issuance of
the stock certificate to him or her for such shares. No adjustments shall be
made for dividends (ordinary or extraordinary, whether in cash, securities, or
other properties) or distributions or other rights for which the record date is
prior to the date such certificate is issued.
14. Adjustments of and Change In Stock. No adjustment shall be made to
----------------------------------
the number of shares of Common Stock for which options are granted by the Plan
or the exercise price thereof as a result of any change in the number of issued
and outstanding shares of Common Stock. Provided, however, the number of shares
of Common Stock covered by outstanding Options, as well as the exercise price,
shall be adjusted proportionately for any increase or decrease in the number of
outstanding shares of Common Stock resulting from a stock split, the payment of
a stock dividend with respect to the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt
of consideration by the Company. In addition, in the event of a dissolution or
liquidation of the Corporation, a merger of the Corporation, or sale of all
7
<PAGE>
or substantially all of the assets of the Corporation, the Corporation shall
take such action as may be necessary to enable the Optionee to receive, in lieu
of shares of Common Stock, securities or other assets that were issued or
payable upon such event in receipt of or in exchange for such shares of Common
Stock.
15. Stock Option Agreement. The granting of an Option under this
----------------------
Agreement occurs only by a written Stock Option Agreement, effective on the date
set forth therein, substantially in the form attached hereto and marked Exhibit
1, executed by and on behalf of the Corporation and the employee to whom the
Option is granted, and such executed Agreement is delivered to the Corporation.
16. Nonassignability. No Option granted under this Plan shall be
----------------
assignable or transferable in any manner voluntarily, involuntarily, or by
operation of law, except by will or by the laws of descent and distribution.
During the life of such recipient, an Option shall be exercisable only by such
person or by such person's guardian or legal representative.
17. Period of Plan. No Options shall be granted on or after May 21,
--------------
2009. The Plan shall terminate on the later of (1) May 21, 2009; (2) the date on
which all Options granted under the Plan have expired; or (3) the date on which
all Options granted under the Plan have been exercised in full.
ADOPTED BY THE BOARD OF DIRECTORS OF WESTERN GAS
RESOURCES, INC.
May 21, 1999 By: /s/ Brion G. Wise
- ------------ _______________________________________
Date Brion G. Wise
Chairman of the Board of Directors
ATTEST:
_______________________________
8
<PAGE>
This document constitutes part of a prospectus covering securities that have
been registered under the Securities Act of 1933.
WESTERN GAS RESOURCES, INC.
1999 STOCK OPTION PLAN AGREEMENT
(Three Year Vesting Schedule)
THIS AGREEMENT, made effective the ______ day of _______, 1999, by and
between Western Gas Resources, Inc. (hereinafter called the Company"), a
Delaware corporation, and ____________, an employee of the Company (hereinafter
called the "Optionee"),
RECITALS:
A. The Optionee is eligible as an employee of the Company to participate in
the Western Gas Resources, Inc. 1999 Stock Option Plan (the "Plan").
B. The Board of Directors of the Company considers it desirable and in the
Company's best interests that the Optionee be given an opportunity to purchase
shares of its Common Stock in furtherance of the Plan to provide incentive for
the Optionee to remain in the employ of the Company and to promote the success
of the Company.
NOW, THEREFORE, in consideration of the premises, it is agreed as follows:
1. Grant of Option. The Company hereby grants to the Optionee the right,
---------------
privilege and option to purchase ________ shares of Common Stock of the Company,
at a purchase price of ____________ Dollars and cents ($ ) per share in
the manner and subject to the conditions hereafter provided. Said purchase
price is not less than the fair market value of the shares of Common Stock of
the Company at the time this option was granted.
2. Period of Exercise of Option. This Option may be exercised in whole or
----------------------------
in part, or in installments, from time to time, with respect to the shares
covered hereby, in the amounts and at the times specified below. The Option or
any portion thereof, once it becomes exercisable as specified below, shall
remain exercisable until it shall expire in accordance with the provisions of
this Agreement.
(a) Notwithstanding anything to the contrary, no Option or portion thereof
grained under this Agreement may be exercised after the earlier of (i) five
years after the date the Optionee has the right to exercise such Option or
portion thereof, in accordance with paragraph 2(b), below; or (ii) ten
years after the date the Option is granted.
(b) Options granted under this Agreement may be exercised following the
date each such Option or portion thereof becomes vested, pursuant to the
following vesting schedule:
(1) Commencing one year from the date of the grant, the Optionee shall
have the right to exercise thirty-three and one-third percent (33-
1/3%) of the Option and to purchase thirty-three and one-third percent
(33-1/3%) of the Common Stock subject to the Option.
(2) Commencing two years from the date of the grant, the optionee
shall have the right to exercise an additional thirty-three and one-
third percent (33-1/3%) of the Option and to purchase an additional
thirty-three and one-third percent (33-1/3%) of the Common Stock
subject to the Option.
(3) Commencing three years from the date of the grant, the Optionee
shall have the right to exercise an additional thirty-three and one-
third percent (33-1/3%) of the Option and to purchase an additional
thirty-three and one-third percent (33-1/3%) of the Common
<PAGE>
Stock subject to the Option.
The optionee's right to purchase Shares subject to the Option shall be
cumulative, so that three (3) years from the date of the grant, the
Optionee shall be entitled to exercise one hundred percent (100%) of the
Option, and to purchase all of the Common Stock subject to the Option,
subject to all of the provisions of this Agreement.
(c) Except as provided in Sections 2(d) and 2(e), an Optionee may exercise
an Option only if, at the time such Option is exercised, such Optionee is
an employee of, and has continuously since the grant of the Option, been an
employee of the Corporation.
(d) If an Optionee's employment is terminated for any reason other than
(i) his or her death or disability; or (ii) his or her discharge for
dishonesty or commission of a crime, the Optionee may, within sixty (60)
days thereafter, and subject to provisions of Sections 2(a), (b) and (c),
exercise the Option to the extent that the Option was exercisable as of the
date of termination of his or her employment. All unexercised Options, or
portions thereof, shall terminate, be forfeited, and shall lapse upon
expiration of said sixty (60) day period, or immediately if the employment
of the Optionee is terminated by the Corporation for any of the reasons set
forth in (ii), above.
(e) If an Optionee dies or becomes disabled while he is an employee of the
Corporation, or ceases to be employed as a result of disability, all of the
Options granted to such employee shall become one hundred percent (100%)
exercisable, without regard to the provisions of Section 2(b), above. In
such event, the Options may be exercised by the disabled employee, or the
person or persons to whom his or her rights under the Option shall pass by
will, or by the applicable laws of descent and distribution; provided,
however, that no such Option may be exercised after 180 days from such
employee' s date of death, or termination of employment as a result of
disability, whichever is applicable. Upon expiration of said period, all
unexercised Options, or portions thereof, shall terminate, be forfeited,
and shall lapse.
3. Method of Exercise.
------------------
(a) To exercise an Option, the Optionee, or his or her successors, shall
give written notice to the Corporation Treasurer at the Corporation's
principal office accompanied by full payment of the Common Stock being
purchased and a written statement that the shares are purchased for
investment and not with a view to distribution. However, this statement
shall not be required in the event the Common Stock subject to the Option
is registered with the Securities and Exchange Commission. If the Option is
exercised by the successor of the Optionee, following his or her death,
proof shall be submitted, satisfactory to the Board, of the right of the
successor to exercise the Option.
(b) Common Stock issued pursuant to this Plan which has not been
registered with the Securities and Exchange Commission shall bear the
following legend:
"The securities represented by this Stock Certificate have not been
registered under the Securities act of 1933 (the "Act") or applicable
state securities laws (the "State Acts"), and shall not be sold,
pledged, hypothecated, donated or otherwise transferred (whether or
not for consideration) by the holder, except upon the issuance to the
Corporation of a favorable opinion of its counsel and submission to
the Corporation of such other evidence as may be satisfactory to the
Corporation to the effect that any such transfer shall not be in
violation of the Act and the State Acts."
(c) The Corporation shall not be required to transfer and deliver any
stock certificate or certificates for shares purchased upon exercise of
said Options until after compliance with all then
<PAGE>
applicable requirements of law. In no event shall the Corporation be
required to issue fractional shares to the Optionee.
(d) If the Corporation shall be advised by counsel that shares of stock
deliverable upon exercise of an Option are required to be registered under
the Securities Act of 1933, or that the consent of any other authority is
required for the issuance of same, the Corporation may effect registration
or obtain consent and delivery of shares by the Corporation may be deferred
until registration is effected or consent obtained.
4. Treatment as Incentive Stock Options. It is intended that the Options
------------------------------------
granted hereunder constitute "incentive stock options" within the meaning of
(S)422 of the Internal Revenue Code of 1986, as amended, provided, however, that
to the extent that the aggregate fair market value of the stock with respect to
which Options are exercisable for the first time by Optionee during any calendar
year under all of the Company's plans exceeds $100,000, such Options shall be
treated as options which are not incentive stock options.
5. Limitation Upon Transfer. Except as otherwise provided hereto, the option
------------------------
and all rights granted hereunder shall not be transferred by the Optionee, and
may not be assigned, pledged, or hypothecated in any way and shall not be
subject to execution, attachment or similar process. Upon any attempt to
transfer the option, or to assign, pledge, hypothecate or otherwise dispose of
such Option or of any rights granted hereunder, contrary to the provisions
hereof, or upon the levy of any attachment or similar process upon such option
or such rights, such option and such rights shall immediately become null and
void.
6. Adjustments of and Change in Stock. No adjustment shall be made to the
----------------------------------
number of shares of Common Stock for which Options are granted by the Plan or
the exercise price thereof as a result of any change in the number of issued and
outstanding shares of Common Stock; except that the number of shares of Common
Stock covered by outstanding Options, as well as the exercise price, shall be
adjusted proportionately for any increase or decrease in the number of
outstanding shares of Common Stock resulting from a stock split, the payment of
a stock dividend with respect to the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt
of consideration by the Company. In addition, in the event of a dissolution or
liquidation of the Corporation, a merger of the Corporation, sale of all or
substantially all of the assets of the Corporation, the Corporation shall take
such action as may be necessary to enable the Optionee to receive, in lieu of
shares of Common Stock, securities or other assets that were issued or payable
upon such event in receipt of or in exchange for such shares of Common Stock.
7. Rights of Stockholder. Neither the Optionee, his or her legal
---------------------
representative, nor other persons entitled to exercise the option shall be or
have any rights of a stockholder in the Company in respect of the shares
issuable upon exercise of the option granted hereunder, unless and until
certificates representing such shares shall have been delivered pursuant to the
terms hereof.
8. Rights of Employees. Nothing contained in this Agreement shall confer
-------------------
upon Optionee any right to continued employment by the Company or limit, in any
way, the right of the Company or any subsidiary or parent of the Company to
terminate an Optionee's employment at any time.
9. Stock Reserved. The Company shall at all times during the term of this
--------------
Agreement reserve and keep available such number of shares of its Common Stock
as will be sufficient to satisfy the terms of this Agreement.
10. Binding Effect. This Agreement shall be binding upon and inure to the
--------------
benefit of any successor or successors of the Company.
11. Incorporation of Plan by Reference. The Option is granted pursuant to the
----------------------------------
terms of the Plan, the terms of which are incorporated herein by reference, and
the Option shall, in all respects, be interpreted in accordance with the Plan.
The Company shall interpret and construe the Plan and this instrument, and its
interpretations and determinations shall be conclusive and binding on the
parties hereto and any other
<PAGE>
person claiming an interest hereunder, with respect to an issue arising
hereunder or thereunder.
12. Governing Law. The validity, construction, interpretation, and effect of
-------------
tiffs document shall be exclusively governed by and determined in accordance
with the laws of the State of Colorado, except to the extent preempted by
federal law which shall to the extent govern.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed the day and year first above written.
ATTEST: WESTERN GAS RESOURCES, INC.
__________________________________ By:__________________________________
Secretary President
WITNESS:
__________________________________ _____________________________________
Name Printed: Optionee
<PAGE>
This document constitutes part of a prospectus covering securities that have
been registered under the Securities Act of 1933.
WESTERN GAS RESOURCES, INC.
1999 STOCK OPTION PLAN AGREEMENT
(Four Year Vesting Schedule)
THIS AGREEMENT, made effective the ______ day of _______,1999, by and
between Western Gas Resources, Inc. (hereinafter called the Company"), a
Delaware corporation, and ____________, an employee of the Company (hereinafter
called the "Optionee"),
RECITALS:
A. The Optionee is eligible as an employee of the Company to participate in
the Western Gas Resources, Inc. 1999 Stock Option Plan (the "Plan").
B. The Board of Directors of the Company considers it desirable and in the
Company's best interests that the Optionee be given an opportunity to purchase
shares of its Common Stock in furtherance of the Plan to provide incentive for
the Optionee to remain in the employ of the Company and to promote the success
of the Company.
NOW, THEREFORE, in consideration of the premises, it is agreed as follows:
1. Grant of Option. The Company hereby grants to the Optionee the right,
---------------
privilege and option to purchase ________ shares of Common Stock of the Company,
at a purchase price of ____________ Dollars and cents ($ ) per share in
the manner and subject to the conditions hereafter provided. Said purchase
price is not less than the fair market value of the shares of Common Stock of
the Company at the time this option was granted.
2. Period of Exercise of Option. This Option may be exercised in whole or
----------------------------
in part, or in installments, from time to time, with respect to the shares
covered hereby, in the amounts and at the times specified below. The Option or
any portion thereof, once it becomes exercisable as specified below, shall
remain exercisable until it shall expire in accordance with the provisions of
this Agreement.
(a) Notwithstanding anything to the contrary, no Option or portion thereof
grained under this Agreement may be exercised after the earlier of (i) five
years after the date the Optionee has the right to exercise such Option or
portion thereof, in accordance with paragraph 2(b), below; or (ii) ten
years after the date the Option is granted.
(b) Options granted under this Agreement may be exercised following the
date each such Option or portion thereof becomes vested, pursuant to the
following vesting schedule:
(1) Commencing one year from me date of the grant, the Optionee shall
have the right to exercise twenty-five percent (25%) of the Option and
to purchase twenty-five percent (25%) of the Common Stock subject to
the Option.
(2) Commencing two years from the date of the grant, the Optionee
shall have the right to exercise an additional twenty-five percent
(25%) of the Option and to purchase an additional twenty-five percent
(25%) of the Common Stock subject to the Option.
(3) Commencing three years from the date of the grant, the Optionee
shall have the right to exercise an additional twenty-five percent
(25%) of the Option and to purchase an additional twenty-five percent
(25%) of the Common Stock subject to the Option.
(4) Commencing four years from the date of the grant, the Optionee
shall have the right
<PAGE>
to exercise an additional twenty-five percent (25%) of the Option and
to purchase an additional twenty-five percent (25 %) of the Common
Stock subject to the Option.
The Optionee's right to purchase Shares subject to the Option shall be
cumulative, so that four (4) years from the date of the grant, the Optionee
shall be entitled to exercise one hundred percent (100%) of the Option, and
to purchase all of the Common Stock subject to the Option, subject to all
of the provisions of this Agreement.
(c) Except as provided in Sections 2(d) and 2(e), an Optionee may exercise
an Option only if, at the time such Option is exercised, such Optionee is
an employee of, and has continuously since the grant of the Option, been an
employee of the Corporation.
(d) If an Optionee's employment is terminated for any reason other than
(i) his or her death or disability; or (ii) his or her discharge for
dishonesty or commission of a crime, the Optionee may, within sixty (60)
days thereafter, and subject to provisions of Sections 2(a), (b) and (c),
exercise the Option to the extent that the Option was exercisable as of the
date of termination of his or her employment. All unexercised Options, or
portions thereof, shall terminate, be forfeited, and shall lapse upon
expiration of said sixty (60) day period, or immediately if the employment
of the Optionee is terminated by the Corporation for any of the reasons set
forth in (ii), above.
(e) If an Optionee dies or becomes disabled while he is an employee of the
Corporation, or ceases to be employed as a result of disability, all of the
Options granted to such employee shall become one hundred percent (100%)
exercisable, without regard to the provisions of Section 2(b), above. In
such event, the Options may be exercised by the disabled employee, or the
person or persons to whom his or her rights under the Option shall pass by
will, or by the applicable laws of descent and distribution; provided,
however, that no such Option may be exercised after 180 days from such
employee's date of death, or termination of employment as a result of
disability, whichever is applicable. Upon expiration of said period, all
unexercised Options, or portions thereof, shall terminate, be forfeited,
and shall lapse.
3. Method of Exercise.
------------------
(a) To exercise an Option, the Optionee, or his or her successors, shall
give written notice to the Corporation's Treasurer at the Corporation's
principal office accompanied by full payment of the Common Stock being
purchased and a written statement that the shares are purchased for
investment and not with a view to distribution. However, this statement
shall not be required in the event the Common Stock subject to the Option
is registered with the Securities and Exchange Commission, if the Option is
exercised by the successor of the Optionee, following his or her death,
proof shall be submitted, satisfactory to the Board, of the right of the
successor to exercise the Option.
(b) Common Stock issued pursuant to this Plan which has not been
registered with the Securities and Exchange Commission shall bear the
following legend:
"The securities represented by this Stock Certificate have
not been registered under the Securities act of 1933 (the
"Act") or applicable state securities laws (the "State
Acts"), and shall not be sold, pledged, hypothecated,
donated or otherwise transferred (whether or not for
consideration) by the holder, except upon the issuance to
the Corporation of a favorable opinion of its counsel and
submission to the Corporation of such other evidence as may
be satisfactory to the Corporation to the effect that any
such transfer shall not be in violation of the Act and the
State Acts."
(c) The Corporation shall not be required to transfer and deliver any
stock certificate or certificates for shares purchased upon exercise of
said Options until after compliance with all then applicable requirements
of law. In no event shall the Corporation be required to issue fractional
<PAGE>
shares to the Optionee.
(d) If the Corporation shall be advised by counsel that shares of stock
deliverable upon exercise of an Option are required to be registered under
the Securities Act of 1933, or that the consent of any other authority is
required for the issuance of same, the Corporation may effect registration
or obtain consent, and delivery of shares by the Corporation may be
deferred until registration is effected or consent obtained.
4. Treatment as Incentive Stock Options. It is intended that the
-------------------------------------
Options granted hereunder constitute "incentive stock options" within the
meaning of (S)422 of the Internal Revenue Code of 1986, as amended, provided,
however, that to the extent that the aggregate fair market value of the stock
with respect to which Options are exercisable for the first time by Optionee
during any calendar year under all of the Company's plans exceeds $100,000,
such Options shall be treated as options which are not incentive stock options.
5. Limitation Upon Transfer. Except as otherwise provided hereto, the
------------------------
option and all rights granted hereunder shall not be transferred by the
Optionee, and may not be assigned, pledged, or hypothecated in any way and shall
not be subject to execution, attachment or similar process. Upon any attempt to
transfer the option, or to assign, pledge, hypothecate or otherwise dispose of
such Option or of any rights granted hereunder, contrary to the provisions
hereof, or upon the levy of any attachment or similar process upon such option
or such rights, such option and such rights shall immediately become null and
void.
6. Adjustments of and Change in Stock. No adjustment shall be made to
----------------------------------
the number of shares of Common Stock for which Options are granted by the Plan
or the exercise price thereof as a result of any change in the number of issued
and outstanding shares of Common Stock; except that the number of shares of
Common Stock covered by outstanding Options, as well as the exercise price,
shall be adjusted proportionately for any increase or decrease in the number of
outstanding shares of Common Stock resulting from a stock split, the payment of
a stock dividend with respect to the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt
of consideration by the Company. In addition, in the event of a dissolution or
liquidation of the Corporation, a merger of the Corporation, sale of all or
substantially all of the assets of the Corporation, the Corporation shall take
such action as may be necessary to enable the Optionee to receive, in lieu of
shares of Common Stock, securities or other assets that were issued or payable
upon such event in receipt of or in exchange for such shares of Common Stock.
7. Rights of Stockholder. Neither the Optionee, his or her legal
---------------------
representative, nor other persons entitled to exercise the option shall be or
have any rights of a stockholder in the Company in respect of the shares
issuable upon exercise of the option granted hereunder, unless and until
certificates representing such shares shall have been delivered pursuant to the
terms hereof.
8. Rights of Employees. Nothing contained in this Agreement shall
-------------------
confer upon Optionee any right to continued employment by the Company or
limit, in any way, the right of the Company or any subsidiary or parent of the
Company to terminate an Optionee's employment at any time.
9. Stock Reserved. The Company shall at all times during the term of this
--------------
Agreement reserve and keep available such number of shares of its Common Stock
as will be sufficient to satisfy the terms of this Agreement.
10. Binding Effect. This Agreement shall be binding upon and inure to the
--------------
benefit of any successor or successors of the Company.
11. Incorporation of Plan by Reference. The Option is granted pursuant
----------------------------------
to the terms of the Plan, the temps of which are incorporated herein by
reference, and the Option shall, in all respects, be interpreted in accordance
with the Plan. The Company shall interpret and construe the Plan and this
instrument, and its interpretations and determinations shall be conclusive and
binding on the parties hereto and any other person claiming an interest
hereunder, with respect to an issue arising hereunder or thereunder.
<PAGE>
12. Governing Law. The validity, construction, interpretation, and effect
-------------
of tiffs document shall be exclusively governed by and determined in accordance
with the laws of the State of Colorado, except to the extent preempted by
federal law which shall to the extent govern.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed the day and year first above written.
ATTEST: WESTERN GAS RESOURCES, INC.
__________________________________ By:____________________________________
Secretary President
WITNESS:
__________________________________ _______________________________________
Name Printed: Optionee
<PAGE>
This document constitutes part of a prospectus covering securities that have
been registered under the Securities Act of 1933.
WESTERN GAS RESOURCES, INC.
1999 STOCK OPTION PLAN AGREEMENT
(Five Year Vesting Schedule)
THIS AGREEMENT, made effective the ______ day of _______,1999, by and between
Western Gas Resources, Inc. (hereinafter called the Company"), a Delaware
corporation, and ____________, an employee of the Company (hereinafter called
the "Optionee"),
RECITALS:
A. The Optionee is eligible as an employee of the Company to participate in
the Western Gas Resources, Inc. 1999 Stock Option Plan (the "Plan").
B. The Board of Directors of the Company considers it desirable and in the
Company's best interests that the Optionee be given an opportunity to purchase
shares of its Common Stock in furtherance of the Plan to provide incentive for
the Optionee to remain in the employ of the Company and to promote the success
of the Company.
NOW, THEREFORE, in consideration of the premises, it is agreed as follows:
1. Grant of Option. The Company hereby grants to the Optionee the right,
-----------------
privilege and option to purchase ________ shares of Common Stock of the Company,
at a purchase price of ____________ Dollars and cents ($ ) per share in
the manner and subject to the conditions hereafter provided. Said purchase
price is not less than the fair market value of the shares of Common Stock of
the Company at the time this option was granted.
2. Period of Exercise of Option. This Option may be exercised in whole or
-----------------------------
in part, or in installments, from time to time, with respect to the shares
covered hereby, in the amounts and at the times specified below. The Option or
any portion thereof, once it becomes exercisable as specified below, shall
remain exercisable until it shall expire in accordance with the provisions of
this Agreement.
(a) Notwithstanding anything to the contrary, no Option or portion thereof
grained under this Agreement may be exercised after the earlier of (i) five
years after the date the Optionee has the right to exercise such Option or
portion thereof, in accordance with paragraph 2(b), below; or (ii) ten
years after the date the Option is granted.
(b) Options granted under this Agreement may be exercised following the
date each such Option or portion thereof becomes vested, pursuant to the
following vesting schedule:
(1) Commencing one year from the date of the grant, the Optionee
shall have the right to exercise twenty percent (20%) of the Option
and to purchase twenty percent (20%) of the Common Stock subject to
the Option.
(2) Commencing two years from the date of the grant, the Optionee
shall have the right to exercise an additional twenty percent (20%) of
the Option and to purchase an additional twenty percent (20%) of the
Common Stock subject to the Option.
(3) Commencing three years from the date of the giant, the Optionee
shall have the right to exercise an additional twenty percent (20%) of
the Option and to purchase an additional twenty percent (20%) of the
Common Stock subject to the Option.
(4) Commencing four years from the date of the grant, the Optionee
shall have the right to exercise an additional twenty percent (20%) of
the Option and to purchase an
<PAGE>
additional twenty percent (20%) of the Common Stock subject to the
Option.
(5) Commencing five years from the date of the grant, the Optionee
shall have the right to exercise an additional twenty percent (20%) of
the Option and to purchase an additional twenty percent (20%) of the
Common Stock subject to the Option.
The Optionee's right to purchase Shares subject to the Option shall be
cumulative, so that five (5) years from the date of the grant, the Optionee
shall be entitled to exercise one hundred percent (100%) of the Option, and
to purchase all of the Common Stock subject to the Option, subject to all
of the provisions of this Agreement.
(c) Except as provided in Sections 2(d) and 2(e), an Optionee may exercise
an Option only if, at the time such Option is exercised, such Optionee is
an employee of, and has continuously since the grant of the Option, been an
employee of the Corporation.
(d) If an Optionee's employment is terminated for any reason other than
(i) his or her death or disability; or (ii) his or her discharge for
dishonesty or commission of a crime, the Optionee may, within sixty (60)
days thereafter, and subject to provisions of Sections 2(a), (b) and (c),
exercise the Option to the extent that the Option was exercisable as of the
date of termination of his or her employment. All unexercised Options, or
portions thereof, shall terminate, be forfeited, and shall lapse upon
expiration of said sixty (60) day period, or immediately if the employment
of the Optionee is terminated by the Corporation for any of the reasons set
forth in (ii), above.
(e) If an Optionee dies or becomes disabled while he is an employee of the
Corporation, or ceases to be employed as a result of disability, all of the
Options granted to such employee shall become one hundred percent (100 %)
exercisable, without regard to the provisions of Section 2(b), above. In
such event, the Options may be exercised by the disabled employee, or the
person or persons to whom his or her rights under the Option shall pass by
will, or by the applicable laws of descent and distribution; provided,
however, that no such Option may be exercised after 180 days from such
employee's date of death, or termination of employment as a result of
disability, whichever is applicable. Upon expiration of said period, all
unexercised Options, or portions thereof, shall terminate, be forfeited,
and shall lapse.
3. Method of Exercise.
-------------------
(a) To exercise an Option, the Optionee, or his or her successors, shall
give written notice to the Corporation's Treasurer at the Corporation's
principal office accompanied by full payment of the Common Stock being
purchased and a written statement that the shares are purchased for
investment and not with a view to distribution. However, this statement
shall not be requited in the event the Common Stock subject to the Option
is registered with the Securities and Exchange Commission. If the Option is
exercised by the successor of the optionee, following his or her death,
proof shall be submitted, satisfactory to the Board, of the right of the
successor to exercise the Option.
(b) Common Stock issued pursuant to this Plan which has not been
registered with the Securities and Exchange Commission shall bear the
following legend:
"The securities represented by this Stock Certificate have not been
registered under the Securities act of 1933 (the "Act") or applicable
state securities laws (the "State Acts'), and shall not be sold,
pledged, hypothecated, donated or otherwise transferred (whether or
not for consideration) by the holder, except upon the issuance to the
Corporation of a favorable opinion of its counsel and submission to
the Corporation of such other evidence as may be satisfactory to the
Corporation to the
<PAGE>
effect that any such transfer shall not be in violation of the Act and
the State Acts."
(c) The Corporation shall not be required to transfer and deliver any
stock certificate or certificates for shares purchased upon exercise of
said Options until after compliance with, all then applicable requirements
of law. In no event shall the Corporation be required to issue fractional
shares to the Optionee.
(d) If the Corporation shall be advised by counsel that shares of stock
deliverable upon exercise of an Option are required to be registered under
the Securities Act of 1933, or that the consent of any other authority is
required for the issuance of same, the Corporation may effect registration
or obtain consent, and delivery of shares by the Corporation may be
deferred until registration is effected or consent obtained.
4. Treatment as Incentive Stock Options. It is intended that the Options
--------------------------------------
granted hereunder constitute "incentive stock options" within the meaning of
'422 of the Internal Revenue Code of 1986, as amended, provided, however, that
to the extent that the aggregate fair market value of the stock with respect to
which Options are exercisable for the first time by Optionee during any calendar
year under all of the Company's plans exceeds $100,000, such Options shall be
treated as options which are not incentive stock options.
5. Limitation Upon Transfer. Except as otherwise provided herein, the
-------------------------
option and all rights granted hereunder shall not be transferred by the
Optionee, and may not be assigned, pledged, or hypothecated in any way and shall
not be subject to execution, attachment or similar process. Upon any attempt to
transfer the option, or to assign, pledge, hypothecate or otherwise dispose of
such Option or of any rights granted hereunder, contrary to the provisions
hereof, or upon the levy of any attachment or similar process upon such option
or such rights, such option and such rights shall immediately become null and
void.
6. Adjustments of and Change in Stock. No adjustment shall be made to
-----------------------------------
the number of shares of Common Stock for which Options are granted by the Plan
or the exercise price thereof as a result of any change in the number of issued
and outstanding shares of Common Stock; except that the number of shares of
Common Stock covered by outstanding Options, as well as the exercise price,
shall be adjusted proportionately for any increase or decrease in the number of
outstanding shares of Common Stock resulting from a stock split, the payment of
a stock dividend with respect to the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt
of consideration by the Company. In addition, in the event of a dissolution or
liquidation of the Corporation, a merger of the Corporation, sale of all or
substantially all of the assets of the Corporation, the Corporation shall take
such action as may be necessary to enable the Optionee to receive, in lieu of
shares of Common Stock, securities or other assets that were issued or payable
upon such event in receipt of or in exchange for such shares of Common Stock.
7. Rights of Stockholder. Neither the Optionee, his or her legal
----------------------
representative, nor other persons entitled to exercise the option shall be or
have any rights of a stockholder in the Company in respect of the shares
issuable upon exercise of the option granted hereunder, unless and until
certificates representing such shares shall have been delivered pursuant to the
terms hereof.
8. Rights of Employees. Nothing contained in this Agreement shall
--------------------
confer upon Optionee any right to continued employment by the Company or limit,
in any way, the right of the Company or any subsidiary or parent of the Company
to terminate an Optionee's employment at any time.
9. Stock Reserved. The Company shall at all times during the term of
---------------
this Agreement reserve and keep available such number of shares of its Common
Stock as will be sufficient to satisfy the terms of this Agreement.
<PAGE>
10. Binding Effect. This Agreement shall be binding upon and inure to the
---------------
benefit of any successor or successors of the Company.
11. Incorporation of Plan by Reference. The Option is granted pursuant
------------------------------------
to the terms of the Plan, the terms of which are incorporated herein by
reference, and the Option shall, in all respects, be interpreted in accordance
with the Plan. The Company shall interpret and construe the Plan and this
instrument, and its interpretations and determinations shall be conclusive and
binding on the parties hereto and any other person claiming an interest
hereunder, with respect to an issue arising hereunder or thereunder.
12. Governing Law. The validity, construction, interpretation, and
--------------
effect of this document shall be exclusively governed by and determined in
accordance with the laws of the State of Colorado, except to the extent
preempted by federal law which shall to the extent govern.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed the day and year first above written.
ATTEST: WESTERN GAS RESOURCES, INC.
_____________________________ By: ______________________________________
Secretary President
WITNESS:
_____________________________ __________________________________________
Name Printed: Optionee
<PAGE>
EXHIBIT 5.1
Western Gas Resources, Inc.
12200 N. Pecos Street
Denver, CO 80234
January 24, 2000
Western Gas Resources, Inc.
12200 North Pecos Street
Denver, Colorado 80234
Gentlemen:
I am the general counsel for Western Gas Resources, Inc., a Delaware
corporation (the "Corporation") and am delivering this opinion in connection
with the preparation of a registration statement on Form S-8 of the Corporation
(the "Registration Statement") relating to the registration by the Corporation
of an aggregate of 750,000 shares of the Corporation's common stock, par value
$.10 per share (the "Common Stock"), to be issued pursuant to options granted
under the Corporation's 1999 Stock Option Plan (the "Plan").
This opinion is being delivered in accordance with the requirements of Item
601 (b) (5) of Regulation S-K under the Securities Act of 1933, as amended (the
"Securities Act"). Capitalized terms used herein but not otherwise defined
herein have the meaning ascribed to them in the Registration Statement.
In connection with this opinion, I have examined the originals or copies
certified or otherwise authenticated to my satisfaction of such corporate
records of the Corporation, of certificates of public officials and of officers
of the Corporation, and of other agreements, instruments or documents as I have
deemed necessary as a basis for the opinions contained herein. I have also
reviewed the Registration Statement.
In my examination, I have assumed the legal capacity of natural persons,
the genuineness of all signatures, the authenticity of all documents submitted
to me as originals, the conformity to original documents of all documents
submitted to me as a certified or photostatic copies and the authenticity of the
originals of such copies. In making my examination of documents executed by
parties other than the Corporation, I have assumed that such parties had the
power, corporate or other, to enter into and perform all obligations thereunder
and have also assumed the due authorization by all requisite action, corporate
or other, and execution and delivery by such parties of such documents and that
such documents constitute valid and binding obligations of such parties. As to
any facts material to this opinion that I did not independently establish or
verify, I have relied upon certificates, statements and representations of
officers, trustees and other representatives of the Corporation and others.
I am a member of the Bar of the State of Colorado and do not express any
opinion as to the laws of any other state or jurisdiction. Insofar as opinions
herein expressed relate to matters governed by Delaware law, I have relied
solely upon a reading of applicable statutes and records of the Corporation and
certificates of public officials.
<PAGE>
Based upon and subject to the foregoing and the limitations,
qualifications, exceptions and assumptions set forth herein, I advise you that,
in my opinion:
1. The Corporation has been duly incorporated and is validly existing and
in good standing under the laws of the State of Delaware.
2. The shares of Common Stock initially issuable pursuant to the Plan have
been duly authorized by the Corporation and, when issued and sold by the
Corporation in accordance with the provisions of the Plan, will have been
validly issued and will be fully paid and non-assessable.
I hereby consent to the filing of this opinion with the Securities and
Exchange Commission (the "Commission") as an exhibit to the Registration
Statement and the reference to me under the heading "Interests of Named Experts
and Counsel" in the Registration Statement. In giving such consent, I do not
thereby admit that I am in the category of persons whose consent is required
under Section 7 of the Securities Act or the rules and regulations of the
Commission promulgated thereunder. As of January 21, 2000, I owned 29,625
shares of Common Stock and options to purchase 68,000 shares of Common Stock,
none of which were granted under this Plan.
Respectfully submitted,
/s/ John C. Walter
John C. Walter, Esquire
General Counsel
<PAGE>
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated March 22, 1999 relating to the
financial statements, which appears in Western Gas Resources, Inc.'s Annual
Report on Form 10-K for the year ended December 31, 1998.
Denver, Colorado
January 24, 2000
PriceWaterhouseCoopers
