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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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(Mark one) FORM 10-K/A
Amendment No. 2
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transaction period from ________ to ________
Commission file number 1-10509
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SNYDER OIL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 75-2306158
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
777 Main Street 76102
Fort Worth, Texas (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code (817) 338-4043
Securities registered pursuant to Section 12(b)of the Act:
Name of each exchange
Title of each class on which registered
------------------------------- -----------------------------------
Common Stock New York Stock Exchange
Preferred Stock Purchase Rights New York Stock Exchange
Securities registered pursuant to Section 12(g of the Act:
None
(Title of class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
-------- -------
Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. [T]
Aggregate market value of the common stock held by non-affiliates of the
registrant as of February 26, 1999.........................$321,653,346
Number of shares of common stock outstanding as of
February 26, 1999............................................33,364,567
DOCUMENTS INCORPORATED BY REFERENCE
NONE
<PAGE>
AMENDMENT NO. 2 TO FORM 10-K/A
This Amendment No. 2 to Snyder Oil Corporation's Annual Report on Form
10-K for the fiscal year ended December 31, 1999, supplies the information
required by Part III of Form 10-K.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Board of Directors
Set forth below is a list of the Registrant's directors, including
their ages and certain information relating to their business experience.
Roger W. Brittain (61), director since 1983, has been, since July 1997,
a director of Corporate Finance, Investec Henderson Crosthwaite (formerly
Guinness Mahon Corporate Finance) and, since March 1990, Mr. Britain has been
Managing Director of Guinness Mahon Energy Services Limited, (now dormant) a
subsidiary of Guinness Mahon & Co. Limited ("GM&Co.") formed to provide
investment banking and consultant services to the oil and gas industry. He was a
Director of GM&Co., a London merchant bank from 1994 to July 1997. From 1980
through October 1989, Mr. Brittain was Managing Director and from mid-1987 an
Executive Director of TR Energy, an investment company making oil and gas
investments principally in the United States. From 1977 to 1980, Mr. Brittain
was a Director of Shaw Wallace & Co. Ltd., Calcutta, India. From 1967 to 1977,
he was employed by Hill Samuel & Co. Ltd, William Brandts & Sons Ltd. and Edward
Bates and Sons Ltd, (director), merchant banks in London. Prior to that time,
Mr. Brittain was with Her Majesty's Diplomatic Service. Mr. Brittain serves on
the Audit and Compensation Committees. Mr. Brittain also serves as a director of
SOCO International plc, which is listed on the London Stock Exchange, and of Sen
Hong Resources Holdings Limited (formerly Seaunion Holdings Limited), an oil and
gas company listed on the Hong Kong Stock Exchange.
William G. Hargett (49), President, Chief Operating Officer and a
director, has been with the Company since April 1997. Prior to joining the
Company, Mr. Hargett served as President of Greenhill Petroleum Corporation from
1994 to 1997, Amax Oil & Gas, Inc. from 1993 to 1994 and North Central Oil
Corporation from 1988 to 1993. Mr. Hargett serves on the Executive Committee.
John A. Hill (57), director since 1981, is Vice Chairman and Managing
Director of First Reserve Corporation, an oil and gas investment management
company. Prior to joining First Reserve, Mr. Hill was President, Chief Executive
Officer and Director of Marsh & McLennan Asset Management Company, the money
management subsidiary of Marsh & McLennan Companies, Inc. From 1979 to 1980, Mr.
Hill served as President and Chief Executive Officer of Eberstadt Asset
Management Company, the asset management division of F. Eberstadt & Co., Inc.
Prior to 1976, Mr. Hill held several senior positions in the federal government
including Deputy Administrator of the Federal Energy Administration from 1975 to
1976 and Deputy Associate Director of the Office of Management and Budget from
1973 to 1974. Mr. Hill received his Bachelors Degree in Economics from Southern
Methodist University and pursued graduate studies there as a Woodrow Wilson
Fellow. Mr. Hill is Vice Chairman and a trustee of the Putnam Funds in Boston
and a director of Transmontaigne Oil Company, a refined products distribution
company. Mr. Hill serves as Chairman of the Governance Committee and as a member
of both the Compensation and the Executive Committees.
William J. Johnson (64), director since 1994, is a private consultant
for the oil and gas industry and is President and a director of JonLoc Inc., an
oil and gas company of which he and his family are the sole shareholders. From
1991 to 1994, Mr. Johnson was President, Chief Operating Officer and a director
of Apache Corporation. Previously, he was a director, President and Chief
Executive Officer of Tex/Con Oil and Gas, where he served from 1989 to 1991.
Prior thereto, Mr. Johnson served in various capacities with major oil
companies, including director and President USA of BP Exploration Company,
President of Standard Oil Production Company and Senior Vice President of The
Standard Oil Company. Mr. Johnson received a Bachelor of Science degree in
Petroleum Geology from Mississippi State University and completed the Advanced
Management Course at the University of Houston. Mr. Johnson serves as a director
of Tesoro Petroleum Corporation, an integrated petroleum company and J. Ray
McDermott, a marine construction company. Mr. Johnson serves on the Audit,
Compensation and Governance Committees.
<PAGE>
B. J. Kellenberger (73), director since 1989, is the founder and owner
of Kelloil, Inc., which is engaged in exploration and production of oil and
natural gas and secondary recovery of oil. In 1965, he founded Shenandoah Oil
Corporation and served as President, Chief Executive Officer and Chairman of the
Board until Shenandoah's voluntary liquidation in 1979. Mr. Kellenberger serves
on the Executive Committee.
Harold R. Logan, Jr. (54), director since 1997, is Executive Vice
President/Finance and a director of TransMontaigne Inc., a holding company
engaged in providing logistical services; i.e. the transportation, terminaling
and marketing, to the manufacturers and end-users of refined petroleum products.
Mr. Logan is also a director of Suburban Propane Partners, L.P. and a director
of Union Bank Shares, Ltd., Denver, Colorado. Previously, from 1984 to 1994, Mr.
Logan was Senior Vice President/Finance and a director of Associated Natural Gas
Corporation. Prior to joining Associated Natural Gas Corporation, Mr. Logan was
with Dillon, Read & Co. Inc. and Rothschild, Inc. Mr. Logan also serves as a
director of Suburban Propane Partners, L.P. Mr. Logan serves as Chairman of the
Audit Committee.
James E. McCormick (71), director since 1992, served as President,
Chief Operating Officer and a director of Oryx Energy Company from its inception
in November 1988 until his retirement in March 1992. Prior to his service with
Oryx, Mr. McCormick served from 1953 in a number of positions with the Sun
organization, most recently serving as President, Chief Executive Officer and a
director of Sun Exploration and Production Company. Mr. McCormick serves as a
director of Lone Star Technologies, Inc., B. J. Services, Inc., an oilfield
service company, TESCO Corporation, a manufacturer of oil field drilling
systems, and is a Director of the Dallas National Bank. Mr. McCormick serves as
Chairman on the Compensation Committee and is a member of the Governance
Committee.
John C. Snyder (57), Chairman and a director, founded a predecessor of
the Company in 1978. From 1973 to 1977, Mr. Snyder was an independent oil
operator in Texas and Oklahoma. Previously, he was a director and the Executive
Vice President of May Petroleum Inc. where he served from 1971 to 1973. From
1969 to 1971, Mr. Snyder was with Canadian-American Resources Fund, Inc., which
he founded. From 1964 to 1966, Mr. Snyder was employed by Humble Oil and
Refining Company (currently Exxon Co., USA) as a petroleum engineer. He received
his Bachelor of Science Degree in Petroleum Engineering from the University of
Oklahoma and his Masters Degree in Business Administration from the Harvard
University Graduate School of Business Administration. In 1995, Mr. Snyder was
named Wildcatter of the Year by the Independent Petroleum Association of
Mountain States. Mr. Snyder is a director of SOCO International plc, an
international oil and gas company listed on the London Stock Exchange; a
director of the Community Enrichment center of Fort Worth; a director of Texas
Capital Bancshares, Inc.; and is a member of the National Petroleum Council. Mr.
Snyder serves as the Chairman of the Executive Committee.
Edward T. Story (55), director since 1996, is President of SOCO
International plc, an independent international oil and gas company traded on
the London Stock Exchange. From 1991 until the formation of SOCO International
plc in 1997 through the consolidation of international interests of the Company
and various third parties, Mr. Story was Vice President -- International of the
Company and President of SOCO International, Inc. From 1990 to 1991, Mr. Story
was Chairman of the Board of a jointly-owned Thai/US company, Thaitex Petroleum
Company. Mr. Story was co-founder, Vice Chairman of the Board and Chief
Financial Officer of Conquest Exploration Company from 1981 to 1990. He served
as Vice President, Finance and Chief Financial Officer of Superior Oil Company
from 1979 to 1981. Mr. Story held the positions of Exploration and Production
Controller and Refining Controller with Exxon USA from 1975 to 1979. He held
various positions in Esso Standard's international companies from 1966 to 1975.
Mr. Story serves as a director of Cairn Energy plc, an independent international
oil and gas company traded on the London Stock Exchange, First BanksAmerica,
Inc., a bank holding company listed on the New York Stock Exchange, Hallwood
Realty Corporation, the general partner of Hallwood Realty Partners, L.P., an
American Stock Exchange-listed real estate limited partnership, and Sen Hong
Resources Limited, an oil and gas company listed on the Hong Kong Stock
Exchange. Mr. Story serves on the Audit Committee.
2
<PAGE>
Executive Officers
Set forth below is a list of the Registrant's executive officers,
including their ages and certain information relating to their business
experience. Information concerning John C. Snyder, Chief Executive Officer, and
William G. Hargett, President and Chief Operating Officer, is incorporated by
reference from above.
John C. Snyder (57), Chairman of the Board and Chief Executive Officer
- See above.
William G. Hargett (49), President and Chief Operating Officer
- See above.
Charles A. Brown (51), Senior Vice President -- Rocky Mountain Region,
joined the Company in 1987. He was a petroleum engineering consultant from 1986
to 1987. He served as President of CBW Services, Inc., a petroleum engineering
consulting firm, from 1979 to 1986 and was employed by Kansas Nebraska Natural
Gas Company from 1971 to 1979 and Amerada Hess Corporation from 1969 to 1971.
Mr. Brown received his Bachelor of Science degree in Petroleum Engineering from
the Colorado School of Mines.
Steven M. Burr (42), Vice President -- Engineering and Planning, joined
the Company in 1987. From 1982 to 1987, he was a Vice President with the
petroleum engineering consulting firm of Netherland, Sewell & Associates, Inc.
From 1978 to 1982, Mr. Burr was employed by Exxon Company, USA in the Production
Department. Mr. Burr received his Bachelor of Science degree in Civil
Engineering from Tulane University and attended the Program for Management
Development at the Graduate Business School of Harvard University..
Mark A. Jackson (43), Senior Vice President and Chief Financial
Officer, joined the Company in August, 1997. Prior to joining the Company, Mr.
Jackson served in various executive capacities at Apache Corporation including
Vice President and Controller from 1988, Vice President, Finance from 1994 and
Chief Financial Officer from 1996. From 1984 until 1988, Mr. Jackson served as
Assistant Controller of Diamond Shamrock and Maxus Energy Company. Mr. Jackson
began his career with the certified public accounting firm of Ernst & Ernst,
specializing in the oil and gas industry. Mr. Jackson received his Bachelor of
Science degree in Accounting from Oklahoma Christian University.
John H. Karnes (37), Vice President -- General Counsel and Secretary,
joined the Company in 1998. Mr. Karnes served as Senior Vice President of
FIRSTPLUS Financial Group, Inc., a specialty consumer lending company, from
January to June of 1998. He was Vice President and General Counsel of Pillowtex
Corporation, a home textile manufacturer, throughout 1997, and of AMRE, Inc., a
national franchising company, throughout 1996. From 1994 to 1995, he was Vice
President and General Counsel of Pratt Hotel Corporation, a hotel management and
gaming company. From 1991 to 1994 he served as Deputy General Counsel of Apache
Corporation, an oil and gas exploration and production company. Prior to joining
Apache, he was in private practice with the national law firm of Kirkland &
Ellis, where he specialized in mergers and acquisitions.
David M. Posner (45), Vice President -- Marketing, joined the Company
in 1991. From 1980 to 1991 he held various positions with Ladd Petroleum
Corporation (a subsidiary of the General Electric Company) including Vice
President of Gas Gathering, Processing and Marketing. Mr. Posner received his
Bachelor of Arts degree from Brown University and his Master of Science in
Mineral Economics from the Colorado School of Mines.
Roger B. Rice (54), Vice President -- Human Resources, joined the
Company in 1997. From 1992 to 1997, Mr. Rice was Vice President Human Resources
and Administration with Apache Corporation. From 1989 to 1992, he was Managing
Consultant with Barton Raben, Inc., an executive search and consulting firm
specializing in the energy industry. Previously, Mr. Rice was Vice President
Administration for The Superior Oil Company and held various management
positions with Shell Oil Company. He earned his Bachelor of Arts degree and
Masters degree in Business Administration from Texas Technological University.
Jay H. Smith (52), Senior Vice President -- Southern Region. Joined the
Company in February 1998. From 1993 until he joined the Company, Mr. Smith
served as Executive Vice President of Sonat Exploration Company. From 1983 until
1993 Mr. Smith served in a variety of positions with BP Exploration and Sohio
Petroleum Company, most recently as Chief of Staff, Western Hemisphere North.
From 1981 to 1983, Mr. Smith was Vice President - Operations of Spectrum Oil and
Gas Company. Mr. Smith began his career with Shell Oil Company in 1968. Mr.
Smith received his Bachelor of Science degree from Syracuse University.
3
<PAGE>
John M. Thibeaux (49), Vice President -- Corporate Development, joined
the Company in May of 1998. Before coming to the Company, Mr. Thibeaux was with
J.P. Morgan from 1990 to 1998 where he served as Vice President of Engineering
and Acquisitions. Most of his career was spent at Tenneco Oil Company where he
held various positions, including Area Manager in the International Division,
Planning Manager, Division Reservoir Engineer, Rocky Mountain Division,
Reservoir Engineer, and Supervisor for Gulf Coast Division. Before joining
Tenneco Oil, Mr. Thibeaux served in the U.S. Navy from 1973 to 1976, where he
acquired the rank of Lieutenant JG and was a Petroleum Engineer for the Naval
Petroleum Reserves. Mr. Thibeaux started his career with Atlantic Richfield
Company in 1972, where he spent a year as a Production Engineer. His educational
background includes a Bachelor of Science degree in Petroleum Engineering from
University of Southwestern Louisiana received in 1972, and a Masters of Business
Administration degree from University of Houston, received in 1985.
Rodney L. Waller (49), Vice President -- Treasurer, joined the Company
in 1977 as an officer. Since that time, Mr. Waller has performed various
corporate, operational and finance functions. Previously, Mr. Waller was
employed by Arthur Andersen & Co. Mr. Waller received his Bachelor of Arts
degree from Harding University.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934 requires executive
officers, directors and persons who beneficially own more than ten percent of
the Company's stock to file initial reports of ownership and reports of changes
of ownership with the SEC and the New York Stock Exchange. Copies of such
reports are required to be furnished to the Company. Based solely on a review of
such forms furnished to the Company and certain written representations from the
executive officers and directors, the Company believes that all Section 16(a)
filing requirements applicable to its executive officers, directors and greater
than 10% beneficial owners were complied with on a timely basis.
ITEM 11. EXECUTIVE COMPENSATION
Shown below is information concerning the annual and long-term
compensation for services in all capacities to the Company for the fiscal years
ended December 31, 1998, 1997 and 1996 of those persons who were at December 31,
1998 the chief executive officer and the other four most highly compensated
executive officers of the Company (the "Named Officers").
<TABLE>
SUMMARY COMPENSATION TABLE (a)
<CAPTION>
Long-Term
------------
Annual Compensation Compensation
------------------- ------------
Stock
Option All
Name and Position Year Salary Bonus (b) Awards (c) Other (d)
- ----------------------- -------- ------------- ------------ ------------- -------------
<S> <C> <C> <C> <C> <C>
John C. Snyder 1998 $414,164 $180,000 80,000 $42,006
Chairman and Chief 1997 384,984 200,000 77,000 42,874
Executive Officer 1996 381,652 400,000 48,700 41,179
William G. Hargett 1998 345,824 150,000 65,000 42,006
President and Chief 1997 215,615 150,000 200,000 24,931
Operating Officer 1996 -- -- -- --
Charles A. Brown 1998 226,922 150,000 20,400 42,006
Senior Vice President, 1997 183,333 85,000 17,500 42,874
Rocky Mountain Region 1996 174,167 30,000 13,600 41,179
Mark A. Jackson 1998 246,672 350,000 24,300 42,006
Senior Vice President, 1997 95,830 50,000 75,000 24,586
Chief Financial Officer 1996 -- -- -- --
John H. Karnes 1998 103,125 200,000 50,000 17,877
Vice President and 1997 -- -- -- --
General Counsel 1996 -- -- -- --
<FN>
(a) Excludes the cost to the Company of other compensation that, with
respect to any Named Officer, does not exceed the lesser of $50,000 or
10% of the Named Officer's salary and bonus.
(b) Bonuses are paid in March of each year based on performance during the
preceding year. Bonus amounts are included in the year preceding the
year in which the bonus is paid.
(c) Stock options are generally granted in February of each year based in
part on performance during the preceding year.
(d) Includes amounts accrued for the fiscal year for the Named Officers
under the Company's Profit Sharing and Savings Plan and as matching
contributions under the Company's Deferred Compensation Plan for Select
Employees as follows:
</FN>
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
Profit Sharing Plan Deferred Compensation Plan
------------------------------ -----------------------------
1996 1997 1998 1996 1997 1998
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
John C. Snyder $16,179 $17,874 $17,006 $25,000 $25,000 $25,000
William G. Hargett -- -- 17,006 -- 24,931 25,000
Charles A. Brown 16,179 17,874 17,006 25,000 25,000 25,000
Mark A. Jackson -- -- 17,006 -- 24,586 25,000
John H. Karnes -- -- -- -- -- 17,877
</TABLE>
Stock Options
Shown below is information with respect to options to purchase common
stock granted during 1998 to the Named Officers. No stock appreciation rights
("SARs") were granted during 1998.
<TABLE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<CAPTION>
Percentage Potential Realizable Value
of Total at Assumed Annual Rates of
Options Grants in Exercise Expiration Stock Price Appreciation (b)
Name Granted (a) Year Price Date 5% 10%
- ----------------- ----------- ---- ----------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
John C. Snyder 80,000 9.26 $17.6875 2/17/03 $390,936 $863,872
William G. Hargett 65,000 7.52 $17.6875 2/17/03 317,636 701,896
Charles A. Brown 20,400 2.36 $17.6875 2/17/03 99,689 220,287
Mark A. Jackson 25,300 2.93 $17.6875 2/17/03 123,634 273,200
John H. Karnes 50,000 5.79 $19.8750 7/20/03 274,555 606,695
<FN>
(a) All options were awarded under the Snyder Oil Corporation Restated 1989
Stock Option Plan. Options awarded during 1998 must become exercisable
as follows: one year after grant: 20%; two years after grant:
30%; and three years after grant: 40%.
(b) The assumed annual rates of stock price appreciation used in showing the
potential realizable value of stock option grants are prescribed by
rules of the Securities and Exchange Commission (the "SEC"). The actual
realized value of the options may be significantly greater or less than
the amounts shown. For options granted during 1998 at an exercise price
of $17.6875, the values shown for 5% and 10% appreciation equate to a
stock price of $22.5742 and $28.4859, respectively, at the expiration
date of the options.
</FN>
</TABLE>
5
<PAGE>
<TABLE>
AGGREGATED OPTION/SAR EXERCISES
IN LAST FISCAL YEAR AND YEAR-END OPTION/SAR VALUES
<CAPTION>
Value of
Number of Unexercised Unexercised In-the-Money
Options/SARS YearEnd 1998 Options/SARS at Year End 1998
Shares Acquired Value -------------------------- ------------------------------
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- ------------------ ---------------- --------- ----------- ------------- ----------- -------------
- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
John C. Snyder 46,000 $218,500 148,920 153,380 $586,373 $603,934
William G. Hargett -- -- 60,000 205,000 -- --
Charles A. Brown -- -- 68,610 38,090 270,152 149,979
Mark A. Jackson 20,000 201,250 22,500 97,800 -- 134,375
John H. Karnes -- -- -- 50,000 -- --
</TABLE>
Compensation Committee Report on Executive Compensation
The Compensation Committee of the Board of Directors has furnished the
following report on executive compensation:
The Compensation Committee of the Board of Directors, which is composed
of independent members of the Board, establishes the general compensation
policies of the Company, establishes the compensation plans and compensation
levels for officers and certain other key employees, and administers the
Company's stock option plan and deferred compensation plan. In establishing
compensation levels, the Committee establishes the specific compensation of
Messrs. Snyder and Hargett. For other officers and key employees, the Committee
establishes compensation ranges for each position and reviews management's
compensation recommendations within the prescribed ranges.
The Committee believes that the cash compensation of executive
officers, as well as other key employees, should be competitive with other
companies while, within the Company, being fair and correlative to the level of
each individual's personal performance. Annual awards of stock options are
intended both to retain executives and to motivate them to improve long-term
stock market performance.
Total cash compensation (base salary plus "expected bonus") for Mr.
Snyder and the Company's other executives during 1998 was targeted at the median
level for executives having similar responsibilities within the Company's
30-company peer group. This peer group was established in 1997 as part of an
executive compensation analysis performed by independent consultants. The peer
group is intended to be representative of the companies against which the
Company competes for its personnel requirements. Actual cash compensation for
1998 was set within the ranges indicated by this survey and other more general
salary surveys based upon the individual's responsibilities and performance.
Targeting cash compensation at the peer-group median is intended to induce
Company executives to make extraordinary personal contributions in order to
maximize their incentive bonus awards, thereby creating a strong relationship
between company performance and compensation level.
During 1998, Mr. Snyder's base salary was increased $20,000, or
approximately 5%. Generally, changes in Mr. Snyder's compensation are not based
on any particular measure of performance, but are determined subjectively by the
Committee based on corporate performance, salaries of chief executive officers
of comparable companies and other factors considered applicable by the
Committee.
Mr. Snyder's bonus is based primarily on company performance. The
Committee has not established any particular formula or singled out particular
factors as more important than others. The Committee considers various factors,
including growth in reserves, net income and cash flow, as well as performance
of the Company's common stock. The Committee also considers other matters, such
as the extent to which these factors were influenced by management decisions
during the year and steps taken by management to position the Company for future
growth. Based on these and other considerations, the Committee awarded Mr.
Snyder a bonus of $180,000 for 1998. Factors considered heavily in determining
Mr. Snyder's 1998 bonus included the Company's continued reserve growth and
commendable financial performance during a period of record-setting low
commodity prices, as well as Mr. Snyder's leadership and personal time
commitment involved in facilitating the Company's pending merger with Santa Fe
Energy Resources, Inc.
6
<PAGE>
Bonuses for other officers and key employees are influenced by Company
performance, but are determined primarily based on senior management's
assessment of performance of the executive's duties and success in attaining
specific performance goals which are directed toward improving operating unit
and Company performance. In 1998, the Committee awarded exceptional incentive
bonuses to two senior executives in consideration of their extraordinary
personal contributions leading up to the merger with Santa Fe Energy Resources
Inc.
In addition to the foregoing cash compensation, the Committee also
awarded Mr. Snyder and other executives stock options during 1998 to retain and
motivate management to improve the Company's long-term stock market performance.
Options were granted at the prevailing market price and will have value only if
the price of the Company's common stock increases. Options granted have a term
of five years and vest 30% after one year, an additional 30% after two years and
are fully vested after three years, subject to the grantee's continued
employment. The Committee determined the number of options granted during the
year based on a formula under which the number of options granted is equal to a
percentage, which varies with the degree to which an individual's
responsibilities might affect the long-term price of the Company's stock, of the
individual's base salary.
Mr. Snyder and other executives also participate in a deferred
compensation plan as a means to provide additional incentives for management to
remain in the employ of the Company. Under the Plan, key employees selected by
the Committee are permitted the defer a portion of their compensation for
periods determined by them or until their employment by the Company ceases. The
Committee also determines annually the matching contribution to be made by the
Company and may, in addition, authorize additional Company contributions to be
made on behalf of designated individuals. Company matching contributions vest
over three years through December 31, 1996 and four years thereafter, and
additional Company contributions vest over the period determined by the
Committee. The Committee determined that Company contributions during 1998 would
match each participant's contribution up to 10% of the participant's salary and
would equal one-third of the participant's contributions in excess of such
amount, subject to a maximum Company contribution of $25,000 for any
participant.
COMPENSATION COMMITTEE
James E. McCormick, Chairman
Roger W. Brittain
John A. Hill
William J. Johnson
Shareholder Return Performance Presentation
Set forth below is a line graph comparing the percentage change in the
cumulative total shareholder return on the Company's common stock against the
total return of the Dow Jones Equity Market Index and the Dow Jones Secondary
Oils Index for the calendar years 1994 through 1998. None of the companies on
the Dow Jones Secondary Oils Index is included in the companies surveyed as to
compensation levels by the independent consultants advising the Compensation
Committee of the Board of Directors. The Index is composed of thirteen
companies, all of which are significantly larger than the Company, selected by
Dow Jones & Company, Inc. to represent non-major oil producers that generally do
the bulk of their business domestically. The graph assumes that the value of the
investment in the Company's common stock and each index was $100 on January 1,
1994 and that all dividends were reinvested. The closing sales prices of the
Company's common stock on the last trading days of 1993 and 1998 were $ 17.75
and $ 13.3125, respectively.
7
<PAGE>
Employment Agreements and Change in Control Arrangements
In 1997, the Company and Mr. Hargett executed an employment agreement
(the "Hargett Agreement") pursuant to which Mr. Hargett will serve as President
and Chief Operating Officer of the Company, effective May 2, 1997. The
Employment Agreement provides for (a) a minimum annual base salary of $325,000,
(b) a minimum bonus for 1997 in the amount of $90,278, (c) a $50,000 payment to
cover Mr. Hargett's expenses for relocating to Fort Worth and (d) an initial
grant of a five-year option (vesting over three years) to purchase 200,000
shares of Common Stock at a price per share equal to $16.25, the fair market
value of a share of Common Stock on the day Mr. Hargett's employment commenced.
The Employment Agreement has an initial four-year term, and unless either party
terminates the Employment Agreement or provides notice that the term should not
be extended, the term will be extended automatically for an additional one year
period as of May 2 of each year (beginning on May 2, 1999). As a result, the
Employment Agreement will generally have a remaining term of at least two years.
If Mr. Hargett's employment is terminated by the Company without
"cause" (as defined) or by Mr. Hargett because of a material breach of the
Employment Agreement by the Company, a material reduction in his duties and
responsibilities or the assignment to him of duties that are materially
inconsistent with his positions with the Company, then (a) the Company will pay
Mr. Hargett a lump sum equal to the aggregate base salary for the remaining term
and (b) all stock options awarded to Mr. Hargett will become fully exercisable
for a limited period of time. Mr. Hargett will also receive these termination
benefits if he terminates his employment (i) for any reason whatsoever on or
within 12 months after a "change in control" (as defined) or (ii) during the
60-day period commencing on May 2, 1999 because, in his judgment, and subject to
the concurrence of the Compensation Committee, the scope of his authority within
the Company is not appropriate. In addition, if any payment or distribution to
Mr. Hargett, whether or not pursuant to the Employment Agreement, is subject to
federal excise tax on "excess parachute payments," the Company is required to
pay an additional amount so that Mr. Hargett receives, net of taxes, an amount
sufficient to pay all such excise taxes.
The Company has entered into Change of Control Severance Agreements
with each of its officers (other than Mr. Hargett). Pursuant to these
agreements, if within two years following a change of control (as defined) an
officer's employment is terminated by the Company without "cause" (as defined)
or by the officer because of a reduction in his compensation or entitlements to
benefits or a significant reduction in his duties and responsibilities, then (a)
the Company will pay to the officer a lump sum equal to two years' aggregate
base salary and (b) all stock options awarded to the officer will become fully
exercisable for a limited period of time. In addition, if any payment or
8
<PAGE>
distribution to the officer, whether or not pursuant to the agreement, is
subject to federal excise tax on "excess parachute payments," the Company is
required to pay an additional amount so that the officer receives, net of taxes,
an amount sufficient to pay all such excise taxes.
The Company has adopted the Snyder Oil Corporation Supplemental
Executive Retirement Plan pursuant to which eligible participants receive fixed
monthly retirement benefits upon retirement from the Company after reaching age
55. Participation in the plan is limited to a select group of management and
highly-compensated employees identified as influential within the Company and
selected to participate by the Board of Directors. The plan is a top-hat plan
for purposes of the Employee Retirement Income Security Act of 1974 and is not
designed to be qualified under to Section 401(a) of the Internal Revenue Code of
1986, as amended. The amount of benefits payable under the plan are
discretionary based on the Board's perception of the value of each participant's
contribution to the Company and the level of benefits provided by peer companies
to comparably situated individuals. Benefits are not determined by reference to
the participant's compensation or years of service. The Company funds its
obligations to each participant into a grantor trust for the participant upon
the participant reaching the age of 55. The only employee currently
participating in the plan is John C. Snyder. Upon Mr. Snyder's retirement from
the Company, Mr. Snyder will be entitled to monthly retirement benefits equal to
$21,750 per month for life and his surviving spouse will be entitled to $14,507
for life. Although the adoption of the plan was not related to the Company's
pending merger into Santa Fe Energy Resources, Inc., in light of the timing of
the merger, the Company has agreed to indemnify Mr. Snyder for any excise tax
under Section 4999 of the Internal Revenue Code of 1986 (and any interest,
penalties and other amounts related thereto, including additional income and
other taxes arising with respect to such indemnification) assessed against him
relating to the payment of benefits under the plan as a result of the merger.
Director Compensation
Non-employee directors of the Company receive an annual retainer,
payable quarterly, of 2,000 shares of the Company's common stock. In addition,
non-employee directors receive $2,000 for attendance at each Board of Directors
meeting and $750 for attendance at each meeting of a committee of the Board of
Directors. Non-employee directors also receive $750 for each telephone meeting
in which they participate. Non-employee directors are reimbursed for expenses
incurred in attending Board of Directors and committee meetings, including those
for travel, food and lodging. Directors and members of committees of the Board
of Directors who are employees of the Company or its affiliates are not
compensated for their Board of Directors and committee activities. From time to
time in the discretion of the Board, the Board may grant additional compensation
to one or more non-employee directors.
The Directors Stock Plan also provides that the Company will
automatically grant to each non-employee director, on the date of his
appointment, election, reappointment or reelection as a member of the Board of
Directors, a stock option for 2,500 shares of common stock. The exercise price
for all Director Options is the fair market value on the date of grant. The
duration of each option is five years from the date of award, and each option
vests as to 30% of the shares covered after one year, an additional 30% of the
shares after two years, and all remaining shares three years after the date of
grant.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERSHIP AND MANAGEMENT
The following table provides information as to the beneficial ownership
of common stock of the Company as of April 20, 1999, by each person who, to the
knowledge of the Company, beneficially owned 5% or more of the common stock,
each director of the Company, each executive officer named in the Summary
Compensation Table and by all executive officers and directors of the Company as
a group. No directors or executive officers of the Company beneficially owns any
equity securities of the Company other than common stock. Unless indicated
otherwise, the business address of each individual listed below is: c/o Snyder
Oil Corporation, 777 Main Street, Fort Worth, Texas 76102.
9
<PAGE>
<TABLE>
<CAPTION>
Common Stock
-----------------------------------
Number of Percent of
Shares Class
Owned (a) (b) Outstanding
------------- -----------
<S> <C> <C>
John C. Snyder 1,932,897 5.7 %
Roger W. Brittain 35,285 *
William G. Hargett 140,500 *
John A. Hill 108,454 *
William J. Johnson 18,450 *
B.J. Kellenberger 29,523 *
Harold R. Logan, Jr. 5,550 *
James E. McCormick 24,450 *
Edward T. Story 560,817 1.7
Charles A. Brown 64,620 *
Mark A. Jackson 30,090 *
John H. Karnes -- *
All executive officers and
directors as a group 3,242,000 9.5
Schroder Capital Management (c) 1,829,200 5.5
787 Seventh Avenue
New York, New York 10019-6090
The Crabbe Huson Group, Inc. (d) 1,793,850 5.4
121 SW Morrison, Suite 1400
Portland, Oregon 97204
* Less than 1%.
<FN>
(a) The number of shares in the table includes 506,750 shares that the named
executive officers and directors and 699,520 shares that all executive
officers and directors as a group have the right to acquire within 60 days
after March 19, 1999 including 167,500 for Mr. Snyder, 139,500 for Mr.
Hargett and 59,050 for Mr.
Story.
(b) Of the shares shown, beneficial ownership of 303,760 is disclaimed by Mr.
Snyder and by all executive officers and directors as a group. To the
knowledge of the Company, each person holds sole investment and voting
power over the shares shown, except Mr. Snyder shares such powers with
respect to 3,760 shares, Mr. Brittain shares such powers with respect to
1,750 shares, Mr. Hill shares investment power with respect to 37,006
shares and all officers and directors as a group share such powers with
respect to 42,516 shares.
(c) The number of shares is based on information set forth in Schedule 13G
dated February 8, 1999, by Schroder Capital Management Inc. Schroder
Capital Management Inc. has sole voting power of 1,617,700 shares and sole
dispositive power of 1,829,200 shares
(d) The number of shares is based on information set forth in Amendment No. 1
to the Schedule 13G dated February 12, 1999 by The Crabbe Huson Group,
Inc. The shares are owned by clients of The Crabbe Huson Group with whom
it shares voting and dispositive power.
</FN>
</TABLE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In May of 1997, Edward T. Story, a former executive of the Company and
currently a director, issued notes to the Company with an aggregate principal
amount of $590,500. The notes represented the exercise price of options issued
to Mr. Story relating to 10% of the stock of each of the Company's two
international subsidiaries. The notes initially were unsecured, bore interest at
the rate of 1% per month and were due on April 10, 1998. In July of 1997, the
interest rate on the notes was reduced to two percent over the Company's
incremental cost of funds and Mr. Story collateralized the notes with 50,000
shares of common stock of the Company. In March of 1998, Mr. Story repaid all
amounts outstanding under the notes, including $69,581 in accrued interest.
10
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
(a) 1. Reference is made to Item 8 on page 31.
2. Schedules otherwise required by Item 8 have been omitted as
not required or not applicable.
3. Exhibits.
3.1 - Certificate of Incorporation of Registrant -- incorporated by
reference from Exhibit 3.1 to the Registrant's Registration
Statement on Form S-4 (Registration No. 33-33455).
3.1.1 - Certificate of Amendment to Certificate of Incorporation of
Registrant filed February 9, 1990 -- incorporated by
reference from Exhibit 3.1.1 to the Registrant's Registration
Statement on Form S-4 (Registration No. 33-33455).
3.1.2 - Certificate of Amendment to Certificate of Incorporation of
Registrant filed May 22, 1991 -- incorporated by reference
from Exhibit 3.1.2 to the Registrant's Registration Statement
on Form S-1 (Registration No. 33-43106).
3.1.3 - Certificate of Amendment to Certificate of Incorporation of
Registrant filed May 24, 1993 -- incorporated by reference
from Exhibit 3.1.5 to the Registrant's Quarterly Report on
Form 10-Q for the quarter-ended June 30, 1993 (File No.
1-10509).
3.2 - By-laws of the Registrant, as amended -- incorporated by
reference from Exhibit 3.2 to the Registrant's Annual Report
on Form 10-K for the fiscal year ended December 31, 1997
(File No.1-10509).
4.1 - Indenture dated as of June 10, 1997 between the Registrant
and Texas Commerce Bank National Association relating to
Registrant's 8 3/4percent Senior Subordinated Notes due 2007
-- incorporated by reference from Exhibit 4.1 to the
Registrant's Current Report on Form 8-K dated June 10, 1997
(File No. 1-10509).
4.1.1 - First Supplemental Indenture dated as of June 10, 1997 to
Exhibit 4.1.5 -- incorporated by reference from Exhibit 4.2
to the Registrant's Current Report on Form 8-K dated June 10,
1997 (File No. 1-10509).
4.1.2 - Second Supplemental Indenture dated as of June 10, 1997 to
Exhibit 4.1.5 -- incorporated by reference from Exhibit 4.3
to the Registrant's Current Report on Form 8-K dated June 10,
1997 (File No. 1-10509).
4.2 - Rights Agreement, dated as of May 27, 1997, between the
Registrant and ChaseMellon Shareholder Services, L.L.C., as
Rights Agent, specifying the terms of the Rights, which
includes the form of Certificate of Designation of Junior
Participating Preferred Stock as Exhibit A and the form of
Right Certificate as Exhibit B -- incorporated by reference
from Exhibit 1 to the Registrant's Current Report on Form 8-K
dated June 2, 1997 (File No. 1-10509).
*4.3 - Amendment Number 1 to Rights Agreement, dated as of January
13, 1999, between the Registrant and ChaseMellon Shareholder
Services, L.L.C., as Rights Agent.
4.4 - Form of Certificate of Designation of Junior Participating
Preferred Stock setting forth the terms of the Junior
Participating Preferred Stock, par value $.01 per share --
incorporated by reference from Exhibit A to Exhibit 1 to the
Registrant's Current Report on Form 8-K dated June 2, 1997
(File No. 1-10509).
11
<PAGE>
10.1 - Agreement and Plan of Merger, dated January 13, 1999, between
Registrant and Santa Fe Energy Resources Inc. -- incorporated
by reference from Exhibit 2.1 to Santa Fe Energy Resources,
Inc.'s Registration Statement on Form S-4
(Registration No. 333-71595).
10.2 - Snyder Oil Corporation 1990 Stock Option Plan for
Non-Employee Directors -- incorporated by reference from
Exhibit 10.4 to the Registrant's Registration Statement on
Form S-4(Registration No. 33-33455).
10.2.1 - Amendment dated May 20, 1992 to the Registrant's 1990 Stock
Plan for Non-Employee Directors' incorporated by reference
from Exhibit 10.1.1 to the Registrant's Quarterly Report on
Form 10-Q for the quarter-ended June 30, 1993 (File No.
1-10509).
10.3 - Registrant's Amended and Restated 1989 Stock Option Plan --
incorporated by reference from Exhibit 10.2 to the
Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1997 (File No. 1-10509).
10.4 - Registrant's Deferred Compensation Plan for Select Employees,
adopted effective June 1, 1994, as amended -- incorporated by
reference from Exhibit 10.3 to the Registrant's Annual Report
on Form 10-K for the fiscal year ended December 31, 1997
(File No. 1-10509).
10.5 - Registrant's Profit Sharing & Savings Plan and Trust as
amended and restated effective October 1, 1993 --
incorporated by reference from Exhibit 10.12 to the
Registrant's Quarterly Report on Form 10-Q for the
quarter-ended September 30, 1993 (File No. 1-10509).
10.6 - Form of Indemnification Agreement-- incorporated by reference
from Exhibit 10.15 to the Registrant's Registration Statement
on Form S-4 (Registration No. 33-33455).
10.7 - Form of Change in Control Protection Agreement-- incorporated
by reference from Exhibit 10.11 to the Registrant's
Registration Statement on Form S-1 (Registration
No. 33-43106).
10.8 - Long-term Retention and Incentive Plan and Agreement between
the Registrant and Charles A. Brown -- incorporated by
reference from Exhibit 10.1.2 to the Registrant's Quarterly
Report on Form 10-Q for the quarter-ended June 30, 1993 (File
No. 1-10509).
10.9 - Agreement dated as of April 30, 1993 between the Registrant
and Edward T. Story -- incorporated by reference from Exhibit
10.8 to the Registrant's Annual Report on Form 10-K for the
year ended December 31, 1993 (File No. 1-10509).
10.10 - Formation and Capitalization Agreement dated as of December
30, 1996 among Registrant, SOCO International, Inc., SOCO
International Holdings, Inc., SOCO International Operations,
Inc. and Edward T. Story-- incorporated by reference from
Exhibit 10.9 to the Registrant's Annual Report on Form 10-K
for the year ended December 31, 1996 (File No. 1-10509).
10.10.1 - Promissory Note dated December 30, 1996 from Edward T.
Story payable to the order of SOCO International Holdings,
Inc. -- incorporated by reference from Exhibit 10.9.1 to the
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1996 (File No. 1-10509).
10.10.2 - Promissory Note dated December 30, 1996 from Edward T.
Story payable to the order of SOCO International Operations,
Inc. -- incorporated by reference from Exhibit 10.9.2 to the
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1996 (File No. 1-10509).
12
<PAGE>
10.10.3 - Exchange Agreement dated July 10, 1997 between SOCO
International, Inc. and Edward T. Story, Jr. -- incorporated
by reference from Exhibit 10.9.3 to the Registrant's Annual
Report on Form 10-K for the fiscal year ended December 31,
1997 (File No. 1-10509).
10.11 - Amended and Restated Stock Repurchase Agreement dated as of
July 31, 1997 and amended and restated as of September 18,
1997 among the Registrant and Patina Oil & Gas Corporation--
incorporated by reference to Exhibit 10.12 to Amendment No. 2
to the Registration Statement on Form S-3 of Patina Oil & Gas
Corporation (Commission File No. 333-32671).
10.12 - Fifth Restated Credit Agreement dated as of June 30, 1994
among the Registrant and the banks party thereto --
incorporated by reference from Exhibit 10.11 to the
Registrant's Quarterly Report on Form 10-Q for the
quarter-ended June 30, 1994 (File No. 1-10509).
10.12.1 - First Amendment dated as of May 1, 1995 to Fifth Restated
Credit Agreement -- incorporated by reference from Exhibit
10.11.1 to Registrant's Quarterly Report on Form 10-Q for the
quarter-ended June 30, 1995 (File No. 1-10509).
10.12.2 - Second Amendment dated as of June 30, 1995 to Fifth
Restated Credit Agreement -- incorporated by reference from
Exhibit 10.12.2 to Registrant's Quarterly Report on Form 10-Q
for the quarter-ended June 30, 1995 (File No. 1-10509).
10.12.3 - Third Amendment dated as of November 1, 1995 to Fifth
Restated Credit Agreement -- incorporated by reference from
Exhibit 10.11.3 to Registrant's Annual Report on Form 10-K of
the year ended December 31, 1995 (File No. 1-10509).
10.12.4 - Fourth Amendment dated as of April 4, 1996 to Fifth
Restated Credit Agreement -- incorporated by reference to
Registrant's Quarterly Report on Form 10-Q for the
quarter-ended March 31, 1996 (File No. 1-10509).
10.12.5 - Fifth Amendment dated as of November 1, 1996 to Fifth
Restated Credit Agreement -- incorporated by reference from
Exhibit 10.11.5 to the Registrant's Annual Report on Form
10-K for the year ended December 31, 1996 (File No. 1-10509).
10.12.6 - Sixth Amendment dated as of May 19, 1997 to Fifth Restated
Credit Agreement -- incorporated by reference from Exhibit
10.11.6 to the Registrant's Quarterly Report on Form 10-Q for
the quarter ended June 30, 1997 (File No. 1-10509).
10.12.7 - Seventh Amendment dated as of October 13, 1997 to Fifth
Restated Credit Agreement -- incorporated by reference from
Exhibit 10.11.7 to the Registrant's Annual Report on Form
10-K for the fiscal year ended December 31, 1997 (File No.
1-10509).
*10.12.8 - Eighth Amendment dated as of November 1, 1998 to Fifth
Restated Credit Agreement.
10.13 - Directors Deferral Plan for Independent Directors of the
Registrant-- incorporated by reference from Exhibit 10.12 to
the Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1997 (File No. 1-10509).
10.14 - Amended and Restated Agreement and Plan of Merger dated as
of March 20, 1996 among Registrant, Patina Oil & Gas
Corporation, Patina Merger Corporation and Gerrity Oil & Gas
Corporation -- incorporated by reference from Exhibit 2.1 to
Amendment No. 1 to the Registration Statement on Form S-4 of
Patina Oil & Gas Corporation (Registration No. 333-572).
13
<PAGE>
10.15 - Employment Agreement effective as of May 2, 1997 between
Registrant and William G. Hargett -- incorporated by
reference from Exhibit 1 to the Registrant's Current Report
on Form 8-K dated April 24, 1997 (File No. 1-10509).
10.16 - Indemnification Agreement dated as of May 2, 1997 between
Registrant and William G. Hargett -- incorporated by
reference from Exhibit 2 to the Registrant's Current Report
on Form 8-K dated April 24, 1997 (File No. 1-10509).
10.17 - Severance Agreement dated as of April 17, 1997 between
Registrant and Thomas J. Edelman -- incorporated by reference
from Exhibit 3 to the Registrant's Current Report on Form 8-K
dated April 24, 1997 (File No. 1-10509).
10.18 - Advisory Agreement entered into effective as of May 1, 1997
between Registrant and Thomas J. Edelman -- incorporated by
reference from Exhibit 4 to the Registrant's Current Report
on Form 8-K dated April 24, 1997 (File No. 1-10509).
#10.19 - Form of Supplemental Executive Retirement Plan.
#10.20 - Form of Supplemental Executive Retirement Plan Agreement
between Snyder Oil Corporation and John C. Snyder.
*12 - Computation of Ratio of Earnings to Fixed Charges and Ratio
of Earnings to Combined Fixed Charges and Preferred Stock
Dividends.
*22.1 - Subsidiaries of the Registrant.
#23.1 - Opinion of Arthur Andersen LLP.
*23.2 - Consent of Netherland, Sewell & Associates, Inc.
*27 - Financial Data Schedule.
*99.1 - Reserve letter from Netherland, Sewell & Associates, Inc.
dated February 3, 1999 to the Registrant interest as of
December 31, 1998.
(b) Current reports on Form 8-K filed during the quarter ended
December 31, 1998.
* Previously filed in connection with Registrant's Annual Report on Form
10-K for the fiscal year ended December 31, 1998.
# Filed herewith in connection with Amendment No.2 to Registrant's Annual
Report on Form 10-K for the fiscal year ended December 31, 1998.
14
<PAGE>
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
/s/ John C. Snyder * April 30, 1999
- -------------------------
Director and Chairman of the Board
John C. Snyder (Principal Executive Officer)
/s/ William G. Hargett * April 30, 1999
- ------------------------- Director, President and Chief
William G. Hargett Operating Officer
/s/ Roger W. Brittain * April 30, 1999
- ------------------------- Director
Roger W. Brittain
/s/ John A. Hill * April 30, 1999
- -------------------------- Director
John A. Hill
/s/ William J. Johnson * April 30, 1999
- -------------------------- Director
William J. Johnson
/s/ B. J. Kellenberger * April 30, 1999
- -------------------------- Director
B. J. Kellenberger
/s/ Harold R. Logan, Jr. * April 30, 1999
- -------------------------- Director
Harold R. Logan, Jr.
/s/ James E. McCormick * April 30, 1999
- ------------------------- Director
James E. McCormick
/s/ Edward T. Story * April 30, 1999
- ------------------------- Director
Edward T. Story
/s/ Mark A. Jackson * April 30, 1999
- ------------------------- Senior Vice President and Chief
Mark A. Jackson Financial Officer (Principal Financial
and Accounting Officer)
*By: /s/ John H. Karnes
---------------------
John H. Karnes
Attorney-in-Fact
EXHIBIT 10.19
SNYDER OIL CORPORATION
RABBI TRUST
THIS AGREEMENT made this day of ___________, 1999, by and between
Snyder Oil Corporation (the "Company") and (the "Trustee").
W I T N E S S E T H:
WHEREAS, the Company has adopted the Snyder Oil Corporation
Supplemental Executive Retirement Plan (the "Plan") with an initial effective
date of January 12, 1999, a copy of which is attached hereto as Appendix A,
pursuant to which the Company has agreed to pay certain benefits to eligible
employees upon the occurrence of certain events as described in the Plan; and
WHEREAS, the Company wishes to establish a trust (the "Trust") and to
contribute to the Trust assets that shall be held therein, subject to the claims
of the Company's creditors in the event of the Company's Insolvency, as herein
defined, to serve as a reserve for the discharge of the Company's obligations
under the Plan to participants as of the initial effective date of the Plan,
until such benefits are paid to Plan participants and their beneficiaries in
such manner and at such times as specified in the Plan; and
WHEREAS, it is the intention of the parties that the Trust shall
constitute an unfunded arrangement and shall not affect the status of the Plan
as an unfunded plan maintained for the purpose of providing deferred
compensation for a select group of management or highly compensated employees
for purposes of Title I of the Employee Retirement Income Security Act of 1974;
and
WHEREAS, it is the intention of the Company to make contributions to
the Trust to provide itself with a source of funds to assist it in meeting its
obligations under the Plan to participants as of the initial effective date of
the Plan;
WHEREAS, the Trust shall not be used as a source of funds to assist in
satisfying any liabilities accrued with respect to participants who enter the
Plan on or after the initial effective date of the Plan, and such participants'
benefits, instead, shall be paid from the general assets of the Company or
another unfunded trust arrangement;
NOW, THEREFORE, the parties do hereby establish the Trust and agree
that the Trust shall be comprised, held, and disposed of in accordance with the
terms of this agreement ("Trust Agreement") as follows:
<PAGE>
SECTION 1. ESTABLISHMENT OF TRUST
(a) The Company hereby deposits with the Trustee in trust
________________________ ($_________), which shall become the principal of the
Trust to be held, administered, and disposed of by the Trustee as provided in
this Trust Agreement.
(b) The Trust hereby established shall be irrevocable.
(c) The Trust is intended to be a grantor trust, of which the Company
is the grantor (within the meaning of subpart E, part I, subchapter J, chapter
1, subtitle A of the Internal Revenue Code of 1986, as amended) and shall be
construed accordingly.
(d) The principal of the Trust, and any earnings thereon, shall be held
separate and apart from other funds of the Company and shall be used exclusively
for the uses and purposes of Plan participants and general creditors as herein
set forth. Plan participants and their beneficiaries shall have no preferred
claim on, or any beneficial ownership interest in, any assets of the Trust. Any
rights created under the Plan and this Trust Agreement shall be mere unsecured
contractual rights of Plan participants and their beneficiaries against the
Company. Any assets held by the Trust will be subject to the claims of the
Company's general creditors under federal and state law in the event of
Insolvency, as defined in Section 3(a) herein.
(e) Within seven (7) days following the date this Trust is executed,
the Company shall be required to irrevocably deposit additional cash or other
property to the Trust in an amount which is determined by an independent actuary
selected by the Company to be sufficient to pay each Plan participant or
beneficiary, as of the initial effective date of the Plan, the benefits payable
pursuant to the terms of the Plan, such amount to be determined as of the close
of the applicable Plan year(s).
(f) The principal of the Trust, and any earnings thereon used to pay
Plan benefits, shall be used solely to pay Plan participants as of the initial
effective date of the Plan, and beneficiaries of such participants. Any other
such individuals entitled to benefits under the Plan shall not be entitled to a
payment from the Trust. Instead, such benefits shall be paid from the general
assets of the Company or another unfunded trust arrangement.
SECTION 2. PAYMENTS TO PLAN PARTICIPANTS AND THEIR BENEFICIARIES
(a) At such time as a Plan participant is entitled to a payment under
the Plan (as determined by the Trustee after having been notified in writing by
the Company of the Plan participant's entitlement to the payment), the Plan
participant shall receive payment from the Trust Fund in an amount equal to the
benefits to which such Plan participant is entitled under the terms of the Plan.
In such event, the Trustee shall be empowered to liquidate such portion of the
Trust Fund as may be available and necessary, or to take such actions as the
Trustee deems appropriate, to satisfy the Company's obligations under the Plan.
If payment required under the terms of the Plan has not been made to the Plan
participant (whether due to the failure of the Company to notify the Trustee as
required by this paragraph or otherwise), the Plan participant may notify the
Trustee in writing of the amount (or a reasonable estimate of the amount) due
the Plan participant pursuant to the Plan and the date such amount was due and
payable. The Trustee shall notify the Company within fifteen (15) days of the
<PAGE>
receipt of such payment request. If the Company and the Plan participant do not
agree as to whether the Plan participant is entitled to a payment, the Trustee
shall apply to a court of competent jurisdiction for instructions as to whether
the distribution should be made. The Trustee shall be reimbursed from the Trust
Fund for any reasonable costs incurred by the Trustee in connection with such
litigation. If the Trust Fund is insufficient to pay such costs, then the
Company shall reimburse the Trustee. Notwithstanding the preceding sentences, if
a final determination is made that the Plan participant is not entitled to such
payment and it is determined the participant's claim for payment which resulted
in the Trustee's legal action was not made in good faith, the Plan participant,
rather than the Company, shall reimburse the Trustee and/or the Trust Fund for
any such expenses. To the extent, however, that the participant does not
reimburse any expenses paid by the Trustee for which there are not sufficient
Trust Assets to pay, such amounts shall be reimbursed by the Company.
(b) The Company may make payment of benefits directly to Plan
participants or their beneficiaries as they become due under the terms of the
Plan. The Company shall notify the Trustee of its decision to make payment of
benefits directly prior to the time amounts are payable to participants or their
beneficiaries. In addition, if the principal of the Trust, and any earnings
thereon, are not sufficient to make payments of benefits in accordance with the
terms of the Plan, the Company shall make the balance of each such payment as it
falls due directly to the Plan participant pursuant to the provisions of the
Plan and the Trustee shall not be liable to the Plan participant for the
insufficiency. The Trustee shall notify the Company where principal and earnings
are not sufficient.
SECTION 3. TRUSTEE RESPONSIBILITY REGARDING PAYMENTS TO TRUST
BENEFICIARY WHEN THE COMPANY IS INSOLVENT
(a) The Trustee shall cease payment of benefits to Plan participants
and their beneficiaries if the Company is Insolvent. The Company shall be
considered "Insolvent" for purposes of this Trust Agreement if (1) the Company
is unable to pay its debts as they become due or (2) the Company is subject to a
pending proceeding as a debtor under the United States Bankruptcy Code.
(b) At all times during the continuance of this Trust, as provided in
Section 1(d) hereof, the principal and income of the Trust shall be subject to
claims of general creditors of the Company under federal and state law as set
forth below.
(1) The Board of Directors and the Chief Executive Officer of
the Company shall have the duty to inform the Trustee in writing of the
Company's Insolvency. If a person claiming to be a creditor of the
Company alleges in writing to the Trustee that the Company has become
Insolvent, the Trustee shall determine whether the Company is Insolvent
and, pending such determination, the Trustee shall discontinue payment
of benefits to Plan participants or their beneficiaries.
(2) Unless the Trustee has actual knowledge of the Company's
Insolvency, or has received notice from the Company or a person
claiming to be a creditor alleging that the Company is Insolvent, the
<PAGE>
Trustee shall have no duty to inquire whether the Company is Insolvent.
The Trustee may in all events rely on such evidence concerning the
Company's solvency as may be furnished to the Trustee and that provides
the Trustee with a reasonable basis for making a determination
concerning the Company's solvency.
(3) If at any time the Trustee has determined that the Company
is Insolvent, the Trustee shall discontinue payments to Plan
participants or their beneficiaries and shall hold the assets of the
Trust for the benefit of the Company's general creditors. Nothing in
this Trust Agreement shall in any way diminish any rights of Plan
participants or their beneficiaries to pursue their rights as general
creditors of the Company with respect to benefits due under the Plan or
otherwise.
(4) The Trustee shall resume the payment of benefits to Plan
participants or their beneficiaries in accordance with Section 2 of
this Trust Agreement only after the Trustee has determined that the
Company is not Insolvent (or is no longer Insolvent) or pursuant to an
order of a court of competent jurisdiction.
(c) Provided that there are sufficient assets, if the Trustee
discontinues the payment of benefits from the Trust pursuant to Section 3(a) and
(b) hereof and subsequently resumes such payments, the first payment following
such discontinuance shall include the aggregate amount of all payments due to
Plan participants or their beneficiaries under the terms of the Plan for the
period of such discontinuance, less the aggregate amount of any payments made to
Plan participants or their beneficiaries by the Company in lieu of the payments
provided for hereunder during any such period of discontinuance.
SECTION 4. PAYMENTS TO THE COMPANY
Except as provided in Section 3 hereof, after the Trust has become
irrevocable, the Company shall have no right or power to direct the Trustee to
return to the Company, or to divert to others, any of the Trust assets before
all payment of benefits have been made to Plan participants, as of the initial
effective date of the Plan, and their beneficiaries pursuant to the terms of the
Plan.
SECTION 5. INVESTMENT AUTHORITY OF THE TRUSTEE
(a) In no event may the Trustee invest in securities (including stock
or rights to acquire stock) or obligations issued by the Company, other than a
de minimis amount held in common investment vehicles in which the Trustee
invests. All rights associated with assets of the Trust shall be exercised by
the Trustee or the person designated by the Trustee, and shall in no event be
exercisable by or rest with Plan participants.
(b) Subject to any other limitations stated elsewhere in this Trust
Agreement, and in addition to the authority, rights, privileges, powers, and
duties elsewhere herein vested in the Trustee, the Trustee shall also have the
following investment powers:
(1) To hold, manage, control, collect, and use the
Trust in accordance with the terms of this instrument;
<PAGE>
(2) To sell (for cash or on credit, or both), exchange, or
otherwise dispose of the whole or any part of the Trust at public or
private sale; to lease (including, but not limited to, oil, gas, or
mineral leases), rent, mortgage (including purchase money mortgages),
pledge, or otherwise encumber the whole or any part of the Trust; and
to loan or borrow money in any manner, including by joint and several
obligations, all upon such terms, regardless of the duration of the
Trust, as the Trustee may deem advisable (provided that neither the
Company nor any participant may borrow from the Trust except as
otherwise permitted herein);
(3) To invest or reinvest the Trust in property of any
description whatsoever (including, but not limited to, oil, gas, or
mineral interests; common or preferred stock; shares of investment
trusts or companies; bills, notes, and other evidences of indebtedness;
non-income producing property; and property outside of Texas);
(4) To make or hold investments of any part of the Trust in
common or undivided interest with other persons or entities, including
an undivided interest in any property in which the Trustee,
individually or otherwise, may hold an undivided interest; to buy from
or sell to any person or entity to the extent not otherwise prohibited
herein;
(5) To make commingled, collective, or common investments and
to invest and reinvest all or any portion of the Trust collectively,
including, without limitation, power to invest collectively with such
other funds through the medium of one or more of the common,
collective, or commingled trust funds, which has been or may hereafter
be established and maintained by the Trustee or its affiliates. To the
extent of the interest of the Trust in any such collective trust, the
agreement or declaration of trust establishing such collective trust
shall be deemed to be adopted and made a part of the Plan(s) and Trust
as if set forth in full herein;
(6) To deposit or invest all or a part of the Trust in savings
accounts, certificates of deposit, or other deposits that bear a
reasonable rate of interest in a bank or similar financial institution,
including the commercial department of the Trustee, if such bank or
other institution is supervised by any agency of a state or the federal
government;
(7) To employ and compensate such attorneys, counsel, brokers,
banks, investment advisors, or other agents, employees, or independent
contractors and to delegate to them such of the duties, rights, and
powers of the Trustee as may be deemed advisable in handling and
administering the Plan;
(8) To partition any property or interest held as a part of
the Trust and, in any and all such partitions, to pay or receive such
money or property as may be necessary or advisable to equalize
differences and to evaluate any property belonging to the Trust;
(9) To institute, join in, maintain, defend, compromise,
submit to arbitration, or settle any litigation, claim, obligation, or
controversy with respect to any matter affecting the Trust, regardless
of the manner in which such matter may have arisen, all in the name of
the Trustee;
<PAGE>
(10) To hold uninvested for a reasonable period of time any
moneys received by it until the same shall be invested or disbursed
pursuant to the provisions of the Plan;
(11) To invest or reinvest from time to time any part or all
of the Trust in securities of an open-end management investment trust
or investment company registered under the Investment Company Act of
1940, as amended, including any such investment trust or company for
which the Trustee or one of its affiliates acts as investment advisor,
custodian, transfer agent, registrar, sponsor, distributor, manager, or
otherwise;
(12) To exercise, personally or by general or limited power of
attorney, any right, including the right to vote or grant proxies,
discretionary or otherwise, appurtenant to any assets held by the
Trust, and the right to participate in voting trusts with other
stockholders;
(13) To register any securities or other property held by it
hereunder in the name of the Trustee or in the names of nominees with
or without the addition of words indicating that such securities or
other property are held in a fiduciary capacity, to take and hold the
same unregistered or in form permitting transferability by delivery, to
deposit or arrange for the deposit of securities in a qualified central
depository even though, when so deposited, such securities or other
property may be held in the name of the nominee of such depository with
other securities deposited therein by other persons, or to deposit or
to arrange for the deposit of any securities or other property issued
by the United States government, or any agency or instrumentality
thereof, with a Federal Reserve bank, provided that the books and
records of the Trustee shall at all times disclose that all such
securities or other property are part of the Trust.
SECTION 6. DISPOSITION OF INCOME
During the term of this Trust, all income received by the Trust, net of
expenses and taxes, shall be accumulated and reinvested.
SECTION 7. ACCOUNTING BY THE TRUSTEE
The Trustee shall keep records in reasonable detail of all investments,
receipts, disbursements and all other transactions required with respect to the
Trust Fund, including such specific records as shall be agreed upon in writing
by the Company and the Trustee. Within sixty (60) days following the close of
each calendar year and within sixty (60) days after the removal or resignation
of the Trustee, the Trustee shall deliver to the Company a written account of
its administration of the Trust during such year or during the period from the
close of the last preceding year to the date of such removal or resignation,
setting forth all investments, receipts, disbursements, and other transactions
effected by it, including a description of all securities and investments
purchased and sold with the cost or net proceeds of such purchases or sales
(accrued interest paid or receivable being shown separately), and showing all
cash, securities, and other property held in the Trust at the end of such year
or as of the date of such removal or resignation, as the case may be.
<PAGE>
SECTION 8. RESPONSIBILITY OF THE TRUSTEE
(a) The Trustee accepts the Trust fund hereunder and agrees to accept
and retain, manage, administer, and hold the Trust fund in accordance with the
terms of this Trust Agreement. The Trustee shall act with the care, skill,
prudence, and diligence under the circumstances then prevailing that a prudent
person acting in like capacity and familiar with such matters would use in the
conduct of an enterprise of a like character and with like aims; provided,
however, that the Trustee shall incur no liability to any person for any action
taken pursuant to a direction, request or approval given by the Company, which
is contemplated by, and in conformity with, the terms of the Plan or this Trust
and is given in writing by the Company.
(b) In the event of a dispute between the Company and a party, the
Trustee may apply to a court of competent jurisdiction to resolve the dispute.
(c) Except as otherwise provided herein, if the Trustee undertakes or
defends any litigation arising in connection with this Trust, the Company agrees
to indemnify the Trustee against the Trustee's costs, expenses and liabilities
(including, without limitation, attorneys' fees and expenses) relating thereto
and to be primarily liable for such payments.
(d) The Trustee may consult with legal counsel (who may also be counsel
for the Company generally) with respect to any of its duties or obligations
hereunder.
(e) The Trustee may hire agents, accountants, actuaries, investment
advisors, financial consultants, or other professionals to assist it in
performing any of its duties or obligations hereunder.
(f) The Trustee shall have, without exclusion, all powers conferred on
trustees by applicable law, unless expressly provided otherwise herein;
provided, however, that if an insurance policy is held as an asset of the Trust,
the Trustee shall have no power to name a beneficiary of the policy other than
the Trust, to assign the policy (as distinct from conversion of the policy to a
different form) other than to a successor Trustee, or to loan to any person the
proceeds of any borrowing against such policy.
(g) Notwithstanding any powers granted to the Trustee pursuant to this
Trust Agreement or applicable law, the Trustee shall not have any power that
could give this Trust the objective of carrying on a business and dividing the
gains therefrom, within the meaning of section 301.7701-2 of the Procedure and
Administrative Regulations promulgated pursuant to the Internal Revenue Code.
SECTION 9. COMPENSATION AND EXPENSES OF THE TRUSTEE
The Company shall pay all administrative and the Trustee's fees and
expenses. If not so paid, such fees and expenses shall be paid from the Trust.
<PAGE>
SECTION 10. RESIGNATION AND REMOVAL OF THE TRUSTEE
(a) The Trustee may resign at any time by written notice to the
Company, which shall be effective thirty (30) days after receipt of such notice,
unless the Company and the Trustee agree otherwise.
(b) Except as provided in Section 10(c), the Trustee may be removed by
the Company on sixty (60) days written notice or upon shorter notice accepted by
the Trustee.
(c) Upon a Change of Control, as defined in Section 13(d) herein, the
Trustee may not be removed by the Company for three (3) years.
(d) If the Trustee resigns, or is removed, within three (3) years of a
Change of Control as defined in Section 13(d) herein, the Trustee shall select a
successor Trustee in accordance with the provisions of Section 11(b) hereof
prior to the effective date of the Trustee's resignation or removal.
(e) Upon resignation or removal of the Trustee and appointment of a
successor Trustee, all assets shall subsequently be transferred to the successor
Trustee. The transfer shall be completed within thirty (30) days after receipt
of notice of resignation, removal or transfer, unless the Company extends the
time limit.
(f) If the Trustee resigns or is removed, a successor shall be
appointed, in accordance with Section 11 hereof, by the effective date of
resignation or removal under paragraph (a) or (b) of this Section. If no such
appointment has been made, the Trustee may apply to a court of competent
jurisdiction for appointment of a successor Trustee or for instructions. All
expenses of the Trustee in connection with the proceeding shall be allowed as
administrative expenses of the Trust.
SECTION 11. APPOINTMENT OF SUCCESSOR TRUSTEE
(a) If the Trustee resigns or is removed in accordance with Section
10(a) or (b) hereof, the Company may appoint any third party, such as a bank
trust department or other party that may be granted corporate trustee powers
under state law, as a successor to replace the Trustee upon resignation or
removal. The appointment shall be effective when accepted in writing by the new
Trustee, who shall have all of the rights and powers of the former Trustee,
including ownership rights in the Trust assets. The former Trustee shall execute
any instrument necessary or reasonably requested by the Company or the successor
Trustee to evidence the transfer.
(b) If the Trustee resigns or is removed pursuant to the provisions of
Section 10(d)hereof and selects a successor Trustee, the Trustee may appoint any
third party such as a bank trust department or other party that may be granted
corporate trustee powers under state law. The appointment of a successor Trustee
shall be effective when accepted in writing by the new Trustee. The new Trustee
shall have all the rights and powers of the former Trustee, including ownership
rights in Trust assets. The former Trustee shall execute any instrument
necessary or reasonably requested by the successor Trustee to evidence the
transfer.
<PAGE>
SECTION 12. AMENDMENT OR TERMINATION
(a) This Trust Agreement may be amended by a written instrument
executed by the Trustee and the Company. Notwithstanding the foregoing, no such
amendment shall (i) cause the Trust to be used to fund benefits for participants
who enter the Plan on or after the initial effective date of the Plan, (ii)
conflict with the terms of the Plan(s) or (iii) make the Trust revocable after
it has become irrevocable in accordance with Section 1(b) hereof.
(b) The Trust shall not terminate until the date on which Plan
participants, as of the effective date of the Plan, and their beneficiaries are
no longer entitled to benefits pursuant to the terms of the Plan. Upon
termination of the Trust any assets remaining in the Trust shall be returned to
the Company.
(c) Sections 1, 2, 4, 6,10, and this Section 12(c) of this Trust
Agreement may not be amended by the Company for three (3) years following a
Change of Control, as defined herein.
SECTION 13. MISCELLANEOUS
(a) Any provision of this Trust Agreement prohibited by law shall be
ineffective to the extent of any such prohibition, without invalidating the
remaining provisions hereof.
(b) Benefits payable to Plan participants and their beneficiaries under
this Trust Agreement may not be anticipated, assigned (either at law or in
equity), alienated, pledged, encumbered, or subjected to attachment,
garnishment, levy, execution, or other legal or equitable process.
(c) This Trust Agreement shall be governed by and construed in
accordance with the laws of the State of Texas.
(d) For purposes of this Trust, a "Change of Control" shall mean (i)
the purchase or other acquisition by any person, entity, or group of persons,
within the meaning of section 13(d) or 14(d) of the Securities Exchange Act of
1934 ("Act"), or any comparable successor provisions, of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Act) of 30 percent or
more of either the outstanding shares of common stock or the combined voting
power of the Company's then outstanding voting securities entitled to vote
generally, (ii) the approval by the stockholders of the Company of a
reorganization, merger, or consolidation, in each case, with respect to which
persons who were stockholders of the Company immediately prior to such
reorganization, merger or consolidation do not, immediately thereafter, own more
than 50 percent of the combined voting power entitled to vote generally in the
election of directors of the reorganized, merged or consolidated Company's then
outstanding securities, (iii) a liquidation or dissolution of the Company or
(iv) the sale of all or substantially all of the Company's assets.
<PAGE>
SECTION 14. EFFECTIVE DATE
The effective date of this Trust Agreement shall be January 12, 1999.
EXECUTED on this _____ day of ___________, 1999.
SNYDER OIL CORPORATION
"Company"
By:
------------------------------
"Trustee"
By:
EXHIBIT 10.20
SNYDER OIL CORPORATION
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I - DEFINITIONS......................................................1
ARTICLE II - BENEFITS.........................................................1
ARTICLE III - ADMINISTRATION...................................................2
ARTICLE IV - CLAIMS PROCEDURES................................................3
ARTICLE V - AMENDMENT AND TERMINATION OF PLAN................................4
<PAGE>
SNYDER OIL CORPORATION
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
This unfunded Supplemental Executive Retirement Plan, effective as of
January 12, 1999, is hereby adopted and established by the Snyder Oil
Corporation (the "Company") and will be maintained by the Company for the
purpose of providing benefits for certain individuals as provided herein.
ARTICLE 1.
DEFINITIONS
a. "Board" shall mean the Board of Directors of the Company.
b. "Code" shall mean the Internal Revenue code of 1986, as amended from
time to time.
c. "Company" shall mean Snyder Oil Corporation and any of its
subsidiaries or affiliated business entities designated by the Board as
participating entities.
d. "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as from time to time amended.
e. "Normal Retirement Age" shall mean age 55.
f. "Participant" shall mean John Snyder, the current chief executive
officer of the Company and all management or highly-compensated employees of the
Company who have been identified as influential within the Company and selected
to participate in the Plan by the Board of Directors of the Company.
g. "Plan" shall mean the Snyder Oil Corporation Supplemental Executive
Retirement Plan, as from time to time amended or restated.
ARTICLE 2.
BENEFITS
a. Upon the retirement or termination of employment, for any reason, of
a Participant on or after his Normal Retirement Age, he shall be entitled to a
normal retirement benefit paid each month in an amount equal to $21,750. The
normal retirement benefit shall be payable each month beginning with the month
the first day of which coincides with or immediately follows the month of the
Participant's retirement or termination of employment. The normal retirement
benefit shall be paid each month until and including the month of the
Participant's death. If the Participant is survived by a spouse, the spouse
shall be entitled to a monthly benefit calculated in accordance with Section
2.2.
<PAGE>
b. If a Participant dies, his spouse at the time he originally became a
Participant shall be entitled to a monthly benefit equal to $14,507. The spousal
pension benefit shall be payable each month beginning with the month the first
day of which immediately follows the month of the Participant's death. The
spousal pension benefit shall be paid each month until and including the month
of the spouse's death. The spousal pension benefit shall be paid regardless of
whether the Participant's death occurs while he is still employed by the Company
as long as the Participant would be entitled to a monthly benefit pursuant to
2.1 if his termination occurs before his death.
c. Notwithstanding the foregoing, the Participant or the Participant's
spouse if receiving a spousal retirement benefit, may request at any time on or
after the Participant's termination of employment, if the Company so agrees in
its sole and absolute discretion, that the actuarial present value of any
benefits expected to be paid including spousal retirement benefits under this
Plan, as determined in accordance with the appropriate actuarial factors and
interest rates in effect at the beginning of the calendar year for an immediate
annuity upon a plan termination under Pension Benefit Guaranty Corporation
requirements, be immediately paid to the Participant or the surviving spouse if
such spouse is currently collecting a spousal retirement benefit, in a lump sum
in cash.
ARTICLE 3.
ADMINISTRATION
a. The right of a Participant or the Participant's spouse to receive a
distribution hereunder shall be an unsecured claim against the general assets of
the Company. The Plan at all times shall be considered entirely unfunded both
for tax purposes and for purposes of Title I of ERISA. Any funds invested
hereunder shall continue for all purposes to be part of the general assets of
the Company and available to its general creditors in the event of bankruptcy or
insolvency. Notwithstanding the foregoing, a rabbi trust or rabbi trusts shall
be established, substantially in the form attached hereto, in connection with
the Plan in order to hold amounts contributed thereto. Any benefits which may be
payable pursuant to this Plan are not subject in any manner to anticipation,
sale, alienation, transfer, assignment, pledge, encumbrance, attachment, or
garnishment by creditors of a Participant or a Participant's spouse. The Plan
constitutes a mere promise by the Company to make benefit payments in the
future. No interest or right to receive a benefit may be taken, either
voluntarily or involuntarily, for the satisfaction of the debts of, or other
obligations or claims against, such person or entity, including claims for
alimony, support, separate maintenance and claims in bankruptcy proceedings.
2
<PAGE>
b. The Plan shall be administered by the Board, which shall have the
authority, duty and power to interpret and construe the provisions of the Plan
as the Board deems appropriate including the authority to determine eligibility
for benefits under the Plan. The Board shall have the duty and responsibility of
maintaining records, making the requisite calculations and disbursing the
payments hereunder. The interpretations, determinations, regulations and
calculations of the Board shall be final and binding on all persons and parties
concerned.
c. The Board shall be entitled to rely on all tables, valuations,
certificates, opinions, data and reports furnished by an actuary, accountant,
controller, counsel or other person employed or retained by the Company with
respect to the Plan.
d. The Board shall furnish individual annual statements of accrued
benefits to each Participant, or Participant's spouse, in such form as
determined by the Board or as required by law.
e. The sole rights of a Participant or a Participant's spouse under
this Plan shall be to have this Plan administered according to its provisions
and to receive whatever benefits he or she may be entitled to hereunder.
Further, the adoption and maintenance of this Plan shall not be construed as
creating any contract of employment between the Company and any Participant. The
Plan shall not affect the right of the Company to deal with any Participants in
employment respects, including their hiring, discharge, compensation, and
conditions of employment.
f. The Company may from time to time establish rules and procedures
which it determines to be necessary for the proper administration of the Plan.
g. The Company shall require any successor, whether direct or indirect,
by purchase, merger, consolidation or otherwise, to all or substantially all of
the business or assets of the Company, expressly to assume and agree to pay the
benefits accrued under this Plan as of the date of such succession in the same
manner and to the same extent as the Company would have been required if no such
succession had taken place. In any event, however, the provisions of this Plan
shall be binding upon the corporation or other entity resulting from such
purchase, merger, consolidation or other transaction and this Section 3.7 shall
apply to the successor in the event of any subsequent purchase, merger,
consolidation or other transaction. The Plan may not be amended to eliminate or
alter the requirements of this Section 3.7.
h. Each Participant or Participant's spouse, as the case may be, shall
keep the Company informed of his or her current address.
i. All questions pertaining to the construction, validity and effect of
the Plan shall be determined in accordance with the laws of the State of Texas
to the extent not preempted by federal law.
j. The Company shall pay all benefits arising under this Plan and all
costs, charges and expenses relating thereto.
3
<PAGE>
ARTICLE 4.
CLAIMS PROCEDURES
a. For purposes of handling claims with respect to this Plan, the
"Claims Reviewer" shall be the Company, unless another person or organizational
unit is designated by the Company as Claims Reviewer.
b. An initial claim for benefits under the Plan must be made by the
Participant or the Participant's spouse, as the case may be. Not later than 7
days after receipt of such a claim, the Claims Reviewer will render a written
decision on the claim to the claimant, unless special circumstances require the
extension of such 7-day period. If such extension is necessary, the Claims
Reviewer shall provide the Participant or the Participant's spouse with written
notification of such extension before the expiration of the initial 7-day
period. Such notice shall specify the reason or reasons for such extension and
the date by which a final decision can be expected. In no event shall such
extension exceed a period of 7 days from the end of the initial 7-day period. In
the event the Claims Reviewer denies the claim of a Participant or the
Participant's spouse in whole or in part, the Claims Reviewer's written
notification shall specify, in a manner calculated to be understood by the
claimant, the reason for denial; a reference to the Plan or other document or
form that is the basis for the denial; a description of any additional material
or information necessary for the claimant to perfect the claim; an explanation
as to why such information or material is necessary; and an explanation of the
applicable claims procedure. Should the claim be denied in whole or in part and
should the claimant be dissatisfied with the Claims Reviewer's disposition of
the claimant's claim, the claimant may have a full and fair review of the claim
by the Company upon written request therefor submitted by the claimant or the
claimant's duly authorized representative and received by the Company within 60
days after the claimant receives written notification that the claimant's claim
has been denied. In connection with such review, the claimant or the claimant's
duly authorized representative shall be entitled to review pertinent documents
and submit the claimant's views as to the issues, in writing. The Company shall
act to deny or accept the claim within 7 days after receipt of the claimant's
written request for review unless special circumstances require the extension of
such 7-day period. If such extension is necessary, the Company shall provide the
claimant with written notification of such extension before the expiration of
such initial 7-day period. In all events, the Company shall act to deny or
accept the claim within 14 days of the receipt of the claimant's written request
for review. The action of the Company shall be in the form of a written notice
to the claimant and its contents shall include all of the requirements for
action on the original claim. In no event may a claimant commence legal action
for benefits the claimant believes are due the claimant until the claimant has
exhausted all of the remedies and procedures afforded the claimant by this
Article IV.
ARTICLE 5.
4
<PAGE>
AMENDMENT AND TERMINATION OF PLAN
The Company reserves the right to amend or terminate the Plan subject
to the requirements of Section 3.7 and notification of each Participant and each
Participant's spouse receiving benefits pursuant to the Plan. Notification will
be by first class mail, addressed to each Participant or Participant's spouse at
his or her last known address, or by other notice acknowledged in writing by the
participant. Any amounts the Participant or the Participant's spouse would be
entitled to if the Participant's employment terminated as of the effective date
of such amendment or termination shall remain subject to the provisions of the
Plan and distribution will not be accelerated because of the termination of the
Plan. No amendment or termination shall directly or indirectly reduce or
eliminate a Participant's and/or Participant's spouse's right to a benefit the
Participant and/or the Participant's spouse would be entitled to if the
Participant's employment terminated as of the effective date of such amendment
or termination.
5
<PAGE>
IN WITNESS WHEREOF, the Company, acting by and through its officers
hereunto duly authorized has executed this instrument, this _______ day of
_______________, 1999, but to be effective as set forth above.
SNYDER OIL CORPORATION
By:
Name:
Title:
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
----------------------------------------
TO THE STOCKHOLDERS OF SNYDER OIL CORPORATION:
We have audited the accompanying consolidated balance sheets of Snyder
Oil Corporation (a Delaware corporation) and subsidiaries as of December 31,
1998 and 1997, and the related consolidated statements of operations, changes in
stockholders' equity, and cash flows for each of the three years in the period
ended December 31, 1998. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Snyder Oil
Corporation and subsidiaries as of December 31, 1998 and 1997, and the results
of their operations and their cash flows for each of the three years in the
period ended December 31, 1998, in conformity with generally accepted accounting
principles.
ARTHUR ANDERSEN LLP
Fort Worth, Texas,
February 10, 1999
