<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 11, 1995
REGISTRATION NO. 33-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
SANTA FE ENERGY RESOURCES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELAWARE 36-2722169
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
1616 SOUTH VOSS ROAD, SUITE 1000
HOUSTON, TEXAS 77057
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
</TABLE>
SANTA FE ENERGY RESOURCES, INC.
1990 INCENTIVE STOCK COMPENSATION PLAN
(FULL TITLE OF THE PLAN)
DAVID L. HICKS
VICE PRESIDENT-LAW AND GENERAL COUNSEL
SANTA FE ENERGY RESOURCES, INC.
1616 SOUTH VOSS ROAD, SUITE 1000
HOUSTON, TEXAS 77057
(NAME AND ADDRESS OF AGENT FOR SERVICE)
(713) 507-5000
(TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
---------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
PROPOSED PROPOSED
MAXIMUM MAXIMUM AMOUNT OF
TITLE OF SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE REGISTRATION
TO BE REGISTERED REGISTERED PER SHARE OFFERING PRICE FEE
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------
Common Stock, par value $0.01
per share 2,500,000 Shares $9.625(1) $24,062,500(1) $8,298
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated pursuant to Rule 457(c) solely for the purpose of calculating the
registration fee, based upon the average of the high and low sales prices of
a share of the Company's Common Stock on the New York Stock Exchange on May
9, 1995.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
This Registration Statement on Form S-8 hereby incorporates by reference
the contents of the registrant's Registration Statements on Form S-8
(Registration Nos. 33-44541 and 33-52102) which were filed with the Securities
and Exchange Commission on December 16, 1991 and September 17, 1992,
respectively.
ITEM 8. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C>
5.1 Opinion of Andrews & Kurth L.L.P.
23.1 Consent of Price Waterhouse LLP.
23.2 Consent of Andrews & Kurth L.L.P. (included in their opinion filed as
Exhibit 5.1).
23.3 Consent of Ryder Scott Company.
24.1 A power of attorney, pursuant to which amendments to this Registration
Statement may be filed, is included on the signature page contained in
Part II of this Registration Statement.
99.1 Santa Fe Energy Resources, Inc. 1990 Incentive Stock Compensation Plan
(Second Amendment and Restatement).
99.2 Form of Nonqualified Stock Option Agreement under Santa Fe Energy
Resources, Inc. 1990 Incentive Stock Compensation Plan.
</TABLE>
II-1
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Santa Fe Energy
Resources, Inc. certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Houston, State of Texas, on May 11, 1995.
SANTA FE ENERGY RESOURCES, INC.
By: /s/ JAMES L. PAYNE
------------------------------------
James L. Payne
Chairman of the Board, President
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Know all men by these presents, that each of the undersigned officers and
directors of Santa Fe Energy Resources, Inc. hereby constitutes and appoints
James L. Payne, R. Graham Whaling and David L. Hicks, and each or any of them,
as his or her true and lawful attorneys-in-fact and agents, with full power of
substitution, for him or her and in his or her name, place and stead, in any and
all capacities to sign any or all amendments or post-effective amendments to
this Registration Statement, and to file the same, and with all exhibits thereto
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as he
or she might or could do in person, hereby ratifying and confirming all that
said attorneys-in-fact and agents, or any of them or their substitutes, may
lawfully do or cause to be done by virtue hereof.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ JAMES L. PAYNE Chairman of the Board, President May 11, 1995
- --------------------------------------------- and Chief Executive Officer
James L. Payne and Director (Principal
executive officer)
/s/ R. GRAHAM WHALING Senior Vice President and Chief May 11, 1995
- --------------------------------------------- Financial Officer (Principal
R. Graham Whaling financial and accounting
officer)
/s/ ROD F. DAMMEYER Director May 11, 1995
- ---------------------------------------------
Rod F. Dammeyer
/s/ WILLIAM E. GREEHEY Director May 11, 1995
- ---------------------------------------------
William E. Greehey
/s/ MELVYN N. KLEIN Director May 11, 1995
- ---------------------------------------------
Melvyn N. Klein
/s/ ROBERT D. KREBS Director May 11, 1995
- ---------------------------------------------
Robert D. Krebs
/s/ ALLAN V. MARTINI Director May 11, 1995
- ---------------------------------------------
Allan V. Martini
</TABLE>
II-2
<PAGE> 4
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ MICHAEL A. MORPHY Director May 11, 1995
- ---------------------------------------------
Michael A. Morphy
/s/ REUBEN F. RICHARDS Director May 11, 1995
- ---------------------------------------------
Reuben F. Richards
Director
- ---------------------------------------------
David M. Schulte
/s/ MARC J. SHAPIRO Director May 11, 1995
- ---------------------------------------------
Marc J. Shapiro
/s/ ROBERT F. VAGT Director May 11, 1995
- ---------------------------------------------
Robert F. Vagt
Director
- ---------------------------------------------
Kathryn D. Wriston
</TABLE>
II-3
<PAGE> 5
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
NUMBERED
NUMBER DESCRIPTION PAGE
------ ----------- ------------
<S> <C> <C>
5.1 Opinion of Andrews & Kurth L.L.P.
23.1 Consent of Price Waterhouse LLP.
23.2 Consent of Andrews & Kurth L.L.P. (included in their opinion filed
as Exhibit 5.1).
23.3 Consent of Ryder Scott Company.
24.1 A power of attorney, pursuant to which amendments to this
Registration Statement may be filed, is included on the signature
page contained in Part II of this Registration Statement.
99.1 Santa Fe Energy Resources, Inc. 1990 Incentive Stock Compensation
Plan (Second Amendment and Restatement).
99.2 Form of Nonqualified Stock Option Agreement under Santa Fe Energy
Resources, Inc. 1990 Incentive Stock Compensation Plan.
</TABLE>
II-4
<PAGE> 1
EXHIBIT 5.1
[LETTERHEAD OF ANDREWS & KURTH L.L.P.]
May 11, 1995
Board of Directors
Santa Fe Energy Resources, Inc.
1616 South Voss Road, Suite 1000
Houston, Texas 77057
Gentlemen:
We have acted as counsel to Santa Fe Energy Resources, Inc., a
Delaware corporation (the "Company"), in connection with the Company's
registration statement on Form S-8 (the "Registration Statement") relating to
the registration under the Securities Act of 1933, as amended, of 2,500,000
shares of common stock, par value $0.01 per share (the "Common Stock"), of the
Company issuable under the Santa Fe Energy Resources, Inc. 1990 Incentive Stock
Compensation Plan (the "Plan").
In such capacity, we have examined such corporate records and
documents, certificates of corporate and public officials and such other
instruments as we have deemed necessary for the purposes of the opinions
contained herein. As to all matters of fact material to such opinions, we have
relied upon the representations of officers of the Company. We have assumed
the genuineness of all signatures, the authenticity of all documents submitted
to us as originals, and the conformity with the original of all documents
submitted to us as copies.
Based upon the foregoing and having due regard for such legal
considerations as we deem relevant, we are of the opinion that the
above-described shares of Common Stock to be issued by the Company pursuant to
the Plan have been duly authorized, and that such shares, when issued in
accordance with the terms of the Plan, will be validly issued, fully paid and
nonassessable.
We hereby consent to the inclusion of this opinion as an exhibit
to the Registration Statement.
Very truly yours,
ANDREWS & KURTH L.L.P.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated March 10, 1995 appearing on page 32
of Santa Fe Energy Resources, Inc.'s Annual Report on Form 10-K for the year
ended December 31, 1994.
PRICE WATERHOUSE LLP
Houston, Texas
May 11, 1995
<PAGE> 1
EXHIBIT 23.3
CONSENT OF RYDER SCOTT COMPANY PETROLEUM ENGINEERS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of references to our firm contained in Santa Fe Energy
Resources, Inc.'s Annual Report on Form 10-K for the year ended December 31,
1994.
RYDER SCOTT COMPANY
PETROLEUM ENGINEERS
Houston, Texas
May 11, 1995
<PAGE> 1
EXHIBIT 99.1
SANTA FE ENERGY RESOURCES, INC.
1990 INCENTIVE STOCK COMPENSATION PLAN
(SECOND AMENDMENT AND RESTATEMENT)
STATEMENT OF PURPOSE
One purpose of the Santa Fe Energy Resources, Inc. 1990 Incentive
Stock Compensation Plan (the "Plan") is to encourage superior performance by
employees, by allowing the Board of Directors of Santa Fe Energy Resources,
Inc. ("SFER") to award several forms of incentive compensation to employees of
the Company. By providing incentive compensation commensurate and competitive
with that provided by other companies, the Plan should also assist SFER in
attracting and retaining the services of qualified and capable employees.
In order to further the identity of interest of employees with
the stockholders of SFER, all of the forms of compensation under the Plan
relate to SFER Common Stock. Employees' success in enhancing stockholder value
will translate directly into an enhanced benefit for the employee.
An additional purpose of the Plan is to encourage the Directors
to own shares of the Company's stock and thereby to align their interests more
closely with the interests of the other stockholders of SFER, to encourage the
highest level of Director performance by providing the Directors with a direct
interest in SFER's attainment of its financial goals, and to provide a
financial incentive that will help attract and retain the most qualified
Directors.
I. DEFINITIONS
Unless the context indicates otherwise, the following terms have the
meanings set forth below:
"Acceleration Date" means the earliest date on which any of the
following events shall first have occurred: (i) the acquisition
described in clause (a) of the definition of "Change in Control"
contained in this Section I, (ii) the change in the composition of the
Board of Directors described in clause (b) of such definition or (iii)
the stockholder approval or adoption described in clause (c) or (d) of
such definition.
"Award" means a grant of Options, Restricted Stock, Phantom
Units, Bonus Stock or Stock Appreciation Rights pursuant to the Plan.
"Board" means the Board of Directors of SFER.
"Bonus Stock" means Common Stock, which is not subject to a
Restricted Period, awarded by the Committee pursuant to the Plan.
"Cause" means (a) the willful and continued failure by the
Participant to substantially perform his duties with the Company (other
than any such failure resulting from his incapacity due to physical or
mental illness), or (b) the willful engaging by the Participant in
conduct which is demonstrably and materially injurious to the Company,
monetarily or otherwise. For purposes of this definition,
<PAGE> 2
no act, or failure to act, shall be deemed "willful" unless done, or
omitted to be done, by the Participant not in good faith and without
reasonable belief that his action or omission was in the best
interest of the Company.
A "Change in Control" shall be deemed to have occurred if:
(a) any "person," as such term is used in Section 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), other than any trustee or other
fiduciary holding securities under an employee benefit
plan of SFER or any company owned, directly or indirectly,
by the stockholders of SFER in substantially the same
proportions as their ownership of stock of SFER), is or
becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of
securities of SFER representing 25% or more of the
combined voting power of SFER's then outstanding
securities;
(b) during any period of two consecutive years (not including
any period prior to the effective date of this provision),
individuals who at the beginning of such period constitute
the Board of Directors of SFER, and any new director
(other than a director designated by a person who has
entered into an agreement with SFER to effect a
transaction described in clause (a), (c) or (d) of this
definition) whose election by the Board of Directors of
SFER or nomination for election by SFER's stockholders was
approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors
at the beginning of the period or whose election or
nomination for election was previously so approved, cease
for any reason to constitute at least a majority thereof;
(c) the stockholders of SFER approve a merger or consolidation
of SFER with any other company other than (i) a merger or
consolidation which would result in the voting securities
of SFER outstanding immediately prior thereto continuing
to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity)
more than 65% of the combined voting power of the voting
securities of SFER (or such surviving entity) outstanding
immediately after such merger or consolidation, or (ii) a
merger or consolidation effected to implement a
recapitalization of SFER (or similar transaction) in which
no "person" (as hereinabove defined) acquires more than
25% of the combined voting power of SFER's then
outstanding securities; or
(d) the stockholders of SFER adopt a plan of complete
liquidation of SFER or approve an agreement for the sale
or disposition by SFER of all or substantially all of
SFER's assets. For purposes of this clause (d), the term
"the sale or disposition by SFER of all or substantially
all of SFER's assets" shall mean a sale or other
disposition transaction or series of related transactions
involving assets of SFER or of any direct or indirect
subsidiary of SFER (including the stock of any direct or
indirect subsidiary of SFER) in which the value of the
assets or stock being sold or otherwise disposed of (as
measured by the purchase price being paid therefor or by
such other method as the Board of Directors of SFER
determines is appropriate in a case where there is no
readily ascertainable purchase price) constitutes more
than two-thirds of the fair market value of SFER (as
hereinafter defined). For purposes of the
-2-
<PAGE> 3
preceding sentence, the "fair market value of SFER" shall
be the aggregate market value of the outstanding shares of
common stock of SFER (on a fully diluted basis) plus the
aggregate market value of SFER's other outstanding equity
securities. The aggregate market value of the shares of
common stock of SFER shall be determined by multiplying
the number of shares of SFER's common stock (on a fully
diluted basis) outstanding on the date of the execution
and delivery of a definitive agreement with respect to the
transaction or series of related transactions (the
"Transaction Date") by the average closing price of the
shares of common stock of SFER for the ten trading days
immediately preceding the Transaction Date. The aggregate
market value of any other equity securities of SFER shall
be determined in a manner similar to that prescribed in
the immediately preceding sentence for determining the
aggregate market value of the shares of common stock of
SFER or by such other method as the Board shall determine
is appropriate.
"Code" means the Internal Revenue Code of 1986, as amended.
"Committee" means the Compensation and Benefits Committee of the
Board.
"Common Stock" means the common stock, $0.01 par value, of SFER.
"Company" means collectively SFER and all companies in which SFER
owns, directly or indirectly, more than 50% of the voting stock.
"Director" means a member of the Board who is not also an
employee of the Company.
"Disability" means the inability of a Participant to continue to
perform the duties of his or her employment with the Company or as a
member of the Board, as the case may be, as determined by the Committee.
"Fair Market Value" shall mean the value per share equal to the
Market Price as of the date of determination unless, with respect to an
Award to a key employee, the Board or the Committee shall, in good faith
and using any fair and reasonable means selected in its discretion,
determine another value to be used for such purpose.
"Grant Date" as used with respect to a particular Award means the
date as of which such Award is granted pursuant to the Plan.
"Option" means an option to purchase shares of Common Stock
granted by the Committee pursuant to the Plan, which may be designated
as either an "Incentive Stock Option" or a "Non-Qualified Stock Option."
"Incentive Stock Option" means an option that is intended to
qualify as an Incentive Stock Option as described in Section 422 of the
Code.
"Limited Right" means a Stock Appreciation Right that is
exercisable only as set forth in Section XIV of the Plan.
"Market Price" means the average of the daily closing prices per
share of the Common Stock for the 10 consecutive trading days
immediately preceding the day
-3-
<PAGE> 4
as of which "Market Price" is being determined. The closing price for
each day shall be the last sale price regular way or, in case no such
sale takes place on such day, the average of the closing bid and asked
prices regular way, in either case on the New York Stock Exchange, or,
if shares of the Common Stock are not listed or admitted to trading on
the New York Stock Exchange, on the principal national securities
exchange on which the shares are listed or admitted to trading, or if
the shares are not so listed or admitted to trading, the average of the
highest reported bid and lowest reported asked prices as furnished by
the National Association of Securities Dealers, Inc., through NASDAQ, or
through a similar organization if NASDAQ is no longer reporting such
information. If shares of Common Stock are not listed or admitted to
trading on any exchange or quoted through NASDAQ or any similar
organization, the "Market Price" shall be determined by the Board in
good faith using any fair and reasonable means selected in its
discretion.
"Non-Qualified Stock Option" means an option granted pursuant to
the Plan, other than an Incentive Stock Option.
"Participant" means any key employee of the Company or Director
who has an Award outstanding under the Plan.
"Phantom Unit" means a right to receive upon the achievement of
specified performance goals a payment from the Company in an amount
equal to a specified percentage of the Fair Market Value of a share of
Common Stock on the date on which such right becomes payable.
"Plan" means the Santa Fe Energy Resources, Inc. 1990 Incentive
Stock Compensation Plan as set forth herein and as may be amended from
time to time.
"Related LSAR Option" means an Option outstanding under the Plan
with respect to which a Limited Right is granted pursuant to Section
XIV.
"Restricted Period" means the period of time for which Restricted
Stock and/or Phantom Units are subject to forfeiture pursuant to the
Plan or during which Options and Stock Appreciation Rights are not
exercisable.
"Restricted Stock" means Common Stock subject to a Restricted
Period which is granted pursuant to the Plan.
"Retirement" means an Employee's leaving the employment of the
Company, other than for Cause, after his early retirement date as
defined in the Company's tax-qualified retirement plan, or predecessor
plan, under which the Participant is entitled to the immediate receipt
of a benefit thereunder. With respect to a Director, "Retirement" means
ceasing to be a member of the Board on or after reaching age 65.
"Stock Appreciation Right" means the right, granted by the
Committee pursuant to the Plan, to receive a payment equal to the
increase in the Fair Market Value of a share of Common Stock subsequent
to the Grant Date of such Award.
II. STOCK AND PHANTOM UNITS SUBJECT TO THE PLAN
Subject to adjustment as provided in the Plan, the maximum aggregate
number of shares of Common Stock with respect to which Options,
Restricted Stock, Bonus Stock, Phantom Units and Stock Appreciation
Rights may be granted from time to
-4-
<PAGE> 5
time under the Plan is 7,500,000; provided, however, no more than
500,000 shares of Common Stock shall be issued after January 1, 1995 as
Restricted Stock. The Common Stock issued under the Plan may be either
previously authorized but unissued shares or treasury shares acquired by
SFER. In the event that any Award expires, lapses, is forfeited or
otherwise terminates, any shares of Common Stock allocable to the
terminated portion of such Award may again be made subject to an Award
under the Plan. Further, to the extent an Award is paid in cash, rather
than in Common Stock, or shares of Common Stock are tendered to the
Company, or withheld by the Company from an Award, as payment of the
exercise price of an Award or in satisfaction of any Company tax
withholding obligation, such shares of Common Stock may again be made
subject to an Award (other than Incentive Stock Options) under the Plan.
III. ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Committee. The members of the
Committee shall not be eligible to participate in the Plan, except as
provided in Section XVIII, concerning automatic grants of Restricted
Stock to Directors. The Committee shall select from time to time those
employees to be granted Awards under the Plan. The Committee shall also
determine the terms and provisions of Awards, which need not be
identical. The Committee shall grant all Awards. The Committee shall
construe the Plan, prescribe and rescind rules and regulations relating
to the Plan and make all other determinations deemed necessary or
advisable for the administration of the Plan, subject to the limitations
of Section XXII.
IV. ELIGIBILITY
Subject to the discretion of the Committee, all officers and other key
employees of the Company who have responsibility for the growth and
profitability of the Company are eligible to receive Awards under the
Plan; provided, however, no employee may receive in any calendar year an
Award or Awards of Options and/or Stock Appreciation Rights with respect
to more than 1,000,000 shares of Common Stock. Directors shall
automatically participate in the Plan as provided in Section XVIII.
V. OPTIONS
The Committee may, from time to time and subject to the provisions of
the Plan, grant Awards of Options to employees of the Company to
purchase shares of Common Stock. Any Options granted may be designated
as either Incentive Stock Options or as Non-Qualified Stock Options, or
the Committee may designate a portion of an Award as "Incentive Stock
Options" and the remaining portion as "Non-Qualified Stock Options."
Any portion of an Award that is not designated as "Incentive Stock
Options" shall be "Non-Qualified Stock Options" and shall not be subject
to the requirements of Section VI of the Plan.
The purchase price of the Common Stock subject to any Options shall be
determined by the Committee, but, with respect to a Non-Qualified Stock
Option, may not be less than 50% of the Fair Market Value of the Common
Stock on the Grant Date. Such price shall be subject to adjustment as
provided in Section XIII of the Plan.
-5-
<PAGE> 6
Options shall not be exercisable prior to the date that is six months
after the Grant Date. In addition, the Committee may include in each
agreement evidencing the Option grant a provision stating that the
Option granted therein may not be exercised in whole or in part for an
additional period(s) of time specified in such agreement, and may
further limit the exercisability of the Option in such manner as the
Committee deems appropriate, including, without limitation, the
achievement of performance goals. The Committee may, in its discretion,
at any time and from time-to-time accelerate the exercisability of all
or part of any Option.
The period of any Option, which is the time period during which the
Option may be exercised, shall be determined by the Committee and shall
not extend more than ten years after the Grant Date.
Options shall not be transferable other than by will or the laws of
descent and distribution and during the Participant's lifetime shall be
exercisable only by the Participant.
Termination for Cause, as defined in Section I, shall result in
forfeiture of all outstanding Options. Termination by the Company for
any reason other than Cause (including terminations pursuant to formal
severance programs sponsored by the Company or an affiliate), or
terminations by reason of death, Disability or Retirement, shall result
in a lapse of all or a proportion of the Restricted Period applicable to
any outstanding Award as set forth in Section XI.
A person electing to exercise an Option shall give written notice of
such election to the Company in such form as the Committee may require.
Upon exercise of an Option, the full option purchase price for the
shares with respect to which the Option is being exercised shall be
payable to the Company (i) in cash or by check payable and acceptable
to the Company or (ii) subject to the approval of the Committee,
(a) by tendering to the Company shares of Common Stock owned by such
person having an aggregate Fair Market Value as of the date of exercise
and tender that is not greater than the full option purchase price for
the shares with respect to which the Option is being exercised and by
paying any remaining amount of the option purchase price as provided in
(i) above (provided that the Committee may, upon confirming that such
person owns the number of additional shares being tendered, authorize
the issuance of a new certificate for the number of shares being
acquired pursuant to the exercise of the Option less the number of
shares being tendered upon the exercise and return to such person (or
not require surrender of) the certificate for the shares being tendered
upon the exercise) or (b) by such person delivering to the Company a
properly executed exercise notice together with irrevocable instructions
to a broker to promptly deliver to the Company cash or a check payable
and acceptable to the Company to pay the option purchase price; provided
that in the event such person chooses to pay the option purchase price
as provided in (ii)(b) above, such person and the broker shall comply
with such procedures and enter into such agreements of indemnity and
other agreements as the Committee shall prescribe as a condition of such
payment procedure. Payment instruments will be received subject to
collection.
Notwithstanding any other provision in the Plan, if a Change in Control
occurs while unexercised Options, and Stock Appreciation Rights relating
thereto, remain outstanding under the Plan, then from and after the
Acceleration Date, all Options and Stock Appreciation Rights shall be
exercisable in full, whether or not otherwise exercisable; provided,
however, that no Option or Stock Appreciation Right shall
-6-
<PAGE> 7
become exercisable by reason of this paragraph to the extent that such
acceleration of exercisability, when aggregated with other payments or
benefits to the Participant pursuant to this Plan or any other plan,
arrangement or agreement with the Company, any person whose actions
result in a Change in Control or any person affiliated with the Company
or such person, would, as determined by tax counsel selected by the
Company, result in "Excess Parachute Payments" (as defined below) equal
to or greater than three times the "base amount" as defined in Section
280G of the Code. "Excess Parachute Payments" shall mean "parachute
payments" as defined in Section 280G of the Code other than (1) health
and life insurance benefits and (2) payments attributable to any award,
benefit or other compensation plan or program based upon the number of
full or fractional months of any restricted period (relating thereto)
which has elapsed prior to the date of the Change in Control.
Furthermore, such payments or benefits provided to a Participant under
this Plan shall be reduced to the extent necessary so that no portion
thereof shall be subject to the excise tax imposed by Section 4999 of
the Code, but only if, by reason of such reduction, the Participant's
net after tax benefit shall exceed the net after tax benefit if such
reduction were not made. "Net after tax benefit" shall mean the sum of
(i) all payments and benefits which a Participant receives or is then
entitled to receive from the Company that would constitute a "parachute
payment" within the meaning of Section 280G of the Code, less (ii) the
amount of federal income taxes payable with respect to the payments and
benefits described in (i) above calculated at the maximum marginal
income tax rate for each year in which such payments and benefits shall
be paid to the Participant (based upon the rate for such year as set
forth in the Code at the time of the first payment of the foregoing),
less (iii) the amount of excise taxes imposed with respect to the
payments and benefits described in (i) above by Section 4999 of the Code.
VI. INCENTIVE STOCK OPTIONS
An Option designated by the Committee as an "Incentive Stock Option" is
intended to qualify as an "incentive stock option" within the meaning of
Section 422 of the Code and shall satisfy, in addition to the conditions
of Section V, the conditions set forth in this Section VI.
The purchase price of the Common Stock subject to an Incentive Stock
Option shall be the greater of the Fair Market Value of the Common Stock
on the Grant Date or the "fair market value" of the Common Stock as such
term is used for purposes for Section 422(b)(4) of the Code.
An Incentive Stock Option shall not be granted to an employee who, on
the Grant Date, owns stock possessing more than ten percent of the total
combined voting power of all classes of stock of SFER, or of its parent
or subsidiary corporations.
VII. RESTRICTED STOCK
The Committee may, from time to time and subject to the provisions of
the Plan, grant Awards of Restricted Stock to employees of the Company;
provided, however, no employee may receive in any calendar year
Restricted Stock Awards with respect to more than 500,000 shares of
Common Stock.
The Committee shall, at the time shares of Restricted Stock are granted,
designate the Restricted Period and the performance goals, if any, of
the Company with respect to such Award. Such goals must be achieved
(and certified by the
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<PAGE> 8
Committee) in order for a Participant to receive the unrestricted
shares of Common Stock at the designated time.
With respect to any Restricted Stock Award that is intended to meet the
requirements of Section 162(m) of the Code, the performance goal or
goals for such Award shall be with respect to one or more of the
following: earnings per share; earnings before interest, taxes,
depreciation and amortization expenses ("EBITDA"); earnings before
interest and taxes ("EBIT"); EBITDA, EBIT or earnings before taxes and
unusual or nonrecurring items as measured either against the annual
budget or as a ratio to revenue; market share; sales; costs; return on
equity; operating cash flow; production volumes compared to plan or
prior years; reserves added; discretionary cash flow; return on net
capital employed and/or stock price performance. The goals can be
applied, where appropriate, with respect to an individual, a business
unit or the Company as a whole and need not be based on increases or
positive results, but can be based on maintaining the status quo or
limiting economic losses, for example. Which goals to use with respect
to such Award, the weighting of the goals if more than one is used, and
whether the goal is to be measured against a Company-established budget
or target, an index or a peer group of companies, shall also be
determined by the Committee at the time of grant of the Award.
Each certificate representing Restricted Stock awarded under the Plan
shall be registered in the name of the Participant and, during the
Restricted Period, shall be left on deposit with the Company with a
stock power endorsed in blank. Participants shall have the right to
receive dividends paid on their Restricted Stock and to vote such
shares. Restricted Stock may not be sold, pledged, assigned,
transferred or encumbered during the Restricted Period other than by
will or the laws of descent and distribution.
Termination for Cause, as defined in Section I, shall result in
forfeiture of all outstanding Restricted Stock. Termination by the
Company for any reason other than Cause (including terminations pursuant
to formal severance programs sponsored by the Company or an affiliate),
or termination by reason of death, Disability or Retirement, shall
result in a lapse on all or a portion of the Restricted Period
applicable to any outstanding Award as set forth in Section XI.
Notwithstanding any other provisions in the Plan, if a Change in Control
occurs while any shares of Restricted Stock remain subject to
restrictions relating thereto, then from and after the Acceleration
Date, (1) all such restrictions and all Restricted Periods shall lapse
and (2) no later than the fifth day following the Acceleration Date, any
Restricted Stock theretofore granted a Participant shall be delivered to
the Participant; provided, however, that no restriction or Restricted
Period shall lapse or payment or benefit shall be made by reason of this
paragraph to the extent that such lapse or payment or benefit, when
aggregated with other payments or benefits to the Participant pursuant
to this Plan or any other plan, arrangement or agreement with the
Company, any person whose actions result in a Change in Control or any
person affiliated with the Company or such person, would, as determined
by tax counsel selected by the Company, result in Excess Parachute
Payments equal to or greater than three times the "base amount" as
defined in Section 280G of the Code. "Excess Parachute Payments" shall
mean "parachute payments" as defined in Section 280G of the Code other
than (1) health and life insurance benefits and (2) payments
attributable to any award, benefit or other compensation plan or program
based upon the number of full or fractional months of any restricted
period (relating thereto) which has elapsed prior to the
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<PAGE> 9
date of the Change in Control. Furthermore, such payments or benefit
provided to a Participant under this Plan shall be reduced to the extent
necessary so that no portion thereof shall be subject to the excise tax
imposed by Section 4999 of the Code, but only if, by reason of such
reduction, the Participant's net after tax benefit shall exceed the net
after tax benefit if such reduction were not made. "Net after tax
benefit" shall have the meaning prescribed in Section V.
VIII. STOCK APPRECIATION RIGHTS
The Committee may, from time to time and subject to the provisions of
the Plan, grant Awards of Stock Appreciation Rights to employees of the
Company subject to the limitation in Section II. An Award of Stock
Appreciation Rights, in the Committee's discretion, may or may not be
made in tandem with the grant of an Option, and need not be granted at
the same time as the Option grant to be made in tandem with the Option
grant.
The period of any Stock Appreciation Right, which is the time period
during which the Stock Appreciation Right may be exercised, shall be
determined by the Committee and shall not extend more than ten years
after the Grant Date or, if in tandem with an Option, the period of
such Option.
Stock Appreciation Rights shall not be transferable other than by will
or the laws of descent and distribution and during the Participant's
lifetime shall be exercisable only by the Participant.
Termination for Cause, as defined in Section I, shall result in
forfeiture of all outstanding Stock Appreciation Rights. Termination by
the Company for any reason other than Cause (including terminations
pursuant to formal severance programs sponsored by the Company or an
affiliated company), or termination by reason of death, Disability or
Retirement, shall result in a lapse on all or a portion of the
Restricted Period applicable to any outstanding Award as set forth in
Section XI.
Subject to any restrictions or conditions imposed by the Committee, upon
the exercise of a Stock Appreciation Right, the Company shall pay the
amount, if any, by which the Fair Market Value of a share of Common
Stock on the date of exercise exceeds the Fair Market Value of a share
of Common Stock on the Grant Date. The amount payable by the Company
upon the exercise of a Stock Appreciation Right may be paid in cash or
in shares of Common Stock or in any combination thereof as the
Committee, in its sole discretion, shall determine, but no fractional
shares shall be issuable pursuant to any Stock Appreciation Right.
A person electing to exercise a Stock Appreciation Right shall give
written notice of such election to the Company in such form as the
Committee may require. The exercise of Stock Appreciation Rights or
Options granted in tandem will result in an equal reduction in the
number of corresponding Options or Stock Appreciation Rights which were
granted in tandem with such Stock Appreciation Rights and Options.
The Change in Control provisions in Section V, concerning Options and
Stock Appreciation Rights granted in tandem with an Option, shall also
apply to Stock Appreciation Rights that are not granted in tandem with
Options.
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IX. PHANTOM UNITS
The Committee may, from time to time and subject to the provisions of
the Plan, grant Awards of Phantom Units to employees of the Company;
provided, however, no employee may receive in any calendar year Phantom
Unit Awards with respect to more than 500,000 shares of Common Stock.
Phantom Units may not be sold, pledged, assigned, transferred or
encumbered during the Restricted Period, other than by will or the laws
of descent and distribution.
The Committee shall, at the time Phantom Units are granted, designate
the Restricted Period and the performance goals, if any, of the Company
with respect to such Award. Such goals must be achieved (and certified
by the Committee) in order for a Participant to receive the value of
the Phantom Units at the designated time. To the extent earned in
accordance with this Section and the grant of such Award, all such
Phantom Units must be paid as soon as practicable following the end of
the Restricted Period in cash or in shares of Common Stock or in any
combination thereof as the Committee, in its sole discretion shall
determine, but no fractional shares shall be issuable pursuant to any
Phantom Unit.
With respect to any Phantom Unit Award that is intended to meet the
requirements of Section 162(m) of the Code, the performance goal or
goals for such Award shall be with respect to one or more of the
following: earnings per share; earnings before interest, taxes,
depreciation and amortization expenses ("EBITDA"); earnings before
interest and taxes ("EBIT"); EBITDA, EBIT or earnings before taxes and
unusual or nonrecurring items as measured either against the annual
budget or as a ratio to revenue; market share; sales; costs; return on
equity; operating cash flow; production volumes compared to plan or
prior years; reserves added; discretionary cash flow; return on net
capital employed and/or stock price performance. The goals can be
applied, where appropriate, with respect to an individual, a business
unit or the Company as a whole and need not be based on increases or
positive results, but can be based on maintaining the status quo or
limiting economic losses, for example. Which goals to use with respect
to such Award, the weighting of the goals if more than one is used, and
whether the goal is to be measured against a Company-established budget
or target, an index or a peer group of companies, shall also be
determined by the Committee at the time of grant of the Award.
At the discretion of the Committee, Phantom Units may at any time be
converted into Non-Qualified Stock Options, Bonus Stock or shares of
Restricted Stock or any combination thereof having a value, as
determined in the good faith judgment of the Committee, substantially
equal to the value of the Phantom Units so converted.
Termination for Cause, as defined in Section I, shall result in
forfeiture of all outstanding Phantom Units. Termination by the Company
for any reason other than Cause (including terminations pursuant to
formal severance programs sponsored by the Company or an affiliate), or
termination by reason of death, Disability or Retirement, shall result
in a lapse on all or a proportion of the Restricted Period applicable to
any outstanding Award as set forth in Section XI.
Notwithstanding any other provisions in the Plan, if a Change in Control
occurs while any Phantom Units remain outstanding, then from and after
the Acceleration Date, (1) all designated goals shall be deemed to have
been met and (2) no later than the fifth day following the Acceleration
Date, the full value of all such
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<PAGE> 11
Phantom Units shall be paid to the Participant in cash; provided,
however, that no payment or benefit shall be made by reason of this
paragraph to the extent that such payment or benefit, when aggregated
with other payments or benefits to the Participant pursuant to this Plan
or any other plan, arrangement or agreement with the Company, any person
whose actions result in a Change in Control or any person affiliated
with the Company or such person, would, as determined by tax counsel
selected by the Company, result in Excess Parachute Payments equal to or
greater than three times the "base amount" as defined in Section 280G of
the Code. "Excess Parachute Payments" shall mean "parachute payments"
as defined in Section 280G of the Code other than (1) health and life
insurance benefits and (2) payments attributable to any award, benefit
or other compensation plan or program based upon the number of full or
fractional months of any restricted period (relating thereto) which has
elapsed prior to the date of the Change in Control. Furthermore, such
payments or benefit provided to a Participant under this Plan shall be
reduced to the extent necessary so that no portion thereof shall be
subject to the excise tax imposed by Section 4999 of the Code, but only
if, by reason of such reduction, the Participant's net after tax benefit
shall exceed the net after tax benefit if such reduction were not made.
"Net after tax benefit" shall have the meaning prescribed in Section V.
X. CONTINUED EMPLOYMENT
Participation in the Plan shall confer no rights to continued employment
with the Company, nor shall it restrict the rights of the Company to
terminate a Participant's employment relationship at any time.
XI. TERMINATION OF EMPLOYMENT
In the event of a Participant's termination of employment with the
Company by reason of death, the Restricted Period shall lapse on all of
the Participant's outstanding Awards.
In the event of a Participant's termination of employment with the
Company by reason of Disability, Retirement or by the Company for any
reason other than Cause, a portion of all of the Participant's
outstanding Awards shall be immediately forfeited to the extent not then
otherwise vested. The portion of an Award forfeited shall be a
fraction, the denominator of which is the total number of months of any
Restricted Period applicable to the Award (rounded up to the nearest
whole month) and the numerator of which is the number of months
remaining in such Restricted Period (rounded up to the nearest whole
month) as of the termination of employment.
Unless the Committee directs the acceleration of the payment of That
portion of an Award of Phantom Units or Restricted Stock that is not
automatically forfeited as provided above upon the Participant's
termination of employment, such Phantom Units and Restricted Stock shall
be payable or issued, as the case may be, at the end of the Restricted
Period applicable to such Awards, but only to the extent otherwise
payable pursuant to the Award Agreement evidencing such Phantom Units or
Restricted Stock, e.g., the goals, if any, for such Award are achieved.
Any such Awards not payable or earned at the end of such Restricted
Period, as provided above, shall be forfeited at such time.
Phantom Units and Restricted Stock upon which the Restricted Period
lapse as provided above shall be paid or issued to the Participant or,
in the case of death
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<PAGE> 12
prior to such payment or issuance, to the Participant's designated
beneficiary, or in the absence of such designation, to the person to
whom the Participant's rights pass by will or the laws of descent
and distribution.
Options and Stock Appreciation Rights which are or become exercisable at
the time of a Participant's termination of employment with the Company
by reason of Disability, Retirement or any reason other than Cause, may
be exercised by the Participant within three months following such
termination of employment but not after the expiration of the period of
the Option or Stock Appreciation Right. Options and Stock Appreciation
Rights which are or become exercisable at the time of a Participant's
termination of employment with the Company by reason of
death, may be exercised by the Participant's designated beneficiary, or
in the absence of such designation, by the person to whom the
Participant's rights pass by will or the laws of descent and
distribution at any time within one year after the Participant's death
but not after the expiration of the period of the Option or Stock
Appreciation Right. Options and Stock Appreciation Rights that do not
become exercisable as provided above, or that are not otherwise vested,
shall be forfeited.
In the event of a Participant's termination of employment with the
Company for any reason other than as provided above, all Awards not
otherwise vested or earned as of the date of such termination of
employment shall be forfeited.
If a Participant's employer ceases to be a part of the Company as
defined in Section I, such Participant shall be deemed to have been
involuntarily terminated by the Company (other than for Cause) as of the
date the Participant's employer so ceased to be a company of which more
than 50% of the voting stock is owned directly or indirectly by SFER.
Notwithstanding the foregoing however, the Committee may determine that
termination of employment by reasons of any other special circumstances
not set forth above shall not terminate an Award or a portion thereof.
XII. AWARD AGREEMENT
Each employee granted an Award pursuant to the Plan shall sign an Award
Agreement which signifies the offer of the Award by the Company and the
acceptance of the Award by the employee in accordance with the terms of
the Award and the provisions of the Plan. Each Award Agreement shall
reflect the terms and conditions of the Award.
XIII. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION
In the event of a change in the capitalization of SFER due to a stock
split, stock dividend, recapitalization, merger, consolidation,
combination, or similar event, the aggregate shares subject to the Plan
and the terms of any existing Awards shall be adjusted by the Committee
to reflect such change.
XIV. LIMITED STOCK APPRECIATION RIGHTS
(a) The Committee shall have authority to grant a Limited Right to
the holder of any Option with respect to all or some of the shares of
Common Stock covered by such Option. A Limited Right may be granted
either at the time of grant of the Related LSAR Option or any time
thereafter during its term. A Limited Right may be exercised only
during the sixty-day period beginning on an Acceleration Date.
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<PAGE> 13
Each Limited Right shall be exercisable only if, and to the extent that,
the Related LSAR Option is exercisable. Notwithstanding the provisions
of the two immediately preceding sentences, no Limited Right may be
exercised by a holder who is subject to Section 16 of the Exchange Act
until the expiration of six months from the date of grant of the Limited
Right. Upon the exercise of a Limited Right, the Related LSAR Option
(and any tandem Stock Appreciation Right) shall cease to be exercisable
to the extent of the shares of Common Stock with respect to which such
Limited Right is exercised, but shall be considered to have been
exercised to that extent for purposes of determining the number of
shares of Common Stock available for the grant of further Options, Stock
Appreciation Rights and Limited Rights pursuant to this Plan. Upon the
exercise or termination of a Related LSAR Option, the Limited Right with
respect to such Related LSAR Options shall terminate to the extent of
the shares of Common Stock with respect to which the Related LSAR Option
was exercised or terminated.
(b) Upon the exercise of a Limited Right, the holder thereof shall
receive in cash whichever of the following amounts is applicable:
(i) in the case of an exercise of Limited Rights by reason of
an acquisition of Common Stock described in clause (a) of
the definition of Change in Control contained in Section I
hereof, an amount equal to the Acquisition Spread (as
defined in Subsection (d) hereof);
(ii) in the case of an exercise of Limited Rights by reason of
the change in composition of the Board of Directors
described in clause (b) of the definition of Change in
Control contained in Section I hereof, an amount equal to
the Spread (as defined in Subsection (g) hereof); or
(iii) in the case of an exercise of Limited Rights by reason of
stockholder approval of an agreement or adoption of a plan
described in clause (c) or (d) of the definition of Change
in Control contained in Section I hereof, an amount equal
to the Merger Spread (as defined in Subsection (f)
hereof).
Notwithstanding the foregoing provisions of this Section XIV(b), (i) in
the case of a Limited Right granted in respect of an Incentive Stock
Option, the holder may not receive an amount in excess of the maximum
amount that will enable such option to continue to qualify as an
Incentive Stock Option, and (ii) no payment shall occur by reason of
this Section XIV(b) to the extent that such payment, when aggregated
with other payments or benefits to the Participant, would as determined
by tax counsel selected by the Company, result in an Excess Parachute
Payment equal to or greater than three times the "base amount" as
defined in Section 280G of the Code. Furthermore, such payments or
benefits provided to a Participant under this Plan shall be reduced to
the extent necessary so that no portion thereof shall be subject to the
excise tax imposed by Section 4999 of the Code, but only if, by reason
of such reduction, the Participant's net after tax benefit shall exceed
the net after tax benefit if such reduction were not made. "Net after
tax benefit" shall have the meaning prescribed in Section V.
(c) The term "Acquisition Price Per Share" as used in this Section
XIV shall mean, with respect to the exercise of any Limited Right by
reason of an acquisition of Common Stock described in clause (a) of the
definition of Change in Control contained in Section I, the highest Fair
Market Value per share of Common Stock during the sixty-day period
ending on the date the Limited Right is exercised.
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<PAGE> 14
(d) The term "Acquisition Spread" as used in this Section XIV shall
mean an amount equal to the product obtained by multiplying (i) the
excess of (A) the Acquisition Price Per Share over (B) the price per
share of Common Stock at which the Related LSAR Option is exercisable,
by (ii) the number of shares of Common Stock with respect to which such
Limited Right is being exercised.
(e) The term "Merger Price Per Share" as used in this Section XIV
shall mean, with respect to the exercise of any Limited Right by reason
of stockholder approval of an agreement or adoption of a plan described
in clause (c) or (d) of the definition of Change in Control contained in
Section I, the greater of (i) the fixed or formula price for the
acquisition of shares of Common Stock specified in such agreement or
adoption, if such fixed or formula price is determinable on the date on
which such Limited Right is exercised, and (ii) the highest Fair Market
Value per share of Common Stock during the sixty-day period ending on
the date on which such Limited Right is exercised.
(f) The term "Merger Spread" as used in this Section XIV shall mean
an amount equal to the product obtained by multiplying (i) the excess of
(A) the Merger Price Per Share over (B) the price per share of Common
Stock at which the Related LSAR Option is exercisable, by (ii) the
number of shares of Common Stock with respect to which such Limited
Right is being exercised.
(g) The term "Spread" as used in this Section XIV shall mean, with
respect to the exercise of any Limited Right by reason of a change in
the composition of the Board described in clause (b) of the definition
of Change in Control contained in Section I, an amount equal to the
product obtained by multiplying (i) the excess of (A) the highest Fair
Market Value per share of Common Stock during the sixty-day period
ending on the date the Limited Right is exercised over (B) the price per
share of Common Stock at which the Related LSAR Option is exercisable,
by (ii) the number of shares of Common Stock with respect to which the
Limited Right is being exercised.
(h) A Limited Right shall not be transferable except by will or by
the laws of descent and distribution. During the lifetime of a
Participant, the Limited Right shall be exercisable only by such
Participant or by the Participant's guardian or legal representative.
(i) Each Limited Right shall be granted on such terms and conditions
not inconsistent with the Plan as the Committee may determine.
(j) To exercise a Limited Right, the Participant shall (i) give
written notice thereof to the Committee in form satisfactory to the
Committee specifying the number of shares of Common Stock with respect
to which the Limited Right is being exercised, and (ii) if requested by
the Committee, deliver the option agreement to the Committee, who shall
endorse thereon a notation of such exercise and return the option
agreement to the Participant. The date of exercise of a Limited Right
that is validly exercised shall be deemed to be the date on which there
shall have been delivered the instruments referred to in the first
sentence of this paragraph (j).
(k) The Company intends that this Section XIV shall comply with the
requirements of Rule 16b-3 and any future rules promulgated in
substitution therefor ("the Rule") under the Exchange Act during the
term of the Plan. Should
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<PAGE> 15
any provision of this Section XIV not be necessary to comply with the
requirements of the Rule or should any additional provisions be
necessary for this Section XIV to comply with the requirements of the
Rule, the Board may amend the Plan to add to or modify the provisions
of the Plan accordingly.
XV. BONUS STOCK
The Committee may, from time to time and subject to the provision of the
Plan, grant Awards of Bonus Stock to employees of the Company. In
addition, the Committee shall have the authority to pay in shares of
Common Stock all or any portion of the cash amounts payable under any
other compensation program of the Company, but not exceeding $2 million
with respect to any employee during any calendar year.
XVI. EMPLOYEE'S AGREEMENT
If, at the time of the exercise of any Option or Stock Appreciation
Right or Award of Restricted Stock or Bonus Stock, in the opinion of
counsel for the Company, it is necessary or desirable, in order to
comply with any then applicable laws or regulations relating to the sale
of securities, for the individual exercising the Option or Stock
Appreciation Right or receiving the Restricted Stock or Bonus Stock to
agree to hold any shares issued to the individual for investment and
without intention to resell or distribute the same and for the
individual to agree to dispose of such shares only in compliance with
such laws and regulations, the individual will, upon the request of the
Company, execute and deliver to the Company a further agreement to such
effect.
XVII. WITHHOLDING FOR TAXES
Any cash payment under the Plan shall be reduced by any amounts required
to be withheld or paid with respect thereto under all present or future
federal, state and local taxes and other laws and regulations that may
be in effect as of the date of each such payment ("Tax Amounts"). Any
issuance of Common Stock pursuant to the exercise of an Option or other
distribution of Common Stock under the Plan shall not be made until
appropriate arrangements have been made for the payment of any amounts
that may be required to be withheld or paid with respect thereto. Such
arrangements may, at the discretion of the Committee, include allowing
the Participant to tender to the Company shares of Common Stock owned by
the Participant, or to request the Company to withhold a portion of the
shares of Common Stock being acquired pursuant to the exercise or
otherwise distributed to the Participant, which have a Fair Market Value
per share as of the date of such Award exercise, tender or withholding
that is not greater than the sum of all Tax Amounts, together with
payment of any remaining portion of all Tax Amounts in cash or by check
payable and acceptable to the Company.
XVIII. AUTOMATIC DIRECTOR AWARDS
Beginning with the 1992 annual meeting of the stockholders of SFER, and
on each annual stockholders' meeting date thereafter, except as provided
below, each Director shall receive 37.5% of the value of his annual
retainer fee for serving as Director for such year then commencing paid
in the form of a Restricted Stock Award. The total number of shares of
Common Stock included in each such Restricted Stock Award shall be
determined by dividing the amount of the Director's annual retainer fee
that is to be paid in Common Stock by the Fair
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<PAGE> 16
Market Value of a share of Common Stock on such Grant Date. In no
event, however, shall SFER be required to issue a fractional share and
whenever a fractional share of Common Stock would otherwise be required
to be issued, an amount in lieu thereof shall be paid in cash based upon
the Fair Market Value of such fractional share.
The Restricted Period shall lapse on an Award of Restricted Stock
granted pursuant to this Section XVIII upon the earlier of the date that
is six months and one day after the Grant Date, the Director's death,
Retirement, or Disability or the occurrence of a Change in Control. If
a Director ceases to be a member of the Board during a Restricted Period
for any reason other than death, Disability or Retirement, the
Restricted Stock subject to such Restricted Period shall be forfeited.
Each certificate representing Restricted Stock awarded hereunder shall
be registered in the name of the Director and, during the Restricted
Period, shall be left on deposit with SFER with a stock power endorsed
in blank. Directors shall have the right to receive dividends paid on
their Restricted Stock and to vote such shares. Restricted Stock may
not be sold, pledged, assigned, transferred or encumbered during the
Restricted Period other than by will or the laws of descent and
distribution.
Notwithstanding the foregoing, any Director who immediately prior to the
relevant Grant Date owns, directly or indirectly, a beneficial interest
in 25,000 or more shares of Common Stock shall receive his annual
retainer fee paid solely in cash and not partly in the form of a
Restricted Stock Award as provided above.
XIX. DESIGNATION OF BENEFICIARY
Each Participant to whom an Award has been made under this Plan may
designate a beneficiary or beneficiaries (which beneficiary may be an
entity other than a natural person) to exercise any rights or receive
any payment that under the terms of such Award may become exercisable or
payable on or after the Participant's death. At any time, and from time
to time, any such designation may be changed or canceled by the
Participant without the consent of any such beneficiary. Any such
designation, change or cancellation must be on a form provided for that
purpose by the Committee and shall not be effective until received by
the Committee. If no beneficiary has been named by a deceased
Participant, or the designated beneficiaries have predeceased the
Participant, the beneficiary shall be the Participant's estate. If a
Participant designates more than one beneficiary, any such exercise or
payment under this Plan shall be made in equal shares unless the
Participant has designated otherwise, in which case the exercise or
payment shall be made in the shares designated by the Participant.
XX. PREEMPTION BY APPLICABLE LAWS AND REGULATIONS
Anything in the Plan or any agreement entered into pursuant to the Plan
to the contrary notwithstanding, if, at any time specified herein or
therein for the making of any determination, the issuance or other
distribution of shares of Common Stock, the payment of consideration to
an employee as a result of the exercise of any Stock Appreciation Right
or Limited Right, or the payment of any Phantom Units, as the case may
be, any law, regulation or requirement of any governmental authority
having jurisdiction in the premises shall require either the Company or
the Participant (or the Participant's beneficiary), as the case may be,
to take any
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<PAGE> 17
action in connection with any such determination, the shares then to be
issued or distributed, or such payment, the issue or distribution of
such shares or the making of such determination or payment, as the case
may be, shall be deferred until such action shall have been taken.
XXI. EFFECTIVE DATE AND DURATION OF PLAN
This Plan amendment and restatement shall become effective upon its
approval by the stockholders of SFER. Unless previously terminated by
the Board, the Plan shall terminate on the tenth anniversary of its
approval by the stockholders; provided, however, that such termination
shall not terminate any Award then outstanding. No Awards shall be made
pursuant to this Plan after December 31, 1999.
XXII. TERMINATION AND AMENDMENT
The Board may suspend, terminate, modify or amend the Plan, provided
that any amendment that would increase the aggregate number of shares
which may be issued under the Plan or materially modify the requirements
as to eligibility for participation in the Plan, shall be subject to the
approval of SFER's stockholders, except that any such increase or
modification that may result from adjustments authorized by Section XIII
does not require such approval; provided, further, that no amendment or
modification shall be made to Section XVIII more than once every six
months, other than to comport with changes in the Code or the Employee
Retirement Income Security Act of 1974, as amended, or rules promulgated
thereunder. No suspension, termination, modification or amendment of
the Plan may terminate a Participant's existing Award or materially
adversely affect a Participant's rights under such Award.
XXIII. MISCELLANEOUS
(a) Nothing contained in the Plan shall be construed as conferring
upon any employee the right to continue in the employ of the Company.
(b) An employee shall have no rights as a stockholder with respect to
shares covered by such employee's Option, Stock Appreciation Rights or
Restricted Stock award until the date of the issuance of shares to the
employee pursuant thereto. No adjustment will be made for dividends or
other distributions or rights for which the record date is prior to the
date of such issuance. An employee shall have no rights as a
stockholder with respect to any award of Phantom Units under the Plan.
(c) Nothing contained in the Plan shall be construed as giving any
employee, such employee's beneficiaries or any other person any equity
or other interest of any kind in any assets of the Company or creating a
trust of any kind or a fiduciary relationship of any kind between the
Company and any such person.
(d) Nothing contained in the Plan shall be construed to prevent the
Company from taking any corporate action that is deemed by the Company
to be appropriate or in its best interest, whether or not such action
would have an adverse effect on the Plan or any award made under the
Plan. No employee, beneficiary or other person shall have any claim
against the Company as a result of any such action.
(e) Neither an employee nor an employee's beneficiary shall have the
power or right to sell, exchange, pledge, transfer, assign or otherwise
encumber or dispose of
-17-
<PAGE> 18
such employee's or beneficiary's interest arising under the Plan or in
any Award received under the Plan; nor shall such interest be subject to
seizure for the payment of an employee's or beneficiary's debts,
judgments, alimony, or separate maintenance or be transferable by
operation of law in the event of an employee's or beneficiary's
bankruptcy or insolvency and to the extent any such interest arising
under the Plan or Award received under the Plan is awarded to a spouse
pursuant to any divorce proceeding, such interest shall be deemed to be
terminated and forfeited notwithstanding any vesting provisions or other
terms herein or in the agreement evidencing such award.
(f) All rights and obligations under the Plan shall be governed by,
and the Plan shall be construed in accordance with, the laws of the
State of Texas without regard to the principles of conflicts of laws.
Titles and headings to Sections herein are for purposes of reference
only, and shall in no way limit, define or otherwise affect the meaning
or interpretation of any provisions of the Plan.
-18-
<PAGE> 1
[SANTA FE ENERGY RESOURCES, INC. LETTERHEAD]
[Date]
Dear:
I am pleased to inform you that the Board of Directors of Santa Fe Energy
Resources, Inc. (The "Company") has granted you a non-qualified stock option to
buy the common stock of The Company as follows:
Non-Qualified Stock Option Grant #
Grant Date
Option Price Per Share
Total Number of Share Granted
By Signing this letter and the copy attached, you agree that this option is
granted under and governed by the terms and conditions of the Plan, including
the Terms and Conditions attached hereto and incorporated herein by reference.
I have included herewith a copy of the Plan for your convenience. This grant
shall be void and of no effect unless you execute both copies of the agreement
and return them to the undersigned within 30 days of the above date. Upon
receipt, The Company will execute both copies and return one to you for your
records.
Sincerely,
C. G. Hain, Jr.
OPTIONEE SANTA FE ENERGY RESOURCES,INC.
______________________ ____________________________________
______________________ ____________________________________
Date Date
<PAGE> 2
SANTA FE ENERGY RESOURCES, INC.
1990 INCENTIVE STOCK COMPENSATION PLAN
TERMS AND CONDITIONS-OPTION
The terms and conditions set forth below are hereby incorporated by
reference into the attached award agreement ("Agreement") by and between Santa
Fe Energy Resources, Inc. ("SFER") and the employee named therein (the
"Employee"). Terms defined in the Plan are used herein with the same meaning.
1. The Employee has agreed to perform services for SFER or its
subsidiary companies and to accept the grant of a Non-Qualified Stock Option
("Option") in accordance with the terms and provisions of the Plan and the
Agreement.
2. SFER has granted to the Employee the Option as shown in the
Agreement subject to the terms and conditions set forth in the Plan and the
Agreement. The Option shall become vested and exercisable [Insert Vesting
Schedule].
3. The Option may be exercised in whole or in part in two or more
successive parts; provided, however, that the Option shall not be exercisable
following the tenth anniversary of its Grant Date or the earlier lapse or
termination of the Option as provided herein. In no event shall this Option be
exercisable prior to the date that is six (6) months after the Grant Date.
4. Employee agrees that SFER or its subsidiaries may withhold any
federal, state or local taxes upon the exercise of the Option, at such time and
upon such terms and conditions as required by law. Notwithstanding anything
herein to the contrary, SFER shall not be obligated to issue any shares of
Common Stock pursuant to the exercise of the Option until the Employee has
satisfied such withholding obligations or made arrangements for satisfying such
obligations that are acceptable to SFER.
5. The Option may be exercised from time to time by a notice in
writing of such exercise, which states the Option Grant # set forth in the
Agreement and the number of shares in respect of which the Option is being
exercised. Such notice shall be delivered to the Secretary of SFER or
addressed to the Secretary of SFER at its office, 1616 South Voss Road,
Houston, Texas 77057. An election to exercise shall be irrevocable. The date
of exercise shall be the date the notice is hand delivered or mailed to the
Secretary, whichever is applicable.
6. An election to exercise an Option shall be accompanied by the
tender of the full purchase price of the shares of Common Stock for which the
election is made. Payment may be in cash, Common Stock of SFER already owned
or a combination of cash and shares. If the Employee desires to tender Common
Stock already owned by the Employee as payment, the Employee must notify the
Secretary in the written notice of exercise of such desire and, subject to the
Secretary's confirmation that the Employee is the recordholder of such number
of shares, it shall not be necessary for the Employee to tender stock
certificates to effectuate such payment of the exercise price. The value of
the number of shares tendered to exercise the Option cannot exceed the Option's
exercise price and such tendered shares shall be valued at their Fair Market
Value on the date of exercise of the Option.
7. The Option is not transferable by the Employee, otherwise than
by will or laws of descent and distribution, and may be exercised during the
lifetime of the Employee only by the Employee.
<PAGE> 3
8. Subject to paragraph 2 herein, upon termination of the
Employee's employment for any reason other than Disability, death or
Retirement, or by SFER or a subsidiary other than for cause, the Option
outstanding on such date of termination may be exercised by the Employee (a) to
the extent not then subject to a Restricted Period, within three months
following such termination of employment, but not thereafter, and (b) to the
extent subject to a Restricted Period, but not thereafter; however, in no event
shall the Option be exercisable after the tenth anniversary of the Grant Date.
To the extent the Option is subject to a Restricted Period on the Employee's
date of termination, such Option or the portion thereof that is not vested on
such date shall automatically lapse and be canceled unexercised as of the
employee's date of termination.
9. In the event of the Employee's termination of employment by
reason of death, the Restricted Period shall lapse on the Options awarded
herein. Following the date of death of the Employee the Option may be exercised
by the person to whom his rights shall pass by will or the laws of descent and
distribution, at any time within the one-year period beginning on the date of
death but not thereafter, and in no event shall the Option be exercisable after
the tenth anniversary of the Grant Date.
10. In the event of the Employee's termination of employment by
reason of Disability, Retirement or by the Company or a subsidiary for any
reason other than Cause, the Restricted Period shall lapse as to a portion of
Options as follows. The number of Options granted hereby shall be multiplied
by a fraction the denominator of which shall be 36 and the numerator of which
shall be the number of full months which have elapsed since the date of the
Grant with the Restricted Period lapsing as to the amount of Options so
determined.
11. In the event of a change in the capitalization of SFER due to
a stock split, stock dividend, recapitalization, merger, consolidation,
combination, or similar event, the terms of the Agreement shall be adjusted by
the Board to reflect such change.
12. Notwithstanding any other provision in the Plan or this
Agreement, if a Change in Control occurs while unexercised Options relating
thereto remain outstanding under the Plan, then from and after the Acceleration
Date, all Options shall be fully vested and exercisable in full on and after
the Acceleration Date whether or not otherwise exercisable; provided, however,
that no Option shall become exercisable by reason of this paragraph to the
extent that such acceleration of exercisability, when aggregated with other
payments or benefits to the Employee, would, as determined by tax counsel
selected by the Company, result in "Excess Parachute Payments" (as defined
below) equal to or greater than three times the "base amount" as defined in
Section 280G of the Internal Revenue Code of 1986, as amended (the "Code").
"Excess Parachute Payments" shall mean "parachute payments" as defined in
Section 280G of the Code other than (i) health and life insurance benefits and
(ii) payments attributable to any award, benefit or other compensation plan or
program based upon the number of full or fractional months of any restricted
period (relating thereto) which has elapsed prior to the date of the Change in
Control. Furthermore, such payments or benefits provided to an Employee under
this Plan shall be reduced to the extent necessary so that no portion thereof
shall be subject to the excise tax imposed by Section 4999 of the Code, but
only if, by reason of such reduction, the Employee's net after tax benefits
shall exceed the net after tax benefit if such a reduction were not made. "Net
after tax benefit" shall mean the sum of (i) all payments and benefits which an
Employee receives or is then entitled to receive from the Company and any of
its subsidiaries that would constitute a "parachute payment" within the meaning
of Section 280G of the Code, less (ii) the amount of federal income taxes
payable with respect to the payments and benefits described in (i) above
calculated at the maximum marginal income tax rate for each year in which such
payments and benefits shall be paid to Employee (based upon the rate in effect
for such year as set forth in the Code at the time of the first payment of the
foregoing); less (iii) the amount of excise taxes imposed with respect to the
payments and benefits described in (i) above by Section 4999 of the Code.
2
<PAGE> 4
13. Nothing in the Agreement or in the Plan shall confer any right
on the Employee to continue employment with SFER or its subsidiaries nor
restrict SFER or its subsidiaries from termination of the employment
relationship of the Employee at ant time.
14. Notwithstanding any other provision of the Agreement, the
Employee agrees that the Employee will not exercise any Options and SFER shall
not be obligated to deliver any shares of Common Stock or make any cash
payments, if counsel to SFER determines such exercise, delivery or payment
would violate any law or regulation of any governmental authority or agreement
between SFER and any national securities exchange upon which the Common Stock
is listed.
15. In the event of a conflict between the terms of this Agreement
and the Plan, the Plan shall be the controlling document. Capitalized terms
used herein and not otherwise defined shall have the meaning ascribed to them
in the Plan.
3
