<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.
1995 INCENTIVE STOCK COMPENSATION PLAN
FOR NONEXECUTIVE EMPLOYEES
(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 1,000,000 Shares $9.625(1) $9,625,000(1) $3,319
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
</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
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.
Santa Fe Energy Resources, Inc. (the "Company") incorporates herein by
reference the following documents, or portions of documents, as of their
respective dates as filed with the Securities and Exchange Commission:
(1) The Annual Report of the Company on Form 10-K for the fiscal year
ended December 31, 1994;
(2) The Quarter Report of the Company on Form 10-Q for the quarterly
period ended March 31, 1995;
(3) The Current Report of the Company on Form 8-K dated April 20,
1995; and
(4) The description of the Company's common stock, par value $.01 per
share (the "Common Stock"), contained in the Company's Registration
Statement on Form 8-A (File No. 1-7667) filed pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), on February 21,
1990.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Exchange Act after the date of this Registration Statement and
prior to the filing of a post-effective amendment, which indicates that all
securities offered hereby have been sold or which deregisters all such
securities then remaining unsold, shall be deemed to be incorporated by
reference in this Registration Statement and to be a part hereof from the date
of filing such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
The information required by Item 4 is not applicable to this Registration
Statement since the class of securities to be offered is registered under
Section 12 of the Exchange Act.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The information required by Item 5 is not applicable to this Registration
Statement.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Subsection (a) of Section 145 of the General Corporation Law of the State
of Delaware empowers a corporation to indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful.
Subsection (b) of Section 145 empowers a corporation to indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that such
person acted in any of the capacities set forth above, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation, except that no indemnification may be made in
respect of any claim, issue or matter as to which such person shall have been
II-1
<PAGE> 3
adjudged to be liable to the corporation unless and only to the extent that the
Court of Chancery or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of Chancery or such
other court shall deem proper.
Section 145 further provides that to the extent a director or officer of a
corporation has been successful on the merits or otherwise in the defense of any
action, suit or proceeding referred to in subsections (a) and (b) of Section 145
or in the defense of any claim, issue or matter therein, he shall be indemnified
against expenses (including attorneys' fees) actually and reasonably incurred by
him in connection therewith; that indemnification provided for by Section 145
shall not be deemed exclusive of any other rights to which the indemnified party
may be entitled; that indemnification provided by Section 145 shall, unless
otherwise provided when authorized or ratified, continue as to a person who has
ceased to be a director, officer, employee or agent and shall inure to the
benefit of such person's heirs, executors and administrators; and empowers the
corporation to purchase and maintain insurance on behalf of a director or
officer of the corporation against any liability asserted against him and
incurred by him in any such capacity, or arising out of his status as such,
whether or not the corporation would have the power to indemnify him against
such liabilities under Section 145.
Section 102(b)(7) of the General Corporation Law of the State of Delaware
provides that a certificate of incorporation may contain a provision eliminating
or limiting the personal liability of a director to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director,
provided that such provision shall not eliminate or limit the liability of a
director (i) for any breach of the director's duty of loyalty to the corporation
or its stockholders, (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the Delaware General Corporation Law, or (iv) for any transaction
from which the director derived an improper personal benefit.
Article NINTH of the Company s Restated Certificate of Incorporation states
that:
"No director of the Corporation shall be personally
liable to the Corporation or its stockholders for monetary
damages from breach of fiduciary duty by such director as a
director; provided, however, that this Article NINTH shall not
eliminate or limit the liability of a director to the extent
provided by applicable law (i) for any breach of the
director's duty of loyalty to the Corporation or its
stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of
law, (iii) under Section 174 of the General Corporation Law of
the State of Delaware, or (iv) for any transaction from which
the director derived an improper personal benefit. No
amendment to or repeal of this Article NINTH shall apply to,
or have any effect on, the liability or alleged liability of
any director of the Corporation for or with respect to any
facts or omissions of such director occurring prior to such
amendment or repeal. If the General Corporation Law of the
State of Delaware is amended to authorize corporate action
further eliminating or limiting the personal liability of
directors, then the liability of a director of the Corporation
shall be eliminated or limited to the fullest extent permitted
by the General Corporation Law of the State of Delaware, as so
amended."
Article VI of the Company's Bylaws further provides that the Company shall
indemnify its officers, directors and employees to the fullest extent permitted
by law. Pursuant to such provision, the Company has entered into agreements with
various of its officers, directors and employees which provide for
indemnification of such persons.
The Company maintains a $25,000,000 policy of officers' and directors'
liability insurance.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
The information required by Item 7 is not applicable to this Registration
Statement.
II-2
<PAGE> 4
ITEM 8. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
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. 1995 Incentive Stock Compensation Plan
for Nonexecutive Employees.
</TABLE>
ITEM 9. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this Registration Statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in this Registration Statement
or any material change to such information in this Registration
Statement.
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be included in a post-effective
amendment by the foregoing paragraphs is contained in periodic reports
filed by the registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in this
Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in this Registration
Statement shall be deemed to be a new registration statement relating to the
securities offered herein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
II-3
<PAGE> 5
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-4
<PAGE> 6
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-5
<PAGE> 7
<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-6
<PAGE> 8
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
NUMBERED
NUMBER DESCRIPTION PAGE
------ ----------- -----------
<C> <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. 1995 Incentive Stock Compensation
Plan for Nonexecutive Employees.
</TABLE>
II-7
<PAGE> 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 1,000,000
shares of common stock, par value $0.01 per share (the "Common Stock"), of the
Company issuable under the Santa Fe Energy Resources, Inc. 1995 Incentive Stock
Compensation Plan for Nonexecutive Employees (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
SANTA FE ENERGY RESOURCES, INC.
1995 INCENTIVE STOCK COMPENSATION PLAN
FOR NONEXECUTIVE EMPLOYEES
STATEMENT OF PURPOSE
The purpose of the Santa Fe Energy Resources, Inc. 1995 Incentive
Stock Compensation Plan For Nonexecutive Employees (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.
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, 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"),
<PAGE> 2
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 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
-2-
<PAGE> 3
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.
"Disability" means the inability of a Participant to continue
to perform the duties of his or her employment with the Company 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 an 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 shall be a
"Non-Qualified Stock Option."
"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 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
-3-
<PAGE> 4
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, which is not an Incentive Stock Option within the
meaning of Code Section 422.
"Participant" means any eligible employee of the Company 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. 1995
Incentive Stock Compensation Plan For Nonexecutive Employees 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.
"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. SHARES SUBJECT TO AWARDS UNDER THE PLAN
Subject to the adjustment as provided in the Plan, the maximum
number of shares of Common Stock with respect to which Options,
Restricted Stock, Bonus Stock, Phantom Units and Stock Appreciation
Rights may be granted under the Plan is 1,000,000; provided,
however, if as of any January 1 the number of shares of Common Stock
that are available for Awards under the Plan is less than 1,000,000
shares, the maximum number of shares available for Awards shall be
increased automatically on such January 1 by the number of shares
necessary to equal 1,000,000 shares available for Awards.
Notwithstanding the foregoing, in no event shall the aggregate
shares of Common Stock granted pursuant to Awards and available for
Awards equal or exceed 20% of the Company's "voting power
outstanding" (as such term is
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defined in Paragraph 312.03 of the New York Stock Exchange Listed
Company Manual). 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 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. 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 XX.
IV. ELIGIBILITY
Subject to the discretion of the Committee, all employees of the
Company who have responsibility for the growth and profitability of
the Company, but excluding any employee who is subject to the
provisions of Section 16 of the Securities Exchange Act of 1934, as
amended, as determined by the Committee, are eligible to receive
Awards under the Plan ("Eligible Employees").
V. OPTIONS
The Committee may, from time to time and subject to the provisions
of the Plan, grant Awards of Options to Eligible Employees of the
Company to purchase shares of Common Stock. Any Options granted
shall be designated as Non-Qualified Stock Options.
The purchase price of the Common Stock subject to any Options shall
be determined by the Committee, but may not be less than 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.
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.
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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 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
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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. BONUS STOCK
The Committee may, from time to time and subject to the provision of
the Plan, grant Awards of Bonus Stock to Eligible 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.
VII. RESTRICTED STOCK
The Committee may, from time to time and subject to the provisions
of the Plan, grant Awards of Restricted Stock to Eligible Employees
of the Company.
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
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<PAGE> 8
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
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 Eligible
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,
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<PAGE> 9
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.
IX. PHANTOM UNITS
The Committee may, from time to time and subject to the provisions
of the Plan, grant Awards of Phantom Units to Eligible Employees of
the Company. 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 certain goals for the performance of the Company and the
Restricted Period over which the goals must be achieved. Such
designated goals must be achieved in order for a Participant to
receive the full 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.
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 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
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<PAGE> 10
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 (determined at date of grant) applicable to
the Award (rounded up to the nearest whole month) and the numerator
of which is the number of months of such Restricted Period remaining
(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 prior to such payment or issuance, to the
Participant's designated beneficiary,
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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
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an Acceleration Date. 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
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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.
(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).
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(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 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. 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.
XVI. 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.
XVII. 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
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<PAGE> 15
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.
XVIII. 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 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.
XIX. EFFECTIVE DATE AND DURATION OF PLAN
This Plan shall become effective upon its approval by the Board of
SFER and shall continue until terminated by the Board.
XX. TERMINATION AND AMENDMENT
The Board may suspend, terminate, modify or amend the Plan at any
time or times; however, 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.
XXI. 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,
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<PAGE> 16
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 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.
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