<PAGE>
As filed with the Securities and Exchange Commission on May 31, 1996
Registration No. 33-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
-------------------
CONVEST ENERGY CORPORATION
(Exact name of registrant as specified in its charter)
TEXAS 76-0312028
(State or other jurisdiction (I.R.S. Employer
incorporation or organization) Identification No.)
2401 Fountain View Dr., Suite 700
Houston, Texas 77057
(Address of Principal Executive Offices)
1995 STOCK INCENTIVE PLAN
(Full title of the plan)
CONVEST ENERGY CORPORATION
2401 Fountain View Dr., Suite 700
Houston, Texas 77057
(713) 780-1952
(Name, address and telephone number of agent for service)
Copies to:
PAUL E. PRYZANT
SNELL & SMITH, P. C.
1000 Louisiana, Suite 3650
Houston, Texas 77002
-------------------
CALCULATION OF REGISTRATION FEE
================================================================================
<TABLE>
<CAPTION>
Proposed Proposed
Title of maximum maximum
securities Amount offering aggregate Amount of
to be to be price offering registration
registered registered(1) per share price fee
- -------------------------- ---------------- ---------- ---------- ------------
<S> <C> <C> <C> <C>
Common Stock, 1,000,000 shares $4 .875 (2) $4,875,000 $1,681.03
$.01 par value
</TABLE>
================================================================================
(1) The registration statement also includes an indeterminable number of
additional shares that may become issuable pursuant to the antidilution
adjustment provisions of the plan.
(2) In accordance with Rule 457, calculated on the basis of the average of the
high and low sale prices for Common Stock on the American Stock Exchange on
May 28, 1996.
================================================================================
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents are incorporated by reference in this
registration statement:
(a) The Registrant's latest annual report on Form 10-K, or, if the
financial statements therein are more current, the Registrant's latest
prospectus, other than the prospectus of which this document is a part, filed
pursuant to rule 424(b) or (c) of the Securities Exchange Commission under the
Securities Act of 1933.
(b) All other reports filed by the Registrant pursuant to sections
13(a) or 15(d) of the Securities Exchange Act of 1934 since the end of the
fiscal year covered by the annual report or the prospectus referred to in (a)
above.
(c) The descriptions of the Registrant's Common Stock which are
contained in the Registrant's registration statement filed under section 12 of
the Securities Exchange Act of 1934, including any amendment or reports filed
for the purpose of updating such descriptions.
All documents subsequently filed by the Registrant pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934,
prior to the filing of a post-effective amendment to the registration statement
which indicates that all of the shares of common stock offered have been sold or
which deregisters all of such shares then remaining unsold, shall be deemed to
be incorporated by reference in the registration statement and to be a part
hereof from the date of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this registration statement
to the extent that a statement contained herein or in any other subsequently
filed document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this registration statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article XI of the Registrant's Articles of Incorporation, as amended
(the "Articles"), and Article IV of the Registrant's Restated Bylaws, as amended
(the "Bylaws"), contain identical indemnification provisions that are consistent
with, and subject to the limitations of the Texas Business Corporation Act
("TBCA"). To the maximum extent permitted by law, the Registrant's Articles and
Bylaws provide for mandatory
II-1
<PAGE>
indemnification of directors, and permissive indemnification of officers,
employees, agents and other persons acting for the Registrant against losses,
damages, claims or liabilities to which they may become subject or which they
may incur as a result of being or having been a director, officer, employee or
agent of the Registrant or other person acting for the Registrant. In addition,
the Registrant must advance or reimburse directors and officers, and may advance
or reimburse employees, agents or other persons for expenses incurred by them in
connection with indemnifiable claims. As permitted by the TBCA, the
Registrant's Board of Directors, by duly adopted resolution, has provided that
the Registrant shall indemnify its officers duly elected or appointed by the
Registrant's Board of Directors in the same manner and to the same extent that
the Registrant is obligated to indemnify its directors pursuant to the Articles
and Bylaws, as each may be amended or restated from time to time.
Article 2.02-1 of the TBCA empowers the Registrant to indemnify
present and former directors, officers, employees, agents and other persons
acting on the Registrant's behalf against judgments, penalties (including excise
and similar taxes), fines, settlements and reasonable expenses (including court
costs and attorneys' fees) actually incurred by them in connection with a
proceeding brought against them in their respective present or former capacities
as directors, officers, employees or agents of the Registrant, or of any other
entity in which they are or were serving in such at the Registrant's request.
However, the TBCA provides that unless a court of competent jurisdiction
determines otherwise, indemnification is available only if the person (1) acted
in good faith, (2) reasonably believed that he acted (a) in his official
capacity, in a manner which was in the corporation's best interests, and (b) in
other than his official capacity, in a manner which he reasonably believed was
at least not opposed to the corporation's best interests, and (3) in the case of
any criminal proceeding, had no reasonable cause to believe his conduct was
unlawful. Even if these three elements are established, if a person is found
liable to the corporation, or liable on the basis that he received an improper
personal benefit, indemnification is (i) limited to his reasonable expenses, and
(ii) prohibited if he is found liable for willful or intentional misconduct in
performing his duties to the corporation.
The TBCA prescribes procedures that a corporation must use in
determining whether a claim is indemnifiable under the statute; if so, whether
to authorize indemnification (unless it is made mandatory by articles of
incorporation, bylaws, director or shareholder resolution, or agreement); and
the reasonableness of any expenses for which indemnification is sought. Each of
these determinations must be made by (i) majority vote of a quorum of
disinterested directors, (ii) if such quorum is unobtainable, then by a majority
vote of a special committee of disinterested directors appointed by a majority
vote of all directors, (iii) special legal counsel selected by the board of
directors or a committee of the board by vote as described in (i) or (ii), or if
such quorum is unobtainable or such committee cannot be established, then by a
majority vote of all directors, or (iv) vote of disinterested shareholders.
Consistent with Article 2.02-1 of the TBCA, the Registrant's Articles
and Bylaws, also empower it to procure and maintain insurance on behalf of any
person who is or was a director, officer, employee or agent of the Registrant,
or at the Registrant's request, of another entity, against any liability
asserted against him in such capacity regardless of whether the Registrant could
indemnify him against such liability under the TBCA.
In accordance with Article 1302-7.06 of the Texas Miscellaneous
Corporation Laws Act, Article X of the Registrant's Articles of Incorporation,
as amended, eliminates a director's liability to the Registrant and its
shareholders for monetary damages for an act or omission in his capacity as a
director, except that such provision does not eliminate or limit a director's
liability for: (1) a breach of his duty of loyalty to the Registrant or its
shareholders, (2) an act or omission not in good faith or involving intentional
misconduct
II-2
<PAGE>
or a knowing violation of law, (3) a transaction from which he received an
improper benefit, (4) an act or omission for which the liability of a director
is expressly provided for by statute, or (5) an act related to an unlawful stock
repurchase or dividend payment. If a director breaches any other fiduciary duty
in performing his duties as a director, neither the Registrant nor its
shareholders could recover monetary damages from the director; only equitable
remedies, such as an action to enjoin or rescind a transaction involving a
breach of fiduciary duty, may be available. To the extent certain claims
against directors are limited to equitable remedies, the provision in the
Registrant's Articles of Incorporation, as amended, may reduce the likelihood of
derivative litigation and may discourage shareholders or management from
initiating litigation against directors for breach of their fiduciary duties.
Additionally, equitable remedies may not be effective in many situations. If a
shareholder's only remedy is to enjoin the completion of the board of directors'
action, such remedy would be ineffective if the shareholder does not become
aware of a transaction or event until after it has been completed. In such a
situation, it is possible that the Registrant and its shareholders would have
not effective remedy against the directors.
The above discussion of the Registrant's Articles and Bylaws and Texas
statutes is not intended to be exhaustive and is qualified in its entirety by
the Articles and Bylaws and such statutes.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
4.1 Articles of Incorporation of the Registrant [Incorporated by reference
to Exhibit 4.2 to Registrant's Current Report on Form 8-K filed on
December 24, 1990]
4.2 Bylaws of the Registrant [Incorporated by reference to Exhibit 3.2 to
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1992]
4.3 Specimen Stock Certificate [Incorporated by reference to Exhibit 8.1
to Registrant's Current Report on Form 8-K filed on December 24, 1990]
* 5.1 Opinion of Snell & Smith, A Professional Corporation
* 10.1 1995 Stock Incentive Plan
* 23.1 Consent of Snell & Smith, a Professional Corporation [Included in
Exhibit 5.1]
* 23.2 Consent of Arthur Andersen LLP
24.1 Powers of Attorney (Included on Page II-7)
_______________
* Filed herewith
II-3
<PAGE>
ITEM 9. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to 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 the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
Provided, however, that paragraph (a)(1)(i) and (a)(1)(ii) shall not
apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed by
the registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in
the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) The undersigned registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent or
given, the latest annual report to security holders that is incorporated by
reference and furnished pursuant to and meeting the requirements of Rule 14a-3
or Rule 14c-3 under the Securities Exchange Act of 1934; and, where interim
financial information required to be presented by Article 3 of Regulation S-X is
not set forth in the prospectus, to deliver, or cause
II-4
<PAGE>
to be delivered to each person to whom the prospectus is sent or given, the
latest quarterly report that is specifically incorporated by reference in the
prospectus to provide such interim financial information.
(d) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Act") 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, un enforceable. In the event that a claim or
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 pinion 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-5
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement or amendment thereto to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Houston, State of Texas on May 30,
1996.
CONVEST ENERGY CORPORATION
By: Michael Y. McGovern
----------------------------------------
MICHAEL Y. McGOVERN, Chairman
and Chief Executive Officer
II-6
<PAGE>
POWER OF ATTORNEY
We, the undersigned officers and directors of Convest Energy Corporation,
hereby severally constitute Michael Y. McGovern and Gary L. Pittman, and each of
them singly, our true and lawful attorneys with full power to them, and each of
them singly, to sign for us and in our names, in the capacities indicated below,
the Registration Statement filed herewith and any amendments to said
Registration Statement, and generally to do all such things in our name and
behalf in our capacities as officers and directors to enable Convest Energy
Corporation to comply with the provisions of the Securities Act of 1933, as
amended, and all requirements of the Securities and Exchange Commission, hereby
ratifying and confirming our signatures as they may be signed by our said
attorneys, or any of them, to said Registration Statement and any and all
amendments thereto.
Witness our hands on the date set forth below.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement or amendment thereto has been signed by the following
persons in the capacities and on May 30, 1996.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
Michael Y. McGovern Chairman of the Board and Chief
- -------------------------------------- Executive Officer
Michael Y. McGovern
Richard T. Howell President and Chief Operating Officer
- -------------------------------------- and Director
Richard T. Howell
Gary L. Pittman Executive Vice President and Chief
- -------------------------------------- Financial Officer (Principal
Gary L. Pittman Financial and Accounting Officer)
Timothy J. Andrews
- -------------------------------------- Director
Timothy J. Andrews
E. Murray Gullatt
- -------------------------------------- Director
E. Murray Gullatt
Vernon T. Jones, Sr.
- -------------------------------------- Director
Vernon T. Jones, Sr.
T. Franklin Myers
- -------------------------------------- Director
T. Franklin Myers
Leonard B. Rosenberg
- -------------------------------------- Director
Leonard B. Rosenberg
</TABLE>
II-7
<PAGE>
EXHIBIT 5.1
SNELL & SMITH, P.C.
1000 Louisiana, Suite 3650
Houston, Texas 77002
713/652-3300
May 30, 1996
Board of Directors
Convest Energy Corporation
2401 Fountain View Drive, Suite 700
Houston, Texas 77057
Gentlemen:
We have acted as counsel to Convest Energy Corporation, a Texas 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
Convest Energy Corporation 1995 Stock Incentive 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 shares of
Common Stock to be issued by the Company pursuant to the Plan have been duly
authorized, and that the Common Stock, 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,
SNELL & SMITH
A Professional Corporation
<PAGE>
EXHIBIT 10.1
================================================================================
CONVEST ENERGY CORPORATION
1995 STOCK INCENTIVE PLAN
October 3, 1995
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I. GENERAL.................................................... 1
Section 1.1. Purpose................................................. 1
Section 1.2. Administration.......................................... 1
Section 1.3. Eligibility for Participation........................... 2
Section 1.4. Types of Awards Under Plan.............................. 2
Section 1.5. Aggregate Limitation on Awards.......................... 3
Section 1.6. Effective Date and Term of Plan......................... 3
ARTICLE II. STOCK OPTIONS............................................. 3
Section 2.1. Award of Stock Options.................................. 3
Section 2.2. Stock Option Agreements................................. 3
Section 2.3. Stock Option Price...................................... 4
Section 2.4. Term and Exercise....................................... 4
Section 2.5. Manner of Payment....................................... 4
Section 2.6. Delivery of Shares...................................... 4
Section 2.7. Death, Retirement and Termination of Employment of
Optionee............................................... 4
Section 2.8. Tax Election............................................ 5
ARTICLE III. INCENTIVE STOCK OPTIONS.................................. 5
Section 3.1. Award of Incentive Stock Options........................ 5
Section 3.2. Incentive Stock Option Agreements....................... 6
Section 3.3. Incentive Stock Option Price............................ 6
Section 3.4. Term and Exercise....................................... 6
Section 3.5. Maximum Amount of Incentive Stock Option Grant.......... 6
Section 3.6. Death of Optionee....................................... 6
Section 3.7. Retirement or Disability................................ 6
Section 3.8. Termination of Employment for Other Than Cause.......... 7
Section 3.9. Termination for Cause or Other Reasons.................. 7
Section 3.10. Applicability of Stock Options Sections................. 7
ARTICLE IV. BONUS STOCK AWARDS........................................ 7
Section 4.1. Award of Bonus Stock.................................... 7
Section 4.2. Bonus Stock Agreements.................................. 7
Section 4.3. Transfer Restriction.................................... 7
ARTICLE V. AUTOMATIC AWARDS........................................... 7
Section 5.1. Grant................................................... 7
Section 5.2. Award Agreements........................................ 7
Section 5.3. Applicability of Stock Options Sections................. 7
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
ARTICLE VI. MISCELLANEOUS......................................... 8
Section 6.1. General Restriction................................. 8
Section 6.2. Non-Assignability................................... 8
Section 6.3. Withholding Taxes................................... 8
Section 6.4. Right to Terminate Employment....................... 8
Section 6.5. Non-Uniform Determinations.......................... 9
Section 6.6. Rights as a Stockholder............................. 9
Section 6.7. Definitions......................................... 9
Section 6.8. Leaves of Absence................................... 10
Section 6.9. Newly Eligible Employees............................ 10
Section 6.10. Adjustments......................................... 10
Section 6.11. Changes in the Company's Capital Structure.......... 10
Section 6.12. Amendment of the Plan............................... 12
Section 6.13. Rights Under the Plan............................... 13
Section 6.14. Applicable Law...................................... 13
Section 6.15. Intention to Comply With Applicable Securities Laws. 13
</TABLE>
<PAGE>
CONVEST ENERGY CORPORATION
1995 STOCK INCENTIVE PLAN
ARTICLE I. GENERAL
SECTION 1.1. PURPOSE. The purposes of this Stock Incentive Plan (the
"Plan") are to: (1) closely associate the interests of the officers, directors
and key employees of CONVEST ENERGY CORPORATION and its subsidiaries
(collectively referred to as the "Company") with the stockholders to generate an
increased incentive to contribute to the Company's future success and
prosperity, thus enhancing the value of the Company for the benefit of its
stockholders; (2) provide officers, directors and key employees with a
proprietary ownership interest in the Company commensurate with Company
performance, as reflected in increased stockholder value; (3) maintain
competitive compensation levels thereby attracting and retaining highly
competent and talented officers and employees; and (4) provide an incentive to
the officers, directors and key employees for continuous employment with the
Company. Certain capitalized terms are defined in Section 6.7.
SECTION 1.2. ADMINISTRATION.
(a) The Plan shall be administered by the Compensation Committee of the
Board of Directors of the Company (the "Committee"), as constituted from
time to time, each member of which shall be a disinterested person
appointed by the Board of Directors. The Committee shall consist of at
least two members of the Board of Directors. During the one year prior to
commencement of service on the Committee, the Committee members shall not
have participated in, and while serving on the Committee, such members
shall not be eligible for selection as persons to whom Options or Bonus
Stock may be granted under the Plan or any other discretionary plan of the
Company under which participants are entitled to acquire stock, stock
options or stock appreciation rights of the Company,
provided, however, that Committee members shall be allowed to participate
in the following:
(i) a formula plan meeting the conditions of Rule 16b-
3(c)(2)(ii) promulgated under Securities Exchange Act of 1934, as
amended (the "1934 Act"), which includes the automatic grant of non-
discretionary awards as provided in Article V herein;
(ii) an ongoing securities acquisition plan meeting the
conditions of Rule 16b-3(d)(2)(i) promulgated under the 1934 Act;
(iii) an election to receive an annual retainer fee in either
cash or an equivalent amount of securities, or partly in cash and
partly in securities; or
(iv) another plan or arrangement for which a grant or award does
not, in the opinion of the Company's counsel, on the basis of (A) the
rules promulgated under the 1934 Act and/or (B) interpretive or no
action advice from the Staff of the Securities and Exchange Commission,
cause a member of the Committee to fail to qualify as a "disinterested
person" under Rule 16b-3(c)(2)(i) promulgated under the 1934 Act.
(b) The Committee shall have the authority, in its sole discretion and
from time to time to:
1
<PAGE>
(i) designate the officers and key employees of the Company
eligible to participate in the Plan;
(ii) grant Awards provided in the Plan in such form and amount
as the Committee shall determine;
(iii) impose such limitations, restrictions and conditions, not
inconsistent with this Plan, upon any such Award as the Committee shall
deem appropriate;
(iv) prescribe the form and terms of instruments evidencing
such Awards; and
(v) interpret the Plan and any agreement, instrument or other
document executed in connection with the Plan; adopt, amend and rescind
rules and regulations relating to the Plan; and make all other
determinations and take all other action necessary or advisable for the
implementation and administration of the Plan.
(c) Decisions and determinations of the Committee on all matters
relating to the Plan shall be in its sole discretion and shall be final,
conclusive and binding upon all persons, including the Company, any
participant, any stockholder of the Company and any employee. A majority of
the members of the Committee may determine its actions and fix the time and
place of its meetings. No member of the Committee shall be liable for any
action taken or decision made relating to the Plan or any Award thereunder.
SECTION 1.3. ELIGIBILITY FOR PARTICIPATION. Participants in the Plan
shall be selected by the Committee from the directors, officers and employees of
the Company who, in the opinion of the Committee, have the capacity to
contribute to the growth, success and profitability of the Company. In making
this selection and in determining the form and amount of Awards, the Committee
shall consider any factors deemed relevant, including the individual's
functions, responsibilities, value of services to the Company, and past and
potential contributions to the Company's profitability and growth.
SECTION 1.4. TYPES OF AWARDS UNDER PLAN. Awards under the Plan may be in
the form of any one or more of the following:
(i) Stock Options, as described in Article II;
(ii) Incentive Stock Options, as described in Article III;
(iii) Bonus Stock Awards, as described in Article IV; and/or
(iv) Automatic Awards, as described in Article V.
Awards under the Plan shall be evidenced by an Award Agreement between the
Company and the recipient of the Award, in form and substance satisfactory to
the Committee, and not inconsistent with this Plan. Award Agreements may provide
such vesting schedules for Stock Options and Incentive Stock Options, and such
other terms, conditions and provisions as are not inconsistent with the terms of
this Plan. Subject to the express provisions of the Plan, and within the
limitations of the Plan, the Committee may modify, extend or renew outstanding
Award Agreements, or accept the surrender of outstanding Awards and authorize
the granting of new Awards in substitution therefor. However, except as
provided in this Plan, no modification of an Award shall impair the rights of
the holder thereof without his consent.
2
<PAGE>
SECTION 1.5. AGGREGATE LIMITATION ON AWARDS.
(a) Shares of stock which may be issued under the Plan shall be
authorized and unissued or treasury shares of Common Stock of the Company
("Common Stock"). Subject to adjustment by the operation of Section 6.10
hereof, the maximum number of shares of Common Stock which may be issued
pursuant to Awards issued under the Plan shall be 1,000,000.
(b) For purposes of calculating the maximum number of shares of
Common Stock which may be issued under the Plan at any time:
(i) all the shares issued (including the shares, if any,
withheld for tax withholding requirements) under the Plan shall be
counted when cash is used as full payment for shares issued upon
exercise of a Stock Option or Incentive Stock Option;
(ii) only the net shares issued (including the shares, if
any, withheld for tax withholding requirements) shall be counted when
shares of Common Stock or another Award under the Plan are used or
withheld as full or partial payment for shares issued upon exercise
of a Stock Option or Incentive Stock Option; and
(iii) only the net shares issued as Bonus Stock shall be
counted (shares reacquired by the Company because of failure to
become fully vested or for any other reason shall again be available
for issuance under the Plan).
(c) Shares tendered by a participant as payment for shares issued
upon exercise of a Stock Option or Incentive Stock Option shall be available
for issuance under the Plan. Any shares of Common Stock subject to a Stock
Option or Incentive Stock Option which for any reason is terminated
unexercised or expires shall again be available for issuance under the Plan.
SECTION 1.6. EFFECTIVE DATE AND TERM OF PLAN.
(a) The Plan shall become effective on the date adopted by the
holders of a majority of the shares of Common Stock present in person or by
proxy and entitled to vote at the Annual Meeting of Stockholders of the
Company held in 1996; provided, however, that the Committee shall have the
discretion to make Plan effective immediately upon a Change of Control.
(b) No Awards shall be made under the Plan after the tenth
anniversary of the effective date of this Plan; provided, however, that the
Plan and all Awards made under the Plan prior to such date shall remain in
effect until such Awards have been satisfied or terminated in accordance with
the Plan and the terms of such Awards.
ARTICLE II. STOCK OPTIONS
SECTION 2.1. AWARD OF STOCK OPTIONS. The Committee may from time to time, and
subject to the provisions of the Plan and such other terms and conditions as the
Committee may prescribe, grant to any participant in the Plan one or more
options to purchase for cash or shares the number of shares of Common Stock
("Stock Options") allotted by the Committee. The date a Stock Option is granted
shall mean the date selected by the Committee as of which the Committee allots a
specific number of shares to a participant pursuant to the Plan.
3
<PAGE>
SECTION 2.2. STOCK OPTION AGREEMENTS. The grant of a Stock Option shall be
evidenced by a written Award Agreement, executed by the Company and the holder
of a Stock Option (the "Optionee"), stating the number of shares of Common Stock
subject to the Stock Option evidenced thereby, and in such form as the Committee
may from time to time determine.
SECTION 2.3. STOCK OPTION PRICE. The option price per share of Common Stock
deliverable upon the exercise of a Stock Option shall be 100% of the fair market
value of a share of Common Stock on the date the Stock Option is granted.
SECTION 2.4. TERM AND EXERCISE. A Stock Option shall be exercisable at such
time and under such conditions as set forth in the Award Agreement, but in no
event shall a Stock Option be exercisable prior to six months from the date of
its grant or later than the tenth anniversary of the date of grant (the "Option
Term"). No Stock Option shall be exercisable after the expiration of its Option
Term.
SECTION 2.5. MANNER OF PAYMENT. Each Award Agreement providing for Stock
Options shall set forth the procedure governing the exercise of the Stock Option
granted thereunder, and shall provide that, upon such exercise in respect of any
shares of Common Stock subject thereto, the Optionee shall pay to the Company,
in full, the option price for such shares with cash, or with previously owned
Common Stock, or at the discretion of the Committee, in whole or in part with,
the surrender of another Award under the Plan, the withholding of shares of
Common Stock issuable upon exercise of such Stock Option, other property, or any
combination thereof (each based on the fair market value of such Common Stock,
Award or other property on the date the Stock Option is exercised as determined
by the Committee).
SECTION 2.6. DELIVERY OF SHARES. As soon as practicable after receipt of
payment, the Company shall deliver to the Optionee a certificate or certificates
for such shares of Common Stock; provided, however, that the Company shall not
be required to issue or deliver any certificates for shares of Common Stock
purchased upon the exercise of a Stock Option prior to the completion of any
registration or other qualification of such shares under any state or federal
law or rulings or regulations of any government regulatory body, which the
Committee shall determine to be necessary or advisable. The Optionee shall
become a stockholder of the Company with respect to Common Stock represented by
share certificates so issued and as such shall be fully entitled to receive
dividends, to vote and to exercise all other rights of a stockholder.
SECTION 2.7. DEATH, RETIREMENT AND TERMINATION OF EMPLOYMENT OF OPTIONEE.
Unless otherwise provided in an Award Agreement or otherwise agreed to by the
Committee:
(a) Upon the death of the Optionee, any rights to the extent
exercisable on the date of death may be exercised by the Optionee's estate,
or by a person who acquires the right to exercise such Stock Option by
bequest or inheritance or by reason of the death of the Optionee, provided
that such exercise occurs within both (i) the remaining Option Term of the
Stock Option and (ii) one year after the Optionee's death. The provisions of
this Section shall apply notwithstanding the fact that the Optionee's
employment may have terminated prior to death, but only to the extent of any
rights exercisable on the date of death.
(b) Upon termination of the Optionee's employment by reason of
retirement or permanent disability (as each is determined by the Committee),
the Optionee may exercise any Stock Options, to the extent exercisable on the
date of termination, provided such option exercise occurs within both (i) the
remaining Option Term of the Stock Option and (ii) one year after the
termination of the Optionee's employment.
4
<PAGE>
(c) Upon termination of the Optionee's employment by reason of
voluntary termination or involuntary termination (as each is determined by
the Committee), the Optionee may exercise any Stock Options, to the extent
exercisable on the date of termination, provided such option exercise occurs
within both (i) the remaining Option Term of the Stock Option and (ii) 90
days (in the case of voluntary termination) and one year (in the case of
involuntary termination) of the date of termination. For purposes of this
Section 2.7(c), "involuntary termination" shall refer to a termination by the
Company for reasons other than for cause or otherwise unrelated to
performance (such as for layoffs, etc.); provided, however, that the
Committee shall have sole discretion to determine whether a termination was
voluntary or involuntary.
(d) Upon termination of the Optionee's employment for cause (as
determined by the Committee), or for any reason other than as provided in
Subsection (a), (b) and (c) of this Section 2.7, all Stock Options shall
terminate immediately upon the termination of the Optionee's employment.
SECTION 2.8. TAX ELECTION. Recipients of Stock Options who are directors or
executive officers of the Company or who own more than 10% of the Common Stock
of the Company ("Section 16(a) Option Holders") at the time of exercise of a
Stock Option may elect, in lieu of paying to the Company an amount required to
be withheld under applicable tax laws in connection with the exercise of a Stock
Option in whole or in part, to have the Company withhold shares of Common Stock
having a fair market value equal to the amount required to be withheld. Such
election may not be made prior to six months following the grant of the Stock
Option, except in the event of a Section 16(a) Option Holder's death or
disability. The election may be made at the time the Stock Option is exercised
by notifying the Company of the election, specifying the amount of such
withholding and the date on which the number of shares to be withheld is to be
determined ("Tax Date"), which shall be either (i) the date the Stock Option is
exercised or (ii) a date six months after the Stock Option was granted, if
later. The number of shares of Common Stock to be withheld to satisfy the tax
obligation shall be the amount of such tax liability divided by the fair market
value of the Common Stock on the Tax Date (or if not a business day, on the next
closest business day). If the Tax Date is not the exercise date, the Company may
issue the full number of shares of Common Stock to which the Section 16(a)
Option Holder is entitled, and such option holder shall be obligated to tender
to the Company on the Tax Date a number of such shares necessary to satisfy the
withholding obligation. Certificates representing such shares of Common Stock
shall bear a legend describing such Section 16(a) Option Holder's obligation
hereunder.
ARTICLE III. INCENTIVE STOCK OPTIONS
SECTION 3.1. AWARD OF INCENTIVE STOCK OPTIONS. The Committee may, from time
to time and subject to the provisions of the Plan and such other terms and
conditions as the Committee may prescribe, grant to any participant in the Plan
one or more "incentive stock options" (intended to qualify as such under the
provisions of section 422 of the Internal Revenue Code of 1986, as amended
("Incentive Stock Options")) to purchase the number of shares of Common Stock
allotted by the Committee. Each provision of the Plan and each Incentive Stock
Option granted thereunder shall be construed so that each such option shall
qualify as an Incentive Stock Option, and any provision thereof that cannot be
so construed shall be disregarded, unless the participant agrees otherwise. The
date an Incentive Stock Option is granted shall mean the date selected by the
Committee as of which the Committee allots a specific number of shares to a
participant pursuant to the Plan.
5
<PAGE>
SECTION 3.2. INCENTIVE STOCK OPTION AGREEMENTS. The grant of an Incentive
Stock Option shall be evidenced by a written Award Agreement, executed by the
Company and the holder of an Incentive Stock Option (the "Optionee"), stating
the number of shares of Common Stock subject to the Incentive Stock Option
evidenced thereby, and in such form as the Committee may from time to time
determine.
SECTION 3.3. INCENTIVE STOCK OPTION PRICE. The option price per share of
Common Stock deliverable upon the exercise of an Incentive Stock Option shall be
100% of the fair market value of a share of Common Stock on the date the
Incentive Stock Option is granted. Incentive Stock Options shall not be granted
to any owner of 10% or more of the total voting power of the Company unless the
option price is at least 110% of the fair market value of a share of Common
Stock on the date the Incentive Stock Option is granted.
SECTION 3.4. TERM AND EXERCISE. Each Incentive Stock Option shall be
exercisable at such time and under such conditions as set forth in the Award
Agreement, but in no event shall an Incentive Stock Option be exercisable prior
to six months from the date of its grant or later than the tenth anniversary of
the date of grant (the "Option Term"). Notwithstanding the foregoing, if the
Optionee is the owner of 10% or more of the total voting power of the Company,
such Incentive Stock Option shall not be exercisable after the expiration of
five years from the date of award. No Incentive Stock Option shall be
exercisable after the expiration of its Option Term.
SECTION 3.5. MAXIMUM AMOUNT OF INCENTIVE STOCK OPTION GRANT. The aggregate
fair market value (determined on the date the Incentive Stock Option is granted)
of Common Stock with respect to which Incentive Stock Options first become
exercisable by an Optionee during any calendar year (under all plans of the
Company) shall not exceed $100,000. If the immediate exercisability of Incentive
Stock Options awarded pursuant to this Article III would cause this $100,000
limitation to be exceeded for an Optionee, such excess Incentive Stock Options
held by such Optionee shall be treated as non-qualified Stock Options to the
extent necessary to comply with the $100,000 limitation by taking all such
Options into account in the order in which they were granted.
SECTION 3.6. DEATH OF OPTIONEE.
(a) Unless otherwise provided in an Award Agreement or otherwise agreed
to by the Committee, upon the death of the Optionee, any Incentive Stock
Option exercisable on the date of death may be exercised by the Optionee's
estate or by a person who acquires the right to exercise such Incentive Stock
Option by bequest or inheritance or by reason of the death of the Optionee,
provided that such exercise occurs within both the remaining Option Term of
the Incentive Stock Option and one year after the Optionee's death.
(b) The provisions of this Section shall apply notwithstanding the fact
that the Optionee's employment may have terminated prior to death, but only
to the extent of any Incentive Stock Options exercisable on the date of
death.
SECTION 3.7. RETIREMENT OR DISABILITY. Unless otherwise provided in an Award
Agreement or otherwise agreed to by the Committee, upon the termination of the
Optionee's employment by reason of permanent disability or retirement (as each
is determined by the Committee), the Optionee may exercise any Incentive Stock
Options, to the extent exercisable on the date of termination, provided such
option exercise occurs within both (i) the remaining Option Term of the
Incentive Stock Option and (ii) one year after the date of termination.
Notwithstanding the foregoing, the tax treatment available pursuant to Section
422 of the Internal Revenue Code of 1986 upon the exercise of an Incentive Stock
Option shall not be available to an Optionee who exercises any Incentive Stock
Options more than (i) one year after the date
6
<PAGE>
of termination of employment due to permanent disability or (ii) three months
after the date of termination of employment due to retirement.
SECTION 3.8. TERMINATION OF EMPLOYMENT FOR OTHER THAN CAUSE. Unless otherwise
provided in an Award Agreement or otherwise agreed to by the Committee, upon
termination of the Optionee's employment by reason of voluntary termination or
involuntary termination (as determined by the Committee), the Optionee may
exercise any Incentive Stock Options, to the extent exercisable on the date of
termination, provided such option exercise occurs within both (i) the remaining
Option Term of the Incentive Stock Option and (ii) 90 days (in the case of
voluntary termination) and one year (in the case of involuntary termination) of
the date of termination. Notwithstanding the foregoing, the tax treatment
available pursuant to Section 422 of the Internal Revenue Code of 1986 upon the
exercise of an Incentive Stock Option shall not be available to an Optionee who
exercises any Incentive Stock Options more than three months after the date of
termination of employment. "Involuntary Termination" shall have the meaning set
forth in Section 2.7(c) herein.
SECTION 3.9. TERMINATION FOR CAUSE OR OTHER REASONS. Upon termination of the
Optionee's employment for cause (as determined by the Committee), or for any
other reason other than as provided in Sections 3.6, 3.7 and 3.8, or except as
otherwise determined by the Committee in an Award Agreement, all Incentive Stock
Options shall terminate immediately upon the termination of the Optionee's
employment.
SECTION 3.10. APPLICABILITY OF STOCK OPTIONS SECTIONS. Sections 2.5, Manner
of Payment; 2.6, Restrictions on Certain Shares; and 2.8, Tax Elections,
applicable to Stock Options, shall apply equally to Incentive Stock Options.
Said Sections are incorporated by reference in this Article III as though fully
set forth herein.
ARTICLE IV. BONUS STOCK AWARDS
SECTION 4.1. AWARD OF BONUS STOCK. The Committee may from time to time, and
subject to the provisions of this Plan and such other terms and conditions as
the Committee may prescribe, grant to any participant in the Plan shares of
Common Stock ("Bonus Stock").
SECTION 4.2. BONUS STOCK AGREEMENTS. The grant of Bonus Stock shall be
evidenced by a written Award Agreement, executed by the Company and the
recipient of the Bonus Stock, in such form as the Committee may from time to
time determine, providing for the terms of such grant, including any vesting
schedule, restrictions on the transfer of such Common Stock or other matters.
SECTION 4.3. TRANSFER RESTRICTION. Any Award Agreement providing for the
issuance of Bonus Stock to any person who, at the time of grant is a person
described in Section 16(a) under the 1934 Act, shall provide that such Common
Stock cannot be resold for a period of six months following the grant of such
Bonus Stock.
ARTICLE V. AUTOMATIC AWARDS
SECTION 5.1. GRANT. Each director who is not an employee of the Company or
its subsidiaries or affiliates ("Non-Employee Directors") shall (i) on October
3, 1995 be granted a Stock Option to purchase 10,000 shares of Common Stock, and
(ii) on the earlier of the 1996 Annual Meeting of Stockholders or May 31, 1996
be granted a Stock Option to purchase 5,000 shares of Common Stock. In addition,
a new Non-Employee Director who is first elected or appointed after October 3,
1995 shall be granted a Stock Option to purchase 10,000 shares of Common Stock,
effective at the date of such first election or
7
<PAGE>
appointment. Thereafter, on the first business day following January 1 of each
subsequent year in which the Non-Employee Director is still serving as a
director (whether or not such Non-Employee Director's term has been continuous),
each Non-Employee Director shall automatically be granted a Stock Option to
purchase an additional 5,000 shares of Common Stock. Each such grant of a Stock
Option hereunder (hereinafter referred to as an "Automatic Award") shall be for
the fair market price on the date of such grant for an Option Term of ten years.
SECTION 5.2. AWARD AGREEMENTS. The grant of an Automatic Award shall be
evidenced by a written Award Agreement, executed by the Company and the
recipient of an Automatic Award in such form as the Committee may from time to
time determine, providing for the terms of such grant, including any vesting
schedule, restrictions on the transfer of such Common Stock or other matters.
Each Stock Option granted to a Non-Employee Director will become fully
exercisable one year after the date of grant; provided, however, that no Stock
Option shall become exercisable prior to six months following stockholder
approval of the Plan.
SECTION 5.3. APPLICABILITY OF STOCK OPTIONS SECTIONS. Sections 2.5, Manner of
Payment; 2.6, Restrictions on Certain Shares; 2.7, Death, Retirement and
Termination of Employment of Optionee; and 2.8, Tax Elections, applicable to
Stock Options, shall apply equally to Automatic Awards. Said Sections are
incorporated by reference in this Article V as though fully set forth herein.
ARTICLE VI. MISCELLANEOUS
SECTION 6.1. GENERAL RESTRICTION. Each Award under the Plan shall be subject
to the requirement that, if at any time the Committee shall determine that (i)
the listing, registration or qualification of the shares of Common Stock subject
or related thereto upon any securities exchange or under any state or Federal
law, or (ii) the consent or approval of any government regulatory body, or (iii)
an agreement by the grantee of an Award with respect to the disposition of
shares of Common Stock, is necessary or desirable as a condition of, or in
connection with, the granting of such Award or the issue or purchase of shares
of Common Stock thereunder, such Award may not be consummated in whole or in
part unless such listing, registration, qualification, consent, approval or
agreement shall have been effected or obtained free of any conditions not
acceptable to the Committee. The provisions of this Plan are intended, and shall
be interpreted, to permit Awards made pursuant hereto to comply with the
exemptions afforded by Rule 16b-3 under the 1934 Act.
SECTION 6.2. NON-ASSIGNABILITY. No Award under the Plan shall be assignable
or transferable by the recipient thereof, except by will or by the laws of
descent and distribution. During the life of the recipient, such Award shall be
exercisable only by such person or by such person's guardian or legal
representative.
SECTION 6.3. WITHHOLDING TAXES. Whenever the Company proposes or is required
to issue or transfer shares of Common Stock under the Plan, the Company shall
have the right to require the grantee to remit to the Company an amount
sufficient to satisfy any Federal, state and/or local withholding tax
requirements prior to the delivery of any certificate or certificates for such
shares. Alternatively, at the Company's discretion, the Company may issue,
transfer or vest only such number of shares of the Company net of the number of
shares sufficient to satisfy the withholding tax requirements. For withholding
tax purposes, the shares of Common Stock shall be valued on the date the
withholding obligation is incurred.
SECTION 6.4. RIGHT TO TERMINATE EMPLOYMENT. Nothing in the Plan or in any
agreement entered into pursuant to the Plan shall confer upon any participant
the right to continue in the employment of the
8
<PAGE>
Company or affect any right which the Company may have to terminate the
employment of such participant.
SECTION 6.5. NON-UNIFORM DETERMINATIONS. The Committee's determinations under
the Plan (including without limitation, determinations of the persons to receive
Awards, the form, amount and timing of such Awards, the terms and provisions of
such Awards and the agreements evidencing same) need not be uniform and may be
made by it selectively among persons who receive, or are eligible to receive,
Awards under the Plan, whether or not such persons are similarly situated.
SECTION 6.6. RIGHTS AS A STOCKHOLDER. The recipient of any Award under the
Plan shall have no rights as a stockholder with respect thereto unless and until
certificates for shares of Common Stock are issued to him.
SECTION 6.7. DEFINITIONS. In this Plan, the following definitions shall
apply:
(a) "Award" shall mean a grant of Stock Options, Incentive Stock
Options, Bonus Stock and Automatic Awards under the Plan.
(b) "Fair market value" as of any date and in respect of any share of
Common Stock shall mean the closing price of a share of Common Stock on the
immediately prior trading day on which there were trades of shares of Common
Stock, as reflected in the consolidated trading tables of The Wall Street
Journal (presently the American Stock Exchange Composite Transactions) or any
other publication selected by the Committee, provided, however, that if
shares of Common Stock shall not have been traded on any public securities
market for more than 10 days immediately preceding such date or if deemed
appropriate by the Committee for any other reason, the fair market value of
shares of Common Stock shall be as determined by the Committee in such other
manner as it may deem appropriate. In no event shall the fair market value of
any share of Common Stock be less than its par value.
(c) "Option" means a Stock Option or Incentive Stock Option.
(d) "Option price" means the purchase price per share of Common Stock
deliverable upon the exercise of a Stock Option or Incentive Stock Option.
(e) "Change of Control" shall include and be deemed to occur upon the
occurrence of any of the following events:
(i) A tender offer or exchange offer is consummated for the
ownership of securities of the Company representing 50% or more of the
combined voting power of the Company's then outstanding voting
securities entitled to vote in the election of directors of the Company;
(ii) The Company is merged, combined, consolidated, or
recapitalized or otherwise reorganized with one or more other entities
that are not subsidiaries and, as a result of the merger, combination,
consolidation, recapitalization or other reorganization, greater than
50% of the outstanding voting securities of the surviving or resulting
corporation shall not be owned in the aggregate, immediately after the
event, by the existing stockholders of the Company (determined on the
basis of record ownership as of the date of determination of holders
entitled to vote on the action, or in the absence of a vote, the day
immediately prior to the event);
9
<PAGE>
(iii) Any person or entity, including a "group" as contemplated by
Section 13(d)(3) of the 1934 Act, becomes the beneficial owner (as
defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of
securities of the Company representing 50% or more of the combined
voting power of the Company's then outstanding securities entitled to
vote in the election of directors of the Company; provided, however,
that in no event shall a distribution by Edisto Resources Corporation
("Edisto") of the shares of Common Stock held by it to all of Edisto's
shareholders (whether as a dividend or otherwise) be considered to be a
Change of Control;
(iv) The "Incumbent Directors" shall cease to constitute at least a
majority of the authorized number of Members of the Board of Directors
of the Company at any time within eighteen months after the occurrence
of an event or series of events described in clauses (i), (ii) or (iii)
above (but which involves greater than 40% but less than 50% of the
outstanding voting securities of the Company). For the purposes hereof,
"Incumbent Directors" shall mean the persons who were members of the
Board of Directors immediately before the first of these events and the
persons who were elected or nominated as their successors or pursuant to
increases in the size of the Board by a vote of at least three-fourths
of the Board who were then Board members (or successors or additional
members so elected or nominated); or
(v) The stockholders of the Company approve a plan of liquidation
and dissolution or the sale or transfer or substantially all of the
Company's business and/or assets as an entirety to an entity that is not
a subsidiary.
SECTION 6.8. LEAVES OF ABSENCE. The Committee shall be entitled to make
such rules, regulations and determinations as it deems appropriate under the
Plan in respect of any leave of absence taken by the recipient of any Award.
Without limiting the generality of the foregoing, the Committee shall be
entitled to determine (i) whether or not any such leave of absence shall
constitute a termination of employment within the meaning of the Plan and (ii)
the impact, if any, of any such leave of absence on Awards under the Plan
theretofore made to any recipient who takes such leave of absence.
SECTION 6.9. NEWLY ELIGIBLE EMPLOYEES. The Committee shall be entitled to
make such rules, regulations, determinations and Awards as it deems appropriate
in respect of any employee who becomes eligible to participate in the Plan or
any portion thereof after the commencement of an Award or incentive period.
SECTION 6.10. ADJUSTMENTS. In the event of any change in the outstanding
Common Stock by reason of a stock dividend or distribution, recapitalization,
merger, consolidation, split-up, combination, exchange of shares or the like,
the Committee may appropriately adjust the number of shares of Common Stock
which may be issued under the Plan, the number of shares of Common Stock subject
to Options or Bonus Stock theretofore granted under the Plan, and any and all
other matters deemed appropriate by the Committee.
SECTION 6.11. CHANGES IN THE COMPANY'S CAPITAL STRUCTURE.
(a) The existence of outstanding Options or Bonus Stock shall not affect
in any way the right or power of the Company or its stockholders to make or
authorize any or all adjustments, recapitalizations, reorganizations or other
changes in the Company's capital structure or its business, or any merger or
consolidation of the Company, or any issue of bonds, debentures, preferred or
prior preference stock ahead of or affecting the Common Stock or the rights
thereof, or the
10
<PAGE>
dissolution or liquidation of the Company, or any sale or transfer of all or
any part of its assets or business, or any other corporate act or proceeding,
whether of a similar character or otherwise.
(b) If, while there are outstanding Options, the Company shall effect a
subdivision or consolidation of shares or other increase or reduction in the
number of shares of the Common Stock outstanding without receiving
compensation therefor in money, services or property, then, subject to the
provisions, if any, in the Award Agreement (a) in the event of an increase in
the number of such shares outstanding, the number of shares of Common Stock
then subject to Options hereunder shall be proportionately increased; and (b)
in the event of a decrease in the number of such shares outstanding, the
number of shares then available for Option hereunder shall be proportionately
decreased.
(c) After a merger of one or more corporations into the Company, or
after a consolidation of the Company and one or more corporations, in which
the Company shall be the surviving corporation and an independent publicly
traded corporation, (i) each holder of an outstanding Option shall, at no
additional cost, be entitled upon exercise of such Option to receive (subject
to any required action by stockholders), in lieu of the number of shares as
to which such Option shall then be so exercisable, the number and class of
shares of stock, other securities or consideration to which such holder would
have been entitled to receive pursuant to the terms of the agreement of
merger or consolidation if, immediately prior to such merger or
consolidation, such holder had been the holder of record of a number of
shares of the Company equal to the number of shares as to which such Option
had been exercisable and (ii) unless otherwise provided by the Committee, the
number of shares of Common Stock, other securities or consideration to be
received with respect to unvested Bonus Stock shall continue to be subject to
the Award Agreement, including any vesting provisions thereof.
(d) If a Change of Control (as defined in Section 6.7) is about to occur
while unvested Bonus Stock or unexercised Options remain outstanding, then
the Committee, acting in its sole discretion without the consent or approval
of any Optionee, shall act to effect one or more of the following
alternatives, which may vary among individual Optionees and which may vary
among Options held by any individual Optionee:
(i) accelerate the time at which Options then outstanding may be
exercised so that such Options may be exercised in full for a limited
period of time on or before a specified date (before or after such
Change of Control) fixed by the Committee, after which specified date
all unexercised Options and all rights of Optionees thereunder shall
terminate;
(ii) provide that such Bonus Stock shall vest upon such Change of
Control;
(iii) require the mandatory surrender to the Company by selected
Optionees of some or all of the outstanding Options held by such
Optionees (irrespective of whether such Options are then exercisable
under the provisions of the Plan) as of a date, before or after such
Change of Control, specified by the Committee, in which event the
Committee shall thereupon cancel such Options and the Company shall pay
to each Optionee an amount of cash per share equal to the excess, if
any, of the Change of Control Value (as defined below) of the shares of
Common Stock subject to such Option over the exercise price(s) for such
Options;
11
<PAGE>
(iv) make such equitable adjustments to Options then outstanding
as the Committee deems appropriate to reflect such Change of Control
(provided, however, that the Committee may determine in its sole
discretion that no adjustment is necessary to Options then outstanding);
or
(v) provide that thereafter upon any exercise of an Option
previously granted, the Optionee shall be entitled to purchase under
such Option, in lieu of the number of shares of Common Stock then
covered by such Option, the number and class of shares of stock or other
securities or property (including, without limitation, cash) to which
the Optionee would have been entitled pursuant to the terms of the
agreement of merger, consolidation, or sale of assets and dissolution
if, immediately prior to such merger, consolidation or sale of assets
and dissolution the Optionee had been the holder of record of the number
of shares of Common Stock then covered by such Option.
For the purposes of clause (iii) above, the "Change of Control Value" shall
equal the amount determined in clause (1), (2) or (3) below, whichever is
applicable, as follows: (1) the per share price offered to shareholders of
the Company in any such merger, consolidation, reorganization, sale of assets
or dissolution transaction; (2) the price per share offered to shareholders
of the Company in any tender offer or exchange offer whereby a Change of
Control takes place; or (3) if such Change of Control occurs other than
pursuant to a tender or exchange offer, the fair market value per share of
the shares into which such Options being surrendered are exercisable, as
determined by the Committee as of the date determined by the Committee to be
the date of cancellation and surrender of such Options. In the event that the
consideration offered to shareholders of the Company in any transaction
described herein consists of anything other than cash, the Committee shall
determine the fair cash equivalent of the portion of the consideration
offered which is other than cash. Any adjustment provided for herein shall be
subject to any required shareholder action.
(e) Except as herein provided, the issuance by the Company of Common
Stock or any other shares of capital stock or securities convertible into
shares of capital stock, for cash, property, labor done or other
consideration, shall not affect, and no adjustment by reason thereof shall be
made with respect to, the number or price of shares of Common Stock then
subject to outstanding Options.
SECTION 6.12. AMENDMENT OF THE PLAN.
(a) The Committee may, without further action by the stockholders and
without receiving further consideration from the participants, amend this
Plan or condition or modify Awards under this Plan in response to changes in
securities or other laws or rules, regulations or regulatory interpretations
thereof applicable to this Plan or to comply with stock exchange rules or
requirements.
(b) The Committee may at any time and from time to time terminate or
modify or amend the Plan in any respect, except that without stockholder
approval the Committee may not: (i) increase the maximum number of shares of
Common Stock which may be issued under the Plan (other than increases
pursuant to Section 6.10), (ii) extend the period during which any Award may
be granted or exercised, (iii) extend the term of the Plan. Notwithstanding
the above, no amendment to the Plan or any Award shall be made without
shareholder approval if such approval is necessary to comply with any
applicable tax or regulatory requirement, including any requirements for
exemptive relief under Section 16(b) of the 1934 Act, or any successor
provision.
12
<PAGE>
The termination or any modification or amendment of the Plan, except as
provided in subsection (a), shall not, without the consent of a participant,
affect a participant's rights under an Award previously granted to him or
her.
(c) Notwithstanding Sections 6.12(a) and (b), the provisions of
Article V of the Plan may not be amended more than once every six months,
other than to comply with changes in the Code, the Employee Retirement Income
Security Act of 1974, or the rules thereunder.
SECTION 6.13. RIGHTS UNDER THE PLAN. No officer or employee of the
Company shall have a right to be selected to participate in the Plan nor, having
been so selected, to be selected again to participate in the Plan. No officer,
employee or other person shall have any claim or right to be granted an Award
under the Plan or under any other incentive or similar plan of the Company.
Neither the Plan nor any action taken thereunder shall be construed as giving
and employee of the Company any right to be retained in the employ of the
Company.
SECTION 6.14. APPLICABLE LAW. To the extent that the Plan is not
governed or regulated by applicable federal law, the Plan shall be governed and
regulated under and in accordance with the laws of the State of Texas.
SECTION 6.15. INTENTION TO COMPLY WITH APPLICABLE SECURITIES LAWS.
(a) With respect to persons subject to Section 16 of the Exchange Act,
transactions under the Plan are intended to comply with all applicable
conditions of Rule 16b-3 or its successors under the 1934 Act. To the extent
any provision of the Plan or action by the Committee fails to so comply, it
shall be deemed null and void, to the extent permitted by law and deemed
advisable by the Committee.
(b) All transactions pursuant to terms of the Plan, including, with
limitation, Awards and vesting of shares of Common Stock, shall only be
effective at such time as counsel to the Company shall have determined that
such transaction will not violate federal or state securities or other laws.
The Committee may, in its sole discretion, defer the effectiveness of such
transaction to pursue whatever actions may be required to ensure compliance
with such federal or state securities or other laws.
13
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Registration Statement on Form S-8 of our reports dated March
15, 1996, and March 10, 1995, respectively, included in Convest Energy
Corporation's Annual Report on Form 10-K for the year ended December 31, 1995
and to all references to our Firm included in this Registration Statement.
ARTHUR ANDERSEN & CO. LLP
Houston, Texas
May 28, 1996
