As filed with the Securities and Exchange Commission on December 22, 1997
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
------------------------
NATIONAL ENERGY GROUP, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 58-1922764
(State or other jurisdiction (I.R.S. Employer
of incorporation or Identification Number)
organization)
4925 GREENVILLE AVENUE 75206
SUITE 1400 (Zip Code)
DALLAS, TEXAS
(Address of principal executive
offices)
NATIONAL ENERGY GROUP, INC.
EMPLOYEE STOCK PURCHASE PLAN
(Full titles of the plan and individual compensation arrangement)
MILES D. BENDER
PRESIDENT AND CHIEF EXECUTIVE OFFICER
4925 GREENVILLE AVENUE, SUITE 1400
DALLAS, TEXAS 75206
(214) 692-9211
(Name and address, including zip code, and
telephone number of agent for service)
Copies to:
DIANE B. MUSE
AKIN, GUMP, STRAUSS, HAUER & FELD, L.L.P
1700 PACIFIC AVENUE, SUITE 4100
DALLAS, TEXAS 75201-4675
(214) 969 -2800
------------------------
CALCULATION OF REGISTRATION FEE
PROPOSED PROPOSED
MAXIMUM MAXIMUM
AMOUNT TO BE OFFERING AGGREGATE AMOUNT OF
TITLE OF SECURITIES REGISTERED PRICE PER OFFERING REGISTRATION
TO BE REGISTERED (1) SHARE (3) PRICE FEE
- ------------------- ------------ ---------- ---------- ------------
Common Stock, $0.01 500,000 (2) $3.625 $1,812,500 $535
par value
Total --- --- --- $-----
(1) Pursuant to Rule 416, this Registration Statement (as defined) also
includes an indeterminate number of additional shares that may become
issuable pursuant to the antidilution adjustment provisions of the
Plan.
(2) Issuable upon exercise of options available for grant under the Plan.
(3) Pursuant to Rule 457(c) and (h), and solely for the purpose of
calculating the applicable registration fee, the proposed maximum
offering price per share for the remaining Common Stock to be
registered hereunder, has been estimated at $3.625, which amount
represents the average of the high and low sales prices of the Common
Stock of National Energy Group, Inc. on December 16, 1997, as reported
by the Nasdaq National Market.
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
The documents constituting Part I of this Registration Statement (the
"Registration Statement") will be sent or given to directors, officers,
consultants, advisors and employees of National Energy Group, Inc. (the
"Company") as specified by Rule 428(b)(1) promulgated under the Securities
Act of 1933, as amended (the "Securities Act").
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed by the Company with the Securities and
Exchange Commission (the "Commission") are incorporated by reference in
this Registration Statement:
(1) The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1997.
(2) The Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1997.
(3) The Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1997.
(4) The Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1996.
(5) The description of the Company's Common Stock, $.01 par value per
share (the "Common Stock"), contained in Item 1 of the
Registration Statement on Form 8-A dated April 5, 1991
(Registration No. 0-19136) and the description of modifications
made to the Common Stock contained in Item 5 of the Current
Report on Form 8-K dated August 29, 1996 (Registration No.
0-19136).
In addition, all documents subsequently filed by the Company pursuant
to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), prior to the filing of a post-
effective amendment to this Registration Statement which indicates that all
securities offered hereby have been sold or which deregisters all
securities then remaining unsold, shall be deemed to be incorporated by
reference in this 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 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.
As authorized by Section 145 of the General Corporation Law of
Delaware (the "Delaware Corporation Law"), each director and officer of the
Company may be indemnified by the Company against expenses (including
attorney's fees, judgments, fines and amounts paid in settlement) actually
and reasonably incurred in connection with the defense or settlement of any
threatened, pending or completed legal proceedings in which he is involved
by reason of the fact that he is or was a director or officer of the
Company if he acted in good faith and in a manner that he reasonably
believed to be in or not opposed to the best interests of the Company, and,
with respect to any criminal action or proceeding, if he had no reasonable
cause to believe that his conduct was unlawful. In each case, such
indemnity shall be to the fullest extent authorized by the Delaware
Corporation Law, as amended, to the extent such amendment permits the
Company to provide broader indemnification rights. If the legal
proceeding, however, is by or in the right of the Company, the director or
officer may not be indemnified in respect of any claim, issue or matter as
to which he shall have been adjudged to be liable for negligence or
misconduct in the performance of his duty to the Company unless a court
determines otherwise.
Article Eighth of the Certificate of Incorporation of the Company
provides that no director of the Company shall be personally liable to the
Company or its stockholders for monetary damages for any breach of
fiduciary duty as a director except for liability: (1) for any breach of
duty of loyalty to the Company or its stockholders, (2) for acts or
omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (3) under Section 174 of the Delaware Corporation
Law, or (4) for any transaction from which the director derived an improper
personal benefit. In addition, Article Ninth of the Certificate of
Incorporation and Section 7.4 of the Bylaws of the Company require the
Company to indemnify to the fullest extent authorized by law any person
made or threatened to be made a party to any action, suit or proceeding,
whether criminal, civil, administrative, or investigative, by reason of the
fact that such person or such person's testator or intestate is or was a
director, officer, employee or agent of the Company or serves or served at
the request of the Company any other enterprise as a director, officer,
employee or agent.
The Company has agreed to indemnify the officers and directors of the
Company against any and all damages to which such indemnified individuals
may become subject, pursuant to any securities, corporate or other laws,
which damages arise in connection with this Registration Statement or any
amendment thereto, or from the inaccuracy or omission of any information in
connection with this Registration Statement. In the event that the
foregoing indemnity is unavailable or insufficient, then the indemnifying
party shall contribute to amounts paid or payable by the indemnified party
in respect to the damages of the indemnified party in such proportion as is
appropriate to reflect the relative fault of the indemnified and
indemnifying parties.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
See Index to Exhibits, attached hereto.
ITEM 9. UNDERTAKINGS.
(a) The Company 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;
(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.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high and of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than 20 percent
change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
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.
(2) That, for the purpose of determining any liability under the
Securities Act, 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 Company hereby undertakes that, for the purpose of
determining any liability under the Securities Act, each filing of the
Company's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement 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.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the Company pursuant to the foregoing provisions, or otherwise,
the Company has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Company of expenses incurred or paid by a director, officer or controlling
person of the Company 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 Company 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 Securities Act and will be governed by the final adjudication of such
issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Company 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 Dallas, State of Texas, on
December 22, 1997.
NATIONAL ENERGY GROUP, INC.
By: /S/ MILES D. BENDER December 22, 1997
--------------------------
Miles D. Bender
President and Chief
Executive Officer
By: /S/ MELISSA H. RUTLEDGE December 22, 1997
--------------------------
Melissa H. Rutledge
Chief Financial Officer,
Controller, and Chief
Accounting Officer
POWER OF ATTORNEY AND SIGNATURES
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and as
of the dates indicated. Each person whose signature to this Registration
Statement appears below hereby constitutes and appoints Miles D. Bender and
Melissa H. Rutledge, and each of them, as his true and lawful attorney-in-
fact and agent, with full power of substitution, to sign on his or her
behalf individually and in the capacity stated below and to perform any
acts necessary to be done in order to file all amendments and post-
effective amendments to this Registration Statement, and any and all
instruments or documents filed as part of or in connection with this
Registration Statement or the amendments thereto and each of the
undersigned does hereby ratify and confirm all that said attorney-in-fact
and agent, or his substitutes, shall do or cause to be done by virtue
hereof.
SIGNATURE TITLE DATE
---------- ----- ----
/s/ Miles D. Bender President, Chief December 22, 1997
- ------------------------ Executive Officer and
Miles D. Bender Director
/s/ George B. McCullough Chairman of the Board December 22, 1997
- ------------------------ and Director
George B. McCullough
/s/ Norman C. Miller Chairman, Executive December 22, 1997
- ------------------------ Committee and
Norman C. Miller Director
/s/ Robert H. Kite Director December 22, 1997
- ------------------------
Robert H. Kite
/s/ George M. McDonald Director December 22, 1997
- ------------------------
George M. McDonald
/s/ Robert V. Sinnot Director December 22, 1997
- ------------------------
Robert V. Sinnott
/s/ Elwood W. Schafer Director December 22, 1997
- ------------------------
Elwood W. Schafer
/s/ Bob G. Alexander Director December 22, 1997
- ------------------------
Bob G. Alexander
/s/ Jim L. David Director December 22, 1997
- ------------------------
Jim L. David
/s/ Robert J. Mitchell Director December 22, 1997
- ------------------------
Robert J. Mitchell
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
- -------- -----------------------
4.1 Certificate of Incorporation of the Company, which
includes the Certificate of Incorporation of the
Company filed with the Secretary of State of
Delaware on November 20, 1990 (1), the Certificate of
Elimination of the Redeemable Convertible Preferred
Stock, Series A of the Company, filed with the office
of the Secretary of State of Delaware on June 2, 1994
(2), the Certificate of Amendment of Certificate of
Incorporation of the Company, filed with the office
of the Secretary of State of the State of Delaware on
August 29, 1996 (2), the Certificate of Designations
of the Company of 10% Cumulative Convertible
Preferred Stock, Series B (3), the Certificate of
Designations of the Company of 10-1/2% Cumulative
Convertible Preferred Stock, Series C (4), the
Certificate of Designations of the Company of
Convertible Preferred Stock, Series D (2), and the
Certificate of Designations of the Company of
Convertible Preferred Stock, Series E (2)
4.2 By-Laws of the Company (1)
4.3 Certificate of Designations of the Company of 10%
Cumulative Convertible Preferred Stock, Series B (3)
4.4 Certificate of Designations of the Company of 10-1/2%
Cumulative Convertible Preferred Stock, Series C (4)
4.5 Certificate of Designations of the Company of
Convertible Preferred Stock, Series D (2)
4.6 Certificate of Designations of the Company of
Convertible Preferred Stock, Series E (2)
4.7 Specimen Common Stock Certificate (5)
4.8 National Energy Group, Inc. 1996 Incentive
Compensation Plan (9)
4.9 National Energy Group, Inc. Employee Stock Purchase
Plan*
4.10 Minutes of Meeting of the Board of Directors of
National Energy Group, Inc. dated March 20, 1997 (10)
4.11 Note Agreement dated as of April 25, 1989, by and
among AEJH 1989 Limited Partnership, Alexander Energy
Corporation ("Alexander") and John Hancock Mutual
Life Insurance (6)
4.12 Letter dated August 29, 1996 between Alexander and
John Hancock Mutual Life Insurance Company relating
to the payment of the 1989 Notes (6)
4.13 Indenture dated as of November 1, 1996, among the
Company, National Energy Group of Oklahoma, Inc.,
formerly NEG-OK, Inc. ("NEG-OK"), and Bank One,
Columbus, N.A. (7)
4.14 Indenture dated August 21, 1997, among the Company
and Bank One, N.A. (8)
4.15 Registration Rights Agreement dated August 21, 1997,
by and among the Company, Guarantor and the Initial
Purchasers (9)
5.1 Opinion of Akin, Gump, Strauss, Hauer & Feld, L.L.P.*
23.1 Consent of Ernst & Young LLP, independent auditors*
23.2 Consent of Netherland, Sewell & Associates, Inc.*
23.3 Consent of Akin, Gump, Strauss, Hauer & Feld, L.L.P.
(included in Exhibit 5.1)*
24.1 Powers of Attorney (included in signature pages to
this Registration Statement)*
(1) Incorporated by reference to the Company's Registration Statement on
Form S-4 (No. 33-38331) dated April 23, 1991.
(2) Incorporated by reference to the Company's Current Report on Form 8-K
(No. 0-19136) dated August 29, 1996.
(3) Incorporated by reference to the Company's Current Report on Form 8-K
(No. 0-19136) dated June 17, 1994.
(4) Incorporated by reference to the Company's Current Report on Form 8-K
(No. 0-19136) dated July 18, 1995.
(5) Incorporated by reference to the Company's Current Report on Form 8-
K/A No. 1 dated August 29, 1996.
(6) Incorporated by reference to Alexander Energy Corporation's Form 10-K
for the fiscal year ended December 31, 1994.
(7) Incorporated by reference to the Company's Quarterly Report on Form
10-Q (No. 0-19136) for the nine months ended September 30, 1996.
(8) Incorporated by reference to the Company's Registration Statement on
Form S-4 (No. 333-38075) dated October 16, 1997.
(9) Incorporated by reference to the Company's Proxy Statement on Schedule
14A (No. 0-19136) dated April 24, 1997.
(10) Incorporated by reference to the Company's Registration Statement
on Form S-8 (No. 333-41539) dated December 5, 1997.
* Filed herewith
EXHIBIT 4.9
NATIONAL ENERGY GROUP, INC.
EMPLOYEE STOCK PURCHASE PLAN
ARTICLE I. PURPOSE
1.1 PURPOSE. The National Energy Group, Inc. Employee Stock Purchase
Plan is intended to provide a method whereby employees of National Energy
Group, Inc. and any subsidiary corporations (hereinafter referred to,
unless the context otherwise requires, as the "Company") will have an
opportunity to acquire a proprietary interest in the Company through the
purchase of shares of the Common Stock of the Company. It is the intention
of the Company to have the Plan qualify as an "employee stock purchase
plan" under 423 of the Internal Revenue Code of 1986, as amended (the
"Code"). The provisions of the Plan shall be construed so as to extend and
limit participation in a manner consistent with the requirements of that
section of the Code.
ARTICLE II. DEFINITIONS
2.1 BASE PAY. "Base Pay" shall mean regular straight-time earnings
excluding payments for overtime, shift premium, bonuses and other special
payments, commissions and other marketing incentive payments.
2.2 COMMITTEE. "Committee" shall mean the individuals described
in Article XI.
2.3 EMPLOYEE. "Employee" means any person who is customarily employed
on a full-time or part-time basis by the Company and is regularly scheduled
to work more than 20 hours per week.
2.4 SUBSIDIARY. "Subsidiary Corporation" shall mean any present or
future corporation which (i) would be a "subsidiary corporation" of Company
as that term is defined in 424 of the Code and (ii) is designated as a
participant in the Plan by the Committee.
ARTICLE III. ELIGIBILITY AND PARTICIPATION
3.1 INITIAL ELIGIBILITY. All persons who are Employees on the
Effective Date (as hereinafter defined) shall have the right to participate
in the Plan, excluding members of the Committee during their periods of
service on the Committee. Therefore, with respect to any additional
Offerings (as hereinafter defined) under the Plan, any Employee who shall
have completed ninety (90) days' employment and shall be employed by the
Company on the date such participation in the Plan is to become effective
shall be eligible to participate in offerings under the Plan which commence
on or after such ninety-day period has concluded.
3.2 LEAVE OF ABSENCE. For purposes of participation in the Plan, a
person on leave of absence shall be deemed to be an Employee for the first
90 days of such leave of absence and such Employee's employment shall be
deemed to have terminated at the close of business on the 90th day of such
leave of absence unless such Employee shall have returned to regular full-
time or part-time employment (as the case may be) prior to the close of
business on such 90th day. Termination by the Company of any Employee's
leave of absence, other than termination of such leave of absence or return
to full-time or part-time employment, shall terminate an Employee's
employment for all purposes of the Plan and shall terminate such Employee's
participation in the Plan and right to exercise any option.
3.3 RESTRICTIONS IN PARTICIPATION. Notwithstanding any provisions of
the Plan to the contrary, no Employee shall be granted an option to
participate in the Plan:
(a) if, immediately after the grant, such Employee would
own stock, and/or hold outstanding options to purchase stock,
possessing 5% or more of the total combined voting power or value of
all classes of stock of the Company (for purposes of this paragraph,
the rules of 424(d) of the Code shall apply in determining stock
ownership of any Employee); or
(b) which permits his or her rights to purchase stock under
all Employee stock purchase plans of the Company to accrue at a rate
which exceeds $25,000.00 in fair market value of the stock (determined
at the time such option is granted) for each calendar year in which
such option is outstanding.
3.4 COMMENCEMENT OF PARTICIPATION. An eligible Employee may become a
participant by completing an authorization for a payroll deduction on the
form provided by the Company and filing it with the Company on or before
the date set therefor by the Committee, which date shall be prior to the
Offering Commencement Date for the Offering (as such terms are defined
below). Payroll deductions for a participant shall commence on the
applicable Offering Commencement Date when such authorization for a payroll
deduction becomes effective and shall end on the Offering Termination Date
of the Offering to which such authorization is applicable unless sooner
terminated by the participant as provided in Article VIII below.
ARTICLE IV. OFFERINGS
4.1 ANNUAL OFFERINGS. The Plan will be implemented by ten (10) semi-
annual offerings of the Company's Common Stock (the "Offerings")
commencing, respectively, on January 1 and July 1 of each of the years
1998, 1999, 2000, 2001 and 2002 and terminating on June 30 and December 31
of each such year, respectively. The maximum number of shares of the
Common Stock of the Company that may be issued in the respective Offering
shall be:
-- From January 1, 1998 to June 30, 1998: 50,000 shares.
-- From July 1, 1998 to December 31, 1998: 50,000 shares plus
unissued shares from the prior Offering, whether offered or
not.
-- From January 1, 1999 to June 30, 1999: 50,000 shares plus
unissued shares from the prior Offerings, whether offered or
not.
-- From July 1, 1999 to December 31, 1999: 50,000 shares plus
unissued shares from the prior Offerings, whether offered or
not.
-- From January 1, 2000 to June 30, 2000: 50,000 shares plus
unissued shares from the prior Offerings, whether offered or
not.
-- From July 1, 2000 to December 31, 2000: 50,000 shares plus
unissued shares from the prior Offerings, whether offered or
not.
-- From January 1, 2001 to June 30, 2001: 50,000 shares plus
unissued shares from the prior Offerings, whether offered or
not.
-- From July 1, 2001 to December 31, 2001: 50,000 shares plus
unissued shares from the prior Offerings, whether offered or
not.
-- From January 1, 2002 to June 30, 2002: 50,000 shares plus
unissued shares from the prior Offerings, whether offered or
not.
-- From July 1, 2002 to December 31, 2002: 50,000 shares plus
unissued shares from the prior Offerings, whether offered or
not.
In any six-month Offering, the maximum number of shares to be issued
shall be 50,000 shares, plus any unissued shares, whether offered or not,
from the immediately preceding six-month Offering. As used in the Plan,
"Offering Commencement Date" means the January 1 or July 1, as the case may
be, on which the particular Offering begins and "Offering Termination Date"
means the June 30 or December 31 as the case may be, on which the
particular Offering terminates. The Committee may in its discretion,
change one or more semi-annual Offerings to annual Offerings. In each such
annual Offering, the maximum number of shares that may be issued shall be
100,000 shares, plus any unissued shares, whether offered or not, from the
immediately preceding Offering.
ARTICLE V. PAYROLL DEDUCTIONS
5.1 AMOUNT OF DEDUCTION. At the time a participant files an
authorization for payroll deduction, the Employee shall elect to have
deductions made on each payday during the time he or she is a participant
in an Offering at the rate of not less than 1%, nor more than 10% of his or
her base pay in effect at the Offering Commencement Date of such Offering.
In the case of a part-time hourly Employee, such Employee's base pay during
the Offering shall be determined by multiplying such Employee's hourly rate
of pay in effect on the Offering Commencement Date by the number of
regularly scheduled hours of work for such Employee during such Offering.
5.2 PARTICIPANT'S ACCOUNT. All payroll deductions made for a
participant shall be credited to the Employee's account under the Plan. A
participant may not make any separate cash payment into such account except
when on leave of absence and then only as provided in 5.4 hereof.
5.3 CHANGES IN PAYROLL DEDUCTIONS. A participant may discontinue his
or her participation in the Plan as provided in Article VIII, but no other
change can be made during an Offering and, specifically, a participant may
not alter the amount of his or her payroll deductions for that Offering.
5.4 LEAVE OF ABSENCE. If a participant goes on a leave of absence,
such participant shall have the right to elect: (a) to withdraw the balance
in his or her account pursuant to 7.2 hereof, (b) to discontinue
contributions to the Plan but remain a participant in the Plan, or (c)
remain a participant in the Plan during such leave of absence, authorizing
deductions to be made from payments by the Company to the participant
during such leave of absence and undertaking to make cash payments to the
Plan at the end of each payroll period to the extent that amounts payable
by the Company to such participant are insufficient to meet such
participant's authorized Plan deductions.
ARTICLE VI. GRANTING OF OPTION
6.1 NUMBER OF OPTION SHARES. On the Commencement Date of each
Offering, a participating Employee shall be deemed to have been granted an
option to purchase a maximum number of shares of Common Stock of the
Company equal to an amount determined as follows: an amount equal to (i)
that percentage of the Employee's base pay which he or she has elected to
have withheld (but not in any case in excess of 10%), multiplied by (ii)
the Employee's base pay during the period of the Offering, divided by (iii)
85% of the market value of the stock of the Company on the applicable
Offering Commencement Date. The market value of the Company's stock shall
be determined as provided in paragraphs (a) and (b ) of 6.2 below. An
Employee's base pay during the period of an Offering shall be determined by
multiplying his or her normal weekly rate of pay (as in effect on the last
day prior to the Commencement Date of the particular Offering) by 26,
PROVIDED that, in the case of a part-time hourly Employee, the Employee's
base pay during the period of an Offering shall be determined by
multiplying such Employee's hourly rate by the number of regularly
scheduled hours of work for such Employee during such Offering.
6.2 OPTION PRICE. The option price of stock purchased with payroll
deductions made during such Offering for a participant therein shall be the
lower of:
(a) 85% of the closing price of the stock on the Offering
Commencement Date or the nearest prior business day on which trading
occurred on the NASDAQ National Market System; or
(b) 85% of the closing price of the stock on the Offering
Termination Date or the nearest prior business day on which trading
occurred on the NASDAQ National Market System; or
(c) if the Common Stock of the Company is not admitted to
trading on any of the aforesaid dates for which closing prices of the
stock are to be determined, then reference shall be made to the fair
market value of the stock on that date, as determined on such basis as
shall be established or specified for purposes of the Offering by the
Committee.
ARTICLE VII. EXERCISE OF OPTION
7.1 AUTOMATIC EXERCISE. Unless a participant gives written notice to
the Company as hereinafter provided, the option for the purchase of stock
with payroll deductions made during any Offering will be deemed to have
been exercised automatically on the Offering Termination Date applicable to
such Offering, for the purchase of the number of full shares of stock which
the accumulated payroll deductions in his or her account at that time will
purchase at the applicable option price (but not in excess of the number of
shares for which options have been granted to the Employee pursuant to
6.1), and any excess in his or her account at that time will be returned
to him.
7.2 WITHDRAWAL OF ACCOUNT. By written notice to the Company, at any
time prior to the Offering Termination Date applicable to any Offering, a
participant may elect to withdraw all the accumulated payroll deductions in
his or her account at such time.
7.3 FRACTIONAL SHARES. Fractional shares will not be issued under
the Plan and any accumulated payroll deductions which would have been used
to purchase fractional shares will be returned to any Employee promptly
following the termination of an Offering, without interest.
7.4 TRANSFERABILITY OF OPTION. During a participant's lifetime,
options held by such participant shall be exercisable only by that
participant.
7.5 DELIVERY OF STOCK. As promptly as practicable after the Offering
Termination Date of each Offering, the Company will deliver to each
participant, as appropriate, the stock purchased upon exercise of his or
her option.
ARTICLE VIII. WITHDRAWAL
8.1 IN GENERAL. As indicated in 7.2, a participant may withdraw
payroll deductions credited to such account under the Plan at any time by
giving written notice to the Company. All of the participant's payroll
deductions credited to his or her account will be paid to the Employee
promptly after receipt of such notice of withdrawal, and no further payroll
deductions will be made during such Offering. The Company may, at its
option, treat any attempt to borrow by an Employee on the security of his
or her accumulated payroll deductions as an election, under 7.2 hereof, to
withdraw such deductions.
8.2 EFFECT ON SUBSEQUENT PARTICIPATION. A participant's withdrawal
from any Offering will not have any effect upon his or her eligibility to
participant in any succeeding Offering or in any similar plan which may
hereafter be adopted by the Company.
8.3 TERMINATION OF EMPLOYMENT. Upon termination of the participant's
employment for any reason, including retirement (but excluding death while
in the employ of the Company or continuation of a leave of absence for a
period beyond 90 days), the payroll deductions credited to the Employee's
account will be returned, or, in the case of death subsequent to the
termination of employment, to the person or persons entitled thereto under
12.1 hereof.
8.4 TERMINATION OF EMPLOYMENT DUE TO DEATH. Upon termination of the
participant's employment because of his or her death, his or her
beneficiary (as defined in 12.1 hereof) shall have the right to elect, by
written notice given to the Company prior to the earlier of the Offering
Termination Date or the expiration of a period of sixty (60) days
commencing with the date of the death of the participant, either:
(a) to withdraw all of the payroll deductions credited to the
participant's account under the Plan, or
(b) to exercise the participant's option for the purchase of
stock on the Offering Termination Date next following the date of the
participant's death for the purchase of the number of full shares of
stock which the accumulated payroll deductions in the participant's
account at the date of the participant's death will purchase at the
applicable option price (but not in excess of the number of shares for
which options have been granted to the Employee pursuant to 6.1), and
any excess in such account will be returned to said beneficiary,
without interest. In the event that no such written notice of
election shall be duly received by the Company, the beneficiary shall
automatically be deemed to have elected, pursuant to this paragraph
(b), to exercise the participant's option.
8.5 LEAVE OF ABSENCE. A participant on leave of absence shall,
subject to the election made by such participant, continue to participate
in the Plan so long as such participant is on continuous leave of absence.
A participant who has been on leave of absence for more than 90 days and
who, therefore, is not an Employee for the purpose of the Plan shall not be
entitled to participate in any Offering commencing after the 90th day of
such leave of absence. Notwithstanding any other provisions of the Plan,
unless a participant on leave of absence returns to regular full-time or
part-time employment with the Company at the earlier of: (a) the
termination of such leave of absence or (b) three months from the 90th day
of such leave of absence, such participant's participation in the Plan
shall terminate on whichever of such dates first occurs.
ARTICLE IX. INTEREST
9.1 PAYMENT OF INTEREST. No interest will be paid or allowed on any
money paid into the Plan or credited to the account of any participant
Employee; provided, however, that interest shall be paid on any and all
money which is distributed to an Employee or his or her beneficiary
pursuant to the provisions of 8.3 and 8.4 hereof. Such distributions
shall bear simple interest during the period from the date of withholding
to the date of return at the regular passbook savings account rates per
annum in effect at Bank One, Texas, N.A. during the applicable Offering
period or, if such rates are not published or otherwise available for such
purpose, at the regular passbook savings account rates per annum in effect
during such period at another major commercial bank in Dallas, Texas
selected by the Board of Directors or the Committee. Where the amount
returned represents an excess amount in an Employee's account after such
account has been applied to the purchase of stock, the Employee's
withholding account shall be deemed to have been applied first toward
purchase of stock under the Plan, so that interest shall be paid on the
last withholdings during the period which results in the excess amount.
ARTICLE X. STOCK
10.1 MAXIMUM SHARES. The maximum number of shares which shall be
issued under the Plan, subject to adjustment upon changes in capitalization
of the Company as provided in 12.4 hereof shall be 50,000 shares in each
semi-annual Offering plus in each Offering all unissued shares from prior
Offerings, whether offered or not, not to exceed 500,000 shares for all
Offerings. If the total number of shares for which options are exercised
on any Offering Termination Date in accordance with Article VI above
exceeds the maximum number of shares for the applicable Offering, the
Company shall make a pro rata allocation of the shares available for
delivery and distribution in a nearly uniform manner as shall be
practicable and as it shall determine to be equitable, and the balance of
payroll deductions credited to the account of each participant under the
Plan shall be returned as promptly as possible.
10.2 PARTICIPANT'S INTEREST IN OPTION STOCK. The participant will
have no interest in stock covered by his or her option until such option
has been exercised.
10.3 REGISTRATION OF STOCK. Stock to be delivered to a participant
under the Plan will be registered in the name of the participant, or, if
the participant so directs by written notice to the Company prior to the
Offering Termination Date applicable thereto, in the names of the
participant and one such other person as may be designated by the
participant, as joint tenants with rights of survivorship or as tenants by
the entireties, to the extent permitted by applicable law.
10.4 RESTRICTIONS ON EXERCISE. The Board of Directors may, in its
discretion, require as conditions to the exercise of any option that the
shares of Common Stock reserved for issuance upon the exercise of the
option shall have been duly listed, upon official notice of issuance, upon
a stock exchange, and that either:
(a) a Registration Statement under the Securities Act of 1933,
as amended, with respect to said shares shall be effective, or
(b) the participant shall have represented at the time of
purchase, in form and substance satisfactory to the Company, that it
is his or her intention to purchase the shares for investment and not
for resale or distribution.
ARTICLE XI. ADMINISTRATION
11.1 APPOINTMENT OF COMMITTEE. The Board of Directors shall appoint a
committee (the "Committee") to administer the Plan, which shall consist of
no fewer than three members of the Board of Directors. No member of the
Committee shall be eligible to purchase stock under the Plan.
11.2 AUTHORITY OF COMMITTEE. Subject to the express provisions of the
Plan, the Committee shall have plenary authority in its discretion to
interpret and construe any and all provisions of the Plan, to adopt rules
and regulations for administering the Plan, and to make all other
determinations deemed necessary or advisable for administering the Plan.
The Committee's determination on the foregoing matters shall be conclusive.
11.3 RULES GOVERNING THE ADMINISTRATION OF THE COMMITTEE. The Board
of Directors may from time to time appoint members of the Committee in
substitution for or in addition to members previously appointed and may
fill vacancies, however caused, in the Committee. The Committee may select
one of its members as its Chairman and shall hold its meetings at such
times and places as it shall deem advisable and may hold telephonic
meetings. A majority of its members shall constitute a quorum. All
determinations of the Committee shall be made by a majority of its members.
The Committee may correct any defect or omission or reconcile any
inconsistency in the Plan, in the manner and to the extent it shall deem
desirable. Any decision or determination reduced to writing and signed by
a majority of the members of the Committee shall be as fully effective as
if it had been made by a majority vote at a meeting duly called and held.
The Committee may appoint a secretary and shall make such rules and
regulations for the conduct of its business as it shall deem advisable.
ARTICLE XII. MISCELLANEOUS
12.1 DESIGNATION OF BENEFICIARY. A participant may file a written
designation of a beneficiary who is to receive any stock and/or cash. Such
designation of beneficiary may be changed by the participant at any time by
written notice to the Treasurer of the Company. Upon the death of a
participant and upon receipt by the Company of proof of identity and
existence at the participant's death of a beneficiary validly designated by
him under the Plan, the Company shall deliver such stock and/or cash to
such beneficiary. In the event of the death of a participant and in the
absence of a beneficiary validly designated under the Plan who is living at
the time of such participant's death, the Company shall deliver such stock
and/or cash to the executor or administrator of the estate of the
participant, or if no such executor or administrator has been appointed (to
the knowledge of the Company), the Company, in its discretion, may deliver
such stock and/or cash to the spouse or to any one or more dependents of
the participant as the Company may designate. No beneficiary shall, prior
to the death of the participant by whom he or she has been designated,
acquire any interest in the stock or cash credited to the participant under
the Plan.
12.2 TRANSFERABILITY. Neither payroll deductions credited to a
participant's account nor any rights with regard to the exercise of an
option or to receive stock under the Plan may be assigned, transferred,
pledged, or otherwise disposed of in any way by the participant other than
by will or the laws of descent and distribution. Any such attempted
assignment, transfer, pledge or other disposition shall be without effect,
except that the Company may treat such act as an election to withdraw funds
in accordance with 7.2 above.
12.3 USE OF FUNDS. All payroll deductions received or held by the
Company under this Plan may be used by the Company for any corporate
purpose and the Company shall not be obligated to segregate such payroll
deductions.
12.4 ADJUSTMENTS UPON CHANGES IN CAPITALIZATION.
(a) If, while any options are outstanding, the outstanding
shares of Common Stock of the Company have increased, decreased,
changed into, or been exchanged for a different number or kind of
shares or securities of the Company through reorganization, merger,
recapitalization, reclassification, stock split, reverse stock split
or similar transaction, appropriate and proportionate adjustments may
be made by the Committee in the number and/or kind of shares which are
subject to purchase under outstanding options and on the option
exercise price or prices applicable to such outstanding options. In
addition, in any such event, the number and/or kind of shares which
may be offered in the Offerings described in Article IV hereof shall
also be proportionately adjusted. No adjustments shall be made for
stock dividends. For the purposes of this paragraph, any distribution
of shares to shareholders in an amount aggregating 20% or more of the
outstanding shares shall be deemed a stock split and any distributions
of shares aggregating less than 20% of the outstanding shares shall be
deemed a stock dividend.
(b) Upon the dissolution or liquidation of the Company, or upon
a reorganization, merger or consolidation of the Company with one or
more corporations as a result of which the Company is not the
surviving corporation, or upon a sale of substantially all of the
property or stock of the Company to another corporation, the holder of
each option then outstanding under the Plan will thereafter be
entitled to receive at the next Offering Termination Date upon the
exercise of such option for each share as to which such option shall
be exercised, as nearly as reasonably may be determined, the cash,
securities and/or property which a holder of one share of the Common
Stock was entitled to receive upon and at the time of such
transaction. The Board of Directors shall take such steps in
connection with such transactions as the Board shall deem necessary to
assure that the provision of this 12.4 shall thereafter be
applicable, as nearly as reasonably may be determined, in relation to
the said cash, securities and/or property as to which such holder of
such option might thereafter be entitled to receive.
12.5 AMENDMENT AND TERMINATION. The Board of Directors shall have
complete power and authority to terminate and amend the Plan; PROVIDED,
however, that the Board of Directors shall not, without the approval of the
stockholders of the Corporation (i) increase the maximum number of shares
which may be issued under any Offering (except pursuant to 12.4 hereof);
or (ii) amend the requirements as to the class of Employees eligible to
purchase stock under the Plan or permit the members of the Committee to
purchase stock under the Plan.
12.6 EFFECTIVE DATE. The Plan shall become effective as of January 1,
1998, subject to approval by the holders of the majority of the Common
Stock present and represented at a special or annual meeting of the
shareholders held on or before December 31, 1998. If the Plan is not so
approved, the Plan shall not become effective.
12.7 NO EMPLOYMENT RIGHTS. The Plan does not, directly or indirectly,
create any right for the benefit of any Employee or class of Employees to
purchase any shares under the Plan, or create in any Employee or class of
Employees any right with respect to continuation of employment by the
Company, and it shall not be deemed to interfere in any way with the
Company's right to terminate, or otherwise modify, an Employee's employment
at any time.
12.8 EFFECT OF PLAN. The provisions of the Plan shall, in accordance
with its terms, be binding upon, and inure to the benefit of, all
successors of each Employee participating in the Plan, including, without
limitation, such Employee's estate and the executors, administrators or
trustees thereof, heirs and legatees, and any receiver, trustee in
bankruptcy or representative of creditors of such Employee.
12.9 GOVERNING LAW. The law of the State of Delaware will govern all
matters relating to this Plan except to the extent it is superseded by the
laws of the United States.
12.10 NOTICES. All notices to the Company shall be in writing or
written telecommunication and deemed effective when received by the Company
at:
National Energy Group, Inc.
4925 Greenville Avenue, Suite 1400
Dallas, TX 75206
Phone: (214) 692.9211
Fax: (214) 692-5055
Attn: Mr. Philip D. Devlin
General Counsel
(or such other address as may be specified from time to time by the
Company); PROVIDED that notice by telecommunication shall be confirmed in
writing by personal delivery, U.S. mail, certified mail or registered mail
of a copy thereof.
EXHIBIT 5.1
Akin, Gump, Strauss, Hauer & Feld, L.L.P.
ATTORNEYS AT LAW
a registered limited liability partnership
including professional corporations
1700 PACIFIC AVENUE
SUITE 4100
DALLAS, TEXAS 75201-4675
(214) 969-2800
FAX (214) 969-4343
WRITER'S DIRECT DIAL NUMBER (214) 969 - 2800
December 22, 1997
National Energy Group
4925 Greenville Avenue
Suite 1400
Dallas, Texas 75206
Ladies and Gentlemen:
We have acted as counsel for National Energy Group, Inc., a Delaware
corporation (the "Company"), in connection with the registration under the
Securities Act of 1993, as amended (the "Securities Act"), of (i) 500,000
shares of Common Stock, $.01 par value per share (the "Shares"), of the
Company to be offered upon the terms and subject to the conditions set
forth in the Company's Employee Stock Purchase Plan (the "Plan") and (ii)
interests in the Plan. At your request, this opinion is being furnished to
the Company for filing as Exhibit 5.1 to the Registration Statement
referred to below.
In connection therewith, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of the Certificate
of Incorporation of the Company, as amended, the Bylaws of the Company, as
amended, the Plan, records of relevant corporate proceedings with respect
to the offering of the Shares and such other documents and instruments as
we have deemed necessary or appropriate as a basis for the opinions
hereinafter expressed. We have also reviewed the Registration Statement on
Form S-8 to be filed by the Company with the Securities and Exchange
Commission with respect to the Shares (the "Registration Statement").
We have assumed the authenticity and completeness of all records,
certificates and other instruments submitted to us as originals, the
conformity to original documents of all records, certificates and other
instruments submitted to us as copies, the authenticity and completeness of
the originals of those records, certificates and other instruments
submitted to us as copies and the correctness of all statements of fact
contained in all records, certificates and other instruments that we have
examined.
Based solely on the foregoing and subject to the qualifications and
exceptions set forth below, we are of the opinion that when the
Registration Statement has become effective and upon issuance of the
Shares, against payment in full therefor in accordance with the terms of
the Plan, the Shares will be legally issued, fully paid and non-assessable
shares of Common Stock of the Company.
The opinion expressed herein assumes that the paid consideration upon
issuance of the Shares under the Plan will be in excess of the par value of
such Shares.
The opinion set forth above is limited exclusively to the General
Corporation Law of the State of Delaware. This firm is a registered
limited liability partnership organized under the laws of the State of
Texas.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement and to the reference to the firm in the Registration
Statement.
Sincerely,
/s/ Akin, Gump, Strauss, Hauer & Feld, L.L.P.
Akin, Gump, Strauss, Hauer & Feld, L.L.P.
EXHIBIT 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Registration
Statement on Form S-8 pertaining to the National Energy Group, Inc.
Employee Stock Purchase Plan of our report dated March 18, 1997 with
respect to the consolidated financial statements of National Energy Group,
Inc. included in its Annual Report on Form 10-K for the year ended December
31, 1996, filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
Dallas, Texas
December 18, 1997
EXHIBIT 23.2
CONSENT OF INDEPENDENT PETROLEUM ENGINEERS AND GEOLOGISTS
We hereby consent to the incorporation by reference in this
Registration Statement on Form S-8 of our reserve reports for the interest
of National Energy Group, Inc. dated March 6, 1997 and February 15, 1996,
relating to the estimated quantities of certain of the Company's proved
reserves of oil and gas and the related estimates of future net revenue and
present values thereof, included in the Company's Annual Report on Form 10K
for the year ended December 31, 1996, as well as to the references to our
estimates of the Company's proved reserves and future net revenue for the
year ending December 31, 1995 and December 31, 1996 in the Notes to the
Financial Statements of the Company in such Annual Report. We also consent
to the reference to us under the heading "Experts" in such Registration
Statement.
NETHERLAND, SEWELL & ASSOCIATES, INC.
By: /s/ Frederic D. Sewell
------------------------
Frederic D. Sewell
President
Dallas, Texas
December 18, 1997
