<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 29, 1998
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
OCEAN ENERGY, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 72-1277752
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
8440 JEFFERSON HIGHWAY
SUITE 420
BATON ROUGE, LOUISIANA 70809
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
OCEAN ENERGY, INC.
LONG-TERM INCENTIVE PLAN
FOR NONEXECUTIVE EMPLOYEES
(FULL TITLE OF THE PLAN)
ROBERT K. REEVES
EXECUTIVE VICE PRESIDENT - ADMINISTRATION,
GENERAL COUNSEL AND SECRETARY
3861 AMBASSADOR CAFFERY PARKWAY
SUITE 500
LAFAYETTE, LOUISIANA 70503
(318) 993-4300
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
----------------------
copy to:
JOHN F. WOMBWELL
ANDREWS & KURTH L.L.P.
4200 TEXAS COMMERCE TOWER
HOUSTON, TEXAS 77002
(713) 220-4200
----------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
PROPOSED
PROPOSED MAXIMUM
MAXIMUM AGGREGATE
TITLE OF SECURITIES AMOUNT TO BE OFFERING PRICE OFFERING AMOUNT OF
TO BE REGISTERED REGISTERED(1) PER SHARE PRICE REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $0.01 per share 600,000 Shares $44.22(2) $26,532,000(2) $7,827(2)
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The number of Shares of Common Stock registered herein is subject to
adjustment to prevent dilution resulting from stock splits, stock dividends
or similar transactions.
(2) Estimated solely for the purpose of calculating the registration fee, based
upon the average of the high and low sales prices of a share of the
Company's Common Stock on the New York Stock Exchange on January 23, 1998
pursuant to Rule 457(h).
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<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
This Registration Statement on Form S-8 is being filed solely to
register additional securities. In accordance with General Instruction E of
Form S-8, the registrant hereby incorporates by reference the contents of the
registrant's registration statement on Form S-8 (No. 33-97154), filed with the
Securities and Exchange Commission on September 21, 1995, relating to the
Flores & Rucks, Inc. Long-Term Incentive Plan for Nonexecutive Employees.
ITEM 8. EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------ -----------
<S> <C>
5.1 Opinion of Andrews & Kurth L.L.P.
23.1 Consent of Andrews & Kurth L.L.P. (included in their opinion filed as Exhibit 5.1).
23.2 Consent of Arthur Andersen L.L.P.
24.1 Power of Attorney (set forth on the signature page contained in Part II of this Registration Statement).
99.1 Ocean Energy, Inc. Long-Term Incentive Plan for Non-Executive Employees, as amended.
</TABLE>
II-1
<PAGE> 3
SIGNATURES
The Registrant. 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 to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Baton Rouge, State of Louisiana, on
the 26th day of January, 1998.
OCEAN ENERGY, INC.
By: /s/ James C. Flores
-------------------------------
James C. Flores
Chairman of the Board, President
and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned officers
and directors of Ocean Energy, Inc. (the "Company") hereby constitutes and
appoints James C. Flores and Robert K. Reeves, and each of them (with full
power to each of them to act alone), his true and lawful attorney-in-fact and
agent, with full power of substitution, for him and on his behalf and in his
name, place and stead, in any and all capacities, to sign, execute and file
this Registration Statement under the Securities Act of 1933, as amended, and
any or all amendments (including, without limitation, post-effective
amendments), with all exhibits and any and all documents required to be filed
with respect thereto, with the Securities and Exchange Commission or any
regulatory authority, granting unto such attorneys-in-fact and agents, and each
of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in order to effectuate the same, as
fully to all intents and purposes as he himself might or could do if personally
present, hereby ratifying and confirming all that such attorneys-in-fact and
agents, or any of them, or their substitute or substitutes, may lawfully do or
cause to be done.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on January 26, 1998.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ James C. Flores Chairman of the Board, President and
- ------------------------------------------- Chief Executive Officer (Principal
James C. Flores Executive Officer)
/s/ Robert L. Belk Executive Vice President, Chief Financial
- ------------------------------------------- Officer, Treasurer and Director (Principal
Robert L. Belk Financial and Accounting Officer)
/s/ Richard G. Zepernick, Jr. Executive Vice President - Exploration &
- ------------------------------------------- Production and Director
Richard G. Zepernick, Jr.
/s/ William W. Rucks, IV Director
- -------------------------------------------
William W. Rucks, IV
</TABLE>
II-2
<PAGE> 4
<TABLE>
<S> <C>
/s/ Thomas D. Clark, Jr. Director
- -------------------------------------------
Thomas D. Clark, Jr.
/s/ Milton J. Womack Director
- -------------------------------------------
Milton J. Womack
/s/ Charles F. Mitchell Director
- -------------------------------------------
Charles F. Mitchell
/s/ Lodwrick M. Cook Director
- -------------------------------------------
Lodwrick M. Cook
</TABLE>
II-3
<PAGE> 5
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Sequentially
Numbered
Number Description Pages
------ ----------- ---------------
<S> <C>
5.1 Opinion of Andrews & Kurth L.L.P.
23.1 Consent of Andrews & Kurth L.L.P. (included in their opinion
filed as Exhibit 5.1.
23.2 Consent of Arthur Andersen L.L.P.
24.1 Power of Attorney (set forth on the signature page contained
in Part II of this Registration Statement).
99.1 Ocean Energy, Inc. Long-Term Incentive Plan for Non-Executive
Employees, as amended
</TABLE>
<PAGE> 1
EXHIBIT 5.1
January 28, 1998
Board of Directors
Ocean Energy, Inc.
8440 Jefferson Highway
Suite 420
Baton Rouge, Louisiana 70809
Gentlemen:
We have acted as counsel to Ocean Energy, Inc. (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 the issuance of 300,000 shares (the "Shares") of the
Company's common stock, $0.01 par value, pursuant to the Company's Long-Term
Incentive Plan for Nonexecutive Employees (the "Plan").
In connection herewith, we have examined copies of such
statutes, regulations, corporate records and documents, certificates of public
and corporate officials and other agreements, contracts, documents and
instruments as we have deemed necessary as a basis for the opinion hereinafter
expressed. In such examination, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as originals and
the conformity with the original documents of all documents submitted to us as
copies. We have also relied, to the extent we deem such reliance proper, upon
information supplied by officers and employees of the Company with respect to
various factual matters material to our opinion.
Based upon the foregoing and having due regard for such legal
considerations as we deem relevant, we are of the opinion that the Shares have
been duly authorized, and that such Shares will, when issued in accordance with
the terms of the Plan, be legally issued, fully paid and nonassessable.
We hereby consent to the use of this opinion as an exhibit to
the Registration Statement.
Very truly yours,
/s/ Andrews & Kurth L.L.P.
1249/2325/2700
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in the Registration Statement (Form S-8) of the registration of
600,000 shares of Common Stock pertaining to the Ocean Energy, Inc. Long-Term
Incentive Plan for Nonexecutive Employees of our report dated February 24, 1997
with respect to the consolidated financial statements of Ocean Energy, Inc.
(formerly Flores & Rucks, Inc.) and subsidiaries included in its Annual Report
(Form 10-K) for the year ended December 31, 1996 filed with the Securities and
Exchange Commission.
/s/ ARTHUR ANDERSEN LLP
January 26, 1998
<PAGE> 1
EXHIBIT 99.1
OCEAN ENERGY, INC.
LONG-TERM INCENTIVE PLAN
FOR NONEXECUTIVE EMPLOYEES,
AS AMENDED
SECTION 1. Purpose of the Plan.
The Ocean Energy, Inc. Long-Term Incentive Plan For Nonexecutive Employees (the
"Plan") is intended to promote the interests of Ocean Energy, Inc., a Delaware
corporation (the "Company"), by encouraging employees of the Company, its
subsidiaries and affiliated entities to acquire or increase their equity
interest in the Company and to provide a means whereby employees may develop a
sense of proprietorship and personal involvement in the development and
financial success of the Company, and to encourage them to remain with and
devote their best efforts to the business of the Company thereby advancing the
interests of the Company and its stockholders. The Plan is also contemplated
to enhance the ability of the Company, its subsidiaries and affiliated entities
to attract and retain the services of individuals who are essential for the
growth and profitability of the Company.
SECTION 2. Definitions.
As used in the Plan, the following terms shall have the meanings set forth
below:
"Affiliate" shall mean (i) any entity that, directly or through one or
more intermediaries, is controlled by the Company and (ii) any entity
in which the Company has a significant equity interest, as determined
by the Committee.
"Award" shall mean any Option, Stock Appreciation Right, Restricted
Stock, Performance Award, Phantom Shares, Bonus Shares or Cash Award.
"Award Agreement" shall mean any written agreement, contract, or other
instrument or document evidencing any Award, which may, but need not,
be executed or acknowledged by a Participant.
"Board" shall mean the Board of Directors of the Company.
"Bonus Shares" shall mean an award of Shares granted pursuant to
Section 6(e) of the Plan.
<PAGE> 2
"Cash Award" shall mean an award payable in cash granted pursuant to
Section 6(g) of the Plan.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the rules and regulations thereunder.
"Committee" shall mean the committee of such executives appointed by
the Chief Executive Officer of the Company to administer the Plan;
however, no member of the Committee may be an employee.
"Employee" shall mean any employee of the Company or an Affiliate, but
excluding any employee who is subject to Section 16 of the Exchange
Act, as determined by the Committee.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Fair Market Value" shall mean, with respect to Shares, the closing
price of a Share quoted on the Composite Tape, or if the Shares are
not listed on the New York Stock Exchange, on the principal United
States securities exchange registered under the Exchange Act on which
such stock is listed, or if the Shares are not listed on any such
stock exchange, the last sale price, or if none is reported, the
highest closing bid quotation on the National Association of
Securities Dealers, Inc., Automated Quotations System or any successor
system then in use on the Date of Grant, or if none are available on
such day, on the next preceding day for which are available, or if no
such quotations are available, the fair market value on the date of
grant of a Share as determined in good faith by the Board. In the
event the Shares are not publicly traded at the time a determination
of its fair market value is required to be made hereunder, the
determination of fair market value shall be made in good faith by the
Committee.
"Incentive Stock Option" or "ISO" shall mean an option granted under
Section 6(a) of the Plan that is intended to qualify as an "incentive
stock option" under Section 422 of the Code or any successor
provision thereto.
"Non-Qualified Stock Option" or "NQO" shall mean an option granted
under Section 6(a) of the Plan that is not intended to be an Incentive
Stock Option. "Option" shall mean an Incentive Stock Option or a
Non-Qualified Stock Option.
"Participant" shall mean any Employee granted an Award under the Plan.
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"Performance Award" shall mean any right granted under Section 6(d) of
the Plan.
"Person" shall mean individual, corporation, partnership, association,
joint-stock company, trust, unincorporated organization, government or
political subdivision thereof or other entity.
"Phantom Shares" shall mean an Award of the right to receive Shares
issued at the end of a Restricted Period which is granted pursuant to
Section 6(f) of the Plan. "Restricted Period" shall mean the period
established by the Committee with respect to an Award during which the
Award either remains subject to forfeiture or is not exercisable by
the Participant.
"Restricted Stock" shall mean any Share, prior to the lapse of
restrictions thereon, granted under Section 6(c) of the Plan.
"Shares" or "Common Shares" or "Common Stock" shall mean the common
stock of the Company, $0.01 par value, and such other securities or
property as may become the subject of Awards of the Plan.
"Stock Appreciation Right" or "Right" shall mean any right to receive
the appreciation of Shares granted under Section 6(b) of the Plan.
"Substitute Award" shall mean Awards granted in assumption of, or in
substitution for, outstanding awards previously granted by (i) a
company acquired by the Company or one or more of its Affiliates, or
(ii) a company with which the Company or one or more of its Affiliates
combines.
SECTION 3. Administration.
The Plan shall be administered by the Committee. A majority of the Committee
shall constitute a quorum, and the acts of the members of the Committee who are
present at any meeting thereof at which a quorum is present, or acts
unanimously approved by the members of the Committee in writing, shall be the
acts of the Committee. Subject to the terms of the Plan and applicable law,
and in addition to other express powers and authorizations conferred on the
Committee by the Plan, the Committee shall have full power and authority to:
(i) designate Participants; (ii) determine the type or types of Awards to be
granted to an eligible Employee; (iii) determine the number of Shares to be
covered by, or with respect to which payments, rights, or other matters are to
be calculated in connection with, Awards; (iv) determine the terms and
conditions of any Award; (v) determine whether, to what extent, and under what
circumstances Awards may be settled or exercised in cash,
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<PAGE> 4
Shares, other securities, other Awards or other property, or cancelled,
forfeited, or suspended and the method or methods by which Awards may be
settled, exercised cancelled, forfeited, or suspended; (vi) determine whether,
to what extent, and under what circumstances cash, Shares, other securities,
other Awards, other property, and other amounts payable with respect to an
Award shall be deferred either automatically or at the election of the holder
thereof or of the Committee; (vii) interpret and administer the Plan and any
instrument or agreement relating to, or Award made under, the Plan; (viii)
establish, amend, suspend, or waive such rules and regulations and appoint such
agents as it shall deem appropriate for the proper administration of the Plan;
and (ix) make any other determination and take any other action that the
Committee deems necessary or desirable for the administration of the Plan.
Unless otherwise expressly provided in the Plan, all designations,
determinations, interpretations, and other decisions under or with respect to
the Plan or any Award shall be within the sole discretion of the Committee, may
be made at any time and shall be final, conclusive, and binding upon all
Persons, including the Company, any Affiliate, any Participant, any holder or
beneficiary of any Award, any stockholder and any Employee.
SECTION 4. Shares Available for Awards.
(a) Shares Available. Subject to adjustment as provided in Section 4(c),
the number of Shares with respect to which Awards may be granted under the Plan
shall be 600,000; provided, however, if as of any January 1 the number of
Shares that are available for Awards under the Plan is less than 600,000
Shares, the maximum number of shares available for awards shall be increased
automatically on such January 1 by the number of Shares necessary to equal
600,000 shares available for Awards. If any Shares covered by an Award granted
under the Plan, or to which such an Award relates, are forfeited, or if an
Award otherwise terminates or is cancelled without the delivery of Shares or of
other consideration, then the Shares covered by such Award, or to which such
Award relates, or the number of Shares otherwise counted against the aggregate
number of Shares with respect to which Awards may be granted, to the extent of
any such forfeiture, termination or cancellation, shall again be, or shall
become, Shares with respect to which Awards may be granted, but only if, and to
the extent that, the number of Shares then available for Awards does not exceed
600,000 Shares.
(b) Sources of Shares Deliverable Under Awards. Any Shares delivered
pursuant to an Award may consist, in whole or in part, of authorized and
unissued Shares or of treasury Shares.
(c) Adjustments. In the event that the Committee determines that any
dividend or other distribution (whether in the form of cash, Shares, other
securities, or other property), recapitalization, stock split, reverse stock
split, reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, or exchange of Shares or other securities of the Company, issuance
of warrants or other rights to purchase Shares or other securities of the
Company, or other similar corporate transaction or event affects the Shares
such that an adjustment is determined by the Committee to be appropriate
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<PAGE> 5
in order to prevent dilution or enlargement of the benefits or potential
benefits intended to be made available under the Plan, then the Committee
shall, in such manner as it may deem equitable, adjust any or all of (i) the
number and type of Shares (or other securities or property) with respect to
which Awards may be granted, (ii) the number and type of Shares (or other
securities or property) subject to outstanding Awards, and (iii) the grant or
exercise price with respect to any Award or, if deemed appropriate, make
provision for a cash payment to the holder of an outstanding Award.
SECTION 5. Eligibility.
Any Employee shall be eligible to be designated a Participant by the Committee.
SECTION 6. Awards.
(a) Options. Subject to the provisions of the Plan, the Committee shall
have the authority to determine the Employees to whom Options shall be granted,
the number of Shares to be covered by each Option, the purchase price therefor
and the conditions and limitations applicable to the exercise of the Option,
including the following terms and conditions and such additional terms and
conditions, as the Committee shall determine, that are not inconsistent with
the provisions of the Plan.
(i) Exercise Price. The purchase price per Share purchasable
under an Option shall be determined by the Committee at the time each
Option is granted.
(ii) Time and Method of Exercise. The Committee shall determine
the time or times at which an Option may be exercised in whole or in
part, and the method or methods by which, and the form or forms (which
may include, without limitation, cash, Shares, outstanding Awards,
Shares that would otherwise be acquired upon exercise of the Option,
other securities or other property, or any combination thereof, having
a Fair Market Value on the exercise date equal to the relevant
exercise price) in which payment of the exercise price with respect
thereto may be made or deemed to have been made.
(iii) Incentive Stock Options. The terms of any Incentive Stock
Option granted under the Plan shall comply in all respects with the
provisions of Section 422 of the Code, or any successor provision, and
any regulations promulgated thereunder. Incentive Stock Options may
be granted only to employees of the Company and its subsidiaries,
within the meaning of Section 424(f) of the Code.
(b) Stock Appreciation Rights. Subject to the provisions of the Plan, the
Committee shall have the authority to determine the Employees to whom Stock
Appreciation Rights shall be granted, the number of Shares to be covered by
each Stock Appreciation Right Award, the grant price thereof and the conditions
and limitations applicable to the exercise thereof. A Stock Appreciation Right
may
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<PAGE> 6
be granted in tandem with another Award, in addition to another Award, or
freestanding and unrelated to another Award. A Stock Appreciation Right
granted in tandem with or in addition to another Award may be granted either at
the same time as such other Award or at a later time.
(i) Grant Price. The grant price of a Stock Appreciation Right
shall be determined by the Committee on the date of grant.
(ii) Other Terms and Conditions. Subject to the terms of the Plan
and any applicable Award Agreement, the Committee shall determine, at
or after the grant of a Stock Appreciation Right, the term, methods of
exercise, methods of settlement, and any other terms and conditions of
any Stock Appreciation Right. Any such determination by the Committee
may be changed by the Committee from time to time and may govern the
exercise of Stock Appreciation Rights granted or exercised prior to
such determination as well as Stock Appreciation Rights granted or
exercised thereafter. The Committee may impose such conditions or
restrictions on the exercise of any Stock Appreciation Right as it
shall deem appropriate.
(c) Restricted Stock. Subject to the provisions of the Plan, the
Committee shall have the authority to determine the Employees to whom
Restricted Stock shall be granted, the number of Shares of Restricted Stock to
be granted to each such Participant, the duration of the Restricted Period
during which, and the conditions, including performance criteria, if any, under
which, the Restricted Stock may be forfeited to the Company, and the other
terms and conditions of such Awards.
(i) Dividends. Dividends paid on Restricted Stock may be paid
directly to the Participant, may be subject to risk of forfeiture
and/or transfer restrictions during any period established by the
Committee or sequestered and held in a bookkeeping cash account (with
or without interest) or reinvested on an immediate or deferred basis
in additional shares of Common Stock, which credit or shares may be
subject to the same restrictions as the underlying Award or such other
restrictions, all as determined by the Committee in its discretion.
(ii) Registration. Any Restricted Stock may be evidenced in such
manner as the Committee shall deem appropriate, including, without
limitation, book-entry registration or issuance of a stock certificate
or certificates. In the event any stock certificate is issued in
respect of Restricted Stock granted under the Plan, such certificate
shall be registered in the name of the Participant and shall bear an
appropriate legend referring to the terms, conditions, and
restrictions applicable to such Restricted Stock.
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<PAGE> 7
(iii) Forfeiture and Restrictions Lapse. Except as otherwise
determined by the Committee or the terms of the Award that granted the
Restricted Stock, upon termination of a Participant's employment (as
determined under criteria established by the Committee) for any reason
during the applicable Restricted Period, all Restricted Stock shall be
forfeited by the Participant and re-acquired by the Company. The
Committee may, when it finds that a waiver would be in the best
interests of the Company, waive in whole or in part any or all
remaining restrictions with respect to such Participant's Restricted
Stock. Unrestricted Shares, evidenced in such manner as the Committee
shall deem appropriate, shall be issued to the holder of Restricted
Stock promptly after the applicable restrictions have lapsed or
otherwise been satisfied.
(iv) Transfer Restrictions. During the Restricted Period,
Restricted Stock will be subject to the limitations on transfer as
provided in Section 6(h)(iii).
(d) Performance Awards. The Committee shall have the authority to
determine the Employees who shall receive a Performance Award, which shall be
denominated as a cash amount at the time of grant and confer on the Participant
the right to receive payment of such Award, in whole or in part, upon the
achievement of such performance goals during such performance periods as the
Committee shall establish with respect to the Award.
(i) Terms and Conditions. Subject to the terms of the Plan and
any applicable Award Agreement, the Committee shall determine the
performance goals to be achieved during any performance period, the
length of any performance period, the amount of any Performance Award
and the amount of any payment or transfer to be made pursuant to any
Performance Award.
(ii) Payment of Performance Awards. Performance Awards may be paid
(in cash and/or in Shares, in the sole discretion of the Committee) in
a lump sum or in installments following the close of the performance
period, in accordance with procedures established by the Committee
with respect to such Award.
(e) Bonus Shares. The Committee shall have the authority, in its
discretion, to grant Bonus Shares to eligible Employees. Each Bonus Share
shall constitute a transfer of an unrestricted Share to the Participant,
without other payment therefor, as additional compensation for the
Participant's services to the Company.
(f) Phantom Shares. The Committee shall have the authority to grant
Awards of Phantom Shares to eligible Employees upon such terms and conditions
as the Committee may determine.
-7-
<PAGE> 8
(i) Terms and Conditions. Each Phantom Share Award shall
constitute an agreement by the Company to issue or transfer a
specified number of Shares or pay an amount of cash equal to a
specified number of Shares, or a combination thereof to the
Participant in the future, subject to the fulfillment during the
Restricted Period of such conditions, including performance
objectives, if any, as the Committee may specify at the date of grant.
During the Restricted Period, the Participant shall not have any right
to transfer any rights under the subject Award, shall not have any
rights of ownership in the Phantom Shares and shall not have any right
to vote such shares.
(ii) Dividends. Any Phantom Share award may provide that any or
all dividends or other distributions paid on Shares during the
Restricted Period be credited in a cash bookkeeping account (without
interest) or that equivalent additional Phantom Shares be awarded,
which account or shares may be subject to the same restrictions as the
underlying Award or such other restrictions as the Committee may
determine.
(g) Cash Awards. The Committee shall have the authority to determine the
Employees to whom Cash Awards shall be granted, the amount, and the terms or
conditions, if any, as additional compensation for the Employee's services to
the Company or its Affiliates. A Cash Award may be granted (simultaneously or
subsequently) separately or in tandem with another Award and may entitle a
Participant to receive a specified amount of cash from the Company upon such
other Award becoming taxable to the Participant, which cash amount may be based
on a formula relating to the anticipated taxable income associated with such
other Award and the payment of the Cash Award.
(h) General.
(i) Awards May Be Granted Separately or Together. Awards to
Employees may, in the discretion of the Committee, be granted either
alone or in addition to, in tandem with, or in substitution for any
other Award granted under the Plan or any award granted under any
other plan of the Company or any Affiliate. Awards granted in
addition to or in tandem with other Awards or awards granted under any
other plan of the Company or any Affiliate may be granted either at
the same time as or at a different time from the grant of such other
Awards or awards.
(ii) Forms of Payment by Company Under Awards. Subject to the
terms of the Plan and of any applicable Award Agreement, payments or
transfers to be made by the Company or an Affiliate upon the grant,
exercise or payment of an Award may be made in such form or forms as
the Committee shall determine, including, without limitation, cash,
Shares, other securities, other Awards or other property, or any
combination thereof, and may be made in a single payment or transfer,
in installments, or on a deferred basis, in each case in accordance
with rules and procedures established by the Committee. Such rules
and
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<PAGE> 9
procedures may include, without limitation, provisions for the payment
or crediting of reasonable interest on installment or deferred
payments.
(iii) Limits on Transfer of Awards.
(A) Each Award, and each right under any Award, shall be
exercisable only by the Participant during the Participant's lifetime,
or, if permissible under applicable law, by the Participant's guardian
or legal representative or by a transferee receiving such Award
pursuant to a qualified domestic relations order (a "QDRO") as
determined by the Committee.
(B) No Award and no right under any such Award may be assigned,
alienated, pledged, attached, sold or otherwise transferred or
encumbered by a Participant otherwise than by will or by the laws of
descent and distribution (or, in the case of Restricted Stock, to the
Company) or pursuant to a QDRO and any such purported assignment,
alienation, pledge, attachment, sale, transfer or encumbrance shall be
void and unenforceable against the Company or any Affiliate.
(iv) Term of Awards. The term of each Award shall be for such
period as may be determined by the Committee; provided, that in no
event shall the term of any Award exceed a period of ten (10) years
from the date of its grant.
(v) Share Certificates. All certificates for Shares or other
securities of the Company or any Affiliate delivered under the Plan
pursuant to any Award or the exercise thereof shall be subject to such
stop transfer orders and other restrictions as the Committee may deem
advisable under the Plan or the rules, regulations, and other
requirements of the SEC, any stock exchange upon which such Shares or
other securities are then listed, and any applicable Federal or state
laws, and the Committee may cause a legend or legends to be put on any
such certificates to make appropriate reference to such restrictions.
(vi) Consideration for Grants. Awards may be granted for no cash
consideration or for such consideration as the Committee determines
including, without limitation, such minimal cash consideration as may
be required by applicable law.
(vii) Delivery of Shares or other Securities and Payment by
Participant of Consideration. No Shares or other securities shall be
delivered pursuant to any Award until payment in full of any amount
required to be paid pursuant to the Plan or the applicable Award
Agreement is received by the Company. Such payment may be made by
such method or methods and in such form or forms as the Committee
shall determine, including, without limitation, cash, Shares, other
securities, other Awards or other property, withholding of Shares,
cashless
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<PAGE> 10
exercise with simultaneous sale, or any combination thereof; provided
that the combined value, as determined by the Committee, of all cash
and cash equivalents and the Fair Market Value of any such Shares or
other property so tendered to the Company, as of the date of such
tender, is at least equal to the full amount required to be paid
pursuant to the Plan or the applicable Award Agreement to the Company.
(viii) Performance Criteria and Payment Limits. The Committee may
establish performance goals applicable to Awards. Until changed by
the Committee, the performance goals shall be based upon the
attainment of such target levels of net income, cash flows, reserve
additions or revisions, acquisitions, total capitalization, total or
comparative shareholder return, assets, exploration successes,
production volumes, findings and development costs, costs reductions
and savings, reportable incidents in safety or environmental matters,
return on equity, profit margin or sales, and/or earnings per share as
may be specified by the Committee. Which factor or factors to be used
with respect to any grant, and the weight to be accorded thereto if
more than one factor is used, shall be determined by the Committee at
the time of grant. The maximum amount of compensation that may be
paid to any Participant with respect to any single Performance Award
or Cash Award in any calendar year shall be $500,000. With respect to
any Restricted Stock Award, Phantom Stock Award, or Cash Award granted
in tandem with, and expressed as a percentage of, a Share-denominated
Award, the maximum payment to any Participant with respect to such
Award in any calendar year shall be an amount (in cash and/or in
Shares) equal to the Fair Market Value of the number of Shares subject
to such Award.
SECTION 7. Amendment and Termination.
Except to the extent prohibited by applicable law and unless otherwise
expressly provided in an Award Agreement or in the Plan:
(a) Amendments to the Plan. The Board may amend, alter, suspend,
discontinue, or terminate the Plan without the consent of any
shareholder, Participant, other holder or beneficiary of an Award, or
other Person.
(b) Amendments to Awards. The Committee may waive any conditions
or rights under, amend any terms of, or alter any Award theretofore
granted , provided no change, other than pursuant to Section 7(c), in
any Award shall reduce the benefit to Participant without the consent
of such Participant.
(c) Adjustment of Awards Upon the Occurrence of Certain Unusual or
Nonrecurring Events. The Committee is hereby authorized to make
adjustments in the terms and conditions of, and the criteria included
in, Awards in recognition of unusual or nonrecurring
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<PAGE> 11
events (including, without limitation, the events described in Section
4(c) of the Plan) affecting the Company, any Affiliate, or the
financial statements of the Company or any Affiliate, or of changes in
applicable laws, regulations, or accounting principles, whenever the
Committee determines that such adjustments are appropriate in order to
prevent dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan.
SECTION 8. Change in Control.
Notwithstanding any other provision of this Plan to the contrary, in the event
of a Change in Control of the Company, all outstanding Awards granted more than
six months prior to the date of the Change in Control automatically shall
become fully vested on such Change in Control, all restrictions, if any, with
respect to such Awards shall lapse, and all performance criteria, if any, with
respect to such Awards shall be deemed to have been met in full. For purposes
of this Plan, a "Change in Control" shall be deemed to occur:
(i) if any person, other than James C. Flores, William W. Rucks,
IV or their affiliates (as such term is used in sections 13(d) and
14(d)(2) of the Exchange Act), is or becomes the "beneficial owner"
(as defined in Rule 13d-3 of the Exchange Act), directly or
indirectly, of securities of the Company representing 25% or more of
the combined voting power of the Company's then outstanding
securities,
(ii) upon the first purchase of the Company's common stock pursuant
to a tender or exchange offer (other than a tender or exchange offer
made by the Company),
(iii) upon the approval by the Company's stockholders of a merger or
consolidation, a sale or disposition of all or substantially all of
the Company's assets or a plan of liquidation or dissolution of the
Company, or
(iv) if, during any period of two consecutive years, individuals
who at the beginning of such period constitute the Board cease for any
reason to constitute at least a majority thereof, unless the election
or nomination for the election by the Company's stockholders of each
new director was approved by a vote of at least two-thirds of the
directors then still in office who were directors at the beginning of
the period.
SECTION 9. General Provisions.
(a) No Rights to Awards. No Employee, Participant or other Person shall
have any claim to be granted any Award, and there is no obligation for
uniformity of treatment of Employees, Participants, or holders or beneficiaries
of Awards. The terms and conditions of Awards need not be the same with
respect to each recipient.
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<PAGE> 12
(b) Withholding. The Company or any Affiliate is authorized to withhold
from any Award, from any payment due or transfer made under any Award or under
the Plan or from any compensation or other amount owing to a Participant the
amount (in cash, Shares, other securities, Shares that would otherwise be
issued pursuant to such Award, other Awards or other property) of any
applicable taxes payable in respect of an Award, its exercise, the lapse of
restrictions thereon, or any payment or transfer under an Award or under the
Plan and to take such other action as may be necessary in the opinion of the
Company to satisfy all obligations for the payment of such taxes.
(c) No Right to Employment. The grant of an Award shall not be construed
as giving a Participant the right to be retained in the employ of the Company
or any Affiliate. Further, the Company or an Affiliate may at any time dismiss
a Participant from employment, free from any liability or any claim under the
Plan, unless otherwise expressly provided in the Plan or in any Award
Agreement.
(d) Governing Law. The validity, construction, and effect of the Plan and
any rules and regulations relating to the Plan shall be determined in
accordance with the laws of the State of Delaware and applicable Federal law.
(e) Severability. If any provision of the Plan or any Award is or becomes
or is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as
to any Person or Award, or would disqualify the Plan or any Award under any law
deemed applicable by the Committee, such provision shall be construed or deemed
amended to conform to the applicable laws, or if it cannot be construed or
deemed amended without , in the determination of the Committee, materially
altering the intent of the Plan or the Award, such provision shall be stricken
as to such jurisdiction, Person or Award and the remainder of the Plan and any
such Award shall remain in full force and effect.
(f) Other Laws. The Committee may refuse to issue or transfer any Shares
or other consideration under an Award if, acting in its sole discretion, it
determines that the issuance of transfer or such Shares or such other
consideration might violate any applicable law or regulation or entitle the
Company to recover the same under Section 16(b) of the Exchange Act, and any
payment tendered to the Company by a Participant, other holder or beneficiary
in connection with the exercise of such Award shall be promptly refunded to the
relevant Participant, holder or beneficiary.
(g) No Trust or Fund Created. Neither the Plan nor the Award shall create
or be construed to create a trust or separate fund of any kind or a fiduciary
relationship between the Company or any Affiliate and a Participant or any
other Person. To the extent that any Person acquires a right to receive
payments from the Company or any Affiliate pursuant to an Award, such right
shall be no greater than the right of any general unsecured creditor of the
Company or any Affiliate.
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<PAGE> 13
(h) No Fractional Shares. No fractional Shares shall be issued or
delivered pursuant to the Plan or any Award, and the Committee shall determine
whether cash, other securities, or other property shall be paid or transferred
in lieu of any fractional Shares or whether such fractional Shares or any
rights thereto shall be cancelled, terminated, or otherwise eliminated.
(i) Headings. Headings are given to the Sections and subsections of the
Plan solely as a convenience to facilitate reference. Such headings shall not
be deemed in any way material or relevant to the construction or interpretation
of the Plan or any provision thereof.
SECTION 10. Effective Date of the Plan.
The Plan shall be effective as of the date of its approval by the Board.
SECTION 11. Term of the Plan.
No Award shall be granted under the Plan ten (10) years after the approval of
the Plan by the Board. However, unless otherwise expressly provided in the
Plan or in an applicable Award Agreement, any Award theretofore granted may,
and the authority of the Board or the Committee to amend, alter, adjust,
suspend, discontinue, or terminate any such Award or to waive any conditions or
rights under any such Award shall, extend beyond such date.
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<PAGE> 14
OCEAN ENERGY, INC.
LONG-TERM INCENTIVE PLAN
FOR NONEXECUTIVE EMPLOYEES,
AS AMENDED
SECTION 1. Purpose of the Plan.
The Ocean Energy, Inc. Long-Term Incentive Plan For Nonexecutive Employees (the
"Plan") is intended to promote the interests of Ocean Energy, Inc., a Delaware
corporation (the "Company"), by encouraging employees of the Company, its
subsidiaries and affiliated entities to acquire or increase their equity
interest in the Company and to provide a means whereby employees may develop a
sense of proprietorship and personal involvement in the development and
financial success of the Company, and to encourage them to remain with and
devote their best efforts to the business of the Company thereby advancing the
interests of the Company and its stockholders. The Plan is also contemplated
to enhance the ability of the Company, its subsidiaries and affiliated entities
to attract and retain the services of individuals who are essential for the
growth and profitability of the Company.
SECTION 2. Definitions.
As used in the Plan, the following terms shall have the meanings set forth
below:
"Affiliate" shall mean (i) any entity that, directly or through one or
more intermediaries, is controlled by the Company and (ii) any entity
in which the Company has a significant equity interest, as determined
by the Committee.
"Award" shall mean any Option, Stock Appreciation Right, Restricted
Stock, Performance Award, Phantom Shares, Bonus Shares or Cash Award.
"Award Agreement" shall mean any written agreement, contract, or other
instrument or document evidencing any Award, which may, but need not,
be executed or acknowledged by a Participant.
"Board" shall mean the Board of Directors of the Company.
"Bonus Shares" shall mean an award of Shares granted pursuant to
Section 6(e) of the Plan.
<PAGE> 15
"Cash Award" shall mean an award payable in cash granted pursuant to
Section 6(g) of the Plan.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the rules and regulations thereunder.
"Committee" shall mean the committee of such executives appointed by
the Chief Executive Officer of the Company to administer the Plan;
however, no member of the Committee may be an employee.
"Employee" shall mean any employee of the Company or an Affiliate, but
excluding any employee who is subject to Section 16 of the Exchange
Act, as determined by the Committee.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Fair Market Value" shall mean, with respect to Shares, the closing
price of a Share quoted on the Composite Tape, or if the Shares are
not listed on the New York Stock Exchange, on the principal United
States securities exchange registered under the Exchange Act on which
such stock is listed, or if the Shares are not listed on any such
stock exchange, the last sale price, or if none is reported, the
highest closing bid quotation on the National Association of
Securities Dealers, Inc., Automated Quotations System or any successor
system then in use on the Date of Grant, or if none are available on
such day, on the next preceding day for which are available, or if no
such quotations are available, the fair market value on the date of
grant of a Share as determined in good faith by the Board. In the
event the Shares are not publicly traded at the time a determination
of its fair market value is required to be made hereunder, the
determination of fair market value shall be made in good faith by the
Committee.
"Incentive Stock Option" or "ISO" shall mean an option granted under
Section 6(a) of the Plan that is intended to qualify as an "incentive
stock option" under Section 422 of the Code or any successor
provision thereto.
"Non-Qualified Stock Option" or "NQO" shall mean an option granted
under Section 6(a) of the Plan that is not intended to be an Incentive
Stock Option. "Option" shall mean an Incentive Stock Option or a
Non-Qualified Stock Option.
"Participant" shall mean any Employee granted an Award under the Plan.
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<PAGE> 16
"Performance Award" shall mean any right granted under Section 6(d) of
the Plan.
"Person" shall mean individual, corporation, partnership, association,
joint-stock company, trust, unincorporated organization, government or
political subdivision thereof or other entity.
"Phantom Shares" shall mean an Award of the right to receive Shares
issued at the end of a Restricted Period which is granted pursuant to
Section 6(f) of the Plan. "Restricted Period" shall mean the period
established by the Committee with respect to an Award during which the
Award either remains subject to forfeiture or is not exercisable by
the Participant.
"Restricted Stock" shall mean any Share, prior to the lapse of
restrictions thereon, granted under Section 6(c) of the Plan.
"Shares" or "Common Shares" or "Common Stock" shall mean the common
stock of the Company, $0.01 par value, and such other securities or
property as may become the subject of Awards of the Plan.
"Stock Appreciation Right" or "Right" shall mean any right to receive
the appreciation of Shares granted under Section 6(b) of the Plan.
"Substitute Award" shall mean Awards granted in assumption of, or in
substitution for, outstanding awards previously granted by (i) a
company acquired by the Company or one or more of its Affiliates, or
(ii) a company with which the Company or one or more of its Affiliates
combines.
SECTION 3. Administration.
The Plan shall be administered by the Committee. A majority of the Committee
shall constitute a quorum, and the acts of the members of the Committee who are
present at any meeting thereof at which a quorum is present, or acts
unanimously approved by the members of the Committee in writing, shall be the
acts of the Committee. Subject to the terms of the Plan and applicable law,
and in addition to other express powers and authorizations conferred on the
Committee by the Plan, the Committee shall have full power and authority to:
(i) designate Participants; (ii) determine the type or types of Awards to be
granted to an eligible Employee; (iii) determine the number of Shares to be
covered by, or with respect to which payments, rights, or other matters are to
be calculated in connection with, Awards; (iv) determine the terms and
conditions of any Award; (v) determine whether, to what extent, and under what
circumstances Awards may be settled or exercised in cash,
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<PAGE> 17
Shares, other securities, other Awards or other property, or cancelled,
forfeited, or suspended and the method or methods by which Awards may be
settled, exercised cancelled, forfeited, or suspended; (vi) determine whether,
to what extent, and under what circumstances cash, Shares, other securities,
other Awards, other property, and other amounts payable with respect to an
Award shall be deferred either automatically or at the election of the holder
thereof or of the Committee; (vii) interpret and administer the Plan and any
instrument or agreement relating to, or Award made under, the Plan; (viii)
establish, amend, suspend, or waive such rules and regulations and appoint such
agents as it shall deem appropriate for the proper administration of the Plan;
and (ix) make any other determination and take any other action that the
Committee deems necessary or desirable for the administration of the Plan.
Unless otherwise expressly provided in the Plan, all designations,
determinations, interpretations, and other decisions under or with respect to
the Plan or any Award shall be within the sole discretion of the Committee, may
be made at any time and shall be final, conclusive, and binding upon all
Persons, including the Company, any Affiliate, any Participant, any holder or
beneficiary of any Award, any stockholder and any Employee.
SECTION 4. Shares Available for Awards.
(a) Shares Available. Subject to adjustment as provided in Section 4(c),
the number of Shares with respect to which Awards may be granted under the Plan
shall be 600,000; provided, however, if as of any January 1 the number of
Shares that are available for Awards under the Plan is less than 600,000
Shares, the maximum number of shares available for awards shall be increased
automatically on such January 1 by the number of Shares necessary to equal
600,000 shares available for Awards. If any Shares covered by an Award granted
under the Plan, or to which such an Award relates, are forfeited, or if an
Award otherwise terminates or is cancelled without the delivery of Shares or of
other consideration, then the Shares covered by such Award, or to which such
Award relates, or the number of Shares otherwise counted against the aggregate
number of Shares with respect to which Awards may be granted, to the extent of
any such forfeiture, termination or cancellation, shall again be, or shall
become, Shares with respect to which Awards may be granted, but only if, and to
the extent that, the number of Shares then available for Awards does not exceed
600,000 Shares.
(b) Sources of Shares Deliverable Under Awards. Any Shares delivered
pursuant to an Award may consist, in whole or in part, of authorized and
unissued Shares or of treasury Shares.
(c) Adjustments. In the event that the Committee determines that any
dividend or other distribution (whether in the form of cash, Shares, other
securities, or other property), recapitalization, stock split, reverse stock
split, reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, or exchange of Shares or other securities of the Company, issuance
of warrants or other rights to purchase Shares or other securities of the
Company, or other similar corporate transaction or event affects the Shares
such that an adjustment is determined by the Committee to be appropriate
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<PAGE> 18
in order to prevent dilution or enlargement of the benefits or potential
benefits intended to be made available under the Plan, then the Committee
shall, in such manner as it may deem equitable, adjust any or all of (i) the
number and type of Shares (or other securities or property) with respect to
which Awards may be granted, (ii) the number and type of Shares (or other
securities or property) subject to outstanding Awards, and (iii) the grant or
exercise price with respect to any Award or, if deemed appropriate, make
provision for a cash payment to the holder of an outstanding Award.
SECTION 5. Eligibility.
Any Employee shall be eligible to be designated a Participant by the Committee.
SECTION 6. Awards.
(a) Options. Subject to the provisions of the Plan, the Committee shall
have the authority to determine the Employees to whom Options shall be granted,
the number of Shares to be covered by each Option, the purchase price therefor
and the conditions and limitations applicable to the exercise of the Option,
including the following terms and conditions and such additional terms and
conditions, as the Committee shall determine, that are not inconsistent with
the provisions of the Plan.
(i) Exercise Price. The purchase price per Share purchasable
under an Option shall be determined by the Committee at the time each
Option is granted.
(ii) Time and Method of Exercise. The Committee shall determine
the time or times at which an Option may be exercised in whole or in
part, and the method or methods by which, and the form or forms (which
may include, without limitation, cash, Shares, outstanding Awards,
Shares that would otherwise be acquired upon exercise of the Option,
other securities or other property, or any combination thereof, having
a Fair Market Value on the exercise date equal to the relevant
exercise price) in which payment of the exercise price with respect
thereto may be made or deemed to have been made.
(iii) Incentive Stock Options. The terms of any Incentive Stock
Option granted under the Plan shall comply in all respects with the
provisions of Section 422 of the Code, or any successor provision, and
any regulations promulgated thereunder. Incentive Stock Options may
be granted only to employees of the Company and its subsidiaries,
within the meaning of Section 424(f) of the Code.
(b) Stock Appreciation Rights. Subject to the provisions of the Plan, the
Committee shall have the authority to determine the Employees to whom Stock
Appreciation Rights shall be granted, the number of Shares to be covered by
each Stock Appreciation Right Award, the grant price thereof and the conditions
and limitations applicable to the exercise thereof. A Stock Appreciation Right
may
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<PAGE> 19
be granted in tandem with another Award, in addition to another Award, or
freestanding and unrelated to another Award. A Stock Appreciation Right
granted in tandem with or in addition to another Award may be granted either at
the same time as such other Award or at a later time.
(i) Grant Price. The grant price of a Stock Appreciation Right
shall be determined by the Committee on the date of grant.
(ii) Other Terms and Conditions. Subject to the terms of the Plan
and any applicable Award Agreement, the Committee shall determine, at
or after the grant of a Stock Appreciation Right, the term, methods of
exercise, methods of settlement, and any other terms and conditions of
any Stock Appreciation Right. Any such determination by the Committee
may be changed by the Committee from time to time and may govern the
exercise of Stock Appreciation Rights granted or exercised prior to
such determination as well as Stock Appreciation Rights granted or
exercised thereafter. The Committee may impose such conditions or
restrictions on the exercise of any Stock Appreciation Right as it
shall deem appropriate.
(c) Restricted Stock. Subject to the provisions of the Plan, the
Committee shall have the authority to determine the Employees to whom
Restricted Stock shall be granted, the number of Shares of Restricted Stock to
be granted to each such Participant, the duration of the Restricted Period
during which, and the conditions, including performance criteria, if any, under
which, the Restricted Stock may be forfeited to the Company, and the other
terms and conditions of such Awards.
(i) Dividends. Dividends paid on Restricted Stock may be paid
directly to the Participant, may be subject to risk of forfeiture
and/or transfer restrictions during any period established by the
Committee or sequestered and held in a bookkeeping cash account (with
or without interest) or reinvested on an immediate or deferred basis
in additional shares of Common Stock, which credit or shares may be
subject to the same restrictions as the underlying Award or such other
restrictions, all as determined by the Committee in its discretion.
(ii) Registration. Any Restricted Stock may be evidenced in such
manner as the Committee shall deem appropriate, including, without
limitation, book-entry registration or issuance of a stock certificate
or certificates. In the event any stock certificate is issued in
respect of Restricted Stock granted under the Plan, such certificate
shall be registered in the name of the Participant and shall bear an
appropriate legend referring to the terms, conditions, and
restrictions applicable to such Restricted Stock.
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<PAGE> 20
(iii) Forfeiture and Restrictions Lapse. Except as otherwise
determined by the Committee or the terms of the Award that granted the
Restricted Stock, upon termination of a Participant's employment (as
determined under criteria established by the Committee) for any reason
during the applicable Restricted Period, all Restricted Stock shall be
forfeited by the Participant and re-acquired by the Company. The
Committee may, when it finds that a waiver would be in the best
interests of the Company, waive in whole or in part any or all
remaining restrictions with respect to such Participant's Restricted
Stock. Unrestricted Shares, evidenced in such manner as the Committee
shall deem appropriate, shall be issued to the holder of Restricted
Stock promptly after the applicable restrictions have lapsed or
otherwise been satisfied.
(iv) Transfer Restrictions. During the Restricted Period,
Restricted Stock will be subject to the limitations on transfer as
provided in Section 6(h)(iii).
(d) Performance Awards. The Committee shall have the authority to
determine the Employees who shall receive a Performance Award, which shall be
denominated as a cash amount at the time of grant and confer on the Participant
the right to receive payment of such Award, in whole or in part, upon the
achievement of such performance goals during such performance periods as the
Committee shall establish with respect to the Award.
(i) Terms and Conditions. Subject to the terms of the Plan and
any applicable Award Agreement, the Committee shall determine the
performance goals to be achieved during any performance period, the
length of any performance period, the amount of any Performance Award
and the amount of any payment or transfer to be made pursuant to any
Performance Award.
(ii) Payment of Performance Awards. Performance Awards may be paid
(in cash and/or in Shares, in the sole discretion of the Committee) in
a lump sum or in installments following the close of the performance
period, in accordance with procedures established by the Committee
with respect to such Award.
(e) Bonus Shares. The Committee shall have the authority, in its
discretion, to grant Bonus Shares to eligible Employees. Each Bonus Share
shall constitute a transfer of an unrestricted Share to the Participant,
without other payment therefor, as additional compensation for the
Participant's services to the Company.
(f) Phantom Shares. The Committee shall have the authority to grant
Awards of Phantom Shares to eligible Employees upon such terms and conditions
as the Committee may determine.
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<PAGE> 21
(i) Terms and Conditions. Each Phantom Share Award shall
constitute an agreement by the Company to issue or transfer a
specified number of Shares or pay an amount of cash equal to a
specified number of Shares, or a combination thereof to the
Participant in the future, subject to the fulfillment during the
Restricted Period of such conditions, including performance
objectives, if any, as the Committee may specify at the date of grant.
During the Restricted Period, the Participant shall not have any right
to transfer any rights under the subject Award, shall not have any
rights of ownership in the Phantom Shares and shall not have any right
to vote such shares.
(ii) Dividends. Any Phantom Share award may provide that any or
all dividends or other distributions paid on Shares during the
Restricted Period be credited in a cash bookkeeping account (without
interest) or that equivalent additional Phantom Shares be awarded,
which account or shares may be subject to the same restrictions as the
underlying Award or such other restrictions as the Committee may
determine.
(g) Cash Awards. The Committee shall have the authority to determine the
Employees to whom Cash Awards shall be granted, the amount, and the terms or
conditions, if any, as additional compensation for the Employee's services to
the Company or its Affiliates. A Cash Award may be granted (simultaneously or
subsequently) separately or in tandem with another Award and may entitle a
Participant to receive a specified amount of cash from the Company upon such
other Award becoming taxable to the Participant, which cash amount may be based
on a formula relating to the anticipated taxable income associated with such
other Award and the payment of the Cash Award.
(h) General.
(i) Awards May Be Granted Separately or Together. Awards to
Employees may, in the discretion of the Committee, be granted either
alone or in addition to, in tandem with, or in substitution for any
other Award granted under the Plan or any award granted under any
other plan of the Company or any Affiliate. Awards granted in
addition to or in tandem with other Awards or awards granted under any
other plan of the Company or any Affiliate may be granted either at
the same time as or at a different time from the grant of such other
Awards or awards.
(ii) Forms of Payment by Company Under Awards. Subject to the
terms of the Plan and of any applicable Award Agreement, payments or
transfers to be made by the Company or an Affiliate upon the grant,
exercise or payment of an Award may be made in such form or forms as
the Committee shall determine, including, without limitation, cash,
Shares, other securities, other Awards or other property, or any
combination thereof, and may be made in a single payment or transfer,
in installments, or on a deferred basis, in each case in accordance
with rules and procedures established by the Committee. Such rules
and
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<PAGE> 22
procedures may include, without limitation, provisions for the payment
or crediting of reasonable interest on installment or deferred
payments.
(iii) Limits on Transfer of Awards.
(A) Each Award, and each right under any Award, shall be
exercisable only by the Participant during the Participant's lifetime,
or, if permissible under applicable law, by the Participant's guardian
or legal representative or by a transferee receiving such Award
pursuant to a qualified domestic relations order (a "QDRO") as
determined by the Committee.
(B) No Award and no right under any such Award may be assigned,
alienated, pledged, attached, sold or otherwise transferred or
encumbered by a Participant otherwise than by will or by the laws of
descent and distribution (or, in the case of Restricted Stock, to the
Company) or pursuant to a QDRO and any such purported assignment,
alienation, pledge, attachment, sale, transfer or encumbrance shall be
void and unenforceable against the Company or any Affiliate.
(iv) Term of Awards. The term of each Award shall be for such
period as may be determined by the Committee; provided, that in no
event shall the term of any Award exceed a period of ten (10) years
from the date of its grant.
(v) Share Certificates. All certificates for Shares or other
securities of the Company or any Affiliate delivered under the Plan
pursuant to any Award or the exercise thereof shall be subject to such
stop transfer orders and other restrictions as the Committee may deem
advisable under the Plan or the rules, regulations, and other
requirements of the SEC, any stock exchange upon which such Shares or
other securities are then listed, and any applicable Federal or state
laws, and the Committee may cause a legend or legends to be put on any
such certificates to make appropriate reference to such restrictions.
(vi) Consideration for Grants. Awards may be granted for no cash
consideration or for such consideration as the Committee determines
including, without limitation, such minimal cash consideration as may
be required by applicable law.
(vii) Delivery of Shares or other Securities and Payment by
Participant of Consideration. No Shares or other securities shall be
delivered pursuant to any Award until payment in full of any amount
required to be paid pursuant to the Plan or the applicable Award
Agreement is received by the Company. Such payment may be made by
such method or methods and in such form or forms as the Committee
shall determine, including, without limitation, cash, Shares, other
securities, other Awards or other property, withholding of Shares,
cashless
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exercise with simultaneous sale, or any combination thereof; provided
that the combined value, as determined by the Committee, of all cash
and cash equivalents and the Fair Market Value of any such Shares or
other property so tendered to the Company, as of the date of such
tender, is at least equal to the full amount required to be paid
pursuant to the Plan or the applicable Award Agreement to the Company.
(viii) Performance Criteria and Payment Limits. The Committee may
establish performance goals applicable to Awards. Until changed by
the Committee, the performance goals shall be based upon the
attainment of such target levels of net income, cash flows, reserve
additions or revisions, acquisitions, total capitalization, total or
comparative shareholder return, assets, exploration successes,
production volumes, findings and development costs, costs reductions
and savings, reportable incidents in safety or environmental matters,
return on equity, profit margin or sales, and/or earnings per share as
may be specified by the Committee. Which factor or factors to be used
with respect to any grant, and the weight to be accorded thereto if
more than one factor is used, shall be determined by the Committee at
the time of grant. The maximum amount of compensation that may be
paid to any Participant with respect to any single Performance Award
or Cash Award in any calendar year shall be $500,000. With respect to
any Restricted Stock Award, Phantom Stock Award, or Cash Award granted
in tandem with, and expressed as a percentage of, a Share-denominated
Award, the maximum payment to any Participant with respect to such
Award in any calendar year shall be an amount (in cash and/or in
Shares) equal to the Fair Market Value of the number of Shares subject
to such Award.
SECTION 7. Amendment and Termination.
Except to the extent prohibited by applicable law and unless otherwise
expressly provided in an Award Agreement or in the Plan:
(a) Amendments to the Plan. The Board may amend, alter, suspend,
discontinue, or terminate the Plan without the consent of any
shareholder, Participant, other holder or beneficiary of an Award, or
other Person.
(b) Amendments to Awards. The Committee may waive any conditions
or rights under, amend any terms of, or alter any Award theretofore
granted , provided no change, other than pursuant to Section 7(c), in
any Award shall reduce the benefit to Participant without the consent
of such Participant.
(c) Adjustment of Awards Upon the Occurrence of Certain Unusual or
Nonrecurring Events. The Committee is hereby authorized to make
adjustments in the terms and conditions of, and the criteria included
in, Awards in recognition of unusual or nonrecurring
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<PAGE> 24
events (including, without limitation, the events described in Section
4(c) of the Plan) affecting the Company, any Affiliate, or the
financial statements of the Company or any Affiliate, or of changes in
applicable laws, regulations, or accounting principles, whenever the
Committee determines that such adjustments are appropriate in order to
prevent dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan.
SECTION 8. Change in Control.
Notwithstanding any other provision of this Plan to the contrary, in the event
of a Change in Control of the Company, all outstanding Awards granted more than
six months prior to the date of the Change in Control automatically shall
become fully vested on such Change in Control, all restrictions, if any, with
respect to such Awards shall lapse, and all performance criteria, if any, with
respect to such Awards shall be deemed to have been met in full. For purposes
of this Plan, a "Change in Control" shall be deemed to occur:
(i) if any person, other than James C. Flores, William W. Rucks,
IV or their affiliates (as such term is used in sections 13(d) and
14(d)(2) of the Exchange Act), is or becomes the "beneficial owner"
(as defined in Rule 13d-3 of the Exchange Act), directly or
indirectly, of securities of the Company representing 25% or more of
the combined voting power of the Company's then outstanding
securities,
(ii) upon the first purchase of the Company's common stock pursuant
to a tender or exchange offer (other than a tender or exchange offer
made by the Company),
(iii) upon the approval by the Company's stockholders of a merger or
consolidation, a sale or disposition of all or substantially all of
the Company's assets or a plan of liquidation or dissolution of the
Company, or
(iv) if, during any period of two consecutive years, individuals
who at the beginning of such period constitute the Board cease for any
reason to constitute at least a majority thereof, unless the election
or nomination for the election by the Company's stockholders of each
new director was approved by a vote of at least two-thirds of the
directors then still in office who were directors at the beginning of
the period.
SECTION 9. General Provisions.
(a) No Rights to Awards. No Employee, Participant or other Person shall
have any claim to be granted any Award, and there is no obligation for
uniformity of treatment of Employees, Participants, or holders or beneficiaries
of Awards. The terms and conditions of Awards need not be the same with
respect to each recipient.
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<PAGE> 25
(b) Withholding. The Company or any Affiliate is authorized to withhold
from any Award, from any payment due or transfer made under any Award or under
the Plan or from any compensation or other amount owing to a Participant the
amount (in cash, Shares, other securities, Shares that would otherwise be
issued pursuant to such Award, other Awards or other property) of any
applicable taxes payable in respect of an Award, its exercise, the lapse of
restrictions thereon, or any payment or transfer under an Award or under the
Plan and to take such other action as may be necessary in the opinion of the
Company to satisfy all obligations for the payment of such taxes.
(c) No Right to Employment. The grant of an Award shall not be construed
as giving a Participant the right to be retained in the employ of the Company
or any Affiliate. Further, the Company or an Affiliate may at any time dismiss
a Participant from employment, free from any liability or any claim under the
Plan, unless otherwise expressly provided in the Plan or in any Award
Agreement.
(d) Governing Law. The validity, construction, and effect of the Plan and
any rules and regulations relating to the Plan shall be determined in
accordance with the laws of the State of Delaware and applicable Federal law.
(e) Severability. If any provision of the Plan or any Award is or becomes
or is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as
to any Person or Award, or would disqualify the Plan or any Award under any law
deemed applicable by the Committee, such provision shall be construed or deemed
amended to conform to the applicable laws, or if it cannot be construed or
deemed amended without , in the determination of the Committee, materially
altering the intent of the Plan or the Award, such provision shall be stricken
as to such jurisdiction, Person or Award and the remainder of the Plan and any
such Award shall remain in full force and effect.
(f) Other Laws. The Committee may refuse to issue or transfer any Shares
or other consideration under an Award if, acting in its sole discretion, it
determines that the issuance of transfer or such Shares or such other
consideration might violate any applicable law or regulation or entitle the
Company to recover the same under Section 16(b) of the Exchange Act, and any
payment tendered to the Company by a Participant, other holder or beneficiary
in connection with the exercise of such Award shall be promptly refunded to the
relevant Participant, holder or beneficiary.
(g) No Trust or Fund Created. Neither the Plan nor the Award shall create
or be construed to create a trust or separate fund of any kind or a fiduciary
relationship between the Company or any Affiliate and a Participant or any
other Person. To the extent that any Person acquires a right to receive
payments from the Company or any Affiliate pursuant to an Award, such right
shall be no greater than the right of any general unsecured creditor of the
Company or any Affiliate.
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<PAGE> 26
(h) No Fractional Shares. No fractional Shares shall be issued or
delivered pursuant to the Plan or any Award, and the Committee shall determine
whether cash, other securities, or other property shall be paid or transferred
in lieu of any fractional Shares or whether such fractional Shares or any
rights thereto shall be cancelled, terminated, or otherwise eliminated.
(i) Headings. Headings are given to the Sections and subsections of the
Plan solely as a convenience to facilitate reference. Such headings shall not
be deemed in any way material or relevant to the construction or interpretation
of the Plan or any provision thereof.
SECTION 10. Effective Date of the Plan.
The Plan shall be effective as of the date of its approval by the Board.
SECTION 11. Term of the Plan.
No Award shall be granted under the Plan ten (10) years after the approval of
the Plan by the Board. However, unless otherwise expressly provided in the
Plan or in an applicable Award Agreement, any Award theretofore granted may,
and the authority of the Board or the Committee to amend, alter, adjust,
suspend, discontinue, or terminate any such Award or to waive any conditions or
rights under any such Award shall, extend beyond such date.
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