As filed with the Securities and Exchange Commission on September 15, 1997
Registration No. 333-_____
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
UNION PACIFIC RESOURCES GROUP INC.
(Exact name of issuer as specified in its charter)
Utah 13-2647483
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation organization)
801 Cherry Street
Fort Worth, Texas 76102
(817) 877-6000
(Address of principal executive offices)
UNION PACIFIC RESOURCES GROUP INC.
EXECUTIVE DEFERRED COMPENSATION PLAN (the "EDCP")
UNION PACIFIC RESOURCES GROUP DEFERRED COMPENSATION PLAN FOR THE
BOARD OF DIRECTORS (the "DDCP")
(Full title of the plans)
Mark L. Jones, Esq.
General Attorney
Union Pacific Resources Group Inc.
801 Cherry Street
Fort Worth, Texas 76102
(Name and address of agent for service)
(817) 877-6000
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of securities Amount to be Proposed maximum Proposed maximum Amount of
to be registered registered offering price aggregate offering registration fee
per share price
- ------------------------------ ------------------------- ------------------------- ------------------------- ---------------------
<S> <C> <C> <C> <C>
Common Stock, 250,000(1) $24.50(2) $6,125,000(2) $1,856(3)
no par value
- ------------------------------ ------------------------- ------------------------- ------------------------- ---------------------
Deferred Compensation $12,500,000(5) 100% $12,500,000 $3,788(3)
Obligations(4)
============================== ========================= ========================= ========================= =====================
</TABLE>
(1) Represents 200,000 shares that may be offered or sold pursuant to the EDCP
and 50,000 shares that may be offered or sold pursuant to the DDCP,
including associated preferred stock purchase rights.
(2) Estimated pursuant to paragraph (h) of Rule 457 solely for the purpose of
calculating the registration fee based on the average of the reported high
and low sales prices for a share of Common Stock on September 12, 1997 as
reported on the New York Stock Exchange.
(3) Calculated pursuant to Section 6(b) as follows: 1/33 of one percent of the
maximum aggregate offering price.
(4) The Deferred Compensation Obligations are unsecured obligations of Union
Pacific Resources Group Inc. to pay deferred compensation in the future in
accordance with the terms of the EDCP and the DDCP.
(5) Represents registration of obligations concerning $10,000,000 that may be
deferred pursuant to the EDCP and $2,500,000 that may be deferred pursuant
to the DDCP.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed by Union Pacific Resources Group Inc. (the
"Registrant") with the Securities and Exchange Commission (the "Commission")
pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange Act")
are incorporated by reference in this Registration Statement:
(a) the Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1996 as amended by Form 10-K/A dated June 30, 1997;
(b) the Registrant's Quarterly Report on Form 10-Q for the quarters
ended March 31, 1997 and June 30, 1997;
(c) the Registrant's Current Report on Form 8-K dated June 24, 1997;
(d) the description of the Registrant's Common Stock, no par value
(the "Common Stock"), set forth in the Registrant's Form 8-A dated August
21, 1995; and
(e) the description of the Registrant's preferred stock purchase
rights (the "Rights") set forth in the Registrant's Form 8-A dated October
29, 1996.
All reports and other documents subsequently filed by the Registrant with
the Commission pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange
Act after the date of this registration statement, and prior to the filing of a
post-effective amendment to this registration statement that indicates that all
securities offered by this registration statement have been sold or which
deregisters all such securities then remaining unsold, shall be deemed to be
incorporated by reference into this registration statement and to be part hereof
from the date of filing of such documents. Each document incorporated by
reference into this registration statement shall be deemed to be a part of this
registration statement from the date of the filing of such document with the
Commission until the information contained therein is superseded or updated by
any subsequently filed document which is incorporated by reference into this
registration statement.
Any statement contained in a document incorporated by reference herein
shall be deemed to be modified or superseded for purposes hereof to the extent
that a statement contained herein (or in any other subsequently filed document
that is also incorporated by reference herein) modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part hereof.
Experts. The financial statements incorporated by reference from the
Registrant's annual report on Form 10-K for the year ended December 31, 1996,
have been audited by Deloitte & Touche LLP, independent auditors, as stated in
their report which is incorporated herein by reference, and have been so
incorporated in reliance upon the report of such firm given upon their authority
as experts in accounting and auditing.
With respect to the unaudited interim financial information for periods
ended March 31, 1997 and 1996 and June 30, 1997 and 1996 which is incorporated
herein by reference, Deloitte & Touche LLP have applied limited procedures in
accordance with professional standards for a review of such information.
However, as stated in their reports included in the Registrant's Quarterly
Reports on Form 10-Q for the quarters ended March 31, 1997 and June 30, 1997 and
incorporated by reference herein, they did not audit and they do not express an
opinion on that interim financial information. Accordingly, the degree of
reliance on their reports on such information should be restricted in light of
the limited nature of the review procedures applied. Deloitte & Touche LLP are
not subject to the liability provisions of Section 11 of the Securities Act of
1933, as amended (the "Securities Act"), for their reports on the unaudited
interim financial information because those reports are not "reports" or a
"part" of the registration statement prepared or certified by an accountant
within the meaning of Sections 7 and 11 of the Securities Act.
Item 4. Description of Securities.
With respect to the Deferred Compensation Obligations registered hereby,
the Registrant will provide directors and eligible employees the opportunity for
the deferral of compensation, including certain long-term and incentive
compensation, as specified in the EDCP and the DDCP. The obligations of the
Registrant under such agreements (the "Obligations") will be unsecured general
obligations of the Registrant to pay the deferred compensation in the
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<PAGE>
future in accordance with the terms of the EDCP and the DDCP, and will rank pari
passu with other unsecured and unsubordinated indebtedness of the Registrant
from time to time outstanding. However, because the Registrant is a holding
company, the right of the Registrant, and hence, the right of creditors of the
Registrant (including participants in the EDCP and the DDCP), to participate in
any distribution of the assets of any subsidiary upon its liquidation or
reorganization or otherwise is necessarily subject to the prior claims of
creditors of the subsidiary, except to the extent that claims of the Registrant
itself as a creditor of the subsidiary may be recognized.
The amount of compensation to be deferred by each participating director
and employee (each a "Participant") will be determined in accordance with the
EDCP and DDCP based on elections by each Participant. In general, each
Obligation will be payable on a date selected by each Participant in accordance
with the terms of the Plan. The Obligations will be indexed to one or more
return options individually chosen by each Participant from a list of investment
media. Each Participant's Obligation will be adjusted to reflect the investment
experience, whether positive or negative, of the selected return options,
including any appreciation or depreciation.
A Participant's right or the right of any other person to the Obligations
cannot be assigned, alienated, sold, garnished, transferred, pledged, or
encumbered except by a written designation of a beneficiary under the EDCP and
the DDCP, by written will, or by the laws of descent and distribution.
The Obligations will not have the benefit of a negative pledge or any other
affirmative or negative covenant on the part of the Registrant. No trustee has
been appointed having the authority to take action with respect to the
Obligations, and each Participant will be responsible for acting independently
with respect to, among other things, the giving of notices, responding to any
requests for consents, waivers or amendments pertaining to the Obligations,
enforcing covenants and taking action upon default.
A description of the Common Stock and Rights registered hereby is not
necessary within this registration statement because the descriptions of such
classes of securities are contained in the Commission filings referenced in
paragraphs (d) and (e) of Item 3 above and incorporated by reference herein.
Item 5. Interests of Named Experts and Counsel.
An opinion concerning the validity of the issuance of shares of Common
Stock and the validity and binding nature of the Obligations has been passed
upon for the Registrant by Mark L. Jones, General Attorney of the Registrant.
Mr. Jones beneficially owns, or has rights to acquire under employee benefit
plans, an aggregate of less than 1% of the Common Stock of the Registrant.
Item 6. Indemnification of Directors and Officers.
The Registrant is a Utah corporation. Section 16-10a-901 et. seq. of the
Utah Revised Business Corporation Act (the "UBCA") grants to a corporation the
power to indemnify an individual made a party to a lawsuit or other proceeding
because such party is or was a director or officer. A corporation is further
empowered under Section 16-10a-908 of the UBCA to purchase insurance on behalf
of any person who is or was a director or officer against any liability asserted
against him or her and incurred by him or her in such capacity or arising out of
his or her status as such. The Registrant maintains insurance on behalf of
directors and officers against liability asserted against them arising out of
their status as such. The Registrant's Amended and Restated By-Laws (the "UPR
By-Laws") provide for mandatory indemnification of its directors, officers and
employees and those of its subsidiaries, against liability asserted against them
arising out of their status as such.
The Registrant's Amended and Restated Articles of Incorporation, as amended
(the "UPR Charter"), eliminate in certain circumstances the personal liability
of directors of the Registrant for monetary damages for their action or failure
to act as a director. These provisions of the UPR Charter do not eliminate the
liability of a director for (i) the
II-2
<PAGE>
amount of a financial benefit received by a director to which he is not
entitled, (ii) an intentional infliction of harm on the corporation or the
shareholders, (iii) a violation of Section 16-10a-842 of the UBCA (relating to
the liability of directors for unlawful distributions) or (iv) an intentional
violation of criminal law.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers or persons controlling the Registrant
pursuant to statute, the UPR By-laws, or otherwise, the Registrant has been
informed that in the opinion of the Commission such indemnification is against
public policy as expressed in the Securities Act and is therefore unenforceable.
Item 7. Exemption from Registration Claimed.
Not Applicable.
Item 8. Exhibits.
<TABLE>
<S> <C>
5.1 Opinion of Mark L. Jones, Esq., General Attorney of the Registrant.
15.1 Letter regarding unaudited interim financial information.
23.1 Consent of Deloitte & Touche LLP.
23.2 Consent of Mark L. Jones, Esq., General Attorney of the Registrant (included in Exhibit
5.1 above).
24.1 Power of Attorney (set forth on signature pages of this Registration Statement).
24.2 Form of Power of Attorney executed concerning the attorney-in-fact set forth on the signature
pages of this Registration Statement.
99.1 Union Pacific Resources Group Inc. Executive Deferred Compensation Plan.
99.2 Union Pacific Resources Group Inc. Deferred Compensation Plan for the Board of Directors.
</TABLE>
Item 9. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(i)(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;
(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;
II-3
<PAGE>
Provided, however, that the undertakings set forth in paragraphs (a)(1)(i)
and (a)(1)(ii) above do not apply if the registration statement is on Form S-3
or Form S-8 and the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed by the
registrant pursuant to section 13 or section 15(d) of the Exchange Act that are
incorporated by reference 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 undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant'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
registrant pursuant to the foregoing provisions, or otherwise, the registrant
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 registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, 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 Fort Worth, State of Texas, on this 12th day of
September, 1997.
UNION PACIFIC RESOURCES GROUP INC.
By: /s/ Morris B. Smith
----------------------------------
Name: Morris B. Smith
Title: Vice President
and Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Jack L. Messman Chairman of the Board and Chief September 12, 1997
- ---------------------------------------- Executive Officer (Principal Executive
Jack L. Messman Officer)
/s/ Morris B. Smith Vice President and Chief September 12, 1997
- ---------------------------------------- Financial Officer (Principal Financial and
Morris B. Smith Accounting Officer)
/s/ H. Jesse Arnelle* Director September 12, 1997
- ----------------------------------------
H. Jesse Arnelle
/s/ Preston M. Geren III* Director September 12, 1997
- ----------------------------------------
Preston M. Geren III
/s/ Lawrence M. Jones* Director September 12, 1997
- -----------------------------------------
Lawrence M. Jones
/s/ John W. Poduska, Sr., Ph.D.* Director September 12, 1997
- ----------------------------------------
John W. Poduska, Sr., Ph.D.
/s/ Michael E. Rossi* Director September 12, 1997
- ----------------------------------------
Michael E. Rossi
/s/ Samuel K. Skinner* Director September 12, 1997
- ----------------------------------------
Samuel K. Skinner
/s/ James R. Thompson* Director September 12, 1997
- ----------------------------------------
James R. Thompson
*By: /s/ Mark L. Jones
----------------------------------
Mark L. Jones
Executing on behalf of at least
a majority of the Board of
Directors as Attorney-in-Fact
</TABLE>
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<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number
<S> <C>
5.1 Opinion of Mark L. Jones, Esq., General Attorney of the Registrant.
15.1 Letter regarding unaudited interim financial information.
23.1 Consent of Deloitte & Touche LLP.
23.2 Consent of Mark L. Jones, Esq., General Attorney of the Registrant (included in
Exhibit 5.1).
24.1 Power of Attorney (set forth on signature pages of this Registration Statement).
24.2 Form of Power of Attorney executed concerning the attorney-in-fact set forth
on the signature pages of this Registration Statement.
99.1 Union Pacific Resources Group Inc. Executive Deferred Compensation Plan.
99.2 Union Pacific Resources Group Inc. Deferred Compensation Plan for the Board of
Directors.
</TABLE>
II-6
Exhibit 5.1
September 11, 1997
Union Pacific Resources Group Inc.
801 Cherry Street
Fort Worth, Texas 76102
Ladies and Gentlemen:
I am a General Attorney at Union Pacific Resources Group Inc. (the "Company")
and have assisted with the filing with the Securities and Exchange Commission
(the "Commission"), under the Securities Act of 1933, as amended (the "Act"), of
a Registration Statement on Form S-8 (the "Registration Statement") for the
purpose of registering 250,000 shares of common stock, no par value, of the
Company (the "Shares") and $12,500,000 in deferred compensation obligations (the
"Obligations"), which represent unsecured obligations of the Company to pay
deferred compensation in the future, all in accordance with the terms of the
Union Pacific Resources Group Inc. Executive Deferred Compensation Plan (the
"EDCP") and the Union Pacific Resources Group Inc. Deferred Compensation Plan
for the Board of Directors (the "DDCP"). In such capacity, I have examined the
Articles of Incorporation and By-Laws of the Company, the EDCP, the DDCP, and
such other documents of the Company as I have deemed necessary or appropriate
for the purposes of the opinion expressed herein.
Based upon the foregoing, in my opinion, (i) the Shares, when issued by the
Company in accordance with the provisions of the EDCP and the DDCP, will be
validly issued, fully-paid and non-assessable, and (ii) the Obligations will be
valid and binding obligations of the Company, enforceable in accordance with
their terms, except as enforcement thereof may be limited by bankruptcy,
insolvency or other laws of general applicability relating to or affecting
enforcement of creditors' rights or by general equity principles.
I consent to the filing of this opinion as an exhibit to the Registration
Statement and to the use of my name wherever appearing in the Registration
Statement and any amendment thereto. In giving such consent, I do not thereby
admit that I am acting within the category of persons whose consent is required
under Section 7 of the Act and the rules and regulations of the Commission
thereunder.
Very truly yours,
Mark L. Jones
General Attorney
Union Pacific Resources Group Inc.
II-7
Exhibit 15.1
September 15, 1997
Union Pacific Resources Group Inc.
801 Cherry Street
Fort Worth, Texas 76102
We have made a review, in accordance with standards established by the American
Institute of Certified Public Accountants, of the unaudited interim financial
information for the periods ended March 31, 1997 and 1996 and June 30, 1997 and
1996 as indicated in our reports dated April 16, 1997 and July 16, 1997,
respectively; because we did not perform an audit we expressed no opinion on
that information.
We are aware that our reports referred to above, which were included in your
Quarterly Reports on Form 10-Q for the quarters ended March 31, 1997 and June
30, 1997, are being used in this Registration Statement.
We are also aware that the aforementioned reports, pursuant to Rule 436(c) under
the Securities Act of 1933, are not considered a part of the Registration
Statement prepared or certified by an accountant or a report prepared or
certified by an accountant within the meaning of Sections 7 and 11 of that Act.
/s/ Deloitte & Touche LLP
II-8
Exhibit 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Union Pacific Resources Group Inc. on Form S-8 of our report dated January 29,
1997, appearing in the Annual Report on Form 10-K of Union Pacific Resources
Group Inc. for the year ended December 31, 1996 and to the reference to us
under the heading "Experts" in this Registration Statement.
/s/ Deloitte & Touche LLP
Fort Worth, Texas
September 15, 1997
II-9
Exhibit 24.2
FORM OF
POWER OF ATTORNEY
UNION PACIFIC RESOURCES GROUP INC.
KNOW ALL MEN BY THESE PRESENTS, that _______________, a Director of Union
Pacific Resources Group Inc., a Utah Corporation (the "Corporation"), hereby
appoints JACK L. MESSMAN, JOSEPH A. LASALA, JR., and MARK L. JONES, and each of
them acting individually, his true and lawful attorney, each with power to act
without the other and full power of substitution, to execute, deliver and file,
for and on his behalf, and in his name and in his capacity as Director,
Registration Statements on Form S-8 (or other appropriate form) for filing with
the Securities and Exchange Commission under the Securities Act of 1933, as
amended, and any other documents in support thereof or supplemental or
amendatory thereto, with respect to the Union Pacific Resources Group Inc.
Executive Deferred Compensation Plan, 1995 Directors Stock Option Plan, Deferred
Compensation Plan for the Board of Directors and Executive Incentive Plan hereby
granting to such attorneys and each of them full power and authority to do and
perform each and every act and thing whatsoever as such attorney or attorneys
may deem necessary or advisable to carry out fully the intent of the foregoing
as the undersigned might or could do personally or in his capacity as Director,
hereby ratifying and confirming all acts and things which such attorney or
attorneys may do or cause to be done by virtue of this power of attorney.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney as of
this 5th day of September, 1997.
--------------------------------
II-10
Exhibit 99.1
[UPR LOGO]
UNION PACIFIC RESOURCES GROUP INC.
EXECUTIVE DEFERRED COMPENSATION PLAN
Effective September 5, 1997
<PAGE>
UNION PACIFIC RESOURCES GROUP INC.
EXECUTIVE DEFERRED COMPENSATION PLAN
(Effective September 5, 1997)
ARTICLE I
Establishment of the Plan
1.1. Purpose. The Union Pacific Resources Group Inc. (the "Company") hereby
adopts the Union Pacific Resources Group Inc. Executive Deferred Compensation
Plan (the "Plan") for the purpose of allowing selected executives of the Company
and its subsidiaries to defer salary, executive incentive awards and certain
items of long-term incentive compensation. The Company intends that the Plan
shall at all times be maintained on an unfunded basis for federal income tax
purposes under the Internal Revenue Code of 1986, as amended (the "Code"), and
administered as a "top hat" plan exempt from the substantive requirements of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"). To the
extent that this Plan permits the deferral of "performance-based compensation"
within the meaning of Code section 162(m), it is the Company's intention that
this Plan be administered in a manner which preserves the status of such
compensation as "performance-based compensation".
1.2. Effective Date. Unless otherwise indicated, this Plan shall be effective
as of September 5, 1997.
ARTICLE II
Definitions
2.1 Account. The bookkeeping record of a Participant's deferrals and
corresponding credits as provided in Article V.
2.2 Beneficiary. The individual or individuals designated by the Participant
to receive distributions under this Plan in the event of the Participant's
death.
2.3 Board. The Board of Directors of the Union Pacific Resources Group Inc.
or such Committee thereof delegated to act on its behalf.
2.4 Change of Control. An event set forth in any one of the following
paragraphs:
(a) any person is or becomes the beneficial owner, directly or
indirectly, of securities of the Company (not including in the securities
beneficially owned by such person any securities
- 1 -
<PAGE>
acquired directly from the Company or its affiliates other than in connection
with the acquisition by the Company or its affiliates of a business)
representing 15% or more of either the then outstanding shares of common stock
of the Company or the combined voting power of the Company's then outstanding
securities; or
(b) the following individuals cease for any reason to constitute a
majority of the number of directors then serving: individuals who, on the date
hereof, constitute the Board and any new director (other than a director whose
initial assumption of office is in connection with an actual or threatened
election contest, including but not limited to a consent solicitation, relating
to the election of directors of the Company (as such terms are used in Rule
14a-11 of Regulation 14A under the Securities Exchange Act of 1933)) whose
appointment or election by the Board or nomination for election by the Company's
shareholders was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors on the date hereof or
whose appointment, election or nomination for election was previously so
approved; or
(c) the shareholders of the Company approve a merger or consolidation
of the Company with any other corporation or approve the issuance of voting
securities of the Company in connection with a merger or consolidation of the
Company (or any direct or indirect subsidiary of the Company) pursuant to
applicable stock exchange requirements, other than (i) a merger or consolidation
which would result in the voting securities of the Company outstanding
immediately prior to such merger or consolidation continuing to represent
(either by remaining outstanding or by being converted into voting securities of
the surviving entity or any parent thereof), in combination with the ownership
of any trustee or other fiduciary holding securities under an employee benefit
plan of the Company, at least 50% of the combined voting power of the voting
securities of the Company or such surviving entity or any parent thereof
outstanding immediately after such merger or consolidation, or (ii) a merger or
consolidation effected to implement a recapitalization of the Company (or
similar transaction) in which no person is or becomes the beneficial owner,
directly or indirectly, of securities of the Company (not including in the
securities beneficially owned by such person any securities acquired directly
from the Company or its affiliates other than in connection with the acquisition
by the Company or its affiliates of a business) representing 15% or more of
either the then outstanding shares of common stock of the Company or the
combined voting power of the Company's then outstanding securities; or
(d) the shareholders of the Company approve a plan of complete
liquidation or dissolution of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the Company's assets,
other than a sale or disposition by the Company of all or substantially all of
the Company's assets to an entity, at least 50% of the combined voting power of
the voting securities of which are owned by persons in substantially the same
proportions as their ownership of the Company immediately prior to such sale.
Notwithstanding the foregoing, no "Change in Control" shall be deemed to have
occurred if there
- 2 -
<PAGE>
is consummated any transaction or series of integrated transactions immediately
following which the record holders of the common stock of the Company
immediately prior to such transaction or series of transactions continue to have
substantially the same proportionate ownership in an entity which owns all or
substantially all of the assets of the Company immediately following such
transaction or series of transactions.
2.5 Committee. The Compensation and Corporate Governance Committee of the
Board.
2.6 Company. Union Pacific Resources Group Inc.
2.7 Deferral Election. The Executive Incentive Award Deferral Election, the
Long-Term Incentive Deferral Election, and the Salary Deferral Election.
2.8 Deferred Executive Incentive Award. The amount of Executive Incentive
Award which the Executive and the Company mutually agree shall be deferred in
accordance with this Plan.
2.9 Deferred Compensation. Deferred Executive Incentive Award, Deferred
Long-Term Incentive and Deferred Salary.
2.10 Deferred Long-Term Incentive. The amount of Long-Term Incentive which
the Officer and the Company mutually agree shall be deferred in accordance with
this Plan.
2.11 Deferred Salary. The amount of Salary which the Officer and the Company
mutually agree shall be deferred in accordance with this Plan.
2.12 Disability. A Participant is considered to have suffered a disability
under this Plan if he or she would be treated as disabled under the Company's
long-term disability plan in force at the time of the disability.
2.13 Election Deadline. The day or date established by the Committee after
which a Deferral Election may not be revoked by the Participant.
2.14 Executive. An Officer or senior manager of the Company or subsidiary
selected by the Committee to be a participant in this Plan.
2.15 Executive Incentive Award. Any form of annual incentive compensation
awarded to the Executive under any plan or arrangement maintained by the Company
or any of its subsidiaries.
2.16 Executive Incentive Award Deferral Election. An Executive's election to
defer all or a portion of an Executive Incentive Award in the form specified by
the Committee and subject to
- 3 -
<PAGE>
the terms of the Plan.
2.17 Investment Fund. Any fund or funds selected by the Committee into which
deferrals and matching contributions are notionally invested under this Plan.
Unless otherwise specified, the UPR Stock Fund shall at all times be an
Investment Fund under this Plan.
2.18 Long-Term Incentive. Compensation attributable to the award of retention
stock, the gains attributable to nonqualified stock options and such other forms
of long-term incentive compensation as the Committee may determine.
2.19 Long-Term Incentive Deferral Election. An Officer's election to defer
all or a portion of Long-Term Incentive in the form specified by the Committee
and subject to the terms of the Plan.
2.20 Officer. A senior level Executive of the Company specifically designated
by the Committee.
2.21 Participant. An Executive who elects to participate in this Plan
pursuant to the requirements of Article III hereof.
2.22 Retirement. A separation from the service of the Company or subsidiary
coupled with the immediate receipt of retirement benefits under the Union
Pacific Resources Group Inc. Employees' Pension Plan.
2.23 Salary. An Officer's annual base pay in excess of the compensation limit
imposed by Code section 401(a)(17) or such other amount as may be determined by
the Committee.
2.24 Salary Deferral Election. An Officer's election to defer Salary in the
form specified by the Committee and subject to the terms of this Plan.
2.25 Termination of Employment. A separation from the service of the Company
or subsidiary for any reason other than Retirement, death or Disability. A
transfer from the Company to a subsidiary shall not constitute a Termination of
Employment.
2.26 UPR Stock Fund. An Investment Fund into which amounts deferred and
credited shall be converted to phantom shares of the Company's common stock in
the manner determined by the Committee. Deferrals into the UPR Stock Fund shall
be available to Officers only.
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ARTICLE III
Eligibility and Participation
3.1 Eligibility. An Executive shall be eligible to participate in this Plan
only if he or she has already made or agreed to make, with respect to the
Company's Employee's Thrift Plan, the maximum elective deferrals described in
Code section 402(g) or the maximum elective contributions permitted under such
Thrift Plan; provided, however, that this eligibility requirement shall remain
effective only for such period as it is deemed necessary to preserve the
tax-qualified status of the Thrift Plan.
3.2. Election to Defer Executive Incentive Award. An Executive may
participate in the Deferred Executive Incentive Award portion of this Plan by
executing an Executive Incentive Award Deferral Election on or before the date
prescribed by the Committee with respect to any Executive Incentive Award not
yet awarded. The Executive Incentive Award Deferral Election shall be made on a
form approved by the Committee, which shall require an electing Executive to
defer a specific amount of any Executive Incentive Award which may be made to
him or her in the future, not to exceed the Executive Incentive Award less
applicable withholding taxes.
3.3 Election to Defer Salary. An Executive, who is an Officer, may
participate in the Deferred Salary portion of this Plan by executing a Salary
Deferral Election on or before the date prescribed by the Committee with respect
to Salary not yet earned. The Salary Deferred Election shall be made on a form
approved by the Committee which shall require the electing Officer to defer a
specific amount of Salary not to exceed the Salary less applicable withholding
taxes.
3.4 Election to Defer Long-Term Incentive. An Executive, who is an Officer,
may participate in the Deferred Long-Term Incentive portion of this Plan by
executing a Long-Term Incentive Election on or before the date prescribed by the
Committee with respect to any Long-Term Incentive which is not yet recognizable
by the Officer for federal income tax purposes. The Long-Term Incentive Election
shall be made on a form approved by the Committee, which shall require the
electing Officer to defer a specified amount of the Long-Term Incentive, not to
exceed the Long-Term Incentive less applicable withholding taxes.
3.5 Revocation. A Deferral Election may not be revoked by the Participant
after the Election Deadline; provided, however, that with respect to a Salary
Deferral Election, a Participant may revoke future deferrals of amounts not yet
earned for the remainder of the year in question, with appropriate written
notice to the Committee.
3.6 Change of Status. Notwithstanding any other provision of this Plan, in
the case of any Executive who becomes a non-Executive while still employed by
the Company, any Executive Incentive Award Deferral Election, Salary Deferral
Election or Long-Term Incentive Deferral Election entered into prior to the
occurrence of such change in status shall be unaffected by such
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change in status, except that, as provided in Section 3.4 hereof, future
deferrals of Salary not yet earned for the year in question may be revoked. No
new elections relating to Salary, an Executive Incentive Award or a Long-Term
Incentive will be permitted hereunder while such employee remains in a
non-Executive status.
ARTICLE IV
Matching Company Contributions
4.1 Contribution. The Company shall credit an additional 25 percent to the
Account of any Officer who elects to have his or her Deferred Executive
Incentive Award or his or her Deferred Salary notionally invested in the UPR
Stock Fund for a period of at least three years. The Company's matching
contribution shall also be invested in the UPR Stock Fund and shall remain so
invested until the Officer terminates employment with the Company for any
reason.
4.2 Forfeiture. The Company's matching contribution shall be forfeited by the
Officer if the Officer incurs a Termination of Employment or Retirement prior to
the first anniversary of the date such matching contribution is credited to his
or her Account and under the circumstances described in the hardship withdrawal
provisions of Section 7.2. Notwithstanding the foregoing, a forfeiture shall not
be imposed if either (a) the Officer's Termination of Employment or Retirement
occurs within two years after a Change of Control, or (b) the Committee
determines that it is in the best interests of the Company that the forfeiture
not be imposed.
ARTICLE V
Account
5.1 Account. The Committee shall establish an Account (including all
necessary subaccounts) for each Participant hereunder.
5.2 Participant and Matching Contributions. Each Participant's Account shall
be credited by bookkeeping entries in amounts equal to the amounts which (a) the
Participant has elected to defer by a Deferral Election as of the date such
amounts would have been paid to such Participant had such Deferral Election not
been in force and (b) any matching amounts, if applicable, credited under
Article IV.
5.3 Adjustments. Each Participant's Account shall be credited by bookkeeping
entries with earnings (or losses) reflecting the Investment Fund into which his
or her Deferred Compensation or corresponding matching contribution was
notionally invested. A Participant may change Investment Funds at any time and
in any manner prescribed by the Committee; provided, however, that (a) only an
Officer may elect to have his or her deferrals notionally invested in the UPR
Stock Fund; (b) any Deferred Executive Incentive Award or any Deferred Salary
which an
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Officer elects to have notionally invested in the UPR Stock Fund shall remain so
invested until paid to the Officer under Article VII and (c) any Deferred
Long-Term Incentive and any Company matching contributions credited to the
Officer's Account under Section 4.1 shall be invested in the UPR Stock and shall
remain so invested until the Officer terminates employment with the Company for
any reason.
5.4 Statements. Each Participant will receive a statement of his or her
Account at such regular intervals as determined by the Committee.
ARTICLE VI
Deferred Elections
6.1 Deferral Period. A Participant shall elect at the time of his or her
Deferral Election to have the specified amount, plus any earnings attributable
thereto, deferred until (a) a future date specified by the Participant in such
Deferral Election or (b) the earliest to occur of such Participant's Termination
of Employment, Retirement, Disability or death. If a Participant, who is an
officer, elects to have his or her Deferred Executive Incentive Award or
Deferred Salary notionally invested in the UPR Stock Fund, the deferral period
for such investment must be at least three years, otherwise the Company's
matching contribution under Section 4.1 shall not be credited to his or her
Account.
6.2 Limitations. Notwithstanding Section 6.1, a Participant may not make a
Deferral Election to a date beyond the Participant's life expectancy and, in
general, the commencement of any distribution under this Plan will not be
deferred beyond the earliest to occur of the following: the Participant's
Termination of Employment, Retirement, Disability or death.
ARTICLE VII
Distributions and Withdrawals
7.1 Distributions. Distributions under this Plan shall be made in the manner
set forth below:
(a) In-Service. Deferred Compensation shall be distributed to a
Participant, while employed with the Company, on the date specified pursuant to
Section 6.1(a) hereof and in accordance with the distribution method selected by
the Participant on his or her Deferral Election form.
(b) Termination of Service. Upon a Participant's termination of
employment for any reason, the Committee shall distribute his or her Account, in
the sole discretion of the Committee, as follows:
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(i) in a single distribution paid in the year of his or her termination
or in January of the following year, as determined by the Committee; or
(ii) over such number of years as are fixed by the Committee but not
exceeding fifteen, in annual installments of substantially equal value, the
first of such installments to be paid or delivered in the month following the
month of his or her termination, or at the discretion of the Committee not later
than 12 months following the date of termination and subsequent installments to
be paid or delivered in January of each subsequent year; or
(iii) in the event of Retirement or death of a currently employed
Participant, at a specified future date not to exceed 15 years from the date of
such Retirement or death in a single distribution, an amount equal to the value
of the Participant's Account. Prior to such distribution, the income generated
by such Account shall be paid in cash quarterly to such Participant's or his or
her Beneficiary commencing with the first day of the month subsequent to such
Participant's Retirement or death. In the case of Retirement, the single
distribution referred to above will be paid on the date specified or upon death,
whichever occurs first; or
(iv) in any other manner determined by the Committee.
7.2 Hardship Withdrawals. Upon written application to the Committee, a
Participant may request a withdrawal of all or any portion of the amounts then
credited to his or her Account (except for any Company matching contributions
credited under Section 4.1) prior to the time of payment applicable under
section 6.1 in the case of an unforeseeable emergency.
For purposes of this Section 7.2, an unforeseeable emergency is any severe
financial hardship to the Participant resulting from a sudden and unexpected
illness or accident of the Participant or of a dependent of the Participant,
loss of the Participant's property due to casualty, or other similar
extraordinary and unforeseeable circumstances arising as a result of events
beyond the control of the Participant. The circumstances that will constitute an
unforeseeable emergency will depend upon the facts of each case, but, in any
case, payment may not be made to the extent that such hardship is or may be
relieved --
(a) Through reimbursement or compensation by insurance or otherwise,
(b) By liquidation of the Participant's assets, to the extent the
liquidation of such assets would not itself cause severe financial hardship, or
(c) By cessation of deferrals under the Plan.
The Participant's need to send a child to college, the desire to
purchase a home and similar financial circumstances shall not be considered
unforeseeable emergencies under this Plan.
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The decision of the Committee shall be final, conclusive and binding
upon the Participant and any and all persons claiming through the Participant.
Under no circumstances shall the Committee consent to the withdrawal of an
amount which is in excess of the amount necessary to relieve the Participant's
need. If a Participant, who is an officer, requests, and the Committee consents
to, the release of amounts held in the UPR Stock Fund for a period of less than
three years, then the release of any such amounts shall result in the forfeiture
of any corresponding Company matching contributions credited under Section 4.1
hereto.
7.3 Death.
(a) If the Participant dies prior to the time his or her Account is
distributed under Section 7.1, all amounts credited to such Account shall be
paid to the Participant's Beneficiary in accordance with Section 7.1.
(b) All designations of Beneficiary shall be on such forms as are
specified by and filed with the Committee. Any Beneficiary designation made by
the Participant in accordance with this provision may be changed from time to
time by filing with the Committee a notice of such change on the form provided
by the Committee and such change of Beneficiary designation shall become
effective upon receipt by the Committee.
(c) In the event a Participant's Beneficiary would otherwise become
entitled to a distribution hereunder, and all Beneficiaries designated by the
Participant are not then living, or if no valid Beneficiary designation is in
effect, the Participant's estate or duly authorized personal representative
shall be deemed to have been designated by the Participant.
7.4 Accelerated Payments. The Committee may accelerate any payments deferred
hereunder if it determines that such acceleration is in the best interests of
the Company.
7.5 Payments from the UPR Stock Fund. Notwithstanding the foregoing, any
distributions or withdrawals from the UPR Stock Fund shall be paid in whole
shares of the Company's common stock, except that any fractional share shall be
paid in cash.
ARTICLE VIII
Administration
8.1 The Plan shall be administered by the Committee. The Committee shall be
vested with full authority to make, administer and interpret such rules and
regulations as it deems necessary to administer the Plan. Any determination,
decision or action of the Committee in connection with the construction,
interpretation, administration or application of the Plan shall be final,
conclusive and binding upon all Participants and any and all persons claiming
under or through any Participant. The Committee shall have the authority to:
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(i) Engage agents to perform services on behalf of the Committee and to
authorize the payment of reasonable compensation for the performance of such
service;
(ii) Delegate to designated employees or departments of the Company the
authority to perform such of the Committee's administrative duties hereunder as
may be delegated to such employees or departments.
8.2 The Company shall pay the costs of administering the Plan.
ARTICLE IX
Amendment and Termination
9.1 Amendment. The Company may at any time amend this Plan; provided, however
that no amendment shall reduce amounts already credited to a Participant's
Account at the time of such amendment.
9.2 Termination. The Company may at any time terminate this Plan provided
that:
(a) no such termination shall reduce amounts already credited to a
Participant's Account at such time; and
(b) termination of the Plan will not automatically accelerate the time
of distributions nor cease the accrual of earnings prior to the applicable event
under section 6.1 hereof, unless the Company, by action of its Board, shall
elect to accelerate all distributions at the time it elects to terminate this
Plan.
ARTICLE X
Miscellaneous
10.1 Effect on Other Plans. This Plan relates only to deferrals made by
Executives pursuant to its provisions on or after the Effective Date. The timing
and method of payment of distributions attributable to any other deferral
elections previously made by the Executive under any other plan or plans
maintained by the Company shall be controlled by such other plan or plans.
10.2 No Right of Employment. Nothing in the Plan shall be deemed to grant an
Executive any rights other than those specifically outlined in the Plan. Nothing
in the Plan shall be deemed to create any right of, or contract for, employment
between an Executive and the Company.
10.3 Withholding. The Company shall, on behalf of itself or any subsidiary,
deduct from any
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distributions due to any Participant or Beneficiary hereunder, any taxes
required to be withheld by Federal, state or local governments.
10.4 Non-Assignability Clause. Participants may not borrow from their
Accounts in this Plan. Neither the Participant, nor his Beneficiary, nor any
other designee, shall have any right to commute, sell, assign, encumber,
transfer or otherwise convey the right to receive any distributions hereunder
which distributions and right thereto are expressly declared to be non-
assignable and non-transferable; and, any such attempted assignment or transfer
shall be null and void.
10.5 Prohibition Against Funding. Any provision for distributions hereunder
shall be by means of bookkeeping entries on the books of the Company and shall
not create in the Participant or Beneficiary any right to, or claim against any
specific assets of the Company, nor result in the creation of any trust or
escrow account for the Participant or Beneficiary. A Participant or Beneficiary
entitled to any distributions hereunder shall be a general creditor of the
Company.
10.6 Controlling Law. This Plan and the respective rights and obligations of
the Company and the Participants and Beneficiaries, except to the extent
otherwise provided by Federal law, shall be construed under the laws of the
State of Texas.
10.7 Severability. The invalidity or unenforceability of any provision of
this Plan shall not affect the other provisions, and the Plan shall be construed
in all respects as if any invalid or unenforceable provision were omitted.
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Exhibit 99.2
Union Pacific Resources Group Inc.
Deferred Compensation Plan
for the Board of Directors
Amended and Restated
Effective September 5, 1997
1. Purpose
The purpose of this Plan is to provide a means for deferring payment of all
or a portion of any compensation, excluding expenses, payable to Directors
for their service on the Board of Directors (the "Board") of Union Pacific
Resources Group Inc. (the "Company") in accordance with the By-Laws of the
Company. Such compensation eligible to be deferred is referred to herein as
"Compensation". This Plan shall also permit Directors to defer gains
attributable to the exercise of non-qualified stock options which may be
granted to them by the Company ("Stock Option Gains").
2. Eligibility
Any individual serving as a member of the Board as of the effective date of
this Plan or who subsequently becomes a member is eligible under this Plan,
provided that no member who is an employee of the Company or any of its
subsidiaries shall be eligible under this Plan.
3. Prior Plan
Any person who terminated service as a Director prior to the effective date
of this Plan and who participated in and is entitled to benefits under the
Union Pacific Resources Group Inc. Stock Unit Grant and Deferred Compensation
Plan for the Board of Directors, effective September 28, 1995 (the "Prior
Plan") shall continue to have such rights and be subject to such restrictions
as would pertain to him or her under the Prior Plan. Any person who is a
Director on the effective date of this Plan and who participated in and is
entitled to benefits under the Prior Plan shall now have such rights and be
subject to such restrictions as would pertain to him or her under this Plan;
provided, however, that under no circumstances shall any benefits or rights
under the Prior Plan be diminished or impaired by this Plan.
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4. Election
Election to defer Compensation is to be made on or before December 31 of any
year for Compensation for services as a member of the Board for the following
and later calendar years. Election to defer is a continuing election until
changed by the Director on or before December 31 of any year for the then
following and later calendar years. However, once an election is made (and
effective), subsequent elections will have no effect on the amounts, timing
and manner of payment covered by the previous election.
Any newly elected Director who was not a Director on the preceding December
31 may elect, before his or her term begins, to defer Compensation for
services as a member of the Board for the balance of the calendar year in
which such election is made.
Any Director who has not previously made a deferral election because such
Director was not eligible to participate in this Plan, may elect, prior to
the calendar quarter for which Compensation will initially be paid, to defer
Compensation for services as a member of the Board for the balance of the
calendar year in which such election is made.
The deferral of Stock Option Gains shall be subject to similar prior election
procedures as determined by the Company.
Forms shall be made available to Directors each year for the purpose of
making or changing their election.
5. Amount
All or any portion, in multiples of 10%, of a Director's Compensation may be
deferred.
Stock Option Gains may be deferred to the extent permitted by the Company.
6. Deferred Accounts
Each Director shall have a Stock Unit Account and a Fixed Income Account
(together, the "Accounts"). Amounts deferred pursuant to paragraph 4 may be
credited to either Account, at the election of the Director made at the time
of the deferral election, in multiples of 10% of such Director's
Compensation; provided, however, that deferred Stock Option Gains must be
credited to the Stock Unit Account.
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(a) Stock Unit Account
(i) Amounts deferred and credited to the Stock Unit Account shall be
converted into whole Stock Units on the basis of the Fair Market Value
of the Company's Common Stock on the first business day of the month
following the quarter in which the Compensation was earned, and cash
shall be credited to the Stock Unit Account in lieu of any fractional
Stock Unit. "Fair Market Value" on a date means the average of the
high and low trading prices per share on that date, as reported in The
Wall Street Journal listing of consolidation trading for New York
Stock Exchange issues. Stock Option Gains shall be converted into
whole stock units under similar rules established by the Company.
(ii) On the payment date for each cash dividend or other cash distribution
with respect to the Company's Common Stock, each Director's Stock Unit
Account shall be credited with an amount equal to the amount of the
per share dividend or distribution, multiplied by the number of Stock
Units in such Account, and, if such Director is then serving as a
member of the Board, shall be converted into whole Stock Units on the
basis of the Fair Market Value of the Company's Common Stock on the
payment date for such dividend or distribution, and cash shall be
credited to the Stock Unit Account in lieu of any fractional Stock
Units. If a Director is no longer serving as a member of the Board on
the payment date for such dividend or distribution, the amount
representing such dividend or distribution shall be paid out of the
Stock Unit Account to such Director as soon as practicable after the
payment date for such dividend or distribution. Except as provided in
the preceding sentence, any cash credited to a Director's Stock Unit
Account shall be added to other cash credited to such Account and
converted into a whole Stock Unit on the date sufficient cash exists
to purchase a whole Stock Unit, based on the Fair Market Value of the
Company's Common Stock on such date.
(iii) In the event of a subdivision or combination of shares of Company
Stock, the number of Stock Units credited to the Stock Unit Accounts
on the effective date of such subdivision or combination shall be
proportionately subdivided or combined as the case may be. No
adjustment shall be made in Stock Units in connection with the
issuance by the Company of any rights or options to acquire additional
shares of Company Common Stock or securities convertible into Company
Common Stock. In the event of any stock dividend or reclassification
of Company Common Stock, any merger or consolidation to which the
Company is a party, or any spinoff of shares or distribution of
property other than cash with respect to the Company Common Stock, the
Committee shall cause appropriate adjustments, if any, to be made in
the Stock Units to reflect such stock dividend, reclassification,
merger or consolidation, spinoff or distribution of property.
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(iv) The Company shall credit an additional 25 percent to the Account of
any Director who elects to have his or her Compensation deferred and
credited to the Stock Unit Account for a period of at least three
years. The Company's matching contribution shall also be credited to
the Stock Unit Account and shall remain so credited until the Director
terminates service as a member of the Board for any reason. The
Company's matching contribution shall be forfeited by the Director if
he or she terminates service (for reasons other than disability or
death) prior to the first anniversary of the date such matching
contribution is credited to his or her Account. Notwithstanding the
foregoing, a forfeiture shall not be imposed if the Director's
termination of service occurs within two years of a change of control
of the Company or the Company determines that it is in the best
interests of the Company not to impose the forfeiture. The Company's
matching contribution shall not be credited with respect to a
Director's deferral of Stock Option Gains.
(b) Fixed Income Account. Amounts credited to the Fixed Income Account shall
earn interest compounded quarterly, from the date the Compensation would
otherwise have been paid until it is actually paid in full. The rate of
interest shall be set at an annual rate equal to the average for the
previous four years of the interest rates for the months of December in
each such years on Moody's A Public Utility Bond Yields and Moody's A
Corporate Bond Yields.
7. Distribution
All distribution from the Fixed Income Account shall be made in cash. All
distributions from the Stock Unit Account shall be made in whole shares of
the Company's common stock, except that any fractional share shall be paid in
cash. The Director must elect, at the same time and on the same form provided
to elect a deferral of Compensation or a Stock Option Gain, the timing and
manner of payment of such Compensation or Stock Option Gain.
- Timing of Payment: Distributions from the Accounts shall begin
following termination from the Board for any reason, provided that in
the case of distributions from the Fixed Income Account, the Director
may elect that distributions begin following retirement from the
Director's principal occupation.
- Manner of Payment: The Director may elect to receive payment from the
Accounts in a lump sum or in a number of annual installments of an
aggregate amount of cash equal to the value of the accounts maintained
for the Director in the Accounts at the Valuation Date next preceding
the installment payment divided by the remaining number of such annual
installments. The installments may be paid over a period of either 5 or
10 years.
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The lump sum or first installment is to be paid in January of the year
following the year of termination or retirement, as elected by the Director,
and any remaining installments in January of each succeeding year until the
total balance is paid.
Distributions from the Stock Unit Account in installments shall be based on
equal numbers of Stock Units in each installment.
In the event of the death of a Director then serving as a member of the Board
or a terminated or retired Director entitled to a distribution under this
Plan, the balance of the Accounts shall be payable to the estate or
designated beneficiary in full during the January of the year following the
year of such Director's, terminated Director's or retired Director's death.
The Director may designate his or her beneficiary at the same time he or she
elects deferral of Compensation or Stock Option Gain. However, the latest
designated beneficiary will be the beneficiary or beneficiaries for the total
of all distributions from the Accounts. The designated beneficiary may be
changed at any time on a form provided by the Secretary of the Company,
provided that no designation will be effective unless it is filed with the
Secretary of the Company prior to the Director's death.
8. Unfunded Plan
The liability of the Company to any Director, terminated Director, retired
Director or his or her estate or designated beneficiary under the Plan shall
be that of a debtor only pursuant to such contractual obligations as are
created by the Plan, and no such obligation of the Company shall be deemed to
be secured by any assets, pledges, or other encumbrances on any property of
the Company.
9. Inalienability of Deferred Compensation
Except to the extent of the rights of a designated beneficiary, no
distribution pursuant to, or interest in, the Plan may be transferred,
assigned, pledged or otherwise alienated and no such distribution or interest
shall be subject to legal process or attachment for the payment of any claims
against any individual entitled to receive the same.
10. Controlling State Law
All questions pertaining to the construction, regulation, validity and effect
of the Plan shall be determined in accordance with the laws of the State of
Texas.
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11. Amendment
The Board of Directors of the Company in its sole discretion may amend,
suspend or terminate the Plan at any time. However, any such amendment,
suspension or termination of the Plan may not adversely affect any Director's
or his or her beneficiary's rights with respect to Compensation previously
deferred.
12. Administration
Administration of the Plan will be coordinated by the Finance Department of
the Company. Administration will include, but not be limited to, crediting of
deferred compensation, dividends and accrued interest to individual Director
accounts and ultimate disbursement of deferred amounts.
13. Effective Date
This Plan shall become effective September 5, 1997, applicable only to
compensation for services rendered on or after that date. This Plan shall
supersede the plan that was effective June 1, 1997 (the "Prior Plan"), except
that any deferrals made under the Prior Plan shall continue to be subject to
the terms and conditions of the Prior Plan.
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