EXHIBIT 10.1
SEAGULL ENERGY CORPORATION
1993 NONEMPLOYEE DIRECTORS' STOCK OPTION PLAN
I. Purpose of the Plan
The SEAGULL ENERGY CORPORATION 1993 NONEMPLOYEE DIRECTORS' STOCK OPTION
PLAN (the "Plan") is intended to promote the interests of SEAGULL ENERGY
CORPORATION, a Texas corporation (the "Company"), and its shareholders by
helping to award and retain highly-qualified independent directors, and allowing
them to develop a sense of proprietorship and personal involvement in the
development and financial success of the Company. Accordingly, the Company shall
grant to directors of the Company who are not and who never have been employees
of the Company or any of its subsidiaries ("Nonemployee Directors") the option
("Option") to purchase shares of the common stock of the Company ("Stock"), as
hereinafter set forth. Options granted under the Plan shall be options which do
not constitute incentive stock options, within the meaning of section 422(b) of
the Internal Revenue Code of 1986, as amended (the "Code").
II. Option Agreements
Each Option shall be evidenced by a written agreement in the form attached
to the Plan.
III. Eligibility of Optionee
Options may be granted only to individuals who are Nonemployee Directors of
the Company. Each Nonemployee Director who serves in such capacity on the
effective date of the Plan shall receive, as of such date and without the
exercise of the discretion of any person or persons, an Option exercisable for
3,000 shares of Stock. Each Nonemployee Director who is elected or appointed to
the Board of Directors of the Company (the "Board") for the first time after the
effective date of the Plan shall receive, as of the date of his or her election
or appointment and without the exercise of the discretion of any person or
persons, an Option exercisable for 3,000 shares of Stock (subject to adjustment
in the same manner as provided in Paragraph VII hereof with respect to shares of
Stock subject to Options then outstanding). As of the date of the annual meeting
of the shareholders of the Company in each year that the Plan is in effect as
provided in Paragraph VI hereof, each Nonemployee Director who is in office
immediately after such meeting and who is not then entitled to receive an Option
pursuant to the preceding provisions of this Paragraph III shall receive,
without the exercise of the discretion of any person or persons, an Option
exercisable for 3,000 shares of Stock (subject to adjustment in the same manner
as provided in Paragraph VII hereof with respect to shares of Stock subject to
Options then outstanding). If, as of any date that the Plan is in effect, there
are not sufficient shares of Stock available under the Plan to allow for the
grant to each Nonemployee Director of an Option for the number of shares
provided herein, the Plan shall terminate as provided in Paragraph VI hereof.
All Options granted under the Plan shall be at the Option price set forth in
Paragraph V hereof and shall be subject to adjustment as provided in
Paragraph VII hereof.
IV. Shares Subject to the Plan
The aggregate number of shares which may be issued under Options granted
under the Plan shall not exceed 300,000 shares of Stock. Such shares may consist
of authorized but unissued shares of Stock or previously issued shares of Stock
reacquired by the Company. Any of such shares which remain unissued and which
are not subject to outstanding Options at the termination of the Plan shall
cease to be subject to the Plan, but, until termination of the Plan, the Company
shall at all times make available a sufficient number of shares to meet the
requirements of the Plan. Should any Option hereunder expire or terminate prior
to its exercise in full, the shares theretofore subject to such Option may again
be subject to an Option granted under the Plan. The aggregate number of shares
which may be issued under the Plan shall be subject to adjustment in the same
manner as provided in Paragraph VII hereof with respect to shares of Stock
subject to Options then outstanding. Exercise of an Option shall result in a
decrease in the number of shares of Stock which may thereafter be available,
both for purposes of the Plan and for sale to any one individual, by the number
of shares as to which the Option is exercised.
V. Option Price
The purchase price of Stock issued under each Option shall be the fair
market value of Stock subject to the Option on the date the Option is granted.
For all purposes under the Plan, the fair market value of a share of Stock on a
particular date shall be equal to the closing price of the Stock on the New York
Stock Exchange composite tape on that date, or if no prices are reported on that
date, on the last preceding date on which such prices of the Stock are so
reported.
VI. Term of Plan
The Plan shall be effective on the date the Plan is approved by the
shareholders of the Company. Except with respect to Options then outstanding, if
not sooner terminated under the provisions of Paragraph VIII, the Plan shall
terminate upon and no further Options shall be granted as of the date that the
remaining number of shares of Stock which may be issued under the Plan pursuant
to Paragraph IV is not sufficient to cover the Options required to be granted
under Paragraph III.
VII. Recapitalization or Reorganization
(a) The existence of the Plan and the Options granted hereunder shall
not affect in any way the right or power of the Board or the shareholders
of the Company to make or authorize any adjustment, recapitalization,
reorganization or other change in the Company's capital structure or its
business, any merger or consolidation of the Company, any issue of debt or
equity securities, the dissolution or liquidation of the Company or any
sale, lease, exchange or other disposition of all or any part of its assets
or business or any other corporate act or proceeding.
(b) The shares with respect to which Options may be granted are shares
of Stock as presently constituted, but if, and whenever, prior to the
expiration of an Option theretofore granted, the Company shall effect a
subdivision or consolidation of shares of Stock or the payment of a stock
dividend on Stock without receipt of consideration by the Company, the
number of shares of Stock with respect to which such Option may thereafter
be exercised (i) in the event of an increase in the number of outstanding
shares shall be proportionately increased, and the purchase price per share
shall be proportionately reduced, and (ii) in the event of a reduction in
the number of outstanding shares shall be proportionately reduced, and the
purchase price per share shall be proportionately increased.
(c) If the Company recapitalizes or otherwise changes its capital
structure, thereafter upon any exercise of an Option theretofore granted
the optionee shall be entitled to purchase under such Option, in lieu of
the number and class of shares of Stock then covered by such Option, the
number and class of shares of stock and securities to which the optionee
would have been entitled pursuant to the terms of the recapitalization if,
immediately prior to such recapitalization, the optionee had been the
holder of record of the number of shares of Stock then covered by such
Option. If (i) the Company shall not be the surviving entity in any merger
or consolidation (or survives only as a subsidiary of an entity other than
a previously wholly-owned subsidiary of the Company), (ii) the Company
sells, leases or exchanges or agrees to sell, lease or exchange all or
substantially all of its assets to any person or entity (other than a
wholly-owned subsidiary of the Company) or (iii) the Company is to be
dissolved and liquidated (each such event is referred to herein as a
"Corporate Change"), then effective as of the earlier of (1) the date of
approval by the shareholders of the Company of such Corporate Change or (2)
the date of such Corporate Change, (A) in the event of any such merger or
consolidation, upon any exercise of an Option theretofore granted the
optionee shall be entitled to purchase under such Option, in lieu of the
number of shares of Stock as to which such Option shall then be
exercisable, the number and class of shares of stock or other securities or
property to which the optionee would have been entitled pursuant to the
terms of the agreement of merger or consolidation if, immediately prior to
such merger or consolidation the optionee had been the holder of record of
the number of shares of Stock as to which such Option is then exercisable
and (B) in the event of any such sale, lease or exchange of assets or
dissolution, all outstanding Options shall be fully vested and each
optionee shall surrender his or her Options to the Company and the Company
shall cancel such Options and pay to each optionee an amount of cash per
share equal to the excess of the per share price offered to shareholders of
the Company in any such sale, lease or exchange of assets or dissolution
transaction for the shares subject to such Options over the exercise
price(s) under such Options for such shares.
(d) Any adjustment provided for in Subparagraphs (b) or (c) above
shall be subject to any required shareholder action.
(e) Except as hereinbefore expressly provided, the issuance by the
Company of shares of stock of any class or securities convertible into
shares of stock of any class, for cash, property, labor or services, upon
direct sale, upon the exercise of rights or warrants to subscribe therefor,
or upon conversion of shares or obligations of the Company convertible into
such shares or other securities, and in any case whether or not for fair
value, shall not affect, and no adjustment by reason thereof shall be made
with respect to, the number of shares of Stock subject to Options
theretofore granted or the purchase price per share.
VIII. Amendment or Termination of the Plan
The Board in its discretion may terminate the Plan at any time with respect
to any shares for which Options have not theretofore been granted. The Board
shall have the right to alter or amend the Plan or any part thereof from time to
time; provided, that the Plan shall not be amended more than once every six
months, other than to comport with changes in the Code, the Employee Retirement
Income Security Act of 1974, as amended, or the rules thereunder; and provided,
further, that no change in any Option theretofore granted may be made which
would impair the rights of the optionee without the consent of such optionee;
and provided, further, that the Board may not make any alteration or amendment
which would materially increase the benefits accruing to participants under the
Plan, increase the aggregate number of shares which may be issued pursuant to
the provisions of the Plan, increase or decrease the number of shares subject to
each Option, change the schedule of the grants, extend the term of the Options,
change the class of individuals eligible to receive Options under the Plan or
extend the term of the Plan, without the approval of the shareholders of the
Company.
IX. Securities Laws
(a) The Company shall not be obligated to issue any Stock pursuant to
any Option granted under the Plan at any time when the offering of the
shares covered by such Option have not been registered under the Securities
Act of 1933, as amended, and such other state and federal laws, rules or
regulations as the Company deems applicable and, in the opinion of legal
counsel for the Company, there is no exemption from the registration
requirements of such laws, rules or regulations available for the offering
and sale of such shares.
(b) It is intended that the Plan and any grant of an Option made to a
person subject to Section 16 of the Securities Exchange Act of 1934, as
amended (the "1934 Act") meet all of the requirements of Rule 16b-3, as
currently in effect or as hereinafter modified or amended ("Rule 16b-3"),
promulgated under the 1934 Act. If any provision of the Plan or any such
Option would disqualify the Plan or such Option under, or would otherwise
not comply with, Rule 16b-3, such provision or Option shall be construed or
deemed amended to conform to Rule 16b-3.
NONEMPLOYEE DIRECTOR'S STOCK OPTION AGREEMENT
AGREEMENT made as of the ______ day of ________________, 19___, between
SEAGULL ENERGY CORPORATION, a Texas corporation (the "Company") and
________________________________ ("Director").
To carry out the purposes of the SEAGULL ENERGY CORPORATION 1993
NONEMPLOYEE DIRECTORS' STOCK OPTION PLAN (the "Plan"), a copy of which is
attached hereto as Exhibit A, by affording Director the opportunity to purchase
shares of common stock of the Company ("Stock"), and in consideration of the
mutual agreements and other matters set forth herein and in the Plan, the
Company and Director hereby agree as follows:
1. Grant of Option. The Company hereby irrevocably grants to Director the
right and option ("Option") to purchase all or any part of an aggregate of
______ shares of Stock, on the terms and conditions set forth herein and in the
Plan, which Plan is incorporated herein by reference as a part of this
Agreement. This Option shall not be treated as an incentive stock option within
the meaning of section 422(b) of the Internal Revenue Code of 1986, as amended.
2. Purchase Price. The purchase price of Stock purchased pursuant to the
exercise of this Option shall be $_______ per share, which has been determined
to be not less than the fair market value of the Stock at the date of grant of
this Option. For all purposes of this Agreement, fair market value of Stock
shall be determined in accordance with the provisions of the Plan.
3. Exercise of Option. Subject to the earlier expiration of this Option as
herein provided, this Option may be exercised, by written notice to the Company
at its principal executive office addressed to the attention of its Chairman,
President and Chief Executive Officer, at any time and from time to time after
the date of grant hereof, but, except as otherwise provided below, this Option
shall not be exercisable for more than a percentage of the aggregate number of
shares offered by this Option determined by the number of full years from the
date of grant hereof to the date of such exercise, in accordance with the
following schedule:
Percentage of Shares
Number of Full Years That May Be Purchased
Less than 1 year 0%
1 year 20%
2 years 40%
3 years 60%
4 years 80%
5 years or more 100%
This Option is not transferable by Director otherwise than by will or the
laws of descent and distribution, and may be exercised only by Director (or
Director's guardian or legal representative) during Director's lifetime. If a
Director's membership on the Board of Directors of the Company (the "Board")
terminates, this Option may be exercised as follows:
(a) If Director's membership on the Board terminates for cause or
voluntarily by Director (other than by reason of mandatory retirement
pursuant to the policy of the Board) not at the request of the Board, this
Option may be exercised by Director at any time during the period of three
months following such termination, or by Director's estate (or the person
who acquires this Option by will or the laws of descent and distribution or
otherwise by reason of the death of Director) during a period of one year
following Director's death if Director dies during such three-month period,
but in each case only as to the number of shares Director was entitled to
purchase hereunder upon exercise of this Option as of the date Director's
membership on the Board so terminates. For purposes of this Agreement,
"cause" shall mean Director's gross negligence or willful misconduct in
performance of his duties as a director, or Director's final conviction of
a felony or of a misdemeanor involving moral turpitude.
(b) If Director's membership on the Board terminates by reason of
disability, this Option may be exercised in full by Director (or Director's
guardian or legal representative or Director's estate or the person who
acquires this Option by will or the laws of descent and distribution or
otherwise by reason of the death of Director) at any time during the period
of one year following such termination.
(c) If Director dies while a member of the Board, Director's estate,
or the person who acquires this Option by will or the laws of descent and
distribution or otherwise by reason of the death of Director, may exercise
this Option in full at any time during the period of one year following the
date of Director's death.
(d) If Director's membership on the Board terminates for any reason
other than as described in (a), (b) or (c) above, this Option may be
exercised in full by Director at any time during the period of three months
following such termination, or by Director's estate (or the person who
acquires this Option by will or the laws of descent and distribution or
otherwise by reason of the death of Director) during a period of one year
following Director's death if Director dies during such three-month period.
This Option shall not be exercisable in any event after the expiration of ten
years from the date of grant hereof. The purchase price of shares as to which
this Option is exercised shall be paid in full at the time of exercise (A) in
cash (including check, bank draft or money order payable to the order of the
Company), (B) by delivering to the Company shares of Stock having a fair market
value equal to the purchase price, or (C) any combination of cash or Stock. No
fraction of a share of Stock shall be issued by the Company upon exercise of an
Option or accepted by the Company in payment of the purchase price thereof;
rather, Director shall provide a cash payment for such amount as is necessary to
effect the issuance and acceptance of only whole shares of Stock. Unless and
until a certificate or certificates representing such shares shall have been
issued by the Company to Director, Director (or the person permitted to exercise
this Option in the event of Director's death) shall not be or have any of the
rights or privileges of a shareholder of the Company with respect to shares
acquirable upon an exercise of this Option.
4. Withholding of Tax. To the extent that the exercise of this Option or
the disposition of shares of Stock acquired by exercise of this Option results
in compensation income to Director for federal or state income tax purposes,
Director shall deliver to the Company at the time of such exercise or
disposition such amount of money or shares of Stock as the Company may require
to meet its obligation under applicable tax laws or regulations, and, if
Director fails to do so, the Company is authorized to withhold from any cash or
Stock remuneration then or thereafter payable to Director any tax required to be
withheld by reason of such resulting compensation income. Upon an exercise of
this Option, the Company is further authorized in its discretion to satisfy any
such withholding requirement out of any cash or shares of Stock distributable to
Director upon such exercise.
5. Status of Stock. The Company intends to register for issuance under the
Securities Act of 1933, as amended (the "Act"), the shares of Stock acquirable
upon exercise of this Option, and to keep such registration effective throughout
the period this Option is exercisable. In the absence of such effective
registration or an available exemption from registration under the Act, issuance
of shares of Stock acquirable upon exercise of this Option will be delayed until
registration of such shares is effective or an exemption from registration under
the Act is available. The Company intends to use all reasonable efforts to
ensure that no such delay will occur. In the event exemption from registration
under the Act is available upon an exercise of this Option, Director (or the
person permitted to exercise this Option in the event of Director's death or
incapacity), if requested by the Company to do so, will execute and deliver to
the Company in writing an agreement containing such provisions as the Company
may require to assure compliance with applicable securities laws.
Director agrees that the shares of Stock which Director may acquire by
exercising this Option will not be sold or otherwise disposed of in any manner
which would constitute a violation of any applicable federal or state securities
laws. Director also agrees (i) that the certificates representing the shares of
Stock purchased under this Option may bear such legend or legends as the Company
deems appropriate in order to assure compliance with applicable securities laws,
(ii) that the Company may refuse to register the transfer of the shares of Stock
purchased under this Option on the stock transfer records of the Company if such
proposed transfer would in the opinion of counsel satisfactory to the Company
constitute a violation of any applicable securities law and (iii) that the
Company may give related instructions to its transfer agent, if any, to stop
registration of the transfer of the shares of Stock purchased under this Option.
6. Binding Effect. This Agreement shall be binding upon and inure to the
benefit of any successors to the Company and all persons lawfully claiming under
Director.
7. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Texas.
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed by its officer thereunto duly authorized, and Director has executed
this Agreement, all as of the day and year first above written.
SEAGULL ENERGY CORPORATION
By: _______________________________________________
Chairman, President and Chief Executive Officer
_______________________________________________
Director
AMENDMENT TO
NONEMPLOYEE DIRECTOR'S STOCK OPTION AGREEMENT(S)
WHEREAS, SEAGULL ENERGY CORPORATION, a Texas corporation (the "Company")
has previously adopted the SEAGULL ENERGY CORPORATION 1993 NONEMPLOYEE
DIRECTORS' STOCK OPTION PLAN (the "Directors' Option Plan"); and
WHEREAS, certain nonstatutory stock options (collectively, "Options") have
heretofore been granted to the optionee, a nonemployee director of the Company
(the "Director"), that are currently outstanding under the Directors' Option
Plan, each of such Options being listed on the schedule attached hereto and
evidenced by a Nonemployee Director's Stock Option Agreement (collectively, the
"Agreements"); and
WHEREAS, the Company desires to amend the Agreements in certain respects;
and
WHEREAS, the Board of Directors of the Company has adopted an amendment to
the Agreements and such amendment has been approved by the shareholders of the
Company;
NOW, THEREFORE, the Agreements shall be amended as follows, effective as of
May 14, 1996:
1. Paragraph 3 of the Agreements shall be deleted and the following shall
be substituted therefor:
"3. Exercise of Option. Subject to the earlier expiration of this
Option as herein provided, this Option may be exercised, by written notice
to the Company at its principal executive office addressed to the attention
of its Chairman, President and Chief Executive Officer, at any time and
from time to time after the date of grant hereof, but, except as otherwise
provided below, this Option shall not be exercisable for more than a
percentage of the aggregate number of shares offered by this Option
determined by the number of full years from the date of grant hereof to the
date of such exercise, in accordance with the following schedule:
AMENDMENT TO NONEMPLOYEE
DIRECTORS' STOCK OPTION AGREEMENT(S)
Percentage of Shares
Number of Full Years That May Be Purchased
Less than 1 year 0%
1 year 20%
2 years 40%
3 years 60%
4 years 80%
5 years or more 100%
This Option is not transferable by Director otherwise than by will or the
laws of descent and distribution, and may be exercised only by Director (or
Director's guardian or legal representative) during Director's lifetime. If a
Director's membership on the Board of Directors of the Company (the "Board")
terminates, this Option may be exercised as follows:
(a) If Director's membership on the Board terminates for cause or
voluntarily by Director not at the request of the Board, this Option may be
exercised by Director at any time during the period of three months
following such termination, or by Director's estate (or the person who
acquires this Option by will or the laws of descent and distribution or
otherwise by reason of the death of Director) during a period of one year
following Director's death if Director dies during such three-month period,
but in each case only as to the number of shares Director was entitled to
purchase hereunder upon exercise of this Option as of the date Director's
membership on the Board so terminates. For purposes of this Agreement,
"cause" shall mean Director's gross negligence or willful misconduct in
performance of his duties as a director, or Director's final conviction of
a felony or of a misdemeanor involving moral turpitude. For purposes of
this Agreement, a Director's termination by reason of the mandatory
retirement policy of the Board shall not constitute a voluntary
termination, and the provisions of clause (b) shall be applicable to any
such termination by reason of mandatory retirement.
(b) If Director's membership on the Board terminates for any reason
other than as described in clause (a) above (including without limitation
because of Director's death, disability or by reason of mandatory
retirement pursuant to the policy of the Board), this Option may be
exercised in full by Director at any time until (i) three years after such
termination or (ii) one year after Director's death,
whichever is later. After Director's death, this Option shall be
exercisable for the periods stated in the immediately preceding sentence by
Director's estate (or the person who acquires this Option by will or the
laws of descent and distribution or otherwise by reason of the death of
Director). After Director's termination as a director by reason of
disability, this Option shall be exercisable for the periods stated in the
first sentence of this clause (b) by Director or by Director's guardian or
legal representative.
This Option shall not be exercisable in any event after the expiration of
ten years from the date of grant hereof. The purchase price of shares as to
which this Option is exercised shall be paid in full at the time of
exercise (A) in cash (including check, bank draft or money order payable to
the order of the Company), (B) by delivering to the Company shares of Stock
having a fair market value equal to the purchase price, or (C) any
combination of cash or Stock. No fraction of a share of Stock shall be
issued by the Company upon exercise of an Option or accepted by the Company
in payment of the purchase price thereof; rather, Director shall provide a
cash payment for such amount as is necessary to effect the issuance and
acceptance of only whole shares of Stock. Unless and until a certificate or
certificates representing such shares shall have been issued by the Company
to Director, Director (or the person permitted to exercise this Option in
the event of Director's death) shall not be or have any of the rights or
privileges of a shareholder of the Company with respect to shares
acquirable upon an exercise of this Option."
2. As amended hereby, the Agreements are specifically ratified and
reaffirmed.
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed by its officer thereunto duly authorized, and Director has executed
this Agreement, effective as of May 14, 1996.
SEAGULL ENERGY CORPORATION
By:___________________________
Chairman, President and
Chief Executive Officer
___________________________
Director
_________________________ ___________________ ___________________
_________________________ ___________________ ___________________
IN WITNESS WHEREOF, the Company has caused this amendment to be duly
executed by one of its officers thereunto duly authorized, and Vagt has executed
this amendment, effective as of June 30, 1997.
SEAGULL ENERGY CORPORATION
By:_________________________________
_________________________________
ROBERT F. VAGT