AGREEMENT dated as of April 30, 1993
between SNYDER OIL CORPORATION, a Delaware corporation
("SOCO"), and Edward T. Story ("Story")
SOCO and Story are parties to a letter agreement dated July 19, 1991
and an agreement dated November 15, 1991 (the "Prior Agreements") ,
relating to the capitalization and management of SOCO International,
Inc., a Delaware corporation ("International"). Pursuant to the Prior
Agreements:
SOCO owns 900 shares of common stock, and Story owns 100 shares
of common stock (the "Story Shares"), of International,
constituting all the outstanding shares of International.
Story has the option (the "Story Option") to purchase from SOCO
additional shares of common stock of International representing
up to 25% of the outstanding shares of common stock of
International.
Story holds a note (the "Story Note") dated November 15, 1991 of
International in the principal amount of $100,000, under which
Story has advanced $27,778 to International.
SOCO holds a note (the "SOCO Note") dated November 15, 1991 of
International in the principal amount of $900,000, under which
SOCO has made an initial advance of $250,000 and has from time
to time advanced additional sums to International.
Story and SOCO have each agreed to make additional loans to
International under the Story Note and the SOCO Note at the
request of International.
SOCO and Story wish to modify the arrangements provided for in the
initial agreements as set forth herein.
Accordingly, SOCO and Story agree as follows:
1. Purchase of Story Shares and Story Note; Cancellation of Story
Option and Prior Agreements. On May 20, 1993 or such other mutually
acceptable day not later than 30 days after approval of this
Agreement by the Board of Directors of SOCO, but effective April 30,
1993, SOCO will purchase the Story Shares and the Story Note for an
aggregate purchase price of $27,878. In that regard, (a) SOCO will
deliver a check payable to Story in the amount of $27,878 and (b)
Story is delivering a certificate representing the Story Shares and
the Story Note to SOCO, in each case duly endorsed for transfer to
SOCO. Simultaneously with such deliveries, and without any further
action on the part of SOCO or Story, the Prior Agreements, including
the Story Option, will be canceled and will no longer have any force
or effect.
2. Issuance of New Option. Subject to the purchase of the Story
Shares and Story Note pursuant to Section 1, SOCO hereby grants to
Story an option to purchase from SOCO 100 of the shares of common
stock of International (being equal to 10% of the shares of common
stock held by SOCO immediately after giving effect to the purchase of
the Story Shares) at an aggregate exercise price of $590,500 on the
following terms:
(a) The option shall expire at the close of business on April
30, 1998 (the "Expiration Time"). The option may be exercised by
Story in whole but not in part, by written notice to SOCO
received by SOCO prior to the Expiration Time. Any such notice
shall be accompanied by (i) a certified or bank check payable to
SOCO in the amount of the exercise price and (ii) a statement
that Story is acquiring the shares for his own account for
purposes of investment, and that Story recognizes that the
shares are not registered under the federal Securities Act of
1993, as amended, that the shares cannot be sold unless so
registered or pursuant to an exemption from such registration
requirement and that the certificate representing the shares
will bear a legend to that effect.
(b) If International makes a dividend payable in the form of
shares of common stock, or combines or subdivides the
outstanding shares of common stock, the number of shares subject
to the option shall be adjusted so that the number of shares
subject to the option after such event shall be equal to the
number of shares of common stock Story would have been entitled
to receive had the option been exercised immediately prior to
the record date of such dividend or effective date of such
combination or subdivision. SOCO will give Story prompt notice
of any adjustments pursuant to this paragraph.
(c) If International (i) makes a distribution on the common
stock in the form of debt instruments, cash (except dividends
out of retained earnings) or other assets or (ii) consolidates
with or merges with any person (except any consolidation or
merger which does not result in the exchange or cancellation of
the common stock of International), sells all or substantially
all its assets or liquidates, SOCO will give notice thereof to
Story at least 30 days before the record date of such
distribution or the effective date of such consolidation, merger
or sale. Unless Story exercises the option prior to such record
date or effective date, as the case may be, Story shall have no
right to receive any of the debt instruments, cash or other
assets distributed or consideration received in such merger,
consolidation, sale or liquidation and, in if an event described
in clause (ii) of the preceding sentence occurs, the option will
terminate.
(d) If any or all of the shares of common stock held by SOCO
are to be redeemed by International or sold by SOCO (it being
understood that SOCO shall have the absolute right to sell any
or all its shares or other investment in International, subject
only to SOCO's obligations under this paragraph), SOCO will give
Story written notice thereof at least 30 days before such event
occurs. If Story exercises the option prior to the time such
event occurs, he shall have the right and, if requested by SOCO,
the obligation to participate proportionately with SOCO in such
redemption or sale (i.e., assuming Story participates in all
future sales of International stock to SOCO pursuant to Section
3 of this Agreement, 90% of the shares redeemed or sold shall
have been owned by SOCO and 10% of the shares redeemed or sold
shall have been owned by Story).
(e) As long as the option remains exercisable, services
provided by SOCO and its affiliates to International and other
transactions between SOCO and its affiliates and International
will be on terms that SOCO in good faith believes to be
commercially reasonable under the circumstances. All loans or
advances made by SOCO or its affiliates to International will
bear simple interest at the rate of 1% per month.
3. Right to Participate in Certain Stock Sales. If, in its
discretion, SOCO elects to invest additional equity into
International through the purchase of additional shares of common
stock, SOCO will determine the terms of such purchase based on SOCO's
assessment of the "fair value" of the shares at the time of the
investment. SOCO will give Story 30 days' written notice of any such
proposed purchase of additional shares of common stock of
International, which notice will set forth the number of shares to be
purchased, the purchase price per share and the date of the purchase.
Story will have the right, which may be exercised by irrevocable
written notice from Story to SOCO received not less than 15 days
before the date of purchase specified in SOCO's notice, to
participate in such purchase and purchase 10% of the number of
additional shares to be purchased by SOCO at the purchase price per
share specified in SOCO's notice. By written notice to Story at any
time prior to the completion of the proposed purchase, SOCO will have
the right to alter the terms of, or cancel, the purchase, provided
that, if Story shall have elected to participate in the purchase and
SOCO shall have increased the aggregate purchase price of the shares
to be purchased (by increasing the number of shares, the price per
share, or both), Story will have the right, for five business days
after the receipt of such notice, to elect, by written notice to
SOCO, to withdraw from participation in the purchase.
4. Special Bonus. SOCO agrees that if SOCO Tunisia, Inc. sells all
or part of its interest in its Tunisian concession for cash prior to
August 1, 1993, SOCO will cause International to pay a special bonus
to Story equal to 25% of the excess of International's share (95%) of
the actual cash proceeds received by SOCO Tunisia from such sale over
the transaction costs incurred in connection with such sale and all
costs incurred prior to such sale by International and SOCO Tunisia
related to such concession.
5. Compensation Arrangements. At the May 1993 meeting of SOCO's
Board of Directors, SOCO's management will recommend that (i) Story's
salary be reviewed to assure that it reflects his position in the
SOCO organization and, if the Board determines that a modification is
appropriate, recommend to International that Story's salary be
modified in accordance with the Board's recommendation, (ii) the
Board recommend that International adopt a bonus program for Story
and that International coordinate such bonus program with SOCO's
annual bonus program and (iii) International become a participating
subsidiary in SOCO's 401-k savings and profit sharing plan.
Management will also recommend at such meeting that the Compensation
Committee of SOCO's Board of Directors grant Story options to
purchase shares of common stock of SOCO under SOCO's 1989 Stock
Option Plan in line with Story's position in the SOCO organization
and that, in the discretion of the Compensation Committee, Story be
eligible to receive additional grants from time to time while he is
employed by International. Nothing in this Agreement shall be deemed
a contract of employment or a guarantee of employment or continued
employment.
6. Representations of Story. Story represents that (a) upon
payment therefore in accordance with this Agreement, SOCO will
receive good and marketable title to the Story Shares and the Story
Note and (b) neither the execution, delivery or performance of this
Agreement by Story will violate any contract, agreement, judgment or
order applicable to Story.
7. Representations of SOCO. SOCO represents that (a) upon approval
of this Agreement by SOCO's Board of Directors, this Agreement will
have been duly authorized, executed and delivered by SOCO, (b)
neither the execution, delivery or performance of this Agreement by
SOCO will violate any contract, agreement, judgment or order
applicable to SOCO and (c) upon exercise of the option by Story and
payment of the exercise price, Story will receive good and marketable
title to the shares of International acquired pursuant to such
exercise.
8. No Assignment. This Agreement and the rights, interests and
benefits of Story hereunder may not be assigned, transferred or
hypothecated in any way by Story without the express written consent
of SOCO, except that Story's right to exercise the option provided
for in Section 2 may be transferred by will or the laws of descent.
Any assignment, transfer, hypothecation or delegation contrary to the
foregoing provisions shall be void.
9. Notices. Any notices, payments, revocations or demands under
this Agreement shall be made by hand delivery or certified mail at
the following addresses:
If to Story, at
Edward T. Story
944 Rochow
Houston, Texas 77019
If to the Company, at
Snyder Oil Corporation
595 Madison Avenue, 27th Floor
New York, New York 10022
Attention: Thomas J. Edelman
and
Snyder Oil Corporation
777 Main Street, Suite 2500
Fort Worth, Texas 76102
Attention: Peter E. Lorenzen
10. Miscellaneous. This Agreement is made or to be performed in
whole or in part, or both, in Texas and shall be governed by, and
shall be construed in accordance with, the laws of the State of Texas
applicable to contracts made and to be performed entirely within such
State. Any claim under or relating to this Agreement shall be filed
only in the courts of Tarrant County, Texas. The waiver by any party
hereto of a breach of any provision of this Agreement by any other
party shall not operate as, or be construed as, a waiver of any other
provision or of any subsequent breach. If any provision of this
Agreement shall be held to be unenforceable or invalid, as contrary
to public policy, law or otherwise, then such provision, or the
invalidity or unenforceability thereof, shall in no way affect the
validity of any other provisions hereof. This Agreement contains the
entire agreement of the parties with respect to the subject matter
hereof, and supersedes any prior agreements, written or oral, between
the parties with respect to such subject matter. This Agreement may
be amended only in writing signed by both parties.
SNYDER OIL CORPORATION EDWARD T. STORY
by John C. Snyder Edward T. Story
John C. Snyder
Chairman
Date: May 19, 1993 Date: May 19, 1993