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SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec. 240.14a-11(c) or sec. 240.14a-12
Santa Fe Snyder Corporation
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(Name of Registrant as Specified in its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(l) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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SANTA FE SNYDER CORPORATION
---------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The annual meeting of stockholders of Santa Fe Snyder Corporation will be
held at the Omni Houston Hotel, Four Riverway, Houston, Texas, on Tuesday, May
16, 2000 at 10:00 a.m. for the following purposes:
(A) To elect three directors;
(B) To approve the Santa Fe Snyder Corporation Incentive Stock Compensation
Plan 2000;
(C) To ratify and approve the appointment of PricewaterhouseCoopers LLP as
independent public accountants for the fiscal year ending December 31,
2000; and
(D) To transact such other business as is properly brought before the
meeting.
Common stockholders of record at the close of business on March 17, 2000
are entitled to notice of and to vote at the meeting. A list of such
stockholders will be kept at the office of the Corporation at 840 Gessner,
Houston, Texas 77024, for a period of ten days prior to the meeting.
By order of the Board of Directors.
MARK A. OLDER
Corporate Secretary
840 Gessner
Houston, Texas 77024
March 22, 2000
YOUR VOTE IS IMPORTANT
PLEASE MARK, DATE, AND SIGN YOUR PROXY AND RETURN
IT PROMPTLY IN THE ENCLOSED ENVELOPE OR
CAST YOUR VOTE BY TELEPHONE OR VIA THE INTERNET
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SANTA FE SNYDER CORPORATION
840 GESSNER
HOUSTON, TEXAS
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PROXY STATEMENT
MARCH 22, 2000
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ANNUAL MEETING OF STOCKHOLDERS, MAY 16, 2000
The annual meeting of stockholders of Santa Fe Snyder Corporation (the
"Corporation") will be held on May 16, 2000 in Houston, Texas. The enclosed
proxy card is solicited by the Board of Directors of the Corporation, and your
execution and prompt return of the card is requested. For your convenience you
may also vote your shares by telephone or via the Internet as described on the
proxy card. Every common stockholder, regardless of the number of shares held,
should be represented at the annual meeting. Whether or not you expect to be
present at the meeting, please mark, sign and date the enclosed proxy card and
return it in the enclosed envelope or vote by telephone or via the Internet. Any
stockholder giving a proxy has the right to revoke it at any time before it is
exercised by submitting a written revocation to the Secretary of the
Corporation, submitting a subsequently dated proxy, or voting by telephone or
Internet at a later time. If you attend the meeting and wish to vote your shares
in person, you may do so at that time.
The shares represented by your proxy will be voted in accordance with the
specifications made on the proxy card, by telephone or the Internet. Unless
otherwise directed, it is intended that such shares will be voted:
(A) For the election to the Corporation's Board of Directors of the three
nominees named below; and
(B) For the approval of the Santa Fe Snyder Corporation Incentive Stock
Compensation Plan 2000; and
(C) For the ratification and approval of the appointment of
PricewaterhouseCoopers LLP as independent public accountants for the
fiscal year ending December 31, 2000; and
(D) In accordance with the best judgment of the persons acting under the
proxy concerning other matters that are properly brought before the
meeting.
Common stockholders of record at the close of business on March 17, 2000
are entitled to notice of the meeting and are entitled to vote at the meeting in
person or by proxy. Each share of common stock of the Corporation is entitled to
one vote. At the close of business on March 17, 2000, the Corporation had
approximately 182,000,000 shares of common stock outstanding and entitled to
vote. The Corporation anticipates first sending this proxy statement and the
enclosed proxy card to stockholders on or about March 22, 2000.
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ELECTION OF DIRECTORS
The number of directors of the Corporation, as determined by the Board
under Article Fifth of the Corporation's Restated Certificate of Incorporation,
is currently eleven. The terms of three current directors expire in 2000, and
three directors are to be elected at the 2000 annual meeting for a term of three
years. Directors hold office until the annual meeting for the year in which
their terms expire and until their successors are elected and qualify. The
nominees for whom the enclosed proxy is intended to be voted are set forth
below. The Corporation does not contemplate that any of these nominees will be
unavailable for election, but if such a situation should arise, the proxy will
be voted in accordance with the best judgment of the persons acting under it.
The election as directors of the persons nominated in this proxy statement will
require a plurality of the votes cast by the shares entitled to vote in the
election at a meeting at which a quorum is present. A holder of a share will be
treated as being present at a meeting if the holder of such share is either
present in person at the meeting or is represented at the meeting by a valid
proxy, whether the proxy is marked as casting a vote or abstaining, is left
blank or does not empower such proxy to vote with respect to some or all matters
to be voted upon at the meeting. In determining the number of votes cast, shares
abstaining from voting or not voted on a matter (including elections) will not
be treated as votes cast. In general, pursuant to the Corporation's Bylaws,
action on a matter (other than the election of directors) shall be approved if
the votes cast in favor of the matter exceed the votes cast opposing the matter.
Unless otherwise indicated, each director listed below has served in his or
her present occupation for at least five years. Ages are as of February 1, 2000.
NOMINEES FOR ELECTION AS DIRECTORS TO BE ELECTED
FOR A TERM OF THREE YEARS ENDING IN 2003
FIRST
ELECTED A
NAME, AGE AND BUSINESS EXPERIENCE DIRECTOR
- --------------------------------- ---------
William E. Greehey, 63...................................... 1991
Chairman of the Board, Chief Executive Officer and
director of Valero Energy Corporation (refining and
marketing) since 1983.
Harold R. Logan, Jr., 55.................................... 1999(1)
Executive Vice President/Finance and a director of
TransMontaigne Inc., a holding company engaged in
providing logistical services, i.e., transportation,
terminaling and marketing to the manufacturers and
end-users of refined petroleum products. Senior Vice
President/Finance and a director of Associated Natural Gas
Corporation from 1987 until 1994. Mr. Logan also serves as
a director of the general partner of Suburban Propane
Partners, L.P. (retail propane distribution) and Union
Banc Shares, Ltd.
Edward T. Story, 56......................................... 1999(1)
President of SOCO International plc., an independent
international oil and gas company traded on the London
Stock Exchange. From 1991 until the formation of SOCO
International plc in 1997 through the consolidation of
international interests of Snyder Oil Corporation ("SOCO")
and various third parties, Mr. Story was Vice
President-International of SOCO and President of SOCO
International, Inc. Mr. Story also serves as a director of
Cairn Energy plc, (London based oil and gas company),
First BankAmerica, Inc., (bank holding company), Hallwood
Realty Corporation, the general partner of Hallwood Realty
Partners, L.P., (real estate), and Sen Hong Resources
Limited, (Hong Kong based oil and gas company).
- ---------------
(1) First elected to the board on May 5, 1999 in conjunction with the merger of
SOCO into the Corporation.
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DIRECTORS CONTINUING IN OFFICE UNTIL 2001
FIRST
ELECTED A
NAME, AGE AND BUSINESS EXPERIENCE DIRECTOR
- --------------------------------- ---------
Melvyn N. Klein, 58......................................... 1993
Attorney and Counselor at Law; private investor. The
managing general partner of GKH Partners, L.P., an
investment partnership. Mr. Klein was also a founder and a
principal of Questor Management Company through 1999. He
is a director of Anixter International (distributor of
networking products), Bayou Steel Corporation (specialty
steel manufacturer), Hanover Compressor Corporation
(provider of full service natural gas compression and
fabricator of compressors and production equipment) and
ACTV, Inc. (a digital media company with proprietary
technologies).
John A. Hill, 58............................................ 1999(1)
Vice Chairman and Managing Director of First Reserve
Corporation, an oil and gas investment management company.
Prior to joining First Reserve, Mr. Hill was President,
Chief Executive Officer and Director of Marsh & McLennan
Asset Management Company and served as the Deputy
Administrator of the Federal Energy Administration during
the Ford Administration. Mr. Hill is a trustee of the
Putnam Funds in Boston and a director of TransMontaigne
Inc. and various companies controlled by First Reserve
Corporation.
James L. Payne, 62.......................................... 1986
Chief Executive Officer of the Corporation since June
1990, Chairman of the Board from June 1990 until May 1999
and President from January 1990 until April, 1998. Mr.
Payne was President of Santa Fe Energy Company, a
predecessor in interest of the Corporation from January
1986 to January 1990 when he became President of the
Corporation. Mr. Payne is also a director of Nabors
Industries, Inc. (oilfield services) and BJ Services, Inc.
(oilfield services).
John C. Snyder, 57.......................................... 1999(1)
Chairman of the Board of the Corporation since May 1999.
From the inception of predecessors in interest of SOCO in
1978, Mr. Snyder served as Chairman and a director of
SOCO. Mr. Snyder is also a director of SOCO International
plc, a director of the Community Enrichment Center of Fort
Worth, a director of Texas Capital BancShares, Inc. and is
a member of the National Petroleum Council.
DIRECTORS CONTINUING IN OFFICE UNTIL 2002
Allan V. Martini, 72........................................ 1990
Retired Vice President Exploration/Production and director
of Chevron Corporation (petroleum operations) since August
1988. Mr. Martini served in that position from July 1986
until his retirement.
James E. McCormick, 72...................................... 1999(1)
Retired President, Chief Operating Officer and director of
Oryx Energy Company (petroleum operations) since March
1992. Mr. McCormick served in that position from November
1988 until his retirement. Mr. McCormick is also a
director of Lone Star Technologies, BJ Services, Inc.
(oilfield services), TESCO Corporation (oil field drilling
systems), and Dallas National Bank.
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Reuben F. Richards, 70...................................... 1992
Chairman of the Board, Terra Industries Inc.
(agribusiness) from December 1982 until his retirement in
March 1996; Chief Executive Officer thereof from December
1982 to May 1991 and President thereof from July 1983 to
May 1991; Chairman of the Board, Engelhard Corporation
(specialty chemicals, engineering materials and precious
metals management services) from May 1985 to December 1994
and director thereof since prior to 1990; Chairman of the
Board of Minorco (U.S.A.) Inc. from May 1990 to March 1996
and Chief Executive Officer and President from February
1994 to March 1996. Mr. Richards is also a director of
Ecolab, Inc. (cleaning and sanitizing products), Engelhard
Corporation and Potlatch Corporation (forest products).
Kathryn D. Wriston, 60...................................... 1990
For the past five years, director of various corporations
and organizations, including Northwestern Mutual Life
Insurance Company (life insurance) and the Stanley Works
(manufacturer of tools).
Certain Relationships and Related Transaction
Mr. Payne is also a director of Nabors Industries, Inc., which provides
various oilfield services. During 1999, the Corporation paid Nabors subsidiaries
an aggregate of $3,308,784 for services performed on properties operated by the
Corporation. Mr. Payne is also a director of BJ Services which also provides
various oilfield services. During 1999, the Corporation paid BJ Services an
aggregate of $4,065,624 for services performed on properties operated by the
Corporation. Mr. Payne has no direct or personal interest in these services. His
interest arises only because of his position as an officer of the Corporation
and a director of Nabors Industries, Inc. and BJ Services. In the opinion of the
Corporation, the amounts paid for services performed by Nabors and BJ Services
were competitive and were reasonable and customary in the industry.
Mr. McCormick is also a director of BJ Services and TESCO Corporation. In
1999 the Corporation paid affiliates of TESCO $175,153 for various oilfield
services. Mr. McCormick has no direct or personal interest in these services.
His interest arises only because of his position as a director of the
Corporation and a director of BJ Services and TESCO. In the opinion of the
Corporation, the amounts paid for services performed by TESCO were competitive
and reasonable and customary in the industry.
Mr. Klein is the sole stockholder of a general partner in GKH Partners,
L.P. ("GKH"). The Corporation entered into an Agreement Regarding Shelf
Registration dated March 24, 1995, with HC Associates ("HC"), which owns
approximately 3% of the Corporation's common stock, whereby the Corporation
agreed that upon written demand (which demand may be submitted to the
Corporation once, provided such registration is effected and the registration
statement is declared effective) from HC, GKH, GKH Investments, L.P., Cockrell
Equity Partners, L.P., and Cockrell Investment Partners, L.P. (collectively, the
"Selling Stockholders") at any time prior to March 27, 2000 to file with the
Securities and Exchange Commission a registration statement to register the
offer and sale, from time to time, by the Selling Stockholders of up to
5,203,091 shares of the Corporation's common stock beneficially owned by them as
of March 24, 1995, subject to certain specified restrictions. The Corporation is
obligated to pay all expenses incidental to such registration, excluding
underwriting discounts, commissions, fees or disbursements of legal counsel for
the Selling Stockholders. This agreement was amended in 1997 to include two
demand rights (provided that any one demand must include at least 40% of the
total shares covered) and up to two piggyback rights. In addition, in connection
with the merger of SOCO into the Corporation on May 5, 1999, GKH received a fee
for financial advisory services in the amount of $500,000.
Mr. Klein is also a director of Hanover Compressor Corporation. The
Corporation leases compressors for oilfield operations from Hanover pursuant to
competitive bids.
Other Information Concerning Directors. In 1999, the Board met eight times,
and each member of the Board as it was composed at the time attended at least
75% of the total number of meetings of the Board and
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the total number of meetings held by all committees of the Board on which he or
she served, except Mr. Martini who attended 70% of the meetings.
Directors Compensation. Directors who are not employees of the Corporation
or its subsidiaries receive an annual cash retainer fee of $10,000 (plus an
additional $2,000 annual retainer for the committee chairmen) and the
non-employee Chairman receives an additional $10,000 per month fee. Non-employee
directors also receive a fee of $1,000 for each meeting of the Board attended,
and a fee of $1,000 for each committee meeting attended plus expenses. In
addition, pursuant to the 1990 Incentive Stock Compensation Plan and the 1995
Incentive Stock Compensation Plan for Nonexecutive Employees and Directors (the
"Stock Plans"), non-employee directors receive annually (i) 2,000 shares of
Common Stock with a six month restriction period during which such shares cannot
be transferred and (ii) 5,000 Non-Qualified Stock Options ("NQSO's") per year
having an exercise price of the Fair Market Value (as defined in the Stock Plan)
on the date of grant. In addition, all newly elected directors receive a
one-time grant of 10,000 NQSO's with an exercise price of the Fair Market Value
on the date the director is first elected. Mr. Snyder also received a one time
grant of 10,000 NQSO's effective on the date of the merger of SOCO into the
Corporation. In connection with the amendment of the 1990 Stock Plan in 1996,
then current directors received a similar one-time grant of 10,000 NQSO's
effective February 1, 1996. No further grants may be made under the 1990
Incentive Stock Compensation Plan and the stockholders are being requested to
approve the Incentive Stock Compensation Plan 2000 (the "2000 Stock Plan") at
the 2000 Annual Meeting of Stockholders. If the 2000 Stock Plan is approved, all
non-employee directors will receive 4,000 shares of Restricted Stock annually
under the Plan as a portion of their yearly retainer beginning with the
1999-2000 fiscal year. No future grants would be made to non-employee directors
under the 1995 Plan if the 2000 Stock Plan is approved.
Board Committees. In 1999, the Board maintained Audit, Compensation and
Benefits, Executive and Nominating and Governance Committees. Following are the
members of each committee and brief descriptions of the functions of the Board
Committees. All chairpersons of the above committees are non-employee directors.
The members of the Audit Committee are Harold R. Logan, Jr. (Chairman),
Reuben F. Richards, Edward T. Story and Kathryn D. Wriston. Mr. Story served as
Vice President-International of SOCO and President of SOCO International, Inc.
until June 1997. SOCO was merged into the Corporation in May 1999. The Board of
Directors of the Corporation has determined that, because of Mr. Story's
extensive knowledge of the oil and gas exploration and production business, it
is in the best interests of the Corporation and the shareholders that Mr. Story
serve on the Audit Committee. The principal functions of the Audit Committee,
which met three times in 1999, include overseeing the performance and reviewing
the scope of the audit function of independent accountants and internal audit.
The Audit Committee also reviews, among other things, audit plans and
procedures, the Corporation's policies with respect to conflicts of interest and
the prohibition on the use of corporate funds or assets for improper purposes,
changes in accounting policies, and the use of independent accountants for
non-audit services.
The members of the Compensation and Benefits Committee are William E.
Greehey (Chairman), John A. Hill, James E. McCormick and Reuben F. Richards. The
principal function of the Compensation and Benefits Committee, which met five
times in 1999, is to administer all executive compensation and benefit plans of
the Corporation. In addition, the Committee reviews the actions of the Pension
Benefits Committee which is composed of employees of the Corporation, making
recommendations to the Board of Directors concerning future membership of that
committee and such other recommendations as may be necessary or appropriate, and
recommending to the Board of Directors substantive amendments to the
Corporation's retirement plan. Members of the Compensation and Benefits
Committee are not eligible to participate in any benefit plans of the
Corporation that they administer except the Stock Plans pursuant to which grants
may be made only as described above.
The members of the Executive Committee are Melvyn N. Klein (Chairman),
William E. Greehey, Harold R. Logan, Jr., Allan V. Martini, James L. Payne, John
C. Snyder and Edward T. Story. The Executive Committee, which did not meet in
1999, may exercise, during periods between meetings of the Board of
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Directors, all powers of the Board in the management and business of the
Corporation, subject to limitations imposed by the Bylaws, Certificate of
Incorporation or applicable law.
The members of the Nominating and Governance Committee are John A. Hill
(Chairman), Allan V. Martini, James L. Payne and John C. Snyder. This Committee,
which met twice in 1999, receives recommendations for review and evaluates the
qualifications of and selects and recommends to the Board of Directors, nominees
for election as Directors. The Committee will consider nominees recommended by
stockholders. Any such recommendation, together with the nominee's
qualifications and consent to be considered as a nominee, should be sent in
writing to the Secretary of the Corporation not less than 90 days nor more than
120 days prior to the annual meeting. The Committee also addresses issues
relating to corporate governance.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
To the best of the Corporation's knowledge, the following persons are the
only persons who are beneficial owners of more than five percent of the
Corporation's common stock based upon the number of shares outstanding on
February 1, 2000:
NUMBER OF
SHARES OF PERCENT
COMMON OF
NAME AND ADDRESS STOCK CLASS
- ---------------- ---------- -------
FMR Corp.(1)................................................ 22,175,945 13.0
82 Devonshire Street
Boston, MA 02109
Mellon Financial Corporation(2)............................. 9,889,645 5.4
One Mellon Center
Pittsburgh, PA 15258
- ---------------
(1) As reported at June 10, 1999, as of May 31, 1999, Fidelity Management &
Research Company ("Fidelity"), 82 Devonshire Street, Boston, Massachusetts
02109, a wholly owned subsidiary of FMR Corp. and an investment advisor
registered under Section 203 of the Investment Advisors Act of 1940, was the
beneficial owner of 18,717,508 or 10.26% of the common stock outstanding of
the Corporation as a result of acting as investment adviser to various
investment companies registered under Section 8 of the Investment Company
Act of 1940.
The ownership of one investment company, Fidelity Dividend Growth Fund,
amounted to 11,384,515 or 6.24% of the common stock outstanding of the
Corporation. Fidelity Dividend Growth Fund has its principal business office
at 82 Devonshire Street, Boston, Massachusetts 02109.
Edward C. Johnson, 3d, FMR Corp., through its control of Fidelity, and the
Fidelity Funds each has the power to dispose of the 18,717,508 shares owned
by the funds. Neither FMR Corp. nor Edward C. Johnson 3d, Chairman of FMR
Corp., has the sole power to vote or direct the voting shares owned directly
by the Fidelity Funds, which power resides with the Funds' Board of
Trustees. Fidelity carries out the voting of the shares under written
guidelines established by the Funds' Boards of Trustees.
Fidelity Management Trust Company ("FMT"), 82 Devonshire Street, Boston,
Massachusetts 02109, a wholly owned subsidiary of FMR Corp. and a bank as
defined in Section 3(a)(6) of the Securities Exchange Act of 1934, is the
beneficial owner of 3,458,437 shares or less than 2% of common stock
outstanding of the Corporation as a result of its serving as an investment
manager of the institutional account(s). Mr. Johnson and FMR Corp., through
its control of FMT, each has dispositive power over 3,458,437 shares and
sole power to vote or direct the voting of 2,999,534 shares, and no power to
vote or direct the voting of 458,903 shares of common stock owned by the
institutional account(s) as reported above.
Members of Mr. Johnson's family and trusts for their benefit are the
predominant owners of Class B shares of common stock of FMR Corp.,
representing approximately 49% of the voting power of FMR
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Corp. Mr. Johnson owns 12% and Abigail Johnson owns 24.5% of the aggregate
outstanding voting stock of FMR Corp. Mr. Johnson is Chairman of FMR Corp.
and Abigail P. Johnson is a Director of FMR Corp. The Johnson family group
and all other Class B stockholders have entered into a stockholders' voting
agreement under which all Class B shares will be voted in accordance with
the majority vote of Class B shares. Accordingly, through their ownership of
voting common stock and the execution of the stockholders' voting agreement,
members of the Johnson family may be deemed, under the Investment Company
Act of 1940, to form a controlling group with respect to FMR Corp.
(2) As reported at January 24, 2000, Mellon Financial Corporation, One Mellon
Center, Pittsburgh, Pennsylvania 15258, a parent holding company, was the
beneficial owner of 9,889,645 shares or 5.4% of the common stock outstanding
of the Corporation. The amount beneficially owned includes, where
appropriate, securities not outstanding which are subject to options,
warrants, rights or conversion privileges that are exercisable within 60
days. Mellon Bank, N.A. is the trustee of the Corporation's Savings
Investment Plan which is subject to ERISA. The securities reported include
all shares held of record by Mellon Bank, N.A. as trustee of the Plan which
have not been allocated to the individual accounts of employee participants
in the Plan for which directions have been received and followed.
All of the securities are beneficially owned by Mellon Financial Corporation
and direct or indirect subsidiaries in their various fiduciary capacities.
As a result, another entity in every instance is entitled to dividends or
proceeds of sale. No individual accounts hold an interest of 5% or more. The
shares reported are beneficially owned by the following direct or indirect
subsidiaries of Mellon Financial Corporation: Boston Safe Deposit and Trust
Company, Mellon Bank, N.A. (also parent holding company of the Dreyfus
Corporation and Mellon Equity Associates), Mellon Trust of New York,
Franklin Portfolio Associate Trust, Mellon Capital Management Corporation,
Mellon Equity Associates, the Dreyfus Corporation (also parent holding
company of Dreyfus Investment Advisors, Inc.), the Boston Company Asset
Management, Inc., Boston Group Holdings, Inc., (parent holding company of
the Boston Company, Inc.), MBC Investment Corporation (parent holding
company of Laurel Capital Advisors, Franklin Portfolio Associates, Mellon
Bank, F.S.B. and Mellon Capital Management Corporation), Mellon Financial
Corporation and the Boston Company, Inc. (parent holding company of Boston
Safe Advisors, Inc., the Boston Company Asset Management, Inc., Boston Safe
Deposit and Trust Company, Mellon Trust of California, Mellon Trust of New
York and Mellon Trust Florida.
Mellon Financial Corporation has sole voting power over 7,488,831 shares,
shared voting power over 424,200 shares, sole dispositive power over
8,814,772 shares and shared dispositive power over 963,006 shares.
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STOCK OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the amount of common stock beneficially
owned as of February 1, 2000 by each of the directors and executive officers,
and by all directors and executive officers as a group. Unless otherwise noted,
each of the named persons and members of the group has sole voting and
investment power with respect to the shares shown. In 1999, Mr. Payne made one
late report describing the purchase of common stock.
SHARES
NAME OF DIRECTOR OWNED PERCENT
EXECUTIVE OFFICER OR GROUP BENEFICIALLY OF CLASS
- -------------------------- ------------ --------
William E. Greehey(1)....................................... 125,017 --
John A. Hill(2)............................................. 240,867
Melvyn N. Klein(3).......................................... 5,097,294 2.8
Harold R. Logan, Jr.(4)..................................... 35,040
Allan V. Martini(1)......................................... 56,998 --
James E. McCormick(2)....................................... 68,660
Reuben F. Richards(1)....................................... 55,478 --
John C. Snyder(5)........................................... 4,191,533 2.3
Edward T. Story(6).......................................... 1,188,917
Kathryn D. Wriston(1)....................................... 55,720 --
James L. Payne(7)........................................... 2,485,698 1.4
Hugh L. Boyt(8)............................................. 723,740 --
William G. Hargett(9)....................................... 550,904 --
Janet F. Clark(10).......................................... 357,726 --
Duane C. Radtke(11)......................................... 357,841 --
Directors and Executive Officers as a Group -- 18
Individuals(12)........................................... 16,639,191 9.1
- ---------------
(1) Includes 44,091 shares which could be received upon the exercise of options
within 60 days. The weighted average exercise price of such options is
$7.5591.
(2) Includes 35,500 shares which could be received upon the exercise of options
within 60 days. The weighted average exercise price of such options is
$8.1910.
(3) Includes 5,048,083 shares of common stock which may be deemed to be owned
by GKH primarily through its participation in HC Associates, a Delaware
general partnership ("HC"). The partners of HC (and their respective
percentage interests in HC) are GKH Investments, L.P. (the "GKH Fund")
(92.743587%), GKH as nominee for GKH Private Limited ("GKHPL") (3.506488%),
Cockrell Equity Partners, L.P. (1.089978%) and Cockrell Investment
Partners, L.P. (2.659947%). The sole general partner of the GKH Fund, a
Delaware limited partnership is GKH. Pursuant to a management agreement,
GKH manages assets on behalf of GKHPL. Mr. Klein is the sole stockholder of
one of the general partners in GKH, the general partner of the GKH Fund and
the nominee for GKHPL and disclaims beneficial ownership of the shares held
by HC. Also includes 44,091 shares which could be received upon the
exercise of options within 60 days. The weighted average exercise price of
such options is $7.5591.
(4) Includes 25,250 shares which could be received upon the exercise of options
within 60 days. The weighted average exercise price of such options is
$9.1894.
(5) Includes 536,315 shares which could be received upon the exercise of
options within 60 days. The weighted average exercise price of such options
is $7.3438. Also, includes 1,342 shares owned by Mr. Snyder's spouse and
which he disclaims beneficial ownership.
(6) Includes 157,270 shares which could be received upon the exercise of
options within 60 days. The weighted average exercise price of such options
is $7.014.
(7) Mr. Payne's stock ownership includes 70,320 shares of common stock arising
from participation in the Corporation's Savings Investment Plan and
1,985,680 shares of common stock which could be received upon the exercise
of options within 60 days. The weighted average exercise price of such
options is
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$7.8405. In addition, Mr. Payne's total includes 1,000 shares owned by his
wife. Mr. Payne disclaims beneficial ownership of these shares.
(8) Mr. Boyt's stock ownership includes 9,677 shares of common stock arising
from participation in the Corporation's Savings Investment Plan and 648,248
shares of common stock which could be received upon the exercise of options
within 60 days. The weighted average exercise price of such options is
$7.4696.
(9) Mr. Hargett's stock ownership includes 5,604 shares of common stock arising
from participation in the Corporation's Savings Investment Plan and 543,250
shares of common stock which could be received upon the exercise of options
within 60 days. The weighted average exercise price of such options is
$8.0988.
(10) Ms. Clark's stock ownership includes 13,800 shares of common stock arising
from participation in the Corporation's Savings Investment Plan and 315,450
shares of common stock which could be received upon the exercise of options
within 60 days. The weighted average exercise price of such options is
$8.8608.
(11) Mr. Radtke's stock ownership includes 15,212 shares of common stock arising
from participation in the Corporation's Savings Investment Plan and 291,815
shares of common stock which could be received upon the exercise of options
within 60 days. The weighted average exercise price of such options is
$7.8294.
(12) The stock ownership described includes 155,753 shares arising from
participation in the Corporation's Savings Investment Plan and 5,718,950
shares which could be received upon the exercise of options within 60 days.
The total also includes 3,214 shares owned by spouses where the officer or
director disclaims beneficial ownership.
REPORT OF THE COMPENSATION AND BENEFITS COMMITTEE
The Compensation and Benefits Committee (the "Committee") has been
chartered by the Board to review salaries and other compensation of officers,
including Mr. Payne, the Corporation's Chief Executive Officer, and key
employees on an annual basis. Following review, the Committee submits
recommendations to the Board regarding such salaries and compensation. In
addition, the Committee selects officers and key employees for participation in
incentive compensation plans, establishes performance goals for those officers
and key employees who participate in such plans and reviews and monitors
benefits under all employee plans of the Corporation.
Compensation Policies for Executive Officers
The Committee believes that the Corporation's compensation program is
competitive, it reinforces the Corporation's business strategy and it supports
objectives for enhanced stockholder value. It is designed to attract, retain and
motivate key employees by providing total compensation opportunities consistent
with those maintained by the Corporation's peer group. The group used for this
purpose includes companies from the peer group used for purposes of the
performance graph, which companies the Committee believes approximate the
Corporation's size and asset mix. The program allows compensation to vary
significantly based on performance results, balances objectives for short-term
operating performance, and encourages stock ownership among key employees.
Base salaries for the executive group are maintained near the median
competitive position for comparable positions among the peer group. Annual
incentive opportunities are targeted to provide compensation between the median
and upper quartile of the Corporation's peer group described above. Long-term
incentive opportunities are provided through grants of stock options and Phantom
Units made pursuant to the Corporation's Stock Plans and are targeted between
median and upper quartile award levels with upside opportunities based on
sustained performance and creation of stockholder value.
In conjunction with the merger with SOCO in May 1999, the overall
compensation of the executive officers and key employees was reviewed in the
summer and fall of 1999. It was determined that the executive
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officers, other than Mr. Payne, assumed new duties in the enlarged Corporation
and as a result all executive officers received salary adjustments and/or
Incentive Compensation Plan ("IC Plan") target percentage increases during 1999.
Annual incentives are provided through the IC Plan. Goals are established
annually which, if met at the target objective, will result in the executive
officer being paid 50 percent of the maximum amount for which the individual is
eligible. All executive officers participate in the IC Plan with maximum payout
percentages of base salary in 1999 ranging from 100 percent for Mr. Payne to 60
percent. The Committee may increase or decrease the ultimate award by 25 percent
at its discretion.
The goals established for 1999 were based upon discretionary cash flow per
share, production, reserve replacement, the performance of the Corporation's
common stock as compared to the peer group shown in the performance graph, and
an individual discretionary award. Discretionary cash flow per share is defined
as net cash provided by operating activities before changes in operating assets
and liabilities minus exploration dry hole costs plus total exploration expense
minus capitalized interest divided by the average number of common shares
outstanding. The discretionary cash flow and production goals each comprised 25%
of the total award with the reserve replacement and stock price performance
goals each comprising 20% of the total award. The individual discretionary award
was potentially payable up to 10% of the total award. With the exception of the
stock performance goal and the discretionary award, the goals were compared
against profit plan projections. Pursuant to the terms of the IC Plan, the
merger with SOCO resulted in a "change of control" and all goals were deemed to
have been met at the maximum level, resulting in a 100% payout.
In addition to the above described cash payments, the executive officers
and key employees are eligible to participate in grants made under the Stock
Plans. In order to further the identity of interest of employees with that of
its stockholders, all forms of compensation under the Stock Plans relate to
common stock.
As part of the ongoing strategy discussed above, in July the Committee
granted Mr. Payne, the executive officers and other key employees Non-Qualified
Stock Options ("NQSO's") as noted in the table entitled "Options/SAR Grants in
Last Fiscal Year". All grants were made at fair market value. The awards vest as
to one-half of the grant per year over a two-year period. If a grantee leaves
the Corporation prior to vesting for "Good Reason" as defined in his or her
employment agreement or for "Constructive Termination" as defined in the
Corporation's Severance Program, all unvested NQSO's in this grant that are held
by such employee are forfeited.
As a result of the merger with SOCO, several individuals, including six
executive officers and Mr. Payne, who were parties to employment agreements
incurred either a modification of duties or were required to relocate, thus
allowing them to terminate employment and receive payments pursuant to the
employment agreements. In order to retain the services of the executive
officers, other than Mr. Payne, the Corporation established the 1999 Stock
Retention Plan and four of these individuals were each granted 100,000 Phantom
Units (50,000 in the case of another individual) which convert into shares of
the Corporation's common stock two years from the date of grant. In addition, if
the price of the Corporation's common stock achieves a sustained significant
increase for a period of time prior to the end of the two year period, the
number of Phantom Units granted to such persons increase by 50 percent. If the
grantee voluntarily terminates employment prior to the conclusion of the vesting
period, the Phantom Units held by such persons will be forfeited. Accelerated
vesting of the Phantom Units may occur if a change of control of the Corporation
occurs subsequent to the SOCO merger or if a grantee is involuntary terminated
by the Corporation other than for Cause. In return for accepting the grant of
Phantom Units, these executive officers agreed to waive their right to terminate
employment and receive payments pursuant to their employment agreements.
Chief Executive Compensation
A review of the executive compensation discussed above also included a
review of Mr. Payne's compensation. As in the case of the executive officers, as
a result of the review of the peer group the Compensation Committee determined
that Mr. Payne's salary should be increased effective January 1, 2000 to
$615,000 per year and his maximum IC Plan payout percentage should be increased
to 140%. In addition to
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the NQSO's granted in July, Mr. Payne received another grant of 150,000 NQSO's
in December. This grant was made pursuant to the 2000 Stock Plan and is subject
to approval of the 2000 Stock Plan at the 2000 Annual Meeting of Stockholders.
This grant vests one-third per year over a three year period.
The Compensation Committee also recognized that the SOCO merger had
resulted in a modification of Mr. Payne's duties which would allow him to
terminate his employment and receive payments pursuant to his employment
agreement. In order to retain his services as Chief Executive Officer, the
Committee granted Mr. Payne the right to receive 345,324 shares of Restricted
Stock which vest as to one-third upon the first anniversary of the grant date
(December 9), one-third upon the second anniversary of the grant date and one-
third upon his 65th birthday (March 7, 2002). The shares are to be issued
pursuant to the 2000 Stock Plan if it is approved by the stockholders at the
2000 Annual Meeting. If the 2000 Stock Plan is not so approved, Mr. Payne would
be entitled to receive shares of treasury stock, stock purchased on the open
market or the cash equivalent as determined by the Committee in its discretion.
In certain circumstances the vesting of the shares may be accelerated and would
also be forfeited to the extent not otherwise vested if Mr. Payne voluntarily
terminates his employment. In return for this grant of Restricted Stock, Mr.
Payne agreed to terminate his employment agreement and to forego any other cash
severance payments under any Corporation severance program. If the vesting of
these shares or any cash payment would be subject to the excise tax imposed by
Section 4999 of the Internal Revenue Code (the "golden parachute" payment
provision), Mr. Payne will be paid such additional amounts of cash as necessary
to put him in the same economic position he would have been in had the vesting
or payment of the grant not been subject to such excise tax. The Board of
Directors concurred in the employment agreement modification and the Restricted
Stock grant.
Section 162(m) of the Internal Revenue Code of 1986, as amended
The Committee continues to review implications of the $1 million pay cap
rules set forth in Section 162(m) of the Internal Revenue Code of 1986, as
amended, and takes this into account when establishing and reviewing
compensation policies.
COMPENSATION AND BENEFITS COMMITTEE
William E. Greehey, Chairman
Reuben F. Richards
John A. Hill
James E. McCormick
Compensation Committee Interlocks and Insider Participation
No member of the Compensation and Benefits Committee was an officer or
employee of the Corporation in 1997, 1998 or 1999.
The following table summarizes certain information regarding compensation
paid or accrued by the Corporation during each of the last three fiscal years to
the Chief Executive Officer and each of the Corporation's four other most highly
compensated executive officers (the "named executives"): The table also
identifies the principal capacity in which each of the named executives served
at the Corporation at the end of fiscal year 1999.
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SUMMARY COMPENSATION TABLE
LONG TERM
COMPENSATION
------------ PAYOUTS
SECURITIES ---------
UNDERLYING LTIP ALL OTHER
NAME AND OPTIONS/SARS PAYOUT COMPENSATION
PRINCIPAL POSITION YEAR SALARY $ BONUS $(1) # SHARES(2) $(3) $(4)
- ------------------ ---- -------- ---------- ------------ --------- ------------
James L. Payne.............. 1999 515,000 515,000 280,000 2,193,855 25,132
Chief Executive Officer 1998 515,000 231,750 310,000 28,767
1997 515,000 562,464 60,000 30,500
Hugh L. Boyt................ 1999 275,000 233,750 50,000 688,156 13,155
President -- International 1998 245,000 90,956 125,000 13,447
1997 230,000 171,271 20,000 13,400
William G. Hargett(5)....... 1999 233,336 350,000 593,250 -- 110,685
President -- North America
Janet F. Clark.............. 1999 237,500 187,500 40,000 596,164 11,479
Executive Vice
President -- 1998 225,000 75,938 110,000 11,747
Corporate Development 1997 206,250 138,558 135,000 7,159
and Administration
Duane C. Radtke............. 1999 230,000 172,500 40,000 463,023 10,953
Executive Vice
President -- 1998 199,250 63,885 115,000 10,935
Production 1997 187,000 122,541 20,000 10,640
- ---------------
(1) The bonus amounts shown for 1999 and 1998 were payable in cash, and in 1997,
although determined on a cash basis, were actually paid in shares of common
stock pursuant to the Stock Plans. For 1997, Messrs. Payne, Boyt, Ms. Clark
and Mr. Radtke received 9,798, 3,282, 2,414 and 2,135 shares of Bonus Stock,
and 44,091, 9,846, 10,862 and 9,606 shares of Restricted Stock,
respectively.
(2) As a result of the spin-off of Monterey Resources, Inc. by the Corporation
in July 1997, all outstanding NQSO's were adjusted to reflect the effect of
the transaction on the value of the Corporation's common stock. The
anti-dilution formula follows the Internal Revenue Service approved
guidelines for adjusting Qualified Incentive Stock Options and took into
account the average sales prices for the Corporation's common stock for a
period of time before and after the spin-off. As a result of the adjustment,
the number of options outstanding increased by a factor of 1.7045 and the
strike price was reduced accordingly at that time. The Corporation will
receive the same overall consideration for the underlying securities upon
exercise of the option. The option shown as granted in 1997 to Messrs.
Payne, Boyt and Radtke were granted following the spin-off and no adjustment
was made to these options. Ms. Clark received two option grants in 1997. The
first grant of 100,000 options was made prior to the spin-off and was
increased to 170,450 options as a result of the adjustment. The second grant
of 35,000 options was made following the spin-off and, therefore, no
adjustment was made to the options.
The option grant in 1999 for Mr. Hargett includes 50,000 NQSO's issued
pursuant to the Stock Plan. In accordance with the terms of the Agreement
of Merger with SOCO, Mr. Hargett received 543,250 NQSO's or Incentive Stock
Options upon the cancellation of SOCO options held at the time of the
merger.
(3) Amounts reflect the accelerated payout of Phantom Units as a result of the
merger with SOCO.
(4) Amounts shown for Messrs. Payne and Boyt, Ms. Clark and Mr. Radtke reflect
matches made by the Corporation for employee contributions to the Santa Fe
Snyder Corporation Savings Investment Plan, as well as, the performance
match. (See "-- Benefit Plans -- Savings Plan" for a description of the
Savings Investment Plan and the performance match). The performance match is
contributed in the year following the performance and, therefore, total
amounts shown for 1997, 1998 and 1999 include the match made for 1996, 1997
and 1998 results, respectively. The Corporation made a performance match in
January 2000 for 1999 results for Messrs. Payne and Boyt, Ms. Clark and Mr.
Radtke in the amount of
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$3,200 for each individual. In addition, amounts shown also include the
match made by the Corporation relating to deferrals under the Deferred
Compensation Plan. (See "-- Benefit Plans -- Savings Plan" for a description
of the Deferred Compensation Plan). These amounts are also subject to the
performance match outlined in the Savings Investment Plan. In January 2000,
the Corporation allocated to the accounts maintained by Messrs. Payne and
Boyt, Ms. Clark and Mr. Radtke $7,100, $2,299, $1,549 and $1,399,
respectively, as a performance match.
Amounts shown for Mr. Hargett reflect taxes reimbursed as a result of
relocation to the Corporation's offices in Houston, Texas.
(5) Mr. Hargett was first employed by the Corporation on May 5, 1999 following
the merger with SOCO.
The table below sets forth the number of stock options granted at fair market
value to each of the named executives during the fiscal year 1999. In
satisfaction of applicable SEC regulations, the table further sets forth the
potential realizable value of stock options in the year 2009 (the expiration
date of the stock options) at arbitrarily assumed annualized rates of stock
price appreciation of 5% and 10% over the full ten-year term of the stock
options. As the table indicates, the annualized stock price appreciation of 5%
and 10% will result in stock prices in the year 2009 of approximately $12.83 and
$20.43, respectively. No gain to the named executives is possible without an
increase in stock price, which would benefit all stockholders proportionately.
Actual gains, if any, on stock option exercises and Common Stock holdings are
dependent on the future performance of the Common Stock and overall stock market
conditions. There can be no assurance that the potential realizable values shown
in this table will be achieved.
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
--------------------------- POTENTIAL REALIZABLE
NUMBER OF PERCENT OF VALUE AT ASSUMED
SECURITIES TOTAL RATES OF STOCK PRICE
UNDERLYING OPTIONS/SARS EXERCISE APPRECIATION FOR
OPTIONS/SARS GRANTED TO OR BASE OPTION TERM
GRANTED EMPLOYEES IN PRICE EXPIRATION ---------------------
NAME #S FISCAL YEAR ($/SH) DATE 5% ($) 10% ($)
- ---- ------------ ------------ -------- ---------- -------- ----------
James L. Payne............ 150,000 8.26% 6.875 12/09/09 648,555 1,643,580
130,000 7.16% 7.875 6/30/09 643,812 1,631,617
Hugh L. Boyt.............. 50,000 2.75% 7.875 6/30/09 247,620 627,545
William G. Hargett........ 50,000 2.75% 7.875 6/30/09 247,620 627,545
Janet F. Clark............ 40,000 2.20% 7.875 6/30/09 198,096 502,036
Duane C. Radtke........... 40,000 2.20% 7.875 6/30/09 198,096 502,036
- ---------------
The NQSO's were granted at market on the date of the grant and as to the options
shown with an expiration date of June 30, 2009, vest one-half per year over a
two-year period. The grant to Mr. Payne with the expiration date of December 9,
2009 vests one-third per year over a three-year period. This grant is also
subject to approval of the 2000 Stock Plan by the stockholders at the 2000
Annual Meeting.
(1) Does not include options granted to former SOCO employees in replacement of
SOCO options which were cancelled upon the merger of SOCO into the
Corporation.
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The following table sets forth information concerning option exercises and
the fiscal year-end values of the unexercised stock options (and SARs), provided
on an aggregate basis, for each of the named executives.
AGGREGATED OPTION/SAR EXERCISES DURING 1999 AND
OPTION/SAR VALUES AT DECEMBER 31, 1999
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS/SARS
SHARES OPTIONS/SARS AT AT DECEMBER 31, 1999(1)
ACQUIRED VALUE DECEMBER 31, 1999 ($)
ON REALIZED --------------------------- ---------------------------
NAME EXERCISE ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- -------- -------- ----------- ------------- ----------- -------------
James L. Payne.............. -- -- 1,985,680 280,000 1,932,388 185,000
Hugh L. Boyt................ -- -- 648,248 50,000 661,061 6,250
William G. Hargett.......... -- -- 543,250 50,000 30,012 6,250
Janet F. Clark.............. -- -- 315,450 40,000 -- 5,000
Duane C. Radtke............. -- -- 291,815 40,000 273,869 5,000
- ---------------
(1) The closing price of common stock on December 31, 1999 was $8.00
The following table sets forth information regarding awards granted during
fiscal year 1999 to the named executives under the Corporation's incentive
plans.
LONG-TERM INCENTIVE PLANS AWARDS IN 1999
ESTIMATED FUTURE PAYOUT UNDER
NUMBER OF PERFORMANCE OR NON-STOCK PRICE-BASED PLANS
SHARES, UNITS OTHER PERIOD -----------------------------
OR OTHER UNTIL MATURATION THRESHOLD TARGET MAXIMUM
NAME RIGHTS # OR PAYOUT # # #
- ---- ------------- ---------------- --------- ------- -------
James L. Payne................... 345,324 12/9/99 - 3/7/02 -- 345,324 --
Hugh L. Boyt..................... 100,000 9/2/99 - 9/2/01 -- 100,000 150,000
William G. Hargett............... -- -- -- -- --
Janet F. Clark................... 100,000 9/2/99 - 9/2/01 -- 100,000 150,000
Duane C. Radtke.................. 100,000 9/2/99 - 9/2/01 -- 100,000 150,000
In September 1999, Mr. Boyt, Ms. Clark and Mr. Radtke received the number
of Phantom Units described above pursuant to the 1999 Retention Stock
Compensation Plan. The grant was expressly conditioned upon their agreement that
with respect to the Change in Control that occurred upon the merger of the
Corporation with SOCO and any subsequent Change in Control that occurs prior to
January 1, 2002, the terms "Good Reason" under their Employment Agreements with
the Corporation and "Constructive Termination" under the Corporation's Severance
Program, as it applied to them, were amended to mean (i) a reduction in base
salary, without written consent, prior to January 1, 2002 or (ii) a termination
of employment by the Corporation for any reason other than "Cause" as defined in
their Employment Agreements. The Phantom Units become 100% vested and payable in
cash, shares of common stock from treasury shares only, or any combination
thereof at the discretion of the Compensation and Benefits Committee on the
earlier of (i) September 2, 2001 and (ii) the effective date of a Change in
Control. The amount of Units shown as the maximum number will become 100% vested
and payable (I) if the average Fair Market Value per share of common stock for
any 20 consecutive trading days during the 90 day period ending on (X) September
2, 2001 is equal to or greater than 150% of the Fair Market Value of the Common
Stock on May 5, 1999 (the "Target Stock Price") or (Y) September 2, 2002 is
equal to or greater than 175% of the Target Stock Price; or (iii) upon the
effective date of a Change in Control that occurs prior to September 2, 2002 if
the Target Stock Price has been met or exceeded on such effective date. If the
2000 Stock Plan is approved by the stockholders at the 2000 Annual Meeting
shares of common stock earned pursuant to this grant will be supplied from the
2000 Stock Plan.
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In December 1999, Mr. Payne was granted the right to receive 345,324 shares
of Restricted Stock in return for his agreement that (i) his Employment
Agreement was terminated in full effective with the date of grant and (ii) he
would not be entitled to any cash severance payments under any Corporation
severance program. The shares will become vested one third as of December 9,
2000, an additional one third as of December 9, 2001 and the final one third on
March 7, 2002, his 65th birthday. In addition, the shares will become 100%
vested upon the first to occur of the following; (a) the Corporation ceases to
be an independent publicly traded company, (b) the termination of his employment
due to death or disability (as defined in the grant agreement) and (c) the Board
of Directors removing him as the Chief Executive Officer of the Corporation
other than for Cause (as defined in the agreement). Except to the extent vesting
has occurred, pursuant to the above, the shares will be forfeited upon his
termination of employment for any reason other than as provided above. This
grant is subject to the terms of the 2000 Stock Plan as approved by the
stockholders. If the Plan is not approved by the stockholders, Mr. Payne has the
right to receive in lieu of the Restricted Stock an equal amount of common stock
having the same vesting terms with such stock being acquired on the open market,
treasury shares, cash of equivalent value or any combination thereof, as
determined by the Compensation and Benefits Committee in its discretion.
CHANGE IN CONTROL
The Stock Plans and the IC Plan contain "Change in Control" provisions. A
Change in Control is generally defined to occur if (a) any "person" becomes the
beneficial owner of securities representing 25% or more of the voting power of
the Corporation's outstanding securities; or (b) during any period of two
consecutive years, individuals who at the beginning of such period constitute
the Board of Directors cease to constitute at least a majority of the Board; or
(c) the Corporation's stockholders approve a merger or consolidation of the
Corporation with another corporation and the voting securities of the
Corporation outstanding immediately prior thereto do not represent 65% (amended
in December 1999 to 60%) of the combined voting power of the voting securities
outstanding immediately thereafter; or (d) the Corporation's stockholders
approve a plan of complete liquidation or an agreement for the sale or
disposition by the Corporation of all or substantially all of its assets. The
merger with SOCO resulted in a Change in Control. Therefore, at the time of the
merger all stock options granted under the Stock Plans became exercisable, all
restrictions on Restricted Stock lapsed, all goals associated with Phantom Units
awards were deemed met at the maximum level and such awards became payable in
cash and each participant in the IC Plan who remains employed at year-end will
be entitled to the maximum bonus that would have been payable if all performance
goals had been met in full.
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PERFORMANCE GRAPH
The following performance graph compares the performance of the common
stock to the S&P 500 Index and to an index composed of independent oil and gas
companies which the Corporation believes have an asset base and operations which
are comparable to those of the Corporation.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN(1)
AMONG SANTA FE SNYDER CORP., THE S&P INDEX
AND A PEER GROUP(2)
[PERFORMANCE GRAPH]
- ---------------
(1) $100 invested on December 31, 1994 in stock or index -- including
reinvestment of dividends. Fiscal year ending December 31.
(2) This group of companies, which includes the Corporation, also currently
includes Anadarko Petroleum Corp., Apache Corp., Barrett Resources Corp.,
Burlington Resources, Cabot Oil & Gas, Cross Timbers Oil Co., Devon Energy,
Enron Oil & Gas, Mitchell Energy & Development, Noble Affiliates, Inc.,
Ocean Energy (reflects value of United Meridian Corporation through date of
merger with Ocean Energy on March 27, 1998), Pioneer Natural Resources, Pogo
Producing Company, Vastar Resources, Inc., and Vintage Petroleum. Due to
activities such as reorganizations and mergers, additions and deletions are
made to the group from time to time.
BENEFIT PLANS
The Corporation maintains a 401(k) savings plan and a retirement income
plan. In addition, the Corporation has entered into employment agreements with
certain officers and key employees and maintains a severance program for all
full-time salaried employees. These plans and agreements are briefly described
below.
Savings Plan. The Corporation has adopted the Santa Fe Snyder Corporation
Savings Investment Plan. The Savings Investment Plan offers eligible employees
an opportunity to make long-term investments on a regular basis through salary
contributions, which are supplemented by matching employer contributions.
Substantially all salaried employees are eligible to participate on the first
day of the month after their date of hire. The Corporation will match an
employee's contribution up to 4% of such employee's compensation.
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In addition to the employer match described above, at the end of each
fiscal year, the Company's performance is evaluated using the same performance
measures used in the IC Plan. If the performance meets or exceeds the goals for
that year, participants will receive up to another fifty cents on each regular
matching dollar contributed by the Corporation. The regular employer matching
contributions as well as the performance match are made in common stock. Due to
the merger with SOCO all goals were deemed met at the maximum level and a full
performance match was made.
The Savings Investment Plan is intended to qualify as a Section 401(k) cash
or deferred compensation arrangement whereby an employee's contributions and the
employer's matching contributions are not subject to federal income taxes at the
time of the contribution to the Savings Investment Plan, and the Savings
Investment Plan is subject to the restrictions imposed by the Code. A variety of
investment alternatives are offered, including a fund which is invested in
Corporation common stock.
The Corporation also maintains a Deferred Compensation Plan whereby
employees earning in excess of $100,000 per year are allowed to defer all or a
portion of their salary until any future year or retirement. These amounts are
not matched by the Corporation. Employees earning in excess of $160,000 per year
may also defer up to 4% of such excess and the amount will be matched by the
Corporation. The amount contributed is also subject to the performance match
described above in the Savings Investment Plan.
Retirement Plans. The Corporation maintains the Santa Fe Snyder Corporation
Retirement Income Plan, a qualified defined benefit plan for substantially all
salaried employees, and the Santa Fe Snyder Corporation Supplemental Retirement
Plan, which is a non-qualified plan. The Supplemental Plan will pay benefits to
Retirement Plan participants where the Retirement Plan formula produces a
benefit to members in excess of limits imposed by ERISA and applicable
government regulations. It also includes amounts deferred under the Deferred
Compensation Plan as pensionable compensation. Benefits which have accrued to
the Corporations' participants under both the Retirement Income Plan and
Supplemental Plan are shown below for selected compensation levels and years of
service. As of December 31, 1999, Messrs. Payne, Boyt, Hargett, Ms. Clark, and
Mr. Radtke were credited with 17.8, 16.2, 0.7, 3.0 and 7.7 years of service
under the plans, respectively.
PENSION PLAN TABLE
YEARS OF SERVICE
----------------------------------------------------
AVERAGE YEARLY COMPENSATION 15 20 25 30 35
- --------------------------- -------- -------- -------- -------- --------
$250,000................................ $ 45,000 $ 60,000 $ 74,000 $112,000 $130,000
$350,000................................ $ 63,000 $ 84,000 $105,000 $158,000 $184,000
$450,000................................ $ 82,000 $109,000 $136,000 $205,000 $239,000
$550,000................................ $100,000 $134,000 $167,000 $251,000 $293,000
$650,000................................ $119,000 $159,000 $198,000 $298,000 $347,000
$750,000................................ $138,000 $184,000 $229,000 $344,000 $401,000
$850,000................................ $156,000 $208,000 $260,000 $391,000 $456,000
$950,000................................ $175,000 $233,000 $291,000 $437,000 $510,000
Benefit figures shown are amounts payable based on a straight life annuity
assuming retirement by the participant at age 62 in 1999 without a joint
survivorship provision. The benefits listed in the above table are not subject
to any deduction for social security or other offset amounts.
Benefits under the plans are computed based on a participant's total
compensation for the 60 consecutive months during the ten-year period
immediately prior to the termination of his covered employment, for which his
total compensation is the highest, divided by 60. If a participant has not
received compensation for 60 consecutive months during such ten-year period, his
compensation shall equal the total of his compensation for the longest period of
consecutive months during such ten-year period divided by the total number of
months of compensation so considered.
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Compensation recognized under the plans is the total basic compensation,
including any elective salary deferral amounts excluded from income pursuant to
Section 125 or 402 of the Code, plus overtime, shift differentials and bonuses
(whether cash or stock) paid pursuant to recurring bonus programs, including
compensation deferred under the Deferred Compensation Plan, but excluding any
special or extraordinary bonuses and any other items of compensation. A
participant's basic compensation is the regular rate of pay specified for his
position and does not include automobile allowances, imputed income under any
group term life insurance program, moving expense or other reimbursements,
fringe benefits, or similar items.
The pension compensation therefore differs from the compensation listed in
the Summary Compensation Table in several respects. Pension compensation is
based on average compensation as explained above. It does not include restricted
stock awards, stock options and other compensation in the "All Other
Compensation" column (i.e., employer matching contributions to the Savings
Investment Plan and the performance match). It also does not include special or
extraordinary bonuses.
The pension compensation of officers listed in the Summary Compensation
Table is listed below:
PENSION COMPENSATION
PENSION COMPENSATION
NAME (FINAL AVERAGE PAY)
- ---- --------------------
James L. Payne.............................................. $939,800
Hugh L. Boyt................................................ $397,000
William G. Hargett.......................................... $583,300
Janet F. Clark.............................................. $347,000
Duane C. Radtke............................................. $301,800
Employment Agreements. The Corporation has entered into employment
agreements (the "Employment Agreements") covering 31 employees of the
Corporation (including each of the individuals named in the Summary Compensation
Table). The Employment Agreements are intended to encourage such employees to
remain in the employ of the Corporation. The initial term of most Employment
Agreements is for three years; however, beginning on the second January 1 and
each succeeding January 1 after its effective date, the term is automatically
extended for an additional one-year period, unless by September 30 of the
preceding year the Corporation gives notice that the Employment Agreement will
not be so extended. The term of the Employment Agreement, however, is
automatically extended for a minimum period of 24 months following a Change in
Control. A Change in Control is defined substantially the same as in the Stock
Plans.
Twenty of these Agreements contain provisions stating that if, (a)
following a Change in Control (and during the term of the Employment Agreement),
the employee terminates his employment for "Good Reason" or the Corporation
terminates the employee other than for "Cause" (as those terms are defined in
the Employment Agreements), or (b) during the six months preceding a Change in
Control, the employee terminates his employment for Good Reason or the
Corporation terminates his employment other than for Cause, and such termination
is demonstrated to be connected with the Change in Control, the Corporation will
pay certain amounts to the employee based on the employee's salary and bonus
under the IC Plan; payout of non-vested restricted stock, phantom units, stock
options, if any, and continuation of certain insurance benefits on a tax neutral
basis for a period of up to 24 months. The payments and benefits are payable
pursuant to the Employment Agreement only to the extent they are not paid out
under the terms of any other plan of the Corporation. Seven of these agreements
provide for payments only if the individual incurs a reduction of base salary,
or is terminated by the Corporation. The payments and benefits provided by these
Employment Agreements may be further limited by certain restrictions commonly
known as "parachute payment" limitations as set forth in the Employment
Agreements. Without giving effect to such limitation, the estimated value of the
payments and benefits to which Mr. Boyt, Mr. Hargett, Ms. Clark and Mr. Radtke
and all executive officers as a group would be entitled if a qualifying
termination occurred on March 1, 2000 would be $1,095,821, $1,156,057, $736,761
and $773,738 and $5,825,570, respectively. The merger with SOCO resulted in a
Change in Control which activated the first trigger of 20 of these agreements.
These individuals have also been notified that their current agreements would
not be renewed following their expiration on December 31,
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2001. In conjunction with the grant of Performance Units described in Long-Term
Incentive Plan Awards, Mr. Boyt, Ms. Clark and Mr. Radtke agreed to modify their
agreements and will be eligible for benefits only if they are terminated by the
Corporation or incur a reduction in base salary at any time prior to January 1,
2002. In addition, Mr. Payne has agreed to terminate his agreement in return for
the grant of Restricted Stock discussed in Long-Term Incentive Plan Awards. If
Mr. Payne's Restricted Stock would vest in a manner that would cause the value
to exceed the "parachute payment" limits, he will be made "whole" on a net
after-tax basis for any excise tax incurred.
Severance Program. The Corporation has adopted a Severance Program for all
full-time salaried employees who are terminated by the Corporation or terminated
or constructively terminated by an acquiring Corporation, other than for Cause
(as defined in the Severance Program). However, following a Change in Control
(defined substantially the same as in the Stock Plans), an executive officer or
key employee who has entered into an Employment Agreement is not eligible to
receive duplicate benefits under the Employment Agreement and the Severance
Program. A participant in the severance programs is generally entitled to an
amount of up to 78 weeks' pay (52 weeks maximum after May 5, 2000) based upon a
participant's age, length of service and highest rate of base salary in effect
during the 24-month period preceding his termination, provided that the
aggregate of such payments does not exceed two times the participant's actual
salary for the 12-month period preceding the date of termination. In addition, a
participant is entitled to continuation of health and life insurance benefits
for up to a period of two years. The merger with SOCO on May 5, 1999 resulted in
a Change in Control.
APPROVAL OF THE SANTA FE SNYDER CORPORATION
INCENTIVE STOCK COMPENSATION PLAN 2000
The Board of Directors recommends the approval of the Santa Fe Snyder
Corporation Incentive Stock Compensation Plan (the "2000 Stock Plan") under
which a total of 5,000,000 shares of the Corporation's common stock will be made
available for grants. The Plan is intended to promote the interests of the
Corporation by encouraging officers, employees, directors and consultants of the
Corporation and its affiliates to acquire or increase their equity interest in
the Corporation and to provide a means whereby they may develop a sense of
proprietorship and personal involvement in the development and financial success
of the Corporation and to encourage them to remain with and devote their best
efforts to the business of the Corporation and its stockholders. The Plan is
also contemplated to enhance the ability of the Corporation and its Affiliates
to attract and retain the service of individuals who are essential for the
growth and profitability of the Corporation.
The Board of Directors adopted the 2000 Stock Plan on December 9, 1999,
subject to approval by the stockholders. The 2000 Stock Plan is intended to
replace the 1990 Incentive Stock Compensation Plan which pursuant to its terms
does not allow for grants to be made after December 31, 1999. Upon its approval,
the 2000 Stock Plan will be used for 2000 and future awards to Directors,
executive officers, key employees or consultants. The Corporation continues to
maintain the 1995 Incentive Stock Compensation Plan for non-executive employees.
If the 2000 Stock Plan is approved, the grants of 450,000 Phantom Units (and
225,000 Contingent Phantom Units) made pursuant to the 1999 Stock Retention Plan
would be replaced by grants under the 2000 Stock Plan. In addition, the grant of
150,000 Non-Qualified Stock Options to Mr. Payne made on December 9, 1999 would
be effective and the annual retainer of non-employee directors would be
increased from 2,000 shares of Restricted Stock (1,000 from the 1990 Plan and
1,000 from the 1995 Plan) to 4,000 shares of Restricted Stock effective for the
1999-2000 fiscal year. Finally, the shares of Restricted Stock to Mr. Payne made
in December 1999, in return for the termination of his employment agreement and
his forfeiture of any cash severance payments under any corporate severance
program, would be satisfied by a grant under the 2000 Stock Plan.
The full text of the 2000 Stock Plan is presented as an Appendix to this
proxy statement. The following is a summary of the material provisions of the
Plan and is qualified in its entirety by the full text of the Plan itself.
Capitalized items shall have the same meaning as defined in the Plan.
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Administration. The Plan is administered by the Compensation and Benefits
Committee of the Board of Directors. The Committee, in its sole discretion, may
delegate any or all of its powers and duties under the Plan to the Chief
Executive Officer, subject to such limitations on such delegated powers and
duties as the Committee may impose.
Eligibility for participation. Any employee, director or consultant is
eligible for participation.
Amendment and Termination of the Plan. The Board or the Committee may
amend, alter, suspend, discontinue, or terminate the Plan without the consent of
any stockholders, Participant, other holder or beneficiary of an Award or other
person. However, the Board or the Committee may not, without stockholder
approval, make any amendment which would (i) materially increase the number of
shares authorized under the Plan (except certain adjustments appropriate in
order to prevent dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan), or (ii) materially increase the
Persons eligible to receive Awards under the Plan. No Award may be granted under
the Plan after December 9, 2009.
Available Shares. The Committee may grant Awards until December 9, 2009
unless the Plan is terminated prior to that date. The number of shares, with
respect to which Awards may be granted, is 5,000,000, subject to adjustment as
provided in the Plan. No more than 2,000,000 of such 5,000,000 shares may be
issued with respect to Restricted Stock, Performance Awards, Phantom Stock and
other Stock-Based Awards. If any Award is exercised, paid, forfeited, terminated
or canceled without the delivery of shares, then the shares covered by such
Award may again be subject to Awards.
Limitation on Awards. No Participant may receive more than 1,000,000 Stock
Options, 500,000 shares of Restricted Stock, Phantom Shares or other Stock-Based
Awards denominated in shares, or Performance Awards or other Stock-Based Awards
denominated in dollars worth more than $1,000,000 in any calendar year.
Stock Options. The Committee may grant an Award in the form of incentive
stock options and non-qualified stock options. Any stock option intended to
qualify as an incentive stock option will satisfy the applicable requirements of
Section 422 of the Internal Revenue Code. The purchase price per share under an
Option will be determined by the Committee at the time of grant, but will not be
less than the Fair Market Value per share on the grant date. In addition, the
Committee may not reduce the exercise price of an option, except certain
adjustments appropriate in order to prevent dilution or enlargement of benefits,
without stockholder approval.
Restricted Stock. The Committee will determine the duration of the
Restricted Period during which, and the conditions, including Performance
Objectives, if any, under which, if not achieved, the Restricted Stock may be
forfeited and other terms and conditions of such Awards. Unless subject to the
achievement of Performance Objectives or a special determination is made by the
Committee as to a shorter Restricted Period, the Restricted Period will not be
less than three years.
Performance Awards. The Committee will have the authority to determine the
Participants who may receive a Performance Award. These Awards will be
denominated as a cash amount (e.g. $100 per award unit) at the time of grant and
confer on the Participant the right to receive payment of such Award, in whole
or in part, upon the achievement of such Performance Objectives during such
performance periods as the Committee shall establish.
Bonus Shares. The Committee will have the authority, in its discretion, to
grant Bonus Shares. Each Bonus Share will constitute a transfer of an
unrestricted share, without other payment therefor, as additional compensation
for services to the Corporation. Bonus Shares will be in lieu of a cash bonus
that otherwise would be granted to the Participant.
Phantom Shares. The Committee will have authority to grant Phantom Shares
which constitute an agreement to issue or transfer a specified number of Shares
or pay an amount of cash equal to a specified number of Shares or combination
thereof. The issuance of Shares or payment of cash is subject to the fulfillment
during the Restricted Period of such conditions, including Performance
Objectives, if any, as the Committee may specify.
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Cash Awards. The Committee will have the authority to determine the
Participants to whom Cash Awards may be granted, the amount, and the terms or
conditions, if any, as additional compensation for the Participant's services to
the Corporation or its Affiliates. A Cash Award may be granted (simultaneously
or subsequently) separately or in tandem with another Award and may entitle a
Participant to receive a specified amount of cash upon such other Award becoming
taxable to the Participant.
Other Stock-Based Awards. The Committee may grant an Other Stock-Based
Award which will consist of a right which is an Award denominated or payable in,
valued in whole or in part by reference to, or otherwise based on or related to,
Shares as is deemed consistent with the purposes of the 2000 Stock Plan. The
Committee will determine the terms and conditions of such Awards, including the
Performance Objectives, if any, applicable to such Awards.
Automatic Director Awards. Each Director who is elected or appointed to the
Board for the first time after the effective date of the 2000 Stock Plan will
automatically receive, on the date of such election, a non-qualified option for
10,000 shares of common stock. On the date of each Annual Meeting of
Stockholders each director who is serving on that day, including a director who
was elected for the first time at such meeting, will receive a non-qualified
option for 5,000 shares of common stock. Finally, each director will receive on
the date of each Annual Meeting of Stockholders a Restricted Stock Award for
4,000 shares of common stock. In addition, each director who is serving on the
date of the Annual Meeting of Stockholders in 2000 will receive a grant of 2,000
Bonus Shares on that date, thus allowing such director to receive a total of
4,000 shares for fiscal year 1999-2000 when combined with the 2,000 shares
previously received.
Change in Control. If a "change in control" (as defined in the Plan)
occurs, and except to the extent an Award Agreement expressly provides to the
contrary, all outstanding Awards automatically will become fully vested
immediately prior to such change in control (or such earlier time as set by the
Committee), all restrictions, if any, with respect to such Awards will lapse,
and all performance criteria, if any, with respect to such Awards will be deemed
met at the target level. All outstanding options shall terminate if not assumed
or substituted by the surviving Corporation unless the Corporation is the
survivor.
In general, the 2000 Stock Plan defines a "change in control" as occurring
if (a) any "person" becomes the beneficial owner of securities representing 25%
or more of the combined voting power of the Corporation's then outstanding
securities, or (b) during any period of two consecutive years individuals who at
the beginning of such period, constitute the Board cease to constitute at least
a majority thereof, or (c) the stockholders of the Corporation approve a merger
or consolidation with another corporation which would result in the voting
securities of the Corporation outstanding immediately prior thereto continuing
to represent more than 60% of the combined voting powers of the voting
securities of the Corporation outstanding immediately after such merger or
consolidation; or (d) the stockholders of the Corporation approve a plan of
complete liquidation of the Corporation or an agreement for the sale or
disposition by the Corporation of all or substantially all of the Corporation's
assets.
The 2000 Stock Plan will be approved if the votes cast in favor of such
approval represent a majority of the votes cast on the proposal.
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INDEPENDENT PUBLIC ACCOUNTANTS
PricewaterhouseCoopers LLP served as the independent public accountants for
the Corporation in 1999 and has been appointed the Corporation's independent
public accountants for 2000. Representatives of PricewaterhouseCoopers LLP will
be present at the annual meeting with the opportunity to make a statement if
they desire to do so and will be available to respond to appropriate questions.
The stockholders are requested to ratify and approve the appointment of
PricewaterhouseCoopers LLP as independent public accountants for 2000.
The appointment of PricewaterhouseCoopers LLP will be approved if the votes
cast in favor of such approval exceed the votes cast opposing such approval.
OTHER BUSINESS
The Board knows of no business that will come before the meeting except
that indicated above. However, if any other matters are properly brought before
the meeting, it is intended that the persons acting under the proxy will vote
thereunder in accordance with their best judgment.
COST OF PROXY SOLICITATION
The cost of preparing, assembling and mailing this proxy material will be
borne by the Corporation. In addition to solicitation by mail, solicitations may
be made by regular employees of the Corporation or by paid solicitors in person
or by telephone or telegraph. Arrangements may be made with brokerage houses,
custodians, nominees and fiduciaries to send proxy material to their principals
and the Corporation will reimburse them for their expense in so doing.
STOCKHOLDER PROPOSALS
In accordance with the bylaws of the Corporation and the proxy rules of the
Securities and Exchange Commission, in order for proposals by stockholders to be
brought before the 2001 annual meeting and included in the proxy material
solicited by the Corporation for the 2001 annual meeting such proposals must be
received at the Corporation's executive offices no later than November 23, 2000;
provided, however, that if the date of the 2001 annual meeting is scheduled to
be held prior to April 16, 2001 or later than June 16, 2001, the proposals are
then required to be received by the Corporation within a reasonable time before
its solicitation is made if the proposals are to be included in such proxy
material, and no later than the close of business on the tenth day following the
day on which the proxy materials for the 2001 annual meeting are first mailed or
public disclosure is made if the proposals are to be brought before the 2001
annual meeting.
By order of the Board of Directors.
MARK A. OLDER
Corporate Secretary
March 22, 2000
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APPENDIX
SANTA FE SNYDER CORPORATION
INCENTIVE STOCK COMPENSATION PLAN 2000
SECTION 1. Purpose of the Plan.
The Santa Fe Snyder Corporation Incentive Stock Compensation Plan 2000 (the
"Plan") is intended to promote the interests of Santa Fe Snyder Corporation, a
Delaware corporation (the "Company"), by encouraging officers, employees,
directors and consultants of the Company and its Affiliates to acquire or
increase their equity interest in the Company and to provide a means whereby
they may develop a sense of proprietorship and personal involvement in the
development and financial success of the Company, and to encourage them to
remain with and devote their best efforts to the business of the Company thereby
advancing the interests of the Company and its stockholders. The Plan is also
contemplated to enhance the ability of the Company and its Affiliates to attract
and retain the services of individuals who are essential for the growth and
profitability of the Company.
SECTION 2. Definitions.
As used in the Plan, the following terms shall have the meanings set forth
below:
"Affiliate" shall mean (i) any "parent corporation" of the Company (as
defined in Section 424(e) of the Code) and any "subsidiary corporation" of any
such corporation (as defined in Section 424(f) of the Code), (ii) any entity
that, directly or through one or more intermediaries, is controlled by the
Company, and (iii) any entity in which the Company has a significant equity
interest, as determined by the Committee.
"Award" shall mean any Option, Restricted Stock, Performance Award, Phantom
Shares, Bonus Shares, Other Stock-Based Award or Cash Award.
"Award Agreement" shall mean any agreement, contract, or other instrument
or document (written or electronic) evidencing any Award, which may, but need
not, be executed or acknowledged by a Participant.
"Board" shall mean the Board of Directors of the Company.
"Bonus Shares" shall mean an award of Shares granted pursuant to Section
6(d) of the Plan.
"Cash Award" shall mean an award payable in cash granted pursuant to
Section 6(f) of the Plan.
"Change in Control" shall mean the occurrence of any one of the following
events:
(a) any "person" (as such term is used in Section 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act")),
other than a trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any affiliate, or any corporation
owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the
Company, is or becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly of securities of the
Company representing 25% or more of the combined voting power of the
Company's then outstanding securities;
(b) during any period of two consecutive years (not including any
period prior to the effective date of the Plan), individuals who at the
beginning of such period constitute the Board, and any new director (other
than a director designated by a person who has entered into an agreement
with the Company to effect a transaction described in clause (a), (c) or
(d) of this Change in Control definition and excluding any individual whose
initial assumption of office occurs as a result of either (i) an actual or
threatened election contest (as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act), or an actual or
threatened solicitation of proxies or consents by or on behalf of a Person
other than the Board) whose election by the Board or nomination for
election by the Company's stockholders was approved by a vote of at least
two-thirds of the directors then still in office who either were directors
at the beginning of the period or whose election or nomination for election
was previously
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so approved (hereinafter referred to as "Continuing Directors"), cease for
any reason to constitute at least a majority thereof;
(c) the stockholders of the Company approve a merger or consolidation
of the Company with any other corporation, other than a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than 60% of the combined voting power of the voting
securities of the Company (or such surviving entity) outstanding
immediately after such merger or consolidation; or
(d) the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by
the Company of all or substantially all of the Company's assets. For
purposes of this clause (d), the term "the sale or disposition by the
Company of all or substantially all of the Company's assets" shall mean a
sale or other disposition transaction or series of related transactions
involving assets of the Company or of any direct or indirect subsidiary of
the Company (including the stock of any direct or indirect subsidiary of
the Company) in which the value of the assets or stock being sold or
otherwise disposed of (as measured by the purchase price being paid
therefor or by such other method as the Board determines is appropriate in
a case where there is no readily ascertainable purchase price) constitutes
more than two-thirds of the "fair market value of the Company" (as
hereinafter defined). For purposes of the preceding sentence, the "fair
market value of the Company" shall be the aggregate market value of the
Company's outstanding common stock (on a fully diluted basis) plus the
aggregate market value of the Company's other outstanding equity
securities. The aggregate market value of the Company's common stock shall
be determined by multiplying the number of shares of the Company's common
stock (on a fully diluted basis) outstanding on the date of the execution
and delivery of a definitive agreement with respect to the transaction or
series of related transactions (the "Transaction Date") by the average
closing price for the Company's common stock for the ten trading days
immediately preceding the Transaction Date. The aggregate market value of
any other equity securities of the Company shall be determined in a manner
similar to that prescribed in the immediately preceding sentence for
determining the aggregate market value of the Company's common stock or by
such other method as the Board shall determine is appropriate. However,
notwithstanding anything in this clause (d) to the contrary, a spinoff or
distribution of the stock of a subsidiary of the Company to those persons
who were stockholders of the Company immediately prior to such spinoff or
distribution in substantially the same proportion as their ownership of
Company stock immediately prior to such spinoff or distribution shall not
constitute a "sale or disposition by the Company of all or substantially
all of the Company's assets".
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time, and the rules and regulations thereunder.
"Committee" shall mean the Compensation and Benefits Committee of the
Board.
"Consultant" shall mean any individual, other than a Director or an
Employee, who renders consulting services to the Company or an Affiliate for a
fee.
"Director" shall mean a "non-employee director" of the Company, as defined
in Rule 16b-3.
"Employee" shall mean any employee of the Company or an Affiliate.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"Fair Market Value" shall mean, with respect to Shares, the average of the
high and low sales price of a Share on the applicable date (or if there is no
trading in the Shares on such date, on the next preceding date on which there
was trading) as reported in The Wall Street Journal (or other reporting service
approved by the Committee). In the event the Shares are not publicly traded at
the time a determination of its fair market value is required to be made
hereunder, the determination of fair market value shall be made in good faith by
the Committee.
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"Option" shall mean an option granted under Section 6(a) of the Plan.
Options granted under the Plan may constitute "incentive stock options" for
purposes of Section 422 of the Code or nonqualified stock options.
"Other Stock-Based Award" shall mean an award granted pursuant to Section
6(g) of the Plan that is not otherwise specifically provided for, the value of
which is based in whole or in part upon the value of a Share.
"Participant" shall mean any Director, Employee or Consultant granted an
Award under the Plan.
"Performance Award" shall mean any right granted under Section 6(c) of the
Plan.
"Performance Objectives" means the objectives, if any, established by the
Committee that are to be achieved with respect to an Award granted under this
Plan, which may be described in terms of Company-wide objectives, in terms of
objectives that are related to performance of a division, subsidiary, department
or function within the Company or an Affiliate in which the Participant
receiving the Award is employed or in individual or other terms, and which will
relate to the period of time determined by the Committee. The Performance
Objectives intended to qualify under Section 162(m) of the Code shall be with
respect to one or more of the following: earnings per share; earnings before
interest, taxes, depreciation and amortization expenses ("EBITDA"); earnings
before interest and taxes ("EBIT"); EBITDA, EBIT or earnings before taxes and
unusual or nonrecurring items as measured either against the annual budget or as
a ratio to revenue; market share; sales; costs; return on equity; operating cash
flow; production volumes compared to plan or prior years; reserves added;
discretionary cash flow; return on net capital employed; and stock price
performance. Which objectives to use with respect to an Award, the weighting of
the objectives if more than one is used, and whether the objective is to be
measured against a Company-established budget or target, an index or a peer
group of companies, shall be determined by the Committee in its discretion at
the time of grant of the Award. A Performance Objective need not be based on an
increase or a positive result and may include, for example, maintaining the
status quo or limiting economic losses.
"Person" shall mean individual, corporation, partnership, association,
joint-stock company, trust, unincorporated organization, government or political
subdivision thereof or other entity.
"Phantom Shares" shall mean an Award of the right to receive Shares issued
at the end of a Restricted Period which is granted pursuant to Section 6(e) of
the Plan.
"Restricted Period" shall mean the period established by the Committee with
respect to an Award during which the Award either remains subject to forfeiture
or is not exercisable by the Participant.
"Restricted Stock" shall mean any Share, prior to the lapse of restrictions
thereon, granted under Sections 6(b) of the Plan.
"Rule 16b-3" shall mean Rule 16b-3 promulgated by the SEC under the
Exchange Act, or any successor rule or regulation thereto as in effect from time
to time.
"SEC" shall mean the Securities and Exchange Commission, or any successor
thereto.
"Shares" or "Common Shares" or "Common Stock" shall mean the common stock
of the Company, $0.01 par value, and such other securities or property as may
become the subject of Awards under the Plan.
SECTION 3. Administration.
The Plan shall be administered by the Committee. A majority of the
Committee shall constitute a quorum, and the acts of the members of the
Committee who are present at any meeting thereof at which a quorum is present,
or acts unanimously approved by the members of the Committee in writing, shall
be the acts of the Committee. Subject to the following, the Committee, in its
sole discretion, may delegate any or all of its powers and duties under the
Plan, including the power to grant Awards under the Plan, to the Chief Executive
Officer of the Company, subject to such limitations on such delegated powers and
duties as the Committee may impose. Upon any such delegation all references in
the Plan to the "Committee", other than in Section 8, shall be deemed to include
the Chief Executive Officer; provided, however, that such delegation shall not
limit the Chief Executive Officer's right to receive Awards under the Plan.
Notwithstanding the
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foregoing, the Chief Executive Officer may not grant Awards to, or take any
action with respect to any Award previously granted to, a person who is an
officer or a member of the Board. Subject to the terms of the Plan and
applicable law, and in addition to other express powers and authorizations
conferred on the Committee by the Plan, the Committee shall have full power and
authority to: (i) designate Participants; (ii) determine the type or types of
Awards to be granted to a Participant; (iii) determine the number of Shares to
be covered by, or with respect to which payments, rights, or other matters are
to be calculated in connection with, Awards; (iv) determine the terms and
conditions of any Award; (v) determine whether, to what extent, and under what
circumstances Awards may be settled or exercised in cash, Shares, other
securities, other Awards or other property, or canceled, forfeited, or suspended
and the method or methods by which Awards may be settled, exercised, canceled,
forfeited, or suspended; (vi) determine whether, to what extent, and under what
circumstances cash, Shares, other securities, other Awards, other property, and
other amounts payable with respect to an Award shall be deferred either
automatically or at the election of the holder thereof or of the Committee;
(vii) interpret and administer the Plan and any instrument or agreement relating
to an Award made under the Plan; (viii) establish, amend, suspend, or waive such
rules and regulations and appoint such agents as it shall deem appropriate for
the proper administration of the Plan; and (ix) make any other determination and
take any other action that the Committee deems necessary or desirable for the
administration of the Plan. Unless otherwise expressly provided in the Plan, all
designations, determinations, interpretations, and other decisions under or with
respect to the Plan or any Award shall be within the sole discretion of the
Committee, may be made at any time and shall be final, conclusive, and binding
upon all Persons, including the Company, any Affiliate, any Participant, any
holder or beneficiary of any Award, any stockholder and any Employee.
SECTION 4. Shares Available for Awards.
(a) Shares Available. Subject to adjustment as provided in Section 4(c),
the number of Shares with respect to which Awards may be granted under the Plan
shall be five million; provided, however, not more than two million of such five
million Shares may be issued with respect to Restricted Stock, Performance
Awards, Phantom Shares and Other Stock-Based Awards. If any Award is exercised,
paid, forfeited, terminated or canceled without the delivery of Shares, then the
Shares covered by such Award, to the extent of such payment, exercise,
forfeiture, termination or cancellation, shall again be Shares with respect to
which Awards may be granted.
(b) Sources of Shares Deliverable Under Awards. Any Shares delivered
pursuant to an Award may consist, in whole or in part, of authorized and
unissued Shares or of treasury Shares.
(c) Adjustments. In the event that the Committee determines that any
dividend or other distribution (whether in the form of cash, Shares, other
securities, or other property), recapitalization, stock split, reverse stock
split, reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, or exchange of Shares or other securities of the Company, issuance
of warrants or other rights to purchase Shares or other securities of the
Company, or other similar corporate transaction or event affects the Shares such
that an adjustment is determined by the Committee to be appropriate in order to
prevent dilution or enlargement of the benefits or potential benefits intended
to be made available under the Plan, then the Committee shall, in such manner as
it may deem equitable, adjust any or all of (i) the number and type of Shares
(or other securities or property) with respect to which Awards may be granted,
(ii) the number and type of Shares (or other securities or property) subject to
outstanding Awards, and (iii) the grant or exercise price with respect to any
Award or, if deemed appropriate, make provision for a cash payment to the holder
of an outstanding Award.
SECTION 5. Eligibility.
Any Employee, Director or Consultant shall be eligible to be designated a
Participant and receive an Award under the Plan. In addition, each Director
shall receive Awards automatically as provided in Section 7.
SECTION 6. Awards.
(a) Options. Subject to the provisions of the Plan, the Committee shall
have the authority to determine the Participants to whom Options shall be
granted, the number of Shares to be covered by each Option, the
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purchase price therefor and the conditions and limitations applicable to the
exercise of the Option, including the following terms and conditions and such
additional terms and conditions, as the Committee shall determine, that are not
inconsistent with the provisions of the Plan.
(i) Exercise Price. The purchase price per Share purchasable under an
Option shall be determined by the Committee at the time the Option is
granted, but shall not be less than the Fair Market Value per Share on such
grant date.
(ii) Time and Method of Exercise. The Committee shall determine the
time or times at which an Option may be exercised in whole or in part
(which may include the achievement of one or more Performance Objectives),
and the method or methods by which, and the form or forms (which may
include, without limitation, cash, check acceptable to the Company, Shares
already-owned for more than six months, outstanding Awards, Shares that
would otherwise be acquired upon exercise of the Option, a
"cashless-broker" exercise through procedures approved by the Company,
other securities or other property, loans, notes approved by the Committee,
or any combination thereof, having a Fair Market Value on the exercise date
equal to the relevant exercise price) in which payment of the exercise
price with respect thereto may be made or deemed to have been made.
(iii) Incentive Stock Options. The terms of any Option granted under
the Plan intended to be an incentive stock option shall comply in all
respects with the provisions of Section 422 of the Code, or any successor
provision, and any regulations promulgated thereunder. Incentive stock
options may be granted only to employees of the Company and its parent
corporation and subsidiary corporations, within the meaning of Section 424
of the Code. To the extent the aggregate Fair Market Value of the Shares
(determined as of the date of grant) of an Option to the extent exercisable
for the first time during any calendar year (under all plans of the Company
and its parent and subsidiary corporations) exceeds $100,000, such Option
Shares in excess of $100,000 shall be nonqualified stock options.
(iv) Limits. The maximum number of Options that may be granted to any
Participant during any calendar year shall not exceed 1.0 million Shares.
(b) Restricted Stock. Subject to the provisions of the Plan, the Committee
shall have the authority to determine the Participants to whom Restricted Stock
shall be granted, the number of Shares of Restricted Stock to be granted to each
such Participant, the duration of the Restricted Period during which, and the
conditions, including Performance Objectives, if any, under which if not
achieved, the Restricted Stock may be forfeited to the Company, and the other
terms and conditions of such Awards. Unless subject to the achievement of
Performance Objectives or a special determination is made by the Committee as to
a shorter Restricted Period, the Restricted Period shall not be less than three
years.
(i) Dividends. Dividends paid on Restricted Stock may be paid directly
to the Participant, may be subject to risk of forfeiture and/or transfer
restrictions during any period established by the Committee or sequestered
and held in a bookkeeping cash account (with or without interest) or
reinvested on an immediate or deferred basis in additional shares of Common
Stock, which credit or shares may be subject to the same restrictions as
the underlying Award or such other restrictions, all as determined by the
Committee in its discretion.
(ii) Registration. Any Restricted Stock may be evidenced in such
manner as the Committee shall deem appropriate, including, without
limitation, book-entry registration or issuance of a stock certificate or
certificates. In the event any stock certificate is issued in respect of
Restricted Stock granted under the Plan, such certificate shall be
registered in the name of the Participant and may bear an appropriate
legend referring to the terms, conditions, and restrictions applicable to
such Restricted Stock or such legend may be noted in the records of the
transfer agent.
(iii) Forfeiture and Restrictions Lapse. Except as otherwise
determined by the Committee or the terms of the Award that granted the
Restricted Stock, upon termination of a Participant's employment (as
determined under criteria established by the Committee) for any reason
during the applicable Restricted Period, all Restricted Stock shall be
forfeited by the Participant and reacquired by the Company. Unrestricted
Shares, evidenced in such manner as the Committee shall deem appropriate,
shall be issued to the holder of Restricted Stock promptly after the
applicable restrictions have lapsed or otherwise been satisfied.
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(iv) Transfer Restrictions. During the Restricted Period, Restricted
Stock will be subject to the limitations on transfer as provided in Section
6(i)(iii).
(v) Limits. The maximum number of Shares of Restricted Stock that may
be granted to any Participant during any calendar year shall not exceed
500,000 shares.
(c) Performance Awards. The Committee shall have the authority to determine
the Participants who shall receive a Performance Award, which shall be
denominated as a cash amount (e.g., $100 per award unit) at the time of grant
and confer on the Participant the right to receive payment of such Award, in
whole or in part, upon the achievement of such Performance Objectives during
such performance periods as the Committee shall establish with respect to the
Award.
(i) Terms and Conditions. Subject to the terms of the Plan and any
applicable Award Agreement, the Committee shall determine the Performance
Objectives to be achieved during any performance period, the length of any
performance period, the amount of any Performance Award and the amount of
any payment or transfer to be made pursuant to any Performance Award.
(ii) Payment of Performance Awards. Performance Awards, to the extent
earned, shall be paid (in cash and/or in Shares, in the sole discretion of
the Committee) in a lump sum following the close of the performance period.
(iii) Limits. The maximum value of Performance Awards that may be
granted to any Participant during any calendar year shall not exceed $1.0
million.
(d) Bonus Shares. The Committee shall have the authority, in its
discretion, to grant Bonus Shares to Participants. Each Bonus Share shall
constitute a transfer of an unrestricted Share to the Participant, without other
payment therefor, as additional compensation for the Participant's services to
the Company. Bonus Shares shall be in lieu of a cash bonus that otherwise would
be granted to the Participant.
(e) Phantom Shares. The Committee shall have the authority to grant Awards
of Phantom Shares to Participants upon such terms and conditions as the
Committee may determine.
(i) Terms and Conditions. Each Phantom Share Award shall constitute an
agreement by the Company to issue or transfer a specified number of Shares
or pay an amount of cash equal to a specified number of Shares, or a
combination thereof to the Participant in the future, subject to the
fulfillment during the Restricted Period of such conditions, including
Performance Objectives, if any, as the Committee may specify at the date of
grant. During the Restricted Period, the Participant shall not have any
right to transfer any rights under the subject Award, shall not have any
rights of ownership in the Phantom Shares and shall not have any right to
vote such shares.
(ii) Dividends. Any Phantom Share award may provide that amount equal
to any or all dividends or other distributions paid on Shares during the
Restricted Period be credited in a cash bookkeeping account (without
interest) or that equivalent additional Phantom Shares be awarded, which
account or shares may be subject to the same restrictions as the underlying
Award or such other restrictions as the Committee may determine.
(iii) Limits. The maximum number of Phantom Shares that may be granted
to any Participant during any calendar year shall not exceed 500,000.
(f) Cash Awards. The Committee shall have the authority to determine the
Participants to whom Cash Awards shall be granted, the amount, and the terms or
conditions, if any, as additional compensation for the Participant's services to
the Company or its Affiliates. A Cash Award may be granted (simultaneously or
subsequently) separately or in tandem with another Award and may entitle a
Participant to receive a specified amount of cash from the Company upon such
other Award becoming taxable to the Participant, which cash amount may be based
on a formula relating to the anticipated taxable income associated with such
other Award and the payment of the Cash Award.
(g) Other Stock-Based Awards. The Committee may grant to Participants an
Other Stock-Based Award, which shall consist of a right which is an Award
denominated or payable in, valued in whole or in part by reference to, or
otherwise based on or related to, Shares as is deemed by the Committee to be
consistent
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with the purposes of the Plan. Subject to the terms of the Plan, including the
Performance Objectives, if any, applicable to such Award, the Committee shall
determine the terms and conditions of any such Other Stock-Based Award. The
maximum number of Shares or the value for which Other Stock-Based Awards may be
granted to any Participant during any calendar year shall not exceed 500,000
shares, if the Award is in Shares, or $1.0 million, if the Award is denominated
in dollars.
(h) Replacement Awards. The Committee shall have the authority to grant an
Award to any Participant conditioned upon such Participant canceling his or her
rights with respect to a similar award granted to the Participant under another
plan of the Company, including, without limitation, the Company's 1999 Retention
Stock Compensation Plan.
(i) General.
(i) Awards May Be Granted Separately or Together. Awards may, in the
discretion of the Committee, be granted either alone or in addition to, in
tandem with, or in substitution for any other Award granted under the Plan
or any award granted under any other plan of the Company or any Affiliate.
Awards granted in addition to or in tandem with other Awards or awards
granted under any other plan of the Company or any Affiliate may be granted
either at the same time as or at a different time from the grant of such
other Awards or awards.
(ii) Forms of Payment by Company Under Awards. Subject to the terms of
the Plan and of any applicable Award Agreement, payments or transfers to be
made by the Company or an Affiliate upon the grant, exercise or payment of
an Award may be made in such form or forms as the Committee shall
determine, including, without limitation, cash, Shares, other securities,
other Awards or other property, or any combination thereof, and may be made
in a single payment or transfer, in installments, or on a deferred basis,
in each case in accordance with rules and procedures established by the
Committee. Such rules and procedures may include, without limitation,
provisions for the payment or crediting of reasonable interest on
installment or deferred payments.
(iii) Limits on Transfer of Awards.
(A) Except as provided in (C) below, each Award, and each right
under any Award, shall be exercisable only by the Participant during the
Participant's lifetime, or by the person to whom the Participant's
rights shall pass by will or the laws of descent and distribution.
(B) Except as provided in (C) below, no Award and no right under
any such Award may be assigned, alienated, pledged, attached, sold or
otherwise transferred or encumbered by a Participant otherwise than by
will or by the laws of descent and distribution (or, in the case of
Restricted Stock, to the Company) and any such purported assignment,
alienation, pledge, attachment, sale, transfer or encumbrance shall be
void and unenforceable against the Company or any Affiliate.
(C) Notwithstanding anything in the Plan to the contrary, to the
extent specifically provided by the Committee with respect to a grant, a
nonqualified stock option may be transferred to immediate family members
or related family trusts, or similar entities on such terms and
conditions as the Committee may establish.
(iv) Term of Awards. The term of each Award shall be for such period
as may be determined by the Committee; provided, that in no event shall the
term of any Award exceed a period of 10 years from the date of its grant.
(v) Share Certificates. All certificates for Shares or other
securities of the Company or any Affiliate delivered under the Plan
pursuant to any Award or the exercise thereof shall be subject to such stop
transfer orders and other restrictions as the Committee may deem advisable
under the Plan or the rules, regulations, and other requirements of the
SEC, any stock exchange upon which such Shares or other securities are then
listed, and any applicable federal or state laws, and the Committee may
cause a legend or legends to be put on any such certificates to make
appropriate reference to such restrictions.
(vi) Consideration for Grants. Awards may be granted for no cash
consideration or for such consideration as the Committee determines
including, without limitation, such minimal cash consideration as may be
required by applicable law.
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(vii) Delivery of Shares or other Securities and Payment by
Participant of Consideration. No Shares or other securities shall be
delivered pursuant to any Award until payment in full of any amount
required to be paid pursuant to the Plan or the applicable Award Agreement
(including, without limitation, any exercise price, tax payment or tax
withholding) is received by the Company. Such payment may be made by such
method or methods and in such form or forms as the Committee shall
determine, including, without limitation, cash, Shares, other securities,
other Awards or other property, withholding of Shares, cashless exercise
with simultaneous sale, or any combination thereof; provided that the
combined value, as determined by the Committee, of all cash and cash
equivalents and the Fair Market Value of any such Shares or other property
so tendered to the Company, as of the date of such tender, is at least
equal to the full amount required to be paid pursuant to the Plan or the
applicable Award Agreement to the Company.
SECTION 7. Automatic Director Awards.
Each Director who is elected or appointed to the Board for the first time
after the effective date of this Plan shall automatically receive, on the date
of his or her election or appointment, a nonqualified Option for 10,000 shares
of Common Stock.
On the date of the regular Annual Meeting of Stockholders of the Company in
each year that this Plan is in effect (commencing with the Annual Meeting of
Stockholders in 2000), each Director who is serving on that day, including a
Director who was elected for the first time at such annual meeting, shall
automatically receive the following:
(a) Director Options. A nonqualified Option grant for 5,000 shares of
Common Stock. Each such Option will be subject to all of the limitations
contained in the following provisions:
(i) Each such Director Option shall become exercisable (vested) six
months and one day after its grant date.
(ii) The purchase price of each Director Option shall be the Fair
Market Value of the Common Stock on its grant date.
(iii) Each such Director Option may be exercised in full at one time
or in part from time to time by giving written notice to the Company,
stating the number of shares of Common Stock with respect to which the
Director Option is being exercised, accompanied by payment in full of the
option purchase price for such shares, which payment may be (i) in cash by
check acceptable to the Company, (ii) by the transfer to the Company of
shares of Common Stock already owned by the optionee having an aggregate
Fair Market Value at the date of exercise equal to the aggregate option
purchase price, (iii) from the proceeds of a sale through a broker of some
or all of the shares to which such exercise relates, or (iv) by a
combination of such methods of payment.
(iv) Each Director Option shall expire 10 years from the grant date
thereof, but shall be subject to earlier termination as follows: (1) to the
extent exercisable as of the date a Director ceases to serve as a director
of the Company (the "Resignation Date"), the Director Option may be
exercised only within three years of such Resignation Date by the Director
or the Director's legal representative or the person to whom the Director's
rights shall pass by will or the laws of descent and distribution, as the
case may be, and to the extent not so exercised shall terminate on the
third anniversary of the Resignation Date and (2) to the extent not
exercisable as of the Resignation Date, the Director Option shall terminate
on such Resignation Date.
(b) Restricted Stock. A Restricted Stock Award for 4,000 shares of Common
Stock.
(i) The Restricted Period shall lapse on an Award of Restricted Stock
granted to a Director pursuant to this Section upon the earlier of the date
that is six months and one day after the grant date, the Director's death,
termination from the Board either after reaching age 65 or due to a
disability. If a Director ceases to be a member of the Board during a
Restricted Period for any other reason, the Restricted Stock subject to
such Restricted Period shall be forfeited.
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(ii) Each certificate representing Restricted Stock awarded hereunder
shall be registered in the name of the Director and, during the Restricted
Period, shall be left on deposit with the Company with a stock power
endorsed in blank. Directors shall have the right to receive dividends paid
on their Restricted Stock and to vote such shares. Restricted Stock may not
be sold, pledged, assigned, transferred or encumbered during the Restricted
Period other than by will or the laws of descent and distribution.
In addition, each Director who is serving on the date of the Annual Meeting
of Stockholders in 2000 shall receive a grant of 2,000 Bonus Shares on that
date.
In the event that the number of shares of Common Stock available for
automatic Director Awards under this Plan is insufficient to make all such
automatic Awards provided for in this Section on the applicable date, then all
Directors who are entitled to a grant on such date shall share ratably in the
number of shares then available for grant under this Plan (Restricted Stock
Awards shall be made first, then the Director Options), and shall have no right
to receive a grant with respect to the deficiencies in the number of available
shares and all future grants under this Section.
SECTION 8. Amendment and Termination.
Except to the extent prohibited by applicable law and unless otherwise
expressly provided in an Award Agreement or in the Plan:
(a) Amendments to the Plan. Except as required by applicable law or the
rules of the principal securities market on which the shares are traded and
subject to paragraph (b) below, the Board or the Committee may amend, alter,
suspend, discontinue, or terminate the Plan without the consent of any
stockholder, Participant, other holder or beneficiary of an Award, or other
Person; provided, however, no such amendment may be made without stockholder
approval, if such amendment would (i) materially increase the number of Shares
authorized under the Plan, but excluding any adjustment made pursuant to Section
4(c), or (ii) materially increase the Persons eligible to receive Awards under
the Plan.
(b) Amendments to Awards. The Committee may waive any conditions or rights
under, amend any terms of, or alter any Award theretofore granted, provided no
change, other than pursuant to paragraph (c) or (d), in any Award shall reduce
the benefit to Participant without the consent of such Participant. In addition,
the Committee may not reduce the exercise price of an Option, except as provided
in Section 4(c), without the approval of the stockholders of the Company.
(c) Adjustment of Awards Upon the Occurrence of Certain Unusual or
Nonrecurring Events. Subject to paragraph (d) below, the Committee is hereby
authorized to make adjustments in the terms and conditions of, and the criteria
included in, Awards in recognition of unusual or nonrecurring events (including,
without limitation, the events described in Section 4(c) of the Plan) affecting
the Company, any Affiliate, or the financial statements of the Company or any
Affiliate, or of changes in applicable laws, regulations, or accounting
principles, whenever the Committee determines that such adjustments are
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan.
(d) Section 162(m). The Committee, in its sole discretion and without the
consent of the Participant, may amend (i) any stock-based Award to reflect (1) a
change in corporate capitalization, such as a stock split or dividend, (2) a
corporate transaction, such as a corporate merger, a corporate consolidation,
any corporate separation (including a spinoff or other distribution of stock or
property by a corporation), any corporate reorganization (whether or not such
reorganization comes within the definition of such term in Section 368 of the
Code), (3) any partial or complete corporate liquidation, or (4) a change in
accounting rules required by the Financial Accounting Standards Board and (ii)
any Award that is not intended to meet the requirements of Section 162(m) of the
Code, to reflect any significant event that the Committee, in its sole
discretion, believes to be appropriate to reflect the original intent in the
grant of the Award. With respect to an Award that is subject to Section 162(m)
of the Code, the Committee (i) shall not take any action that would disqualify
such Award and (ii) must first certify that the Performance Objectives, if
applicable, have been achieved before the Award may be paid.
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SECTION 9. Change in Control.
(a) Subject to paragraph (b) below, and except to the extent an Award
Agreement expressly provides to the contrary, in the event of a Change in
Control of the Company all outstanding Awards automatically shall become fully
vested immediately prior to such Change in Control (or such earlier time as set
by the Committee), all restrictions, if any, with respect to such Awards shall
lapse, all performance criteria, if any, with respect to such Awards shall be
deemed to have been met at the target level, and unless the Company survives as
an independent publicly traded company, all Options outstanding at the time of
the event or transaction shall terminate, except to the extent provision is made
in writing in connection with such event or transaction for the continuation of
the Plan and/or the assumption of the Options theretofore granted, or for the
substitution for such Options of new options covering the stock of a successor
entity, or the parent or subsidiary thereof, with appropriate adjustments as to
the number and kinds of shares and exercise prices, in which event the Plan and
Options theretofore granted shall continue in the manner and under the terms so
provided.
(b) If a Participant is a "disqualified individual" (as defined in Section
280G of the Code) and the accelerated vesting of an Award and/or the termination
of the Restricted Period occurs with respect to a Change in Control, together
with any other payments which the Participant has the right to receive from the
Company and its Affiliates, whether or not under this Plan, would constitute a
"parachute payment" (as defined in Section 280G of the Code), then, except to
the extent such Participant has entered into an Award Agreement or a written
severance or employment agreement with the Company that expressly provides for a
"parachute tax gross-up", such accelerated vesting and/or termination of the
Restricted Period provided under the paragraph above shall be reduced to the
extent necessary (beginning with Options) so that the present value thereof (as
determined for parachute purposes) to the Participant will be $1.00 less than
three times the Participant's "base amount" (as defined in Section 280G of the
Code), but only if such reduction produces a better net after-tax position to
the Participant. Such determinations shall be made by the Company in good faith.
SECTION 10. General Provisions.
(a) No Rights to Awards. No Director, Employee, Consultant or other Person
shall have any claim to be granted any Award, and there is no obligation for
uniformity of treatment of Employees, Consultants, or holders or beneficiaries
of Awards. The terms and conditions of Awards need not be the same with respect
to each recipient.
(b) Withholding. The Company or any Affiliate is authorized to withhold
from any Award, from any payment due or transfer made under any Award or under
the Plan or from any compensation or other amount owing to a Participant the
amount (in cash, Shares, other securities, Shares that would otherwise be issued
pursuant to such Award, other Awards or other property) of any applicable taxes
payable in respect of an Award, its exercise, the lapse of restrictions thereon,
or any payment or transfer under an Award or under the Plan and to take such
other action as may be necessary in the opinion of the Company to satisfy all
obligations for the payment of such taxes. Notwithstanding the above, a
Participant who is subject to Rule 16b-3 may direct the Company to satisfy such
Participant's tax withholding obligation through the "constructive" tender of
already-owned Shares or the withholding of Shares otherwise to be acquired upon
the exercise or payment of such Award.
(c) No Right to Employment. The grant of an Award shall not be construed as
giving a Participant the right to be retained in the employ of the Company or
any Affiliate. Further, the Company or an Affiliate may at any time dismiss a
Participant from employment, free from any liability or any claim under the
Plan, unless otherwise expressly provided in the Plan or in any Award Agreement.
(d) Governing Law. The validity, construction, and effect of the Plan and
any rules and regulations relating to the Plan shall be determined in accordance
with the laws of the State of Delaware and applicable federal law.
(e) Severability. If any provision of the Plan or any Award is or becomes
or is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as
to any Person or Award, or would disqualify the Plan or any Award under any law
deemed applicable by the Committee, such provision shall be construed or deemed
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amended to conform to the applicable laws, or if it cannot be construed or
deemed amended without, in the determination of the Committee, materially
altering the intent of the Plan or the Award, such provision shall be stricken
as to such jurisdiction, Person or Award and the remainder of the Plan and any
such Award shall remain in full force and effect.
(f) Other Laws. The Committee may refuse to issue or transfer any Shares or
other consideration under an Award if, acting in its sole discretion, it
determines that the issuance of transfer or such Shares or such other
consideration might violate any applicable law or regulation or entitle the
Company to recover the same under Section 16(b) of the Exchange Act, and any
payment tendered to the Company by a Participant, other holder or beneficiary in
connection with the exercise of such Award shall be promptly refunded to the
relevant Participant, holder or beneficiary.
(g) No Trust or Fund Created. Neither the Plan nor the Award shall create
or be construed to create a trust or separate fund of any kind or a fiduciary
relationship between the Company or any Affiliate and a Participant or any other
Person. To the extent that any Person acquires a right to receive payments from
the Company or any Affiliate pursuant to an Award, such right shall be no
greater than the right of any general unsecured creditor of the Company or any
Affiliate.
(h) No Fractional Shares. No fractional Shares shall be issued or delivered
pursuant to the Plan or any Award, and the Committee shall determine whether
cash, other securities, or other property shall be paid or transferred in lieu
of any fractional Shares or whether such fractional Shares or any rights thereto
shall be canceled, terminated, or otherwise eliminated.
(i) Headings. Headings are given to the Sections and subsections of the
Plan solely as a convenience to facilitate reference, Such headings shall not be
deemed in any way material or relevant to the construction or interpretation of
the Plan or any provision thereof.
SECTION 11. Designation of Beneficiary.
Each Participant to whom an Award has been made under this Plan may
designate a beneficiary or beneficiaries (which beneficiary may be an entity
other than a natural person) to exercise any rights or receive any payment that
under the terms of such Award may become exercisable or payable on or after the
Participant's death. At any time, and from time to time, any such designation
may be changed or cancelled by the Participant without the consent of any such
beneficiary. Any such designation, change or cancellation must be on a form
provided for that purpose by the Company and shall not be effective until
received by the Company. If no beneficiary has been named by a deceased
Participant, or the designated beneficiaries have predeceased the Participant,
the beneficiary shall be the Participant's estate, If a Participant designates
more than one beneficiary, any such exercise or payment under this Plan shall be
made in equal shares unless the Participant has designated otherwise, in which
case the exercise or payment shall be made in the shares designated by the
Participant.
SECTION 12. Effective Date of the Plan.
The Plan shall become effective upon its adoption by the Board; however, no
Award may become exercisable or payable unless and until the Plan is approved by
the stockholders of the Company at (1) the first annual meeting of the
stockholders following the date the Plan is adopted by the Board or (2) if
earlier, a special meeting of the stockholders at which the Plan is presented
for approval by the stockholders. In the event such stockholder approval is not
obtained, all Awards outstanding on such date, whichever is applicable, shall be
automatically cancelled without payment.
SECTION 13. Term of the Plan.
No Award shall be granted under the Plan after the 10th anniversary of the
date the Plan is adopted by the Board. However, unless otherwise expressly
provided in the Plan or in an applicable Award Agreement, any Award granted
prior to such termination, and the authority of the Board or the Committee to
amend, alter, adjust, suspend, discontinue, or terminate any such Award or to
waive any conditions or rights under such Award, shall extend beyond such
termination date.
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SANTA FE SNYDER CORPORATION
P PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE COMPANY FOR ANNUAL MEETING ON MAY 16, 2000
R
The undersigned hereby constitutes and appoints John C. Snyder,
O James L. Payne and Kathryn D. Wriston and each of them, his true and
lawful agents and proxies with full power of substitution in each,
X to represent the undersigned at the Annual Meeting of Stockholders
of Santa Fe Snyder Corporation to be held at the Omni Hotel, Four
Y Riverway, Houston, Texas on Tuesday, May 16, 2000 at 10:00 a.m., and
at any adjournments thereof, on all matters coming before said meeting.
Proposal 1 -- Election of Directors Nominees:
01. William E. Greehey, 02. Harold R. Logan, Jr., and
03. Edward T. Story
Proposal 2 -- To approve the Sante Fe Snyder Corporation Incentive
Stock Compensation Plan 2000.
Proposal 3 -- To ratify and approve the appointment of
PricewaterhouseCoopers, LLP as independent public
accountants for the fiscal year ending December 31, 2000.
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICE BY MARKING THE APPROPRIATE BOX,
SEE REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN
ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THE PROXY
COMMITTEE CANNOT VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN THIS CARD.
THIS CARD PROVIDES VOTING INSTRUCTIONS FOR SHARES HELD FOR THE BENEFIT
OF COMPANY EMPLOYEES IN THE SANTA FE SNYDER SAVINGS INVESTMENT PLAN.
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37
PLEASE MARK YOUR
[X] VOTES AS IN THIS
EXAMPLE.
Unless you indicate otherwise, this proxy will be voted in accordance with the Board of Directors' recommendations
DIRECTORS RECOMMEND A VOTE FOR ALL NOMINEES AND FOR PROPOSALS 2 AND 3
FOR WITHHELD FOR AGAINST ABSTAIN
1. Election of [ ] [ ]
Directors 2. Approval of the Incentive Stock [ ] [ ] [ ]
(See reverse) Compensation Plan 2000
For all except the following nominee(s):
3. Approval of Independent Public [ ] [ ] [ ]
Accountants
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Please complete, sign and promptly mail this proxy in
the enclosed envelope.
Note: Please sign exactly as name appears on this card.
Joint owners should each sign personally. Corporation
proxies should be signed by an authorized officer.
Executors, administrators, trustee, etc. should so
indicate when signing.
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SIGNATURE(S) DATE
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* FOLD AND DETACH HERE IF YOU ARE RETURNING YOUR VOTED PROXY CARD BY MAIL *
SANTA FE SNYDER CORPORATION
ANNUAL MEETING -- MAY 16, 2000
NOW OFFERING TELEPHONE OR INTERNET VOTING SERVICES -- FAST AND CONVENIENT
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o Shareholders from the United States and Canada may call toll-free
1-877-779-8683.
o Shareholders from other locations may dial (201) 536-8073; these shareholders
must bear the normal cost of international telephone charges to use the
telephone voting services.
o Follow the simple recorded instructions.
o When prompted for your "Voter Control Number," enter the series of numbers
printed in the box above using your touch-tone telephone.
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o Shareholders with Internet access may go to http://www.eproxyvote.com/sfs.
o Follow the simple on-line instructions.
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Telephone or Internet voting authorizes the named proxies to represent you at
the meeting in the same manner as if you completed, signed, dated and mailed
your proxy card.
IF YOU VOTE BY TELEPHONE OR INTERNET, DO NOT MAIL YOUR PROXY CARD
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