1
EXHIBIT 10.33
1990 EMPLOYEE STOCK OPTION PLAN
OF
THE PHOENIX RESOURCE COMPANIES, INC.
(EFFECTIVE APRIL 9, 1990)
AS AMENDED THROUGH SEPTEMBER 29, 1995
(AMENDED TO REFLECT JANUARY 1995 & SEPTEMBER 1995 TWO-FOR-ONE SPLITS)
1. Purpose of the Plan.
This 1990 Employee Stock Option Plan (the "Plan") is intended as an
employment incentive, to retain in the employ of The Phoenix Resource
Companies, Inc., a Delaware corporation (the "Company"), and any
Parent or Subsidiary of the Company (within the meaning of Section
425(e) or (f) of the Internal Revenue Code of 1986, as amended
("Code")), persons of training, experience and ability, to attract new
employees, to encourage the sense of proprietorship of such persons
and to stimulate the active interest of such persons in the
development and financial success of the Company. It is further
intended that the options granted under the Plan will not be incentive
stock options as that term is defined in Section 422A of the Code.
2. Administration of the Plan.
The Plan shall be administered by the Board of Directors, which shall
serve as the Stock Option Committee (the "Committee"); provided,
however, that any member of the Board of Directors who is eligible to
receive options under the Plan, or any member of the Board of
Directors who has, during the year preceding, been eligible to receive
options under the Plan, shall not be a member of the Committee. A
majority of the Committee and a majority of the directors acting on
any matter related to the Plan shall not have been eligible to
participate in the Plan or any other plan of the Company or its
affiliates which entitles participants to acquire stock, stock
appreciation rights or stock options of the Company or its affiliates,
other than the Company's 1990 Nonemployee Director Stock Option Plan
(the "Director Plan"), at any time within the preceding twelve (12)
months. A majority of the Committee and a majority of the directors
acting on any matter relating to the Plan shall not be eligible to
receive stock options under this Plan ("Options") or any other plan of
the Company or its affiliates which entitles participants to acquire
stock, stock appreciation rights or stock options of the Company or
its affiliates, other than the Director Plan, while serving on the
Committee. No director who is eligible to participate in the Plan
shall take part in any Committee deliberations or action respecting
the Plan related to such director. The Committee shall have full
power and authority to designate participants, to determine the terms
and provisions of respective option agreements (which need not be
identical) and to interpret the provisions and supervise the
administration of the Plan. All decisions and selections made by the
Committee pursuant to the provisions of this Plan shall be made by a
majority of its members. Any decision reduced to writing and signed
by all the members shall be fully effective as if it had been made by
a majority at a meeting duly held. The Committee shall have the
authority to grant in its discretion to the holder of an outstanding
Option in exchange for the surrender and cancellation of such Option,
a new Option having a purchase price per share lower than provided in
the Option so
2
surrendered and cancelled and containing such other terms and
conditions as the Committee may prescribe in accordance with the
provisions of the Plan. All Options granted under this Plan are
subject to, and may not be exercised before, the approval of the Plan
by the stockholders of the Company pursuant to Rule 16b-3 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). For
purposes of compliance with such rule, the entry of an order of
confirmation of the bankruptcy plan of reorganization respecting the
Company will constitute such stockholder approval.
3. Designation of Participants.
The persons eligible for participation in the Plan as recipients of
Options shall include only employees of the Company or of any Parent
or wholly-owned subsidiary of the Company. Directors of the Company
shall not be eligible to participate in the Plan as directors, but
Directors otherwise qualified shall be eligible to participate. An
employee who has been granted an Option hereunder ("Optionee") may be
granted an additional Option or Options, if the Committee shall so
determine.
4. Stock Reserved for the Plan.
Subject to adjustment as provided in Paragraph 9 hereof, a total of
one million, six hundred thousand (1,600,000) shares of Common Stock,
par value $.01 per share ("Stock"), of the Company shall be subject to
this Plan. Pursuant to Amendment Number One of the Plan, approved by
the stockholders at its 1995 Annual Meeting, an additional 600,000
shares of Common Stock, par value $.01 per share, of the Company shall
be subject to this Plan, subject to adjustment as provided in
Paragraph 9 hereof. The Shares subject to this Plan shall consist of
unissued shares or previously issued shares reacquired and held by the
Company, or any Parent or wholly-owned subsidiary of the Company, and
such amount of shares shall be and is hereby reserved for such
purpose. Any of such shares which may remain unsold and which are not
subject to outstanding Options at the termination of this Plan shall
cease to be reserved for the purpose of this Plan, but until
termination of this Plan the Company shall at all times reserve a
sufficient number of shares to meet the requirements of this Plan.
Should any Option expire or be cancelled prior to its exercise or
relinquishment in full, the shares theretofore subject to such Option,
to the extent it had not been exercised, may again be subjected to an
Option under the Plan.
5. Option Price.
(a) The purchase price of each share of Stock subject to an Option
shall be determined by the Committee prior to granting the
Option and shall not be less than the fair market value per
share of Stock on the date of the grant.
(b) The fair market value of a share on a particular date shall be
deemed to be (i) in the event the Stock is not listed on a
stock exchange or traded in the over-the-counter market, the
value determined in good faith by the Board of Directors of
the Company, which determination shall be conclusive, (ii) in
the event the Stock is listed on a national or regional stock
exchange, the closing sales price per share of the Stock on
such exchange on the date, or, if there shall have been no
sale on that date, on the last preceding date on which such a
sale or sales were so reported (the "Sale Date") or (iii) if
the Stock is traded in the over-the-counter market, the mean
between the highest closing bid and lowest
2
3
closing asked price for the Stock as reported by the National
Association of Securities Dealers Automated Quotation System
on the Sale Date, or if not reported by such system, the mean
between the closing bid and asked price on the Sale Date as
quoted by such quotation source as shall be designated by the
Committee.
6. Option Period.
Any Option granted under this Plan shall terminate and be of no force
and effect with respect to any securities not previously taken up by
the Optionee thereunder upon the expiration of the term of such Option
as specified in the option agreement relating thereto, which term
shall not exceed ten (10) years from the date of grant of such Option.
7. Exercise of Options.
(a) The Committee, in granting Options hereunder, shall have
discretion to determine the terms upon which such Options
shall be exercisable, subject to the applicable provisions of
the Plan. The Committee may determine to permit any Option
granted hereunder to be exercisable at any time after six (6)
months from the date of grant of such Option.
(b) Options may be exercised solely by the Optionee during his
lifetime or after his death by the personal representative of
the Optionee's estate or the person or persons entitled
thereto under his will or under the laws of descent and
distribution.
(c) The purchase price of the shares as to which an Option is
exercised shall be paid in full at the time of the exercise.
Such purchase price shall be payable in cash, or at the option
of the holder of such Option, in Stock theretofore owned by
such holder (or any combination of cash and such Stock). For
purposes of determining the amount, if any, of the purchase
price satisfied by payment in Stock, such Stock shall be
valued at its fair market value on the date of exercise in
accordance with Paragraph 5(b) hereof. Any Stock delivered in
satisfaction of all or a portion of the purchase price shall
be appropriately endorsed for transfer and assignment to the
Company. No holder of an Option shall be, or have any of the
rights or privileges of, a stockholder of the Company in
respect of any shares purchasable upon the exercise of any
part of an Option unless and until certificates representing
such shares shall have been issued by the Company to such
holders. The Company may make loans to the Optionees the
proceeds of which will be used to exercise the Options granted
pursuant to the Plan. Although the terms of any such loans
will be determined on an individual basis, such loans will be
secured by a lien on the Stock to be purchased by the Optionee
and will bear interest at an interest rate to be determined on
the date the loan is made that is sufficient to avoid the
classification of the loan as a below-market loan under
Section 7872 of the Code.
8. Relinquishment of Options; Assignability.
(a) The Committee, in granting Options hereunder, shall have
discretion to determine whether or not Options shall include a
right of relinquishment as hereinafter provided by this
Paragraph 8. The Committee shall also have discretion to
determine whether an option agreement evidencing an Option
granted by the Committee shall be amended or supplemented to
include such a right of relinquishment. Neither the Committee
nor the Company shall be under any obligation or incur any
liability to any person by reason of
3
4
the Committee's refusing to grant or include a right of
relinquishment in any Option granted hereunder or in any
option agreement evidencing the same. Subject to the
Committee's determining in any case that the grant by it of a
right of relinquishment is consistent with Paragraph 1 hereof,
any Option granted under the Plan, and the option agreement
evidencing such Option, may provide:
(i) That the Optionee, or his heirs or other legal
representatives to the extent entitled to exercise
the Option under the terms thereof, in lieu of
purchasing the entire number of shares subject to
purchase thereunder, shall have the right to
relinquish all or any part of the then unexercised
portion of the Option (to the extent exercisable as
provided in (iv) hereinbelow) for a number of shares
of Stock, for an amount of cash or for a combination
of Stock and cash, to be determined as follows:
(A) The written notice of exercise of such right
of relinquishment, provided for in clause
(ii) of this subparagraph (a), shall state
the percentage, if any, of the Appreciated
Value (as defined below), that such Optionee
elects to receive in cash (which percentage
is called the "Cash Percentage"), such Cash
Percentage to be in increments of 10% of such
Appreciated Value up to 100% thereof;
(B) The number of shares of Stock of the Company,
if any, issuable pursuant to such
relinquishment shall be the number of such
shares, rounded to the next greater number of
full shares, as shall be equal to: 100% of
the Appreciated Value less the Cash
Percentage, multiplied by the excess of (1)
the aggregate current market value of the
shares of Stock covered by the Option or the
portion thereof so relinquished over (2) the
aggregate purchase price for such shares
specified in such Option (which excess is
called the "Appreciated Value"), divided by
the then-current market value per share of
such Stock; and
(C) The amount of cash payable pursuant to such
relinquishment shall be an amount equal to
the Appreciated Value less the aggregate
current market value of the Stock issued
pursuant to such relinquishment, if any,
which cash shall be paid by the Company
subject to such conditions as are deemed
advisable by the Committee to permit
compliance by the Company with the
withholding provisions applicable to
employers under the Code (and under any
applicable State income tax law);
(ii) That such right of relinquishment may be exercised
only upon receipt by the Company of a written notice
of such relinquishment which shall be dated the date
of election to make such relinquishment; and that,
for the purposes of the Plan, such date of election
shall be deemed to be the date when such notice is
sent by registered or certified mail, or when receipt
is acknowledged by the Company, if mailed by other
than registered or certified mail or if delivered by
hand or by any telegraphic communications equipment
of the sender or otherwise delivered, provided that,
in the event the method described above for
determining such date of election shall not be or
remain consistent with provisions of Section 16(b) of
the Exchange Act or the rules and regulations adopted
by the Securities and
4
5
Exchange Commission thereunder, as presently existing
or as may be hereafter amended, which exempt from the
operation of said Section 16(b) in whole or in part
any such relinquishment transaction, then such date
of election shall be determined by such other method
consistent with said Section 16(b) or rules or
regulations as the Committee shall in its discretion
select and apply;
(iii) That the "current market value" of a share on a
particular date shall be deemed to be its fair market
value on that date as determined in accordance with
Paragraph 5(b) hereof; and
(iv) That the Option, or any portion thereof, may be
relinquished only to the extent that (A) it is
exercisable on the date written notice of
relinquishment is received by the Company and (B) the
Committee, subject to the provisions of Paragraph
8(b) hereof, shall consent to the election of the
holder of such Option to relinquish such Option as
set forth in such written notice of relinquishment,
and (C) the holder of such Option pays, or makes
provision satisfactory to the Company for the payment
of, any taxes which the Company is obligated to
collect with respect to such relinquishment.
(b) The Committee shall have sole discretion to consent to or
disapprove any election of a holder of an Option to relinquish
such Option for Stock and cash as provided in Paragraph 8(a)
hereof. Neither the Committee nor the Company shall be under
any liability to any person by reason of the Committee's
disapproval of any election pursuant to this subparagraph (b).
(c) The Committee, in granting Options hereunder, shall have
discretion to determine the terms upon which such Options
shall be relinquishable, subject to the applicable provisions
of the Plan, and including such provisions as are deemed
advisable to permit the exemption from the operation from
Section 16(b) of the Exchange Act in whole or in part of any
such transaction involving such relinquishment, and Options
outstanding, and option agreements evidencing such Options,
may be amended, if necessary, to permit such exemption. If an
Option is relinquished, such Option shall be deemed to have
been exercised to the extent of the number of shares of Stock
covered by the Option or part thereof which is relinquished,
and no further Options may be granted covering such shares of
Stock.
(d) Neither any Option nor any right to relinquish the same to the
Company as contemplated by this Paragraph 8 shall be
assignable or otherwise transferable except by will or the
laws of descent and distribution.
(e) No right of relinquishment may be exercised within the first
six months of the date of grant of such right; provided,
however, that this limitation shall not apply in the event of
death or disability.
9. Capital Change of the Company; Certain Corporate Transactions.
(a) The existence of this Plan and Options granted hereunder shall
not affect in any way the right or power of the Company or its
stockholders to make or authorize any or all adjustments,
recapitalizations, reorganizations or other changes in the
Company's capital
5
6
structure or its business, or any merger or consolidation of
the Company, or any issue of bonds, debentures, preferred or
prior preference stocks ahead of or affecting the Company's
Stock or the rights thereof, or the dissolution or liquidation
of the Company, or any sale or transfer of all or any part of
its assets or business, or any other corporate act or
proceeding, whether of a similar character or otherwise.
(b) The shares with respect to which Options may be granted
hereunder are shares of the Stock of the Company as presently
constituted. If, and whenever, prior to the delivery by the
Company of all of the shares of the Stock that are subject to
Options granted hereunder, the Company shall effect a
subdivision or consolidation of shares or other capital
readjustment, the payment of a stock dividend, a stock split,
combination of shares or recapitalization or other increase or
reduction of the number of shares of the Stock outstanding
without receiving compensation therefor in money, services or
property, the number of shares of Stock available under the
Plan and the number of shares of Stock with respect to which
Options granted hereunder may thereafter be exercised shall
(i) in the event of an increase in the number of outstanding
shares, be proportionately increased, and the cash
consideration payable per share with respect to Options then
issued and outstanding shall be proportionately reduced; and
(ii) in the event of a reduction in the number of outstanding
shares, be proportionately reduced, and the cash consideration
payable per share with respect to Options then issued and
outstanding shall be proportionately increased.
(c) Except as expressly provided herein, the issue by the Company
of shares of stock of any class, or securities convertible
into shares of stock of any class, for cash or property, or
for labor or services, either upon direct sale or upon the
exercise of rights or warrants to subscribe therefor, or upon
conversion of shares or obligations of the Company convertible
into such shares or other securities, shall not affect, and no
adjustment by reason thereof shall be made with respect to,
the number of shares of Stock subject to Options granted
hereunder.
(d) If the Company is reorganized, or merged or consolidated or
party to a plan of exchange with another corporation pursuant
to which reorganization, merger, consolidation, or plan of
exchange stockholders of the Company receive any shares of
Stock or other securities or if the Company shall distribute
("Spin Off") securities of another corporation to its
stockholders, there shall be substituted for the shares
subject to the unexercised portions of outstanding Options an
appropriate number of shares of (i) each class of stock or
other securities which were distributed to the stockholders of
the Company in respect of such shares in the case of a
reorganization, merger, consolidation, or plan of exchange, or
(ii) in the case of a Spin Off, the securities distributed to
stockholders of the Company together with shares of Stock,
such number of shares or securities to be determined in
accordance with the provisions of Section 425 of the Code (or
other applicable provisions of the Code or regulations issued
thereunder which may from time to time govern the treatment of
incentive stock options in such a transaction).
Notwithstanding the foregoing, any unmatured installments of
the Options shall be accelerated and the Option shall
thereupon be exercisable in full without regard to any
installment exercise provision in the event of a Change of
Control (as defined below).
6
7
(i) For purposes of this Plan, a Change of Control will
occur when
(A) any "person," including a "group" as
determined in accordance with Section
13(d)(3) of the Exchange Act is, or becomes
the beneficial owner, directly or indirectly,
of securities of the Company representing a
Control Percentage (as defined below) of the
combined voting power of the then outstanding
securities of the Company;
(B) as a result of, or in connection with, any
tender offer or exchange offer, merger or
other business combination, sale of assets or
contested election, or any combination of the
foregoing transactions (a "Transaction"), the
persons who were Directors of the Company
before the Transaction shall cease to
constitute a majority of the Board of
Directors of the Company, or any successor to
the Company1;
(C) the Company is merged or consolidated with
another corporation and as a result of such
merger or consolidation a Control Percentage
of the outstanding voting securities of the
surviving or resulting corporation shall no
longer be owned in the aggregate by the
stockholders of the Company on April 9, 1990,
or their respective affiliates within the
meaning of the Exchange Act;
(D) the Company transfers substantially all of
its assets to another corporation that is not
an affiliate of the Company.
(ii) The term "Control Percentage" shall mean at least 25%
in the event the applicable securities are registered
under the Exchange Act or at least 40% in the event
the applicable securities are not registered under
the Exchange Act.
10. Purchase for Investment.
Unless the Options and shares covered by the Plan have been registered
under the Securities Act of 1933, as amended, or the Company has
determined that such registration is unnecessary, each person
exercising an Option under the Plan may be required by the Company to
give a representation in writing that he is acquiring such shares for
his own account for investment and not with a view to, or for sale in
connection with, the distribution of any part thereof.
11. Taxes.
The Company may make such provisions as it may deem appropriate for
the withholding of any taxes which it determines is required in
connection with any Options or rights of relinquishment granted under
the Plan. However, the holder of an Option may pay all or any portion
of the taxes required to be withheld by the Company or paid by the
holder of the Option in connection with the exercise of all or any
portion of this Option (including an exercise through relinquishment)
by
__________________________________
1 Pursuant to resolution of the Board of Directors on May 23, 1990, in
determining whether a person is the beneficial owner of a Control Percentage,
the Stock originally received by a person pursuant to the plan of
reorganization of Texas International Company in exchange for securities of
Texas International Company shall not be included in the numerator of such
computation.
7
8
electing to have the Company withhold shares of Stock, or by
delivering previously owned shares of Stock, having a fair market
value determined in accordance with Paragraph 5(b) hereof, equal to
the amount required to be withheld or paid. The holder of the Option
must make the foregoing election on or before the date that the amount
of tax to be withheld is determined ("Tax Date"). Any such election
is irrevocable and subject to disapproval by the Committee. If the
holder of the Option is subject to the short-swing profits recapture
provisions of Section 16(b) of the Exchange Act, in the event the
method described above for determining such date of election shall not
be or remain consistent with provisions of Section 16(b) of the
Exchange Act or the rules and regulations adopted by the Securities
and Exchange Commission thereunder, as now existing or as may be
hereafter amended, then such date of election shall be determined by
such other method consistent with the provisions of Section 16(b) of
the Exchange Act or rules and regulations as the Committee in its
discretion shall select and apply.
12. Other Rights of Optionees and the Company.
(a) The Committee, in granting any Option hereunder, shall have
the discretion to afford the grantee of such Option any one or
more of the following rights, on such terms and subject to
such conditions (which may vary from Option to Option) as the
Committee shall prescribe in the option agreement relating to
such Option: (i) the right to have the shares underlying such
Option, to the extent purchasable ("Vested Shares") sold in an
underwritten public offering; and (ii) the right to have his
Vested Shares purchased or repurchased on the occurrence of
such events as may be specified in the option agreement
relating to such Option.
(b) The Committee, in granting any Option hereunder, shall have
the discretion to afford the Company the right, on the terms
and subject to such conditions (which may vary from Option to
Option) as the Committee shall prescribe in the option
agreement relating to such Option, to repurchase or cause the
purchase of the Vested Shares underlying such Option on the
occurrence of such events as may be specified in such option
agreement.
13. Effective Date of Plan.
The Plan shall be effective as of April 9, 1990.
14. Amendments or Termination.
The Board of Directors may amend, alter or discontinue the Plan,
except that no amendment or alteration shall be made which would
impair the rights of any Optionee under any Option theretofore
granted, without his consent, and except that no amendment or
alteration shall be made which, without the approval of the
stockholders, would:
(a) Increase the total number of shares reserved for the purposes
of the Plan, except as is provided in Paragraph 9 of the Plan;
or
(b) Alter the class of employees eligible to participate in the
Plan, as described in Paragraph 3 hereof.
8
9
15. Government Regulations.
The Plan, and the granting and exercise of Options thereunder, and the
obligation of the Company to sell and deliver shares under such
Options, shall be subject to all applicable laws, rules and
regulations, and to such approvals by any governmental agencies or
national securities exchanges as may be required.
THE PHOENIX RESOURCE COMPANIES, INC.
9