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NUEVO ENERGY COMPANY EMPLOYEE STOCK PURCHASE PLAN
(Effective July 1, 1998)
1. PURPOSE
The Nuevo Energy Company Employee Stock Purchase Plan (the "Plan") is
designed to encourage and assist employees of Nuevo Energy Company ("Nuevo") and
Subsidiaries (as defined in Section 4) (hereinafter collectively referred to as
the "Company"), where permitted by applicable laws and regulations, to acquire
an equity interest in Nuevo through the purchase of shares of common stock, $.01
par value, of Nuevo ("Common Stock"). It is intended that this Plan shall
constitute an "employee stock purchase plan" within the meaning of Section 423
of the Internal Revenue Code of 1986, as amended (the "Code").
2. ADMINISTRATION OF THE PLAN
The Plan shall be administered and interpreted by the Compensation
Committee (the "Committee") appointed by the Board of Directors of Nuevo (the
"Board"), which Committee shall consist of at least two (2) "non-employee
directors" within the meaning of Rule 16b-3 ("Rule l6b-3") promulgated by the
Securities and Exchange Commission pursuant to the Securities Exchange Act of
1934, as amended (the "Exchange Act"). The Committee shall supervise the
administration and enforcement of the Plan according to its terms and provisions
and shall have complete discretion and all powers necessary to accomplish these
purposes and discharge its duties hereunder including, but not by way of
limitation, the power to (i) employ and compensate agents of the Committee for
the purpose of administering the accounts of participating employees; (ii)
construe or interpret the Plan; (iii) determine all questions of eligibility;
and (iv) compute the amount and determine the manner and time of payment of all
benefits according to the Plan.
The Committee may act by decision of a majority of its members at a regular
or special meeting of the Committee or by decision reduced to writing and signed
by all members of the Committee without holding a formal meeting.
3. NATURE AND NUMBER OF SHARES
The Common Stock subject to issuance under the terms of the Plan shall be
shares of Nuevo's authorized but unissued shares or previously issued shares
reacquired and held by Nuevo. The aggregate number of shares which may be issued
under the Plan shall not exceed 25,000 shares of Common Stock. All shares of
Common Stock purchased under the Plan shall be counted against the 25,000 share
limitation.
In the event of any reorganization, stock split, reverse stock split, stock
dividend, combination of shares, merger, consolidation, offering of rights or
other similar change in the capital structure of Nuevo, the Committee may make
such adjustment, if any, as it deems appropriate in the number, kind and
purchase price of the shares of Common Stock available for purchase under the
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Plan and in the maximum number of shares which may be issued under the Plan,
subject to the approval of the Board and in accordance with Section 20.
4. ELIGIBILITY REQUIREMENTS
Each "Employee" (as hereinafter defined), except as described in the next
following paragraph, shall become eligible to participate in the Plan in
accordance with Section 5 on the first "Enrollment Date" (as defined therein)
following the day he becomes an Employee. Participation in the Plan is
voluntary.
The following Employees are not eligible to participate in the Plan:
(i) Employees who are "highly compensated employees," as defined in
Code Section 414(q) and who participate in the Nuevo Energy Company
Deferred Compensation Plan; and
(ii) Employees who are customarily employed by the Company less than
twenty (20) hours per week or less than five (5) months in any calendar
year.
Notwithstanding anything herein to the contrary, an Employee may not
participate in this Plan if such Employee would, immediately upon enrollment in
the Plan, own directly or indirectly, or hold options or rights to acquire, an
aggregate of five percent (5%) or more of the total combined voting power or
value of all outstanding shares of Common Stock of all classes of Nuevo or any
subsidiary (in determining stock ownership of an individual, the rules of Code
Section 424(d) shall be applied, and the Committee may rely on representations
of fact made to it by the employee and believed by it to be true).
"Employee" shall mean any individual employed by Nuevo or any Subsidiary
(as hereinafter defined). "Subsidiary" shall mean any corporation (a) which is
in an unbroken chain of corporations beginning with Nuevo if, on or after the
Effective Date, each of the corporations other than the last corporation in the
chain owns stock possessing fifty percent (50%) or more of the total combined
voting power of all classes of stock in one of the other corporations in the
chain and (b) which has adopted the Plan with the approval of the Board.
5. ENROLLMENT
For purposes of this Plan, the first day of each Purchase Period (as
defined in Section 6) shall be an "Enrollment Date." Each eligible Employee of
Nuevo or any Subsidiary as of March 1, 1998 (the "Effective Date" herein) may
enroll in the Plan as of the Effective Date. Each other eligible Employee of
Nuevo or a participating Subsidiary who thereafter becomes eligible to
participate may enroll in the Plan on the first Enrollment Date following the
date he first meets the eligibility requirements of Section 4. Any eligible
Employee not enrolling in the Plan when first eligible may enroll in the Plan on
any subsequent Enrollment Date. In order to enroll or re-enroll, an eligible
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Employee must complete, sign and submit the appropriate form to the person
designated by the Committee prior to the applicable Enrollment Date.
6. METHOD OF PAYMENT
Payment for shares of Common Stock is to be made as of the applicable
"Purchase Date" (as defined in Section 9) with Employee contributions, which
shall be made through payroll deductions on an after-tax basis (with no right of
prepayment) over the Plan's designated purchase period (the "Purchase Period"),
with the first such deduction commencing with the first payroll period ending
after the Enrollment Date. Each Purchase Period under the Plan shall be a period
of one month beginning on the first day of each calendar month and ending on the
last day of such month or such other period as the Committee may prescribe. The
initial Purchase Period shall commence on the Effective Date. Each
participating Employee (hereinafter referred to as a "Participant") will
authorize such deductions from his pay for each payroll period during the
Purchase Period and such amounts will be deducted in conformity with his
employer's payroll deduction schedule.
Each Participant may elect to contribute to his account from one percent
(1%) to twenty percent (20%) of his Compensation each payroll period, but not
less than $10 during any payroll period (or such other dollar amounts and
percentages as the Committee may establish from time to time before an
Enrollment Date for all purchases to occur during the relevant Purchase Period).
In establishing other dollar amounts and percentages of permitted contributions,
the Committee may take into account the "Maximum Share Limitation" (as defined
in Section 8). The rate of contribution shall be designated by the Participant
in the enrollment form.
"Compensation" shall mean wages as defined in Code Section 3401(a) and all
other payments of compensation to a Participant by Nuevo (in the course of
Nuevo's trade or business) for which Nuevo is required to furnish the
Participant a written statement under Code Sections 6041(d) and 6051(a)(3).
Compensation must be determined without regard to any rules under Code Section
3401(a) that limit the remuneration included in wages based on the nature or
location of the employment or the services performed (such as the exception for
agricultural labor in Code Section 3401(a)(2)). Notwithstanding anything herein
to the contrary, Compensation shall not include reimbursements or other expense
allowances, fringe benefits (cash and noncash), moving expenses, deferred
compensation and welfare benefits. Compensation shall include amounts that are
not includible in the gross income of a Participant by reason of the application
of Code Sections 125, 402(e)(3), 402(h) or 403(b).
A Participant may elect to increase or decrease the rate of contribution
effective as of the first day of the next Purchase Period by giving prior
written notice to the person designated by the Committee on the appropriate
form. A Participant may not elect to increase or decrease the rate of
contribution during a Purchase Period. A Participant may suspend contributions
during the Purchase Period by giving prior written notice to the person
designated by the Committee on the appropriate form, at least ten (10) days
prior to the last day of the Purchase Period. If a Participant elects to suspend
his contributions, any contributions made during the Purchase Period prior to
such suspension will be used to purchase stock at the end of the Purchase
Period. Any Participant who
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suspends contributions during any Purchase Period cannot resume contributions
during such Purchase Period and must re-enroll in the Plan in order to
participate in a subsequent Purchase Period.
7. CREDITING OF CONTRIBUTIONS AND DIVIDENDS
Contributions shall be credited to a Participant's account as soon as
administratively feasible after payroll withholding. Dividends on shares of
Common Stock held in a Participant's account will be credited to such
Participant's account and used to purchase shares of Common Stock at, the market
price on the date such shares are purchased. All Participants' accounts shall be
held by a bank or financial institution designated by the Committee for this
purpose (the "Custodian").
8. GRANT OF RIGHT TO PURCHASE SHARES ON ENROLLMENT
Enrollment in the Plan by an Employee on an Enrollment Date will constitute
the grant by Nuevo to the Participant of the right to purchase shares of Common
Stock under the Plan. Re-enrollment by a Participant in the Plan will constitute
a grant by Nuevo to the Participant of a new opportunity to purchase shares of
Common Stock on the Enrollment Date on which such re-enrollment occurs. A
Participant will have shares of Common Stock purchased for him on the applicable
Purchase Date, and he will automatically be re-enrolled in the Plan on the next
Enrollment Date, unless, prior to the next such Enrollment Date, such
Participant (a) terminates employment, (b) dies, (c) suspends his contributions
to the Plan and does not re-enroll, or (d) notifies the person designated by the
Committee on the appropriate form that he elects not to re-enroll.
Each right to purchase shares of Common Stock under the Plan shall have the
following terms:
(i) the right to purchase shares of Common Stock during a particular
Purchase Period shall expire on the earlier of, (A) the completion of the
purchase of shares of Common Stock on the Purchase Date applicable to the
Purchase Period, or (B) the date on which participation of such Participant
in the Plan terminates for any reason;
(ii) payment for shares of Common Stock purchased will be made only
through Participant contributions and the crediting of dividends, if
applicable, in accordance with Section 7;
(iii) purchase of shares of Common Stock will be accomplished only in
accordance with Section 9;
(iv) the purchase price per share of Common Stock will be determined
as provided in Section 9;
(v) the right to purchase shares of Common Stock (taken together with
all other such rights then outstanding under this Plan and under all other
similar stock purchase plans
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of Nuevo or any Subsidiary) will in no event give a Participant the right
to purchase Common Stock at a rate which exceeds $25,000 in fair market
value of the Common Stock (determined on the applicable Grant Date) for
each calendar year in which an option to purchase shares of Common Stock
granted to such Participant is outstanding at any time. Such limit shall be
referred to herein as the "Maximum Share Limitation"; and
(vi) the right to purchase shares of Common Stock will in all respects
be subject to the terms and conditions of the Plan, as interpreted by the
Committee from time to time.
9. PURCHASE OF SHARES
The right to purchase shares of Common Stock granted by Nuevo under the
Plan is for the term of a Purchase Period. The Fair Market Value of the Common
Stock to be purchased during such Purchase Period will be determined on the
first trading day during the Purchase Period or such other trading date
designated by the Committee (the "Grant Date"). The Fair Market Value of the
Common Stock will again be determined in the same manner on the last trading day
during the Purchase Period or such other trading date designated by the
Committee (the "Purchase Date"); however, in no event shall the Committee, in
the exercise of its discretion, designate a Purchase Date beyond five (5) years
from the related Grant Date or otherwise fail to meet the requirements of
Section 423(b)(7) of the Code. These dates constitute the date of grant and the
date of exercise for valuation purposes of Section 423 of the Code.
"Fair Market Value" means the closing price for a share of Common Stock as
reported in The Wall Street Journal's NYSE-Composite Transactions listing for
such day (corrected for obvious typographical errors), or if shares of Common
Stock are not reported in such listing, the closing price on the largest
national securities exchange (based on the aggregate dollar value of securities
listed) on which such shares are listed or traded, or if such shares are not
listed or traded on any national securities exchange, then the average of the
reported "high" and "low" sales prices for such shares in the over-the-counter
market, as reported on the National Association of Securities Dealers Automated
Quotations System, or, if such prices shall not be reported thereon, the average
between the closing bid and asked prices so reported, or, if such prices shall
not be reported, then the average closing bid and asked prices reported by the
national Quotation Bureau Incorporated, or, in all other cases, the value
established by the Committee in good faith.
As of the Purchase Date, the Custodian shall apply the contributions to
each Participant's account during the Purchase Period to the purchase of shares
of Common Stock. On the Enrollment Date of each Purchase Period, a Participant
shall be deemed to have been granted an option to purchase a maximum number of
shares of Common Stock (the "Enrollment Date Maximum") equal to an amount
determined as follows: an amount equal to (i) that percentage of the
Participant's base pay which he has elected to have withheld (but not in any
case in excess of 20%) multiplied by (ii) the Participant's base pay during the
Purchase Period (iii) divided by 85% of the Fair Market Value of the stock of
the Company on the applicable Enrollment Date. The number of shares of Common
Stock to be purchased for each participant shall be the lesser of (i) the amount
determined by dividing (a) the amount contributed to the Participant's account
during the Purchase Period, by (b) the purchase price for the Purchase Period or
(ii) the Enrollment Date Maximum. the purchase price for the shares of Common
Stock purchased during a Purchase Period shall be eighty-five percent (85%) of
the Fair Market Value of Common Stock on the Purchase Date.
Certificates evidencing shares of Common Stock purchased shall be delivered
to the Custodian to be held in each Participant's account as soon as
administratively feasible after the
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Purchase Date. Notwithstanding the foregoing, Participants shall be treated as
the record owners of their shares of Common Stock effective as of the Purchase
Date. Shares of Common Stock that are held by the Custodian shall be held in
book entry form. If for any reason the purchase of shares of Common Stock with a
Participants allocations to the Plan exceeds or would exceed the Maximum Share
Limitation, such excess amounts shall be refunded to the Participant as soon as
practicable after such excess has been determined to exist.
If as of any Purchase Date the shares of Common Stock authorized for
purchase under the Plan are exceeded, enrollments shall be reduced
proportionately to eliminate the excess. Any funds that cannot be applied to the
purchase of shares of Common Stock due to excess enrollment shall be refunded as
soon as administratively feasible. The Committee in its discretion may also
provide that excess enrollments may be carried over to the next Purchase Period
under this Plan or any successor plan according to the regulations set forth
under Section 423 of the Code.
10. WITHDRAWAL OF SHARES AND SALE OF SHARES
(a) Withdrawal of Shares. A Participant may elect to withdraw (without
withdrawing from participation in the Plan) shares of Common Stock in his
account at any time after the expiration of one year from the Purchase Date
on which such shares were purchased by giving notice to the Custodian. Upon
receipt of such notice, the Custodian will arrange for the issuance and
delivery of certificates for such shares held in the Participant's account
as soon as administratively feasible. The Participant may be charged a
reasonable fee for each such certificate.
(b) Sale of Shares. A Participant may sell shares of Common Stock
which are held in his account at any time after the expiration of one year
from the Purchase Date on which such shares were purchased (unless such
transaction would be deemed to be matchable for short-swing liability
purposes under Section 16(b) of the Exchange Act) by giving notice to the
Custodian. Upon receipt of such notice, the Custodian will arrange for the
sale of such Participant's shares of Common Stock. Proceeds of a sale of
Common Stock held in a Participant's account shall be paid to the
Participant, less any fees related to the sale as described in Section 16.
11. TERMINATION OF PARTICIPATION
The right to participate in the Plan terminates immediately when a
Participant ceases to be an Employee for any reason whatsoever (including death,
unpaid disability or when the Participants employer ceases to be a Subsidiary)
or the Participant otherwise becomes ineligible. Participation terminates
immediately after the Purchase Date if the Participant is not in the Plan for
the next Purchase Period or if the Participant has suspended contributions
during any Purchase Period and has not in the Plan for the next Purchase Period.
After termination of participation for any reason, any contributions made to the
Plan during the Purchase Period in which the termination of participation occurs
shall be used to purchase shares of Common Stock on the Purchase Date. With
respect to a termination of participation for reasons other than death, the
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Committee shall direct the Custodian to pay to the Participant or his legal
representative cash amounts representing any fractional shares of Common Stock
credited to his account and (unless participation has resumed) to cause a
certificate for the number of whole shares of Common Stock held in his account
to be delivered to the Participant or his legal representative as soon as
administratively feasible after the expiration of one year from the Purchase
Date on which such shares were purchased. For purposes of the Plan, a
Participant is not deemed to have terminated his employment if he transfers
employment from Nuevo to a Subsidiary, or vice versa, or transfers employment
between Subsidiaries.
12. UNPAID LEAVE OF ABSENCE
Shares of Common Stock will be purchased for a Participant's account on the
Purchase Date next following commencement of an unpaid leave of absence by such
Participant. The number of shares of Common Stock to be purchased will be
determined by applying to the purchase the amount of the Participants
contributions made during the Purchase Period up to the commencement of such
unpaid leave of absence. If the Participant's unpaid leave of absence both
commences and terminates during the same Purchase Period and he has resumed
eligible employment prior to the Purchase Date related to that Purchase Period,
he may also resume contributions immediately, and shares of Common Stock will be
purchased for him on such Purchase Date as otherwise provided in Section 9.
13. DEATH
Each Participant may designate (in accordance with the procedure
established by the Custodian) one or more beneficiaries in the event of death
and may, in his sole discretion, change such designation at any time. Any such
designation shall be effective upon receipt by the Custodian and shall control
over any disposition by will or otherwise.
As soon as administratively feasible after the death of a Participant, the
Custodian shall pay to the Participant's designated beneficiaries or, in the
absence of such designation, to the executor, administrator or other legal
representative of the Participant's estate, cash amounts representing any
fractional shares of Common Stock credited to his account, and shall cause a
certificate for the number of whole shares of Common Stock held in the
Participant's account to be delivered to the Participant's designated
beneficiaries or, in the absence of such designation, to the executor,
administrator or other legal representative of the Participant's estate, as soon
as administratively feasible after the expiration of one year from the Purchase
Date on which such shares were purchased. Such payment shall relieve Nuevo of
further liability to the deceased Participant with respect to the Plan. If more
than one beneficiary is designated, each beneficiary shall receive an equal
portion of the account unless the Participant has given express contrary
instructions.
14. ASSIGNMENT
Except as provided in Section 13, the rights of a Participant under the
Plan will not be assignable or otherwise transferable by the Participant, other
than by will or the laws of descent and distribution. No purported assignment or
transfer of such rights of a Participant under the Plan,
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whether voluntary or involuntary, by operation of law or otherwise, shall vest
in the purported assignee or transferee any interest or right therein
whatsoever, but immediately upon such assignment or transfer, or any attempt to
make the same, such rights shall terminate and become of no further affect. If
this provision is violated, the Participant's election to purchase Common Stock
shall terminate, and the only obligation of Nuevo remaining under the Plan will
be to pay to the person entitled thereto the amount then credited to the
Participant's account. No Participant may create a lien on any funds,
securities, rights or other property held for the account of the Participant
under the Plan, except to the extent that there has been a designation of
beneficiaries in accordance with the Plan, and except to the extent permitted by
will or the laws of descent and distribution if beneficiaries have not been
designated. A Participant's right to purchase shares of Common Stock under the
Plan shall be exercisable only during the Participant's lifetime and only by
him.
15. VOTING OF COMMON STOCK
The Custodian will vote the Common Stock held by it in accordance with
instructions received from Participants with respect to shares of Common Stock
credited to the Participants' accounts. The Custodian will transmit to
Participants all proxy material and other reports furnished by Nuevo to its
stockholders.
16. COSTS
All costs and expenses incurred in administering this Plan shall be paid by
Nuevo. Any (i) brokerage fees for the sale of shares of Common Stock purchased
under the Plan, or (ii) fees for registering shares of Common Stock held by the
Custodian in a Participant's name shall be paid by the Participant.
17. REPORTS
At the end of each calendar quarter, Nuevo shall provide or cause to be
provided to each Participant a report of his contributions and the number of
shares of Common Stock purchased with such contributions by that Participant on
each Purchase Date.
18. EQUAL RIGHTS AND PRIVILEGES
All eligible Employees shall have equal rights and privileges with respect
to the Plan so that the Plan qualifies as an "employee stock purchase plan"
within the meaning of Code Section 423 or any successor provision of the Code
and related regulations. Any provision of the Plan which is inconsistent with
Code Section 423 or any successor provision of the Code shall without further
act or amendment by Nuevo be reformed to comply with the requirements of Code
Section 423. This Section 18 shall take precedence over all other provisions in
the Plan.
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19. RIGHTS AS STOCKHOLDERS
A Participant will have no rights as a stockholder under the election to
purchase until he becomes a stockholder as herein provided. A Participant will
become a stockholder with respect to shares of Common Stock for which payment
has been completed as provided in Section 9.
20. AMENDMENT AND TERMINATION
The Board may amend or terminate the Plan at any time insofar as permitted
by law. No amendment shall be effective unless within one (1) year after it is
adopted by the Board it is approved by the stockholders of Nuevo.
(i) if and to the extent such amendment is required to be approved by
stockholders to continue the exemption provided for in Rule 16b-3; or
(ii) if and to the extent such amendment is required to be approved by
stockholders in order to cause the rights granted under the Plan to
purchase shares of Common Stock to meet the requirements of Section 423 of
the Code (or any successor provision).
The Plan shall terminate after all Common Stock issued under the Plan has
been purchased, unless terminated earlier by the Board or unless additional
Common Stock is issued under the Plan with the approval of the stockholders. In
the event the Plan is terminated, the Committee may elect to terminate all
outstanding rights to purchase shares of Common Stock under the Plan either
immediately or upon completion of the purchase of shares of Common Stock on the
next Purchase Date, unless the Committee has designated that the right to make
all such purchases shall expire on some other designated date occurring prior to
the next Purchase Date. If the rights to purchase shares of Common Stock under
the Plan are terminated prior to expiration, all funds contributed to the Plan
which have not been used to purchase shares of Common Stock shall be returned to
the Participants as soon as administratively feasible.
21. BOARD AND STOCKHOLDER APPROVAL; EFFECTIVE DATE
This Plan was approved by the Board. The Plan will become effective as of
March 1, 1998, upon approval by the holders of a majority of the shares of
outstanding Common Stock of Nuevo present, or represented, and entitled to vote
at the 1998 Annual Meeting of Stockholders.
22. GOVERNMENTAL APPROVALS OR CONSENTS
This Plan and any offering or sale made to Employees under it are subject
to any governmental approvals or consents that may be or become applicable in
connection therewith. Subject to the provisions of Section 20, the Board may
make such changes in the Plan and include such terms in any offering under the
Plan as may be desirable to comply with the rules or regulations of any
governmental authority.
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23. LISTING OF SHARES AND RELATED MATTERS
If at any time the Board or the Committee shall determine, based on opinion
of legal counsel, that the listing, registration or qualification of the shares
of Common Stock covered by the Plan upon any national securities exchange or
reporting system or under any state or federal law is necessary or desirable as
a condition of, or in connection with, the sale or purchase of shares of Common
Stock under the Plan, no shares of Common Stock will be sold, issued or
delivered unless and until such listing, registration or qualification shall
have been effected or obtained, or otherwise provided for, free of any
conditions not acceptable to legal counsel.
24. EMPLOYMENT RIGHTS
The Plan shall neither impose any obligation on Nuevo or on any Subsidiary
to continue the employment of any Participant, nor impose any obligation on any
Participant to remain the employ of Nuevo or of any Subsidiary.
25. WITHHOLDING OF TAXES
The Committee may make such provisions as it may deem appropriate for the
withholding of any taxes which it determines is required in connection with the
purchase of Common Stock under the Plan.
26. RESPONSIBILITY AND INDEMNITY
Neither Nuevo, the Board, the Committee, any subsidiary of Nuevo, nor any
member, officer, agent or employee of any of them, shall be liable to any
Participant under the Plan for any mistake of judgment or for any omission or
wrongful act unless resulting from gross negligence or willful misconduct. Nuevo
will indemnify and hold harmless the Board, the Committee, any subsidiary of
Nuevo, and any member, officer, agent or employee of any of them against any
claim, loss, liability or expense arising out of the Plan, except such as may
result from the gross negligence or willful misconduct of such entity or person.
27. GOVERNING LAW
The Plan and rights to purchase shares of Common Stock that may be granted
hereunder shall I be governed by and construed and enforced in accordance with
the laws of the state of Texas.
28. USE OF GENDER
The gender of words used in the Plan shall be construed to include
whichever may be appropriate under any particular circumstances of the
masculine, feminine or neuter genders.
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