Annual Report — Form 10-K
Filing Table of Contents
Document/Exhibit Description Pages Size
1: 10-K Mitchell Energy 10-K 1994 25 138K
2: EX-4.A To Mitchell 10-K 12 38K
3: EX-10.F To Mitchell 10-K 21 40K
4: EX-10.G To Mitchell 10-K 19 39K
5: EX-10.J To Mitchell 10-K 26 92K
6: EX-12 To Mitchell 10-K 2± 10K
7: EX-13 To Mitchell 10-K 70 350K
8: EX-21 To Mitchell 10-K 2± 9K
9: EX-23 To Mitchell 10-K 1 7K
10: EX-99.A To Mitchell 10-K 1 7K
11: EX-99.B To Mitchell 10-K 1 7K
EX-10.J — To Mitchell 10-K
| EX-10.J | 1st Page of 26 | TOC | ↑Top | Previous | Next | ↓Bottom | Just 1st |
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Exhibit 10(j)
January 3, 1994
Mr. W. D. Stevens
5715 Indian Trail
Houston, Texas 77057
Dear Bill:
The purpose of this letter is to document the offer by Mitchell Energy
& Development Corp. (the "Company") for you to become President and Chief
Operating Officer of the Company effective January 3, 1994 (your "Employment
Date") and your acceptance of that offer.
In your new position, you will report directly to me, as I will
continue as Chairman of the Board of Directors and Chief Executive Officer of
the Company. You will remain a Director of the Company (subject, of course, to
your re-election annually by the stockholders); but as an "inside" Director,
you will have to resign from the Audit Committee of the Board of Directors (the
"Board"), effective your Employment Date. (You will, of course, no longer
receive compensation as an "outside" Director.)
Your starting annual salary, as a regular employee of the Company, will
be FOUR HUNDRED THOUSAND AND NO/100 DOLLARS ($400,000.00). Subsequent salary
increases will be based upon your performance, Company financial results and
Board action. Additionally, your compensation package includes the following
provisions:
- You will have full rights and be eligible to participate in all of the
benefit plans of the Company, as described in the Employee Handbook and
related documents; and
- Beginning January 1, 1995, you will be eligible for four (4) weeks paid
annual vacation.
On your Employment Date, you will receive stock option grants for SIXTY
THOUSAND (60,000) shares of the Company's Class A Common Stock and SIXTY
THOUSAND (60,000) shares of the Company's Class B Common Stock. The mix of the
options between incentive options and non-incentive options will need to be
determined at the time of grant, for as you are aware to the extent that the
aggregate fair market value at the time of grant of stock to which incentive
options are exercisable for the first time by an individual during any
calendar-year exceeds $100,000, such stock options do not qualify as incentive
stock options. Such grants will be made pursuant to the terms of the Company's
1989 Stock Option Plan (as amended, the "1989 Plan") and Stock Option
Agreements between you and
Mr. W. D. Stevens
Page 2
the Company, copies of which are attached hereto as Exhibits "A", "B", "C" and
"D". and made a part of this offer. Vesting of such options will be as
provided in the 1989 Plan and these Exhibits. You will also be eligible to
participate in any bonus or bonus unit awards made to Company employees, all as
awarded and determined at the sole discretion of the Compensation Committee of
the Board.
It is understood that, as a result of your recent relationship with
Exxon Corporation, it may be necessary for you to recuse yourself from matters
where you have prior proprietary knowledge resulting from such previous
employment and in which the Company is in direct competition with Exxon
Corporation (or any of its affiliates, together "Exxon"). The Company agrees to
this restriction. I understand, and the Company also agrees, that you are not
to participate in any direct business dealings, without Exxon's prior consent,
between the Company and Exxon or otherwise conduct business for the Company,
which could reasonably be interpreted as a conflict of interest as a
consequence of your prior Exxon employment. I also recognize that, from time
to time, you may have to make yourself available to Exxon for legal or other
proceedings related to events or actions which occurred during your previous
Exxon employment.
Again, Bill, I am most pleased to have you become a very important part
of the Company. If the terms contained herein are as we have agreed, please
execute this letter and the enclosed copy and return the fully-executed copy to
me.
Sincerely,
George P. Mitchell
AGREED to this 3rd day
of January, 1994.
By: /s/ W. D. STEVENS
_____________________________
W. D. Stevens
Attachments: Exhibits "A", "B", "C" and "D"
[ISO/Class A]
INCENTIVE STOCK OPTION AGREEMENT
AGREEMENT made this 3rd day of January, 1994, between MITCHELL ENERGY &
DEVELOPMENT CORP., a Texas corporation (the "Company"), and W. D. STEVENS
("Employee").
To carry out the purposes of the MITCHELL ENERGY & DEVELOPMENT CORP.
1989 STOCK OPTION PLAN (the "Plan"), by affording Employee the opportunity to
purchase shares of the Class A Common Stock of the Company ("Stock"), and in
consideration of the mutual agreements and other matters set forth herein and
in the Plan, the Company and Employee hereby agree as follows:
1. GRANT OF OPTION. The Company hereby irrevocably grants to Employee
the right and option ("Option") to purchase all or any part of an aggregate of
12,230 shares of Stock, on the terms and conditions set forth herein and in the
Plan, which Plan is incorporated herein by reference as a part of this
Agreement. This Option is intended to constitute an incentive stock option,
within the meaning of section 422(b) of the Internal Revenue Code of l986, as
amended (the "Code").
2. PURCHASE PRICE. The purchase price of Stock purchased pursuant to
the exercise of this Option shall be $20.625 per share, which has been
determined to be not less than the fair market value of the Stock at the date
of grant of this Option. For all purposes of this Agreement, fair market value
of Stock shall be determined in accordance with the provisions of the Plan.
3. EXERCISE OF OPTION. Subject to the earlier expiration of this
Option as herein provided, this Option may be exercised, by written notice to
the Company at its principal executive office addressed to the attention of its
Option Plan Administrator, at any time and from time to time after the date of
grant hereof, but, except as otherwise provided below, this Option shall not be
exercisable for more than a portion of the aggregate number of shares offered
by this Option determined by the number of full years from the date of grant
hereof to the date of such exercise, in accordance with the following schedule:
[Download Table]
Number of Full Years Number of Shares that May be Purchased
-------------------- --------------------------------------
Less than 1 year 0
1 year 2,446
2 years 4,892
3 years 7,338
4 years 9,784
5 years 12,230
This Option is not transferable by Employee otherwise than by will or
the laws of descent and distribution, and may be exercised only by Employee (or
his guardian or legal representative) during Employee's lifetime and while
Employee remains an employee of the Company, except that:
(a) If Employee dies while in the employ of the Company,
Employee's estate, or the person who acquires this Option by will
or the laws of descent and distribution or otherwise by reason of
the death of Employee, may exercise this Option at any time during
the period of one year following the date of Employee's death, but
only as to the number of shares Employee was entitled to purchase
hereunder as of the date of Employee's death.
(b) If Employee's employment with the Company is terminated for
cause, this option may be exercised by Employee at any time during
the period of three months following such termination, or by
Employee's estate (or the person who acquires this Option by will
or the laws of descent and distribution or otherwise by reason of
the death of Employee) during a period of one year following
Employee's death if Employee dies during such three-month period,
but in each case only as to the number of shares Employee was
entitled to purchase hereunder as of the date Employee's employment
so terminates. For purposes of this paragraph, "cause" shall mean
Employee's actions significantly and adversely affecting (except
for disability) the performance of, or his ability to perform,
Employee's job, including but not limited to failure or refusal to
perform his duties to the Company, major violation of the Company's
conflict of interest or other policies, or Employee's final
conviction of a felony or of a misdemeanor involving moral
turpitude.
(c) If Employee's employment with the Company terminates for
any reason other than as described in (a) or (b) above, this Option
may be exercised by Employee at any time during the period of one
year following such
-2-
termination, or by Employee's estate (or the person who acquires
this Option by will or the laws of descent and distribution or
otherwise by reason of the death of Employee) during a period of
one year following Employee's death if Employee dies during such
one-year period, but in each case only as to the number of shares
Employee was entitled to purchase hereunder as of the date
Employee's employment so terminates.
This Option shall not be exercisable in any event after the expiration
of ten years from the date of grant hereof. The purchase price of shares as to
which this Option is exercised shall be paid in full at the time of exercise (a)
in cash (including check, bank draft or money order payable to the order of the
Company), or (b) by delivering to the Company shares of Stock having a fair
market value equal to the purchase price, or (c) any combination of cash and
Stock. No fraction of a share of Stock shall be issued by the Company upon
exercise of an Option or accepted by the Company in payment of the exercise
price thereof; rather, Employee shall provide a cash payment for such amount as
is necessary to effect the issuance and acceptance of only whole shares of
Stock. Unless and until a certificate or certificates representing such shares
shall have been issued by the Company to Employee, Employee (or the person
permitted to exercise this Option in the event of Employee's death or
incapacity) shall not be or have any of the rights or privileges of a
shareholder of the Company with respect to shares acquirable upon an exercise of
this Option.
Notwithstanding the foregoing, upon an exercise of this Option, if
Employee is not then subject to the restrictions on insider trading pursuant to
section 16(b) of the Securities Exchange Act of 1934, Employee may elect to
follow such exercise by immediate sale of any treasury Stock acquired pursuant
to such exercise in accordance with the following:
(i) Upon receipt of notice of exercise and immediate sale
pursuant to this provision, the Company will extend credit, on an
interest-free basis, to Employee for the aggregate exercise price; and
(ii) The Company's transfer agent will be instructed to issue
certificates for such Stock; and
(iii) A brokerage company or companies selected by the Company
will sell the Stock for the account of Employee; and
(iv) The portion of the proceeds of such sale totaling the
Option exercise price plus the amount of applicable withheld taxes will
be paid on settlement date to the Company; and
-3-
(v) The proceeds of such sale less the Option exercise price,
the amount of applicable withheld taxes, and applicable brokerage fees
will be paid on settlement date to the Employee.
4. WITHHOLDING OF TAX. To the extent that the exercise of this Option
or the disposition of shares of Stock acquired by exercise of this Option
results in compensation income to Employee for federal or state income tax
purposes, Employee shall pay to the Company at the time of such exercise or
disposition such amount of money as the Company may require to meet its
obligation under applicable tax laws or regulations, and, if Employee fails to
do so, the Company is authorized to withhold from any cash remuneration then or
thereafter payable to Employee any tax required to be withheld by reason of such
resulting compensation income.
5. STATUS OF STOCK. The Company intends to register for sale under the
Securities Act of l933, as amended (the "Act") the shares of Stock acquirable
upon exercise of this Option, and to keep such registration effective throughout
the period this Option is exercisable. In the absence of such effective
registration or an available exemption from registration under the Act,
issuance of shares of Stock acquirable upon exercise of this Option
will be delayed until registration of such shares is effective or
an exemption from registration under the Act is available. The
Company intends to use its best efforts to ensure that no
such delay will occur. In the event exemption from registration under
the Act is available upon an exercise of this Option, Employee (or the person
permitted to exercise this Option in the event of Employee's death or
incapacity), if requested by the Company to do so, will execute and deliver to
the Company in writing an agreement containing such provisions as the Company
may require to assure compliance with applicable securities laws.
Employee agrees that the shares of Stock which Employee may
acquire by exercising this Option will not be sold or otherwise disposed of in
any manner which would constitute a violation of any applicable securities laws,
whether federal or state. Employee also agrees (i) that the certificates
representing the shares of Stock purchased under this Option may bear such
legend or legends as the Committee deems appropriate in order to assure
compliance with applicable securities laws, and (ii) that the Company may refuse
to register the transfer of the shares of Stock purchased under this Option on
the stock transfer records of the Company if such proposed transfer would in the
opinion of counsel satisfactory to the Company constitute a violation of any
applicable securities laws and (iii) that the Company may give related
instructions to its transfer agent, if any, to stop registration of the transfer
of the shares of Stock purchased under this Option.
6. EMPLOYMENT RELATIONSHIP. For purposes of this Agreement, Employee
shall be considered to be in the employment of the Company as long as Employee
remains an employee of either the Company, a parent or subsidiary corporation
(as defined in section 424 of the Code) of the Company, or a corporation or a
parent or subsidiary of such corporation assuming or
-4-
substituting a new option for this Option. Any question as to whether and when
there has been a termination of such employment, and the cause of such
termination, shall be determined by the Committee and its determination shall
be final.
7. CHANGE OF CONTROL. In addition to the conditions for vesting
contained hereinabove in this Agreement and in the Plan, Employee shall have the
right to exercise any or all of the remaining unexercised shares offered by this
Option upon the occurrence of the following described event, so long as such
event occurs more than one year from the date of grant of this Option.
o If the ownership of the Company changes from the majority voting
control of the Company being held by George P. Mitchell ("Mr.
Mitchell") himself only ("Change of Control"); and
o If Employee is employed in a position at least equivalent to President
and Chief Operating Officer of the Company immediately prior to the
Change of Control; and
o If Employee is no longer employed in a position at least substantially
equivalent to President and Chief Operating Officer of the Company and
no longer paid a salary at least equivalent to the salary being paid to
Employee immediately prior to the Change of Control ("Loss of
Position") for at least one year following the Change of Control.
o For the purposes hereof, the "Company" includes the largest surviving
energy company if Mitchell Energy & Development Corp. is ever merged or
consolidated or is divided or otherwise reorganized into two or more
companies.
o If Employee voluntarily severs employment with the Company for any
reason except Loss of Position or if the Company discharges him for
cause, this right to accelerate remaining unexercised shares offered
by this Option shall terminate immediately. For the purposes hereof,
"for cause" shall mean Employee's actions significantly and adversely
affecting (except for disability or death) the performance of, or his
ability to perform, Employee's job, including but not limited to
failure or refusal to perform his duties to the Company, major
violation of the Company's conflict of interest or other policies,
or Employee's final conviction of a felony or of a misdemeanor
involving moral turpitude.
8. BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefit of any successors to the Company and all persons lawfully claiming
under Employee.
9. GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Texas.
-5-
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed by its officer thereunto duly authorized, and Employee has executed
this Agreement, all as of the day and year first above written.
MITCHELL ENERGY & DEVELOPMENT
CORP.
By: /s/ George P. Mitchell
_________________________________________
W. D. STEVENS
/s/ W. D. Stevens
_________________________________________
-6-
[ISO/Class B]
INCENTIVE STOCK OPTION AGREEMENT
AGREEMENT made this 3rd day of January, 1994, between MITCHELL ENERGY &
DEVELOPMENT CORP., a Texas corporation (the "Company"), and W. D. STEVENS
("Employee").
To carry out the purposes of the MITCHELL ENERGY & DEVELOPMENT CORP.
1989 STOCK OPTION PLAN (the "Plan"), by affording Employee the opportunity to
purchase shares of the Class B Common Stock of the Company ("Stock"), and in
consideration of the mutual agreements and other matters set forth herein and
in the Plan, the Company and Employee hereby agree as follows:
1. GRANT OF OPTION. The Company hereby irrevocably grants to Employee
the right and option ("Option") to purchase all or any part of an aggregate of
12,230 shares of Stock, on the terms and conditions set forth herein and in the
Plan, which Plan is incorporated herein by reference as a part of this
Agreement. This Option is intended to constitute an incentive stock option,
within the meaning of section 422(b) of the Internal Revenue Code of l986, as
amended (the "Code").
2. PURCHASE PRICE. The purchase price of Stock purchased pursuant to
the exercise of this Option shall be $20.25 per share, which has been
determined to be not less than the fair market value of the Stock at the date
of grant of this Option. For all purposes of this Agreement, fair market value
of Stock shall be determined in accordance with the provisions of the Plan.
3. EXERCISE OF OPTION. Subject to the earlier expiration of this
Option as herein provided, this Option may be exercised, by written notice to
the Company at its principal executive office addressed to the attention of its
Option Plan Administrator, at any time and from time to time after the date of
grant hereof, but, except as otherwise provided below, this Option shall not be
exercisable for more than a portion of the aggregate number of shares offered
by this Option determined by the number of full years from the date of grant
hereof to the date of such exercise, in accordance with the following schedule:
[Download Table]
Number of Full Years Number of Shares that May be Purchased
-------------------- --------------------------------------
Less than 1 year 0
1 year 2,446
2 years 4,892
3 years 7,338
4 years 9,784
5 years 12,230
This Option is not transferable by Employee otherwise than by will or
the laws of descent and distribution, and may be exercised only by Employee (or
his guardian or legal representative) during Employee's lifetime and while
Employee remains an employee of the Company, except that:
(a) If Employee dies while in the employ of the Company,
Employee's estate, or the person who acquires this Option by
will or the laws of descent and distribution or otherwise by
reason of the death of Employee, may exercise this Option at
any time during the period of one year following the date of
Employee's death, but only as to the number of shares Employee
was entitled to purchase hereunder as of the date of Employee's
death.
(b) If Employee's employment with the Company is terminated for
cause, this option may be exercised by Employee at any time
during the period of three months following such termination,
or by Employee's estate (or the person who acquires this Option
by will or the laws of descent and distribution or otherwise by
reason of the death of Employee) during a period of one year
following Employee's death if Employee dies during such
three-month period, but in each case only as to the number of
shares Employee was entitled to purchase hereunder as of the
date Employee's employment so terminates. For purposes of this
paragraph, "cause" shall mean Employee's actions significantly
and adversely affecting (except for disability) the performance
of, or his ability to perform, Employee's job, including but
not limited to failure or refusal to perform his duties to the
Company, major violation of the Company's conflict of interest
or other policies, or Employee's final conviction of a felony
or of a misdemeanor involving moral turpitude.
(c) If Employee's employment with the Company terminates for any
reason other than as described in (a) or (b) above, this
Option may be exercised by Employee at any time during the
period of one year following such termination, or by
Employee's estate (or the person who acquires this Option by
will or the laws of descent and distribution or otherwise by
reason of the death of Employee) during a period of one year
following
-2-
Employee's death if Employee dies during such one year
period, but in each case only as to the number of shares
Employee was entitled to purchase hereunder as of the date
Employee's employment so terminates.
This Option shall not be exercisable in any event after the expiration
of ten years from the date of grant hereof. The purchase price of shares as to
which this Option is exercised shall be paid in full at the time of exercise
(a) in cash (including check, bank draft or money order payable to the order of
the Company), or (b) by delivering to the Company shares of Stock having a fair
market value equal to the purchase price, or (c) any combination of cash and
Stock. No fraction of a share of Stock shall be issued by the Company upon
exercise of an Option or accepted by the Company in payment of the exercise
price thereof; rather, Employee shall provide a cash payment for such amount as
is necessary to effect the issuance and acceptance of only whole shares of
Stock. Unless and until a certificate or certificates representing such shares
shall have been issued by the Company to Employee, Employee (or the person
permitted to exercise this Option in the event of Employee's death or
incapacity) shall not be or have any of the rights or privileges of a
shareholder of the Company with respect to shares acquirable upon an exercise
of this Option.
Notwithstanding the foregoing, upon an exercise of this Option, if
Employee is not then subject to the restrictions on insider trading pursuant to
section 16(b) of the Securities Exchange Act of 1934, Employee may elect to
follow such exercise by immediate sale of any treasury Stock acquired pursuant
to such exercise in accordance with the following:
(i) Upon receipt of notice of exercise and immediate sale
pursuant to this provision, the Company will extend credit, on an
interest-free basis, to Employee for the aggregate exercise price; and
(ii) The Company's transfer agent will be instructed to issue
certificates for such Stock; and
(iii) A brokerage company or companies selected by the Company
will sell the Stock for the account of Employee; and
(iv) The portion of the proceeds of such sale totaling the
Option exercise price plus the amount of applicable withheld taxes will
be paid on settlement date to the Company; and
(v) The proceeds of such sale less the Option exercise price,
the amount of applicable withheld taxes, and applicable brokerage fees
will be paid on settlement date to the Employee.
4. WITHHOLDING OF TAX. To the extent that the exercise of this Option
or the disposition of shares of Stock acquired by exercise of this Option
results in compensation income
-3-
to Employee for federal or state income tax purposes, Employee shall pay to the
Company at the time of such exercise or disposition such amount of money as the
Company may require to meet its obligation under applicable tax laws or
regulations, and, if Employee fails to do so, the Company is authorized to
withhold from any cash remuneration then or thereafter payable to Employee any
tax required to be withheld by reason of such resulting compensation income.
5. STATUS OF STOCK. The Company intends to register for sale under the
Securities Act of l933, as amended (the "Act") the shares of Stock acquirable
upon exercise of this Option, and to keep such registration effective
throughout the period this Option is exercisable. In the absence of such
effective registration or an available exemption from registration under the
Act, issuance of shares of Stock acquirable upon exercise of this Option will
be delayed until registration of such shares is effective or an exemption from
registration under the Act is available. The Company intends to use its best
efforts to ensure that no such delay will occur. In the event exemption from
registration under the Act is available upon an exercise of this Option,
Employee (or the person permitted to exercise this Option in the event of
Employee's death or incapacity), if requested by the Company to do so, will
execute and deliver to the Company in writing an agreement containing such
provisions as the Company may require to assure compliance with applicable
securities laws.
Employee agrees that the shares of Stock which Employee may acquire by
exercising this Option will not be sold or otherwise disposed of in any manner
which would constitute a violation of any applicable securities laws, whether
federal or state. Employee also agrees (i) that the certificates representing
the shares of Stock purchased under this Option may bear such legend or legends
as the Committee deems appropriate in order to assure compliance with
applicable securities laws, and (ii) that the Company may refuse to register
the transfer of the shares of Stock purchased under this Option on the stock
transfer records of the Company if such proposed transfer would in the opinion
of counsel satisfactory to the Company constitute a violation of any applicable
securities laws and (iii) that the Company may give related instructions to its
transfer agent, if any, to stop registration of the transfer of the shares of
Stock purchased under this Option.
6. EMPLOYMENT RELATIONSHIP. For purposes of this Agreement, Employee
shall be considered to be in the employment of the Company as long as Employee
remains an employee of either the Company, a parent or subsidiary corporation
(as defined in section 424 of the Code) of the Company, or a corporation or a
parent or subsidiary of such corporation assuming or substituting a new option
for this Option. Any question as to whether and when there has been a
termination of such employment, and the cause of such termination, shall be
determined by the Committee and its determination shall be final.
7. CHANGE OF CONTROL. In addition to the conditions for vesting
contained hereinabove in this Agreement and in the Plan, Employee shall have
the right to exercise any or all of the remaining unexercised shares offered by
this Option upon the occurrence of the
-4-
following described event, so long as such event occurs more than one year from
the date of grant of this Option.
o If the ownership of the Company changes from the majority voting
control of the Company being held by George P. Mitchell ("Mr.
Mitchell") himself only ("Change of Control"); and
o If Employee is employed in a position at least equivalent to President
and Chief Operating Officer of the Company immediately prior to the
Change of Control; and
o If Employee is no longer employed in a position at least substantially
equivalent to President and Chief Operating Officer of the Company and
no longer paid a salary at least equivalent to the salary being paid to
Employee immediately prior to the Change of Control ("Loss of
Position") for at least one year following the Change of Control.
o For the purposes hereof, the "Company" includes the largest surviving
energy company if Mitchell Energy & Development Corp. is ever merged or
consolidated or is divided or otherwise reorganized into two or more
companies.
o If Employee voluntarily severs employment with the Company for any
reason except Loss of Position or if the Company discharges him for
cause, this right to accelerate remaining unexercised shares offered
by this Option shall terminate immediately. For the purposes hereof,
"for cause" shall mean Employee's actions significantly and adversely
affecting (except for disability or death) the performance of, or his
ability to perform Employee's job, including but not limited to
failure or refusal to perform his duties to the Company, major
violation of the Company's conflict of interest or other policies, or
Employee's final conviction of a felony or of a misdemeanor involving
moral turpitude.
8. BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefit of any successors to the Company and all persons lawfully claiming
under Employee.
9. GOVERNING LAW. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Texas.
-5-
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed by its officer thereunto duly authorized, and Employee has executed
this Agreement, all as of the day and year first above written.
MITCHELL ENERGY & DEVELOPMENT
CORP.
By: /s/ GEORGE P. MITCHELL
_____________________________________
W. D. STEVENS
/s/ W. D. STEVENS
______________________________________
-6-
[NQ/Class A]
NONSTATUTORY STOCK OPTION AGREEMENT
AGREEMENT made as of the 3rd day of January, 1994, between MITCHELL
ENERGY & DEVELOPMENT CORP., a Texas corporation (the "Company"), and W. D.
STEVENS ("Employee").
To carry out the purposes of the MITCHELL ENERGY & DEVELOPMENT CORP.
1989 STOCK OPTION PLAN (the "Plan"), by affording Employee the opportunity to
purchase shares of the Class A Common Stock of the Company ("Stock"), and in
consideration of the mutual agreements and other matters set forth herein and
in the Plan, the Company and Employee hereby agree as follows:
1. GRANT OF OPTION. The Company hereby irrevocably grants to Employee
the right and option ("Option") to purchase all or any part of an aggregate of
47,770 shares of Stock, on the terms and conditions set forth herein and in the
Plan, which Plan is incorporated herein by reference as a part of this
Agreement. This Option shall not be treated as an incentive stock option
within the meaning of Section 422(b) of the Internal Revenue Code of 1986, as
amended (the "Code").
2. PURCHASE PRICE. The purchase price of Stock purchased pursuant to
the exercise of this Option shall be $20.625 per share, which has been
determined to be not less than the fair market value of the Stock at the date
of grant of this Option. For all purposes of this Agreement, fair market value
of Stock shall be determined in accordance with the provisions of the Plan.
3. EXERCISE OF OPTION. Subject to the earlier expiration of this
Option as herein provided, this Option may be exercised, by written notice to
the Company at its principal executive office addressed to the attention of its
Option Plan Administrator, at any time and from time to time after the date of
grant hereof, but, except as otherwise provided below, this Option shall not be
exercisable for more than a portion of the aggregate number of shares offered
by this Option determined by the number of full years from the date of grant
hereof to the date of such exercise, in accordance with the following schedule:
[Download Table]
Number of Full Years Number of Shares That May Be Purchased
-------------------- --------------------------------------
Less than 1 year 0
1 year 7,554
2 years 15,108
3 years 22,662
4 years 30,216
5 years 47,770
This Option is not transferable by Employee otherwise than by will or
the laws of descent and distribution, and may be exercised only by Employee (or
his guardian or legal representative) during Employee's lifetime and while
Employee remains an employee of the Company, except that:
(a) If Employee dies while in the employ of the Company, Employee's
estate, or the person who acquires this Option by will or the
laws of descent and distribution or otherwise by reason of the
death of Employee, may exercise this Option at any time during
the period of one year following the date of Employee's death
but only as to the number of shares Employee was entitled to
purchase hereunder as of the date of Employee's death.
(b) If Employee's employment with the Company is terminated for
cause, this option may be exercised by Employee at any time
during the period of three months following such termination,
or by Employee's estate (or the person who acquires this Option
by will or the laws of descent and distribution or otherwise by
reason of the death of Employee) during a period of one year
following Employee's death if Employee dies during such
three-month period, but in each case only as to the number of
shares Employee was entitled to purchase hereunder as of the
date Employee's employment so terminates. For purposes of this
paragraph, "cause" shall mean Employee's actions significantly
and adversely affecting (except for disability) the performance
of, or his ability to perform, Employee's job, including but
not limited to failure or refusal to perform his duties to the
Company, major violation of the Company's conflict of interest
or other policies, or Employee's final conviction of a felony
or of a misdemeanor involving moral turpitude.
(c) If Employee's employment with the Company terminates for any
reason other than as described in (a) or (b) above, this Option
may be exercised by Employee at any time during the period of
one year following such termination, or by Employee's estate
(or the person who acquires this
-2-
Option by will or the laws of descent and distribution or
otherwise by reason of the death of Employee) during a period
of one year following Employee's death if Employee dies during
such one year period, but in each case only as to the number of
shares Employee was entitled to purchase hereunder as of the
date Employee's employment so terminates.
This Option shall not be exercisable in any event after the expiration
of ten years from the date of grant hereof. The purchase price of shares as to
which this Option is exercised shall be paid in full at the time of exercise
(a) in cash (including check, bank draft or money order payable to the order of
the Company), (b) by delivering to the Company shares of Stock having a fair
market value equal to the purchase price, or (c) any combination of cash and
Stock. No fraction of a share of Stock shall be issued by the Company upon
exercise of an Option or accepted by the Company in payment of the purchase
price thereof; rather, Employee shall provide a cash payment for such amount as
is necessary to effect the issuance and acceptance of only whole shares of
Stock. Unless and until a certificate or certificates representing such shares
shall have been issued by the Company to Employee, Employee (or the person
permitted to exercise this Option in the event of Employee's death or
incapacity) shall not be or have any of the rights or privileges of a
shareholder of the Company with respect to shares acquirable upon an exercise
of this Option.
Notwithstanding the foregoing, upon an exercise of this Option, if
Employee is not then subject to the restrictions on insider trading pursuant to
section 16(b) of the Securities Exchange Act of 1934, Employee may elect to
follow such exercise by immediate sale of any treasury Stock acquired pursuant
to such exercise in accordance with the following:
(i) Upon receipt of notice of exercise and immediate sale
pursuant to this provision, the Company will extend credit, on an
interest-free basis, to Employee for the aggregate exercise price; and
(ii) The Company's transfer agent will be instructed to issue
certificates for such Stock; and
(iii) A brokerage company or companies selected by the Company
will sell the Stock for the account of Employee; and
(iv) The portion of the proceeds of such sale totaling the
Option exercise price plus the amount of applicable withheld taxes will
be paid on settlement date to the Company; and
-3-
(v) The proceeds of such sale less the Option exercise price,
the amount of applicable withheld taxes, and applicable brokerage fees
will be paid on settlement date to the Employee.
4. WITHHOLDING OF TAX. To the extent that the exercise of this Option
or the disposition of shares of Stock acquired by exercise of this Option
results in compensation income to Employee for federal or state income tax
purposes, Employee shall pay to the Company at the time of such exercise or
disposition such amount of money as the Company may require to meet its
obligation under applicable tax laws or regulations, and, if Employee fails to
do so, the Company is authorized to withhold from any cash remuneration then or
thereafter payable to Employee any tax required to be withheld by reason of
such resulting compensation income.
5. STATUS OF STOCK. The Company intends to register for sale under
the Securities Act of l933, as amended (the "Act") the shares of Stock
acquirable upon exercise of this Option, and to keep such registration
effective throughout the period this Option is exercisable. In the absence of
such effective registration or an available exemption from registration under
the Act, issuance of shares of Stock acquirable upon exercise of this Option
will be delayed until registration of such shares is effective or an exemption
from registration under the Act is available. The Company intends to use its
best efforts to ensure that no such delay will occur. In the event exemption
from registration under the Act is available upon an exercise of this Option,
Employee (or the person permitted to exercise this Option in the event of
Employee's death or incapacity), if requested by the Company to do so, will
execute and deliver to the Company in writing an agreement containing such
provisions as the Company may require to assure compliance with applicable
securities laws.
Employee agrees that the shares of Stock which Employee may acquire by
exercising this Option will not be sold or otherwise disposed of in any manner
which would constitute a violation of any applicable securities laws, whether
federal or state. Employee also agrees (i) that the certificates representing
the shares of Stock purchased under this Option may bear such legend or legends
as the Committee deems appropriate in order to assure compliance with
applicable securities laws, (ii) that the Company may refuse to register the
transfer of the shares of Stock purchased under this Option on the stock
transfer records of the Company if such proposed transfer would in the opinion
of counsel satisfactory to the Company constitute a violation of any applicable
securities law and (iii) that the Company may give related instructions to its
transfer agent, if any, to stop registration of the transfer of the shares of
Stock purchased under this Option.
6. EMPLOYMENT RELATIONSHIP. For purposes of this Agreement, Employee
shall be considered to be in the employment of the Company as long as Employee
remains an employee of either the Company, a parent or subsidiary corporation
(as defined in Section 424 of the Code) of the Company, or a corporation or a
parent or subsidiary of such corporation assuming
-4-
or substituting a new option for this Option. Any question as to whether and
when there has been a termination of such employment, and the cause of such
termination, shall be determined by the Committee, and its determination shall
be final.
7. CHANGE OF CONTROL. In addition to the conditions for vesting
contained hereinabove in this Agreement and in the Plan, Employee shall have
the right to exercise any or all of the remaining unexercised shares offered by
this Option upon the occurrence of the following described event, so long as
such event occurs more than one year from the date of grant of this Option.
o If the ownership of the Company changes from the majority
voting control of the Company being held by George P. Mitchell ("Mr.
Mitchell") himself only ("Change of Control"); and
o If Employee is employed in a position at least equivalent to
President and Chief Operating Officer of the Company immediately prior
to the Change of Control; and
o If Employee is no longer employed in a position at least
substantially equivalent to President and Chief Operating Officer of
the Company and no longer paid a salary at least equivalent to the
salary being paid to Employee immediately prior to the Change of
Control ("Loss of Position") for at least one year following the Change
of Control.
o For the purposes hereof, the "Company" includes the largest
surviving energy company if Mitchell Energy & Development Corp. is ever
merged or consolidated or is divided or otherwise reorganized into two
or more companies.
o If Employee voluntarily severs employment with the Company
for any reason except Loss of Position or if the Company discharges him
for cause, this right to accelerate remaining unexercised shares
offered by this Option shall terminate immediately. For the purposes
hereof, "for cause" shall mean Employee's actions significantly and
adversely affecting (except for disability or death) the performance
of, or his ability to perform, Employee's job, including but not
limited to failure or refusal to perform his duties to the Company,
major violation of the Company's conflict of interest or other
policies, or Employee's final conviction of a felony or of a
misdemeanor involving moral turpitude.
8. BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefit of any successors to the Company and all persons lawfully claiming
under Employee.
-5-
9. GOVERNING LAW. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Texas.
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed by its officer thereunto duly authorized, and Employee has executed
this Agreement, all as of the day and year first above written.
MITCHELL ENERGY & DEVELOPMENT
CORP.
By: /s/ GEORGE P. MITCHELL
___________________________________
W. D. STEVENS
/s/ W. D. STEVENS
___________________________________
-6-
[NQ/CLASS B]
NONSTATUTORY STOCK OPTION AGREEMENT
AGREEMENT made as of the 3rd day of January, 1994, between MITCHELL
ENERGY & DEVELOPMENT CORP., a Texas corporation (the "Company"), and W. D.
STEVENS ("Employee").
To carry out the purposes of the MITCHELL ENERGY & DEVELOPMENT CORP.
1989 STOCK OPTION PLAN (the "Plan"), by affording Employee the opportunity to
purchase shares of the Class B Common Stock of the Company ("Stock"), and in
consideration of the mutual agreements and other matters set forth herein and
in the Plan, the Company and Employee hereby agree as follows:
1. GRANT OF OPTION. The Company hereby irrevocably grants to Employee
the right and option ("Option") to purchase all or any part of an aggregate of
47,770 shares of Stock, on the terms and conditions set forth herein and in the
Plan, which Plan is incorporated herein by reference as a part of this
Agreement. This Option shall not be treated as an incentive stock option
within the meaning of Section 422(b) of the Internal Revenue Code of 1986, as
amended (the "Code").
2. PURCHASE PRICE. The purchase price of Stock purchased pursuant to
the exercise of this Option shall be $20.25 per share, which has been
determined to be not less than the fair market value of the Stock at the date
of grant of this Option. For all purposes of this Agreement, fair market value
of Stock shall be determined in accordance with the provisions of the Plan.
3. EXERCISE OF OPTION. Subject to the earlier expiration of this
Option as herein provided, this Option may be exercised, by written notice to
the Company at its principal executive office addressed to the attention of its
Option Plan Administrator, at any time and from time to time after the date of
grant hereof, but, except as otherwise provided below, this Option shall not be
exercisable for more than a portion of the aggregate number of shares offered
by this Option determined by the number of full years from the date of grant
hereof to the date of such exercise, in accordance with the following schedule:
[Download Table]
Number of Full Years Number of Shares That May Be Purchased
-------------------- --------------------------------------
Less than 1 year 0
1 year 7,554
2 years 15,108
3 years 22,662
4 years 30,216
5 years 47,770
This Option is not transferable by Employee otherwise than by will or
the laws of descent and distribution, and may be exercised only by Employee (or
his guardian or legal representative) during Employee's lifetime and while
Employee remains an employee of the Company, except that:
(a) If Employee dies while in the employ of the Company, Employee's
estate, or the person who acquires this Option by will or the
laws of descent and distribution or otherwise by reason of the
death of Employee, may exercise this Option at any time during
the period of one year following the date of Employee's death
but only as to the number of shares Employee was entitled to
purchase hereunder as of the date of Employee's death.
(b) If Employee's employment with the Company is terminated for
cause, this option may be exercised by Employee at any time
during the period of three months following such termination,
or by Employee's estate (or the person who acquires this Option
by will or the laws of descent and distribution or otherwise by
reason of the death of Employee) during a period of one year
following Employee's death if Employee dies during such
three-month period, but in each case only as to the number of
shares Employee was entitled to purchase hereunder as of the
date Employee's employment so terminates. For purposes of this
paragraph, "cause" shall mean Employee's actions significantly
and adversely affecting (except for disability) the performance
of, or his ability to perform, Employee's job, including but
not limited to failure or refusal to perform his duties to the
Company, major violation of the Company's conflict of interest
or other policies, or Employee's final conviction of a felony
or of a misdemeanor involving moral turpitude.
(c) If Employee's employment with the Company terminates for any
reason other than as described in (a) or (b) above, this Option
may be exercised by Employee at any time during the period of
one year following such termination, or by Employee's estate
(or the person who acquires this
-2-
Option by will or the laws of descent and distribution or
otherwise by reason of the death of Employee) during a period
of one year following Employee's death if Employee dies during
such one year period, but in each case only as to the number of
shares Employee was entitled to purchase hereunder as of the
date Employee's employment so terminates.
This Option shall not be exercisable in any event after the expiration
of ten years from the date of grant hereof. The purchase price of shares as to
which this Option is exercised shall be paid in full at the time of exercise
(a) in cash (including check, bank draft or money order payable to the order of
the Company), (b) by delivering to the Company shares of Stock having a fair
market value equal to the purchase price, or (c) any combination of cash and
Stock. No fraction of a share of Stock shall be issued by the Company upon
exercise of an Option or accepted by the Company in payment of the purchase
price thereof; rather, Employee shall provide a cash payment for such amount as
is necessary to effect the issuance and acceptance of only whole shares of
Stock. Unless and until a certificate or certificates representing such shares
shall have been issued by the Company to Employee, Employee (or the person
permitted to exercise this Option in the event of Employee's death or
incapacity) shall not be or have any of the rights or privileges of a
shareholder of the Company with respect to shares acquirable upon an exercise
of this Option.
Notwithstanding the foregoing, upon an exercise of this Option, if
Employee is not then subject to the restrictions on insider trading pursuant to
section 16(b) of the Securities Exchange Act of 1934, Employee may elect to
follow such exercise by immediate sale of any treasury Stock acquired pursuant
to such exercise in accordance with the following:
(i) Upon receipt of notice of exercise and immediate sale
pursuant to this provision, the Company will extend credit, on an
interest-free basis, to Employee for the aggregate exercise price; and
(ii) The Company's transfer agent will be instructed to issue
certificates for such Stock; and
(iii) A brokerage company or companies selected by the Company
will sell the Stock for the account of Employee; and
(iv) The portion of the proceeds of such sale totaling the
Option exercise price plus the amount of applicable withheld taxes will
be paid on settlement date to the Company; and
-3-
(v) The proceeds of such sale less the Option exercise price,
the amount of applicable withheld taxes, and applicable brokerage fees
will be paid on settlement date to the Employee.
4. WITHHOLDING OF TAX. To the extent that the exercise of this Option
or the disposition of shares of Stock acquired by exercise of this Option
results in compensation income to Employee for federal or state income tax
purposes, Employee shall pay to the Company at the time of such exercise or
disposition such amount of money as the Company may require to meet its
obligation under applicable tax laws or regulations, and, if Employee fails to
do so, the Company is authorized to withhold from any cash remuneration then or
thereafter payable to Employee any tax required to be withheld by reason of
such resulting compensation income.
5. STATUS OF STOCK. The Company intends to register for sale under
the Securities Act of l933, as amended (the "Act") the shares of Stock
acquirable upon exercise of this Option, and to keep such registration
effective throughout the period this Option is exercisable. In the absence of
such effective registration or an available exemption from registration under
the Act, issuance of shares of Stock acquirable upon exercise of this Option
will be delayed until registration of such shares is effective or an exemption
from registration under the Act is available. The Company intends to use its
best efforts to ensure that no such delay will occur. In the event exemption
from registration under the Act is available upon an exercise of this Option,
Employee (or the person permitted to exercise this Option in the event of
Employee's death or incapacity), if requested by the Company to do so, will
execute and deliver to the Company in writing an agreement containing such
provisions as the Company may require to assure compliance with applicable
securities laws.
Employee agrees that the shares of Stock which Employee may acquire by
exercising this Option will not be sold or otherwise disposed of in any manner
which would constitute a violation of any applicable securities laws, whether
federal or state. Employee also agrees (i) that the certificates representing
the shares of Stock purchased under this Option may bear such legend or legends
as the Committee deems appropriate in order to assure compliance with
applicable securities laws, (ii) that the Company may refuse to register the
transfer of the shares of Stock purchased under this Option on the stock
transfer records of the Company if such proposed transfer would in the opinion
of counsel satisfactory to the Company constitute a violation of any applicable
securities law and (iii) that the Company may give related instructions to its
transfer agent, if any, to stop registration of the transfer of the shares of
Stock purchased under this Option.
6. EMPLOYMENT RELATIONSHIP. For purposes of this Agreement, Employee
shall be considered to be in the employment of the Company as long as Employee
remains an employee of either the Company, a parent or subsidiary corporation
(as defined in Section 424 of the Code) of the Company, or a corporation or a
parent or subsidiary of such corporation assuming
-4-
or substituting a new option for this Option. Any question as to whether and
when there has been a termination of such employment, and the cause of such
termination, shall be determined by the Committee, and its determination shall
be final.
7. CHANGE OF CONTROL. In addition to the conditions for vesting
contained hereinabove in this Agreement and in the Plan, Employee shall have
the right to exercise any or all of the remaining unexercised shares offered by
this Option upon the occurrence of the following described event, so long as
such event occurs more than one year from the date of grant of this Option.
o If the ownership of the Company changes from the majority
voting control of the Company being held by George P. Mitchell ("Mr.
Mitchell") himself only ("Change of Control"); and
o If Employee is employed in a position at least equivalent to
President and Chief Operating Officer of the Company immediately prior
to the Change of Control; and
o If Employee is no longer employed in a position at least
substantially equivalent to President and Chief Operating Officer of
the Company and no longer paid a salary at least equivalent to the
salary being paid to Employee immediately prior to the Change of
Control ("Loss of Position") for at least one year following the Change
of Control.
o For the purposes hereof, the "Company" includes the largest
surviving energy company if Mitchell Energy & Development Corp. is ever
merged or consolidated or is divided or otherwise reorganized into two
or more companies.
o If Employee voluntarily severs employment with the Company
for any reason except Loss of Position or if the Company discharges him
for cause, this right to accelerate remaining unexercised shares
offered by this Option shall terminate immediately. For the purposes
hereof, "for cause" shall mean Employee's actions significantly and
adversely affecting (except for disability or death) the performance
of, or his ability to perform, Employee's job, including but not
limited to failure or refusal to perform his duties to the Company,
major violation of the Company's conflict of interest or other
policies, or Employee's final conviction of a felony or of a
misdemeanor involving moral turpitude.
8. BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefit of any successors to the Company and all persons lawfully claiming
under Employee.
9. GOVERNING LAW. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Texas.
-5-
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed by its officer thereunto duly authorized, and Employee has executed
this Agreement, all as of the day and year first above written.
MITCHELL ENERGY & DEVELOPMENT
CORP.
By: /s/ GEORGE P. MITCHELL
_______________________________________
W. D. STEVENS
/s/ W. D. STEVENS
_______________________________________
-6-
Dates Referenced Herein and Documents Incorporated by Reference
| Referenced-On Page |
|---|
| This ‘10-K’ Filing | | Date | | First | | Last | | | Other Filings |
|---|
| |  |
| | 1/1/95 | | 1 |
| Filed on: | | 4/26/94 |
| For Period End: | | 1/31/94 | | | | | | | 10-K/A |
| | 1/3/94 | | 1 |
| List all Filings |
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