-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SpaiKEUYBVWNOvtabXKabpA/UX8uU1OQxlprvOGHSDpPJkLLx7O1osWTnmZ+9pob 3AW0ksc53yimgr7rUsHu7Q== 0000899078-96-000111.txt : 19960605 0000899078-96-000111.hdr.sgml : 19960605 ACCESSION NUMBER: 0000899078-96-000111 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 19960604 EFFECTIVENESS DATE: 19960623 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CAIRN ENERGY USA INC CENTRAL INDEX KEY: 0000353153 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 232169839 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: 1933 Act SEC FILE NUMBER: 333-05165 FILM NUMBER: 96576619 BUSINESS ADDRESS: STREET 1: 8235 DOUGLAS AVE STE 1221 CITY: DALLAS STATE: TX ZIP: 75225 BUSINESS PHONE: 2143690316 MAIL ADDRESS: STREET 1: 8235 DOUGLAS AVE STREET 2: STE 1221 CITY: DALLAS STATE: TX ZIP: 75225 FORMER COMPANY: FORMER CONFORMED NAME: OMNI EXPLORATION INC DATE OF NAME CHANGE: 19920703 S-8 1 S-8 FOR CAIRN ENERGY USA As filed with the Securities and Exchange Commission on June 4, 1996 Registration No. 33-_____________ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 CAIRN ENERGY USA, INC. (Exact name of registrant as specified in its charter) Delaware 23-2169839 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 8235 Douglas Avenue, Suite 1221 Dallas, Texas 75225 (Address of principal executive offices) (Zip Code) CAIRN ENERGY USA, INC. 1993 STOCK OPTION PLAN CAIRN ENERGY USA, INC. 1993 DIRECTORS STOCK OPTION PLAN (Full title of the plans) Michael R. Gilbert Copy to: President Mark D. Wigder, Esq. Cairn Energy USA, Inc. Jenkens & Gilchrist, 8235 Douglas Avenue, Suite 1221 A Professional Corporation Dallas, Texas 75225 1445 Ross Avenue, Suite 3200 (214) 369-0316 Dallas, Texas 75202 (Name, address and telephone number including area code of agent for service)
CALCULATION OF REGISTRATION FEE Proposed Proposed Amount Maximum Maximum Amount of Title of Class of to be Offering Price Aggregate Registration Securities to be Registered Registered(1) per Share(2)(3) Offering Price(2)(3) Fee(3) Common Stock, $0.01 par value per share 870,000 Shares $10,222,500 $11.75 $3,525 ============================================ ======================== ====================== ========================== ====== (1) The securities to be registered include 750,000 shares reserved for issuance under the Cairn Energy USA, Inc. 1993 Stock Option Plan and 120,000 shares reserved for issuance under the Cairn Energy USA, Inc. 1993 Directors Stock Option Plan (collectively, the "Plans"). (2) Estimated solely for the purpose of calculating the registration fee. (3) Calculated pursuant to Rule 457(c) and (h). Accordingly, the price per share of the Common Stock offered hereunder pursuant to the Plans is based on 870,000 shares of Common Stock reserved for issuance under the Plans but not subject to outstanding stock options.
PART I INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS Item 1. Plan Information* Item 2. Registrant Information and Employee Plan Annual Information* PART II INFORMATION REQUIRED IN REGISTRATION STATEMENT The Corporation hereby incorporates by reference the Registration Statement, as amended, on Form S-8 relating to the Cairn Energy USA, Inc. 1993 Stock Option Plan, Registration Number 33-77102. Item 8. Exhibits Each of the following exhibits is filed herewith: 4.3+ Amendment No. 3 to Cairn Energy USA, Inc. 1993 Stock Option Plan, as amended. 4.4+ Form of Incentive Stock Option Agreement under the Cairn Energy USA, Inc. 1993 Stock Option Plan. 4.5+ Form of Nonstatutory Stock Option Agreement under the Cairn Energy USA, Inc. 1993 Stock Option Plan. 5.1 Opinion of Jenkens & Gilchrist, a Professional Corporation. 23.1 Consent of Ernst & Young. 23.2 Consent of Jenkens & Gilchrist, a Professional Corporation (included in their opinion filed as exhibit 5.1 hereto). 23.3 Consent of Ryder Scott Company. ________________________ + Stock option plan, management contract or compensatory arrangement. - -------- *Information required by Part I to be contained in the Section 10(a) prospectus is omitted from this Registration Statement in accordance with Rule 428 under the Securities Act of 1933 and the Note to Part I of Form S-8. CORPDAL:47942.1 15467-00006 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant certifies that it has reasonable grounds to believe that it meets all the requirements for filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Dallas, Texas, on June 3, 1996. CAIRN ENERGY USA, INC. By: /s/ Michael R. Gilbert Michael R. Gilbert, President and Chief Executive Officer POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature appears below constitutes and appoints Michael R. Gilbert and J. Munro M. Sutherland, and each of them, his true and lawful attorneys-in-fact and agents with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this Registration Statement, and to file the same with all exhibits, thereto, and all document sin connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or either of them, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
Signature Office Date /s/ Michael R. Gilbert President and Chief Executive June 3, 1996 Michael R. Gilbert Officer and Director (Principal Executive Officer) /s/ J. Munro M. Sutherland Senior Vice President, Chief June 3, 1996 J. Munro M. Sutherland Financial Officer, Treasurer and Director (Principal Financial and Accounting Officer) /s/ Robert P. Murphy Vice President - Exploration and June 3, 1996 Robert P. Murphy Director /s/ John C. Halsted Director June 3, 1996 John C. Halsted CORPDAL:47942.1 15467-00006 Signature Office Date /s/ R. Daniel Robins Director June 3, 1996 R. Daniel Robins /s/ Jack O. Nutter, II Director June 3, 1996 Jack O. Nutter, II /s/ James M. Alexander Director June 3, 1996 James M. Alexander /s/ Thomas R. Hix Director June 3, 1996 Thomas R. Hix
CORPDAL:47942.1 15467-00006 INDEX TO EXHIBITS Exhibit Description of Exhibit 4.3+ Amendment No. 3 to Cairn Energy USA, Inc. 1993 Stock Option Plan, as amended. 4.4+ Form of Incentive Stock Option Agreement under the Cairn Energy USA, Inc. 1993 Stock Option Plan. 4.5+ Form of Nonstatutory Stock Option Agreement under the Cairn Energy USA, Inc. 1993 Stock Option Plan. 5.1 Opinion of Jenkens & Gilchrist, a Professional Corporation. 23.1 Consent of Ernst & Young. 23.2 Consent of Ryder Scott Company. 23.3 Consent of Jenkens & Gilchrist, a Professional Corporation (included in their opinion filed as exhibit 5.1 hereto). CORPDAL:47942.1 15467-00006 EX-99 2 AMENDMENT 3 1993 STOCK OPTION PLAN EXHIBIT 4.3 CORPDAL:47942.1 15467-00006 AMENDMENT NO. 3 TO THE CAIRN ENERGY USA, INC. 1993 STOCK OPTION PLAN This Amendment No. 3 to the Cairn Energy USA, Inc. 1993 Stock Option Plan (the "Amendment") is hereby adopted by Cairn Energy USA, Inc. on the 29th day of May, 1996 pursuant to the terms of Section 9 of the Cairn Energy USA, Inc. 1993 Stock Option Plan (the "Plan"). W I T N E S S E T H: WHEREAS, Cairn Energy USA, Inc., a Delaware corporation (the "Corporation"), established the Plan as approved and ratified by stockholders effective April 8, 1993; WHEREAS, the Corporation subsequently adopted amendments to the Plan; WHEREAS, pursuant to Section 9 of the Plan, the Corporation, acting through its Board of Directors, has the right to amend the Plan subject to stockholder approval; WHEREAS, the Compensation Committee of the Board of Directors (the "Committee" has recommended to the Board of Directors of the Corporation that the Plan be amended to extend the exercise period upon termination of employment and provide for full vesting on death, effective only for options granted after the effective date of this Amendment, unless a holder of a granted option consents to either or both of these changes for his or her granted option, to increase the maximum number of shares of stock to be granted under the Plan, and to correct certain typographical errors in a previous amendment; WHEREAS, the Board of Directors has accepted the recommendation of the Committee, has obtained the approval of the stockholders of the Corporation, and has delegated to the Committee the preparation, adoption, and execution of this Amendment within constraints it established; NOW THEREFORE, pursuant to its authority under Section 9 of the Plan, the Corporation hereby amends the Plan, effective May 22, 1996 unless otherwise indicated below, as follows: 1. Existing Paragraph 2.1 is hereby deleted in its entirety and replaced with the following new Paragraph 2.1: "2.1 Description of Stock and Maximum Shares Allocated. The Stock which may be issued upon the exercise of an Option may either be unissued or reacquired shares of Stock, as the Board of Directors may, in its sole and absolute discretion, from time to time determine. Subject to the adjustments provided in Paragraph 6.6, the aggregate number of shares of Stock to be issued pursuant to the exercise of all Options granted under the Plan may equal but shall not exceed 1,150,000 shares of Stock." CORPDAL:47942.1 15467-00006 2. Effective as of February 23, 1994, Paragraph 6.4 is hereby deleted in its entirety and the following new paragraph 6.4 is added in its place: "6.4. Term, Time of Exercise and Transferability of Options. In addition to such other terms and conditions as may be included in a particular Agreement granting an Option, an Option shall be exercisable during a Holder's lifetime only by the Holder or by the Holder's guardian or legal representative. An Option shall not be transferrable other than by will or the laws of descent and distribution or pursuant to a qualified domestic relations order as defined by the Code or Title I of the Employee Retirement Income Security Act or the rules thereunder. The provisions of the remainder of this Paragraph shall apply to the extent a Holder's Agreement does not expressly provide otherwise. If a Holder ceases to be an Eligible Individual, the portion, if any, of the Option that is exercisable but remains unexercised on the date the Holder stops being an Eligible Individual shall terminate ninety (90) days after such Holder ceases to be an Eligible Individual. Notwithstanding the foregoing, if a Holder ceases to be an Eligible Individual by reason of (a) disability (as defined in section 105(d)(4) of the Code immediately prior to its repeal) or (b) death, the Holder shall have the right for twelve months after the date of disability or death to exercise an Option to the extent such Option is exercisable on the date of his disability or death. The portion of the Option that is not exercisable on the date the Holder ceases to be an Eligible Individual shall terminate and be forfeited to the Corporation on the date of such cessation. Notwithstanding the previous sentence, if a Change in Control of the Corporation occurs and, within twenty-four months from the date of the Change in Control of the Corporation, a Holder ceases to be an Eligible Individual either because (i) the Corporation terminates the Holder's employment with the Corporation for a reason other than Due Cause or (ii) the Holder terminates his employment with the Corporation due to a Severance Termination by the Holder of the Holder's Employment Agreement, then any Options held by such Holder shall be exercisable in full on the date such Holder ceases to be an Eligible Individual and no portion of an Option held by such Holder shall terminate or forfeit on the date such holder ceases to be an Eligible Person. Notwithstanding any other provision of this Plan, no Option shall be exercisable after the expiration of ten (10) years from the date it is granted, or the period specified in Paragraph 4.1 if applicable. The Committee shall have the authority to prescribe in any Agreement that the Option evidenced by the Agreement may be exercised in full or in part as to any number of shares subject to the Option at any time or from time to time during the term of the Option, or in such installments at such times during said term as the Committee may prescribe; provided, however, that no part of an Option may be made exercisable during the six (6) month period beginning on the date the Option was granted. Except as provided above and unless otherwise provided in any Agreement, an Option may be exercised at any time or from time to time during the term of the Option. Such exercise may be as to any or all whole (but no fractional) shares which have become purchasable under the Option. CORPDAL:47942.1 15467-00006 Within a reasonable time (or such time as may be permitted by law) after the Corporation receives written notice that the Holder has elected to exercise all or a portion of an Option, such notice to be accompanied by payment in full of the aggregate Option exercise price of the number of shares of Stock purchased, the Corporation shall issue and deliver a certificate representing the shares acquired in consequence of the exercise and any other amounts payable in consequence of such exercise. In the event that a Holder exercises both an Incentive Option, or portion of one, and a Nonstatutory Stock Option, or a portion of one, separate Stock certificates shall be issued, one for the Stock subject to the Incentive Option and one for the Stock subject to the Nonstatutory Stock Option. The number of the shares of Stock transferrable due to an exercise of an Option under this Plan shall not be increased due to the passage of time, except as may be provided in an Agreement; provided, however, the number of such shares of Stock which are transferrable may increase due to the occurrence of certain events which are fully described in Paragraph 6.5. Nothing in the Plan or in any Option granted under the Plan shall require the Corporation to issue any shares upon exercise of any Option if such issuance would, in the opinion of counsel for the Corporation, constitute a violation of the Securities Act or any other applicable statute or regulation, as then in effect. At the time of any exercise of an Option, the Corporation may, as a condition precedent to the exercise of such Option, require from the Holder (or in the event of his death, his legal representatives, heirs, legatees, or distributees) such written representations, if any, concerning his sophistication, financial means, access to information about the Corporation, and intentions with regard to the retention or disposition of the shares being acquired by exercise of such Option and such written covenants and agreements, if any, as to the manner of disposal of such shares as, in the opinion of counsel to the Corporation, may be necessary to ensure that any disposition by such Holder (or in the event of his death, his legal representatives, heirs, legatees, or distributees), will not involve a violation of the Securities Act or any other applicable state or federal statute or regulation, as then in effect. Certificates for shares of Stock, when issued, may have the following or similar legend, or statements of other applicable restrictions, endorsed on them, and may not be immediately transferable: The shares of stock evidenced by this certificate have been issued to the registered owner in reliance upon written representations that these shares have been purchased for investment. These shares have not been registered under the Securities Act of 1933, as amended, or any applicable state securities laws, in reliance upon an exemption from registration. Without such registration, these shares may not be sold, transferred, assigned or otherwise disposed of unless, in the opinion of the Corporation and its legal counsel, such sale, transfer, assignment or disposition will not be in violation of the Securities Act of 1933, as amended, applicable rules and regulations of the Securities and Exchange Commission, and any applicable state securities laws." 3. Paragraph 6.4 is hereby amended to delete the third and fourth paragraphs of Paragraph 6.4 in their entirety and to replace them with the following new language: CORPDAL:47942.1 15467-00006 "The provisions of the remainder of this Paragraph shall apply to the extent a Holder's Agreement does not expressly provide otherwise. If a Holder ceases to be an Eligible Individual, the portion, if any, of the Option that is exercisable but remains unexercised on the date the Holder stops being an Eligible Individual shall terminate twenty-four (24) months after such Holder ceases to be an Eligible Individual. The portion of the Option that is not exercisable on the date the Holder ceases to be an Eligible Individual shall terminate and be forfeited to the Corporation on the date of such cessation. Notwithstanding the previous sentence, if (i) a Change in Control of the Corporation occurs and, within twenty-four months from the date of the Change in Control of the Corporation, a Holder ceases to be an Eligible Individual either because (A) the Corporation terminates the Holder's employment with the Corporation for a reason other than Due Cause or (B) the Holder terminates his employment with the Corporation due to a Severance Termination by the Holder of the Holder's Employment Agreement, or (ii) a Holder ceases to be an Eligible Individual by reason of death, any Options held by such Holder shall be exercisable in full on the date such Holder ceases to be an Eligible Individual, and no portion of an Option held by such Holder shall terminate or forfeit on the date such Holder ceases to be an Eligible Individual. The provisions of this paragraph of Paragraph 6.4 shall be applied before the provisions of the immediately preceding paragraph of Paragraph 6.4." CORPDAL:47942.1 15467-00006 IN WITNESS WHEREOF, the Corporation has caused this instrument to be executed by its duly authorized officer on the date first written above. CAIRN ENERGY USA, INC. By: /s/ Michael R. Gilbert Title: President CORPDAL:47942.1 15467-00006 EX-99 3 INCENTIVE STOCK OPTION AGREEMENT EXHIBIT 4.4 CORPDAL:47942.1 15467-00006 CAIRN ENERGY USA, INC. 1993 STOCK OPTION PLAN INCENTIVE STOCK OPTION AGREEMENT THIS AGREEMENT is made and entered into this day of , 199 , between Cairn Energy USA, Inc., a Delaware corporation (the "Corporation"), and (the "Holder") in connection with the grant of an Incentive Option (defined below) under the Cairn Energy USA, Inc. 1993 Stock Option Plan (the "Plan"), as amended. W I T N E S S E T H: WHEREAS, the Holder is employed by the Corporation or one of its Affiliates (defined below) in a key position; and WHEREAS, the Corporation desires to encourage the Holder to own Stock (defined below) and to give him added incentive to advance the interests of the Corporation through the Plan; and WHEREAS, the Corporation adopted the Plan, as approved and ratified by stockholders, effective April 8, 1993, and subsequently adopted amendments to the Plan; and WHEREAS, the Corporation desires to grant the Holder an Incentive Option to purchase shares of Stock of the Corporation under terms and conditions established by the Board of Directors (defined below); NOW, THEREFORE, in consideration of these premises, the parties agree that the following shall constitute the Agreement between the Corporation and the Holder: 1. Definitions. For purposes of this Agreement, defined terms shall have the meanings given to them by the Plan except as specified below: a. "Affiliate" shall mean (a) any corporation, other than the Corporation, in an unbroken chain of corporations ending with the Corporation if each of the corporations, other than the Corporation, 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 such chain and (b) any corporation, other than the Corporation, in an unbroken chain of corporations beginning with the Corporation if each of the corporations, other than the last corporation in the unbroken 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 such chain. b. "Agreement" shall mean this document as executed by the Corporation and the Holder, and as it may be subsequently amended. CORPDAL:47942.1 15467-00006 c. "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended, or any similar or superseding statute or statutes. d. "Incentive Option" and "Option" shall mean a stock option granted pursuant to this Agreement that is intended to satisfy the requirements of section 422 of the Code. e. "Securities Act" shall mean the Securities Act of 1933, as amended, or any similar or superseding statute or statutes. 2. Grant of Incentive Option. Subject to the terms and conditions set forth in this Agreement, the Corporation grants to the Holder an Incentive Option to purchase from the Corporation during the period ending ten (10) years from the date of this Agreement shares of Stock at a price of $ per share, subject to adjustment, if any, as provided in this Agreement. In no event shall the exercise price per share of this Option be less than the greater of (a) the par value per share of Stock or (b) 100% of the Fair Market Value per share of Stock on the date of grant of this Option. This Incentive Option is exercisable with respect to the shares of Stock indicated above on or after the following dates: shares of Stock additional shares of Stock additional shares of Stock In no event shall the Option be exercisable within the first six months of its Date of Grant. In addition, the number of shares exercisable under this Option shall be reduced to the extent necessary so that the sum of: (a) the aggregate Fair Market Value of shares of Stock subject to this Incentive Option that first become purchasable in a calendar year under this Incentive Option, and (b) the aggregate Fair Market Value of shares of Stock or stock of any Affiliate (or a predecessor of the Corporation or an Affiliate) subject to any other incentive stock option (within the meaning of section 422 of the Code) of the Corporation or its Affiliates (or a predecessor corporation of any such corporation), that first become purchasable in a calendar year under such incentive stock option does not (with respect to the Holder) exceed $100,000, with such Fair Market Value to be determined as of the date this Incentive Option or such other incentive stock option is granted. For purposes of this Paragraph, "predecessor corporation" means (i) a corporation that was a party to a transaction described in section 425(a) of the Code (or that would be so described if a substitution or assumption under such section had been effected) with the Corporation, (ii) a corporation that at the time the new incentive stock option (within the meaning of section 422 of the Code) is granted, is an Affiliate of the Corporation or a predecessor corporation of any such corporations, or (iii) a predecessor corporation of any such corporations. CORPDAL:47942.1 15467-00006 3. Notice of Exercise. This Incentive Option may be exercised in whole or in part, from time to time, in accordance with Paragraph 2, by written notice to the Corporation at the address provided in this Agreement, which notice shall: i. specify the number of whole shares of Stock to be purchased and the exercise price to be paid for such shares; ii. if the person exercising this Incentive Option is not the Holder himself, contain or be accompanied by evidence satisfactory to the Committee of such person's right to exercise this Incentive Option; and (c) be accompanied by payment in full of the purchase price in the form of cash, a certified or cashier's check to the order of the Corporation, or a wire transfer of immediately available funds. This Incentive Option may be exercised only in increments at least equal to the lesser of one hundred (100) shares or ten percent (10%) of the number of whole shares as to which it is exercisable. 4. Investment Letter. The Holder agrees that the shares of Stock acquired on exercise of this Incentive Option shall be acquired for his own account for investment only and not with a view to, or for resale in connection with, any distribution or public offering thereof within the meaning of the Securities Act or other applicable securities laws. If the Committee so determines, any Stock certificates issued upon exercise of this Incentive Option shall bear a legend to the effect that the shares have been so acquired. The Corporation may, but in no event shall be required to, bear any expenses of complying with the Securities Act, other applicable securities laws or the rules and regulations of any national securities exchange or other regulatory authority in connection with the registration, qualification, or transfer, as the case may be, of this Incentive Option or any shares of Stock acquired upon the exercise thereof. The foregoing restrictions on the transfer of the shares of Stock shall be inoperative if (a) the Corporation previously shall have been furnished with an opinion of counsel, satisfactory to it, to the effect that such transfer will not require registration under the Securities Act or other applicable securities laws or (b) the shares of Stock shall have been duly registered in compliance with the Securities Act and other applicable securities laws. 5. Transfer and Exercise of Incentive Option. This Incentive Option shall not be transferable except by will or by the laws of descent and distribution or pursuant to a qualified domestic relations order as defined in the Code or Title I of the Employee Retirement Income Security Act ("ERISA") or the rules thereunder. No assignment or transfer of this Incentive Option, whether voluntary or involuntary, by operation of law or otherwise, except a transfer by will or by the laws of descent or distribution or pursuant to a qualified domestic relations order as defined in the Code or Title I of ERISA or the rules thereunder, shall vest in the assignee or transferee any interest or right whatsoever in this Incentive Option. CORPDAL:47942.1 15467-00006 During the Holder's lifetime, this Incentive Option may be exercised only by him, his guardian or legal representative or the recipient of this Incentive Option pursuant to a qualified domestic relations order as defined in the Code or Title I of ERISA or the rules thereunder. 6. Status of Holder. The Holder shall not be deemed a stockholder of the Corporation with respect to any of the shares of Stock subject to this Incentive Option, except to the extent that such shares shall have been purchased and transferred to him. The Corporation shall not be required to issue or transfer any certificates for shares of Stock purchased upon exercise of this Incentive Option until all applicable requirements of law have been complied with and such shares shall have been duly listed on any securities exchange on which the Stock may then be listed. 7. No Effect on Capital Structure. This Incentive Option shall not affect the right of the Corporation or any Affiliate to reclassify, recapitalize or otherwise change its capital or debt structure or to merge, consolidate, convey any or all of its assets, dissolve, liquidate, windup, or otherwise reorganize. 8. Expiration of Incentive Option Upon Termination of Employment. Except as otherwise specifically provided in this Agreement, if a Holder ceases to be an Eligible Individual, the portion, if any, of the Option that is exercisable but remains unexercised on the date the Holder stops being an Eligible Individual shall terminate twenty-four (24) months after such Holder ceases to be an Eligible Individual. The portion of the Option that is not exercisable on the date the Holder ceases to be an Eligible Individual shall terminate and be forfeited to the Corporation on the date of such cessation. Notwithstanding the previous sentence, if (i) a Change in Control of the Corporation occurs and, within twenty-four months from the date of the Change in Control of the Corporation, a Holder ceases to be an Eligible Individual either because (A) the Corporation terminates the Holder's employment with the Corporation for a reason other than Due Cause or (B) the Holder terminates his employment with the Corporation due to a Severance Termination by the Holder of the Holder's Employment Agreement, or (ii) a Holder ceases to be an Eligible Individual by reason of death, then any Options held by such Holder shall be exercisable in full on the date such Holder ceases to be an Eligible Individual, and no portion of an Option held by such Holder shall terminate or forfeit on the date such Holder ceases to be an Eligible Individual. The provisions of this paragraph of Paragraph 8 shall be applied before the provisions of the immediately preceding paragraph of Paragraph 8. 9. Adjustments Upon Changes in Capitalization, Merger, Etc. Notwithstanding any other provision of this Agreement, in the event of any change in the number of outstanding shares of Stock (a) effected without receipt of consideration by the Corporation, by reason of a stock dividend, or split, combination, exchange of shares or other recapitalization, merger, or otherwise, in which the Corporation is the surviving corporation, or CORPDAL:47942.1 15467-00006 (b) by reason of a spin-off of a part of the Corporation into a separate entity, or assumptions and conversions of outstanding grants due to an acquisition by the Corporation of a separate entity, (1) the aggregate number and class of shares subject to this Incentive Option and (2) the exercise price of this Incentive Option shall be automatically adjusted to accurately and equitably reflect the effect of such changes. In the event of a dispute concerning such adjustment, the Committee shall have full discretion to resolve the dispute. The number of shares subject to this Incentive Option shall be automatically reduced by any fraction which results from any adjustment made pursuant to this Paragraph. In the event of: (a) a dissolution or liquidation of the Corporation, (b) a merger or consolidation (other than a merger effecting a reincorporation of the Corporation in another state or any other merger or a consolidation in which the stockholders of the surviving corporation and their proportionate interests in the surviving corporation immediately after the merger or consolidation are substantially identical to the stockholders of the Corporation and their proportionate interests in the Corporation immediately prior to the merger or consolidation) in which the Corporation is not the surviving corporation (or survives only as a subsidiary of another corporation in a transaction in which the stockholders of the parent of the Corporation and their proportionate interests in the parent immediately after the transaction are not substantially identical to the stockholders of the Corporation and their proportionate interests therein immediately prior to the transaction; provided that the Board of Directors may at any time prior to such a merger or consolidation provide by resolution that the foregoing provisions of this parenthetical shall not apply if a majority of the board of directors of such parent immediately after the transaction consists of individuals who constituted a majority of the Board of Directors immediately prior to the transaction), or (c) a transaction in which any person (other than Cairn Energy PLC) becomes the owner of 50% or more of the total combined voting power of all classes of stock of the Corporation (provided, however, that the Board of Directors may at any time prior to such transaction provide by resolution that this Subparagraph (c) shall not apply if such acquiring person is a corporation and a majority of the board of directors of the acquiring corporation immediately after the transaction consists of individuals who constituted a majority of the Board of Directors immediately prior to the acquisition of such 50% or more total combined voting power) the Board of Directors may, at its election, as of the effective time of such transaction, either (1) change the number and kind of shares of stock (including substitution of shares of another corporation) and exercise price in the manner it deems appropriate, provided, however, that in no event may any change be made under this Paragraph which would constitute a "modification" within the meaning of section 425(h)(3) of the Code, or (2) purchase the Option from the Holder by tendering cash equal to the Fair Market Value of the Stock represented by the Option less the exercise price of the Option specified in this Agreement, without regard to the determination as CORPDAL:47942.1 15467-00006 to the periods and installments of exercisability made pursuant to this Agreement, if (and only if) the Option has not at that time expired or been terminated. 10. Committee Authority. Any question concerning the interpretation of this Agreement, any adjustments required to be made under this Agreement, and any controversy which may arise under this Agreement shall be determined by the Committee in its sole discretion. 11. Notice of Disqualifying Disposition. In order to enable the Corporation to avail itself of any income tax deduction to which it may be entitled, the Holder shall notify the Corporation of his intent to dispose of any of the shares of Stock purchased pursuant to this Incentive Option within two (2) years from the date of the grant of the Incentive Option and one (1) year from the date of exercise of the Incentive Option, and promptly after such disposition the Holder shall notify the Corporation of the number of shares of Stock disposed of, the dates of acquisition and disposition of such shares, and the consideration, if any, received on such disposition. Nothing in this Paragraph, however, shall give the Holder any right to dispose of shares of Stock in a manner that is inconsistent with any provision of the Plan or any Paragraph of this Agreement. If in connection with any such disposition the Corporation becomes liable for withholding taxes and has no amounts owing the Holder with which to discharge its withholding obligation, the Holder shall provide the Corporation with the amount needed to discharge the Corporation's withholding obligation and shall indemnify the Corporation against any penalties it may incur through its inability to apply amounts owing the Holder in discharge of its withholding obligation. 12. Incentive Option Qualification. This Incentive Option is intended to qualify as an "incentive stock option" within the meaning of section 422 of the Internal Revenue Code of 1986, as amended, and shall be so construed; provided, however, that nothing in this Agreement shall be interpreted as a representation, guarantee or other undertaking on the part of the Corporation that this Incentive Option is or will be determined to be an "incentive stock option" within such section or any other section of the Internal Revenue Code. 13. Plan Controls. The terms of this Agreement are governed by the terms of the Plan, a copy of which is attached as Exhibit A and made a part of this Agreement as if fully set forth in this Agreement, and in the case of any inconsistency between the terms of this Agreement and the terms of the Plan, the terms of the Plan shall control. 14. Notice. Whenever any notice is required or permitted under the Plan or this Agreement, such notice must be in writing and personally delivered, telecopied (if confirmed), or sent by mail. Any notice required or permitted to be delivered under the Plan or this Agreement shall be deemed to be delivered on the date which it is personally delivered, or, whether actually received or not, on the third business day after it is deposited in the United States mail, certified or registered, postage prepaid, addressed to the person who is to receive it at the address which such person has previously specified by written notice delivered in accordance with this Paragraph. The Corporation or Holder may change, at any time and from time to time, by written notice to the other, the address previously specified for receiving notices. Until changed in accordance with this paragraph, the Corporation and the Holder specify their respective addresses as set forth below: Corporation: Cairn Energy USA, Inc. 8235 Douglas Avenue, Suite 1221 Dallas, Texas 75225 Attention: Secretary Holder: 15. Information Confidential. As partial consideration for the granting of this Incentive Option, the Holder agrees that he will keep confidential all information and knowledge that he has relating to the manner and amount of his participation in the Plan; provided, however, that such information may be disclosed as required by law and may be given in confidence to the Holder's spouse, tax and financial advisors, or to a financial institution to the extent that such information is necessary to secure a loan. IN WITNESS WHEREOF, the Corporation has caused this Agreement to be executed and the Holder has executed this Agreement on the day and year first above written. "CORPORATION" CAIRN ENERGY USA, INC. By: "HOLDER" EX-99 4 1993 STOCK OPTION PLAN EXHIBIT 4.5 CAIRN ENERGY USA, INC. 1993 STOCK OPTION PLAN NONSTATUTORY STOCK OPTION AGREEMENT THIS AGREEMENT is made and entered into this day of , 199 , between Cairn Energy USA, Inc., a Delaware corporation (the "Corporation"), and (the "Holder") in connection with the grant of a Nonstatutory Option (defined below) under the Cairn Energy USA, Inc. 1993 Stock Option Plan (the "Plan"), as amended. W I T N E S S E T H: WHEREAS, the Holder is either an employee of the Corporation or one of its Affiliates (defined below) in a key position; and WHEREAS, the Corporation desires to encourage the Holder to own Stock (defined below) and to give him added incentive to advance the interests of the Corporation through the Plan; and WHEREAS, the Corporation adopted the Plan, as approved and ratified by stockholders, effective April 8, 1993, and subsequently adopted amendments to the Plan; and WHEREAS, the Corporation desires to grant the Holder a Nonstatutory Option to purchase shares of Stock of the Corporation under terms and conditions established by the Board of Directors (defined below); NOW, THEREFORE, in consideration of these premises, the parties agree that the following shall constitute the Agreement between the Corporation and the Holder: 1. Definitions. For purposes of this Agreement, defined terms shall have the meanings given to them by the Plan except as specified below: 1.1 "Agreement" shall mean this document as executed by the Corporation and the Holder, and as it may be subsequently amended. 1.2 "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended, or any similar or superseding statute or statutes. 1.3 "Nonstatutory Option" and "Option" shall mean a stock option granted pursuant to this Agreement that does not satisfy the requirements of section 422 of the Code. 1.4 "Securities Act" shall mean the Securities Act of 1933, as amended, or any similar or superseding statute or statutes. CORPDAL:47942.1 15467-00006 2. Grant of Nonstatutory Option. Subject to the terms and conditions set forth in this Agreement, the Corporation grants to the Holder a Nonstatutory Option to purchase from the Corporation during the period ending ten (10) years from the date of this Agreement shares of Stock at a price of $ per share, subject to adjustment, if any, as provided in this Agreement. In no event shall the exercise price per share of this Option be less than the par value per share of Stock. This Nonstatutory Option is exercisable with respect to the shares of Stock indicated above on or after the following dates:
shares of Stock additional shares of Stock additional shares of Stock
In no event shall the Option be exercisable within the first six months of its Date of Grant. 3. Notice of Exercise. This Nonstatutory Option may be exercised in whole or in part, from time to time, in accordance with Paragraph 2, by written notice to the Corporation at the address provided in this Agreement, which notice shall: (a) specify the number of whole shares of Stock to be purchased and the exercise price to be paid for such shares; (b) if the person exercising this Nonstatutory Option is not the Holder himself, contain or be accompanied by evidence satisfactory to the Committee of such person's right to exercise this Nonstatutory Option; and (c) be accompanied by payment in full of the purchase price in the form of cash, a certified or cashier's check to the order of the Corporation or a wire transfer of immediately available funds. This Nonstatutory Option may be exercised only in increments at least equal to the lesser of one hundred (100) shares or ten percent (10%) of the number of whole shares as to which it is exercisable. 4. Investment Letter. The Holder agrees that the shares of Stock acquired on exercise of this Nonstatutory Option shall be acquired for his own account for investment only and not with a view to, or for resale in connection with, any distribution or public offering thereof within the meaning of the Securities Act or other applicable securities laws. If the Committee so determines, any Stock certificates issued upon exercise of this Nonstatutory Option shall bear a legend to the effect that the shares have been so acquired. The Corporation may, but in no event shall be required to, bear any expenses of complying with the Securities Act, other applicable securities laws or the rules and regulations of any national securities exchange or other regulatory authority in connection with the registration, qualification, or transfer, as the case may be, of this Nonstatutory Option or any shares of Stock acquired upon the exercise of this Nonstatutory Option. The foregoing restrictions on the transfer of the shares of Stock shall be inoperative if (a) the Corporation previously shall have been furnished with an opinion of counsel, satisfactory to it, to the effect that such transfer will not require registration under the Securities Act or other CORPDAL:47942.1 15467-00006 applicable securities laws, or (b) the shares of Stock shall have been duly registered in compliance with the Securities Act and other applicable securities laws. 5. Transfer and Exercise of Nonstatutory Option. This Nonstatutory Option shall not be transferable except by will or by the laws of descent and distribution or pursuant to a qualified domestic relations order as defined in the Code or Title I of the Employee Retirement Income Security Act ("ERISA") or the rules thereunder. No assignment or transfer of this Nonstatutory Option, whether voluntary or involuntary, by operation of law or otherwise, except a transfer by will or by the laws of descent or distribution or pursuant to a qualified domestic relations order as defined in the Code or Title I of ERISA or the rules thereunder, shall vest in the assignee or transferee any interest or right whatsoever in this Nonstatutory Option. During the Holder's lifetime, this Nonstatutory Option may be exercised only by him, his guardian or legal representative or the recipient of the Nonstatutory Option pursuant to a qualified domestic relations order as defined in the Code or Title I of ERISA or the rules thereunder. 6. Status of Holder. The Holder shall not be deemed a stockholder of the Corporation with respect to any of the shares of Stock subject to this Nonstatutory Option, except to the extent that such shares shall have been purchased and transferred to him. The Corporation shall not be required to issue or transfer any certificates for shares of Stock purchased upon exercise of this Nonstatutory Option until all applicable requirements of law have been satisfied and such shares shall have been duly listed on any securities exchange on which the Stock may then be listed. 7. No Effect on Capital Structure. This Nonstatutory Option shall not affect the right of the Corporation or any Affiliate to reclassify, recapitalize or otherwise change its capital or debt structure or to merge, consolidate, convey any or all of its assets, dissolve, liquidate, windup, or otherwise reorganize. 8. Expiration of Nonstatutory Option Upon Termination of Employment. Except as otherwise specifically provided in this Agreement, if a Holder ceases to be an Eligible Individual, the portion, if any, of the Option that is exercisable but remains unexercised on the date the Holder stops being an Eligible Individual shall terminate twenty-four (24) months after such Holder ceases to be an Eligible Individual. The portion of the Option that is not exercisable on the date the Holder ceases to be an Eligible Individual shall terminate and be forfeited to the Corporation on the date of such cessation. Notwithstanding the previous sentence, if (i) a Change in Control of the Corporation occurs and, within twenty-four months from the date of the Change in Control of the Corporation, a Holder ceases to be an Eligible Individual either because (A) the Corporation terminates the Holder's employment with the Corporation for a reason other than Due Cause or (B) the Holder terminates his employment with the Corporation due to a Severance Termination by the Holder of the Holder's Employment Agreement, or (ii) a Holder ceases to be an Eligible Individual by reason of death, then any Options held by such Holder shall be exercisable in full on the date such Holder ceases to be an Eligible Individual, and no portion of an Option held by such Holder shall terminate or forfeit on the date such Holder ceases to be an Eligible Individual. The provisions CORPDAL:47942.1 15467-00006 of this paragraph of Paragraph 8 shall be applied before the provisions of the immediately preceding paragraph of Paragraph 8. 9. Adjustments Upon Changes in Capitalization, Merger, Etc. Notwithstanding any other provision of this Agreement, in the event of any change in the number of outstanding shares of Stock (a) effected without receipt of consideration by the Corporation, by reason of a stock dividend, split, combination, exchange or other recapitalization, merger, or otherwise, in which the Corporation is the surviving corporation, or (b) by reason of a spin-off of a part of the Corporation into a separate entity, or assumptions and conversions of outstanding grants due to an acquisition by the Corporation of a separate entity, (1) the aggregate number and class of shares subject to this Nonstatutory Option and (2) the exercise price of this Nonstatutory Option shall be automatically adjusted to accurately and equitably reflect the effect of such changes. In the event of a dispute concerning such adjustment, the Committee shall have full discretion to resolve the dispute. The number of shares subject to this Nonstatutory Option shall be automatically reduced by any fraction which results from any adjustment made pursuant to this Paragraph. In the event of: (a) a dissolution or liquidation of the Corporation, (b) a merger or consolidation (other than a merger effecting a reincorporation of the Corporation in another state or any other merger or consolidation in which the stockholders of the surviving corporation and their proportionate interests in the surviving corporation immediately after the merger or consolidation are substantially identical to the stockholders of the Corporation and their proportionate interests in the Corporation immediately prior to the merger or consolidation) in which the Corporation is not the surviving corporation (or survives only as a subsidiary of another corporation in a transaction in which the stockholders of the parent of the Corporation and their proportionate interests in the parent immediately after the transaction are not substantially identical to the stockholders of the Corporation and their proportionate interests therein immediately prior to the transaction; provided, however, that the Board of Directors may at any time prior to such a merger or consolidation provide by resolution that the foregoing provisions of this parenthetical shall not apply if a majority of the board of directors of such parent immediately after the transaction consists of individuals who constituted a majority of the Board of Directors immediately prior to the transaction), or CORPDAL:47942.1 15467-00006 (c) a transaction in which any person (other than Cairn Energy PLC) becomes the owner of 50% or more of the total combined voting power of all classes of stock of the Corporation (provided, however, that the Board of Directors may at any time prior to such transaction provide by resolution that this Subparagraph (c) shall not apply if such acquiring person is a corporation and a majority of the board of directors of the acquiring corporation immediately after the transaction consists of individuals who constituted a majority of the Board of Directors immediately prior to the acquisition of such 50% or more total combined voting power) the Board of Directors may, at its election, as of the effective time of such transaction, either (1) change the number and kind of shares of stock (including substitution of shares of another corporation) and exercise price in the manner it deems appropriate, or (2) purchase the Option from the Holder by tendering cash equal to the Fair Market Value of the Stock represented by the Option less the exercise price of the Option specified in this Agreement, without regard to the determination as to the periods and installments of exercisability made pursuant to this Agreement, if (and only if) the Option has not at that time expired or been terminated. 10. Committee Authority. Any question concerning the interpretation of this Agreement, any adjustments required to be made under this Agreement, and any controversy which may arise under this Agreement shall be determined by the Committee in its sole discretion. 11. Plan Controls. The terms of this Agreement are governed by the terms of the Plan, a copy of which is attached as Exhibit A and made a part of this Agreement as if fully set forth in this Agreement, and in the case of any inconsistency between the terms of this Agreement and the terms of the Plan, the terms of the Plan shall control. 12. Notice. Whenever any notice is required or permitted under this Agreement, such notice must be in writing and personally delivered, telecopied (if confirmed), or sent by mail. Any notice required or permitted to be delivered under this Agreement shall be deemed to be delivered on the date which it is personally delivered, or, whether actually received or not, on the third business day after it is deposited in the United States mail, certified or registered, postage prepaid, addressed to the person who is to receive it at the address which such person has previously specified by written notice delivered in accordance with this Agreement. The Corporation or Holder may change, at any time and from time to time, by written notice to the other, the address previously specified for receiving notices. Until changed in accordance with this Agreement, the Corporation and the Holder specify their respective addresses as set forth below: Corporation: Cairn Energy USA, Inc. 8235 Douglas Avenue, Suite 1221 Dallas, Texas 75225 Attention: Secretary Holder: CORPDAL:47942.1 15467-00006 13. Information Confidential. As partial consideration for the granting of this Nonstatutory Option, the Holder agrees that he will keep confidential all information and knowledge that he has relating to the manner and amount of participation in the Plan; provided, however, that such information may be disclosed as required by law and may be given in confidence to the Holder's spouse, tax and financial advisors, or to a financial institution to the extent that such information is necessary to secure a loan. IN WITNESS WHEREOF, the Corporation has caused this Agreement to be executed and the Holder has executed this Agreement on the day and year first above written. "CORPORATION" CAIRN ENERGY USA, INC. By: "HOLDER" CORPDAL:47942.1 15467-00006 EX-5 5 JENKENS & GILCHRIST OPINION EXHIBIT 5.1 Cairn Energy USA, Inc. May __, 1996 Page 2 June 3, 1996 Cairn Energy USA, Inc. 8235 Douglas Avenue, Suite 1221 Dallas, Texas 75225 Re: Registration Statement on Form S-8 Gentlemen: We have acted as counsel to Cairn Energy USA, Inc. a Delaware corporation (the "Corporation"), in connection with the preparation of the Registration Statement on Form S-8 (the "Registration Statement") to be filed with the Securities and Exchange Commission on June 3, 1996, under the Securities Act of 1933, as amended (the "Securities Act"), relating to 870,000 shares of the $.01 par value common stock (the "Common Stock") of the Corporation that may be offered through the exercise of stock options (the "Options") granted under the Cairn Energy USA, Inc. 1993 Stock Option Plan and the Cairn Energy USA, Inc. 1993 Directors Stock Option Plan (collectively, the "Plans"). You have requested the opinion of this firm with respect to certain legal aspects of the proposed offering. In connection therewith, we have examined and relied upon the original, or copies identified to our satisfaction, of (1) the Certificate of Incorporation and the Bylaws of the Corporation, as amended; (2) minutes and records of the corporate proceedings of the Corporation with respect to the establishment of the Plan, the reservation of 870,000 additional shares of Common Stock to be issued under the Plans and to which the Registration Statement relates, the issuance of shares of Common Stock pursuant to the Plans and related matters; (3) the Registration Statement and exhibits thereto, including the Plans; and (4) such other documents and instruments as we have deemed necessary for the expression of the opinions herein contained. In making the foregoing examinations, we have assumed the genuineness of all signatures and the authenticity of all documents submitted to us as originals, and the conformity to original documents of all documents submitted to us as certified or photostatic copies. As to various questions of fact material to this opinion, and as to the content and form of the Certificate of Incorporation, the Bylaws, minutes, records, resolutions and other documents or writings of the Corporation, we have relied, to the extent we deem reasonably appropriate, upon representations or certificates of officers or directors of the Corporation and upon documents, records and instruments furnished to us by the Corporation, without independent check or verification of their accuracy. Based upon our examination and consideration of, and reliance on, the documents and other matters described above, we are of the opinion that the Corporation presently has available at least 870,000 shares of authorized but unissued shares of Common Stock and/or treasury shares of Common Stock. From these shares of Common Stock, the 870,000 shares of Common Stock proposed to be offered pursuant to the exercise of Options granted through the Plans may be issued. Assuming that: (i) the outstanding Options were duly granted and that the shares to be sold in the future through the Plans are all in accordance with the terms of the applicable Plan, (ii) the shares of Common Stock to be issued in the future are duly issued in accordance with the terms of the applicable Plan, (iii) the Corporation maintains an adequate number of authorized but unissued shares and/or treasury shares of Common Stock available for issuance to those persons who exercise Options granted under the Plans, and (iv) the consideration for shares of Common Stock issued pursuant to the Plans and pursuant to such Options is actually received by the Corporation as provided in the applicable Plan and exceeds the par value of such shares, then the shares of Common Stock issued in accordance with the terms of the applicable Plan and issued pursuant to the exercise of the Options granted under and in accordance with the terms of the applicable Plan will be duly and validly issued, fully paid and nonassessable. CORPDAL:47942.1 15467-00006 Cairn Energy USA, Inc. May __, 1996 Page 2 We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to references to our firm included in or made a part of the Registration Statement. In giving this consent, we do not admit that we come within the category of person whose consent is required under Section 7 of the Securities Act or the Rules and Regulations of the Securities and Exchange Commission thereunder. Very truly yours, JENKENS & GILCHRIST, a Professional Corporation Mark D. Wigder CORPDAL:47942.1 15467-00006 EX-23 6 CONSENT OF ERNST & YOUNG EXHIBIT 23.1 CORPDAL:47942.1 15467-00006 EXHIBIT 23.1 CONSENT OF INDEPENDENT ACCOUNTANTS We consent to the incorporation by reference in the Registration Statement (Form S-8) as filed with the Securities and Exchange Commission on June 4, 1996 pertaining to the Cairn Energy USA, Inc. 1993 Stock Option Plan and Cairn Energy USA, Inc. 1993 Directors Stock Option Plan and therein of our report dated February 16, 1996, with respect to the consolidated financial statements of Cairn Energy USA, Inc. inclued in its Annual Report (Form 10-K) for the year ended December 31, 1995, filed with the Securities and Exchange Commission. ERNST & YOUNG Dallas, Texas June 4, 1996 CORPDAL:47942.1 15467-00006 EX-23 7 CONSENT OF RYDER SCOTT COMPANY EXHIBIT 23.2 CORPDAL:47942.1 15467-00006 CONSENT OF RYDER SCOTT COMPANY We consent to the incorporation by reference in the Registration Statement of Cairn Energy USA, Inc. (the "Company") on Form S-8 of references to the results of our reserve review letter, dated January 1, 1996, in the Company's Annual Report on Form 10-K for the year ended December 31, 1995. RYDER SCOTT COMPANY PETROLEUM ENGINEERS Houston, Texas May 31, 1996 CORPDAL:47942.1 15467-00006 -----END PRIVACY-ENHANCED MESSAGE-----