-----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, Tr88dx1nDqs1WHjp4mq3cjZXcAAT0CkXPiSnV0hcfDsvw0XHdhvnYLrP0CWE3K0B lDsqKED/UYEEy2wwEICI0A== 0000860713-99-000004.txt : 19990503 0000860713-99-000004.hdr.sgml : 19990503 ACCESSION NUMBER: 0000860713-99-000004 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990430 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SNYDER OIL CORP CENTRAL INDEX KEY: 0000860713 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 752306158 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: SEC FILE NUMBER: 001-10509 FILM NUMBER: 99606695 BUSINESS ADDRESS: STREET 1: 777 MAIN ST STE 2500 CITY: FORT WORTH STATE: TX ZIP: 76102 BUSINESS PHONE: 8173384043 MAIL ADDRESS: STREET 1: 777 MAIN STREET SUITE 2500 CITY: FORT WORTH STATE: TX ZIP: 76102 10-K/A 1 AMENDMENT NO. 2 FORM 10K ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------- (Mark one) FORM 10-K/A Amendment No. 2 [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1998 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transaction period from ________ to ________ Commission file number 1-10509 ---------- SNYDER OIL CORPORATION (Exact name of registrant as specified in its charter) Delaware 75-2306158 (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 777 Main Street 76102 Fort Worth, Texas (Zip Code) (Address of principal executive offices) Registrant's telephone number, including area code (817) 338-4043 Securities registered pursuant to Section 12(b)of the Act: Name of each exchange Title of each class on which registered ------------------------------- ----------------------------------- Common Stock New York Stock Exchange Preferred Stock Purchase Rights New York Stock Exchange Securities registered pursuant to Section 12(g of the Act: None (Title of class) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No -------- ------- Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [T] Aggregate market value of the common stock held by non-affiliates of the registrant as of February 26, 1999.........................$321,653,346 Number of shares of common stock outstanding as of February 26, 1999............................................33,364,567 DOCUMENTS INCORPORATED BY REFERENCE NONE AMENDMENT NO. 2 TO FORM 10-K/A This Amendment No. 2 to Snyder Oil Corporation's Annual Report on Form 10-K for the fiscal year ended December 31, 1999, supplies the information required by Part III of Form 10-K. PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT Board of Directors Set forth below is a list of the Registrant's directors, including their ages and certain information relating to their business experience. Roger W. Brittain (61), director since 1983, has been, since July 1997, a director of Corporate Finance, Investec Henderson Crosthwaite (formerly Guinness Mahon Corporate Finance) and, since March 1990, Mr. Britain has been Managing Director of Guinness Mahon Energy Services Limited, (now dormant) a subsidiary of Guinness Mahon & Co. Limited ("GM&Co.") formed to provide investment banking and consultant services to the oil and gas industry. He was a Director of GM&Co., a London merchant bank from 1994 to July 1997. From 1980 through October 1989, Mr. Brittain was Managing Director and from mid-1987 an Executive Director of TR Energy, an investment company making oil and gas investments principally in the United States. From 1977 to 1980, Mr. Brittain was a Director of Shaw Wallace & Co. Ltd., Calcutta, India. From 1967 to 1977, he was employed by Hill Samuel & Co. Ltd, William Brandts & Sons Ltd. and Edward Bates and Sons Ltd, (director), merchant banks in London. Prior to that time, Mr. Brittain was with Her Majesty's Diplomatic Service. Mr. Brittain serves on the Audit and Compensation Committees. Mr. Brittain also serves as a director of SOCO International plc, which is listed on the London Stock Exchange, and of Sen Hong Resources Holdings Limited (formerly Seaunion Holdings Limited), an oil and gas company listed on the Hong Kong Stock Exchange. William G. Hargett (49), President, Chief Operating Officer and a director, has been with the Company since April 1997. Prior to joining the Company, Mr. Hargett served as President of Greenhill Petroleum Corporation from 1994 to 1997, Amax Oil & Gas, Inc. from 1993 to 1994 and North Central Oil Corporation from 1988 to 1993. Mr. Hargett serves on the Executive Committee. John A. Hill (57), director since 1981, is Vice Chairman and Managing Director of First Reserve Corporation, an oil and gas investment management company. Prior to joining First Reserve, Mr. Hill was President, Chief Executive Officer and Director of Marsh & McLennan Asset Management Company, the money management subsidiary of Marsh & McLennan Companies, Inc. From 1979 to 1980, Mr. Hill served as President and Chief Executive Officer of Eberstadt Asset Management Company, the asset management division of F. Eberstadt & Co., Inc. Prior to 1976, Mr. Hill held several senior positions in the federal government including Deputy Administrator of the Federal Energy Administration from 1975 to 1976 and Deputy Associate Director of the Office of Management and Budget from 1973 to 1974. Mr. Hill received his Bachelors Degree in Economics from Southern Methodist University and pursued graduate studies there as a Woodrow Wilson Fellow. Mr. Hill is Vice Chairman and a trustee of the Putnam Funds in Boston and a director of Transmontaigne Oil Company, a refined products distribution company. Mr. Hill serves as Chairman of the Governance Committee and as a member of both the Compensation and the Executive Committees. William J. Johnson (64), director since 1994, is a private consultant for the oil and gas industry and is President and a director of JonLoc Inc., an oil and gas company of which he and his family are the sole shareholders. From 1991 to 1994, Mr. Johnson was President, Chief Operating Officer and a director of Apache Corporation. Previously, he was a director, President and Chief Executive Officer of Tex/Con Oil and Gas, where he served from 1989 to 1991. Prior thereto, Mr. Johnson served in various capacities with major oil companies, including director and President USA of BP Exploration Company, President of Standard Oil Production Company and Senior Vice President of The Standard Oil Company. Mr. Johnson received a Bachelor of Science degree in Petroleum Geology from Mississippi State University and completed the Advanced Management Course at the University of Houston. Mr. Johnson serves as a director of Tesoro Petroleum Corporation, an integrated petroleum company and J. Ray McDermott, a marine construction company. Mr. Johnson serves on the Audit, Compensation and Governance Committees. B. J. Kellenberger (73), director since 1989, is the founder and owner of Kelloil, Inc., which is engaged in exploration and production of oil and natural gas and secondary recovery of oil. In 1965, he founded Shenandoah Oil Corporation and served as President, Chief Executive Officer and Chairman of the Board until Shenandoah's voluntary liquidation in 1979. Mr. Kellenberger serves on the Executive Committee. Harold R. Logan, Jr. (54), director since 1997, is Executive Vice President/Finance and a director of TransMontaigne Inc., a holding company engaged in providing logistical services; i.e. the transportation, terminaling and marketing, to the manufacturers and end-users of refined petroleum products. Mr. Logan is also a director of Suburban Propane Partners, L.P. and a director of Union Bank Shares, Ltd., Denver, Colorado. Previously, from 1984 to 1994, Mr. Logan was Senior Vice President/Finance and a director of Associated Natural Gas Corporation. Prior to joining Associated Natural Gas Corporation, Mr. Logan was with Dillon, Read & Co. Inc. and Rothschild, Inc. Mr. Logan also serves as a director of Suburban Propane Partners, L.P. Mr. Logan serves as Chairman of the Audit Committee. James E. McCormick (71), director since 1992, served as President, Chief Operating Officer and a director of Oryx Energy Company from its inception in November 1988 until his retirement in March 1992. Prior to his service with Oryx, Mr. McCormick served from 1953 in a number of positions with the Sun organization, most recently serving as President, Chief Executive Officer and a director of Sun Exploration and Production Company. Mr. McCormick serves as a director of Lone Star Technologies, Inc., B. J. Services, Inc., an oilfield service company, TESCO Corporation, a manufacturer of oil field drilling systems, and is a Director of the Dallas National Bank. Mr. McCormick serves as Chairman on the Compensation Committee and is a member of the Governance Committee. John C. Snyder (57), Chairman and a director, founded a predecessor of the Company in 1978. From 1973 to 1977, Mr. Snyder was an independent oil operator in Texas and Oklahoma. Previously, he was a director and the Executive Vice President of May Petroleum Inc. where he served from 1971 to 1973. From 1969 to 1971, Mr. Snyder was with Canadian-American Resources Fund, Inc., which he founded. From 1964 to 1966, Mr. Snyder was employed by Humble Oil and Refining Company (currently Exxon Co., USA) as a petroleum engineer. He received his Bachelor of Science Degree in Petroleum Engineering from the University of Oklahoma and his Masters Degree in Business Administration from the Harvard University Graduate School of Business Administration. In 1995, Mr. Snyder was named Wildcatter of the Year by the Independent Petroleum Association of Mountain States. Mr. Snyder is a director of SOCO International plc, an international oil and gas company listed on the London Stock Exchange; a director of the Community Enrichment center of Fort Worth; a director of Texas Capital Bancshares, Inc.; and is a member of the National Petroleum Council. Mr. Snyder serves as the Chairman of the Executive Committee. Edward T. Story (55), director since 1996, is President of SOCO International plc, an independent international oil and gas company traded on the London Stock Exchange. From 1991 until the formation of SOCO International plc in 1997 through the consolidation of international interests of the Company and various third parties, Mr. Story was Vice President -- International of the Company and President of SOCO International, Inc. From 1990 to 1991, Mr. Story was Chairman of the Board of a jointly-owned Thai/US company, Thaitex Petroleum Company. Mr. Story was co-founder, Vice Chairman of the Board and Chief Financial Officer of Conquest Exploration Company from 1981 to 1990. He served as Vice President, Finance and Chief Financial Officer of Superior Oil Company from 1979 to 1981. Mr. Story held the positions of Exploration and Production Controller and Refining Controller with Exxon USA from 1975 to 1979. He held various positions in Esso Standard's international companies from 1966 to 1975. Mr. Story serves as a director of Cairn Energy plc, an independent international oil and gas company traded on the London Stock Exchange, First BanksAmerica, Inc., a bank holding company listed on the New York Stock Exchange, Hallwood Realty Corporation, the general partner of Hallwood Realty Partners, L.P., an American Stock Exchange-listed real estate limited partnership, and Sen Hong Resources Limited, an oil and gas company listed on the Hong Kong Stock Exchange. Mr. Story serves on the Audit Committee. 2 Executive Officers Set forth below is a list of the Registrant's executive officers, including their ages and certain information relating to their business experience. Information concerning John C. Snyder, Chief Executive Officer, and William G. Hargett, President and Chief Operating Officer, is incorporated by reference from above. John C. Snyder (57), Chairman of the Board and Chief Executive Officer - See above. William G. Hargett (49), President and Chief Operating Officer - See above. Charles A. Brown (51), Senior Vice President -- Rocky Mountain Region, joined the Company in 1987. He was a petroleum engineering consultant from 1986 to 1987. He served as President of CBW Services, Inc., a petroleum engineering consulting firm, from 1979 to 1986 and was employed by Kansas Nebraska Natural Gas Company from 1971 to 1979 and Amerada Hess Corporation from 1969 to 1971. Mr. Brown received his Bachelor of Science degree in Petroleum Engineering from the Colorado School of Mines. Steven M. Burr (42), Vice President -- Engineering and Planning, joined the Company in 1987. From 1982 to 1987, he was a Vice President with the petroleum engineering consulting firm of Netherland, Sewell & Associates, Inc. From 1978 to 1982, Mr. Burr was employed by Exxon Company, USA in the Production Department. Mr. Burr received his Bachelor of Science degree in Civil Engineering from Tulane University and attended the Program for Management Development at the Graduate Business School of Harvard University.. Mark A. Jackson (43), Senior Vice President and Chief Financial Officer, joined the Company in August, 1997. Prior to joining the Company, Mr. Jackson served in various executive capacities at Apache Corporation including Vice President and Controller from 1988, Vice President, Finance from 1994 and Chief Financial Officer from 1996. From 1984 until 1988, Mr. Jackson served as Assistant Controller of Diamond Shamrock and Maxus Energy Company. Mr. Jackson began his career with the certified public accounting firm of Ernst & Ernst, specializing in the oil and gas industry. Mr. Jackson received his Bachelor of Science degree in Accounting from Oklahoma Christian University. John H. Karnes (37), Vice President -- General Counsel and Secretary, joined the Company in 1998. Mr. Karnes served as Senior Vice President of FIRSTPLUS Financial Group, Inc., a specialty consumer lending company, from January to June of 1998. He was Vice President and General Counsel of Pillowtex Corporation, a home textile manufacturer, throughout 1997, and of AMRE, Inc., a national franchising company, throughout 1996. From 1994 to 1995, he was Vice President and General Counsel of Pratt Hotel Corporation, a hotel management and gaming company. From 1991 to 1994 he served as Deputy General Counsel of Apache Corporation, an oil and gas exploration and production company. Prior to joining Apache, he was in private practice with the national law firm of Kirkland & Ellis, where he specialized in mergers and acquisitions. David M. Posner (45), Vice President -- Marketing, joined the Company in 1991. From 1980 to 1991 he held various positions with Ladd Petroleum Corporation (a subsidiary of the General Electric Company) including Vice President of Gas Gathering, Processing and Marketing. Mr. Posner received his Bachelor of Arts degree from Brown University and his Master of Science in Mineral Economics from the Colorado School of Mines. Roger B. Rice (54), Vice President -- Human Resources, joined the Company in 1997. From 1992 to 1997, Mr. Rice was Vice President Human Resources and Administration with Apache Corporation. From 1989 to 1992, he was Managing Consultant with Barton Raben, Inc., an executive search and consulting firm specializing in the energy industry. Previously, Mr. Rice was Vice President Administration for The Superior Oil Company and held various management positions with Shell Oil Company. He earned his Bachelor of Arts degree and Masters degree in Business Administration from Texas Technological University. Jay H. Smith (52), Senior Vice President -- Southern Region. Joined the Company in February 1998. From 1993 until he joined the Company, Mr. Smith served as Executive Vice President of Sonat Exploration Company. From 1983 until 1993 Mr. Smith served in a variety of positions with BP Exploration and Sohio Petroleum Company, most recently as Chief of Staff, Western Hemisphere North. From 1981 to 1983, Mr. Smith was Vice President - Operations of Spectrum Oil and Gas Company. Mr. Smith began his career with Shell Oil Company in 1968. Mr. Smith received his Bachelor of Science degree from Syracuse University. 3 John M. Thibeaux (49), Vice President -- Corporate Development, joined the Company in May of 1998. Before coming to the Company, Mr. Thibeaux was with J.P. Morgan from 1990 to 1998 where he served as Vice President of Engineering and Acquisitions. Most of his career was spent at Tenneco Oil Company where he held various positions, including Area Manager in the International Division, Planning Manager, Division Reservoir Engineer, Rocky Mountain Division, Reservoir Engineer, and Supervisor for Gulf Coast Division. Before joining Tenneco Oil, Mr. Thibeaux served in the U.S. Navy from 1973 to 1976, where he acquired the rank of Lieutenant JG and was a Petroleum Engineer for the Naval Petroleum Reserves. Mr. Thibeaux started his career with Atlantic Richfield Company in 1972, where he spent a year as a Production Engineer. His educational background includes a Bachelor of Science degree in Petroleum Engineering from University of Southwestern Louisiana received in 1972, and a Masters of Business Administration degree from University of Houston, received in 1985. Rodney L. Waller (49), Vice President -- Treasurer, joined the Company in 1977 as an officer. Since that time, Mr. Waller has performed various corporate, operational and finance functions. Previously, Mr. Waller was employed by Arthur Andersen & Co. Mr. Waller received his Bachelor of Arts degree from Harding University. Compliance with Section 16(a) of the Securities Exchange Act of 1934 Section 16(a) of the Securities Exchange Act of 1934 requires executive officers, directors and persons who beneficially own more than ten percent of the Company's stock to file initial reports of ownership and reports of changes of ownership with the SEC and the New York Stock Exchange. Copies of such reports are required to be furnished to the Company. Based solely on a review of such forms furnished to the Company and certain written representations from the executive officers and directors, the Company believes that all Section 16(a) filing requirements applicable to its executive officers, directors and greater than 10% beneficial owners were complied with on a timely basis. ITEM 11. EXECUTIVE COMPENSATION Shown below is information concerning the annual and long-term compensation for services in all capacities to the Company for the fiscal years ended December 31, 1998, 1997 and 1996 of those persons who were at December 31, 1998 the chief executive officer and the other four most highly compensated executive officers of the Company (the "Named Officers"). SUMMARY COMPENSATION TABLE (a)
Long-Term ------------ Annual Compensation Compensation ------------------- ------------ Stock Option All Name and Position Year Salary Bonus (b) Awards (c) Other (d) - ----------------------- -------- ------------- ------------ ------------- ------------- John C. Snyder 1998 $414,164 $180,000 80,000 $42,006 Chairman and Chief 1997 384,984 200,000 77,000 42,874 Executive Officer 1996 381,652 400,000 48,700 41,179 William G. Hargett 1998 345,824 150,000 65,000 42,006 President and Chief 1997 215,615 150,000 200,000 24,931 Operating Officer 1996 -- -- -- -- Charles A. Brown 1998 226,922 150,000 20,400 42,006 Senior Vice President, 1997 183,333 85,000 17,500 42,874 Rocky Mountain Region 1996 174,167 30,000 13,600 41,179 Mark A. Jackson 1998 246,672 350,000 24,300 42,006 Senior Vice President, 1997 95,830 50,000 75,000 24,586 Chief Financial Officer 1996 -- -- -- -- John H. Karnes 1998 103,125 200,000 50,000 17,877 Vice President and 1997 -- -- -- -- General Counsel 1996 -- -- -- -- (a) Excludes the cost to the Company of other compensation that, with respect to any Named Officer, does not exceed the lesser of $50,000 or 10% of the Named Officer's salary and bonus. (b) Bonuses are paid in March of each year based on performance during the preceding year. Bonus amounts are included in the year preceding the year in which the bonus is paid. (c) Stock options are generally granted in February of each year based in part on performance during the preceding year. (d) Includes amounts accrued for the fiscal year for the Named Officers under the Company's Profit Sharing and Savings Plan and as matching contributions under the Company's Deferred Compensation Plan for Select Employees as follows:
4
Profit Sharing Plan Deferred Compensation Plan ------------------------------ ----------------------------- 1996 1997 1998 1996 1997 1998 ------- ------- ------- ------- ------- ------- John C. Snyder $16,179 $17,874 $17,006 $25,000 $25,000 $25,000 William G. Hargett -- -- 17,006 -- 24,931 25,000 Charles A. Brown 16,179 17,874 17,006 25,000 25,000 25,000 Mark A. Jackson -- -- 17,006 -- 24,586 25,000 John H. Karnes -- -- -- -- -- 17,877
Stock Options Shown below is information with respect to options to purchase common stock granted during 1998 to the Named Officers. No stock appreciation rights ("SARs") were granted during 1998. OPTION/SAR GRANTS IN LAST FISCAL YEAR
Percentage Potential Realizable Value of Total at Assumed Annual Rates of Options Grants in Exercise Expiration Stock Price Appreciation (b) Name Granted (a) Year Price Date 5% 10% - ----------------- ----------- ---- ----------- ---------- ---------- ---------- John C. Snyder 80,000 9.26 $17.6875 2/17/03 $390,936 $863,872 William G. Hargett 65,000 7.52 $17.6875 2/17/03 317,636 701,896 Charles A. Brown 20,400 2.36 $17.6875 2/17/03 99,689 220,287 Mark A. Jackson 25,300 2.93 $17.6875 2/17/03 123,634 273,200 John H. Karnes 50,000 5.79 $19.8750 7/20/03 274,555 606,695 (a) All options were awarded under the Snyder Oil Corporation Restated 1989 Stock Option Plan. Options awarded during 1998 must become exercisable as follows: one year after grant: 20%; two years after grant: 30%; and three years after grant: 40%. (b) The assumed annual rates of stock price appreciation used in showing the potential realizable value of stock option grants are prescribed by rules of the Securities and Exchange Commission (the "SEC"). The actual realized value of the options may be significantly greater or less than the amounts shown. For options granted during 1998 at an exercise price of $17.6875, the values shown for 5% and 10% appreciation equate to a stock price of $22.5742 and $28.4859, respectively, at the expiration date of the options.
5 AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND YEAR-END OPTION/SAR VALUES
Value of Number of Unexercised Unexercised In-the-Money Options/SARS YearEnd 1998 Options/SARS at Year End 1998 Shares Acquired Value -------------------------- ------------------------------ Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable - ------------------ ---------------- --------- ----------- ------------- ----------- ------------- - ----------- ------------- John C. Snyder 46,000 $218,500 148,920 153,380 $586,373 $603,934 William G. Hargett -- -- 60,000 205,000 -- -- Charles A. Brown -- -- 68,610 38,090 270,152 149,979 Mark A. Jackson 20,000 201,250 22,500 97,800 -- 134,375 John H. Karnes -- -- -- 50,000 -- --
Compensation Committee Report on Executive Compensation The Compensation Committee of the Board of Directors has furnished the following report on executive compensation: The Compensation Committee of the Board of Directors, which is composed of independent members of the Board, establishes the general compensation policies of the Company, establishes the compensation plans and compensation levels for officers and certain other key employees, and administers the Company's stock option plan and deferred compensation plan. In establishing compensation levels, the Committee establishes the specific compensation of Messrs. Snyder and Hargett. For other officers and key employees, the Committee establishes compensation ranges for each position and reviews management's compensation recommendations within the prescribed ranges. The Committee believes that the cash compensation of executive officers, as well as other key employees, should be competitive with other companies while, within the Company, being fair and correlative to the level of each individual's personal performance. Annual awards of stock options are intended both to retain executives and to motivate them to improve long-term stock market performance. Total cash compensation (base salary plus "expected bonus") for Mr. Snyder and the Company's other executives during 1998 was targeted at the median level for executives having similar responsibilities within the Company's 30-company peer group. This peer group was established in 1997 as part of an executive compensation analysis performed by independent consultants. The peer group is intended to be representative of the companies against which the Company competes for its personnel requirements. Actual cash compensation for 1998 was set within the ranges indicated by this survey and other more general salary surveys based upon the individual's responsibilities and performance. Targeting cash compensation at the peer-group median is intended to induce Company executives to make extraordinary personal contributions in order to maximize their incentive bonus awards, thereby creating a strong relationship between company performance and compensation level. During 1998, Mr. Snyder's base salary was increased $20,000, or approximately 5%. Generally, changes in Mr. Snyder's compensation are not based on any particular measure of performance, but are determined subjectively by the Committee based on corporate performance, salaries of chief executive officers of comparable companies and other factors considered applicable by the Committee. Mr. Snyder's bonus is based primarily on company performance. The Committee has not established any particular formula or singled out particular factors as more important than others. The Committee considers various factors, including growth in reserves, net income and cash flow, as well as performance of the Company's common stock. The Committee also considers other matters, such as the extent to which these factors were influenced by management decisions during the year and steps taken by management to position the Company for future growth. Based on these and other considerations, the Committee awarded Mr. Snyder a bonus of $180,000 for 1998. Factors considered heavily in determining Mr. Snyder's 1998 bonus included the Company's continued reserve growth and commendable financial performance during a period of record-setting low commodity prices, as well as Mr. Snyder's leadership and personal time commitment involved in facilitating the Company's pending merger with Santa Fe Energy Resources, Inc. 6 Bonuses for other officers and key employees are influenced by Company performance, but are determined primarily based on senior management's assessment of performance of the executive's duties and success in attaining specific performance goals which are directed toward improving operating unit and Company performance. In 1998, the Committee awarded exceptional incentive bonuses to two senior executives in consideration of their extraordinary personal contributions leading up to the merger with Santa Fe Energy Resources Inc. In addition to the foregoing cash compensation, the Committee also awarded Mr. Snyder and other executives stock options during 1998 to retain and motivate management to improve the Company's long-term stock market performance. Options were granted at the prevailing market price and will have value only if the price of the Company's common stock increases. Options granted have a term of five years and vest 30% after one year, an additional 30% after two years and are fully vested after three years, subject to the grantee's continued employment. The Committee determined the number of options granted during the year based on a formula under which the number of options granted is equal to a percentage, which varies with the degree to which an individual's responsibilities might affect the long-term price of the Company's stock, of the individual's base salary. Mr. Snyder and other executives also participate in a deferred compensation plan as a means to provide additional incentives for management to remain in the employ of the Company. Under the Plan, key employees selected by the Committee are permitted the defer a portion of their compensation for periods determined by them or until their employment by the Company ceases. The Committee also determines annually the matching contribution to be made by the Company and may, in addition, authorize additional Company contributions to be made on behalf of designated individuals. Company matching contributions vest over three years through December 31, 1996 and four years thereafter, and additional Company contributions vest over the period determined by the Committee. The Committee determined that Company contributions during 1998 would match each participant's contribution up to 10% of the participant's salary and would equal one-third of the participant's contributions in excess of such amount, subject to a maximum Company contribution of $25,000 for any participant. COMPENSATION COMMITTEE James E. McCormick, Chairman Roger W. Brittain John A. Hill William J. Johnson Shareholder Return Performance Presentation Set forth below is a line graph comparing the percentage change in the cumulative total shareholder return on the Company's common stock against the total return of the Dow Jones Equity Market Index and the Dow Jones Secondary Oils Index for the calendar years 1994 through 1998. None of the companies on the Dow Jones Secondary Oils Index is included in the companies surveyed as to compensation levels by the independent consultants advising the Compensation Committee of the Board of Directors. The Index is composed of thirteen companies, all of which are significantly larger than the Company, selected by Dow Jones & Company, Inc. to represent non-major oil producers that generally do the bulk of their business domestically. The graph assumes that the value of the investment in the Company's common stock and each index was $100 on January 1, 1994 and that all dividends were reinvested. The closing sales prices of the Company's common stock on the last trading days of 1993 and 1998 were $ 17.75 and $ 13.3125, respectively. 7 Employment Agreements and Change in Control Arrangements In 1997, the Company and Mr. Hargett executed an employment agreement (the "Hargett Agreement") pursuant to which Mr. Hargett will serve as President and Chief Operating Officer of the Company, effective May 2, 1997. The Employment Agreement provides for (a) a minimum annual base salary of $325,000, (b) a minimum bonus for 1997 in the amount of $90,278, (c) a $50,000 payment to cover Mr. Hargett's expenses for relocating to Fort Worth and (d) an initial grant of a five-year option (vesting over three years) to purchase 200,000 shares of Common Stock at a price per share equal to $16.25, the fair market value of a share of Common Stock on the day Mr. Hargett's employment commenced. The Employment Agreement has an initial four-year term, and unless either party terminates the Employment Agreement or provides notice that the term should not be extended, the term will be extended automatically for an additional one year period as of May 2 of each year (beginning on May 2, 1999). As a result, the Employment Agreement will generally have a remaining term of at least two years. If Mr. Hargett's employment is terminated by the Company without "cause" (as defined) or by Mr. Hargett because of a material breach of the Employment Agreement by the Company, a material reduction in his duties and responsibilities or the assignment to him of duties that are materially inconsistent with his positions with the Company, then (a) the Company will pay Mr. Hargett a lump sum equal to the aggregate base salary for the remaining term and (b) all stock options awarded to Mr. Hargett will become fully exercisable for a limited period of time. Mr. Hargett will also receive these termination benefits if he terminates his employment (i) for any reason whatsoever on or within 12 months after a "change in control" (as defined) or (ii) during the 60-day period commencing on May 2, 1999 because, in his judgment, and subject to the concurrence of the Compensation Committee, the scope of his authority within the Company is not appropriate. In addition, if any payment or distribution to Mr. Hargett, whether or not pursuant to the Employment Agreement, is subject to federal excise tax on "excess parachute payments," the Company is required to pay an additional amount so that Mr. Hargett receives, net of taxes, an amount sufficient to pay all such excise taxes. The Company has entered into Change of Control Severance Agreements with each of its officers (other than Mr. Hargett). Pursuant to these agreements, if within two years following a change of control (as defined) an officer's employment is terminated by the Company without "cause" (as defined) or by the officer because of a reduction in his compensation or entitlements to benefits or a significant reduction in his duties and responsibilities, then (a) the Company will pay to the officer a lump sum equal to two years' aggregate base salary and (b) all stock options awarded to the officer will become fully exercisable for a limited period of time. In addition, if any payment or 8 distribution to the officer, whether or not pursuant to the agreement, is subject to federal excise tax on "excess parachute payments," the Company is required to pay an additional amount so that the officer receives, net of taxes, an amount sufficient to pay all such excise taxes. The Company has adopted the Snyder Oil Corporation Supplemental Executive Retirement Plan pursuant to which eligible participants receive fixed monthly retirement benefits upon retirement from the Company after reaching age 55. Participation in the plan is limited to a select group of management and highly-compensated employees identified as influential within the Company and selected to participate by the Board of Directors. The plan is a top-hat plan for purposes of the Employee Retirement Income Security Act of 1974 and is not designed to be qualified under to Section 401(a) of the Internal Revenue Code of 1986, as amended. The amount of benefits payable under the plan are discretionary based on the Board's perception of the value of each participant's contribution to the Company and the level of benefits provided by peer companies to comparably situated individuals. Benefits are not determined by reference to the participant's compensation or years of service. The Company funds its obligations to each participant into a grantor trust for the participant upon the participant reaching the age of 55. The only employee currently participating in the plan is John C. Snyder. Upon Mr. Snyder's retirement from the Company, Mr. Snyder will be entitled to monthly retirement benefits equal to $21,750 per month for life and his surviving spouse will be entitled to $14,507 for life. Although the adoption of the plan was not related to the Company's pending merger into Santa Fe Energy Resources, Inc., in light of the timing of the merger, the Company has agreed to indemnify Mr. Snyder for any excise tax under Section 4999 of the Internal Revenue Code of 1986 (and any interest, penalties and other amounts related thereto, including additional income and other taxes arising with respect to such indemnification) assessed against him relating to the payment of benefits under the plan as a result of the merger. Director Compensation Non-employee directors of the Company receive an annual retainer, payable quarterly, of 2,000 shares of the Company's common stock. In addition, non-employee directors receive $2,000 for attendance at each Board of Directors meeting and $750 for attendance at each meeting of a committee of the Board of Directors. Non-employee directors also receive $750 for each telephone meeting in which they participate. Non-employee directors are reimbursed for expenses incurred in attending Board of Directors and committee meetings, including those for travel, food and lodging. Directors and members of committees of the Board of Directors who are employees of the Company or its affiliates are not compensated for their Board of Directors and committee activities. From time to time in the discretion of the Board, the Board may grant additional compensation to one or more non-employee directors. The Directors Stock Plan also provides that the Company will automatically grant to each non-employee director, on the date of his appointment, election, reappointment or reelection as a member of the Board of Directors, a stock option for 2,500 shares of common stock. The exercise price for all Director Options is the fair market value on the date of grant. The duration of each option is five years from the date of award, and each option vests as to 30% of the shares covered after one year, an additional 30% of the shares after two years, and all remaining shares three years after the date of grant. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERSHIP AND MANAGEMENT The following table provides information as to the beneficial ownership of common stock of the Company as of April 20, 1999, by each person who, to the knowledge of the Company, beneficially owned 5% or more of the common stock, each director of the Company, each executive officer named in the Summary Compensation Table and by all executive officers and directors of the Company as a group. No directors or executive officers of the Company beneficially owns any equity securities of the Company other than common stock. Unless indicated otherwise, the business address of each individual listed below is: c/o Snyder Oil Corporation, 777 Main Street, Fort Worth, Texas 76102. 9
Common Stock ----------------------------------- Number of Percent of Shares Class Owned (a) (b) Outstanding ------------- ----------- John C. Snyder 1,932,897 5.7 % Roger W. Brittain 35,285 * William G. Hargett 140,500 * John A. Hill 108,454 * William J. Johnson 18,450 * B.J. Kellenberger 29,523 * Harold R. Logan, Jr. 5,550 * James E. McCormick 24,450 * Edward T. Story 560,817 1.7 Charles A. Brown 64,620 * Mark A. Jackson 30,090 * John H. Karnes -- * All executive officers and directors as a group 3,242,000 9.5 Schroder Capital Management (c) 1,829,200 5.5 787 Seventh Avenue New York, New York 10019-6090 The Crabbe Huson Group, Inc. (d) 1,793,850 5.4 121 SW Morrison, Suite 1400 Portland, Oregon 97204 * Less than 1%. (a) The number of shares in the table includes 506,750 shares that the named executive officers and directors and 699,520 shares that all executive officers and directors as a group have the right to acquire within 60 days after March 19, 1999 including 167,500 for Mr. Snyder, 139,500 for Mr. Hargett and 59,050 for Mr. Story. (b) Of the shares shown, beneficial ownership of 303,760 is disclaimed by Mr. Snyder and by all executive officers and directors as a group. To the knowledge of the Company, each person holds sole investment and voting power over the shares shown, except Mr. Snyder shares such powers with respect to 3,760 shares, Mr. Brittain shares such powers with respect to 1,750 shares, Mr. Hill shares investment power with respect to 37,006 shares and all officers and directors as a group share such powers with respect to 42,516 shares. (c) The number of shares is based on information set forth in Schedule 13G dated February 8, 1999, by Schroder Capital Management Inc. Schroder Capital Management Inc. has sole voting power of 1,617,700 shares and sole dispositive power of 1,829,200 shares (d) The number of shares is based on information set forth in Amendment No. 1 to the Schedule 13G dated February 12, 1999 by The Crabbe Huson Group, Inc. The shares are owned by clients of The Crabbe Huson Group with whom it shares voting and dispositive power.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS In May of 1997, Edward T. Story, a former executive of the Company and currently a director, issued notes to the Company with an aggregate principal amount of $590,500. The notes represented the exercise price of options issued to Mr. Story relating to 10% of the stock of each of the Company's two international subsidiaries. The notes initially were unsecured, bore interest at the rate of 1% per month and were due on April 10, 1998. In July of 1997, the interest rate on the notes was reduced to two percent over the Company's incremental cost of funds and Mr. Story collateralized the notes with 50,000 shares of common stock of the Company. In March of 1998, Mr. Story repaid all amounts outstanding under the notes, including $69,581 in accrued interest. 10 PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K. (a) 1. Reference is made to Item 8 on page 31. 2. Schedules otherwise required by Item 8 have been omitted as not required or not applicable. 3. Exhibits. 3.1 - Certificate of Incorporation of Registrant -- incorporated by reference from Exhibit 3.1 to the Registrant's Registration Statement on Form S-4 (Registration No. 33-33455). 3.1.1 - Certificate of Amendment to Certificate of Incorporation of Registrant filed February 9, 1990 -- incorporated by reference from Exhibit 3.1.1 to the Registrant's Registration Statement on Form S-4 (Registration No. 33-33455). 3.1.2 - Certificate of Amendment to Certificate of Incorporation of Registrant filed May 22, 1991 -- incorporated by reference from Exhibit 3.1.2 to the Registrant's Registration Statement on Form S-1 (Registration No. 33-43106). 3.1.3 - Certificate of Amendment to Certificate of Incorporation of Registrant filed May 24, 1993 -- incorporated by reference from Exhibit 3.1.5 to the Registrant's Quarterly Report on Form 10-Q for the quarter-ended June 30, 1993 (File No. 1-10509). 3.2 - By-laws of the Registrant, as amended -- incorporated by reference from Exhibit 3.2 to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1997 (File No.1-10509). 4.1 - Indenture dated as of June 10, 1997 between the Registrant and Texas Commerce Bank National Association relating to Registrant's 8 3/4percent Senior Subordinated Notes due 2007 -- incorporated by reference from Exhibit 4.1 to the Registrant's Current Report on Form 8-K dated June 10, 1997 (File No. 1-10509). 4.1.1 - First Supplemental Indenture dated as of June 10, 1997 to Exhibit 4.1.5 -- incorporated by reference from Exhibit 4.2 to the Registrant's Current Report on Form 8-K dated June 10, 1997 (File No. 1-10509). 4.1.2 - Second Supplemental Indenture dated as of June 10, 1997 to Exhibit 4.1.5 -- incorporated by reference from Exhibit 4.3 to the Registrant's Current Report on Form 8-K dated June 10, 1997 (File No. 1-10509). 4.2 - Rights Agreement, dated as of May 27, 1997, between the Registrant and ChaseMellon Shareholder Services, L.L.C., as Rights Agent, specifying the terms of the Rights, which includes the form of Certificate of Designation of Junior Participating Preferred Stock as Exhibit A and the form of Right Certificate as Exhibit B -- incorporated by reference from Exhibit 1 to the Registrant's Current Report on Form 8-K dated June 2, 1997 (File No. 1-10509). *4.3 - Amendment Number 1 to Rights Agreement, dated as of January 13, 1999, between the Registrant and ChaseMellon Shareholder Services, L.L.C., as Rights Agent. 4.4 - Form of Certificate of Designation of Junior Participating Preferred Stock setting forth the terms of the Junior Participating Preferred Stock, par value $.01 per share -- incorporated by reference from Exhibit A to Exhibit 1 to the Registrant's Current Report on Form 8-K dated June 2, 1997 (File No. 1-10509). 11 10.1 - Agreement and Plan of Merger, dated January 13, 1999, between Registrant and Santa Fe Energy Resources Inc. -- incorporated by reference from Exhibit 2.1 to Santa Fe Energy Resources, Inc.'s Registration Statement on Form S-4 (Registration No. 333-71595). 10.2 - Snyder Oil Corporation 1990 Stock Option Plan for Non-Employee Directors -- incorporated by reference from Exhibit 10.4 to the Registrant's Registration Statement on Form S-4(Registration No. 33-33455). 10.2.1 - Amendment dated May 20, 1992 to the Registrant's 1990 Stock Plan for Non-Employee Directors' incorporated by reference from Exhibit 10.1.1 to the Registrant's Quarterly Report on Form 10-Q for the quarter-ended June 30, 1993 (File No. 1-10509). 10.3 - Registrant's Amended and Restated 1989 Stock Option Plan -- incorporated by reference from Exhibit 10.2 to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1997 (File No. 1-10509). 10.4 - Registrant's Deferred Compensation Plan for Select Employees, adopted effective June 1, 1994, as amended -- incorporated by reference from Exhibit 10.3 to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1997 (File No. 1-10509). 10.5 - Registrant's Profit Sharing & Savings Plan and Trust as amended and restated effective October 1, 1993 -- incorporated by reference from Exhibit 10.12 to the Registrant's Quarterly Report on Form 10-Q for the quarter-ended September 30, 1993 (File No. 1-10509). 10.6 - Form of Indemnification Agreement-- incorporated by reference from Exhibit 10.15 to the Registrant's Registration Statement on Form S-4 (Registration No. 33-33455). 10.7 - Form of Change in Control Protection Agreement-- incorporated by reference from Exhibit 10.11 to the Registrant's Registration Statement on Form S-1 (Registration No. 33-43106). 10.8 - Long-term Retention and Incentive Plan and Agreement between the Registrant and Charles A. Brown -- incorporated by reference from Exhibit 10.1.2 to the Registrant's Quarterly Report on Form 10-Q for the quarter-ended June 30, 1993 (File No. 1-10509). 10.9 - Agreement dated as of April 30, 1993 between the Registrant and Edward T. Story -- incorporated by reference from Exhibit 10.8 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 1993 (File No. 1-10509). 10.10 - Formation and Capitalization Agreement dated as of December 30, 1996 among Registrant, SOCO International, Inc., SOCO International Holdings, Inc., SOCO International Operations, Inc. and Edward T. Story-- incorporated by reference from Exhibit 10.9 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 1996 (File No. 1-10509). 10.10.1 - Promissory Note dated December 30, 1996 from Edward T. Story payable to the order of SOCO International Holdings, Inc. -- incorporated by reference from Exhibit 10.9.1 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 1996 (File No. 1-10509). 10.10.2 - Promissory Note dated December 30, 1996 from Edward T. Story payable to the order of SOCO International Operations, Inc. -- incorporated by reference from Exhibit 10.9.2 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 1996 (File No. 1-10509). 12 10.10.3 - Exchange Agreement dated July 10, 1997 between SOCO International, Inc. and Edward T. Story, Jr. -- incorporated by reference from Exhibit 10.9.3 to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1997 (File No. 1-10509). 10.11 - Amended and Restated Stock Repurchase Agreement dated as of July 31, 1997 and amended and restated as of September 18, 1997 among the Registrant and Patina Oil & Gas Corporation-- incorporated by reference to Exhibit 10.12 to Amendment No. 2 to the Registration Statement on Form S-3 of Patina Oil & Gas Corporation (Commission File No. 333-32671). 10.12 - Fifth Restated Credit Agreement dated as of June 30, 1994 among the Registrant and the banks party thereto -- incorporated by reference from Exhibit 10.11 to the Registrant's Quarterly Report on Form 10-Q for the quarter-ended June 30, 1994 (File No. 1-10509). 10.12.1 - First Amendment dated as of May 1, 1995 to Fifth Restated Credit Agreement -- incorporated by reference from Exhibit 10.11.1 to Registrant's Quarterly Report on Form 10-Q for the quarter-ended June 30, 1995 (File No. 1-10509). 10.12.2 - Second Amendment dated as of June 30, 1995 to Fifth Restated Credit Agreement -- incorporated by reference from Exhibit 10.12.2 to Registrant's Quarterly Report on Form 10-Q for the quarter-ended June 30, 1995 (File No. 1-10509). 10.12.3 - Third Amendment dated as of November 1, 1995 to Fifth Restated Credit Agreement -- incorporated by reference from Exhibit 10.11.3 to Registrant's Annual Report on Form 10-K of the year ended December 31, 1995 (File No. 1-10509). 10.12.4 - Fourth Amendment dated as of April 4, 1996 to Fifth Restated Credit Agreement -- incorporated by reference to Registrant's Quarterly Report on Form 10-Q for the quarter-ended March 31, 1996 (File No. 1-10509). 10.12.5 - Fifth Amendment dated as of November 1, 1996 to Fifth Restated Credit Agreement -- incorporated by reference from Exhibit 10.11.5 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 1996 (File No. 1-10509). 10.12.6 - Sixth Amendment dated as of May 19, 1997 to Fifth Restated Credit Agreement -- incorporated by reference from Exhibit 10.11.6 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 1997 (File No. 1-10509). 10.12.7 - Seventh Amendment dated as of October 13, 1997 to Fifth Restated Credit Agreement -- incorporated by reference from Exhibit 10.11.7 to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1997 (File No. 1-10509). *10.12.8 - Eighth Amendment dated as of November 1, 1998 to Fifth Restated Credit Agreement. 10.13 - Directors Deferral Plan for Independent Directors of the Registrant-- incorporated by reference from Exhibit 10.12 to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1997 (File No. 1-10509). 10.14 - Amended and Restated Agreement and Plan of Merger dated as of March 20, 1996 among Registrant, Patina Oil & Gas Corporation, Patina Merger Corporation and Gerrity Oil & Gas Corporation -- incorporated by reference from Exhibit 2.1 to Amendment No. 1 to the Registration Statement on Form S-4 of Patina Oil & Gas Corporation (Registration No. 333-572). 13 10.15 - Employment Agreement effective as of May 2, 1997 between Registrant and William G. Hargett -- incorporated by reference from Exhibit 1 to the Registrant's Current Report on Form 8-K dated April 24, 1997 (File No. 1-10509). 10.16 - Indemnification Agreement dated as of May 2, 1997 between Registrant and William G. Hargett -- incorporated by reference from Exhibit 2 to the Registrant's Current Report on Form 8-K dated April 24, 1997 (File No. 1-10509). 10.17 - Severance Agreement dated as of April 17, 1997 between Registrant and Thomas J. Edelman -- incorporated by reference from Exhibit 3 to the Registrant's Current Report on Form 8-K dated April 24, 1997 (File No. 1-10509). 10.18 - Advisory Agreement entered into effective as of May 1, 1997 between Registrant and Thomas J. Edelman -- incorporated by reference from Exhibit 4 to the Registrant's Current Report on Form 8-K dated April 24, 1997 (File No. 1-10509). #10.19 - Form of Supplemental Executive Retirement Plan. #10.20 - Form of Supplemental Executive Retirement Plan Agreement between Snyder Oil Corporation and John C. Snyder. *12 - Computation of Ratio of Earnings to Fixed Charges and Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends. *22.1 - Subsidiaries of the Registrant. #23.1 - Opinion of Arthur Andersen LLP. *23.2 - Consent of Netherland, Sewell & Associates, Inc. *27 - Financial Data Schedule. *99.1 - Reserve letter from Netherland, Sewell & Associates, Inc. dated February 3, 1999 to the Registrant interest as of December 31, 1998. (b) Current reports on Form 8-K filed during the quarter ended December 31, 1998. * Previously filed in connection with Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1998. # Filed herewith in connection with Amendment No.2 to Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1998. 14 SIGNATURE Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. /s/ John C. Snyder * April 30, 1999 - ------------------------- Director and Chairman of the Board John C. Snyder (Principal Executive Officer) /s/ William G. Hargett * April 30, 1999 - ------------------------- Director, President and Chief William G. Hargett Operating Officer /s/ Roger W. Brittain * April 30, 1999 - ------------------------- Director Roger W. Brittain /s/ John A. Hill * April 30, 1999 - -------------------------- Director John A. Hill /s/ William J. Johnson * April 30, 1999 - -------------------------- Director William J. Johnson /s/ B. J. Kellenberger * April 30, 1999 - -------------------------- Director B. J. Kellenberger /s/ Harold R. Logan, Jr. * April 30, 1999 - -------------------------- Director Harold R. Logan, Jr. /s/ James E. McCormick * April 30, 1999 - ------------------------- Director James E. McCormick /s/ Edward T. Story * April 30, 1999 - ------------------------- Director Edward T. Story /s/ Mark A. Jackson * April 30, 1999 - ------------------------- Senior Vice President and Chief Mark A. Jackson Financial Officer (Principal Financial and Accounting Officer) *By: /s/ John H. Karnes --------------------- John H. Karnes Attorney-in-Fact EX-10 2 RABBI TRUST EXHIBIT 10.19 SNYDER OIL CORPORATION RABBI TRUST THIS AGREEMENT made this day of ___________, 1999, by and between Snyder Oil Corporation (the "Company") and (the "Trustee"). W I T N E S S E T H: WHEREAS, the Company has adopted the Snyder Oil Corporation Supplemental Executive Retirement Plan (the "Plan") with an initial effective date of January 12, 1999, a copy of which is attached hereto as Appendix A, pursuant to which the Company has agreed to pay certain benefits to eligible employees upon the occurrence of certain events as described in the Plan; and WHEREAS, the Company wishes to establish a trust (the "Trust") and to contribute to the Trust assets that shall be held therein, subject to the claims of the Company's creditors in the event of the Company's Insolvency, as herein defined, to serve as a reserve for the discharge of the Company's obligations under the Plan to participants as of the initial effective date of the Plan, until such benefits are paid to Plan participants and their beneficiaries in such manner and at such times as specified in the Plan; and WHEREAS, it is the intention of the parties that the Trust shall constitute an unfunded arrangement and shall not affect the status of the Plan as an unfunded plan maintained for the purpose of providing deferred compensation for a select group of management or highly compensated employees for purposes of Title I of the Employee Retirement Income Security Act of 1974; and WHEREAS, it is the intention of the Company to make contributions to the Trust to provide itself with a source of funds to assist it in meeting its obligations under the Plan to participants as of the initial effective date of the Plan; WHEREAS, the Trust shall not be used as a source of funds to assist in satisfying any liabilities accrued with respect to participants who enter the Plan on or after the initial effective date of the Plan, and such participants' benefits, instead, shall be paid from the general assets of the Company or another unfunded trust arrangement; NOW, THEREFORE, the parties do hereby establish the Trust and agree that the Trust shall be comprised, held, and disposed of in accordance with the terms of this agreement ("Trust Agreement") as follows: SECTION 1. ESTABLISHMENT OF TRUST (a) The Company hereby deposits with the Trustee in trust ________________________ ($_________), which shall become the principal of the Trust to be held, administered, and disposed of by the Trustee as provided in this Trust Agreement. (b) The Trust hereby established shall be irrevocable. (c) The Trust is intended to be a grantor trust, of which the Company is the grantor (within the meaning of subpart E, part I, subchapter J, chapter 1, subtitle A of the Internal Revenue Code of 1986, as amended) and shall be construed accordingly. (d) The principal of the Trust, and any earnings thereon, shall be held separate and apart from other funds of the Company and shall be used exclusively for the uses and purposes of Plan participants and general creditors as herein set forth. Plan participants and their beneficiaries shall have no preferred claim on, or any beneficial ownership interest in, any assets of the Trust. Any rights created under the Plan and this Trust Agreement shall be mere unsecured contractual rights of Plan participants and their beneficiaries against the Company. Any assets held by the Trust will be subject to the claims of the Company's general creditors under federal and state law in the event of Insolvency, as defined in Section 3(a) herein. (e) Within seven (7) days following the date this Trust is executed, the Company shall be required to irrevocably deposit additional cash or other property to the Trust in an amount which is determined by an independent actuary selected by the Company to be sufficient to pay each Plan participant or beneficiary, as of the initial effective date of the Plan, the benefits payable pursuant to the terms of the Plan, such amount to be determined as of the close of the applicable Plan year(s). (f) The principal of the Trust, and any earnings thereon used to pay Plan benefits, shall be used solely to pay Plan participants as of the initial effective date of the Plan, and beneficiaries of such participants. Any other such individuals entitled to benefits under the Plan shall not be entitled to a payment from the Trust. Instead, such benefits shall be paid from the general assets of the Company or another unfunded trust arrangement. SECTION 2. PAYMENTS TO PLAN PARTICIPANTS AND THEIR BENEFICIARIES (a) At such time as a Plan participant is entitled to a payment under the Plan (as determined by the Trustee after having been notified in writing by the Company of the Plan participant's entitlement to the payment), the Plan participant shall receive payment from the Trust Fund in an amount equal to the benefits to which such Plan participant is entitled under the terms of the Plan. In such event, the Trustee shall be empowered to liquidate such portion of the Trust Fund as may be available and necessary, or to take such actions as the Trustee deems appropriate, to satisfy the Company's obligations under the Plan. If payment required under the terms of the Plan has not been made to the Plan participant (whether due to the failure of the Company to notify the Trustee as required by this paragraph or otherwise), the Plan participant may notify the Trustee in writing of the amount (or a reasonable estimate of the amount) due the Plan participant pursuant to the Plan and the date such amount was due and payable. The Trustee shall notify the Company within fifteen (15) days of the receipt of such payment request. If the Company and the Plan participant do not agree as to whether the Plan participant is entitled to a payment, the Trustee shall apply to a court of competent jurisdiction for instructions as to whether the distribution should be made. The Trustee shall be reimbursed from the Trust Fund for any reasonable costs incurred by the Trustee in connection with such litigation. If the Trust Fund is insufficient to pay such costs, then the Company shall reimburse the Trustee. Notwithstanding the preceding sentences, if a final determination is made that the Plan participant is not entitled to such payment and it is determined the participant's claim for payment which resulted in the Trustee's legal action was not made in good faith, the Plan participant, rather than the Company, shall reimburse the Trustee and/or the Trust Fund for any such expenses. To the extent, however, that the participant does not reimburse any expenses paid by the Trustee for which there are not sufficient Trust Assets to pay, such amounts shall be reimbursed by the Company. (b) The Company may make payment of benefits directly to Plan participants or their beneficiaries as they become due under the terms of the Plan. The Company shall notify the Trustee of its decision to make payment of benefits directly prior to the time amounts are payable to participants or their beneficiaries. In addition, if the principal of the Trust, and any earnings thereon, are not sufficient to make payments of benefits in accordance with the terms of the Plan, the Company shall make the balance of each such payment as it falls due directly to the Plan participant pursuant to the provisions of the Plan and the Trustee shall not be liable to the Plan participant for the insufficiency. The Trustee shall notify the Company where principal and earnings are not sufficient. SECTION 3. TRUSTEE RESPONSIBILITY REGARDING PAYMENTS TO TRUST BENEFICIARY WHEN THE COMPANY IS INSOLVENT (a) The Trustee shall cease payment of benefits to Plan participants and their beneficiaries if the Company is Insolvent. The Company shall be considered "Insolvent" for purposes of this Trust Agreement if (1) the Company is unable to pay its debts as they become due or (2) the Company is subject to a pending proceeding as a debtor under the United States Bankruptcy Code. (b) At all times during the continuance of this Trust, as provided in Section 1(d) hereof, the principal and income of the Trust shall be subject to claims of general creditors of the Company under federal and state law as set forth below. (1) The Board of Directors and the Chief Executive Officer of the Company shall have the duty to inform the Trustee in writing of the Company's Insolvency. If a person claiming to be a creditor of the Company alleges in writing to the Trustee that the Company has become Insolvent, the Trustee shall determine whether the Company is Insolvent and, pending such determination, the Trustee shall discontinue payment of benefits to Plan participants or their beneficiaries. (2) Unless the Trustee has actual knowledge of the Company's Insolvency, or has received notice from the Company or a person claiming to be a creditor alleging that the Company is Insolvent, the Trustee shall have no duty to inquire whether the Company is Insolvent. The Trustee may in all events rely on such evidence concerning the Company's solvency as may be furnished to the Trustee and that provides the Trustee with a reasonable basis for making a determination concerning the Company's solvency. (3) If at any time the Trustee has determined that the Company is Insolvent, the Trustee shall discontinue payments to Plan participants or their beneficiaries and shall hold the assets of the Trust for the benefit of the Company's general creditors. Nothing in this Trust Agreement shall in any way diminish any rights of Plan participants or their beneficiaries to pursue their rights as general creditors of the Company with respect to benefits due under the Plan or otherwise. (4) The Trustee shall resume the payment of benefits to Plan participants or their beneficiaries in accordance with Section 2 of this Trust Agreement only after the Trustee has determined that the Company is not Insolvent (or is no longer Insolvent) or pursuant to an order of a court of competent jurisdiction. (c) Provided that there are sufficient assets, if the Trustee discontinues the payment of benefits from the Trust pursuant to Section 3(a) and (b) hereof and subsequently resumes such payments, the first payment following such discontinuance shall include the aggregate amount of all payments due to Plan participants or their beneficiaries under the terms of the Plan for the period of such discontinuance, less the aggregate amount of any payments made to Plan participants or their beneficiaries by the Company in lieu of the payments provided for hereunder during any such period of discontinuance. SECTION 4. PAYMENTS TO THE COMPANY Except as provided in Section 3 hereof, after the Trust has become irrevocable, the Company shall have no right or power to direct the Trustee to return to the Company, or to divert to others, any of the Trust assets before all payment of benefits have been made to Plan participants, as of the initial effective date of the Plan, and their beneficiaries pursuant to the terms of the Plan. SECTION 5. INVESTMENT AUTHORITY OF THE TRUSTEE (a) In no event may the Trustee invest in securities (including stock or rights to acquire stock) or obligations issued by the Company, other than a de minimis amount held in common investment vehicles in which the Trustee invests. All rights associated with assets of the Trust shall be exercised by the Trustee or the person designated by the Trustee, and shall in no event be exercisable by or rest with Plan participants. (b) Subject to any other limitations stated elsewhere in this Trust Agreement, and in addition to the authority, rights, privileges, powers, and duties elsewhere herein vested in the Trustee, the Trustee shall also have the following investment powers: (1) To hold, manage, control, collect, and use the Trust in accordance with the terms of this instrument; (2) To sell (for cash or on credit, or both), exchange, or otherwise dispose of the whole or any part of the Trust at public or private sale; to lease (including, but not limited to, oil, gas, or mineral leases), rent, mortgage (including purchase money mortgages), pledge, or otherwise encumber the whole or any part of the Trust; and to loan or borrow money in any manner, including by joint and several obligations, all upon such terms, regardless of the duration of the Trust, as the Trustee may deem advisable (provided that neither the Company nor any participant may borrow from the Trust except as otherwise permitted herein); (3) To invest or reinvest the Trust in property of any description whatsoever (including, but not limited to, oil, gas, or mineral interests; common or preferred stock; shares of investment trusts or companies; bills, notes, and other evidences of indebtedness; non-income producing property; and property outside of Texas); (4) To make or hold investments of any part of the Trust in common or undivided interest with other persons or entities, including an undivided interest in any property in which the Trustee, individually or otherwise, may hold an undivided interest; to buy from or sell to any person or entity to the extent not otherwise prohibited herein; (5) To make commingled, collective, or common investments and to invest and reinvest all or any portion of the Trust collectively, including, without limitation, power to invest collectively with such other funds through the medium of one or more of the common, collective, or commingled trust funds, which has been or may hereafter be established and maintained by the Trustee or its affiliates. To the extent of the interest of the Trust in any such collective trust, the agreement or declaration of trust establishing such collective trust shall be deemed to be adopted and made a part of the Plan(s) and Trust as if set forth in full herein; (6) To deposit or invest all or a part of the Trust in savings accounts, certificates of deposit, or other deposits that bear a reasonable rate of interest in a bank or similar financial institution, including the commercial department of the Trustee, if such bank or other institution is supervised by any agency of a state or the federal government; (7) To employ and compensate such attorneys, counsel, brokers, banks, investment advisors, or other agents, employees, or independent contractors and to delegate to them such of the duties, rights, and powers of the Trustee as may be deemed advisable in handling and administering the Plan; (8) To partition any property or interest held as a part of the Trust and, in any and all such partitions, to pay or receive such money or property as may be necessary or advisable to equalize differences and to evaluate any property belonging to the Trust; (9) To institute, join in, maintain, defend, compromise, submit to arbitration, or settle any litigation, claim, obligation, or controversy with respect to any matter affecting the Trust, regardless of the manner in which such matter may have arisen, all in the name of the Trustee; (10) To hold uninvested for a reasonable period of time any moneys received by it until the same shall be invested or disbursed pursuant to the provisions of the Plan; (11) To invest or reinvest from time to time any part or all of the Trust in securities of an open-end management investment trust or investment company registered under the Investment Company Act of 1940, as amended, including any such investment trust or company for which the Trustee or one of its affiliates acts as investment advisor, custodian, transfer agent, registrar, sponsor, distributor, manager, or otherwise; (12) To exercise, personally or by general or limited power of attorney, any right, including the right to vote or grant proxies, discretionary or otherwise, appurtenant to any assets held by the Trust, and the right to participate in voting trusts with other stockholders; (13) To register any securities or other property held by it hereunder in the name of the Trustee or in the names of nominees with or without the addition of words indicating that such securities or other property are held in a fiduciary capacity, to take and hold the same unregistered or in form permitting transferability by delivery, to deposit or arrange for the deposit of securities in a qualified central depository even though, when so deposited, such securities or other property may be held in the name of the nominee of such depository with other securities deposited therein by other persons, or to deposit or to arrange for the deposit of any securities or other property issued by the United States government, or any agency or instrumentality thereof, with a Federal Reserve bank, provided that the books and records of the Trustee shall at all times disclose that all such securities or other property are part of the Trust. SECTION 6. DISPOSITION OF INCOME During the term of this Trust, all income received by the Trust, net of expenses and taxes, shall be accumulated and reinvested. SECTION 7. ACCOUNTING BY THE TRUSTEE The Trustee shall keep records in reasonable detail of all investments, receipts, disbursements and all other transactions required with respect to the Trust Fund, including such specific records as shall be agreed upon in writing by the Company and the Trustee. Within sixty (60) days following the close of each calendar year and within sixty (60) days after the removal or resignation of the Trustee, the Trustee shall deliver to the Company a written account of its administration of the Trust during such year or during the period from the close of the last preceding year to the date of such removal or resignation, setting forth all investments, receipts, disbursements, and other transactions effected by it, including a description of all securities and investments purchased and sold with the cost or net proceeds of such purchases or sales (accrued interest paid or receivable being shown separately), and showing all cash, securities, and other property held in the Trust at the end of such year or as of the date of such removal or resignation, as the case may be. SECTION 8. RESPONSIBILITY OF THE TRUSTEE (a) The Trustee accepts the Trust fund hereunder and agrees to accept and retain, manage, administer, and hold the Trust fund in accordance with the terms of this Trust Agreement. The Trustee shall act with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent person acting in like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims; provided, however, that the Trustee shall incur no liability to any person for any action taken pursuant to a direction, request or approval given by the Company, which is contemplated by, and in conformity with, the terms of the Plan or this Trust and is given in writing by the Company. (b) In the event of a dispute between the Company and a party, the Trustee may apply to a court of competent jurisdiction to resolve the dispute. (c) Except as otherwise provided herein, if the Trustee undertakes or defends any litigation arising in connection with this Trust, the Company agrees to indemnify the Trustee against the Trustee's costs, expenses and liabilities (including, without limitation, attorneys' fees and expenses) relating thereto and to be primarily liable for such payments. (d) The Trustee may consult with legal counsel (who may also be counsel for the Company generally) with respect to any of its duties or obligations hereunder. (e) The Trustee may hire agents, accountants, actuaries, investment advisors, financial consultants, or other professionals to assist it in performing any of its duties or obligations hereunder. (f) The Trustee shall have, without exclusion, all powers conferred on trustees by applicable law, unless expressly provided otherwise herein; provided, however, that if an insurance policy is held as an asset of the Trust, the Trustee shall have no power to name a beneficiary of the policy other than the Trust, to assign the policy (as distinct from conversion of the policy to a different form) other than to a successor Trustee, or to loan to any person the proceeds of any borrowing against such policy. (g) Notwithstanding any powers granted to the Trustee pursuant to this Trust Agreement or applicable law, the Trustee shall not have any power that could give this Trust the objective of carrying on a business and dividing the gains therefrom, within the meaning of section 301.7701-2 of the Procedure and Administrative Regulations promulgated pursuant to the Internal Revenue Code. SECTION 9. COMPENSATION AND EXPENSES OF THE TRUSTEE The Company shall pay all administrative and the Trustee's fees and expenses. If not so paid, such fees and expenses shall be paid from the Trust. SECTION 10. RESIGNATION AND REMOVAL OF THE TRUSTEE (a) The Trustee may resign at any time by written notice to the Company, which shall be effective thirty (30) days after receipt of such notice, unless the Company and the Trustee agree otherwise. (b) Except as provided in Section 10(c), the Trustee may be removed by the Company on sixty (60) days written notice or upon shorter notice accepted by the Trustee. (c) Upon a Change of Control, as defined in Section 13(d) herein, the Trustee may not be removed by the Company for three (3) years. (d) If the Trustee resigns, or is removed, within three (3) years of a Change of Control as defined in Section 13(d) herein, the Trustee shall select a successor Trustee in accordance with the provisions of Section 11(b) hereof prior to the effective date of the Trustee's resignation or removal. (e) Upon resignation or removal of the Trustee and appointment of a successor Trustee, all assets shall subsequently be transferred to the successor Trustee. The transfer shall be completed within thirty (30) days after receipt of notice of resignation, removal or transfer, unless the Company extends the time limit. (f) If the Trustee resigns or is removed, a successor shall be appointed, in accordance with Section 11 hereof, by the effective date of resignation or removal under paragraph (a) or (b) of this Section. If no such appointment has been made, the Trustee may apply to a court of competent jurisdiction for appointment of a successor Trustee or for instructions. All expenses of the Trustee in connection with the proceeding shall be allowed as administrative expenses of the Trust. SECTION 11. APPOINTMENT OF SUCCESSOR TRUSTEE (a) If the Trustee resigns or is removed in accordance with Section 10(a) or (b) hereof, the Company may appoint any third party, such as a bank trust department or other party that may be granted corporate trustee powers under state law, as a successor to replace the Trustee upon resignation or removal. The appointment shall be effective when accepted in writing by the new Trustee, who shall have all of the rights and powers of the former Trustee, including ownership rights in the Trust assets. The former Trustee shall execute any instrument necessary or reasonably requested by the Company or the successor Trustee to evidence the transfer. (b) If the Trustee resigns or is removed pursuant to the provisions of Section 10(d)hereof and selects a successor Trustee, the Trustee may appoint any third party such as a bank trust department or other party that may be granted corporate trustee powers under state law. The appointment of a successor Trustee shall be effective when accepted in writing by the new Trustee. The new Trustee shall have all the rights and powers of the former Trustee, including ownership rights in Trust assets. The former Trustee shall execute any instrument necessary or reasonably requested by the successor Trustee to evidence the transfer. SECTION 12. AMENDMENT OR TERMINATION (a) This Trust Agreement may be amended by a written instrument executed by the Trustee and the Company. Notwithstanding the foregoing, no such amendment shall (i) cause the Trust to be used to fund benefits for participants who enter the Plan on or after the initial effective date of the Plan, (ii) conflict with the terms of the Plan(s) or (iii) make the Trust revocable after it has become irrevocable in accordance with Section 1(b) hereof. (b) The Trust shall not terminate until the date on which Plan participants, as of the effective date of the Plan, and their beneficiaries are no longer entitled to benefits pursuant to the terms of the Plan. Upon termination of the Trust any assets remaining in the Trust shall be returned to the Company. (c) Sections 1, 2, 4, 6,10, and this Section 12(c) of this Trust Agreement may not be amended by the Company for three (3) years following a Change of Control, as defined herein. SECTION 13. MISCELLANEOUS (a) Any provision of this Trust Agreement prohibited by law shall be ineffective to the extent of any such prohibition, without invalidating the remaining provisions hereof. (b) Benefits payable to Plan participants and their beneficiaries under this Trust Agreement may not be anticipated, assigned (either at law or in equity), alienated, pledged, encumbered, or subjected to attachment, garnishment, levy, execution, or other legal or equitable process. (c) This Trust Agreement shall be governed by and construed in accordance with the laws of the State of Texas. (d) For purposes of this Trust, a "Change of Control" shall mean (i) the purchase or other acquisition by any person, entity, or group of persons, within the meaning of section 13(d) or 14(d) of the Securities Exchange Act of 1934 ("Act"), or any comparable successor provisions, of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Act) of 30 percent or more of either the outstanding shares of common stock or the combined voting power of the Company's then outstanding voting securities entitled to vote generally, (ii) the approval by the stockholders of the Company of a reorganization, merger, or consolidation, in each case, with respect to which persons who were stockholders of the Company immediately prior to such reorganization, merger or consolidation do not, immediately thereafter, own more than 50 percent of the combined voting power entitled to vote generally in the election of directors of the reorganized, merged or consolidated Company's then outstanding securities, (iii) a liquidation or dissolution of the Company or (iv) the sale of all or substantially all of the Company's assets. SECTION 14. EFFECTIVE DATE The effective date of this Trust Agreement shall be January 12, 1999. EXECUTED on this _____ day of ___________, 1999. SNYDER OIL CORPORATION "Company" By: ------------------------------ "Trustee" By: EX-10 3 SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN EXHIBIT 10.20 SNYDER OIL CORPORATION SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN TABLE OF CONTENTS Page ---- ARTICLE I - DEFINITIONS......................................................1 ARTICLE II - BENEFITS.........................................................1 ARTICLE III - ADMINISTRATION...................................................2 ARTICLE IV - CLAIMS PROCEDURES................................................3 ARTICLE V - AMENDMENT AND TERMINATION OF PLAN................................4 SNYDER OIL CORPORATION SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN This unfunded Supplemental Executive Retirement Plan, effective as of January 12, 1999, is hereby adopted and established by the Snyder Oil Corporation (the "Company") and will be maintained by the Company for the purpose of providing benefits for certain individuals as provided herein. ARTICLE 1. DEFINITIONS a. "Board" shall mean the Board of Directors of the Company. b. "Code" shall mean the Internal Revenue code of 1986, as amended from time to time. c. "Company" shall mean Snyder Oil Corporation and any of its subsidiaries or affiliated business entities designated by the Board as participating entities. d. "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as from time to time amended. e. "Normal Retirement Age" shall mean age 55. f. "Participant" shall mean John Snyder, the current chief executive officer of the Company and all management or highly-compensated employees of the Company who have been identified as influential within the Company and selected to participate in the Plan by the Board of Directors of the Company. g. "Plan" shall mean the Snyder Oil Corporation Supplemental Executive Retirement Plan, as from time to time amended or restated. ARTICLE 2. BENEFITS a. Upon the retirement or termination of employment, for any reason, of a Participant on or after his Normal Retirement Age, he shall be entitled to a normal retirement benefit paid each month in an amount equal to $21,750. The normal retirement benefit shall be payable each month beginning with the month the first day of which coincides with or immediately follows the month of the Participant's retirement or termination of employment. The normal retirement benefit shall be paid each month until and including the month of the Participant's death. If the Participant is survived by a spouse, the spouse shall be entitled to a monthly benefit calculated in accordance with Section 2.2. b. If a Participant dies, his spouse at the time he originally became a Participant shall be entitled to a monthly benefit equal to $14,507. The spousal pension benefit shall be payable each month beginning with the month the first day of which immediately follows the month of the Participant's death. The spousal pension benefit shall be paid each month until and including the month of the spouse's death. The spousal pension benefit shall be paid regardless of whether the Participant's death occurs while he is still employed by the Company as long as the Participant would be entitled to a monthly benefit pursuant to 2.1 if his termination occurs before his death. c. Notwithstanding the foregoing, the Participant or the Participant's spouse if receiving a spousal retirement benefit, may request at any time on or after the Participant's termination of employment, if the Company so agrees in its sole and absolute discretion, that the actuarial present value of any benefits expected to be paid including spousal retirement benefits under this Plan, as determined in accordance with the appropriate actuarial factors and interest rates in effect at the beginning of the calendar year for an immediate annuity upon a plan termination under Pension Benefit Guaranty Corporation requirements, be immediately paid to the Participant or the surviving spouse if such spouse is currently collecting a spousal retirement benefit, in a lump sum in cash. ARTICLE 3. ADMINISTRATION a. The right of a Participant or the Participant's spouse to receive a distribution hereunder shall be an unsecured claim against the general assets of the Company. The Plan at all times shall be considered entirely unfunded both for tax purposes and for purposes of Title I of ERISA. Any funds invested hereunder shall continue for all purposes to be part of the general assets of the Company and available to its general creditors in the event of bankruptcy or insolvency. Notwithstanding the foregoing, a rabbi trust or rabbi trusts shall be established, substantially in the form attached hereto, in connection with the Plan in order to hold amounts contributed thereto. Any benefits which may be payable pursuant to this Plan are not subject in any manner to anticipation, sale, alienation, transfer, assignment, pledge, encumbrance, attachment, or garnishment by creditors of a Participant or a Participant's spouse. The Plan constitutes a mere promise by the Company to make benefit payments in the future. No interest or right to receive a benefit may be taken, either voluntarily or involuntarily, for the satisfaction of the debts of, or other obligations or claims against, such person or entity, including claims for alimony, support, separate maintenance and claims in bankruptcy proceedings. 2 b. The Plan shall be administered by the Board, which shall have the authority, duty and power to interpret and construe the provisions of the Plan as the Board deems appropriate including the authority to determine eligibility for benefits under the Plan. The Board shall have the duty and responsibility of maintaining records, making the requisite calculations and disbursing the payments hereunder. The interpretations, determinations, regulations and calculations of the Board shall be final and binding on all persons and parties concerned. c. The Board shall be entitled to rely on all tables, valuations, certificates, opinions, data and reports furnished by an actuary, accountant, controller, counsel or other person employed or retained by the Company with respect to the Plan. d. The Board shall furnish individual annual statements of accrued benefits to each Participant, or Participant's spouse, in such form as determined by the Board or as required by law. e. The sole rights of a Participant or a Participant's spouse under this Plan shall be to have this Plan administered according to its provisions and to receive whatever benefits he or she may be entitled to hereunder. Further, the adoption and maintenance of this Plan shall not be construed as creating any contract of employment between the Company and any Participant. The Plan shall not affect the right of the Company to deal with any Participants in employment respects, including their hiring, discharge, compensation, and conditions of employment. f. The Company may from time to time establish rules and procedures which it determines to be necessary for the proper administration of the Plan. g. The Company shall require any successor, whether direct or indirect, by purchase, merger, consolidation or otherwise, to all or substantially all of the business or assets of the Company, expressly to assume and agree to pay the benefits accrued under this Plan as of the date of such succession in the same manner and to the same extent as the Company would have been required if no such succession had taken place. In any event, however, the provisions of this Plan shall be binding upon the corporation or other entity resulting from such purchase, merger, consolidation or other transaction and this Section 3.7 shall apply to the successor in the event of any subsequent purchase, merger, consolidation or other transaction. The Plan may not be amended to eliminate or alter the requirements of this Section 3.7. h. Each Participant or Participant's spouse, as the case may be, shall keep the Company informed of his or her current address. i. All questions pertaining to the construction, validity and effect of the Plan shall be determined in accordance with the laws of the State of Texas to the extent not preempted by federal law. j. The Company shall pay all benefits arising under this Plan and all costs, charges and expenses relating thereto. 3 ARTICLE 4. CLAIMS PROCEDURES a. For purposes of handling claims with respect to this Plan, the "Claims Reviewer" shall be the Company, unless another person or organizational unit is designated by the Company as Claims Reviewer. b. An initial claim for benefits under the Plan must be made by the Participant or the Participant's spouse, as the case may be. Not later than 7 days after receipt of such a claim, the Claims Reviewer will render a written decision on the claim to the claimant, unless special circumstances require the extension of such 7-day period. If such extension is necessary, the Claims Reviewer shall provide the Participant or the Participant's spouse with written notification of such extension before the expiration of the initial 7-day period. Such notice shall specify the reason or reasons for such extension and the date by which a final decision can be expected. In no event shall such extension exceed a period of 7 days from the end of the initial 7-day period. In the event the Claims Reviewer denies the claim of a Participant or the Participant's spouse in whole or in part, the Claims Reviewer's written notification shall specify, in a manner calculated to be understood by the claimant, the reason for denial; a reference to the Plan or other document or form that is the basis for the denial; a description of any additional material or information necessary for the claimant to perfect the claim; an explanation as to why such information or material is necessary; and an explanation of the applicable claims procedure. Should the claim be denied in whole or in part and should the claimant be dissatisfied with the Claims Reviewer's disposition of the claimant's claim, the claimant may have a full and fair review of the claim by the Company upon written request therefor submitted by the claimant or the claimant's duly authorized representative and received by the Company within 60 days after the claimant receives written notification that the claimant's claim has been denied. In connection with such review, the claimant or the claimant's duly authorized representative shall be entitled to review pertinent documents and submit the claimant's views as to the issues, in writing. The Company shall act to deny or accept the claim within 7 days after receipt of the claimant's written request for review unless special circumstances require the extension of such 7-day period. If such extension is necessary, the Company shall provide the claimant with written notification of such extension before the expiration of such initial 7-day period. In all events, the Company shall act to deny or accept the claim within 14 days of the receipt of the claimant's written request for review. The action of the Company shall be in the form of a written notice to the claimant and its contents shall include all of the requirements for action on the original claim. In no event may a claimant commence legal action for benefits the claimant believes are due the claimant until the claimant has exhausted all of the remedies and procedures afforded the claimant by this Article IV. ARTICLE 5. 4 AMENDMENT AND TERMINATION OF PLAN The Company reserves the right to amend or terminate the Plan subject to the requirements of Section 3.7 and notification of each Participant and each Participant's spouse receiving benefits pursuant to the Plan. Notification will be by first class mail, addressed to each Participant or Participant's spouse at his or her last known address, or by other notice acknowledged in writing by the participant. Any amounts the Participant or the Participant's spouse would be entitled to if the Participant's employment terminated as of the effective date of such amendment or termination shall remain subject to the provisions of the Plan and distribution will not be accelerated because of the termination of the Plan. No amendment or termination shall directly or indirectly reduce or eliminate a Participant's and/or Participant's spouse's right to a benefit the Participant and/or the Participant's spouse would be entitled to if the Participant's employment terminated as of the effective date of such amendment or termination. 5 IN WITNESS WHEREOF, the Company, acting by and through its officers hereunto duly authorized has executed this instrument, this _______ day of _______________, 1999, but to be effective as set forth above. SNYDER OIL CORPORATION By: Name: Title: EX-23 4 OPINION OF ARTHUR ANDERSEN LLP REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ---------------------------------------- TO THE STOCKHOLDERS OF SNYDER OIL CORPORATION: We have audited the accompanying consolidated balance sheets of Snyder Oil Corporation (a Delaware corporation) and subsidiaries as of December 31, 1998 and 1997, and the related consolidated statements of operations, changes in stockholders' equity, and cash flows for each of the three years in the period ended December 31, 1998. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Snyder Oil Corporation and subsidiaries as of December 31, 1998 and 1997, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 1998, in conformity with generally accepted accounting principles. ARTHUR ANDERSEN LLP Fort Worth, Texas, February 10, 1999 -----END PRIVACY-ENHANCED MESSAGE-----