-----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, PdWw4fbsK0Y8F7ImkJj3J8R5Htb9B3/uYCNYoJPgsg8vacoCJlU2xtPUv8w/BP+c H2iPXc+XPozHwl1RKV9Lig== 0000898822-02-001299.txt : 20021106 0000898822-02-001299.hdr.sgml : 20021106 20021106164718 ACCESSION NUMBER: 0000898822-02-001299 CONFORMED SUBMISSION TYPE: S-8 POS PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 20021106 EFFECTIVENESS DATE: 20021106 FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNOCAL CORP CENTRAL INDEX KEY: 0000716039 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 953825062 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 POS SEC ACT: 1933 Act SEC FILE NUMBER: 333-99147 FILM NUMBER: 02811454 BUSINESS ADDRESS: STREET 1: 2141 ROSECRANS AVE STREET 2: STE 4000 CITY: EL SEGUNDO STATE: CA ZIP: 90245 BUSINESS PHONE: 3107267600 MAIL ADDRESS: STREET 1: 2141 ROSECRANS AVE STREET 2: STE 4000 CITY: EL SEGUNDO STATE: CA ZIP: 90245 S-8 POS 1 forms8nov5.txt FORM S-8 As filed with the Securities and Exchange Commission on November 6, 2002 Registration No: 333-99147 ================================================================================ Securities and Exchange Commission Washington, D. C. 20549 -------------------- POST-EFFECTIVE AMENDMENT NO. 1 ON FORM S-8 TO FORM S-4 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ---------------------------- UNOCAL CORPORATION (Exact name of registrant specified in its charter Delaware 95-3825062 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 2141 Rosecrans Avenue, Suite 4000, El Segundo, California 90245 (Address, including zip code, of Principal Executive Offices) PURE RESOURCES, INC. 1999 INCENTIVE PLAN PURE RESOURCES, INC. EQUITY PLAN FOR OUTSIDE DIRECTORS TITAN EXPLORATION, INC. 1996 INCENTIVE PLAN TITAN EXPLORATION, INC. 1999 STOCK OPTION PLAN (Full title of the plan) Barry A.L. Hoffman, Esq. Deputy General Counsel 2141 Rosecrans Avenue, Suite 4000 El Segundo, California 90245 (310) 726-7651 (Name, address, including zip code, and telephone number, including area code, of agent for service) --------------------------------- This Post-Effective Amendment No. 1 on Form S-8 to Registration Statement on Form S-4 covers 4,367,381 shares of the common stock, $1.00 par value, and associated preferred stock purchase rights (together with such rights, the "Unocal Common Stock"), of Unocal Corporation, that may be issued by Unocal under the plans listed above. Unocal originally registered the Shares pursuant to its Registration Statement on Form S-4 filed on September 4, 2002 (File No. 333-99147). The Registrant paid the registration fee at the time of filing of the Form S-4 Registration Statement. ================================================================================ PART I INTRODUCTORY STATEMENT Unocal Corporation ("Unocal") is amending its Registration Statement on Form S-4 (No. 333-99147) (the "Form S-4"), by filing this Post-Effective Amendment No.1 on Form S-8 (the "Post-Effective Amendment") relating to the sale of up to 4, 367,381 shares of Unocal Common Stock issuable upon the exercise of stock options granted under the Pure Resources, Inc. 1999 Incentive Plan, Pure Resources, Inc. Equity Plan for Outside Directors, Titan Exploration, Inc. 1996 Incentive Plan, Offshore Energy Development Corporation 1996 Stock Awards Plan, and the Titan Exploration, Inc. 1999 Stock Option Plan (collectively, the "Plans"). On October 30, 2002, PRS Acquisition Corp., a Delaware corporation and an indirect wholly owned subsidiary of Unocal, was merged into Pure Resources, Inc., a Delaware corporation ("Pure"). As a result of such merger (the "Merger"), Pure has become an indirect wholly owned subsidiary of Unocal and each outstanding share (other than shares owned by Unocal's subsidiary Union Oil Company of California, Pure or any direct or indirect wholly owned subsidiary of Unocal or Pure) of common stock, par value $0.01 per share, of Pure ("Pure Common Stock"), other than shares as to which appraisal rights are asserted under Delaware law, has been converted into 0.74 shares of Unocal Common stock. Pursuant to the Merger, each outstanding option issued pursuant to the Plans will no longer be exercisable for shares of Pure Common Stock but instead will constitute an option to acquire shares of Unocal Common Stock in lieu of shares of Pure Common Stock. As permitted by the rules of the Securities and Exchange Commission (the "Commission"), this Post-Effective Amendment to the Registration Statement omits the information specified in Part I of Form S-8. The documents containing the information specified in Part I will be delivered to the participants in the Plans as required by Securities Act Rule 428(b). Such documents are not being filed as part of this Registration Statement or as prospectuses or prospectus supplements pursuant to Rule 424. PART II - INFORMATION REQUIRED IN THE REGISTRATION STATEMENT Item 3. Incorporation of Documents by Reference. There are hereby incorporated by reference in this registration statement the following documents heretofore filed with the Commission: (a) The Annual Report on Form 10-K. as amended, of Unocal for the fiscal year ended December 31, 2001; (b) The Quarterly Reports on Form 10-Q of Unocal for the fiscal quarters ended March 31, June 30 (as amended) and September 30, 2002; (c) Unocal's Current Reports on Form 8-K filed January 24, 2002, January 31,2002, March 28, 2002, April 8, 2002, April 25, 2002, June 25, 2002, July 30, 2002, August 2, 2002, August 13, 2002, August 22, 2002, September 6, 2002, September 18, 2002, September 20, 2002, September 25, 2002, September 27, 2002 (as amended on October 11, 2002), October 2, 2002, October 9, 2002, October 25, 2002 and October 31, 2002, respectively; (d) All other reports filed pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), since December 31, 2001; and (e) The description of Unocal's common stock in our prospectus dated September 25, 1998 and filed on Form 424(B)(5) on September 28, 1998 together with the description of the associated preferred stock purchase rights included in the Unocal Registration Statement on Form S-3/A filed January 6, 2002 and Current Reports on Form 8-K filed March 28, 2002 and August 2, 2002. All documents filed by Unocal pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the filing of a post-effective amendment which indicates that all securities offered have been sold or which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference in this registration statement and to be a part hereof from the date of filing of such documents. Item 5. Interests of Named Experts and Counsel. Legal matters in connection with the issuance and sale of the securities offered hereby will be passed upon by Morris, Nichols, Arsht & Tunnell of Wilmington, Delaware. Item 6. Indemnification of Directors and Officers. Section 145 of the Delaware General Corporation Law authorizes Unocal to indemnify directors and officers in certain circumstances against liabilities, including expenses, incurred while acting in such capacities; provided, generally, that any such indemnified director or officer acted in good faith and in a manner he or she reasonably believed to be in the best interests of the corporation and, in the case of a criminal proceeding, had no reasonable cause to believe his or her conduct was unlawful. The Bylaws of Unocal provide for the indemnification of directors and officers to the maximum extent permitted by the Delaware General Corporation Law. In addition, Unocal has provided in its Restated Certificate of Incorporation that it shall eliminate the personal liability of its directors to the fullest extent permitted by the Delaware General Corporation Law and Unocal has entered into indemnification agreements with each of its directors and officers providing for additional indemnification. Unocal has policies of directors' and officers' liability insurance which insure directors and officers against the costs of defense, settlement or payment of a judgment under certain circumstances. Item 8. Exhibits. The Exhibit Index on page 6 of this registration statement lists the exhibits that are filed as part of this registration statement. -2- Item 9. Undertakings. (a) The undersigned Registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (a) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933, as amended (the "Securities Act"); (b) To reflect in the prospectus any facts or events arising after the effective date of this registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the calculation of Registration Fee table in the effective registration statement; (c) To include any material information with respect to the plan distribution not previously disclosed in this statement or any material change to such information in this registration statement; Provided, however, that the undertakings set forth in paragraphs (a) and (b) above do not apply if the information required to be included in a post- effective amendment by those paragraphs is contained in periodic reports filed with the Commission by the Registrant pursuant to Section 13 or Section 15(d) of the Securities Act of 1934 (the "Exchange Act") that are incorporated by reference in this registration statement. (2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment, any of the securities being registered which remain unsold at the termination of the offering. (a) The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. -3- (b) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. -4- SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of El Segundo, State of California, on November 6, 2002. UNOCAL CORPORATION By: /s/ Joe D. Cecil ------------------------------------- Joe D. Cecil Vice President and Comptroller The undersigned directors and executive officers of Unocal Corporation appoint Joseph D. Cecil our true and lawful attorney with power to sign for us this registration statement and any and all amendments to this registration statement, and generally do all such things in our names and in our capacities as directors to enable Unocal Corporation to comply with the provisions of the Securities Act of 1933 and all requirements of the Securities and Exchange Commission in connection with this offering. Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed below as of November 6, 2002 by the following persons in the capacities indicated: Signature Title /s/ Charles R. Williamson ** Chief Executive Officer and Director* - ------------------------------ (Principal Executive Officer) Charles R. Williamson /s/ Timothy H Ling ** Chief Operating Officer and Director* - ------------------------------ Timothy H Ling /s/ Joe D. Cecil Vice President and Comptroller - ------------------------------ (Principal Financial and Accounting Joe D. Cecil Officer) /s/ John W. Amerman ** Director* - ------------------------------ John W. Amerman /s/ John W. Creighton, Jr. ** Director* - ------------------------------ John W. Creighton, Jr. /s/ James W. Crownover ** Director* - ------------------------------ James W. Crownover /s/ Frank C. Herringer ** Director* - ------------------------------ Frank C. Herringer /s/ Donald B. Rice ** Director* - ------------------------------ Donald B. Rice *A majority of the board of directors ** By Joe D. Cecil, Attorney-In-Fact -5- EXHIBIT INDEX Exhibit Number Exhibit 3.1 Restated Certificate of Incorporation of Unocal Corporation, dated January 31, 2000 (incorporated by reference to Exhibit 3.1 to Unocal's Annual Report on Form 10-K for the Year ended December 31, 1999, File No. 1-8483). 3.2 Bylaws of Unocal, as amended through October 31, 2001, and currently in effect (incorporated by reference to Exhibit 3 to Unocal's Quarterly Report on Form 10-Q for the quarter ended September 30, 2002, File No. 1-08483). 4.1 Rights Agreement, dated as of January 5, 2000, between Unocal and Mellon Investor Services, L.L.C., as Rights Agent (incorporated by reference to Exhibit 4 to Unocal's Current Report on Form 8-K dated January 5, 2000, File No. 1-8483), as amended by Amendment to Rights Agreement, dated as of March 27, 2002 (incorporated by reference to Exhibit 10 to Unocal's Current Report on Form 8-K dated March 27, 2002, File No. 1-8483), and as further amended by Amendment No. 2 to Rights Agreement, dated as of August 2, 2002 (incorporated by reference to Exhibit 10 to Unocal's Current Report on Form 8- K dated August 2, 2002, File No. 1-8483). 5 Opinion of Morris, Nichols, Arsht & Tunnell.* 23.1 Consent of PricewaterhouseCoopers LLP. 23.2 Consent of Morris, Nichols, Arsht & Tunnell (included in Exhibit 5) 23.3 Consent of KPMG LLP. 24* Power of Attorney. 99.14 Pure Resources, Inc. 1999 Incentive Plan (filed as Exhibit 10.3 to the Registrant's Form S-4 (No. 333-34970) and incorporated herein by reference). 99.15 Pure Resources, Inc. 1999 Incentive Plan Form of Option Grant. 99.16 Pure Resources, Inc. Equity Plan for Outside Directors (filed as Exhibit 10.9 to the Pure Resources, Inc.'s Form S-4 (No. 333-34970) and incorporated herein by reference). 99.17 Titan Exploration, Inc. 1999 Stock Option Plan (filed as Exhibit 10.2 to Titan Exploration, Inc.'s Current Report on Form 8-K, as filed on June 11, 1999, and incorporated herein by reference). 99.18 Pure Resources, Inc. 1999 Stock Option Plan Form of Option Grant 99.19 Titan Exploration, Inc. 1996 Incentive Plan (filed as Exhibit 10.9 to Titan Exploration, Inc.'s Registration Statement on Form S-1 (no. 333-14029), and incorporated herein by reference). 99.20 Pure Resources, Inc. 1996 Stock Option Plan Form of Option Grant - -------- * Previously filed as an exhibit to Unocal Corporation's Registration Statement on Form S-4 to which this Post-Effective Amendment relates. EX-23 3 consent.txt EXHIBIT 23.1 - AUDITORS CONSENT Exhibit 23.1 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in this Registration Statement on Form S-8 of Unocal Corporation (the "Company") of our report dated February 14, 2002 relating to the consolidated financial statements and financial statement schedule, which appears in the Company's Annual Report on Form 10-K/A for the year ended December 31, 2001. We also hereby consent to the incorporation by reference in this Registration Statement on Form S-8 of Unocal Corporation of our report dated March 10, 2000 relating to the consolidated statements of operations, of cash flows, and of changes in stockholders' equity and owner's net investment of Pure Resources, Inc. and subsidiaries ("Pure"), formerly referred to as Union Oil's Permian Basin business unit, for the year ended December 31, 1999, which appears in Pure's Annual Report on Form 10-K/A for the year ended December 31, 2001. We also consent to the reference to us under the heading "Experts" in such Registration Statement. /s/ PricewaterhouseCoopers PricewaterhouseCoopers LLP Los Angeles, California November 6, 2002 EX-23 4 kpmgconsent.txt EXHIBIT 23.3 - CONSENT Exhibit 23.3 CONSENT OF INDEPENDENT ACCOUNTANTS The Board Of Directors Unocal Corporation We consent to incorporation by reference in the registration statement (No. 333- 99147) on Form S-4 of Unocal Corporation of our report dated February 14, 2002, except for Note 22 which is dated July 26, 2002, relating to the consolidated balance sheeet of Pure Resources, Inc. and subsidiaries as of December 31, 2001 and 2000 and the related consolidated statements of operations, stockholders' equity and owner's net investment and cash flows for the years then ended, which report appears in the December 31, 2001 annual report on Form 10-K/A Amendment No. 1 of Pure Resources, Inc. Our report refers to a change in accounting for derivative instruments and hedging activities. /s/ KPMG LLP KPMG LLP Midland, Texas November 6, 2002 EX-99 5 stock1pure.txt EXHIBIT 99.15 - 1999 INCENTIVE PLAN Exhibit 99.15 AMENDED AND RESTATED NONQUALIFIED STOCK OPTION AGREEMENT 1999 Incentive Plan of Pure Resources, Inc. This Amended and Restated Option Agreement ("Agreement"), made and entered into effective as of [date], by and among Pure Resources, Inc., a Delaware corporation (the "Company"), Unocal Corporation, a Delaware corporation ("Unocal") and [employee name] (the "Optionee"). W I T N E S S E T H: - - - - - - - - - - WHEREAS, the 1999 Incentive Plan of Pure Resources, Inc. (formerly named Titan Resources Holdings, Inc.) ("Plan") was adopted by the Company, effective as of December 13, 1999 ("Plan Date"), for the benefit of certain employees of the Company and its subsidiaries; and WHEREAS, the Optionee and the Company had entered into an option agreement effective as of the date first set forth on Annex A (the "Prior Option Agreement"), and pursuant to such Prior Option Agreement the committee has granted to Optionee Nonqualified Stock Options to purchase shares of common stock, par value $0.01, of the Company ("Pure Shares") pursuant to the Plan and upon the terms set forth in the Prior Option Agreement (the "Pure Options"); and WHEREAS, as a result of certain modifications to the Plan following the consummation of the merger of a subsidiary of Union Oil Company of California into the Company, effective as of October 29, 2002 (the "Merger"), the terms of the Prior Option Agreement and the Pure Option will be amended. NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements hereinafter set forth, the Company, Unocal and Optionee hereby agree as follows: 1. Certain Definitions. Terms used in this Agreement and not otherwise defined shall have the respective meanings assigned to such terms in the Plan; and the following terms shall have the following meanings: Companies means the Company and any of its Subsidiaries (as defined in the Plan). Expiration Date means 6:00 p.m., Midland, Texas time, on the date ( or dates, as the case may be) set forth on Annex A. 2. Conversion of Options. Subject to the terms, conditions and provisions of the Plan and those hereinafter set forth, each Pure Option to purchase that number of Pure Shares as set forth under "Original Grant Number" on Annex A has been converted into an option to purchase that number of shares of the common stock, par value $1.00 of Unocal ("Shares") as set forth under "Adjusted Grant Number" on Annex A (the "Options"), subject to any future adjustment in accordance with the provisions of Section 7 of this Agreement. 3. Option Price. The price to be paid by Optionee to Unocal for each Share purchased pursuant to the exercise of the Options (the "Option Price") shall be the price set forth under "Adjusted Strike Price" on Annex A, provided, however, that the Option Price shall be subject to any future adjustment in accordance with the provisions of Section 7 of this Agreement. 4. Vesting of Right to Exercise Options. (a) The right to exercise the Options is fully vested as of October 30, 2002. Optionee may exercise the Options, subject to the terms and conditions set forth herein, to purchase all or any portion of the Shares for which Optionee's rights have vested. (b) To the extent Optionee does not purchase all or any part of the Shares at the times the Options become exercisable, the Optionee has the right cumulatively thereafter to purchase any Shares not so purchased and such right shall continue until the Options terminate or expire. (c) If Optionee's employment is terminated on account of fraud against the Company or a Subsidiary or Union Oil Company of California or conviction of a felony, the Options shall automatically terminate as of the date of such termination of employment. (d) If Optionee's employment is terminated voluntarily by Optionee, the Options may be exercised, but only within three months after such termination (if otherwise prior to the date of expiration of the Options), and not thereafter. (e) In the event of Optionee's termination of employment by reason of death or disability (within the meaning of Section 22(e)(3) of the Code) or by action of the Companies for reasons other than as specified in subsection (c) (and following such termination the Optionee is not immediately offered employment by Union Oil Company of California), the Options may be exercised by the person who acquires the Options by will or the laws of descent and distribution, or by Optionee (or the Optionee's legal guardian in the event one is appointed as a result of Optionee's disability), as the case may be, but only within the first to occur of (i) the end of the one year period following the date of termination or (ii) the date of expiration of the Options, and not thereafter. 5. Restrictions on Exercise. The right to exercise the Options shall be subject to the following restrictions: (a) No Fractional Shares. The Options may be exercised only with respect to full Shares. (b) Compliance with Law. The Options may not be exercised in whole or in part, and no Shares shall be issued nor certificates representing such Shares (if any) delivered pursuant to any exercise of the Options, if any requisite approval or consent of any governmental authority of any kind having jurisdiction over the exercise of options or the issuance and sale of 2 Shares shall not have been obtained or if such exercise or issuance would violate any applicable law. (c) Exercise by Optionee. The Option shall only be exercisable by the Optionee and by any transferee who has received such Option pursuant to Section 4(e). 6. Exercise of Options. (a) Subject to the other terms and provisions of this Agreement and the Plan, the Options shall be exercisable by written notice timely given to Unocal by the Optionee (the "Exercise Notice"), which notice (i) shall state the number of Shares that the Optionee then desires to purchase, and (ii) shall be accompanied by payment in full of the Option Price for each of such Shares. Unless Unocal and Optionee shall have made mutually acceptable alternative arrangements, payment of the Option Price shall be made in cash or by surrender of previously acquired nonforfeitable, unrestricted Shares owned by the Optionee (the "Payment Shares") having an aggregate Fair Market Value at the time of exercise equal to the Option Price. (b) Payment of the total Option Price may also be made, in the discretion of the Committee, by delivery to Unocal or its designated agent of an executed irrevocable option exercise form together with irrevocable instructions to a broker-dealer to sell or margin a sufficient portion of the Shares with respect to which the Options are exercised and deliver the sale or margin loan proceeds directly to Unocal to pay the Option Price and any required federal, state and local taxes. (c) The Committee, in its sole and absolute discretion, may approve the extension of a loan to Optionee by Unocal or the Company to assist Optionee in paying the exercise price of Options and/or any tax required by law to be withheld upon exercise of the Options; provided, however, that Optionee shall be required to pay in cash the par value of Unocal common stock received upon exercise of the Options. Any loan approved by the Committee shall be made upon such terms and conditions (including interest rate, security and terms of repayment) as may be determined by the Committee in its discretion. (d) Unless Unocal and Optionee shall make mutually acceptable alternative arrangements, at the time of exercise of the Options, Optionee shall pay to Unocal (or the Company if so directed by Unocal) any federal, state and local taxes required by law to be paid or withheld in connection with such exercise. Unocal may require Optionee to pay to Unocal or the Company such taxes prior to and as a condition of the issuance or delivery of the Shares and Unocal or the Company shall be entitled to deduct from any other compensation payable to the optionee any tax withholding obligations with respect to the Options. 7. Recapitalization or Reorganization; Adjustments. (a) The existence of the Options shall not affect in any way the right or power of Unocal to make or authorize any adjustment, recapitalization, reorganization or other change in Unocal's capital structure or its business, any merger or consolidation of Unocal, any issuance of additional securities by Unocal with priority over Shares or otherwise affecting Shares or the rights thereof, the dissolution or liquidation of Unocal or any sale, lease, exchange or other disposition of all or any part of its assets or business or any other corporate act or proceeding. 3 (b) If Unocal subdivides its outstanding Shares into a greater number of Shares, the Option Price in effect immediately prior to such subdivision shall be proportionately reduced, and the number of Shares then subject to the Options shall be proportionately increased. Conversely, if the outstanding number of Shares of Unocal are combined into a smaller number of Shares, the Option Price in effect immediately prior to such combination shall be proportionately increased, and the number of Shares then subject to the Options shall be proportionately reduced. 8. Termination of Options. Unless terminated earlier pursuant to Section 4 hereof, the Options shall terminate upon the first to occur of the (i) the Expiration Date (for each such Option as set forth on Annex A), or (ii) the date on which Optionee purchases, or in writing surrenders his right to purchase, all Shares or other securities then subject to the Options. 9. Restriction on Transfer of Options. The Options may not be sold, assigned, hypothecated or transferred, except by will or by the laws of descent and distribution. Any attempted transfer of the Options in violation of this provision shall be void and of no effect whatsoever. 10. Certain Rights Incident to Divorce. If an interest in the Options is required by law to be transferred to a spouse of the Optionee pursuant to an order of a court in a divorce proceeding (notwithstanding the provisions of Section 9 hereof), the Optionee shall nevertheless retain all rights with respect to the exercise of the Options and any interest of such spouse shall be subject to such rights of the Optionee. In addition, if it is determined that Optionee will be required to pay any taxes attributable to the interest of the spouse in the Options, any tax liability which is attributable to such spouse's interest shall be taken into account, and shall reduce such spouse's interest in the Options. 11. Employment. Nothing in this Agreement shall confer upon Optionee any right to continue in the employ of the Companies, nor shall this Agreement interfere in any manner with the right of the Companies to terminate the employment of Optionee with or without cause at any time. 12. Rights as a Shareholder. Optionee shall have no rights as a shareholder of Unocal with respect to any Shares covered by the Options until the exercise of the Options. 13. Additional Documents. The Company, Unocal and the Optionee will, upon request of any of the other parties, promptly execute and deliver all additional documents, and take all such further action, reasonably deemed by such party to be necessary, appropriate or desirable to complete and evidence the sale, assignment and transfer of the Shares pursuant to this Agreement. 14. Representations, Warranties and Covenants of Optionee. (a) The Optionee acknowledges that the Options have not been registered under the Securities Act of 1933 or applicable state securities laws on the grounds that the issuance of the Option is exempt from registration under one or more provisions of each of such acts. The Optionee further understands that in determining the availability and applicability of such exemptions and in executing and delivering this Agreement and issuing and delivering any Shares 4 upon exercise of the Options, Unocal has relied and will rely upon the representations, warranties and covenants made by the Optionee herein and in any other documents which he may hereafter deliver to Unocal or the Company. Accordingly, the Optionee represents and warrants to and covenants and agrees with Unocal and the Company that the Optionee is acquiring and will hold the Options for his own account for investment and not with a view to any sale or distribution of all or any part thereof. (b) The Optionee agrees that the certificates representing the Shares or other securities purchased under the Options may bear such legend or legends as Unocal deems appropriate in order to assure compliance with applicable securities laws (c) Optionee acknowledges that the value of the Options over their life will be speculative and uncertain, that there is no market for the Options and it is unlikely that any market will develop, and consequently, the Optionee may ultimately realize no value from the Options. 15. Notices. All notices required or permitted to be given hereunder shall be in writing and shall be deemed to have been given on the earlier of the date of receipt by the party to whom the notice is given or five (5) days after being mailed by certified or registered United States mail, postage prepaid, addressed to the appropriate party at the address shown beside such party's signature below or at such other address as such party shall have theretofore designated by written notice given to the other party. 16. Entirety and Modification. This Agreement contains the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes any and all prior agreements, whether written or oral, between such parties relating to such subject matter. No modification, alteration, amendment or supplement to this Agreement shall be valid or effective unless the same is in writing and signed by the party against whom it is sought to be enforced. 17. Severability. If any provision of this Agreement is held to be unenforceable, this Agreement shall be considered divisible, and such provision shall be deemed inoperative to the extent it is unenforceable, and in all other respects this Agreement shall remain in full force and effect; provided, however, that if any such provision may be made enforceable by limitation thereof, then such provision shall be deemed to be so limited and shall be enforceable to the maximum extent permitted by applicable law. 18. Gender. Words used in this Agreement which refer to Optionee and denote the male gender shall also be deemed to include the female gender or the neuter gender when appropriate. 19. Headings. The headings of the various sections and subsections of this Agreement have been inserted for convenient reference only and shall not be construed to enlarge, diminish or otherwise change the express provisions hereof. 20. Option Subject to Plan. The Options are subject to the terms and conditions of the Plan. 5 21. Prior Option Agreement. This Agreement shall supercede the Prior Option Agreement, which shall be void and of no further force or effect. 22. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE (REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE DELAWARE PRINCIPLES OF CONFLICTS OF LAW). 23. Counterparts. This Agreement may be signed in counterparts, each of which shall be deemed an original and all of which shall constitute one and the same agreement. 6 IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of the date first set forth above. PURE RESOURCES, INC. 500 West Illinois By: Midland, Texas 79701 ------------------------------- UNOCAL CORPORATION. 2141 Rosecrans Avenue By: El Segundo, California 90245 ------------------------------- OPTIONEE 500 West Illinois ---------------------------------- Midland, Texas 79701 Name: ------------------------------ 7 ANNEX A Name of Pure Option Holder: -------------------------------------------- Date of Prior Option Agreement: -----------------------------------
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8 EX-99 6 stock2titan.txt EXHIBIT 99.18 - 1999 STOCK OPTION PLAN Exhibit 99.18 AMENDED AND RESTATED NONQUALIFIED STOCK OPTION AGREEMENT 1999 Stock Option Plan of Titan Exploration, Inc. This Amended and Restated Option Agreement ("Agreement"), made and entered into effective as of [date] by and among Pure Resources, Inc., a Delaware corporation, as successor to Titan Exploration, Inc., a Delaware corporation (the "Company"), Unocal Corporation, a Delaware corporation ("Unocal") and the "Optionee"). WITNESSETH: WHEREAS, the 1999 Stock Option Plan of Titan Exploration, Inc. ("Plan") was adopted by the Company, effective as of ("Plan Date"), for the benefit of certain employees of the Company and its subsidiaries; and WHEREAS, the Optionee and the Company had entered into an option agreement effective as of the date first set forth on Annex A (the "Prior Option Agreement"), and pursuant to such Prior Option Agreement, the Committee has granted to the Optionee Non-Qualified Stock Options to purchase shares of Common Stock, par value $0.01, of the Company ("Pure Shares") pursuant to the Plan and upon the terms set forth in the Prior Option Agreement (the "Pure Options"); and WHEREAS, as a result of certain modification to the Plan following the consummation of the merger of a subsidiary of Union Oil Company of California into the Company, effective as of October 29, 2002 (the "Merger"), the terms of the Prior Option Agreement and the Pure Option will be amended. NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements hereinafter set forth, the Company, Unocal and Optionee hereby agree as follows: 1. Certain Definitions. Terms used in this Agreement and not otherwise defined shall have the respective meanings assigned to such terms in the Plan; and the following terms shall have the following meanings: Companies means the Company and any of its Subsidiaries (as defined in the Plan). Expiration Date means 6:00 P.M., Midland, Texas time, on the date (or dates, as the case may be) set forth on Annex A. 2. Conversion of Options. Subject to the terms, conditions and provisions of the Plan and those hereinafter set forth, each Pure Option to purchase that number of Pure Shares as set forth under "Original Grant Number" on Annex A has been converted into an option to purchase that number of shares of the common stock, par value $1.00 of Unocal ("Shares") as set forth under "Adjusted Grant Number" on Annex A (the "Options"), subject to any future adjustment in accordance with the provisions of Section 7 of this Agreement. 3. Option Price. The price to be paid by Optionee to Unocal for each Share purchased pursuant to the exercise of the Options (the "Option Price") shall be the price set forth under "Adjusted Strike Price" on Annex A; provided, however, that the Option Price shall be subject to any future adjustment in accordance with the provisions of Section 7 of this Agreement. 4. Vesting of Right to Exercise Option. (a) The right to exercise the Options is fully vested as of October 30, 2002. Optionee may exercise the Options, subject to the terms and conditions set forth herein, to purchase all or any portion of the Shares for which Optionee's rights have vested. (b) To the extent Optionee does not purchase all or any part of the Shares at the times the Options become exercisable, the Optionee has the right cumulatively thereafter to purchase any Shares not so purchased and such right shall continue until the Options terminate or expire. (c) If Optionee's employment is terminated on account of fraud or dishonesty or other acts which the Committee determines are materially detrimental to the interests of the Company or a Subsidiary or Union Oil Company of California, the Options shall automatically terminate as of the date of such termination of employment. (d) If Optionee's employment is terminated voluntarily by Optionee, the Options may be exercised, but only within three months after such termination (if otherwise prior to the date of expiration of the Options), and not thereafter. (e) In the event of Optionee's termination of employment by reason of death or disability (within the meaning of Section 22(e)(3) of the Code), or by action of the Companies for reasons other than as specified in subsection (c) (and following such termination the Optionee is not immediately offered employment by Union Oil Company of California), the Options may be exercised by the person who acquires the Options by will or the laws of descent and distribution, or by Optionee (or the Optionee's legal guardian in the event one is appointed as a result of Optionee's disability), as the case may be, but only within the first to occur of (i) the end of the one year period following the date of termination or (ii) the date of expiration of the Options, and not thereafter. 5. Restrictions on Exercise. The right to exercise the Option shall be subject to the following restrictions: -2- (a) No Fractional Shares. The Option may be exercised only with respect to full Shares. (b) Compliance with Law. The Option may not be exercised in whole or in part, and no Shares shall be issued nor certificates representing such Shares (if any) delivered pursuant to any exercise of the Option, if any requisite approval or consent of any governmental authority of any kind having jurisdiction over the exercise of options or the issuance and sale of Shares shall not have been obtained or if such exercise or issuance would violate any applicable law. (c) Exercise by Optionee. The Option shall only be exercisable by the Optionee and by any transferee who has received such Option pursuant to Section 4(e). 6. Exercise of Option. (a) Subject to the other terms and provisions of this Agreement and the Plan, the Option shall be exercisable by written notice timely given to Unocal by the Optionee (the `Exercise Notice"), which notice (i) shall state the number of Shares that the Optionee then desires to purchase, and (ii) shall be accompanied by payment in full of the Option Price for each of such Shares. Unless Unocal and Optionee shall have made mutually acceptable alternative arrangements, payment of the Option Price shall be made in cash or, with the consent of the Committee, by surrender of previously acquired nonforfeitable, unrestricted Shares owned by the Optionee (the "Payment Shares"), having an aggregate Fair Market Value at the time of exercise equal to the Option Price. (b) Payment of the total Option Price may also be made, in the discretion of the Committee, by delivery to Unocal or its designated agent of an executed irrevocable option exercise form together with irrevocable instructions to a broker-dealer to sell or margin a sufficient portion of the Shares with respect to which the Options are exercised and deliver the sale or margin loan proceeds directly to Unocal to pay the Option Price and any required federal, state and local taxes. (c) Unless Unocal and the Optionee shall make mutually acceptable alternative arrangements, at the time of exercise of the Options, the Optionee shall pay to Unocal (or the Company, if so directed by Unocal) any federal, state and local taxes required by law to be paid or withheld in connection with such exercise. Unocal may require the Optionee to pay to Unocal such taxes prior to and as a condition of the issuance or delivery of the Shares and Unocal or a Subsidiary shall be entitled to deduct from any other compensation payable to the Optionee any tax withholding obligations with respect to the Options. 7. Recapitalization or Reorganization; Adjustments. (a) The existence of the Options shall not affect in any way the right or power of Unocal to make or authorize any adjustment recapitalization, reorganization -3- or other change in Unocal's capital structure or its business, any merger or consolidation of Unocal, any issuance of additional securities by Unocal with priority over Shares or otherwise affecting Shares or the rights thereof, the dissolution or liquidation of Unocal or any sale, lease, exchange or other disposition of all or any part of its assets or business or any other corporate act or proceeding. (b) If Unocal subdivides its outstanding Shares into a greater number of Shares, the Option Price in effect immediately prior to such subdivision shall be proportionately reduced, and the number of Shares then subject to the Options shall be proportionately increased. Conversely, if the outstanding number of Shares of Unocal are combined into a smaller number of Shares, the Option Price in effect immediately prior to such combination shall be proportionately increased, and the number of Shares then subject to the Options shall be proportionately reduced. 8. Termination of Option. Unless terminated earlier pursuant to Section 4 hereof, the Options shall terminate upon the first to occur of the (i) the Expiration Date (for each such Option as set forth on Annex A), or (ii) the date on which Optionee purchases, or in writing surrenders his right to purchase, all Shares or other securities then subject to the Options. 9. Restriction on Transfer of Option. The Options may not be sold, assigned, hypothecated or transferred, except by will or by the laws of descent and distribution. Any attempted transfer of the Options in violation of this provision shall be void and of no effect whatsoever. 10. Certain Rights Incident to Divorce. If an interest in the Options is required by law to be transferred to a spouse of the Optionee pursuant to an order of a court in a divorce proceeding (notwithstanding the provisions of Section 9 hereof), the Optionee shall nevertheless retain all rights with respect to the exercise of the Options and any interest of such spouse shall be subject to such rights of the Optionee. In addition, if it is determined that the Optionee will be required to pay any taxes attributable to the interest of the spouse in the Options, any tax liability which is attributable to such spouse's interest shall be taken into account, and shall reduce such spouse's interest in the Options. 11. Employment. Nothing in this Agreement shall confer upon Optionee any right to continue in the employ of the Companies, nor shall this Agreement interfere in any manner with the right of the Companies to terminate the employment of Optionee with or without cause at any time. 12. Rights as a Shareholder. Optionee shall have no rights as a shareholder of Unocal with respect to any Shares covered by the Options until the exercise of the Options. -4- 13. Additional Documents. The Company, Unocal and the Optionee will, upon request of any of the other parties, promptly execute and deliver all additional documents, and take all such further action, reasonably deemed by such party to be necessary, appropriate or desirable to complete and evidence the sale, assignment and transfer of the Shares pursuant to this Agreement. 14. Representations, Warranties and Covenants of Optionee. (a) The Optionee acknowledges that the Options have not been registered under the Securities Act of 1933 or applicable state securities laws on the grounds that the issuance of the Options is exempt from registration under one or more provisions of each of such acts. The Optionee further understands that in determining the availability and applicability of such exemptions and in executing and delivering this Agreement and issuing and delivering any Shares upon exercise of the Options, Unocal has relied and will rely upon the representations, warranties and covenants made by the Optionee herein and in any other documents which he may hereafter deliver to Unocal or the Company. Accordingly, the Optionee represents and warrants to and covenants and agrees with Unocal and the Company that the Optionee is acquiring and will hold the Options for his own account for investment and not with a view to any sale or distribution of all or any part thereof. (b) The Optionee agrees that the certificates representing the Shares or other securities purchased under the Options may bear such legend or legends as Unocal deems appropriate in order to assure compliance with applicable securities laws. (c) Optionee acknowledges that the value of the Options over their life will be speculative and uncertain, that there is no market for the Options and it is unlikely that any market will develop, and consequently, the Optionee may ultimately realize no value from the Options. 15. Notices. All notices required or permitted to be given hereunder shall be in writing and shall be deemed to have been given on the earlier of the date of receipt by the party to whom the notice is given or five (5) days after being mailed by certified or registered United States mail, postage prepaid, addressed to the appropriate party at the address shown beside such party's signature below or at such other address as such party shall have theretofore designated by written notice given to the other party. 16. Entirety and Modification. This Agreement contains the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes any and all prior agreements, whether written or oral, between such parties relating to such subject matter. No modification, alteration, amendment or supplement to this Agreement shall be valid or effective unless the same is in writing and signed by the party against whom it is sought to be enforced. -5- 17. Severability. If any provision of this Agreement is held to be unenforceable, this Agreement shall be considered divisible, and such provision shall be deemed inoperative to the extent it is unenforceable, and in all other respects this Agreement shall remain in full force and effect provided, however, that if any such provision may be made enforceable by limitation thereof, then such provision shall be deemed to be so limited and shall be enforceable to the maximum extent permitted by applicable law. 18. Gender. Words used in this Agreement which refer to Optionee and denote the male gender shall also be deemed to include the female gender or the neuter gender when appropriate. 19. Headings. The headings of the various sections and subsections of this Agreement have been inserted for convenient reference only and shall not be construed to enlarge, diminish or otherwise change the express provisions hereof. 20. No Right to Continued Employment. Nothing contained in the Plan or in this Agreement shall confer upon Optionee the right to continue in the employ of the Companies, or interfere in any way with the rights of the Companies to terminate Optionee's employment at any time, with or without cause. 21. Prior Option Agreement. This Agreement shall supercede the Prior Option Agreement, which shall be void and of no further force or effect. 22. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE (REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE DELAWARE PRINCIPLES OF CONFLICTS OF LAW). 23. Counterparts. This Agreement may be signed in counterparts, each of which shall be deemed an original and all of which shall constitute one and the same agreement. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first set forth above. TITAN EXPLORATION, INC. 500 West Texas By: Suite 200 ------------------------------------ Midland, Texas 79701 Name: Title: -6- OPTIONEE 500 West Texas By: Suite 200 ------------------------------------ Midland, Texas 79701 Name: Title: -7- ANNEX A Name of Pure Option Holder: -------------------------------------------- Date of Prior Option Agreement: -----------------------------------
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-8- EX-99 7 stock3nq.txt EXHIBIT 99.20 - 1996 STOCK OPTION PLAN Exhibit 99.20 AMENDED AND RESTATED OPTION AGREEMENT 1996 Incentive Plan of Titan Exploration, Inc. (Non-Qualified Stock Option) This Amended and Restated Option Agreement ("Agreement"), made and entered into effective as of [date] by and among Pure Resources, Inc., a Delaware corporation, as successor to Titan Exploration, Inc., a Delaware corporation (the "Company"), Unocal Corporation, a Delaware corporation ("Unocal") and (the "Optionee"). WITNESSETH: WHEREAS, the 1996 Incentive Plan of Titan Exploration, Inc. ("Plan") was adopted by the Company, effective as of ("Plan Date"), for the benefit of certain corporate officers and key employees of the Company and its consolidated subsidiaries; WHEREAS, the Optionee and the Company had entered into an option agreement effective as of the date first set forth on Annex A (the "Prior Option Agreement"), and pursuant to such Prior Option Agreement, the Committee has granted to the Optionee Non-Qualified Stock Options to purchase shares of Common Stock, par value $0.01, of the Company ("Pure Shares") pursuant to the Plan and upon the terms set forth in the Prior Option Agreement (the "Pure Options"); and WHEREAS, as a result of certain modification to the Plan following the consummation of the merger of a subsidiary of Union Oil Company of California into the Company, effective as of October 29, 2002 (the "Merger"), the terms of the Prior Option Agreement and the Pure Options will be amended. NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements hereinafter set forth, the Company and Optionee hereby agree as follows: 1. Certain Definitions. Terms used in this Agreement and not otherwise defined shall have the respective meanings assigned to such terms in the Plan; and the following terms shall have the following meanings: Companies means the Company and any of its wholly-owned subsidiaries. Expiration Date means 6:00 P.M., Midland, Texas time, on the date (or dates, as the case may be) set forth on Annex A. 2. Conversion of Options. Subject to the terms, conditions and provisions of the Plan and those hereinafter set forth, each Pure Options to purchase that number of Pure Shares as set forth under "Original Grant Number" on Annex A has been converted into an option to purchase that number of shares of the common stock, par value $1.00 of Unocal ("Shares") as set forth under "Adjusted Grant Number" on Annex A (the "Options"), subject to any future adjustment in accordance with the provisions of Section 7 of this Agreement. 3. Option Price. The price to be paid by Optionee to Unocal for each Share purchased pursuant to the exercise of the Options ("Option Price") shall be the price set forth under "Adjusted Strike Price" on Annex A; provided, however, that the Option Price shall be subject to any future adjustment in accordance with the provisions of Section 7 of this Agreement. 4. Vesting of Right to Exercise Option. (a) The right to exercise the Options is fully vested as of October 30, 2002. Optionee may exercise the Options, subject to the terms and conditions set forth herein, to purchase all or any portion of the Shares for which Optionee's rights have vested. (b) To the extent Optionee does not purchase all or any part of the Shares at the times the Options become exercisable, the Optionee has the right cumulatively thereafter to purchase any Shares not so purchased and such right shall continue until the Options terminate or expire. (c) If Optionee's employment is terminated on account of fraud or dishonesty or other acts which the Board has determined are materially detrimental to the interests of the Company or a Subsidiary or Union Oil Company of California, the Options shall automatically terminate as of the date of such termination of employment. (d) If Optionee's employment is terminated voluntarily by Optionee, the Options may be exercised, but only within three months after such termination (if otherwise prior to the date of expiration of the Options), and not thereafter. (e) In the event of Optionee's termination of employment by reason of death or disability (within the meaning of Section 22(e)(3) of the Code), or by action of the Companies for reasons other than as specified in subsection (c) (and following such termination the Optionee is not immediately offered employment by Union Oil Company of California), the Options may be exercised by the person who acquires the Options by will or the laws of descent and distribution, or by Optionee (or the Optionee's legal guardian in the event one is appointed as a result of Optionee's disability), as the case may be, but only within the first to occur of (i) the end of the one year period following the date of termination or (ii) the date of expiration of the Options, and not thereafter. 5. Restrictions on Exercise. The right to exercise the Options shall be subject to the following restrictions: (a) No Fractional Shares. The Options may be exercised only with respect to full Shares. (b) Compliance with Law. The Options may not be exercised in whole or in part, and no Shares shall be issued nor certificates representing such Shares (if any) delivered pursuant to any exercise of the Options, if any requisite approval or consent of any governmental authority of any kind having jurisdiction over the exercise of options or the issuance and sale of Shares shall not have been obtained or if such exercise or issuance would violate any applicable law. 2 (c) Exercise by Optionee. The Options shall only be exercisable by the Optionee and by any transferee who has received such Options pursuant to Section 4(e). 6. Exercise of Option. (a) Subject to the other terms and provisions of this Agreement, the Options shall be exercisable by written notice timely given to Unocal by the Optionee (the "Exercise Notice"), which notice (i) shall state the number of Shares that the Optionee then desires to purchase, and (ii) shall be accompanied by payment in full of the Option Price for each of such Shares. Unless Unocal and Optionee shall have made mutually acceptable alternative arrangements, payment of the Option Price shall be made in cash or by surrender of Shares owned by the Optionee (the "Payment Shares"), the aggregate Fair Market Value of which shall be credited against the Option Price; provided, however, that in lieu of actually tendering the Payment Shares, the Optionee may make a constructive exchange by relinquishing Shares ("Constructive Exchange") represented by the then exercisable portion of the Options hereby granted, as set forth in subsection (b) of this Section. (b) The Optionee shall notify Unocal in writing of any election to pay all or a portion of the Option Price using a Constructive Exchange (which notice may be included in the Exercise Notice). Such notice shall specify the portion of the Exercise Price which is to be paid by the Constructive Exchange. Upon receipt of such notice, Unocal shall compute the number of Shares deemed to be relinquished in the Constructive Exchange (the "Relinquished Shares") which shall be equal to (A) the portion of the Exercise Price which is to be paid by the Constructive Exchange, divided by (B) the Fair Market Value per Share. The Relinquished Shares shall be deemed to be constructively exchanged, and accordingly, Unocal shall issue to the Optionee a net number of Shares equal to (i) the number of Shares subject to the option exercise for which the Constructive Exchange is being exercised, less (ii) the Relinquished Shares. Upon any Constructive Exchange, the Options shall terminate as to the Relinquished Shares and the Company shall have no further obligation to issue and deliver any Relinquished Shares pursuant hereto. (c) Unless Unocal and Optionee shall make mutually acceptable alternative arrangements, at the time of exercise of the Options, the Optionee shall pay to Unocal (or the Company, if so directed by Unocal) any federal, state and local taxes required by law to be paid or withheld in connection with such exercise. 7. Recapitalization or Reorganization; Adjustments. (a) The existence of the Options shall not affect in any way the right or power of Unocal to make or authorize any adjustment, recapitalization, reorganization or other change in Unocal's capital structure or its business, any merger or consolidation of Unocal, any issuance of additional securities by Unocal with priority over Shares or otherwise affecting Shares or the rights thereof, the dissolution or liquidation of Unocal or any sale, lease, exchange or other disposition of all or any part of its assets or business or any other corporate act or proceeding. (b) If Unocal subdivides its outstanding Shares into a greater number of Shares, the Option Price in effect immediately prior to such subdivision shall be proportionately reduced, 3 and the number of Shares then subject to the Options shall be proportionately increased. Conversely, if the outstanding number of Shares of Unocal are combined into a smaller number of Shares, the Option Price in effect immediately prior to such combination shall be proportionately increased, and the number of Shares then subject to the Options shall be proportionately reduced. 8. Termination of Option. Unless terminated earlier pursuant to Section 4, the Options shall terminate upon the first to occur of the (i) the Expiration Date (for each such Option as set forth on Annex A), or (ii) the date on which Optionee purchases, or in writing surrenders his right to purchase, all Shares or other securities then subject to the Options. 9. Restriction on Transfer of Option. The Options may not be sold, assigned, hypothecated or transferred, except by will or by the laws of descent and distribution. Any attempted transfer of the Options in violation of this provision shall be void and of no effect whatsoever. 10. Certain Rights Incident to Divorce. If an interest in the Options is required by law to be transferred to a spouse of Optionee pursuant to an order of a court in a divorce proceeding (notwithstanding the provisions of Section 9 hereof), the Optionee shall nevertheless retain all rights with respect to the exercise of the Options and any interest of such spouse shall be subject to such rights of Optionee. In addition, if it is determined that the Optionee will be required to pay any taxes attributable to the interest of the spouse in the Options, any tax liability which is attributable to such spouse's interest shall be taken into account, and shall reduce such spouse's interest in the Options. 11. Employment. Nothing in this Agreement shall confer upon Optionee any right to continue in the employ of the Companies, nor shall this Agreement interfere in any manner with the right of the Companies to terminate the employment of Optionee with or without cause at any time. 12. Rights as a Shareholder. Optionee shall have no rights as a shareholder of Unocal with respect to any Shares covered by the Options until the exercise of the Options. 13. Additional Documents. The Company, Unocal and the Optionee will, upon request of any of the other parties, promptly execute and deliver all additional documents, and take all such further action, reasonably deemed by such party to be necessary, appropriate or desirable to complete and evidence the sale, assignment and transfer of the Shares pursuant to this Agreement. 14. Representations, Warranties and Covenants of Optionee. (a) The Optionee acknowledges that the Options have not been registered under the Securities Act of 1933 or applicable state securities laws on the grounds that the issuance of the Options is exempt from registration under one or more provisions of each of such acts. The Optionee further understands that in determining the availability and applicability of such exemptions and in executing and delivering this Agreement and issuing and delivering any Shares upon exercise of the Options, Unocal has relied and will rely upon the representations, warranties and covenants made by the Optionee herein and in any other documents which he 4 may hereafter deliver to Unocal or the Company. Accordingly, the Optionee represents and warrants to and covenants and agrees with Unocal and the Company that the Optionee is acquiring and will hold the Options for his own account for investment and not with a view to any sale or distribution of all or any part thereof (b) The Optionee agrees that the certificates representing the Shares or other securities purchased under the Options may bear such legend or legends as Unocal deems appropriate in order to assure compliance with applicable securities laws. (c) Optionee acknowledges that the value of the Options over their life will be speculative and uncertain, that there is no market for the Options and it is unlikely that any market will develop, and consequently, the Optionee may ultimately realize no value from the Options. 15. Notices. All notices required or permitted to be given hereunder shall be in writing and shall be deemed to have been given on the earlier of the date of receipt by the party to whom the notice is given or five (5) days after being mailed by certified or registered United States mail, postage prepaid, addressed to the appropriate party at the address shown beside such party's signature below or at such other address as such party shall have theretofore designated by written notice given to the other party. 16. Entirety and Modification. This Agreement contains the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes any and all prior agreements, whether written or oral, between such parties relating to such subject matter. No modification, alteration, amendment or supplement to this Agreement shall be valid or effective unless the same is in writing and signed by the party against whom it is sought to be enforced. 17. Severability. If any provision of this Agreement is held to be unenforceable, this Agreement shall be considered divisible, and such provision shall be deemed inoperative to the extent it is unenforceable, and in all other respects this Agreement shall remain in full force and effect; provided, however, that if any such provision may be made enforceable by limitation thereof, then such provision shall be deemed to be so limited and shall be enforceable to the maximum extent permitted by applicable law. 18. Gender. Words used in this Agreement which refer to Optionee and denote the male gender shall also be deemed to include the female gender or the neuter gender when appropriate. 19. Headings. The headings of the various sections and subsections of this Agreement have been inserted for convenient reference only and shall not be construed to enlarge, diminish or otherwise change the express provisions hereof. 20. Prior Option Agreement. This Agreement shall supercede the Prior Option Agreement, which shall be void and of no further force or effect. 21. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF 5 DELAWARE (REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE DELAWARE PRINCIPLES OF CONFLICTS OF LAW). 22. Counterparts. This Agreement may be signed in counterparts, each of which shall be deemed an original and all of which shall constitute one and the same agreement. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first set forth above. TITAN EXPLORATION, INC. 500 West Texas By: Suite 500 ---------------------------------- Midland, Texas 79701 Name: Title: OPTIONEE 500 West Texas By: Suite 500 ---------------------------------- Midland, Texas 79701 Name: Title: 7 ANNEX A Name of Pure Option Holder: -------------------------------------------- Date of Prior Option Agreement: -----------------------------------
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