Exhibit 10.1

 

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BONANZA CREEK ENERGY, INC.
AMENDED AND RESTATED
2011 LONG TERM INCENTIVE PLAN

(Effective June 4, 2015)

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Table of Contents

 

 

 

Page

1.

PURPOSE

1 

2.

DEFINITIONS

1 

3.

ADMINISTRATION OF THE PLAN

6 

 

3.1

Board

6 

 

3.2

Delegation of Authority

6 

 

3.3

Terms of Awards

7 

 

3.4

Deferral Arrangement

8 

 

3.5

No Liability

8 

 

3.6

Book Entry

8 

4.

STOCK SUBJECT TO THE PLAN

8 

 

4.1

Share Reserve

8 

 

4.2

Prohibition on Liberal Share Recycling

9 

 

4.3

Assumption or Substitution of Awards

9 

5.

EFFECTIVE DATE, DURATION AND AMENDMENTS

9 

 

5.1

Effective Date

9 

 

5.2

Term

9 

 

5.3

Amendment and Termination of the Plan

9 

6.

AWARD ELIGIBILITY AND LIMITATIONS

10 

 

6.1

Service Providers and Other Persons

10 

 

6.2

Successive Awards and Substitute Awards

10 

 

6.3

Limitation on Shares of Stock Subject to Awards and Cash Awards

10 

 

6.4

Minimum Vesting Schedule

11 

7.

AWARD AGREEMENT

11 

8.

TERMS AND CONDITIONS OF OPTIONS

11 

 

8.1

Option Price

11 

 

8.2

Vesting

11 

 

8.3

Term

11 

 

8.4

Termination of Service

12 

 

8.5

Limitations on Exercise of Option

12 

 

8.6

Method of Exercise

12 

 

8.7

Rights of Holders of Options

12 

 

8.8

Delivery of Stock Certificates

12 

 

8.9

Transferability of Options

12 

 

8.10

Family Transfers

13 

 

8.11

Limitations on Incentive Stock Options

13 

9.

TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS

13 

 

9.1

Right to Payment and Grant Price

13 

 

9.2

Other Terms

13 

10.

TERMS AND CONDITIONS OF RESTRICTED STOCK AND STOCK UNITS

14 

 

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Table of Contents
(continued)

 

 

 

 

 

 

 

 

Page

 

10.1

Grant of Restricted Stock or Stock Units

14 

 

10.2

Restrictions

14 

 

10.3

Restricted Stock Certificates

14 

 

10.4

Rights of Holders of Restricted Stock

14 

 

10.5

Rights of Holders of Stock Units

15 

 

10.6

Termination of Service

15 

 

10.7

Purchase of Restricted Stock

15 

 

10.8

Delivery of Stock

15 

11.

TERMS AND CONDITIONS OF OTHER STOCK AWARDS

16 

12.

FORM OF PAYMENT FOR OPTIONS AND RESTRICTED STOCK

16 

 

12.1

General Rule

16 

 

12.2

Surrender of Stock

16 

 

12.3

Cashless Exercise

16 

 

12.4

Other Forms of Payment

16 

13.

TERMS AND CONDITIONS OF DIVIDEND EQUIVALENT RIGHTS

17 

 

13.1

Dividend Equivalent Rights

17 

 

13.2

Termination of Service

17 

14.

TERMS AND CONDITIONS OF PERFORMANCE AND ANNUAL INCENTIVE AWARDS

17 

 

14.1

Performance Conditions

17 

 

14.2

Performance or Annual Incentive Awards Granted to Designated Covered Employees

17 

 

14.3

Written Determinations

19 

 

14.4

Status of Section 14.2 Awards Under Code Section 162(m)

19 

15.

PARACHUTE LIMITATIONS

19 

16.

REQUIREMENTS OF LAW

20 

 

16.1

General

20 

 

16.2

Rule 16b-3

21 

 

17.

EFFECT OF CHANGES IN CAPITALIZATION

21 

 

17.1

Changes in Stock

21 

 

17.2

Reorganization in Which the Company Is the Surviving Entity Which does not
Constitute a Change in Control

22 

 

17.3

Change in Control

22 

 

17.4

Adjustments

22 

 

17.5

No Limitations on Company

23 

18.

GENERAL PROVISIONS

23 

 

18.1

Disclaimer of Rights

23 

 

18.2

Nonexclusivity of the Plan

23 

 

18.3

Withholding Taxes

23 

 

 

 

ii

 

 

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Table of Contents
(continued)

 

 

 

 

 

 

 

 

Page

 

18.4

Captions

24 

 

18.5

Other Provisions

24 

 

18.6

Number and Gender

24 

 

18.7

Severability

24 

 

18.8

Governing Law

24 

 

18.9

Section 409A of the Code

24 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

iii

 

 

 

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BONANZA CREEK ENERGY, INC.
AMENDED AND RESTATED
2011 LONG TERM INCENTIVE PLAN

Bonanza Creek Energy, Inc., a Delaware corporation (the “Company”), sets forth
herein the terms of its Amended and Restated 2011 Long Term Incentive Plan (the
“Plan”), as follows:

1.PURPOSE.

The Plan is intended to enhance the Company’s and its Affiliates’ (as defined
herein) ability to attract and retain highly qualified officers, directors, key
employees, and other persons, and to motivate such persons to serve the Company
and its Affiliates and to expend maximum effort to improve the business results
and earnings of the Company, by providing to such persons an opportunity to
acquire or increase a direct proprietary interest in the operations and future
success of the Company.  To this end, the Plan provides for the grant of stock
options, stock appreciation rights, restricted stock, stock units, other stock
awards (including unrestricted stock), dividend equivalent rights and cash
awards.  Any of these awards may, but need not, be made as performance
incentives to reward attainment of annual or long-term performance goals in
accordance with the terms hereof.  Stock options granted under the Plan may be
non-qualified stock options or incentive stock options, as provided herein. 

2.DEFINITIONS. 

For purposes of interpreting the Plan and related documents (including Award
Agreements), the following definitions shall apply: 

2.1“Affiliate” means, with respect to the Company, any company or other trade or
business that controls, is controlled by or is under common control with the
Company within the meaning of Rule 405 of Regulation C under the Securities Act,
including, without limitation, any Subsidiary. 

2.2“Annual Incentive Award” means an Award made subject to attainment of
performance goals (as described in Section 14) over a performance period of up
to one (1) year (the fiscal year, unless otherwise specified by the Committee). 

2.3“Award” means a grant of an Option, Stock Appreciation Right, Restricted
Stock, Other Stock Award, Unrestricted Stock, Stock Unit, Dividend Equivalent
Rights, or cash award under the Plan. 

2.4“Award Agreement” means the written or electronic agreement between the
Company and a Grantee that evidences and sets out the terms and conditions of an
Award. 

2.5“Board” means the Board of Directors of the Company. 

2.6“Change in Control” means 

(i)the acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended)
(a

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“Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 50% or more of either (a) the then outstanding shares
of common stock of the Company (the “Outstanding Company Common Stock”) or (b)
the combined voting power of the then outstanding voting securities of the
Company entitled to vote generally in the election of directors (the
“Outstanding Company Voting Securities”).  For purposes of this Section 2.6, the
following acquisitions by a Person will not constitute a Change in Control:  (I)
any acquisition directly from the Company; (II) any acquisition by the Company;
(III) any acquisition by any employee benefit plan (or related trust) sponsored
or maintained by the Company or any corporation controlled by the Company; or
(IV) any acquisition by any corporation pursuant to a transaction which complies
with clauses (a), (b) and (c) of Section 2.6(iii) below;

(ii)the individuals who, as of the later of the date hereof or the last
amendment to this Plan approved by the Board, constitute the board of directors
(the “Incumbent Board”) cease for any reason to constitute at least a majority
of the board of directors.  Any individual becoming a director subsequent to the
later of the date hereof or the last amendment to this Plan approved by the
Board whose election, or nomination for election by the Company’s stockholders,
is approved by a vote of at least a majority of the directors then comprising
the Incumbent Board will be considered a member of the Incumbent Board as of the
later of the date hereof or the last amendment to this Plan approved by the
Board, but any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Incumbent Board of Directors
will not be deemed a member of the Incumbent Board as of the later of the date
hereof or the last amendment to this Plan approved by the Board;

(iii)the consummation of a reorganization, merger, consolidation or sale or
other disposition of all or substantially all of the assets of the Company (a
“Business Combination”), unless following such Business Combination:  (a) all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 50% of, respectively, the
then outstanding shares of common stock (or, for a non-corporate entity,
equivalent securities) and the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of directors, as
the case may be, of the corporation resulting from such Business Combination
(including, without limitation, a corporation which as a result of such
transaction owns the Company or all or substantially all of the Company’s assets
either directly or through one or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such Business Combination
of the Outstanding Company Common Stock and Outstanding Company Voting
Securities, as the case may be, (b) no Person (excluding any corporation
resulting from such Business Combination or any employee benefit plan (or
related trust) of the Company or such corporation resulting from such Business
Combination) beneficially owns, directly or indirectly, 30% or more of,
respectively, the then outstanding shares of common stock (or, for a
non-corporate entity, equivalent securities) of the corporation resulting from
such Business Combination or the combined voting power of

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the then outstanding voting securities of such corporation except to the extent
that such ownership existed prior to the Business Combination and (c) at least a
majority of the members of the board of directors of the corporation resulting
from such Business Combination were members of the Incumbent Board at the time
of the execution of the initial agreement, or of the action of the Board,
providing for such Business Combination; or 

(iv)the approval by the stockholders of the Company of a complete liquidation or
dissolution of the Company. 

2.7“Code” means the Internal Revenue Code of 1986, as now in effect or as
hereafter amended. 

2.8“Committee” means the Company’s Compensation Committee. 

2.9“Company” has the meaning set forth in the preamble. 

2.10“Covered Employee” means a Grantee who is a “covered employee” within the
meaning of Section 162(m)(3) of the Code. 

2.11“Dividend Equivalent Right” means a right, granted to a Grantee under
Section 13 hereof, to receive cash, Stock, other Awards or other property equal
in value to dividends paid with respect to a specified number of shares of
Stock, or other periodic payments. 

2.12“Effective Date” means the date that this Plan, as amended and restated
herein, is approved by the stockholders of the Company. 

2.13“Exchange Act” means the Securities Exchange Act of 1934, as now in effect
or as hereafter amended. 

2.14“Fair Market Value” means the value of a share of Stock, determined as
follows:  if on the Grant Date or other determination date the Stock is listed
on an established national or regional stock exchange, is admitted to quotation
on The Nasdaq Stock Market, Inc. or is publicly traded on an established
securities market, the Fair Market Value of a share of Stock shall be the
closing price of the Stock on such exchange or in such market (if there is more
than one such exchange or market the Board shall determine the appropriate
exchange or market) on the Grant Date or such other determination date (or if
there is no such reported closing price, the Fair Market Value shall be the mean
between the highest bid and lowest asked prices or between the high and low sale
prices on such trading day) or, if no sale of Stock is reported for such trading
day, on the next preceding day on which any sale shall have been reported.  If
the Stock is not listed on such an exchange, quoted on such system or traded on
such a market, Fair Market Value shall be the value of the Stock as determined
by the Board in good faith.  Notwithstanding the foregoing, for purposes of
reporting and calculating taxable income and applicable tax withholdings, the
Company may use any reasonable method to determine the Fair Market Value,
including (i) using the closing price of the Stock on the applicable exchange or
in the applicable market on the date immediately prior to the determination
date, and (ii) in the event the Grantee makes arrangements with the Company to
satisfy the tax withholdings required by Section 18.3 pursuant to a same day

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“sell-to-cover” or similar transaction, treating Fair Market Value as the amount
received upon sale of the Stock in such same day “sell-to-cover” or similar
transaction.

2.15“Family Member” means a person who is a spouse, former spouse, child,
stepchild, grandchild, parent, stepparent, grandparent, niece, nephew,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother, sister,
brother-in-law, or sister-in-law, including adoptive relationships, of the
Grantee, any person sharing the Grantee’s household (other than a tenant or
employee), a trust in which any one or more of these persons have more than
fifty percent of the beneficial interest, a foundation in which any one or more
of these persons (or the Grantee) control the management of assets, and any
other entity in which one or more of these persons (or the Grantee) own more
than fifty percent of the voting interests. 

2.16“GAAP” means U.S. generally accepted accounting principles. 

2.17“Grant Date” means, as determined by the Board, the latest to occur of (i)
the date as of which the Board approves an Award, (ii) the date on which the
recipient of an Award first becomes eligible to receive an Award under Section 6
hereof, or (iii) such other date as may be specified by the Board. 

2.18“Grantee” means a person who receives or holds an Award under the Plan. 

2.19“Incentive Stock Option” means an “incentive stock option” within the
meaning of Section 422 of the Code, or the corresponding provision of any
subsequently enacted tax statute, as amended from time to time. 

2.20“Non-qualified Stock Option” means an Option that is not an Incentive Stock
Option. 

2.21“Option” means an option to purchase one or more shares of Stock pursuant to
the Plan. 

2.22“Option Price” means the exercise price for each share of Stock subject to
an Option. 

2.23  “Other  Stock Award” means an Award pursuant to Section 11 hereof

2.24“Outside Director” means a member of the Board who is not an officer or
employee of the Company. 

2.25“Performance Award” means an Award made subject to the attainment of
performance goals (as described in Section 14) over a performance period of up
to ten (10) years. 

2.26“Plan” has the meaning set forth in the preamble. 

2.27“Purchase Price” means the purchase price for each share of Stock pursuant
to a grant of Restricted Stock or Unrestricted Stock. 

2.28“Restricted Period” has the meaning set forth in Section 10.2. 

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2.29“Restricted Stock” means shares of Stock, awarded to a Grantee pursuant to
Section 10 hereof. 

2.30“SAR Exercise Price” means the per share exercise price of an SAR granted to
a Grantee under Section 9 hereof. 

2.31“Securities Act” means the Securities Act of 1933, as now in effect or as
hereafter amended. 

2.32“Service” means service as a Service Provider to the Company or an
Affiliate.  Unless otherwise stated in the applicable Award Agreement, a
Grantee’s change in position or duties shall not result in interrupted or
terminated Service, so long as such Grantee continues to be a Service Provider
to the Company or an Affiliate.  Subject to the preceding sentence, whether a
termination of Service shall have occurred for purposes of the Plan shall be
determined by the Board, which determination shall be final, binding and
conclusive. 

2.33“Service Provider” means an employee, officer or director of the Company or
an Affiliate, or a consultant or adviser currently providing services to the
Company or an Affiliate. 

2.34“Stock” means the common stock, par value $0.001 per share, of the Company,
or any security into which such common stock may be changed, reclassified or
converted pursuant to any transaction or event of the type described in Section
17. 

2.35“Stock Appreciation Right” or “SAR” means a right granted to a Grantee under
Section 9 hereof. 

2.36“Stock Unit” means a bookkeeping entry representing the equivalent of one or
more shares of Stock as indicated in the Award Agreement awarded to a Grantee
pursuant to Section 10 hereof. 

2.37“Subsidiary” means any “subsidiary corporation” of the Company within the
meaning of Section 424(f) of the Code. 

2.38“Substitute Awards” means Awards granted upon assumption of, or in
substitution for, outstanding awards previously granted by a company or other
entity acquired by the Company or any Affiliate or with which the Company or any
Affiliate combines. 

2.39“Ten Percent Stockholder” means an individual who owns more than ten percent
(10%) of the total combined voting power of all classes of outstanding stock of
the Company, its parent or any of its Subsidiaries.  In determining stock
ownership, the attribution rules of Section 424(d) of the Code shall be
applied. 

2.40“Total Shares” has the meaning set forth in Section 4 hereof. 

2.41“Unrestricted Stock” means an Award granted pursuant to Section 11 hereof
pursuant to which the Grantee may receive shares of Stock free of any
restrictions under the Plan. 

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3.ADMINISTRATION OF THE PLAN. 

3.1Board.

The Board shall have such powers and authorities related to the administration
of the Plan as are consistent with the Company’s certificate of incorporation
and by-laws and applicable law.  The Board shall have full power and authority
to take all actions and to make all determinations required or provided for
under the Plan, any Award or any Award Agreement, and shall have full power and
authority to take all such other actions and make all such other determinations
not inconsistent with the specific terms and provisions of the Plan that the
Board deems to be necessary or appropriate to the administration of the Plan,
any Award or any Award Agreement.  All such actions and determinations shall be
by the affirmative vote of a majority of the members of the Board present at a
meeting or by unanimous consent of the Board executed in writing in accordance
with the Company’s certificate of incorporation and by-laws and applicable
law.  The interpretation and construction by the Board of any provision of the
Plan, any Award or any Award Agreement shall be final, binding and conclusive. 

3.2Delegation of Authority. 

The Board from time to time may delegate to the Committee, any other separate
committees of the Board, or to one or more officers of the Company, such powers
and authorities related to the administration and implementation of the Plan, as
set forth in Section 3.1 above and other applicable provisions, as the Board
shall determine, consistent with the certificate of incorporation and by-laws of
the Company and applicable law. 

(i)Except as provided in subsection 3.2(ii) of this Section 3.2 and except as
the Board may otherwise determine, the Committee, if any, appointed by the Board
to administer the Plan shall consist of two (2) or more Outside Directors of the
Company who:  (a) qualify as “outside directors” within the meaning of Section
162(m) of the Code and (b) meet such other requirements as may be established
from time to time by the Securities and Exchange Commission for plans intended
to qualify for exemption under Rule 16b-3 (or its successor) under the Exchange
Act. 

(ii)The Board may also appoint one or more separate committees of the Board,
each composed of one or more directors of the Company who need not be Outside
Directors, who may administer the Plan with respect to employees or other
Service Providers who are not officers or directors of the Company, may grant
Awards under the Plan to such employees or other Service Providers, and may
determine all terms of such Awards. 

(iii)The Board may also appoint one or more officers of the Company, who may
administer the Plan with respect to employees or other Service Providers who are
not officers or directors of the Company, may grant Awards under the Plan to
such employees or other Service Providers, and may determine all terms of such
Awards. 

 

In the event that the Plan, any Award or any Award Agreement entered into
hereunder provides for any action to be taken by or determination to be made by
the Board, such action may be taken

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or such determination may be made by the Committee or such other delegate if the
power and authority to do so has been delegated to the Committee or such other
delegate by the Board as provided for in this Section 3.2.  Unless otherwise
expressly determined by the Board, any such action or determination by the
Committee or such other delegate shall be final, binding and conclusive.  To the
extent permitted by applicable law, the Committee may delegate its authority
under the Plan to a member of the Board; but no other delegate hereunder may
further delegate its authority. 

3.3Terms of Awards. 

Subject to the other terms and conditions of the Plan, the Board shall have full
and final authority to: 

(i)designate Grantees,

(ii)determine the type or types of Awards to be made to a Grantee,

(iii)determine the number of shares of Stock to be subject to an Award,

(iv)establish the terms and conditions of each Award (including, but not limited
to, the exercise price of any Option, the nature and duration of any restriction
or condition (or provision for lapse thereof) relating to the vesting, exercise,
transfer, or forfeiture of an Award or the shares of Stock subject thereto, and
any terms or conditions that may be necessary to qualify Options as Incentive
Stock Options),

(v)prescribe the form of each Award Agreement evidencing an Award,

(vi)make Awards to Grantees who are foreign nationals or employed outside the
United States, or both, on such terms and conditions different from those
applicable to Awards to employees employed in the United States as may, in the
judgment of the Board, be necessary or desirable in order to recognize
differences in local law or tax policy.  The Board also may impose conditions on
the exercise or vesting of Awards in order to minimize the Company’s obligation
with respect to tax equalization for employees on assignments outside their home
country; and

(vii)amend, modify, or supplement the terms of any outstanding Award. 

Notwithstanding the foregoing, no amendment, modification or supplement of any
Award shall, without the consent of the Grantee, impair the Grantee’s rights
under such Award. 

The Company may retain the right in an Award Agreement to cause a forfeiture of
the gain realized by a Grantee on account of actions taken by the Grantee in
violation or breach of or in conflict with any employment agreement,
non-competition agreement, any agreement prohibiting solicitation of employees
or clients of the Company or any Affiliate thereof or any confidentiality
obligation with respect to the Company or any Affiliate thereof or otherwise in
competition with the Company or any Affiliate thereof, to the extent specified
in such Award Agreement applicable to the Grantee.  The Company may annul an
Award if the Grantee is an employee of the Company or an Affiliate thereof and
is terminated for cause as defined in the applicable Award Agreement. 

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The grant of any Award shall be contingent upon the Grantee executing (in
writing or electronically) the appropriate Award Agreement. 

Notwithstanding the foregoing, no amendment or modification may be made to an
outstanding Option or SAR which reduces the Option Price or SAR Exercise Price,
either by lowering the Option Price or SAR Exercise Price or by canceling the
outstanding Option or SAR and granting a replacement Option or SAR with a lower
exercise price without the approval of the stockholders of the Company,
provided, that, appropriate adjustments may be made to outstanding Options and
SARs pursuant to Section 17. 

3.4Deferral Arrangement. 

The Board may permit or require the deferral of any award payment into a
deferred compensation arrangement, subject to such rules and procedures as it
may establish, which may include provisions for the payment or crediting of
interest or dividend equivalents, including converting such credits into
deferred Stock equivalents.  Any such deferrals shall be made in a manner that
complies with Code Section 409A. 

3.5No Liability. 

No member of the Board or of the Committee, nor any other delegate hereunder,
shall be liable for any action or determination made in good faith with respect
to the Plan or any Award or Award Agreement. 

3.6Book Entry. 

Notwithstanding any other provision of this Plan to the contrary, the Company
may elect to satisfy any requirement under this Plan for the delivery of stock
certificates through the use of book-entry. 

4.STOCK SUBJECT TO THE PLAN. 

4.1Share Reserve

Subject to adjustment as provided in Section 17 hereof, the number of shares of
Stock available for issuance under the Plan shall be (i) 2,500,000 which is the
number of Shares originally approved under the Plan, minus (ii) the number of
such shares of Stock that are permanently unavailable for issuance under the
Plan as of the Effective Date by virtue of application of the remaining
paragraphs of this Section 4 prior to the Effective Date, plus (iii) an
additional 2,250,000 Shares. (the “Total Shares”).  Stock issued or to be issued
under the Plan shall be authorized but unissued shares; or, to the extent
permitted by applicable law, issued shares that have been reacquired by the
Company.  If any shares covered by an Award are not purchased or are forfeited,
or if an Award otherwise terminates without delivery of any Stock subject
thereto, then the number of shares of Stock counted against the aggregate number
of shares available under the Plan with respect to such Award shall, to the
extent of any such forfeiture or termination, again be available for making
Awards under the Plan. 

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4.2Prohibition on Liberal Share Recycling

If any Award of SARs is settled in shares of Stock, then the number of SARs
subject to the Award shall be deemed delivered for purposes of determining the
maximum number of share of Stock available for delivery under the Plan,
regardless of the number of shares of Stock that are issued upon the settlement
of such SARs.  In addition, if the Option Price of any Option granted under the
Plan, or if pursuant to Section 18.3 the withholding obligation of any Grantee
with respect to an Option or other Award, is satisfied by tendering shares of
Stock to the Company (by either actual delivery or by attestation) or by
withholding shares of Stock, the number of shares of Stock issued including the
shares of Stock tendered or withheld shall be deemed delivered for purposes of
determining the maximum number of shares of Stock available for delivery under
the Plan. 

4.3Assumption or Substitution of Awards

The Board shall have the right to substitute or assume Awards in connection with
mergers, reorganizations, separations, or other transactions to which Section
424(a) of the Code applies.  The number of shares of Stock reserved pursuant to
Section 4 shall be increased by the corresponding number of Awards assumed and,
in the case of a substitution, by the net increase in the number of shares of
Stock subject to Awards before and after the substitution. 

5.EFFECTIVE DATE, DURATION AND AMENDMENTS. 

5.1Effective Date. 

The Plan, as amended and restated, shall be effective as of the Effective Date. 

5.2Term. 

The Plan may be terminated by the Board as provided in Section 5.3; provided,
however, that no Awards may be granted under the Plan after the ten-year
anniversary of the Effective Date. 

5.3Amendment and Termination of the Plan. 

The Board may, at any time and from time to time, amend, suspend, or terminate
the Plan as to any shares of Stock as to which Awards have not been made.  An
amendment shall be contingent on approval of the Company’s stockholders to the
extent stated by the Board, required by applicable law or required by applicable
stock exchange listing requirements.  In addition, an amendment will be
contingent on approval of the Company’s stockholders if the amendment
would:  (i) materially increase the benefits accruing to participants under the
Plan, (ii) materially increase the aggregate number of shares of Stock that may
be issued under the Plan or (iii) materially modify the requirements as to
eligibility for participation in the Plan.  No Awards shall be made after
termination of the Plan.  No amendment, suspension, or termination of the Plan
shall, without the consent of the Grantee, impair rights or obligations under
any Award theretofore awarded under the Plan. 

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6.AWARD ELIGIBILITY AND LIMITATIONS. 

6.1Service Providers and Other Persons. 

Subject to this Section 6, Awards may be made under the Plan to:  (i) any
Service Provider to the Company or of any Affiliate, including any Service
Provider who is an officer or director of the Company, or of any Affiliate, as
the Board shall determine and designate from time to time, and (ii) any Outside
Director. 

6.2Successive Awards and Substitute Awards. 

An eligible person may receive more than one (1) Award, subject to such
restrictions as are provided herein.  Notwithstanding Sections 8.1 and 9.1 the
Option Price of an Option or the grant price of an SAR that is a Substitute
Award may be less than one hundred percent (100%) of the Fair Market Value of a
share of Stock on the original date of grant provided that the Option Price or
grant price is determined in accordance with the principles of Code Section 424
and the regulations thereunder. 

6.3Limitation on Shares of Stock Subject to Awards and Cash Awards. 

During any time when the Company has a class of equity security registered under
Section 12 of the Exchange Act, but only after such time as the reliance period
described in Treas. Reg. Section 1.162-27(f)(2) has expired: 

(i)the maximum number of shares of Stock subject to Options or SARs that can be
awarded under the Plan to any person eligible for an Award under Section 6
hereof is 300,000 per calendar year;

(ii)the maximum number of shares that can be awarded under the Plan, other than
pursuant to an Option or SARs, to any person eligible for an Award under Section
6 hereof is 300,000 per calendar year;

(iii)the maximum amount of any Annual Incentive Award that may be earned in any
calendar year by any one (1) Grantee shall be $2,500,000;

(iv)the maximum cash amount that may be earned pursuant to all Performance Award
or other cash Awards granted in any calendar year to any one (1) Grantee shall
be $2,500,000; provided, however, that for avoidance of doubt, the foregoing
limit shall not apply to Annual Incentive Awards, which shall be subject solely
to the separate limit set forth in Section 6.3(iii), above; and

(v)the maximum number of shares of Stock that may be delivered to Grantees and
their beneficiaries with respect to Incentive Stock Options granted under the
Plan is equal to the Total Shares. 

The preceding limitations in this Section 6.3 are subject to adjustment as
provided in Section 17 hereof. 

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6.4Minimum Vesting Schedule

Except as set forth below, a vesting period of at least one (1) year shall apply
to all Awards issued under the Plan.  Up to 5% of the shares of Stock reserved
for issuance under the Plan as of the Effective Date may be issued pursuant to
Awards that are do not comply with such minimum one (1) year vesting period.

 

7.AWARD AGREEMENT. 

Each Award granted pursuant to the Plan shall be evidenced by an Award
Agreement, in such written or electronic form or forms as the Board shall from
time to time determine.  Award Agreements granted from time to time or at the
same time need not contain similar provisions but shall be consistent with the
terms of the Plan.  Each Award Agreement evidencing an Award of Options shall
specify whether such Options are intended to be Non-qualified Stock Options or
Incentive Stock Options, and in the absence of such specification such options
shall be deemed Non-qualified Stock Options. 

8.TERMS AND CONDITIONS OF OPTIONS. 

8.1Option Price. 

The Option Price of each Option shall be fixed by the Board and stated in the
Award Agreement evidencing such Option.  The Option Price of each Option shall
be at least the Fair Market Value on the Grant Date of a share of Stock;
provided, however, that in the event that a Grantee is a Ten Percent
Stockholder, the Option Price of an Option granted to such Grantee that is
intended to be an Incentive Stock Option shall be not less than one hundred ten
percent (110%) of the Fair Market Value of a share of Stock on the Grant
Date.  In no case shall the Option Price of any Option be less than the par
value of a share of Stock. 

8.2Vesting. 

Subject to Sections 8.3 and 17.3 hereof, each Option granted under the Plan
shall become exercisable at such times and under such conditions as shall be
determined by the Board and stated in the Award Agreement.  For purposes of this
Section 8.2, fractional numbers of shares of Stock subject to an Option shall be
rounded down to the next nearest whole number. 

8.3Term. 

Each Option granted under the Plan shall terminate, and all rights to purchase
shares of Stock thereunder shall cease, upon the expiration of ten (10) years
from the date such Option is granted, or under such circumstances and on such
date prior thereto as is set forth in the Plan or as may be fixed by the Board
and stated in the Award Agreement relating to such Option; provided, however,
that in the event that the Grantee is a Ten Percent Stockholder, an Option
granted to such Grantee that is intended to be an Incentive Stock Option shall
not be exercisable after the expiration of five (5) years from its Grant Date. 

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8.4Termination of Service. 

Each Award Agreement shall set forth the extent to which the Grantee shall have
the right to exercise the Option following termination of the Grantee’s
Service.  Such provisions shall be determined in the sole discretion of the
Board, need not be uniform among all Options issued pursuant to the Plan, and
may reflect distinctions based on the reasons for termination of Service. 

8.5Limitations on Exercise of Option. 

Notwithstanding any other provision of the Plan, in no event may any Option be
exercised, in whole or in part, after the occurrence of an event referred to in
Section 17 hereof which results in termination of the Option. 

8.6Method of Exercise. 

An Option that is exercisable may be exercised by the Grantee’s delivery to the
Company of written notice of exercise on any business day, at the Company’s
principal office, on the form specified by the Company.  Such notice shall
specify the number of shares of Stock with respect to which the Option is being
exercised and shall be accompanied by payment in full, in a form of payment as
provided in Section 12 hereof, of the Option Price of the shares for which the
Option is being exercised plus the amount (if any) of federal and/or other taxes
which the Company may, in its judgment, be required to withhold with respect to
an Award. 

8.7Rights of Holders of Options. 

Unless otherwise stated in the applicable Award Agreement, an individual holding
or exercising an Option shall have none of the rights of a stockholder (for
example, the right to receive cash or dividend payments or distributions
attributable to the subject shares of Stock or to direct the voting of the
subject shares of Stock) until the shares of Stock covered thereby are issued to
such individual.  Except as provided in Section 17 hereof, no adjustment shall
be made for dividends, distributions or other rights for which the record date
is prior to the date of such issuance. 

8.8Delivery of Stock Certificates. 

Subject to Section 3.6, promptly after the exercise of an Option by a Grantee
and the payment in full of the Option Price, such Grantee shall be entitled to
the issuance of a stock certificate or certificates evidencing such Grantee’s
ownership of the shares of Stock subject to the Option. 

8.9Transferability of Options. 

Except as provided in Section 8.10, during the lifetime of a Grantee, only the
Grantee (or, in the event of legal incapacity or incompetency, the Grantee’s
guardian or legal representative) may exercise an Option.  Except as provided in
Section 8.10, no Option shall be assignable or transferable by the Grantee to
whom it is granted, other than by will or the laws of descent and distribution. 

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8.10Family Transfers. 

If authorized in the applicable Award Agreement, a Grantee may transfer, not for
value, all or part of an Option which is not an Incentive Stock Option to any
Family Member.  For the purpose of this Section 8.10, a “not for value” transfer
is a transfer which is (i) a gift, (ii) a transfer under a domestic relations
order in settlement of marital property rights; or (iii) a transfer to an entity
in which more than fifty percent of the voting interests are owned by Family
Members (or the Grantee) in exchange for an interest in that entity.  Following
a transfer under this Section 8.10, any such Option shall continue to be subject
to the same terms and conditions as were applicable immediately prior to
transfer.  Subsequent transfers of transferred Options are prohibited except to
Family Members of the original Grantee in accordance with this Section 8.10 or
by will or the laws of descent and distribution.  The events of termination of
Service of Section 8.4 hereof shall continue to be applied with respect to the
original Grantee, following which the Option shall be exercisable by the
transferee only to the extent, and for the periods specified, in Section 8.4. 

8.11Limitations on Incentive Stock Options. 

An Option shall constitute an Incentive Stock Option only (i) if the Grantee of
such Option is an employee of the Company or any Subsidiary of the Company; (ii)
if and to the extent specifically provided in the related Award Agreement; and
(iii) to the extent that the aggregate Fair Market Value (determined at the time
the Option is granted) of the shares of Stock with respect to which all
Incentive Stock Options held by such Grantee become exercisable for the first
time during any calendar year (under the Plan and all other plans of the
Grantee’s employer and its Affiliates) does not exceed $100,000.  This
limitation shall be applied by taking Options into account in the order in which
they were granted. 

9.TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS.

9.1Right to Payment and Grant Price. 

An SAR shall confer on the Grantee to whom such SAR is granted a right to
receive, upon exercise thereof, the excess of (i) the Fair Market Value of one
share of Stock on the date of exercise over (ii) the grant price of such SAR as
determined by the Board.  The Award Agreement for an SAR shall specify the grant
price of the SAR, which shall be at least the Fair Market Value of a share of
Stock on the date of grant.  SARs may be granted in conjunction with all or part
of an Option granted under the Plan or at any subsequent time during the term of
such Option, in conjunction with all or part of any other Award or without
regard to any Option or other Award.  An SAR granted in tandem with an
outstanding Option following the Grant Date of such Option may have a grant
price that is equal to the Option Price, even if such grant price is less than
the Fair Market Value of a share of Stock on the grant date of the SAR. 

9.2Other Terms. 

The Board shall determine at the date of grant or thereafter, the time or times
at which and the circumstances under which an SAR may be exercised in whole or
in part (including based on achievement of performance goals and/or future
service requirements), the time or times at which SARs shall cease to be or
become exercisable following termination of Service or upon other

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conditions, the method of exercise, method of settlement, form of consideration
payable in settlement, method by or forms in which Stock will be delivered or
deemed to be delivered to Grantees, whether or not an SAR shall be in tandem or
in combination with any other Award, and any other terms and conditions of any
SAR. 

10.TERMS AND CONDITIONS OF RESTRICTED STOCK AND STOCK UNITS.

10.1Grant of Restricted Stock or Stock Units. 

Awards of Restricted Stock or Stock Units may be made for no consideration
(other than par value of the shares which is deemed paid by Services already
rendered).  Stock Units may be used to grant awards commonly known as
“restricted stock units” or “performance shares,” and all references in an Award
Agreement to such types of awards shall be deemed to refer to Stock Units as
authorized by this Plan. 

10.2Restrictions. 

At the time a grant of Restricted Stock or Stock Units is made, the Board may,
in its sole discretion, establish a period of time (a “Restricted Period”)
applicable to such Restricted Stock or Stock Units.  Each Award of Restricted
Stock or Stock Units may be subject to a different Restricted Period.  The Board
may, in its sole discretion, at the time a grant of Restricted Stock or Stock
Units is made, prescribe restrictions in addition to or other than the
expiration of the Restricted Period, including the satisfaction of corporate or
individual performance objectives, which may be applicable to all or any portion
of the Restricted Stock or Stock Units in accordance with Sections 14.1 and
14.2.  Neither Restricted Stock nor Stock Units may be sold, transferred,
assigned, pledged or otherwise encumbered or disposed of during the Restricted
Period or prior to the satisfaction of any other restrictions prescribed by the
Board with respect to such Restricted Stock or Stock Units. 

10.3Restricted Stock Certificates. 

Subject to Section 3.6, the Company shall issue, in the name of each Grantee to
whom Restricted Stock has been granted, stock certificates representing the
total number of shares of Restricted Stock granted to the Grantee, as soon as
reasonably practicable after the Grant Date.  The Board may provide in an Award
Agreement that either (i) the Secretary of the Company or its designee shall
hold such certificates for the Grantee’s benefit until such time as the
Restricted Stock is forfeited to the Company or the restrictions lapse, or (ii)
such certificates shall be delivered to the Grantee, provided,  however, that
such certificates shall bear a legend or legends that comply with the applicable
securities laws and regulations and makes appropriate reference to the
restrictions imposed under the Plan and the Award Agreement. 

10.4Rights of Holders of Restricted Stock. 

Unless the Board otherwise provides in an Award Agreement, holders of Restricted
Stock shall have the right to vote such Stock and the right to receive any
dividends declared or paid with respect to such Stock.  The Board may provide
that any dividends paid on Restricted Stock must be reinvested in shares of
Stock, which may or may not be subject to the same vesting conditions and
restrictions applicable to such Restricted Stock.  All distributions, if any,
received by a Grantee

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with respect to Restricted Stock as a result of any stock split, stock dividend,
combination of shares, or other similar transaction shall be subject to the
restrictions applicable to the original grant. 

10.5Rights of Holders of Stock Units. 

10.5.1Voting and Dividend Rights. 

Unless the Board otherwise provides in an Award Agreement, holders of Stock
Units shall have no rights as stockholders of the Company.  The Board may
provide in an Award Agreement evidencing a grant of Stock Units that the holder
of such Stock Units shall be entitled to receive, upon the Company’s payment of
a cash dividend on its outstanding Stock, a cash payment for each Stock Unit
held equal to the per-share dividend paid on the Stock.  Such Award Agreement
may also provide that such cash payment will be deemed reinvested in additional
Stock Units at a price per unit equal to the Fair Market Value of a share of
Stock on the date that such dividend is paid. 

10.5.2Creditor’s Rights. 

A holder of Stock Units shall have no rights other than those of a general
creditor of the Company.  Stock Units represent an unfunded and unsecured
obligation of the Company, subject to the terms and conditions of the applicable
Award Agreement. 

10.6Termination of Service. 

Unless the Board otherwise provides in an Award Agreement or in writing after
the Award Agreement is issued, upon the termination of a Grantee’s Service, any
Restricted Stock or Stock Units held by such Grantee that have not vested, or
with respect to which all applicable restrictions and conditions have not
lapsed, shall immediately be deemed forfeited.  Upon forfeiture of Restricted
Stock or Stock Units, the Grantee shall have no further rights with respect to
such Award, including but not limited to any right to vote Restricted Stock or
any right to receive dividends with respect to shares of Restricted Stock or
Stock Units. 

10.7Purchase of Restricted Stock. 

The Grantee shall be required, to the extent required by applicable law, to
purchase the Restricted Stock from the Company at a Purchase Price equal to the
greater of (i) the aggregate par value of the shares of Stock represented by
such Restricted Stock or (ii) the Purchase Price, if any, specified in the Award
Agreement relating to such Restricted Stock.  The Purchase Price shall be
payable in a form described in Section 12 or, in the discretion of the Board, in
consideration for past Services rendered to the Company or an Affiliate. 

10.8Delivery of Stock. 

Subject to Section 3.6, upon the expiration or termination of any Restricted
Period and the satisfaction of any other conditions prescribed by the Board, the
restrictions applicable to shares of Restricted Stock or Stock Units settled in
Stock shall lapse, and, unless otherwise provided in the Award Agreement, a
stock certificate for such shares shall be delivered, free of all such
restrictions, to the Grantee or the Grantee’s beneficiary or estate, as the case
may be. 

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11.TERMS AND CONDITIONS OF OTHER STOCK AWARDS.

The Board may, in its sole discretion, grant (or sell at par value or such other
higher purchase price per share of Stock determined by the Board) to any
Grantee: (a) Unrestricted Stock Awards or rights to purchase or acquire shares,
whether at a fixed or variable price or ratio related to the Common Stock
(subject to compliance with applicable laws), upon the passage of time, the
occurrence of one or more events, or the satisfaction of performance criteria or
other conditions, or any combination thereof; or (b) any other securities with a
value derived from the value of or related to the Common Stock and/or returns
thereon (“Other Stock Awards”). Other Stock Awards may be granted or sold as
described in the preceding sentence in respect of past services and other valid
consideration, or in lieu of, or in addition to, any cash compensation due to
such Grantee.

12.FORM OF PAYMENT FOR OPTIONS AND RESTRICTED STOCK.

12.1General Rule. 

Payment of the Option Price for the shares purchased pursuant to the exercise of
an Option or the Purchase Price for Restricted Stock shall be made in cash or in
cash equivalents acceptable to the Company. 

12.2Surrender of Stock. 

To the extent the Award Agreement so provides, payment of the Option Price for
shares purchased pursuant to the exercise of an Option or the Purchase Price for
Restricted Stock may be made all or in part through the tender to the Company of
shares of Stock, which shares, if acquired from the Company and if so required
by the Company, shall have been held for at least six months at the time of
tender and which shall be valued, for purposes of determining the extent to
which the Option Price or Purchase Price has been paid thereby, at their Fair
Market Value on the date of exercise or surrender. 

12.3Cashless Exercise. 

With respect to an Option only (and not with respect to Restricted Stock), to
the extent permitted by law and to the extent the Award Agreement so provides,
payment of the Option Price for shares purchased pursuant to the exercise of an
Option may be made all or in part by delivery (on a form acceptable to the
Board) of an irrevocable direction to a licensed securities broker acceptable to
the Company to sell shares of Stock and to deliver all or part of the sales
proceeds to the Company in payment of the Option Price and any withholding taxes
described in Section 18.3. 

12.4Other Forms of Payment. 

To the extent the Award Agreement so provides, payment of the Option Price for
shares purchased pursuant to exercise of an Option or the Purchase Price for
Restricted Stock may be made in any other form that is consistent with
applicable laws, regulations and rules. 

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13.TERMS AND CONDITIONS OF DIVIDEND EQUIVALENT RIGHTS.

13.1Dividend Equivalent Rights. 

A Dividend Equivalent Right is an Award entitling the recipient to receive
credits based on cash distributions that would have been paid on the shares of
Stock specified in the Dividend Equivalent Right (or other award to which it
relates) if such shares had been issued to and held by the recipient.  A
Dividend Equivalent Right may be granted hereunder to any Grantee as a component
of another Award or as a freestanding award.  The terms and conditions of
Dividend Equivalent Rights shall be specified in the grant.  Dividend
equivalents credited to the holder of a Dividend Equivalent Right may be paid
currently or may be deemed to be reinvested in additional shares of Stock, which
may thereafter accrue additional equivalents.  Any such reinvestment shall be at
Fair Market Value on the date of reinvestment.  Dividend Equivalent Rights may
be settled in cash or Stock or a combination thereof, in a single installment or
installments, all determined in the sole discretion of the Board.  A Dividend
Equivalent Right granted as a component of another Award may provide that such
Dividend Equivalent Right shall be settled upon payment of, or lapse of
restrictions on, but not exercise of (directly or indirectly), such other Award,
and that such Dividend Equivalent Right shall expire or be forfeited or annulled
under the same conditions as such other Award.  A Dividend Equivalent Right
granted as a component of another Award may also contain terms and conditions
different from such other Award. 

13.2Termination of Service. 

Except as may otherwise be provided by the Board either in the Award Agreement
or in writing after the Award Agreement is issued, a Grantee’s rights in all
Dividend Equivalent Rights or interest equivalents shall automatically terminate
upon the Grantee’s termination of Service for any reason. 

14.TERMS AND CONDITIONS OF PERFORMANCE AND ANNUAL INCENTIVE AWARDS. 

14.1Performance Conditions. 

The right of a Grantee to exercise or receive a grant or settlement of any
Award, and the timing thereof, may be subject to such performance conditions as
may be specified by the Board.  The Board may use such business criteria and
other measures of performance as it may deem appropriate in establishing any
performance conditions, and may exercise its discretion to reduce the amounts
payable under any Award subject to performance conditions, except as limited
under Sections 14.2 hereof in the case of a Performance Award or Annual
Incentive Award intended to qualify under Code Section 162(m).  If and to the
extent required under Code Section 162(m), any power or authority relating to a
Performance Award or Annual Incentive Award intended to qualify under Code
Section 162(m), shall be exercised by the Committee and not the Board. 

14.2Performance or Annual Incentive Awards Granted to Designated Covered
Employees. 

If and to the extent that the Committee determines that a Performance Award or
Annual Incentive Award to be granted to a Grantee who is designated by the
Committee as likely to be a

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Covered Employee should qualify as “performance-based compensation” for purposes
of Code Section 162(m), the grant, exercise and/or settlement of such
Performance Award or Annual Incentive Award shall be contingent upon achievement
of pre-established performance goals and other terms set forth in this Section
14.2. 

14.2.1Performance Goals Generally. 

The performance goals for such Performance Awards or Annual Incentive Awards
shall consist of one (1) or more business criteria and a targeted level or
levels of performance with respect to each of such criteria, as specified by the
Committee consistent with this Section 14.2.  Performance goals shall be
objective and shall otherwise meet the requirements of Code Section 162(m) and
regulations thereunder including the requirement that the level or levels of
performance targeted by the Committee result in the achievement of performance
goals being “substantially uncertain.”  The Committee may determine that such
Performance Awards or Annual Incentive Awards shall be granted, exercised and/or
settled upon achievement of any one (1) performance goal or that two (2) or more
of the performance goals must be achieved as a condition to grant, exercise
and/or settlement of such Performance Awards or Annual Incentive
Awards.  Performance goals may differ for Performance Awards or Annual Incentive
Awards granted to any one Grantee or to different Grantees. 

14.2.2Business Criteria. 

One or more of the following business criteria for the Company, on a
consolidated basis, and/or specified subsidiaries or business units of the
Company (except with respect to the total stockholder return and earnings per
share criteria), shall be used exclusively by the Committee in establishing
performance goals for such Performance or Annual Incentive Awards:  (i) earnings
per share; (ii) revenue; (iii) cash flow; (iv) cash flow from operations; (v)
cash flow return; (vi) return on net assets; (vii) return on assets;
(viii) return on investment; (ix) return on capital; (x) return on equity; (xi)
economic value added; (xii) net sales; (xiii) contribution margin; (xiv) net
income; (xv) net income per share; (xvi) pretax earnings; (xvii) pretax earnings
before interest, depreciation and amortization; (xviii) pretax operating
earnings after interest expense and before incentives, service fees, and
extraordinary or special items; (xix) total stockholder return; (xx) debt
reduction; (xxi) market share; (xxii) change in the Fair Market Value of the
Stock; (xxiii) operating margin; (xxiv) operating income; (xxv) reserve growth;
(xxvi) reserve replacement; (xxvii) production growth; (xxviii) finding,
development and exploration costs; (xxix) lease operating expense; (xxx)
completion and/or integration of acquisitions of businesses or companies;
(xxxi) completion of divestitures and asset sales; (xxxii) capital efficiency;
(xxxiii) general and administrative expense; (xxxiv) safety; and (xxxv)
environmental record.  Any of the above business criteria may be determined (a)
on an absolute or relative basis (i.e., performance relative to peer companies),
(b) as compared to the performance of a published or special index deemed
applicable by the Committee including, but not limited to, the Standard & Poor’s
500 Stock Index or a group of comparable companies or (c) on a GAAP or non-GAAP
basis. 

14.2.3Timing For Establishing Performance Goals. 

Performance goals shall be established not later than ninety (90) days after the
beginning of any performance period applicable to such Performance or Annual
Incentive Awards, or at such

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other date as may be required or permitted for “performance-based compensation”
under Code Section 162(m). 

14.2.4Settlement of Performance or Annual Incentive Awards; Other Terms. 

Settlement of such Performance or Annual Incentive Awards shall be in cash,
Stock, other Awards or other property, in the discretion of the Committee.  The
Committee may, in its discretion, reduce the amount of a settlement otherwise to
be made in connection with such Performance or Annual Incentive Awards.  The
Committee shall specify the circumstances in which such Performance or Annual
Incentive Awards shall be paid or forfeited in the event of termination of
Service by the Grantee prior to the end of a performance period or settlement of
Performance Awards. 

14.3Written Determinations. 

All determinations by the Committee as to the establishment of performance
goals, the amount of any Performance Award pool or potential individual
Performance Awards and as to the achievement of performance goals relating to
Performance Awards, and the amount of any Annual Incentive Award pool or
potential individual Annual Incentive Awards and the amount of final Annual
Incentive Awards, shall be made in writing in the case of any Award intended to
qualify under Code Section 162(m).  To the extent required to comply with Code
Section 162(m), the Committee may delegate any responsibility relating to such
Performance Awards or Annual Incentive Awards. 

14.4Status of Section 14.2 Awards Under Code Section 162(m). 

It is the intent of the Company that Performance Awards and Annual Incentive
Awards under Section 14.2 hereof granted to persons who are designated by the
Committee as likely to be Covered Employees within the meaning of Code Section
162(m) and regulations thereunder shall, if so designated by the Committee,
constitute “qualified performance-based compensation” within the meaning of Code
Section 162(m) and regulations thereunder.  Accordingly, the terms of Section
14.2, including the definitions of Covered Employee and other terms used
therein, shall be interpreted in a manner consistent with Code Section 162(m)
and regulations thereunder.  The foregoing notwithstanding, because the
Committee cannot determine with certainty whether a given Grantee will be a
Covered Employee with respect to a fiscal year that has not yet been completed,
the term Covered Employee as used herein shall mean only a person designated by
the Committee, at the time of grant of Performance Awards or an Annual Incentive
Award, as likely to be a Covered Employee with respect to that fiscal year.  If
any provision of the Plan or any agreement relating to such Performance Awards
or Annual Incentive Awards does not comply or is inconsistent with the
requirements of Code Section 162(m) or regulations thereunder, such provision
shall be construed or deemed amended to the extent necessary to conform to such
requirements. 

15.PARACHUTE LIMITATIONS.

Notwithstanding any contrary provision in this Plan, if  a Grantee is a
“disqualified individual” (as defined in Section 280G of the Code), and any
Award under this Plan together with

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any other payments or benefits that such Grantee has a right to receive from the
Company (and affiliated entities required to be aggregated in accordance with
Q/A-10 and Q/A-46 of Treas. Reg. §1.280G-1) (collectively, the “Payments”) would
constitute a “ parachute payment” (as defined in Section 280G of the Code), the
Payments shall be either (a) reduced (but not below zero) so that the aggregate
present value of such Payments and benefits received by the Grantee from the
Company and its Affiliates shall be $1.00 less than three times such Grantee’s “
base amount ” (as defined in Section 280G of the Code) (the “ Safe Harbor Amount
”) and so that no portion of such Payments received by such Grantee shall be
subject to the excise tax imposed by Section 4999; or (b) paid in full,
whichever produces the better net after-tax result for such Grantee (taking into
account any applicable excise tax under Section 4999 and any applicable federal,
state and local income and employment taxes).  The determination as to whether
any such reduction in the amount of the Payments is necessary shall be made by
the Company in good faith and such determination shall be conclusive and binding
on such Grantee.  If reduced Payments are made to the Grantee pursuant to this
Section 15 and through error or otherwise those Payments exceed the Safe Harbor
Amount, the Grantee shall immediately repay such excess to the Company or its
applicable Affiliate upon notification that an overpayment has been made.

 

The reduction of Payments, if applicable, shall be made by reducing, first,
severance payments to be paid in cash in the order in which such payments would
be paid or provided (beginning with such payment or benefit that would be made
last in time and continuing, to the extent necessary, through to such payment or
benefit that would be made first in time) and second, by reducing any other cash
payments that would be payable to the Grantee which are valued in full for
purposes of Code Section 280G in a similar order (last to first), any third, by
reducing any equity acceleration of awards which are valued in full for purposes
of Section 280G of the Code in a similar order (last to first), and finally, by
reducing any other payments or benefit in a similar order (last to first).

 

Notwithstanding anything above to the contrary, this Section 15 shall not apply
to any Grantee who is subject to a specific provision under any separate
employment contract or severance plan maintained by the Company or any of its
Affiliates regarding the application of the golden parachute rules of Code
Sections 280G and 4999.

 

16.REQUIREMENTS OF LAW.

16.1General. 

The Company shall not be required to sell or issue any shares of Stock under any
Award if the sale or issuance of such shares would constitute a violation by the
Grantee, any other individual exercising an Option, or the Company of any
provision of any law or regulation of any governmental authority, including
without limitation any federal or state securities laws or regulations.  If at
any time the Company shall determine, in its discretion, that the listing,
registration or qualification of any shares subject to an Award upon any
securities exchange or under any governmental regulatory body is necessary or
desirable as a condition of, or in connection with, the issuance or purchase of
shares hereunder, no shares of Stock may be issued or sold to the Grantee or any
other individual exercising an Option pursuant to such Award unless such
listing, registration, qualification, consent or approval shall have been
effected or obtained free of any conditions not acceptable to the Company, and
any delay caused thereby shall in no

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way affect the date of termination of the Award.  Specifically, in connection
with the Securities Act, upon the exercise of any Option or the delivery of any
shares of Stock underlying an Award, unless a registration statement under such
Act is in effect with respect to the shares of Stock covered by such Award, the
Company shall not be required to sell or issue such shares unless the Board has
received evidence satisfactory to it that the Grantee or any other individual
exercising an Option may acquire such shares pursuant to an exemption from
registration under the Securities Act.  Any determination in this connection by
the Board shall be final, binding, and conclusive.  The Company may, but shall
in no event be obligated to, register any securities covered hereby pursuant to
the Securities Act.  The Company shall not be obligated to take any affirmative
action in order to cause the exercise of an Option or the issuance of shares of
Stock pursuant to the Plan to comply with any law or regulation of any
governmental authority.  As to any jurisdiction that expressly imposes the
requirement that an Option shall not be exercisable until the shares of Stock
covered by such Option are registered or are exempt from registration, the
exercise of such Option (under circumstances in which the laws of such
jurisdiction apply) shall be deemed conditioned upon the effectiveness of such
registration or the availability of such an exemption. 

16.2Rule 16b-3. 

During any time when the Company has a class of equity security registered under
Section 12 of the Exchange Act, it is the intent of the Company that Awards
pursuant to the Plan and the exercise of Options granted hereunder will qualify
for the exemption provided by Rule 16b-3 under the Exchange Act.  To the extent
that any provision of the Plan or action by the Board does not comply with the
requirements of Rule 16b-3, it shall be deemed inoperative to the extent
permitted by law and deemed advisable by the Board, and shall not affect the
validity of the Plan.  In the event that Rule 16b-3 is revised or replaced, the
Board may exercise its discretion to modify this Plan in any respect necessary
to satisfy the requirements of, or to take advantage of any features of, the
revised exemption or its replacement. 

17.EFFECT OF CHANGES IN CAPITALIZATION.

17.1Changes in Stock. 

If the number of outstanding shares of Stock is increased or decreased or the
shares of Stock are changed into or exchanged for a different number or kind of
shares or other securities of the Company on account of any conversion,
recapitalization, reclassification, stock split, reverse split, combination of
shares, exchange of shares, stock dividend or other distribution payable in
capital stock, or other increase or decrease in such shares effected without
receipt of consideration by the Company occurring after the Effective Date, the
number and kinds of shares for which grants of Options and other Awards may be
made under the Plan shall be adjusted proportionately and accordingly by the
Company.  In addition, the number and kind of shares for which Awards are
outstanding shall be adjusted proportionately and accordingly so that the
proportionate interest of the Grantee immediately following such event shall, to
the extent practicable, be the same as immediately before such event.  Any such
adjustment in outstanding Options or SARs shall not change the aggregate Option
Price or SAR Exercise Price payable with respect to shares that are subject to
the unexercised portion of an outstanding Option or SAR, as applicable, but
shall include a corresponding proportionate adjustment in the Option Price or
SAR Exercise Price per share.  The conversion of any convertible securities of
the Company shall not be treated as an increase in

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shares effected without receipt of consideration.  Notwithstanding the
foregoing, in the event of any distribution to the Company’s stockholders of
securities of any other entity or other assets (including an extraordinary cash
dividend but excluding a non-extraordinary dividend payable in cash or in stock
of the Company) without receipt of consideration by the Company, the Company
may, in such manner as the Company deems appropriate, adjust (i) the number and
kind of shares subject to outstanding Awards and/or (ii) the exercise price of
outstanding Options and Stock Appreciation Rights to reflect such distribution. 

17.2Reorganization in Which the Company Is the Surviving Entity Which does not
Constitute a Change in Control.

Subject to Section 17.3 hereof, if the Company shall be the surviving entity in
any reorganization, merger, or consolidation of the Company with one or more
other entities which does not constitute a Change in Control, any Option or SAR
theretofore granted pursuant to the Plan shall pertain to and apply to the
securities to which a holder of the number of shares of Stock subject to such
Option or SAR would have been entitled immediately following such
reorganization, merger, or consolidation, with a corresponding proportionate
adjustment of the Option Price or SAR Exercise Price per share so that the
aggregate Option Price or SAR Exercise Price thereafter shall be the same as the
aggregate Option Price or SAR Exercise Price of the shares remaining subject to
the Option or SAR immediately prior to such reorganization, merger, or
consolidation.  Subject to any contrary language in an Award Agreement
evidencing an Award, any restrictions applicable to such Award shall apply as
well to any replacement shares received by the Grantee as a result of the
reorganization, merger or consolidation.  In the event of a transaction
described in this Section 17.2, Stock Units shall be adjusted so as to apply to
the securities that a holder of the number of shares of Stock subject to the
Stock Units would have been entitled to receive immediately following such
transaction. 

17.3Change in Control. 

Upon the occurrence of a Change in Control, each outstanding Award shall be
deemed to have vested, and shall become exercisable (if applicable), to the
extent so provided in the applicable Award Agreement; provided that the Board
may elect to accelerate the vesting of, or cancel, or take any other action with
respect to any outstanding Award as it shall deem appropriate in its sole
discretion. 

17.4Adjustments. 

Adjustments under this Section 17 related to shares of Stock or securities of
the Company shall be made by the Board, whose determination in that respect
shall be final, binding and conclusive.  No fractional shares or other
securities shall be issued pursuant to any such adjustment, and any fractions
resulting from any such adjustment shall be eliminated in each case by rounding
downward to the nearest whole share.  The Board shall determine the effect of a
Change in Control upon Awards other than Options, SARs, Stock Units and
Restricted Stock, and such effect shall be set forth in the appropriate Award
Agreement.  The Board may provide in the Award Agreements at the time of grant,
or any time thereafter with the consent of the Grantee, for different provisions
to apply to an Award in place of those described in Sections 17.1 and 17.2. 

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17.5No Limitations on Company. 

The making of Awards pursuant to the Plan shall not affect or limit in any way
the right or power of the Company to make adjustments, reclassifications,
reorganizations, or changes of its capital or business structure or to merge,
consolidate, dissolve, or liquidate, or to sell or transfer all or any part of
its business or assets. 

18.GENERAL PROVISIONS.

18.1Disclaimer of Rights. 

No provision in the Plan or in any Award or Award Agreement shall be construed
to confer upon any individual the right to remain in the employ or service of
the Company or any Affiliate, or to interfere in any way with any contractual or
other right or authority of the Company either to increase or decrease the
compensation or other payments to any individual at any time, or to terminate
any employment or other relationship between any individual and the Company.  In
addition, notwithstanding anything contained in the Plan to the contrary, unless
otherwise stated in the applicable Award Agreement, no Award granted under the
Plan shall be affected by any change of duties or position of the Grantee, so
long as such Grantee continues to be a director, officer, consultant or employee
of the Company or an Affiliate.  The obligation of the Company to pay any
benefits pursuant to this Plan shall be interpreted as a contractual obligation
to pay only those amounts described herein, in the manner and under the
conditions prescribed herein.  The Plan shall in no way be interpreted to
require the Company to transfer any amounts to a third party trustee or
otherwise hold any amounts in trust or escrow for payment to any Grantee or
beneficiary under the terms of the Plan. 

18.2Nonexclusivity of the Plan. 

Neither the adoption of the Plan nor the submission of the Plan to the
stockholders of the Company for approval shall be construed as creating any
limitations upon the right and authority of the Board to adopt such other
incentive compensation arrangements (which arrangements may be applicable either
generally to a class or classes of individuals or specifically to a particular
individual or particular individuals) as the Board in its discretion determines
desirable, including, without limitation, the granting of stock options
otherwise than under the Plan. 

18.3Withholding Taxes. 

The Company or an Affiliate, as the case may be, shall have the right to deduct
from payments of any kind otherwise due to a Grantee any federal, state, or
local taxes of any kind required by law to be withheld with respect to the
vesting of or other lapse of restrictions applicable to an Award or upon the
issuance of any shares of Stock upon the exercise of an Option or pursuant to an
Award.  At the time of such vesting, lapse, or exercise, the Grantee shall pay
to the Company or the Affiliate, as the case may be, any amount that the Company
or the Affiliate may reasonably determine to be necessary to satisfy such
withholding obligation, or shall otherwise make arrangements satisfactory to the
Company or the Affiliate, as the case may be, to provide for the timely payment
of such withholding obligation.  Subject to the prior approval of the Company or
the Affiliate, which may be withheld by the Company or the Affiliate, as the
case may be, in its sole discretion, the Grantee may elect to satisfy such
obligations, in whole or in part, (i) by causing

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the Company or the Affiliate to withhold shares of Stock otherwise issuable to
the Grantee or (ii) by delivering to the Company or the Affiliate shares of
Stock already owned by the Grantee.  The shares of Stock so delivered or
withheld shall have an aggregate Fair Market Value equal to such withholding
obligations.  The Fair Market Value of the shares of Stock used to satisfy such
withholding obligation shall be determined by the Company or the Affiliate as of
the date that the amount of tax to be withheld is to be determined.  A Grantee
who has made an election pursuant to this Section 18.3 may satisfy his or her
withholding obligation only with shares of Stock that are not subject to any
repurchase, forfeiture, unfulfilled vesting, or other similar requirements. 

18.4Captions. 

The use of captions in this Plan or any Award Agreement is for the convenience
of reference only and shall not affect the meaning of any provision of the Plan
or such Award Agreement. 

18.5Other Provisions. 

Each Award granted under the Plan may contain such other terms and conditions
not inconsistent with the Plan as may be determined by the Board, in its sole
discretion. 

18.6Number and Gender. 

With respect to words used in this Plan, the singular form shall include the
plural form, the masculine gender shall include the feminine gender, etc., as
the context requires. 

18.7Severability. 

If any provision of the Plan or any Award Agreement shall be determined to be
illegal or unenforceable by any court of law in any jurisdiction, the remaining
provisions hereof and thereof shall be severable and enforceable in accordance
with their terms, and all provisions shall remain enforceable in any other
jurisdiction. 

18.8Governing Law. 

The validity and construction of this Plan and the instruments evidencing the
Awards hereunder shall be governed by the laws of the State of Delaware, other
than any conflicts or choice of law rule or principle that might otherwise refer
construction or interpretation of this Plan and the instruments evidencing the
Awards granted hereunder to the substantive laws of any other jurisdiction. 

18.9Section 409A of the Code. 

Awards under the Plan are intended to be exempt from or satisfy the requirements
of Section 409A of the Code and related regulations and Treasury pronouncements
(“Section 409A”), and this Plan and all Award Agreements shall be interpreted
accordingly.  In the event it is determined that any Award or Award Agreement
would violate the requirements of Section 409A, the Board shall have the
authority, but not the obligation, to amend the terms and conditions of the
Award or the Award Agreement without the consent of the Participant to the
minimum extent

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necessary to bring the Award or Award Agreement into compliance with Section
409A.  However, neither the Company nor the Board shall have any obligation to
take any action to prevent the assessment of any excise tax or penalty on any
Grantee under Section 409A, and neither the Company nor the Board will have any
liability to any Grantee for such tax or penalty.

 

 

*     *     *

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