EXHIBIT 10.16

 

AWARD AGREEMENT AND STOCK POWER

Under the

Deltic Timber Corporation

2002 Stock Incentive Plan

 

PERFORMANCE BASED RESTRICTED STOCK

 

Company:    Deltic Timber Corporation          210 East Elm Street      El
Dorado, Arkansas 71730 Participant:    _____________________     
_____________________      _____________________ Grant Date:   
_____________________ Award:    The Award of Performance Based Restricted Stock
granted pursuant to this Award Agreement Performance Based Restricted Stock:   
                         Shares of Corporation’s Common Stock subject to the
Contingencies and Restrictions set forth in this Award Agreement Plan:    Deltic
Timber Corporation 2002 Stock Incentive Plan Contingency and Restriction Period:
   The four-year period ending on the fourth anniversary of the Grant Date, or
at such earlier date as specified in Exhibit 1 to this Award Agreement.

 

AGREEMENT

 

Company and Participant agree as follows:

 

1. Defined Terms. Capitalized terms not otherwise defined in this Award
Agreement have the meanings given them in Section 7 of Exhibit 1 to this Award
Agreement, which is incorporated herein.

 

2. Grant of Performance Based Restricted Stock. Subject to the terms and
conditions of the Plan and this Award Agreement, including Exhibit 1, effective
as of the Grant Date set forth above, Company grants to Participant an Award for
the number of shares of Performance Based Restricted Stock specified above.

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3. Contingencies and Restrictions. Participant acknowledges that the Performance
Based Restricted Stock is subject to the Contingencies and Restrictions and all
the terms and conditions set forth in this Award Agreement, including Exhibit 1
hereto.

 

4. Federal Tax Elections. Participant agrees to notify Company promptly if
Participant makes an election under Code Section 83(b) with respect to the
Performance Based Restricted Stock.

 

5. Certificate. Participant agrees that the Certificate for the Performance
Based Restricted Stock, together with an executed counterpart of this Award
Agreement and Stock Power, will be held by Company until the expiration of the
Contingency and Restriction Period with respect to this Award.

 

STOCK POWER

 

Effective as of the Grant Date, Participant assigns and transfers to Company the
shares of Performance Based Restricted Stock evidenced by the Certificate and
appoints Computershare Investor Services as attorney-in-fact to transfer the
stock on the books of the Company, with full power of substitution. Although
Participant may become the owner of the Performance Based Restricted Stock,
Company will hold the Certificate and this Stock Power during the Contingency
and Restriction Period described in the Award Agreement. Upon expiration of the
Contingency and Restriction Period and if all stated contingencies are met
and/or waived by the Committee, Company will return this Stock Power to
Participant, together with a new, unrestricted, certificate for the Performance
Based Restricted Stock.

 

Company:   DELTIC TIMBER CORPORATION     By  

 

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    Its  

 

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Participant:  

 

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EXHIBIT 1

To

Award Agreement and Stock Power for

Performance Based Restricted Stock

 

This Award Agreement evidences the grant of an Award for shares of Performance
Based Restricted Stock to Participant under the Plan.

 

Capitalized terms are defined in Section 7 of this Exhibit 1.

 

1. Shares of Performance Based Restricted Stock; Adjustment

 

In the event of a declaration of a stock dividend or a stock split (whether
effected as a dividend or otherwise) by the Company where the record date for
such dividend or stock split is after the Grant Date, the number of shares of
Performance Based Restricted Stock automatically will be adjusted
proportionately to reflect the effect of such dividend or stock split. The
number of shares of Performance Based Restricted Stock will not be adjusted to
reflect cash dividends paid with respect to Company’s common stock during the
Contingency and Restriction Period.

 

2. Terms of Award

 

This Award is subject to all the provisions of the Plan and to the following
terms and conditions:

 

2.1 Performance Based Restricted Stock. Subject to the Contingencies and
Restrictions set forth in this Section, the Company has granted the Performance
Based Restricted Stock to Participant as of the Grant Date as set forth on the
Award Agreement and Stock Power.

 

2.1.1 Contingencies and Restrictions During Contingency and Restriction Period.
During the Contingency and Restriction Period:

 

(a) Contingencies. The Performance Based Restricted Stock under this Award will
only vest if certain performance contingencies are met, and the amount of shares
may differ from the number of shares listed in the Award. For any shares to
vest, the total stockholder return of the Company during the applicable
Contingency and Restriction Period must equal 80 percent of the total return of
the S&P Forest and Paper Products Index. If the Company’s total stockholder
return is equal to 80 percent of the total return of the S&P Forest and Paper
Products Index at the conclusion of the applicable Contingency and Restriction
Period, then one half, or 50 percent of the amount of Performance Based
Restricted Stock listed in this Award will vest to the Participant. If the
Company’s total stockholder return is equal to 100 percent of the total return
of the S&P Forest and Paper Products Index at the conclusion of the applicable
Contingency and Restriction Period, then all, or 100 percent of the amount of
Performance Based Restricted Stock listed in this Award will vest to the
Participant. If the Company’s total stockholder return is equal to or greater
than 130 percent of the total

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return of the S&P Forest and Paper Products Index at the conclusion of the
applicable Contingency and Restriction Period, then twice, or 200 percent of the
amount of Performance Based Restricted Stock listed in this Award will vest to
the Participant. If the Company’s total stockholder return is between 80 percent
and 130 percent of the total return of the S&P Forest and Paper Products Index,
then the amount of Performance Based Restricted Stock will be determined by
interpolation.

 

(b) Nontransferable. Participant may not sell, assign, pledge, or otherwise
transfer or encumber the Award or the Performance Based Restricted Stock subject
to the Award. Neither this Award nor the shares of Performance Based Restricted
Stock are transferable other than by will or the laws of descent and
distribution. No assignment or transfer of the Award or the Performance Based
Restricted Stock in violation of the foregoing restriction, whether voluntary,
involuntary or by operation of law or otherwise, except by will or the laws of
descent and distribution, will vest in the assignee or transferee any interest
or right whatsoever, but immediately upon any attempt to assign or transfer the
Award or the Performanced Based Restricted Stock, the Award will terminate and
be of no force or effect. Whenever the word “Participant” is used in any
provision of this Award Agreement under circumstances where the provision should
logically be construed to apply to the executor, administrator, or the person or
persons to whom this Award or the Performance Based Restricted Stock may be
transferred by will or by the laws of descent and distribution, it will be
deemed to include such person or persons.

 

(c) Forfeiture. Subject to Section 2.3 hereof and unless the Participant has an
employment agreement to the contrary, in the event Participant ceases to be an
Employee of an Employer prior to the expiration of the Contingency and
Restriction Period, Participant will immediately and automatically forfeit all
shares of Performance Based Restricted Stock subject to the Award, the
Performance Based Restricted Stock will automatically revert to the Company, and
Participant will cease to have any rights as a stockholder with respect to such
Performance Based Restricted Stock.

 

2.1.2 Rights During Restriction Period. During the Contingency and Restriction
Period, Participant will have (except as expressly provided in Section 2.1.1)
all the rights of a stockholder with respect to the Performance Based Restricted
Stock, including without limitation the right to exercise all voting rights with
respect to the Performance Based Restricted Stock and the right to receive cash
dividends with respect to the Performance Based Restricted Stock. Stock
dividends issued with respect to Performance Based Restricted Stock will be
treated as additional shares of Performance Based Restricted Stock covered by
the Award and will be subject to the same Contingencies and Restrictions set
forth herein.

 

2.1.3 Stock Certificates. Certificates for shares of Performance Based
Restricted Stock subject to this Award Agreement will be issued in Participant’s
name and held by the Company, together with an executed counterpart of the Award
Agreement and Stock Power, until the Contingencies and Restrictions are met at
the expiration of the applicable Contingency and Restriction Period or until the
Performance Based Restricted Stock is forfeited as provided in Section 2.1.1(c).
During the Contingency and Restriction Period, each certificate for shares of
Performance Based Restricted Stock will bear a legend in substantially the
following form:

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THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS,
INCLUDING POTENTIAL FORFEITURE, AND ARE ISSUED PURSUANT TO THE DELTIC TIMBER
CORPORATION 2002 STOCK INCENTIVE PLAN, AND SHALL NOT BE ASSIGNED, PLEDGED OR
OTHERWISE DISPOSED OF BY THE NAMED HOLDER, WHETHER BY OPERATION OF LAW OR
OTHERWISE, PRIOR TO REMOVAL OF APPLICABLE RESTRICTIONS BY THE ISSUER HEREOF.

 

Certificates for shares of Performance Based Restricted Stock may also bear any
other restrictive legends required by law or any other agreement.

 

2.2 Settlement of Award.

 

2.2.1 General. Upon the Vesting of shares of Performance Based Restricted Stock
under this Award due to meeting all applicable contingencies and expiration of
the Contingency and Restriction Period, this Award will be settled on a
settlement date as soon as practicable after the end of the Contingency and
Restriction Period by the delivery to Participant of a new stock certificate for
the Vested shares of stock subject to the Award issued in Participant’s name,
without the legend described in Section 2.1.3, together with the Performance
Based Restricted Stock Award Agreement and Stock Power previously held by the
Company.

 

2.2.2 Lapse of Restrictions. Upon settlement of the Award pursuant to Section
2.2.1, the stock subject to the Award will no longer be subject to the
Restrictions.

 

2.3 Employment Requirement; Accelerated Vesting.

 

2.3.1 General. Except as otherwise expressly provided in Sections 2.3.2, 2.3.3
or 2.3.4, if Participant ceases to be an Employee for any reason prior to the
end of the Contingency and Restriction Period, this Award will be canceled and
Participant will forfeit the Performance Based Restricted Stock as provided in
Section 2.1.1(c) and this Award will be cancelled and Participant will not
receive any other payment with respect to this Award.

 

2.3.2 Death or Disability. In the event Participant dies or terminates
Employment by reason of Disability prior to the end of the Contingency and
Restriction Period, the Award and the Performance Based Restricted Stock will be
reduced to an amount reflecting the number of months from the Grant Date to the
date of death or disability over 48, and may vest on such prorated basis at the
end of the Contingency and Restriction Period, if all applicable contingencies
have been met.

 

2.3.3 Retirement. In the event Participant elects to retire at normal retirement
time and such termination of employment is prior to the end of the Contingency
and Restriction Period, the Performance Based Restricted Stock will be reduced
to an amount reflecting the number of months from the Grant Date to the date of
retirement over 48, and may vest on such prorated basis at the end of the
Contingency and Restriction Period, if all applicable contingencies have been
met.

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2.3.4 Change in Control. Upon the occurrence of a Change in Control prior to the
end of the Contingency and Restriction Period, a calculation to determine if the
contingency relating to the Company’s total stockholder return compared to the
total stockholder return of the companies that comprise the S&P Forest and Paper
Products Index will be performed as of the date of the change in control event
as described in Section 2.1(a) hereof, and if the contingency has been met, the
Award and the amount of Performance Based Restricted Stock resulting from such
calculation will automatically become 100% vested as of the Change in Control.

 

2.4 Reimbursement. If or to the extent the accelerated Vesting of the Award in
connection with a Change in Control pursuant to Section 2.3.4 results in an
“excess parachute payment” within the meaning of Section 280G of the Code, the
Company will reimburse Participant, on an after-tax basis, for any excise tax
imposed by Section 4999(a) of the Code that is directly attributable to such
accelerated delivery.

 

2.5 Tax Gross Up. Upon Vesting of an Award, the Company will pay to Participant
an amount up to 50 percent of the value of the Award at Vesting to be applied on
Participant’s behalf to federal and state income taxes and payroll taxes.

 

2.6 Other Documents. Participant will be required to furnish the Company such
other documents or representations as the Company may require to assure
compliance with applicable laws and regulations as a condition of the Company’s
obligation to settle this Award.

 

Taxes; Tax Election

 

3.1 Withholding Taxes.

 

3.1.1 General. Notwithstanding Section 2.5 above, Participant acknowledges that
Participant is responsible for payment of all federal, state, and local
withholding taxes and Participant’s portion of all applicable payroll taxes
imposed in connection with (i) the grant of the Award and the Performance Based
Restricted Stock, (ii) the Vesting of the Performance Based Restricted Stock,
(iii) an election by Participant under Code Section 83(b) with respect to this
Award, and/or (iv) payment by Company of dividends with respect to the
Performance Based Restricted Stock during the Contingency and Restriction Period
(collectively, the “Applicable Taxes”). Company’s obligation to issue
unrestricted stock in settlement of the Award is expressly conditioned on
Participant’s making arrangements satisfactory to Company, in its sole and
absolute discretion, for the payment of all Applicable Taxes.

 

3.1.2 Method of Payment. Participant may pay to Company (in cash or by check) an
amount equal to the Applicable Taxes. In the event that Participant does not
submit payment of the entire amount of Applicable Taxes, Participant expressly
authorizes Company, in its sole and absolute discretion, (a) to withhold all or
a portion of the remaining balance of the Applicable Taxes from other amounts
payable in cash (as compensation or otherwise) by Company or any Employer to
Participant, and/or (b) to withhold a number of unrestricted shares (thus
reducing the number of unrestricted shares to be issued to Participant) having a
fair market value (as of the date the Award is settled) equal to the remaining
balance of the Applicable Taxes.

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3.2 Effect of Tax Election. In the event Participant makes a timely election
under Code Section 83(b) with respect to this Award, the Performance Based
Restricted Stock will be deemed (for income tax purposes) to be transferred to
Participant effective as of the Grant Date (and any obligation for withholding
tax liability imposed by subsequent changes in tax laws would be due as of the
Grant Date). However, such an election will not effect the Contingencies and
Restrictions or terminate the Contingency and Restriction Period for the Award.

 

4. Conditions Precedent

 

The Company will use its best efforts to obtain approval of the Plan and this
Award by any sate or federal agency or authority that the Company determines has
jurisdiction. If the Company determines that any required approval cannot be
obtained, this Award will terminate on notice to Participant to that effect.
Without limiting the foregoing, the Company will not be required to issue any
certificates for Performance Based Restricted Stock, or any portion thereof,
until it has taken all action required to comply with all applicable federal and
state securities laws.

 

5. Successorship

 

Subject to restrictions on transferability set forth in Section 2.1.1(b) and
2.6, this Award Agreement will be binding upon and benefit the parties, their
successors and assigns.

 

6. Notices

 

Any notices under this Award Agreement must be in writing and will be effective
when actually delivered personally or, if mailed, when deposited as registered
or certified mail directed to the address of the Company’s Secretary or to such
other address as a party may certify by notice to the other party.

 

7. Defined Terms

 

When used in this Award Agreement, the following terms have the meaning
specified below:

 

Change in Control of the Company shall have the same meaning as set forth in the
Plan, which definition is incorporated herein by reference.

 

Committee means the Executive Compensation Committee of the Board of Directors
of the Company.

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Contingency and Restriction Period means the period commencing on the Grant Date
for the Award and ending on the first to occur of:

 

  (a) The expiration of the period specified on the cover page to this Award
Agreement;

 

  (b) A Change in Control of the Company

 

Contingencies and Restrictions mean the provisions of Section 2.1 that govern
the Award and the shares of Performance Based Restricted Stock during the
Contingency and Restriction Period.

 

Disability means the condition of being permanently unable to perform
Participant’s duties for an Employer by reason of a medically determinable
physical or mental impairment that can be expected to result in death or that
has lasted or can be expected to last for a continuous period of at least 12
months.

 

Employee and Employment both refer to service by Participant as a full-time or
part-time employee of an Employer, and include periods of illness or other
leaves of absence authorized by an Employer. A transfer of Participant’s
Employment from one Employer to another will not be treated as a termination of
Employment.

 

Employer means the Company or a Subsidiary of the Company.

 

Grant Date shall mean the date of the Committee’s award as set forth in the
Award Agreement and Stock Power.

 

Performance Based Restricted Stock means the number of shares of Performance
Based Restricted Stock that may upon satisfaction of all applicable
contingencies and expiration of applicable Contingency and Restriction Period
may become issuable to Participant pursuant to this Award.

 

Termination Date means the date Participant ceases to be an Employee.

 

Vest or Vesting means, with respect to this Award, the time when the
Participant’s Performance Based Restricted Stock is no longer subject to
forfeiture, and all applicable contingencies have been met.

 

Voting Securities means the Company’s issued and outstanding securities
ordinarily having the right to vote at elections of directors.

 

Capitalized terms not otherwise defined in this Award Agreement have the
meanings given them in the Plan.

 

8. Except for action adverse to Participant’s economic interest, the Committee
may in its discretion at any time modify, amend, or suspend their Award
Agreement and Stock Power or any part hereof.