Document:

exv10w36

 

Exhibit 10.36

        2007 EXECUTIVE INCENTIVE PLAN (EIP)

INTERNATIONAL TECHNIDYNE CORPORATION

EXECUTIVE INCENTIVE PLAN (EIP)

FY 2007

 

 

        2007 EXECUTIVE INCENTIVE PLAN (EIP)

	 
	I.	 	Objective
	 
	 	 	ITC’s Executive Incentive Plan, hereinafter referred to as EIP is intended to reward
executive personnel who significantly impact and influence ITC’s productivity in proportion
to their accomplishment of specified objectives.
	 
	 	 	The purpose of the plan is to ensure maximum return to ITC by encouraging greater
initiative, resourcefulness, teamwork and efficiency on the part of senior management whose
performance and responsibilities directly affect company profits.
	 
	 	 	Awarding of the bonus will be based on accomplishing a set of annual objectives, determined
by the Chief Executive Officer (“CEO”) and the Board of Directors, typically at the
beginning of the year. Bonus determinations and payouts will take place after the financial
statements have been prepared for the fiscal year.
	 
	II.	 	Determination Of The Fund
	 
	 	 	The availability of, and participants in, the fund will be set by the CEO and approved by
the Board of Directors as part of the annual budgeting process.
	 
	III.	 	Effective Date
	 
	 	 	The effective date of this program is December 31, 2006, the beginning of the plan year, and
will continue in effect until December 29, 2007, or until terminated or amended by the Board
of Directors. This plan supersedes all prior EIP plans.
	 
	IV.	 	Eligibility
	 
	 	 	Participation in the plan is limited to those in comparable levels of responsibility who
have a direct and significant influence on ITC’s growth and profitability. Employees must be
regular and not eligible for any other ITC commission, bonus or incentive plan in order to
be eligible to participate in the EIP.
	 
	 	 	Participating employees will be determined at the beginning of the fiscal year, or at such
time during the Fiscal Year that an employee achieves an eligible position. Employees will
be notified of their eligibility and plan objectives, as soon as possible after the
determination by the CEO or Board of Directors.
	 
	 	 	Individuals must be employed by ITC at the close of the fiscal year in order to be eligible
for an award under the EIP except participants who are involuntarily terminated due to a
divestiture, plant closing, reorganization or reduction in force during the plan year may
receive an award on the prorated basis described in Section VIII, Plan
Administration, Prorated Awards, (subject to approval by the CEO). These monies
will be paid out at the usual and customary time of payment of all bonuses. For purposes of
this plan, termination shall mean the day the employee leaves the job, which may not
necessarily be the last day on the payroll.

 

 

        2007 EXECUTIVE INCENTIVE PLAN (EIP)

	V.	 	Incentive Objectives
	 
	 	 	Objectives will be agreed to by the CEO with the Senior Management reporting to him and with
concurrence by the Board of Directors as necessary. Generally, there will be a minimum of
four up to a maximum of seven objectives, which will include two or more financial
objectives. Each objective will be weighted according to its importance, which weight will
determine the percentage of the bonus awarded for completion of that objective. (See
Section VI below.)
	 
	 	 	After approval, copies of these goals must be submitted to Human Resources.
	 
	VI.	 	Bonus Opportunity and Award
	 
	 	 	The award opportunity will be expressed as a percentage of the participant’s base salary at
the close of the fiscal year. The award will be approved by the Board of Directors or the
CEO, and will be consistent with the participant’s peers within the company.
	 
	 	 	The amount that a participant actually receives for the full fiscal year will be based upon
the extent to which the set objectives have been achieved. The participant will receive a
percentage of the total award opportunity corresponding to the percentage of each objective
accomplished and the weight assigned to the objective. Evaluations of performance against
management and business plan objectives are made for the full year prior to fiscal year-end
payment.
	 
	VII.	 	Performance Goal and Payout
	 
	 	 	In addition to your individual goals, everyone will have two company-oriented financial
goals that will be achieved according to the following guidelines:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(1)
	 	 	 	 	 	 	ITC	 	ITC
	 	 	 	 	 	 	Revenue	 	Non-GAAP Income Before Tax
	 	 	 	 	 	 	Goal	 	Award	 	Goal	 	Award
	 	 	 	 	 	 	 
	Threshold
	 	= to, or >	 	$	*	 	 	 	50	%	 	$	*	 	 	 	50	%
	Target
	 	= to, or >	 	$	*	 	 	 	100	%	 	$	*	 	 	 	100	%

	 	 	Note: If revenue is less than $* (95% of target) no payment is earned for that objective.
If ITC NGIBT earnings is less than $* (90% of target), no payment is earned for that
objective. If actual results fall between threshold and target, interpolate between them to
get actual payout percentage. This percentage will be multiplied times the weight given the
objective in your individual plan to determine the achievement. Quarterly revenue and NGIBT
earnings income information may be released at the end of each quarter, after earnings have
been disclosed to the public.

	(1)	 	ITC NGIBT earnings is defined as GAAP net income before taxes for the ITC
Division excluding, as applicable, amortization of intangibles, in-process R&D,
impairment of intangibles, certain litigation, restructuring and CEO transition
expenses and certain other unusual or non-recurring costs, and also excluding
share-based compensation expense under

 

			
	*	 	Amounts to be determined by the Compensation and Option
Committee of the Board of Directors.

 

 

        2007 EXECUTIVE INCENTIVE PLAN (EIP)

	 	 	   SFAS No. 123R and changes in the value of the “make-whole” provision of our convertible
notes and special incentive awards.

	VIII.	 	Over-Achievement Award Opportunity/Performance Accelerator
	 
	 	 	In addition, each EIP participant will receive a ___% increase for every ___% increase
in ITC NGIBT earnings over the target level.
	 
	IX.	 	Plan Administration
	 
	 	 	Prorated Awards. Individuals who are promoted to eligible positions during the plan
year, new hires into eligible positions and eligible employees who are either on
leave or on active written warning for part of the year may be awarded partial bonuses
under this program, based on the accomplished objectives and their respective weights,
subject to the approval of the CEO.
	 
	 	 	Transfers. In the event of transfer of an eligible participant to another position or
department, the transferring manager will evaluate EIP results for prorated award (see
Prorated Awards above) at the end of the year, and forward to the Human Resources
Department. The hiring manager will be responsible for setting the key business plan
objectives for the balance of the year, if applicable, and forwarding to Human Resources for
approval. Awards based on these objectives will be prorated (see Prorated Awards above) as
well, for end of the year payment.
	 
	 	 	Authority. The Board of Directors shall have the full power and authority to construe,
interpret and administer the plan. All decisions, actions or interpretations of the Board
of Directors shall be final and conclusive and binding on all parties. This program shall
be administered by the Human Resources Department.
	 
	X.	 	General Provisions

	 	•	 	The Executive Incentive Plan for 2007 may be reviewed and revised at the Board’s
discretion.
	 
	 	•	 	Nothing in this plan shall be construed to limit in any way the right of
International Technidyne Corporation to terminate an employee’s employment at any time,
with or without cause or notice, nor shall it be evidence of any agreement or
understanding, expressed or implied, that Thoratec or any of its subsidiaries will
employ an employee in any particular position, for any particular period of time,
ensure participation in any incentive programs, or the granting of awards from such
programs as they may from time to time exist or be constituted. ITC reserves the right
to discontinue or alter the plan at its sole discretion at any time with or without
notice.exv10w3

 

Exhibit 10.3

RESTRICTED STOCK AWARD AGREEMENT

     This Restricted Stock Award Agreement (“Agreement”) is effective as of February 12, 2007,
between Encore Acquisition Company, a Delaware corporation
(the “Company”) and _______________ (the
“Executive”).

     WHEREAS, pursuant to the provisions of the Company’s 2000 Incentive Stock Plan as amended and
restated effective March 18, 2004, and as such plan may be thereafter amended (the “Plan”), the
Compensation Committee (the “Committee”) of the Board of Directors of the Company (the “Board of
Directors”), which administers the Plan, has determined to grant a Restricted Stock Award to the
Executive upon the terms set forth below;

     NOW, THEREFORE, the Company and the Executive agree as follows:

     1. Grant of Restricted Stock. The Company hereby awards to the Executive under the Plan,
subject to the terms and conditions hereinafter set forth, ____ shares of common stock, par value
$0.01 per share (the “Common Stock”), of the Company (the “Restricted Stock”). The Company will
issue to the Executive stock certificates evidencing the shares of Restricted Stock, which
certificates will be registered in the name of the Executive and will bear an appropriate legend
referring to the terms, conditions, and restrictions applicable to the Restricted Stock,
substantially in the following form:

The transferability of this certificate and the shares of Common Stock represented
hereby are subject to the terms, conditions and restrictions (including forfeiture)
contained in the Restricted Stock Award Agreement, effective as of February 12,
2007, between Encore Acquisition Company and the registered owner hereof. Copies of
such Agreement are on file in the offices of Encore Acquisition Company, 777 Main
Street, Suite 1400, Fort Worth, Texas 76102.

The certificates evidencing the shares of Restricted Stock shall be held in custody by the Company
or, if specified by the Committee, by a third party custodian or trustee, until the restrictions on
such shares shall have lapsed, and, as a condition of this award of Restricted Stock, the Executive
shall deliver a stock power, duly endorsed in blank, relating to the shares of Restricted Stock.

     2. Transfer Restrictions. Except as expressly provided herein, the shares of Restricted Stock
are non-transferable, otherwise than by will or the laws of descent and distribution, and may not
otherwise be assigned, pledged, hypothecated or otherwise disposed of and shall not be subject to
execution, attachment or similar process. Upon any attempt to effect any such disposition, or upon
the levy of any such process, the award provided for herein shall immediately become null and void,
and the shares of Restricted Stock shall be immediately forfeited to the Company.

     3. Restrictions. Subject to the forfeiture provision of Section 4 hereof, the restrictions on
the shares of Restricted Stock shall lapse and such shares shall vest in the Executive upon the
later of the satisfaction of the Performance-Based Conditions and the Service-Based Conditions, as
defined below:

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(a) The “Performance-Based Conditions” shall be deemed satisfied if and only if the Company shall
achieve any one of the following performance goals during either the 2007 fiscal year or the 2008
fiscal year:

	 	(i)	 	on a barrels of oil equivalent basis using prices of $62.65 per barrel of oil
and $8.06 per thousand cubic feet of natural gas, the Company’s proved oil and natural
gas reserves at December 31, 2007, minus the Company’s proved oil and natural gas
reserves at December 31, 2006, is greater than zero; or
	 
	 	(ii)	 	the Company’s finding and development costs for the year ended December 31,
2007 shall be less than the finding and development costs of at least 50% of the
companies constituting the compensation peer group set forth in Exhibit A hereto; with
the finding and development costs determined as (A) the sum of (a) the capital invested
for development of oil and natural gas properties during the year
ended December
31, 2007, plus (b) the capital invested for acquisition of oil and natural gas
properties during the year ended December 31, 2007, (B) divided by the sum of (x) the
increase in proved oil and natural gas reserves from December 31, 2006 to December 31,
2007, plus (y) oil and natural gas production during the year ended December 31, 2007;
or
	 
	 	(iii)	 	on a barrels of oil equivalent basis using prices of $62.65 per barrel of oil
and $8.06 per thousand cubic feet of natural gas, the Company’s proved oil and natural
gas reserves at December 31, 2008, minus the Company’s proved oil and natural gas
reserves at December 31, 2007 is greater than zero; or
	 
	 	(iv)	 	the Company’s finding and development costs for the year ended December 31,
2008 shall be less than the finding and development costs of at least 50% of the
companies constituting the compensation peer group set forth in Exhibit A hereto; with
the finding and development costs determined as (A) the sum of (a) the capital invested
for development of oil and natural gas properties during the year ended December 31,
2008, plus (b) the capital invested for acquisition of oil and natural gas properties
during the year ended December 31, 2008, (B) divided by the sum of (x) the increase in
proved oil and natural gas reserves from December 31, 2007 to December 31, 2008, plus
(y) oil and natural gas production during the year ended December 31, 2008.

If as of December 31, 2008, the Company shall not have achieved one of the Performance-Based
Conditions set forth above, then all shares of Restricted Stock shall be immediately
forfeited to the Company.

     (b) If the Executive remains continuously employed by the Company, the “Service-Based
Conditions” shall be deemed satisfied with respect to twenty-five percent (25%) of the shares of
Restricted Stock awarded hereunder on each February 12 of the years 2008, 2009, 2010 and 2011;
provided that restrictions shall not lapse with respect to any fraction of a share. If the
Executive does not remain continuously employed by the Company until the dates specified above, the
Service-Based Conditions shall not be satisfied with respect to the specified portion of

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the shares (except as expressly provided otherwise in Section 4), and all shares of
then-outstanding Restricted Stock shall be immediately forfeited to the Company.

     (c) Restrictions on shares as to which both the Performance-Based Conditions and the
Service-Based Conditions shall have been satisfied will lapse, and such shares shall no longer be
deemed Restricted Stock.

     4. Termination of Employment; Forfeiture.

     (a) Upon termination of the Executive’s employment with the Company or any subsidiary of the
Company (or the successor of any such company) as a result of the retirement of the Executive, the
shares of Restricted Stock, after such retirement, shall continue to be subject to the restrictions
set forth herein, which restrictions shall lapse and such shares shall vest in the Executive in
accordance with the provisions of Section 3 hereof as if the Executive had remained employed by the
Company. Retirement of the Executive shall mean (i) the termination of employment with the Company
on or after the last day the month in which the Executive attains age 65 and has, as of such date
of termination, been continuously employed by the Company for at least two years or (ii) otherwise
as the Committee shall determine, in its sole discretion.

     (b) Upon termination of the Executive’s employment with the Company or any subsidiary of the
Company (or the successor of any such company) as a result of the death of the Executive, the
Service-Based Conditions on all shares of Restricted Stock shall be deemed satisfied, and the
restrictions on such shares shall lapse and such shares shall vest in the Executive’s legal
representative, beneficiary or heir only if, and immediately after, the Company achieves one of the
Performance-Based Conditions set forth in Section 3 hereof.

     (c) Upon termination of the Executive’s employment with the Company or any subsidiary of the
Company (or the successor of any such company) as a result of the disability of the Executive, the
shares of Restricted Stock, after such disability, shall continue to be subject to the restrictions
set forth herein, which restrictions shall lapse and such shares shall vest in the Executive in
accordance with the provisions of Section 3 hereof as if the Executive had remained employed by the
Company; provided that if the Executive shall be disabled for a continuous period of 18 months,
then the Service-Based Conditions on all shares of Restricted Stock shall be deemed satisfied, and
the restrictions on such shares shall lapse and such shares shall vest in the Executive if and only
if prior to or during such disability the Company shall achieve one of the Performance-Based
Conditions set forth in Section 3 hereof, which lapse of restrictions and vesting shall occur on
the later of (i) the last day of such 18 months of continuous disability or (ii) the date the
Company shall achieve one of such Performance-Based Conditions if the Executive shall remain so
continuously disabled on such date. The disability of the Executive shall mean the total disability
of the Executive as determined in accordance with the Company’s long-term disability insurance
benefit plan, or if no such plan is then in existence, total and permanent disability as determined
by the Committee in its sole discretion.

     (d) Upon termination of the Executive’s employment with the Company or any subsidiary of the
Company (or the successor of any such company) for any reason other than as described in
subsections (a), (b) and (c) above, all shares of Restricted Stock as to which the

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restrictions thereon shall not have previously lapsed shall be immediately forfeited to the
Company.

     5. Distribution Following Termination of Restrictions. Upon the vesting and expiration of the
restrictions as to any portion of the Restricted Stock, the Company will cause a new certificate
evidencing such number of shares of Common Stock to be delivered to the Executive, or in the case
of his death to his legal representative, beneficiary or heir, free of the legend regarding
transferability; provided that the Company shall not be obligated to issue any fractional shares of
Common Stock.

     6. Voting and Dividend Rights. During the period in which the restrictions provided herein
are applicable to the Restricted Stock, the Executive shall have the right to vote the shares of
Restricted Stock and to receive any cash dividends paid with respect thereto unless and until
forfeiture thereof. Any dividend or distribution payable with respect to shares of Restricted
Stock that shall be paid or distributed in shares of Common Stock shall be subject to the same
restrictions provided for herein, and the shares so paid or distributed shall be deemed Restricted
Stock subject to all terms and conditions herein. Any dividend or distribution (other than cash or
Common Stock) payable or distributable on shares of Restricted Stock, unless otherwise determined
by the Committee, shall be subject to the terms and conditions of this Agreement to the same extent
and in the same manner as the Restricted Stock is subject; provided that the Committee may make
such modifications and additions to the terms and conditions (including restrictions on transfer
and the conditions to the timing and degree of lapse of such restrictions) that shall become
applicable to such dividend or distribution as the Committee may provide in its absolute
discretion.

     7. Corporate Structure Change. Except as otherwise provided in the Plan in the case of a
Change in Control of the Company, in the event of any merger, consolidation, reorganization,
recapitalization, reclassification or other capital or corporate structure change of the Company,
the securities or other consideration receivable for or in conversion of or exchange for shares of
Restricted Stock shall be subject to the terms and conditions of this Agreement to the same extent
and in the same manner as the Restricted Stock is subject; provided that the Board of Directors may
make such modifications and additions to the terms and conditions (including restrictions on
transfer and the conditions to the timing and degree of lapse of such restrictions) that shall
become applicable to the securities or other consideration so receivable as the Board of Directors
may provide in its absolute discretion.

     8. Tax Withholding. The obligation of the Company to deliver any certificate to the Executive
pursuant to Section 5 hereof shall be subject to the receipt by the Company from the Executive of
any withholding taxes required as a result of the award of the Restricted Stock or lapsing of
restrictions thereon. Unless the Committee or the Board of Directors shall determine otherwise at
any time after the date hereof, the Executive may satisfy all or part of such withholding tax
requirement by electing to sell to the Company a designated number of unrestricted shares of Common
Stock held by the Executive at a price per share equal to the Fair Market Value of such shares,
provided that the aggregate value of the shares sold does not exceed the minimum required tax
withholding obligation.

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     9. Securities Laws Requirements. The Company shall not be required to issue shares of
Restricted Stock unless and until (i) such shares have been duly listed upon each stock exchange on
which the Common Stock is then registered and (ii) the Company has complied with applicable federal
and state securities laws.

     The Company may require the Executive to furnish to the Company, prior to the issuance of any
shares of Restricted Stock, an instrument, in such form as the Committee may from time to time deem
appropriate, in which the Executive represents that the shares of Restricted Stock acquired by him
hereunder are being acquired for investment and not with a view to the sale or distribution
thereof.

     10. Incorporation of Plan Provisions. This Agreement and the award of Restricted Stock
hereunder are made pursuant to the Plan and are subject to all of the terms and provisions of the
Plan as if the same were fully set forth herein. In the event that any provision of this Agreement
conflicts with the Plan, the provisions of the Plan shall control. The Executive acknowledges
receipt of a copy of the Plan and agrees that all decisions under and interpretations of the Plan
by the Committee shall be final, binding and conclusive upon the Executive. Capitalized terms not
otherwise defined herein shall have the same meanings set forth in the Plan for such terms.

     11. No Rights to Employment. Nothing contained in this Agreement shall confer upon the
Executive any right to continued employment by the Company or any subsidiary of the Company, or
limit in any way the right of the Company or any subsidiary to terminate or modify the terms of the
Executive’s employment at any time.

     12. Miscellaneous.

     (a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF DELAWARE WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICT OF LAWS.

     (b) This Agreement shall be binding upon and inure to the benefit of the Company and its
successors and assigns.

     (c) If any term or provision of this Agreement should be invalid or unenforceable, such
provision shall be severed from this Agreement, and all other terms and provisions hereof shall
remain in full force and effect.

     (d) This Agreement, including the relevant provisions of the Plan, constitutes the entire
agreement between the parties with respect to the subject matter hereof and supersedes all prior
agreements and understandings, both written and oral, with respect to the subject hereof. This
Agreement may not be amended, except by an instrument in writing signed by the Company and the
Executive.

     (e) This Agreement may be executed in one or more counterparts, each of which shall be an
original, but all of which together shall constitute one and the same instrument.

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     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above
written.

	 	 	 	 	 
	 	ENCORE ACQUISITION COMPANY

 	 
	 	By  	 	 
	 	 	Jon S. Brumley 	 
	 	 	President and Chief Executive Officer 	 
	 
	 	EXECUTIVE

 	 
	 	 	 
	 	_______________ 	 
	 	 	 	 

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Compensation Peer Group

     The following companies constitute the Company’s peer group for employee compensation
purposes. The following group may be modified from time to time by the Committee by adding or
deleting one or more companies as the Committee deems appropriate in its sole discretion; provided
that the peer group hereunder at any particular time shall be the same group of companies as the
peer group then used for employee compensation purposes.

Bill Barrett Corporation

Cabot Oil & Gas Corporation

Chesapeake Energy Corporation

Cimarex Energy Co.

Comstock Resources, Inc.

Denbury Resources Inc.

Energy Partners, Ltd.

EOG Resources, Inc.

Forest Oil Corporation

The Houston Exploration Company

Newfield Exploration Co.

Petrohawk Energy Corporation

Pioneer Natural Resources Company

Plains Exploration & Production Company

Pogo Producing Company

Quicksilver Resources Inc.

Range Resources Corporation

Southwestern Energy Company

St. Mary Land & Exploration Company

Swift Energy Company

XTO Energy Inc.

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