Document:

Filed by Bowne Pure Compliance

 

Exhibit 10.23

NONSTATUTORY STOCK OPTION AGREEMENT

This Nonstatutory Stock Option Agreement is made between BMC Software, Inc., a Delaware
corporation (the “Company”), and the recipient (“Executive”).

To carry out the purposes of the BMC Software, Inc. 2007 Incentive Plan (the “Plan”), by
affording Executive the opportunity to purchase shares of common stock, par value $.01, of the
Company (“Stock”), and in consideration of the mutual agreements and other matters set forth
herein, in the Plan, and in that certain Employment Agreement by and between the Company and
Executive, as the same may be amended from time to time (the “Employment Agreement”), the Company
and Executive hereby agree as follows:

1. Grant of Option. The Company hereby irrevocably grants to Executive the right and
option (“Option”) to purchase all or any part of the number of shares of Stock displayed for this
grant in your on-line brokerage account, on the terms and conditions set forth herein and in the
Plan, which Plan is incorporated herein by reference as a part of this Agreement. This Option
shall not be treated as an incentive stock option within the meaning of section 422(b) of the
Internal Revenue Code of 1986, as amended (the “Code”).

2. Purchase Price. The purchase price of Stock purchased pursuant to the exercise of
this Option shall be displayed in your on-line brokerage account. For all purposes of this
Agreement, fair market value of Stock shall be determined in accordance with the provisions of the
Plan.

3. Exercise of Option. Subject to the earlier expiration of this Option as herein
provided, this Option may be exercised, by written notice (in the form prescribed by the Company
from time to time) to the Company at its principal executive office addressed to the attention of
the President or the Treasurer, at any time and from time to time after the date of grant hereof,
but, this Option shall not be exercisable for more than a percentage of the aggregate number of
shares offered by this Option determined in accordance with the following schedule:

This Option becomes exercisable with respect to the first 2.08333% of the shares subject to this
Option when you complete 1 month of continuous service from the Date of Grant and with respect to
an additional 1/48th of shares subject to this option when you complete each month of
continuous service thereafter.

Notwithstanding the foregoing, if, within the 12-month period beginning on the date upon which a
Change of Control occurs, Executive experiences a Termination of Employment without Cause or due to
a resignation by the Executive within 60 days of an event that constitutes Good Reason, then this
Option shall become immediately and fully exercisable on the date of such termination. For
purposes of the preceding sentence, the terms “Change of Control,” “Cause” and “Good Reason” shall
have the meanings assigned to such terms in the Employment Agreement. Additionally, in the event
Executive takes an unpaid leave of absence from the Company (1) Executive’s right to exercise this
Option shall be suspended three months after the beginning of such leave, (2) Executive’s right to
exercise this Option shall be reinstated if Executive returns to active employment with the Company

 

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within 12 months after the beginning of such leave, and (3) if Executive does not return to active
employment with the Company within 12 months after the beginning of such leave, then, for purposes
of this Option, Executive shall be considered to have experienced a Termination of Employment on
the date such leave began. Further, notwithstanding the exercise schedule set forth above, (i)
while Executive is on an unpaid leave of absence, further vesting of shares stops and this Option
is exercisable (to the extent provided in the preceding sentence) only as to the number of shares
Executive was entitled to purchase hereunder as of the date such leave began, and (ii) if Executive
returns to active employment with the Company within 12 months after the beginning of
such leave, then the exercise schedule set forth above shall be reinstated (subject to the
provisions of clause (i) of this sentence).

This Option is not transferable otherwise than by bequest or the laws of descent and
distribution. This Option may be exercised only while Executive remains an employee of the Company
and will terminate and cease to be exercisable upon Executive’s Termination of Employment, except
that:

(a) If the Termination of Employment occurs by reason of Disability, then this Option
may be exercised by Executive (or Executive’s estate or the person who acquires this Option
by will or the laws of descent and distribution or otherwise by reason of the death of
Executive) at any time during the period of one year following such termination, but only as
to the number of shares Executive was entitled to purchase hereunder as of the date of such
Termination of Employment.

(b) If Executive dies while in the employ of the Company, then Executive’s estate, or
the person who acquires this Option by will or the laws of descent and distribution or
otherwise by reason of the death of Executive, may exercise this Option at any time during
the period of one year following the date of Executive’s death, as follows: (i) if Executive
had attained age 65 at the time of Executive’s death, then this Option may be exercised in
full; and (ii) if Executive had not attained age 65 at the time of Executive’s death, then
this Option may be exercised only as to the number of shares Executive was entitled to
purchase hereunder as of the date of Executive’s death.

(c) If the Termination of Employment is for any reason other than as described in (a) or
(b) above, then, unless such Termination of Employment is for Cause (as such term is defined
in the Employment Agreement as in effect on its original effective date) or as otherwise
provided in Paragraph 7 below, this Option may be exercised by Executive at any time during
the period of one year following such termination, or by Executive’s estate (or the person
who acquires this Option by will or the laws of descent and distribution or otherwise by
reason of the death of Executive) during a period of one year following Executive’s death if
Executive dies during such one year period, but in each case only as to the number of shares
Executive was entitled to purchase hereunder upon exercise of this Option as of the date of
such Termination of Employment.

This Option shall not be exercisable in any event after the expiration of six years from the date
of grant hereof, and this Option shall not become exercisable with respect to any additional shares
after the Executive’s Termination of Employment. Except as provided in Paragraph 4, the purchase
price of shares as to which this Option is exercised shall be paid in full at the time of exercise
in cash (including check, bank draft or money order payable to the order of the Company). No
fraction of a share of Stock shall be issued by the Company upon exercise of an Option or accepted
by the Company in payment of the purchase price thereof; rather, Executive shall provide a cash
payment for such amount as is necessary to effect the issuance and acceptance of only whole shares
of Stock. Unless and until a certificate or certificates representing such shares shall have been
issued by the Company to Executive, Executive (or the person permitted to exercise this Option in
the event of Executive’s death) shall not be or have any of the rights or privileges of a
stockholder of the Company with respect to shares acquirable upon an exercise of this Option.

 

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4. Cashless Exercise. Executive (or the person permitted to exercise this Option in
the event of Executive’s death) may direct, in a properly executed written notice, a cashless
exercise of this Option pursuant to the procedures established by the Committee and in effect on
the date of such exercise of this Option. Notwithstanding the foregoing, the Company shall not be
required to comply with, and may unilaterally terminate, the right of Executive (or such person) to
request a cashless exercise of this Option if, as a result of a change in the
accounting rules and regulations applicable to the Company, or the interpretation thereof,
compliance with such provisions will result in the imposition of adverse financial reporting
requirements on the Company.

5. Withholding of Tax. To the extent that the exercise of this Option or the
disposition of shares of Stock acquired by exercise of this Option results in compensation income
to Executive for federal, state or foreign income tax purposes, Executive shall deliver to the
Company at the time of such exercise or disposition such amount of money or shares of Stock as the
Company may require to meet its obligation under applicable tax laws or regulations, and, if
Executive fails to do so, the Company is authorized to withhold from any cash or Stock remuneration
then or thereafter payable to Executive any tax required to be withheld by reason of such resulting
compensation income. Upon an exercise of this Option, the Company is further authorized in its
discretion to satisfy any such withholding requirement out of any cash or shares of Stock
distributable to Executive upon such exercise.

6. Status of Stock. Until the shares of Stock acquirable upon the exercise of this
Option have been registered for issuance under the Securities Act of 1933, as amended (the “Act”),
the Company will not issue such shares unless the holder of this Option provides the Company with a
written opinion of legal counsel, who shall be satisfactory to the Company, addressed to the
Company and satisfactory in form and substance to the Company’s counsel, to the effect that the
proposed issuance of such shares to such Option holder may be made without registration under the
Act. In the event exemption from registration under the Act is available upon an exercise of this
Option, Executive (or the person permitted to exercise this Option in the event of Executive’s
death), if requested by the Company to do so, will execute and deliver to the Company in writing an
agreement containing such provisions as the Company may require to assure compliance with
applicable securities laws.

Executive agrees that the shares of Stock which Executive may acquire by exercising this
Option will not be sold or otherwise disposed of in any manner which would constitute a violation
of any applicable federal, state, or foreign securities laws. Executive also agrees that (a) the
certificates representing the shares of Stock purchased under this Option may bear such legend or
legends as the Company deems appropriate in order to assure compliance with applicable securities
laws, (b) the Company may refuse to register the transfer of the shares of Stock purchased under
this Option on the stock transfer records of the Company if such proposed transfer would in the
opinion of counsel satisfactory to the Company constitute a violation of any applicable securities
law, and (c) the Company may give related instructions to its transfer agent, if any, to stop
registration of the transfer of the shares of Stock purchased under this Option.

 

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7. Obligations under the Employment Agreement. In connection with Executive’s
employment by the Company, the Company or an Affiliate thereof shall provide Executive with access
to the confidential information of the Company and its Affiliates, or shall provide Executive the
opportunity to develop business good will inuring to the benefit of the Company and its Affiliates,
or shall entrust business opportunities to Executive. Executive has agreed, and hereby agrees, as
specified in more detail in the Employment Agreement and/or Executive’s Invention and
Non-Disclosure Agreement with the Company, to maintain the confidentiality of the Company’s and its
Affiliates’ information and to exercise the highest measures of fidelity and loyalty in the
protection and preservation of the Company’s and its Affiliates’ goodwill and business
opportunities. As part of the consideration for the Option granted to Executive hereunder; to
protect the Company’s and its Affiliates’ confidential information, the business good will of the
Company and its Affiliates that has been and will in the future be developed in Executive, or the
business opportunities that have been and will in the future be disclosed or entrusted to Executive
by the Company and its Affiliates; and as an additional incentive for the Company and Executive to
enter into this Agreement, the Company and Executive agree that if, during the term of Executive’s
employment with the Company or within a 24-month period following the date upon which Executive
terminates employment with the Company, Executive fails for any reason to comply with any of the
restrictive covenants set forth in Sections 7 and 8 of the Employment Agreement (as in effect on
the original effective date of the Employment Agreement), then (a)
this Option shall immediately terminate and cease to be exercisable and (b) the Company shall
be entitled to recover from Executive, and Executive shall pay to the Company, an amount of money
equal to A multiplied by B, where A equals the amount of the gain, if any, that Executive
received from the exercise of this Option during the period beginning on the date that is one year
before the date of Executive’s termination of employment with the Company and ending on the date
this Option terminates and ceases to be exercisable as provided herein, and B equals the fraction X
divided by Y, where X equals 730 minus the number of consecutive days following
Executive’s Termination of Employment during which Executive remained in compliance with the
restrictive covenants set forth in Sections 7 and 8 of the Employment Agreement, and Y equals 730.

If any of the restrictions set forth in this Paragraph 7 are found by a court to be
unreasonable, or overly broad in any manner, or otherwise unenforceable, the parties hereto intend
for such restrictions to be modified by the court so as to be reasonable and enforceable and, as so
modified, to be fully enforced.

8. Employment Relationship. For purposes of this Agreement, Executive shall be
considered to be in the employment of the Company as long as Executive remains an employee of
either the Company, an Affiliate or a corporation or a parent or subsidiary of such corporation
assuming or substituting a new option for this Option. Any question as to whether and when there
has been a Termination of Employment, and the cause of such termination, shall be determined by the
Committee charged with the general administration of the Plan, and its determination shall be
final. Unless otherwise provided in a written employment agreement, nothing herein shall modify
the at-will nature of the employment relationship between Executive and the Company.

 

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9. Surrender of Option. At any time and from time to time prior to the termination of
this Option, Executive may surrender all or a portion of this Option to the Company for no
consideration by providing written notice to the Company at its principal executive office
addressed to the attention of the President or the Treasurer. Such notice shall specify the number
of shares with respect to which this Option is being surrendered and, if this Option is being
surrendered with respect to less than all of the shares then subject to this Option, then such
notice shall also specify the date upon which this Option became (or would become) exercisable in
accordance with Paragraph 3 with respect to the shares being surrendered.

10. Binding Effect; Controlling Document. This Agreement shall be binding upon and
inure to the benefit of any successors to the Company and all persons lawfully claiming under
Executive. In the event of a conflict between the text of this Agreement and the Employment
Agreement, the text of this Agreement shall control.

11. Plan Provisions Control. This Agreement is subject to the terms of the
Plan. To the extent that any of the terms of this Agreement are inconsistent with the provisions
of the Plan, the provisions of the Plan control. Any capitalized terms contained herein which are
not otherwise defined in this Agreement have the meaning ascribed to such terms in the Plan.

12. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF TEXAS, UNITED STATES OF AMERICA, APPLICABLE TO CONTRACTS MADE AND TO
BE PERFORMED IN SUCH STATE WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAWS.

IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by its officer
thereunto duly authorized, and Executive has executed this Agreement by electronic acceptance via
the on-line brokerage system, all as of the day and year first above written.

			
	 	 	 
	BMC Software, Inc.:	 	 
	 	 	 
	
	 	Senior Senior Vice President, Administration

 

-5-Filed by Bowne Pure Compliance

 

Exhibit 10.24

Form Agreement

PERFORMANCE-BASED RESTRICTED STOCK AWARD AGREEMENT

BMC Software, Inc., a Delaware corporation (the “Company”), hereby grants to the Recipient this
Performance-Based Restricted Stock Award (this “Award”) effective as of the Grant Date pursuant to
the terms of this Performance-Based Restricted Stock Award Agreement (this “Agreement”). The Award
and this Agreement are subject to all of the terms and conditions of this Performance-Based
Restricted Stock Award and the BMC Software, Inc. 2007 Incentive Plan (the “Plan”), a copy of which
is attached hereto. Unless otherwise specified, capitalized terms used in this Agreement shall
have the meanings specified in the Plan. The terms and conditions of the Plan are incorporated
herein by this reference and govern except to the extent that this Agreement provides otherwise.

RECIPIENT NAME:

GRANT DATE:

RESTRICTED SHARES: 
 _____ 
SHARES OF THE COMPANY’S COMMON STOCK SUBJECT TO THE
PERFORMANCE-BASED VESTING REQUIREMENTS SET FORTH IN THIS AGREEMENT (“RESTRICTED
SHARES”). THE VESTING TERMS ARE SET FORTH IN THE TERMS AND CONDITIONS ATTACHED HERETO
AS ANNEX A AND THE VESTING SCHEDULE ATTACHED HERETO AS ANNEX B AND SUCH ANNEXES ARE
INCORPORATED HEREIN BY THIS REFERENCE.

By accepting this Performance-Based Restricted Stock Award and any shares of common stock of the
Company (“Common Stock”) issued pursuant to this Performance-Based Restricted Stock Award,
Recipient agrees to the terms and conditions set forth herein (the “Terms and Conditions”) and
acknowledges receipt of a copy of the Plan. Recipient represents that Recipient has read and
understands the terms of the Plan and this Performance-Based Restricted Stock Award, and accepts
this Performance-Based Restricted Stock Award subject to all such terms and conditions, including
any further amendments to the Plan. Recipient also acknowledges that he or she should consult a
tax advisor regarding the tax aspects of this Award. Recipient is further hereby advised that he
or she may not rely on the Company for any opinion or advice as to the personal tax implications of
this Award. IF RECIPIENT DOES NOT ACCEPT THIS AWARD, HE OR SHE MUST NOTIFY HUMAN RESOURCES,
ATTENTION MICHAEL JONES, IN WRITING WITHIN 30 DAYS OF GRANT DATE.

IN WITNESS WHEREOF, this Agreement has been executed by the Company and Recipient to be effective
as of the Grant Date specified above.

	 	 	 
	EMPLOYEE:

	 	BMC Software, Inc.:
	 
 
	 	
	 

Signature

	 	 
	 
	 	 
	 

	 	Michael Vescuso
	 

Print Name

	 	Senior
Vice President, Administration

 

 

 

ANNEX A

TO

PERFORMANCE-BASED RESTRICTED STOCK AWARD AGREEMENT

TERMS AND CONDITIONS

1. Award. Pursuant to the Plan the Restricted Shares shall be issued as hereinafter
provided in Recipient’s name subject to certain restrictions thereon.

2. Definitions. For purposes of this Agreement, the terms “Cause,” “Change of
Control” and “Good Reason” shall have the meanings assigned to such terms in the Employment
Agreement (as defined below) or Change of Control Agreement (as defined below), as applicable to
Recipient, and the following terms shall have the meanings indicated below:

	 	(a)	 	“Change of Control Termination” shall mean a termination of
Recipient’s employment with the Company within the 12-month period beginning on
the date upon which a Change of Control occurs, which termination of employment
is by the Company without Cause or by Recipient within 60 days of an event that
constitutes Good Reason.

	 
	 	(b)	 	“Change of Control Agreement” shall mean the Change of Control
Agreement, if any, between the Company and Recipient.

	 
	 	(c)	 	“Employment Agreement” shall mean the Employment Agreement, if any,
between the Company and Recipient, as the same may be amended from time to time.

	 
	 	(d)	 	“Forfeiture Restrictions” shall mean the restrictions to which the
Restricted Shares are subject as described in Section 3(a) hereof.

3. Restricted Shares. The following restrictions apply to the Restricted Shares:

(a) Forfeiture Restrictions. The Restricted Shares shall not be sold, assigned,
pledged, exchanged, hypothecated or otherwise transferred, encumbered or disposed of to the
extent then subject to the Forfeiture Restrictions, and except as provided in (b) below, in
the event Recipient’s employment with the Company shall terminate for any reason, Recipient
shall, for no consideration, forfeit to the Company all Restricted Shares to the extent then
subject to the Forfeiture Restrictions. The Forfeiture Restrictions shall be binding upon
and enforceable against any transferee of the Restricted Shares.

(b) Lapse of Forfeiture Restrictions. With respect to each Performance Period
(as defined in Annex B), the Forfeiture Restrictions shall lapse as to the Restricted Shares
in accordance with the performance-based vesting schedule set forth on Annex B (the “Vesting
Schedule”), provided that Recipient has been continuously employed by the Company (or one of
its affiliates) from the Grant Date through the date the Committee certifies the results for
such Performance Period (the “Certification Date”). The Committee shall determine the
Company’s actual performance and shall certify such results as soon as reasonably practicable
following the completion of each Performance Period. To the extent that the Vesting Schedule
provides for partial attainment against a performance target and such performance is
achieved, then the Forfeiture Restrictions shall lapse as to the corresponding percentage of
Restricted Shares set forth on the Vesting Schedule. To the extent that a performance target
is not achieved, the corresponding percentage of Restricted Shares as set forth on the
Vesting Schedule shall be forfeited to the Company. The Company shall not issue fractional
 shares and shall round to the nearest whole share when calculating vesting and lapsing of the
Forfeiture Restrictions.

 

2

 

Further, the Forfeiture Restrictions shall lapse as to all of the Restricted Shares then
subject to the Forfeiture Restrictions on the date Recipient incurs a Change of Control
Termination.

(c) Book Entry and Certificates. The Company shall instruct its transfer agent
to record an entry in the Company’s shareholder records for the Restricted Shares in the
Recipient’s name, pursuant to which Recipient shall have all of the rights of a shareholder
of the Company with respect to the Restricted Shares, including, without limitation, voting
rights and the right to receive dividends (provided, however, that dividends paid in shares
of the Company’s stock (“Stock Dividends”) shall be subject to the Forfeiture Restrictions).
Recipient may not sell, transfer, pledge, exchange, hypothecate
or otherwise dispose of the Restricted Shares unless and until the Forfeiture Restrictions
have lapsed and a breach of the terms of this Agreement shall cause a forfeiture of the
Restricted Shares. As soon as practicable following the lapse of the Forfeiture Restrictions
as to any portion of the Restricted Shares and any Stock Dividends thereon, the Company shall
cause the restrictions to be lifted as to such shares and deposit such shares via electronic
share transfer (DWAC) in an account in the name of Recipient at a broker of the Company’s
choosing and shall notify Recipient of such action.

(d) Corporate Acts. The existence of the Restricted Shares shall not affect in
any way the right or power of the Board or the shareholders of the Company to make or
authorize any adjustment, recapitalization, reorganization or other change in the Company’s
capital structure or its business, any merger or consolidation of the Company, any issue of
debt or equity securities, the dissolution or liquidation of the Company or any sale, lease,
exchange or other disposition of all or any part of its assets or business or any other
corporate act or proceeding. The prohibitions of Section 3(a) hereof shall not apply to the
transfer of Restricted Shares pursuant to a plan of reorganization of the Company, but any
stock, securities or other property received in exchange therefor shall also become subject
to the Forfeiture Restrictions and provisions governing the lapsing of such Forfeiture
Restrictions applicable to the original Restricted Shares for all purposes of this Agreement
and any certificates representing such stock, securities or other property shall be legended
to show such restrictions.

4. Tax Matters. RECIPIENT UNDERSTANDS THAT THE GRANT OF THIS AWARD, THE LAPSE OF THE
FORFEITURE RESTRICTIONS, THE ISSUANCE OF THE COMMON STOCK UPON A LAPSE OF THE FORFEITURE
RESTRICTIONS, AND THE SALE OF SUCH COMMON STOCK, MAY HAVE TAX IMPLICATIONS FOR RECIPIENT.
RECIPIENT SHOULD CONSULT HIS OR HER OWN TAX ADVISOR. RECIPIENT ACKNOWLEDGES THAT HE OR SHE IS NOT
RELYING ON THE COMPANY FOR ANY TAX, FINANCIAL OR LEGAL ADVICE. IT IS SPECIFICALLY UNDERSTOOD BY
THE RECIPIENT THAT NO REPRESENTATIONS ARE MADE AS TO ANY PARTICULAR TAX TREATMENT WITH RESPECT TO
THIS AWARD. To the extent that the receipt of the Restricted Shares or the lapse of any Forfeiture
Restrictions results in compensation income to Recipient for federal, state or foreign income tax
purposes, the Company may withhold the number of whole Restricted Shares having a market value
(based on the closing price of the Company’s common stock on the Grant Date or the Certification
Date, as applicable) equal to any tax required to be withheld by reason of such compensation
income. The Company is also authorized to withhold from Recipient’s payroll check any additional
funds to make up the difference between the required tax withholding amount and the value of the
whole Restricted Shares calculated in the preceding sentence, or require payment of such amount
from Recipient, such that the Company does not have to withhold a fractional Restricted Share for
tax withholding purposes.

 

3

 

5. Status of Stock. The Restricted Shares issued under this Agreement will not be
sold or otherwise disposed of in any manner that would constitute a violation of any applicable
federal or state securities laws. The certificates, if any, representing the Restricted Shares may
bear such legend or legends as the Committee deems appropriate in order to reflect the Forfeiture
Restrictions and to assure compliance with applicable securities laws. The Company may refuse to
register the transfer of the Restricted Shares on the stock transfer records of the Company if such
proposed transfer would constitute a violation of the Forfeiture Restrictions, this Agreement or,
in the opinion of counsel satisfactory to the Company, of any applicable securities law. The
Company may give related instructions to its transfer agent, if any, to stop registration of the
transfer of the Restricted Shares in violation of this Agreement or any applicable law.

6. Obligations Upon Termination of Employment. In connection with Recipient’s
employment by the Company, the Company or an Affiliate shall provide Recipient with access to the
confidential information of the Company and its Affiliates, or shall provide Recipient the
opportunity to develop business good will inuring to the benefit of the Company and its Affiliates,
or shall entrust business opportunities to Recipient. Recipient has agreed, and hereby agrees, as
specified in more detail in the Employment Agreement and/or Recipient’s Invention and
Non-Disclosure Agreement with the Company, to maintain the confidentiality of the Company’s and its
Affiliates’ information and to exercise the highest measures of fidelity and loyalty in the
protection and preservation of the Company’s and its Affiliates’ goodwill and business
opportunities. As part of the consideration for the Restricted Shares, to protect the Company’s
and its Affiliates’ confidential information, the business good will of the Company and its
Affiliates that has been and will in the future be developed in Recipient, and the business
opportunities that have been and will in the future be disclosed or entrusted to Recipient by the
Company and its Affiliates, and as an additional incentive for the Company and Recipient to enter
into this Agreement, the Company and Recipient agree that if, during the term of Recipient’s
employment with the Company or its Affiliates or within a 12-month period (or such longer period,
if any, as required for non-competition by Recipient under the terms of his or her Employment
Agreement) following the date upon which Recipient terminates employment with the Company (the
“Restrictive Period”), Recipient fails for any reason to comply with any of the restrictive
covenants set forth in the Employment Agreement (as in effect on the original effective date of the
Employment Agreement), then the Company shall be entitled to recover from Recipient, and Recipient
shall pay to the Company, an amount of money equal to A multiplied by B, where A equals the
value
(determined as of the date the Forfeiture Restrictions lapse) of the Restricted Shares with respect
to which the Forfeiture Restrictions lapse during the one-year period preceding (and including) the
date of Recipient’s termination of employment with the Company and its Affiliates, and B equals the
fraction X divided by Y, where X equals the number of days in the Restrictive Period
minus the number of consecutive days following Recipient’s termination of employment with
the Company during which Recipient remained in compliance with the restrictive covenants set forth
in the Employment Agreement, and Y equals the number of days in the Restrictive Period.

 

4

 

7. Employment Relationship. For purposes of this Agreement, Recipient shall be
considered to be in the employment of the Company as long as Recipient remains an employee of
either the Company, an Affiliate, or a successor corporation. Nothing in the adoption of the Plan,
nor the award of the Restricted Shares thereunder pursuant to this Agreement, shall confer upon
Recipient the right to continued employment by the Company or any of its Affiliates or affect in
any way the right of the Company to terminate such employment at any time. Unless otherwise
specifically provided in a written employment agreement or by applicable law, Recipient’s
employment by the Company shall be on an at-will basis, and the employment relationship may be
terminated at any time by either Recipient or the Company for any reason whatsoever, with or
without cause. Any question as to whether and when there has been a Termination of Employment of
the Recipient with the Company, and the cause of such termination, shall be determined by the
Committee, and its determination shall be final.

8. Notices. Any notices or other communications provided for in this Agreement shall
be sufficient if in writing. In the case of Recipient, such notices or communications shall be
effectively delivered if hand delivered to Recipient at his principal place of employment or if
sent by registered or certified mail to Recipient at the last address Recipient has filed with the
Company. In the case of the Company, such notices or communications shall be effectively delivered
if sent by registered or certified mail to the Company at its principal executive offices.

9. Entire Agreement; Amendment. This Agreement replaces and merges all previous
agreements and discussions relating to the same or similar subject matters between Recipient and
the Company and constitutes the entire agreement between Recipient and the Company with respect to
the subject matter of this Agreement. This Agreement may not be modified in any respect by any
verbal statement, representation or agreement made by any employee, officer, or representative of
the Company or by any written agreement unless signed by an officer of the Company who is expressly
authorized by the Company to execute such document.

10. Binding Effect; Controlling Document. This Agreement shall be binding upon and
inure to the benefit of any successors to the Company and all persons lawfully claiming under
Recipient. In the event of a conflict between the text of this Agreement and the Employment
Agreement, the text of this Agreement shall control.

11. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF TEXAS, UNITED STATES OF AMERICA, APPLICABLE TO CONTRACTS MADE AND TO
BE PERFORMED IN SUCH STATE WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAWS.

 

5

 

ANNEX B

TO

PERFORMANCE-BASED RESTRICTED STOCK AWARD AGREEMENT

VESTING SCHEDULE

 

6

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