EXHIBIT 10(i)
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Parker Drilling Company
1994 Non-Employee
Director Stock Option Plan
PARKER DRILLING COMPANY
1994 NON-EMPLOYEE
DIRECTOR STOCK OPTION PLAN
TABLE OF CONTENTS
Page
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ARTICLE I Establishment........................................... 1
1.1 Purpose................................................. 1
ARTICLE II Definintions............................................ 1
2.1 Affiliate............................................... 1
2.2 Agreement or Option Agreement........................... 1
2.3 Board of Directors or Board............................. 1
2.4 Cause................................................... 1
2.5 Change in Control....................................... 2
2.6 Change in Control Price................................. 3
2.7 Code or Internal Revenue Code........................... 3
2.8 Commission.............................................. 3
2.9 Committee............................................... 3
2.10 Common Stock............................................ 3
2.11 Company................................................. 3
2.12 Director................................................ 3
2.13 Disability.............................................. 3
2.14 Disinterested Person.................................... 4
2.15 Effective Date.......................................... 4
2.16 Exchange Act............................................ 4
2.17 Fair Market Value....................................... 4
2.18 Grant Date.............................................. 4
2.19 Notice Date............................................. 4
2.20 Option.................................................. 4
2.21 Option Period........................................... 4
2.22 Option Price............................................ 4
2.23 Participant............................................. 4
2.24 Plan.................................................... 5
2.25 Representative.......................................... 5
2.26 Rule 16b-3.............................................. 5
2.27 Securities Act.......................................... 5
2.28 Spread.................................................. 5
2.29 Termination of Directorship............................. 5
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TABLE OF CONTENTS
Page
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ARTICLE III Administration.......................................... 5
3.1 Committee Structure and Authority....................... 6
ARTICLE IV Stock Subject to Plan................................... 7
4.1 Number of Shares........................................ 8
4.2 Release of Shares....................................... 8
4.3 Restrictions on Shares.................................. 8
4.4 Shareholder Rights...................................... 8
4.5 Best Efforts to Register................................ 9
4.6 Anti-Dilution........................................... 9
ARTICLE V Option Grants........................................... 9
5.1 Eligibility............................................. 9
5.2 Grant and Exercise...................................... 9
5.3 Terms and Conditions....................................10
ARTICLE VI Change in Control Provisions............................12
6.1 Impact of Event.........................................12
ARTICLE VII Miscellaneous..........................................12
7.1 Amendments and Termination..............................12
7.2 General Provisions......................................13
7.3 Rights with Respect to Continuance of
Employment..............................................14
7.4 Options in Substitution for Options
Granted by Other Corporations...........................14
7.5 Procedure for Adoption..................................14
7.6 Procedure for Withdrawal................................15
7.7 Delay...................................................15
7.8 Headings................................................15
7.9 Severability............................................15
7.10 Successors and Assigns..................................15
7.11 Entire Agreement........................................15
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PARKER DRILLING COMPANY
1994 NON-EMPLOYEE
DIRECTOR STOCK INCENTIVE PLAN
ARTICLE I
Establishment
1.1 Purpose.
The Parker Drilling Company 1994 Director Stock Incentive Plan ("Plan")
is hereby established by Parker Drilling Company ("Company"). The purpose of
the Plan is to promote the overall financial objectives of the Company and its
shareholders by motivating directors of the Company who are not employees to
achieve long-term growth in shareholder equity in the Company and to retain
the association of those individuals. The Plan and the grant of awards
thereunder is expressly conditioned upon the Plan's approval by the security
holders of the Company to the extent required by Rule 16b-3 of the Securities
Exchange Act of 1934, as amended.
ARTICLE II
Definitions
For purposes of the Plan, the following terms are defined as set forth
below:
2.1 "Affiliate" means any individual, corporation, partnership,
association, joint-stock company, trust, unincorporated association or other
entity (other than the Company) that directly, or indirectly through one or
more intermediaries, controls, is controlled by, or is under common control
with, the Company including, without limitation, any member of an affiliated
group of which the Company is a common parent corporation as provided in
Section 1504 of the Code.
2.2 "Agreement" or "Option Agreement" means, individually or
collectively, any agreement entered into pursuant to the Plan pursuant to
which an Option is granted to a Participant.
2.3 "Board of Directors" or "Board" means the Board of Directors of the
Company.
2.4 "Cause" means an act or acts of dishonesty by the Participant
constituting a felony under applicable law and resulting or intending to
result directly or indirectly in gain to or personal enrichment of the
Participant at the Company's expense. Notwithstanding the foregoing, the
Participant shall not be deemed to have been terminated for Cause unless and
until there shall have been delivered to him a copy of a resolution, duly
adopted by the affirmative vote of not less than a majority of the entire
membership of the Board at a meeting of the Board called and held for that
purpose (after reasonable notice to him or her has been given or has been made
and an opportunity for him or her, together with his or her counsel, to be
heard before the Board), finding that in the good faith opinion of the Board
the Participant was guilty of conduct set forth above in the first sentence
hereof and specifying the particulars thereof in detail.
2.5 "Change in Control" means the happening of any of the following
events:
(a) there shall be consummated (i) any consolidation or merger of
the Company in which the Company is not the continuing or surviving
corporation or pursuant to which shares of the Company's common stock
would be converted into cash, securities or other property, other than a
merger of the Company in which the holders of the Company's common stock
immediately prior to the merger have substantially the same
proportionate ownership of common stock of the surviving corporation
immediately after the merger; or (ii) any sale, lease, exchange or other
transfer (in one transaction or a series of related transactions) of all
or substantially all of the assets of the Company; or
(b) the shareholders of the Company shall approve any plan or
proposal for the liquidation or dissolution of the Company; or
(c) any person (as such term is used in Sections 13(d) and
14(d)(2) of the Exchange Act), other than the Company or any employee
benefit plan sponsored by the Company, shall become the beneficial owner
(within the meaning of Rule 13d-3 under the Exchange Act) of securities
of the Company representing an amount greater than two times the
aggregate percentage held or controlled by R. L. Parker, his son R.
L. Parker, Jr. and the Robert L. Parker Trust (and apart from rights
accruing in special circumstances) having the right to vote in the
election of directors, as a result of a tender or exchange offer, open
market purchases, privately negotiated purchases or otherwise; or
(d) any three persons (as such term is used in Sections 13(d) and
14(d)(2) of the Exchange Act), other than the Company or any employee
benefit plan sponsored by the Company, shall become the beneficial owner
(within the meaning of Rule 13d-3 under the Exchange Act) of securities
of the Company whose ownership represents an amount greater than four
times the aggregate percentage held or controlled by R. L. Parker, his
son R. L. Parker, Jr. and the Robert L. Parker Trust (and apart from
rights accruing in special circumstances) having the right to vote in
the election of directors, as a result of a tender or exchange offer,
open market purchases, privately negotiated purchases or otherwise; or
(e) at any time during a period of two consecutive years,
individuals who at the beginning of such period constituted the Board of
Directors of the Company shall cease for any reason to constitute at
least a majority thereof, unless the election or the nomination for
election by the Company's shareholders of each new director during such
two-year period was approved by a vote of at least two-thirds of the
directors then still in office who were directors at the beginning of
such two-year period. A Change of Control shall not be deemed to have
occurred if banks or other creditors receive the Company's stock in
conjunction with transactions involving forgiveness of outstanding debt
or debt restructuring agreements.
(f) at any time an individual is elected to the Board of Directors
who was not nominated by the Board of Directors of the Company to stand
for election.
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2.6 "Change in Control Price" means the highest price per share (a) paid
in any transaction reported on the New York Stock Exchange Composite or other
national exchange on which such shares are listed or on NASDAQ, or (b) paid or
offered in any bona fide transaction related to a potential or actual Change
in Control of the Company at any time during the preceding sixty (60) day
period as determined by the Committee.
2.7 "Code" or "Internal Revenue Code" means the Internal Revenue Code of
1986, as amended, final Treasury Regulations thereunder and any subsequent
Internal Revenue Code.
2.8 "Commission" means the Securities and Exchange Commission or any
successor agency.
2.9 "Committee" means the person or persons who administer the Plan, as
further described in the Plan.
2.10 "Common Stock" means the shares of the regular voting Common Stock,
$.16 2/3 par value per share, whether presently or hereafter issued, and any
other stock or security resulting from adjustment thereof as described
hereinafter or the common stock of any successor to the Company which is
designated for the purpose of the Plan.
2.11 "Company" means the Parker Drilling Company, a Delaware
corporation, and includes any successor or assignee corporation or
corporations into which the Company may be merged, changed or consolidated;
any corporation for whose securities the securities of the Company shall be
exchanged; and any assignee of or successor to substantially all of the assets
of the Company.
2.12 "Director" means each and any director who serves on the Board and
who is not an officer or employee of the Company or any of its Affiliates.
2.13 "Disability" means a permanent and total disability as determined
under procedures established by the Committee for purposes of the Plan. The
determination of Disability for purposes of this Plan shall not be construed
to be an admission of disability for any other purpose.
2.14 "Disinterested Person" shall have the meaning set forth in Rule
16b-3, or any successor definition adopted by the Commission.
2.15 "Effective Date" means December 14, 1994 or such other date
specified by the Board at the time the Plan is approved by the Board.
2.16 "Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
2.17 "Fair Market Value" means, except as otherwise provided in this
Plan, the mean, as of any given date, between the highest and lowest reported
sales prices of the Common Stock on the New York Stock Exchange Composite Tape
or, if not listed on such exchange, any other national exchange on which the
Common Stock is listed or on NASDAQ. If there is no regular public trading
market for such stock, the Fair Market Value of the Common Stock shall be
determined by the Committee in good faith.
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2.18 "Grant Date" means (a) with respect to a Director on the Effective
Date, the first business day of the New York Stock Exchange in calendar year
1995, and (b) with respect to any person who continues as a Director or who
becomes a Director after the Effective Date, the first business day of the
principal exchange on which the Common Stock is traded (or, if applicable,
NASDAQ) in the calendar year immediately following each annual meeting of
shareholders of the Company (provided the person is a Director on such date).
2.19 "Notice Date" means the date established by the Committee as the
deadline for it to receive a Deferral Election or any other notification with
respect to an administrative matter in order to be effective under this Plan.
2.20 "Option" means the right to purchase the number of shares of Common
Stock specified by the Plan at a price and for a term fixed by the Plan, and
subject to such other limitations and restrictions as the Plan and the
Committee imposes.
2.21 "Option Period" means the period during which the Option shall be
exercisable in accordance with the Agreement and the Plan.
2.22 "Option Price" means the price at which the Common Stock may be
purchased under an Option.
2.23 "Participant" means any Director to whom an Option has been granted
under the Plan, and in the event a Representative is appointed for a
Participant or a former spouse becomes a Representative, then the term
"Participant" shall mean such appointed Representative, successor
Representative, or spouse as the case may be. The term shall also include any
person or entity to whom an Option has been transferred, including a trust for
the benefit of the Participant, the Participant's parents, spouse or
descendants, a partnership, the partners of which include any of the
foregoing, or a custodian under a uniform gifts to minors act or similar
statute for the benefit of the Participant's descendants, to the extent
permitted herein. Notwithstanding the foregoing, the term "Termination of
Directorship" shall mean the Termination of Directorship of the Participant.
2.24 "Plan" means the Parker Drilling Company 1994 Director Stock Option
Plan, as herein set forth and as may be amended from time to time.
2.25 "Representative" means (a) the person or entity acting as the
executor or administrator of a Participant's estate pursuant to the last will
and testament of a Participant or pursuant to the laws of the jurisdiction in
which the Participant had the Participant's primary residence at the date of
the Participant's death; (b) the person or entity acting as the guardian or
temporary guardian of a Participant; (c) the person or entity which is the
beneficiary of the Participant upon or following the Participant's death; or
(d) any person to whom an Option has been permissibly transferred; provided
that only one of the foregoing shall be the Representative at any point in
time as determined under applicable law and recognized by the Committee.
2.26 "Rule 16b-3" means Rule 16b-3, as promulgated under the Exchange
Act, as amended from time to time, or any successor thereto.
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2.27 "Securities Act" means the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
2.28 "Spread" means (a) prior to a Change in Control, the amount, on the
relevant date, by which the Fair Market Value of Common Stock exceeds the
Option Price and (b) with respect to a Change in Control, the amount by which
the Change in Control Price exceeds the Option Price.
2.29 "Termination of Directorship" means the occurrence of any act or
event that actually or effectively causes or results in the person's ceasing,
for whatever reason, to be a Director of the Company or of any Affiliate,
including, without limitation, death, Disability, removal, severance at the
election of the Participant, retirement, failure to be elected or stand for
election as a Director, or severance as a result of the discontinuance,
liquidation, sale or transfer by the Company or its Affiliates of all
businesses owned or operated by the Company or its Affiliates.
In addition, certain other terms used herein have definitions given to
them in the first place in which they are used.
ARTICLE III
Administration
3.1 Committee Structure and Authority. The Plan shall be administered
by the Committee which, except as provided herein, may be comprised of one or
more persons. The Committee shall be the Compensation Committee of the Board
of Directors, unless such committee does not exist or the Board establishes a
committee whose sole purpose is the administration of this Plan; provided that
only those members of the Compensation Committee of the Board who participate
in the decision relative to Options under the Plan shall be deemed to be part
of the "Committee" for purposes of the Plan. In the absence of an
appointment, the Board or the portion thereof that is a Disinterested Person
shall be the Committee. A majority of the Committee shall constitute a quorum
at any meeting thereof (including telephone conference) and the acts of a
majority of the members present, or acts approved in writing by a majority of
the entire Committee without a meeting, shall be the acts of the Committee for
purposes of this Plan. The Committee may authorize any one or more of its
members or an officer of the Company to execute and deliver documents on
behalf of the Committee. A member of the Committee shall not exercise any
discretion respecting himself or herself under the Plan. Any member of the
Committee may resign upon notice to the Board. The Committee may allocate
among one or more of its members, or may delegate to one or more of its
agents, such duties and responsibilities as it determines.
Among other things, the Committee shall have the authority, subject to
the terms of the Plan and the limitation of Rule 16b-3 so that the Plan is
described therein:
(a) to determine the terms and conditions of any Option hereunder
(including, but not limited to, the Option Price and Period, any
exercise restriction or limitation and any exercise acceleration or
forfeiture waiver regarding any Option and the shares of Common Stock
relating thereto);
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(b) to adjust the terms and conditions, at any time or from time
to time, of any Option, subject to the limitations of Section 7.1;
(c) to provide for the forms of Agreement to be utilized in
connection with this Plan;
(d) to determine whether a Participant has a Disability or a
retirement;
(e) to determine what securities law requirements are applicable
to the Plan, Options, and the issuance of shares of Common Stock and to
require of a Participant that appropriate action be taken with respect
to such requirements;
(f) to cancel, with the consent of the Participant or as otherwise
provided in the Plan or an Agreement, outstanding Options;
(g) to interpret and make a final determination with respect to
the remaining number of shares of Common Stock available under
Article IV;
(h) to require as a condition of the exercise of an Option or the
issuance or transfer of a certificate of Common Stock, the withholding
from a Participant of the amount of any federal, state or local taxes as
may be necessary in order for the Company or any other employer to
obtain a deduction or as may be otherwise required by law;
(i) to determine whether and with what effect an individual has
incurred a Termination of Directorship;
(j) to determine whether the Company or any other person has a
right or obligation to purchase Common Stock from a Participant and, if
so, the terms and conditions on which such Common Stock is to be
purchased;
(k) to determine the restrictions or limitations on the transfer
of Common Stock;
(l) to determine whether an Option is to be adjusted, modified or
purchased, or is to become fully exercisable, under the Plan or the
terms of an Agreement;
(m) to determine the permissible methods of Option exercise and
payment, including cashless exercise arrangements;
(n) to adopt, amend and rescind such rules and regulations as, in
its opinion, may be advisable in the administration of this Plan; and
(o) to appoint and compensate agents, counsel, auditors or other
specialists to aid it in the discharge of its duties.
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The Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall,
from time to time, deem advisable, to interpret the terms and provisions of
the Plan and any Option issued under the Plan (and any Agreement) and to
otherwise supervise the administration of the Plan. The Committee's policies
and procedures may differ with respect to Options granted at different times
and to different Participants.
Any determination made by the Committee pursuant to the provisions of
the Plan shall be made in its sole discretion, and in the case of any
determination relating to an Option, may be made at the time of the grant of
the Option or, unless in contravention of any express term of the Plan or an
Agreement, at any time thereafter. All decisions made by the Committee
pursuant to the provisions of the Plan shall be final and binding on all
persons, including the Company and Participants. Any determination shall not
be subject to de novo review if challenged in court.
ARTICLE IV
Stock Subject to Plan
4.1 Number of Shares. Subject to the adjustment under Section 4.6, the
total number of shares of Common Stock reserved and available for distribution
pursuant to Options under the Plan shall be 200,000 shares of Common Stock
authorized for issuance on the Effective Date. Such shares may consist, in
whole or in part, of authorized and unissued shares or treasury shares.
4.2 Release of Shares. If any shares of Common Stock that have been
optioned cease to be subject to an Option, if any shares of Common Stock that
are subject to any Option are forfeited, if any Option otherwise terminates
without issuance of shares of Common Stock being made to the Participant, or
if any shares (whether or not restricted) of Common Stock that were previously
issued under the Plan are received in connection with the exercise of an
Option, such shares, in the discretion of the Committee, may again be
available for distribution in connection with Options under the Plan.
4.3 Restrictions on Shares. Shares of Common Stock issued upon exercise
of an Option shall be subject to the terms and conditions specified herein and
to such other terms, conditions and restrictions as the Committee in its
discretion may determine or provide in the Option Agreement. The Company
shall not be required to issue or deliver any certificates for shares of
Common Stock, cash or other property prior to (i) the listing of such shares
on any stock exchange (or other public market) on which the Common Stock may
then be listed (or regularly traded), (ii) the completion of any registration
or qualification of such shares under federal or state law, or any ruling or
regulation of any government body which the Committee determines to be
necessary or advisable, and (iii) the satisfaction of any applicable
withholding obligation in order for the Company or an Affiliate to obtain a
deduction with respect to the exercise of an Option. The Company may cause
any certificate for any share of Common Stock to be delivered to be properly
marked with a legend or other notation reflecting the limitations on transfer
of such Common Stock as provided in this Plan or as the Committee may
otherwise require. The Committee may require any person exercising an Option
to make such representations and furnish such information as it may consider
appropriate in connection with the issuance or delivery of the shares of
Common Stock in compliance with applicable law or otherwise. Fractional
shares shall not be delivered, but shall be rounded to the next lower whole
number of shares.
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4.4 Shareholder Rights. No person shall have any rights of a shareholder
as to shares of Common Stock subject to an Option until, after proper exercise
of the Option or other action required, such shares shall have been recorded
on the Company's official shareholder records as having been issued or
transferred. Upon exercise of the Option or any portion thereof, the Company
will have thirty (30) days in which to issue the shares, and the Participant
will not be treated as a shareholder for any purpose whatsoever prior to such
issuance. No adjustment shall be made for cash dividends or other rights for
which the record date is prior to the date such shares are recorded as issued
or transferred in the Company's official shareholder records, except as
provided herein or in an Agreement.
4.5 Best Efforts To Register. The Company will register under the
Securities Act the Common Stock delivered or deliverable pursuant to Options
on Commission Form S-8 if available to the Company for this purpose (or any
successor or alternate form that is substantially similar to that form to the
extent available to effect such registration), in accordance with the rules
and regulations governing such forms, as soon as such forms are available for
registration to the Company for this purpose. The Company will use its best
efforts to cause the registration statement to become effective as soon as
possible and will file such supplements and amendments to the registration
statement as may be necessary to keep the registration statement in effect
until the earliest of (a) one year following the expiration of the Option
Period of the last Option outstanding, (b) the date the Company is no longer a
reporting company under the Exchange Act and (c) the date all Participants
have disposed of all shares delivered pursuant to any Option. The Company may
delay the foregoing obligation if the Committee reasonably determines that any
such registration would materially and adversely affect the Company's
interests or if there is no material benefit to Participants.
4.6 Anti-Dilution. In the event of any Company stock dividend, stock
split, combination or exchange of shares, recapitalization or other change in
the capital structure of the Company, corporate separation or division of the
Company (including, but not limited to, a split-up, spin-off, split-off or
distribution to Company shareholders other than a normal cash dividend), sale
by the Company of all or a substantial portion of its assets (measured on
either a stand-alone or consolidated basis), reorganization, rights offering,
a partial or complete liquidation, or any other corporate transaction, Company
share offering or event involving the Company and having an effect similar to
any of the foregoing, then the Committee shall adjust or substitute, as the
case may be, the number of shares of Common Stock available for Options under
the Plan, the number of shares of Common Stock covered by outstanding Options,
the exercise price per share of outstanding Options, and any other
characteristics or terms of the Options as the Committee shall deem necessary
or appropriate to reflect equitably the effects of such changes to the
Participants; provided, however, that any fractional shares resulting from
such adjustment shall be eliminated by rounding to the next lower whole number
of shares with appropriate payment for such fractional share as shall
reasonably be determined by the Committee.
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ARTICLE V
Option Grants
5.1 Eligibility. Each Director shall be eligible to be granted Options
to purchase shares of Common Stock as provided in the Plan.
5.2 Grant and Exercise. Each Director who is a Director on the Effective
Date shall be granted an Option on the Grant Date to purchase 5,000 shares of
Common Stock without further action by the Board or the Committee. On each
Grant Date after the Effective Date each person who is a Director on such
Grant Date shall be granted an Option to purchase 5,000 shares of Common Stock
without further action by the Board or the Committee. If the number of shares
of Common Stock available to grant under the Plan on a scheduled date of grant
is insufficient to make all automatic grants required to be made pursuant to
the Plan on such date, then each eligible Director shall receive an Option to
purchase a pro rata number of the remaining shares of Common Stock available
under the Plan; provided further, however, that if such proration results in
fractional shares of Common Stock, then such Option shall be rounded down to
the nearest number of whole shares of Common Stock. Once the total number of
shares received for issuance has been granted, no further shares shall be
granted. Each Option granted under this Plan shall be evidenced by an
Agreement, in a form approved by the Committee, which shall embody the terms
and conditions of such Option and which shall be subject to the express terms
and conditions set forth in the Plan.
5.3 Terms and Conditions. Options shall be subject to such terms and
conditions as shall be determined by the Committee and unless otherwise
provided in an Agreement shall include the following:
(a) Option Price. The Option Price of all Options shall be the
Fair Market Value per share on the Grant Date.
(b) Option Period. The Option Period of each Option shall be ten
(10) years.
(c) Exercisability. Subject to Section 6.1, Options shall be
exercisable upon the earliest of the date of the Participant's death or
Disability and the date that is the six-month anniversary of the Grant
Date. If the Committee provides that any Option is exercisable only in
installments, the Committee may at any time waive such installment
exercise provisions, in whole or in part. In addition, the Committee
may at any time accelerate the exercisability of any Option. An Option,
including any Options not yet exercised and the value of the Account not
yet distributed shall be forfeited if the Participant incurs a
Termination of Directorship due to Cause.
(d) Method of Exercise. A Participant desiring to exercise an
Option, in whole or in part, at any time during the Option Period must
give written notice of exercise on a form provided by the Committee (if
available) to the Company specifying the number of shares of Common
Stock subject to the Option to be purchased. Such notice shall be
accompanied by payment in full of the purchase price by cash or check or
such other form of payment as the Company may accept. If approved by
the Committee, payment in full or in part may also be made (i) by
delivering Common Stock already owned by the Participant having a
total Fair Market Value on the date of such delivery equal to the Option
Price; (ii) by the execution and delivery of a note or other evidence of
indebtedness (and any security agreement thereunder) satisfactory to the
Committee and permitted in accordance with Section 5.3(e); (iii) by
authorizing the Company to retain shares of Common Stock which would
otherwise be issuable upon exercise of the Option having a total Fair
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Market Value on the date of delivery equal to the Option Price; (iv) by
the delivery of cash or the extension of credit by a broker-dealer to
whom the Participant has submitted a notice of exercise or otherwise
indicated an intent to exercise (in accordance with Part 220,
Chapter II, Title 12 of the Code of Federal Regulations, so-called
"cashless" exercise); or (v) by any combination of the foregoing. No
shares of Common Stock shall be issued until full payment therefor has
been made.
(e) Company Loan or Guarantee. Upon the exercise of any Option and
subject to the pertinent Agreement and the discretion of the Committee,
the Company may at the request of the Participant:
(i) lend to the Participant, with recourse, an amount equal
to such portion of the Option Price as the Committee may
determine; or
(ii) guarantee a loan obtained by the Participant from a
third-party for the purpose of tendering the Option Price.
The terms and conditions of any loan or guarantee, including the term,
interest rate, and any security interest thereunder, shall be determined by
the Committee, except that no extension of credit or guarantee shall obligate
the Company for an amount to exceed the lesser of the aggregate Fair Market
Value per share of the Common Stock on the date of exercise, less the par
value of the shares of Common Stock to be purchased upon the exercise of the
Option, or the amount permitted under applicable laws or the regulations and
rules of the Federal Reserve Board and any other governmental agency having
jurisdiction.
(f) Non-transferability of Options. Except as provided in an Agreement,
no Option shall be transferable by the Participant other than by will or by
the laws of descent and distribution, and all Options shall be exercisable
during the Participant's lifetime only by the Participant. Notwithstanding
the foregoing, if and to the extent transferability is permitted by and exempt
under Rule 16b-3 and except as otherwise provided herein or in an Agreement,
every Option granted hereunder shall be freely transferable.
(g) Cashing Out of Option; Settlement of Spread Value in Stock. On
receipt of written notice of exercise any Option for which at least six months
has elapsed since the Grant Date (provided that such limitation of six months
shall not apply to an Option granted to a Participant who has died), the
Committee may elect to cash out all or part of the portion of any Option to be
exercised by paying the Participant an amount, in cash or Common Stock, equal
to the Spread times the number of shares of Common Stock subject to the Option
on the effective date of such cash out. Cash outs relating to Options held by
a Participant who is actually or potentially subject to Section 16(b) of the
Exchange Act shall comply with the "window period" provisions of Rule 16b-3,
to the extent applicable, and the Committee may determine the Spread by
applying the Fair Market Value based on the highest mean sales price of the
Common Stock on any exchange on which the Common Stock is listed (or NASDAQ)
on any day during such "window period".
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ARTICLE VI
Change in Control Provisions
6.1 Impact of Event. Notwithstanding any other provision of the Plan to
the contrary, in the event of a Change in Control:
(a) Any Options outstanding as of the date such Change in Control
and not then exercisable shall become fully exercisable to the full
extent of the original grant.
(b) Notwithstanding any other provision of the Plan, unless the
Committee shall provide otherwise in an Agreement, a Change in Control
is within six months of the Grant Date of the Option held by a
Participant (except a Participant who has died during such six month
period), such Option shall be cancelled in exchange for a payment to the
Participant on the date of the Participant's Termination of Directorship
equal to the Spread multiplied by the number of shares of Common Stock
granted under the Option, plus interest on such amount at the prime rate
determined from the date of the Change in Control to the date of the
Termination of Directorship.
ARTICLE VII
Miscellaneous
7.1 Amendments and Termination. The Board may amend, alter, discontinue
or terminate the Plan at any time, but no amendment, alteration,
discontinuation or termination shall be made which would (a) reduce or impair
the rights of a Participant under an Option theretofore granted without the
Participant's consent, except such an amendment made to cause the Plan to
qualify for the exemption provided by Rule 16b-3 or (b) disqualify the Plan
from the exemption provided by Rule 16b-3. In addition, no such amendment
shall be made without the approval of the Company's shareholders to the extent
such approval is required by law or agreement. Notwithstanding the foregoing,
the Plan may not be amended more than once every six (6) months to change the
Plan provisions listed in Rule 16b-3, other than to comport with changes in
the Code or Rule 16b-3.
The Committee may amend the Plan at any time provided that (a) no
amendment shall impair the rights of any Participant under any Option
theretofore granted without the Participant's consent, (b) no amendment shall
disqualify the Plan from the exemption provided by Rule 16b-3, and (c) any
amendment shall be subject to the approval or rejection of the Board.
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The Committee may amend the terms of any Option, prospectively or
retroactively, but no such amendment shall impair the rights of any
Participant without the Participant's consent, except such an amendment made
to cause the Plan or Option to qualify for the exemption provided by Rule
16b-3. The Committee may also substitute new Options for previously granted
Options, including previously granted Options having higher Option Prices but
no such substitution shall be made which would impair the rights of
Participants under such Option theretofore granted without the Participant's
consent. The Committee's discretion to amend the Plan or Agreement shall be
limited to the Plan's constituting a plan described in Rule 16b-3.
Subject to the above provisions, the Board shall have authority to amend
the Plan to take into account changes in law and tax and accounting rules, as
well as other developments and to grant Options which qualify for beneficial
treatment under such rules without shareholder approval.
The Board may terminate the Plan at any time.
7.2 General Provisions.
(a) Representation. The Committee may require each person
purchasing or receiving shares pursuant to an Option to represent to and
agree with the Company in writing that such person is acquiring the
shares without a view to the distribution thereof. The certificates for
such shares may include any legend which the Committee deems appropriate
to reflect any restrictions on transfer.
(b) No Additional Obligation. Nothing contained in the Plan shall
prevent the Company or an Affiliate from adopting other or additional
compensation arrangements for Directors or employees.
(c) Withholding. No later than the date as of which an amount
first becomes includible in the gross income of the Participant for
Federal income tax purposes with respect to any Option, the Participant
shall pay to the Company (or other entity identified by the Committee),
or make arrangements satisfactory to the Company or other entity
identified by the Committee regarding the payment of, any Federal,
state, local or foreign taxes of any kind required by law to be withheld
with respect to such amount required in order for the Company or an
Affiliate to obtain a current deduction. Unless otherwise determined by
the Committee, withholding obligations may be settled with Common Stock,
including Common Stock that is part of the Option that gives rise to the
withholding requirement provided that any applicable requirements under
Section 16 of the Exchange Act are satisfied. The obligations of the
Company under the Plan shall be conditional on such payment or
arrangements, and the Company and its Affiliates shall, to the extent
permitted by law, have the right to deduct any such taxes from any
payment otherwise due to the Participant.
(d) Representation. The Committee shall establish such procedures
as it deems appropriate for a Participant to designate a Representative
to whom any amounts payable in the event of the Participant's death are
to be paid.
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(e) Controlling Law. The Plan and all Options made and actions
taken thereunder shall be governed by and construed in accordance with
the laws of the State of Delaware (other than its law respecting choice
of law). The Plan shall be construed to comply with all applicable law,
and to avoid liability to the Company, an Affiliate or a Participant,
including, without limitation, liability under Section 16(b) of the
Exchange Act.
(f) Offset. Any amounts owed to the Company or an Affiliate by the
Participant of whatever nature may be offset by the Company from the
value of any shares of Common Stock, cash or other thing of value under
this Plan or an Agreement to be transferred to the Participant, and no
shares of Common Stock, cash or other thing of value under this Plan or
an Agreement shall be transferred unless and until all disputes between
the Company and the Participant have been fully and finally resolved and
the Participant has waived all claims to such against the Company or an
Affiliate.
7.3 Rights with Respect to Continuance of Employment. Nothing contained
herein shall be deemed to alter the relationship between the Company or an
Affiliate and a Participant, or the contractual relationship between a
Participant and the Company or an Affiliate if there is a written contract
regarding such relationship. Nothing contained herein shall be construed to
constitute a contract of employment or appointment between the Company or an
Affiliate and a Participant. The Company or an Affiliate and each of the
Participants continue to have the right to terminate the employment or other
relationship at any time for any reason, except as provided in a written
contract. The Company or an Affiliate shall have no obligation to retain the
Participant in its employ or service as a result of this Plan. There shall be
no inference as to the length of employment or service hereby, and the Company
or an Affiliate reserves the same rights to terminate the Participant's
employment or service as existed prior to the individual becoming a
Participant in this Plan.
7.4 Options in Substitution for Options Granted by Other Corporations.
Options may be granted under the Plan from time to time in substitution for
awards held by employees, directors or service providers of other corporations
who are about to become Directors of the Company or an Affiliate as the result
of a merger or consolidation of the employing corporation with the Company or
an Affiliate, or the acquisition by the Company or an Affiliate of the assets
of the employing corporation, or the acquisition by the Company or Affiliate
of the stock of the employing corporation, as the result of which it becomes a
designated employer under the Plan. The terms and conditions of the Options
so granted may vary from the terms and conditions set forth in this Plan at
the time of such grant as the majority of the members of the Committee may
deem appropriate to conform, in whole or in part, to the provisions of the
awards in substitution for which they are granted.
7.5 Procedure for Adoption. Any Affiliate of the Company may by
resolution of such Affiliate's board of directors, with the consent of the
Board of Directors and subject to such conditions as may be imposed by the
Board of Directors, adopt the Plan for the benefit of its Directors as of the
date specified in the board resolution.
7.6 Procedure for Withdrawal. Any Affiliate which has adopted the Plan
may, by resolution of the board of directors of such direct or indirect
subsidiary, with the consent of the Board of Directors and subject to such
conditions as may be imposed by the Board of Directors, terminate its adoption
of the Plan.
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7.7 Delay. If at the time a Participant incurs a Termination of
Directorship (other than due to Cause) or if at the time of a Change in
Control, the Participant is subject to "short-swing" liability under Section
16 of the Exchange Act, any time period provided for under the Plan or an
Agreement to the extent necessary to avoid the imposition of liability shall
be suspended and delayed during the period the Participant would be subject to
such liability, but not more than six (6) months and one (1) day and not to
exceed the Option Period. The Company shall have the right to suspend or
delay any time period described in the Plan or an Agreement if the Committee
shall determine that the action may constitute a violation of any law or
result in liability under any law to the Company, an Affiliate or a
shareholder of the Company until such time as the action required or permitted
shall not constitute a violation of law or result in liability to the Company,
an Affiliate or a shareholder of the Company. The Committee shall have the
discretion to suspend the application of the provisions of the Plan required
solely to comply with Rule 16b-3 if the Committee shall determine that Rule
16b-3 does not apply to the Plan.
7.8 Headings. The headings contained in this Plan are for reference
purposes only and shall not affect the meaning or interpretation of this Plan.
7.9 Severability. If any provision of this Plan shall for any reason be
held to be invalid or unenforceable, such invalidity or unenforceability shall
not effect any other provision hereby, and this Plan shall be construed as if
such invalid or unenforceable provision were omitted.
7.10 Successors and Assigns. This Plan shall inure to the benefit of and
be binding upon each successor and assign of the Company. All obligations
imposed upon a Participant, and all rights granted to the Company hereunder,
shall be binding upon the Participant's heirs, legal representatives and
successors.
7.11 Entire Agreement. This Plan and the Agreement constitute the entire
agreement with respect to the subject matter hereof and thereof, provided that
in the event of any inconsistency between the Plan and the Agreement, the
terms and conditions of this Plan shall control.
Executed on this 14th day of September, 1994.
PARKER DRILLING COMPANY
By: /s/ Robert L. Parker Jr.
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