EXHIBIT 10(j)
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Parker Drilling Company
1994 Executive Stock Option Plan
PARKER DRILLING COMPANY
1994 EXECUTIVE STOCK OPTION PLAN
TABLE OF CONTENTS
Page
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ARTICLE I Establishment........................................... 1
1.1 Purpose................................................. 1
ARTICLE II Definitions............................................. 1
2.1 Affiliate............................................... 1
2.2 Agreement or Award Agreement............................ 1
2.3 Award................................................... 1
2.4 Board of Directors or Board............................. 1
2.5 Cause................................................... 2
2.6 Change in Control and Change in
Control Price........................................... 2
2.7 Code or Internal Revenue Code........................... 2
2.8 Commission.............................................. 2
2.9 Committee............................................... 2
2.10 Common Stock............................................ 2
2.11 Company................................................. 2
2.12 Deferred Stock.......................................... 2
2.13 Disability.............................................. 2
2.14 Disinterested Person.................................... 3
2.15 Effective Date.......................................... 3
2.16 Exchange Act............................................ 3
2.17 Fair Market Value....................................... 3
2.18 Grant Date.............................................. 3
2.19 Incentive Stock Option.................................. 3
2.20 Nonqualified Stock Option............................... 3
2.21 Option Period........................................... 3
2.22 Option Price............................................ 3
2.23 Participant............................................. 3
2.24 Plan.................................................... 4
2.25 Representative.......................................... 4
2.26 Restricted Stock........................................ 4
2.27 Retirement.............................................. 4
2.28 Rule 16b-3.............................................. 4
2.29 Securities Act.......................................... 4
2.30 Stock Appreciation Right................................ 4
2.31 Stock Option or Option.................................. 4
2.32 Termination of Employment................................4
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TABLE OF CONTENTS
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ARTICLE III Aministration........................................... 5
3.1 Committee Structure and Authority....................... 5
ARTICLE IV Stock Subject to Plan................................... 7
4.1 Number of Shares........................................ 7
4.2 Release of Shares....................................... 7
4.3 Restrictions on Shares.................................. 8
4.4 Shareholder Rights...................................... 8
4.5 Best Efforts to Register................................ 8
4.6 Anti-Dilution........................................... 9
ARTICLE V Eligibility............................................. 9
5.1 Eligibility............................................. 9
ARTICLE VI Stock Options........................................... 9
6.1 General................................................. 9
6.2 Grant and Exercise......................................10
6.3 Terms and Conditions....................................10
6.4 Termination by Reason of Death,
Disability or Retirement................................12
6.5 Other Termination.......................................12
6.6 Cashing Out of Option...................................13
ARTICLE VII Stock Appreciation Rights...............................13
7.1 General.................................................13
7.2 Grant...................................................13
7.3 Terms and Conditions....................................14
ARTICLE VIII Restricted Stock........................................15
8.1 General.................................................15
8.2 Awards and Certificates.................................16
8.3 Terms and Conditions....................................16
ARTICLE IX Deferred Stock..........................................17
9.1 General.................................................17
9.2 Terms and Conditions....................................17
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TABLE OF CONTENTS
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ARTICLE X Change in Control Provisions........................... 18
10.1 Impact of Event........................................ 18
10.2 Definition of Change in Control........................ 19
10.3 Change in Control Price................................ 20
ARTICLE XI MISCELLANEOUS.......................................... 21
11.1 Amendments and Termination............................. 21
11.2 Unfunded Status of Plan................................ 22
11.3 General Provisions..................................... 22
11.4 Mitigation of Excise Tax............................... 23
11.5 Rights with Respect to Continuance
of Employment.......................................... 23
11.6 Awards in Substitution for Awards
Granted by Other Corporations.......................... 23
11.7 Procedure for Adoption................................. 24
11.8 Procedure for Withdrawal............................... 24
11.9 Delay.................................................. 24
11.10 Headings............................................... 24
11.11 Severability........................................... 24
11.12 Successors and Assigns................................. 24
11.13 Entire Agreement....................................... 25
PARKER DRILLING COMPANY
1994 EXECUTIVE STOCK OPTION PLAN
ARTICLE I
Establishment
I. Purpose.
The Parker Drilling Company 1994 Executive Stock Option 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 those persons selected to participate in the Plan
to achieve long-term growth in shareholder equity in the Company and by
retaining the association of those individuals who are instrumental in
achieving this growth. The Plan and the grant of awards thereunder is
expressly conditioned upon the Plan's approval by the security holders of the
Company. The Plan is adopted effective as of December 14, 1994.
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 "Award Agreement" means, individually or
collectively, any agreement entered into pursuant to the Plan pursuant to
which an Award is granted to a Participant.
2.3 "Award" means a Stock Option, Stock Appreciation Right, Restricted
Stock or Deferred Stock.
2.4 "Board of Directors" or "Board" means the Board of Directors of the
Company.
2.5 "Cause" shall mean, for purposes of whether and when a Participant
has incurred a Termination of Employment for Cause, any act or omission which
permits the Company to terminate the written agreement or arrangement between
the Participant and the Company or an Affiliate for Cause as defined in such
agreement or arrangement, or in the event there is no such agreement or
arrangement or the agreement or arrangement does not define the term "cause,"
then Cause shall mean 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 or her 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 previous sentence
of this Section and specifying the particulars thereof in detail.
2.6 "Change in Control" and "Change in Control Price" have the meanings
set forth in Sections 10.2 and 10.3, respectively.
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 appointed by the Board of
Directors to 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, 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 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 "Deferred Stock" means an award made pursuant to Article IX.
2.13 "Disability" means permanent and total disability as determined
under procedures established by the Committee for purposes of the Plan.
Notwithstanding the foregoing, a Disability shall not qualify under this Plan
if it is the result of (i) a willfully self-inflicted injury or willfully
self-induced sickness; or (ii) an injury or disease contracted, suffered, or
incurred, while participating in a criminal offense. The determination of
Disability shall be made by the Committee. 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 and shall
mean a person who is also an "outside director" under Section 162(m) of the
Code.
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2.15 "Effective Date" means December 14, 1994.
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 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 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.
2.18 "Grant Date" means the date that as of which an Award is granted
pursuant to the Plan.
2.19 "Incentive Stock Option" means any Stock Option intended to be and
designated as an "incentive stock option" within the meaning of Section 422 of
the Code.
2.20 "Nonqualified Stock Option" means an Option to purchase Common
Stock in the Company granted under the Plan other than an Incentive Stock
Option within the meaning of Section 422 of the Code.
2.21 "Option Period" means the period during which the Option shall be
exercisable in accordance with the Agreement and Article VI.
2.22 "Option Price" means the price at which the Common Stock may be
purchased under an Option as provided in Section 6.3.
2.23 "Participant" means a person who satisfies the eligibility
conditions of Article V and to whom an Award has been granted by the Committee
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 former spouse as the case may be. The term shall also
include any person or entity to whom an Option has been transfered 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
Employment" shall mean the Termination of Employment of the Participant.
2.24 "Plan" means the Parker Drilling Company 1994 Executive 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
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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 "Restricted Stock" means an award under Article VIII.
2.27 "Retirement" means the Participant's Termination of Employment
after attaining either the normal retirement age or the early retirement age
as defined in the principal (as determined by the Committee) tax-qualified
plan of the Company or an Affiliate, if the Participant is covered by such
plan, and if the Participant is not covered by such a plan, then age 65, or
age 55 with the accrual of 10 years of service.
2.28 "Rule 16b-3" means Rule 16b-3, as promulgated under the Exchange
Act, as amended from time to time, or any successor thereto.
2.29 "Securities Act" means the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
2.30 "Stock Appreciation Right" means a right granted under Article VII.
2.31 "Stock Option" or "Option" means an option granted under
Article VI.
2.32 "Termination of Employment" means the occurrence of any act or
event whether pursuant to an employment agreement or otherwise that actually
or effectively causes or results in the person's ceasing, for whatever reason,
to be an officer, employee or consultant of the Company or of any Affiliate,
or to be an officer, employee or consultant of any entity that provides
services to the Company or an Affiliate, including, without limitation, death,
Disability, dismissal, severance at the election of the Participant,
Retirement, 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. With respect to any person who is
not an employee with respect to the Company or an Affiliate, the Agreement
shall establish what act or event shall constitute a Termination of Employment
for purposes of the Plan. A Termination of Employment shall occur to an
employee who is employed by an Affiliate if the Affiliate shall cease to be an
Affiliate and the Participant shall not immediately thereafter become an
employee of the Company or an Affiliate.
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 Awards 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
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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. The Board shall have
the authority to remove, replace or fill any vacancy of any member of the
Committee upon notice to the Committee and the affected member. 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:
(a) to select those persons to whom Awards may be granted from
time to time;
(b) to determine whether and to what extent Stock Options, Stock
Appreciation Rights, Restricted Stock and Deferred Stock or any
combination thereof are to be granted hereunder;
(c) to determine the number of shares of Common Stock to be
covered by each Award granted hereunder;
(d) to determine the terms and conditions of any Award granted
hereunder (including, but not limited to, the Option Price, the Option
Period, any exercise restriction or limitation and any exercise
acceleration or forfeiture waiver regarding any Award and the shares of
Common Stock relating thereto);
(e) to adjust the terms and conditions, at any time or from time
to time, of any Award, subject to the limitations of Section 11.1;
(f) to determine to what extent and under what circumstances
Common Stock and other amounts payable with respect to an Award shall be
deferred;
(g) to determine under what circumstances an Award may be settled
in cash or Common Stock.
(h) to provide for the forms of Agreement to be utilized in
connection with this Plan;
(i) to determine whether a Participant has a Disability or a
Retirement;
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(j) to determine what securities law requirements are applicable
to the Plan, Awards, and the issuance of shares of Common Stock and to
require of a Participant that appropriate action be taken with respect
to such requirements;
(k) to cancel, with the consent of the Participant or as otherwise
provided in the Plan or an Agreement, outstanding Awards;
(l) to interpret and make a final determination with respect to
the remaining number of shares of Common Stock available under
Article IV;
(m) to require as a condition of the exercise of an Award 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;
(n) to determine whether and with what effect an individual has
incurred a Termination of Employment;
(o) 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;
(p) to determine the restrictions or limitations on the transfer
of Common Stock;
(q) to determine whether an Award is to be adjusted, modified or
purchased, or is to become fully exercisable, under the Plan or the
terms of an Agreement;
(r) to determine the permissible methods of Award exercise and
payment, including cashless exercise arrangements;
(s) to adopt, amend and rescind such rules and regulations as, in
its opinion, may be advisable in the administration of the Plan; and
(t) to appoint and compensate agents, counsel, auditors or other
specialists to aid it in the discharge of its duties.
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 Award 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 Awards granted at different times or
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 Award, may be made at the time of the grant of
the Award or, unless in contravention of any express term of the Plan or an
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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 Awards under the Plan shall be 2,400,000 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. Subject to Section 7.3(f), if any shares of
Common Stock that have been optioned cease to be subject to an Award, if any
shares of Common Stock that are subject to any Award are forfeited, if any
Award 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 Award, such shares, in the discretion of
the Committee, may again be available for distribution in connection with
Awards under the Plan.
4.3 Restrictions on Shares. Shares of Common Stock issued upon exercise
of an Award 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 Award 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 Award. 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 Award
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.
4.4 Shareholder Rights. No person shall have any rights of a shareholder
as to shares of Common Stock subject to an Award until, after proper exercise
of the Award 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 Award 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.
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4.5 Best Efforts To Register. The Company will register under the
Securities Act the Common Stock delivered or deliverable pursuant to Awards 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 Award. 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 Awards under
the Plan, the number of shares of Common Stock covered by outstanding Awards,
the exercise price per share of outstanding Awards, and any other
characteristics or terms of the Awards 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.
ARTICLE V
Eligibility
5.1 Eligibility. Except as herein provided, the persons who shall be
eligible to participate in the Plan and be granted Awards shall be those
persons who are officers, employees and consultants of the Company or any
subsidiary who shall be in a position, in the opinion of the Committee, to
make contributions to the growth, management, protection and success of the
Company and its subsidiaries. Of those persons described in the preceding
sentence, the Committee may, from time to time, select
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persons to be granted Awards and shall determine the terms and conditions with
respect thereto. In making any such selection and in determining the form of
the Award, the Committee may give consideration to the functions and
responsibilities of the person's contributions to the Company and its
subsidiaries, the value of the individual's service to the Company and its
subsidiaries and such other factors deemed relevant by the Committee. The
Committee may designate any person who is not eligible to participate in the
Plan if such person would otherwise be eligible to participate in the Plan
(and members of the Committee are excluded to the extent such persons are
intended as Disinterested Persons).
ARTICLE VI
STOCK OPTIONS
6.1 General. The Committee shall have authority to grant Options under
the Plan at any time or from time to time. Stock Options may be granted alone
or in addition to other Awards and may be either Incentive Stock Options or
Non-Qualified Stock Options. An Option shall entitle the Participant to
receive shares of Common Stock upon exercise of such Option, subject to the
Participant's satisfaction in full of any conditions, restrictions or
limitations imposed in accordance with the Plan or an Agreement (the terms and
provisions of which may differ from other Agreements) including without
limitation, payment of the Option Price. During any calendar year, Options
for no more than 200,000 shares of Common Stock shall be granted to any
Participant.
6.2 Grant and Exercise. The grant of a Stock Option shall occur as of
the date the Committee determines. 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. Such Agreement shall
become effective upon execution by the Participant. Only a person who is a
common-law employee of the Company, any parent corporation of the Company or a
subsidiary (as such terms are defined in Section 424 of the Code) on the date
of grant shall be eligible to be granted an Option which is intended to be and
is an Incentive Stock Option. To the extent that any Stock Option is not
designated as an Incentive Stock Option or even if so designated does not
qualify as an Incentive Stock Option, it shall constitute a Non-Qualified
Stock Option. Anything in the Plan to the contrary notwithstanding, no term
of the Plan relating to Incentive Stock Options shall be interpreted, amended
or altered, nor shall any discretion or authority granted under the Plan be
exercised, so as to disqualify the Plan under Section 422 of the Code or,
without the consent of the Participant affected, to disqualify any Incentive
Stock Option under such Section 422.
6.3 Terms and Conditions. Stock Options shall be subject to such terms
and conditions as shall be determined by the Committee, including the
following:
(a) Option Period. The Option Period of each Stock Option shall be fixed
by the Committee; provided that no Non-Qualified Stock Option shall be
exercisable more than fifteen (15) years after the date the Stock Option is
granted. In the case of an Incentive Stock Option, the Option Period shall
not exceed ten (10) years from the date of grant or five (5) years in the case
of an individual who owns more than ten percent (10%) of the combined voting
power of all classes of stock of the
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Company, a corporation which is a parent corporation of the Company or any
subsidiary of the Company (each as defined in Section 424 of the Code). No
Option which is intended to be an Incentive Stock Option shall be granted more
than ten (10) years from the date the Plan is adopted by the Company or the
date the Plan is approved by the shareholders of the Company, whichever is
earlier.
(b) Option Price. The Option Price per share of the Common Stock
purchasable under an Option shall be determined by the Committee, but in no
event shall the Option Price be less than 50% of the Fair Market Value on the
Grant Date. If such Option is intended to qualify as an Incentive Stock
Option, the Option Price per share shall be not less than the Fair Market
Value per share on the date the Option is granted, or where granted to an
individual who owns or who is deemed to own stock possessing more than ten
percent (10%) of the combined voting power of all classes of stock of the
Company, a corporation which is a parent corporation of the Company or any
subsidiary of the Company (each as defined in Section 424 of the Code), not
less than one hundred ten percent (110%) of such Fair Market Value per share.
(c) Exercisability. Subject to Section 10.1, Stock Options shall be
exercisable at such time or times and subject to such terms and conditions as
shall be determined by the Committee. If the Committee provides that any
Stock 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
Stock Option.
(d) Method of Exercise. Subject to the provisions of this Article VI, a
Participant may exercise Stock Options, in whole or in part, at any time
during the Option Period by the Participant's giving 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 Stock 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 6.3(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 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 an
Option (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. If payment of the Option Price of a Non-Qualified Stock
Option is made in whole or in part in the form of Restricted Stock or Deferred
Stock, the number of shares of Common Stock to be received upon such exercise
equal to the number of shares of Restricted Stock or Deferred Stock used for
payment of the Option Price shall be subject to the same forfeiture
restrictions or deferral limitations to which such Restricted Stock or
Deferred Stock was subject, unless otherwise determined by the Committee. In
the case of an Incentive Stock Option, the right to make a payment in the form
of already owned shares of Common Stock of the same class as the Common Stock
subject to the Stock Option may be authorized only at the time the Stock
Option is granted. No shares of Common Stock shall be issued until full
payment therefor has been made. Subject to any forfeiture restrictions or
deferral limitations that may apply if a Stock Option is exercised using
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Restricted Stock or Deferred Stock, a Participant shall have all of the rights
of a shareholder of the Company holding the class of Common Stock that is
subject to such Stock Option (including, if applicable, the right to vote the
shares and the right to receive dividends), when the Participant has given
written notice of exercise, has paid in full for such shares and such shares
have been recorded on the Company's official shareholder records as having
been issued or transferred.
(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
Award, 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 Stock Option or interest therein shall be transferable by the Participant
other than by will or by the laws of descent and distribution, and all Stock
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 by an Agreement, every Option granted hereunder
shall be freely transferable.
6.4 Termination by Reason of Death, Disability or Retirement. Unless
otherwise provided in an Agreement or determined by the Committee, if a
Participant incurs a Termination of Employment due to death, Disability or
Retirement, any unexpired and unexercised Stock Option held by such
Participant shall thereafter be fully exercisable for a period of five (5)
years (or such other period or no period as the Committee may specify)
immediately following the date of such death, Disability or Retirement (as
applicable) or until the expiration of the Option Period, whichever period is
the shorter. In the event of Termination of Employment by reason of
Disability, if an Incentive Stock Option is exercised after the expiration of
the exercise periods that apply for purposes of Section 422 of the Code, such
Stock Option will thereafter be treated as a Non-Qualified Stock Option.
6.5 Other Termination. Unless otherwise provided in an Agreement or
determined by the
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Committee, if a Participant incurs a Termination of Employment that is not due
to death, Retirement, Disability or with Cause) any Stock Option held by such
Participant shall thereupon terminate, except that such Stock Option, to the
extent then exercisable, may be exercised for the lesser of a period of two
(2) years commencing with the date of such Termination of Employment or until
the expiration of the Option Period, or in the case of a voluntary Termination
of Employment (other than due to death, Retirement, Disability or with Cause),
for a period of six (6) months commencing with the date of such Termination of
Employment in the case of a voluntary Termination of Employment or until the
expiration of the Option Period, whichever is less. If the Participant incurs
a Termination of Employment which is with Cause, the Option shall terminate
immediately. The death, Disability or Retirement of a Participant after a
Termination of Employment otherwise provided herein shall not extend the
exercisability of the time permitted to exercise an Option.
6.6 Cashing Out of Option. On receipt of written notice of exercise, the
Committee may elect to cash out all or part of the portion of any Stock Option
to be exercised by paying the Participant an amount, in cash or Common Stock,
equal to the excess of the Fair Market Value of the Common Stock that is
subject to the Option over the Option Price 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 Participants who are 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, in
the case of cash outs of Non-Qualified Stock Options held by such
Participants, the Committee may determine Fair Market Value under the pricing
rule set forth in Section 7.3(b).
ARTICLE VII
STOCK APPRECIATION RIGHTS
7.1 General. The Committee shall have authority to grant Stock
Appreciation Rights under the Plan at any time or from time to time. Subject
to the Participant's satisfaction in full of any conditions, restrictions or
limitations imposed in accordance with the Plan or an Agreement, a Stock
Appreciation Right shall entitle the Participant to surrender to the Company
the Stock Appreciation Right and to be paid therefor in shares of the Common
Stock, cash or a combination thereof as herein provided, the amount described
in Section 7.3(b).
7.2 Grant. Stock Appreciation Rights may be granted in conjunction with
all or part of any Stock Option granted under the Plan in which case the
exercise of the Stock Appreciation Right shall require the cancellation of a
corresponding portion of the Stock Option and the exercise of the Stock Option
will result in the cancellation of a corresponding portion of the Stock
Appreciation Right. In the case of a Non-Qualified Stock Option, such rights
may be granted either at or after the time of grant of such Stock Option. In
the case of an Incentive Stock Option, such rights may be granted only at the
time of grant of such Stock Option. A Stock Appreciation Right may also be
granted on a stand alone basis. The grant of a Stock Appreciation Right shall
occur as of the date the Committee determines. Each Stock Appreciation Right
granted under this Plan shall be evidenced by an Agreement, which shall embody
the terms and conditions of such Stock Appreciation Right and which shall be
subject to the terms and conditions set forth in the Plan. During any
calendar year, no more than 200,000 Stock Appreciation Rights shall be granted
to any Participant.
7.3 Terms and Conditions. Stock Appreciation Rights shall be subject to
such terms and conditions as shall be determined by the Committee, including
the following:
(a) Period and Exercise. The term of a Stock Appreciation Right
shall be established by the Committee. If granted in conjunction with a
Stock Option, the Stock Appreciation Right shall have a term which is
the same as the Option Period and shall be exercisable only at such time
or times and to the extent the related Stock Options would be
exercisable in accordance with the provisions of Article VI. A Stock
Appreciation Right which is granted on a stand alone basis shall be for
such period and shall be exercisable at such times and to the extent
provided in an Agreement. Stock Appreciation Rights shall be exercised
by the Participant's giving written notice of exercise on a form
provided by the Committee (if available) to the Company specifying the
portion of the Stock Appreciation Right to be exercised.
(b) Amount. Upon the exercise of a Stock Appreciation Right, a
Participant shall be entitled to receive an amount in cash, shares of
Common Stock or both as determined by the Committee or as otherwise
permitted in an Agreement equal in value to the excess of the Fair
Market Value per share of Common Stock over the Option Price per share
of Common Stock specified in the related Agreement multiplied by the
number of shares in respect of which the Stock Appreciation Right is
exercised. In the case of a Stock Appreciation Right granted on a stand
alone basis, the Agreement shall specify the value to be used in lieu of
the Option Price per share of Common Stock. The aggregate Fair Market
Value per share of the Common Stock shall be determined as of the date
of exercise of such Stock Appreciation Right.
(c) Special Rules. In the case of Stock Appreciation Rights
relating to Stock Options held by Participants who are actually or
potentially subject to Section 16(b) of the Exchange Act:
(i) The Committee may require that such Stock Appreciation
Rights be exercised only in accordance with the applicable "window
period" provisions of Rule 16b-3;
(ii) The Committee may provide that the amount to be paid
upon exercise of such Stock Appreciation Rights (other than those
relating to Incentive Stock Options) during a Rule 16b-3 "window
period" shall be based on the highest mean sales price of the
Common Stock on the principal exchange on which the Common Stock
is traded, NASDAQ or other relevant market for determining value
on any day during such "window period"; and
(iii) no Stock Appreciation Right shall be exercisable
during the first six months of its term, except that this
limitation shall not apply in the event of death or Disability of
the Participant prior to the expiration of the six-month period.
(d) Non-transferability of Stock Appreciation Rights. Stock
Appreciation Rights shall be transferable only when and to the extent
that a Stock Option would be transferable under the Plan unless
otherwise provided in an Agreement.
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(e) Termination. A Stock Appreciation Right shall terminate at
such time as a Stock Option would terminate under the Plan, unless
otherwise provided in an Agreement.
(f) Effect on Shares Under the Plan. To the extent required by
Rule 16b-3, upon the exercise of a Stock Appreciation Right, the Stock
Option or part thereof to which such Stock Appreciation Right is related
shall be deemed to have been exercised for the purpose of the limitation
set forth in Section 4.2 on the number of shares of Common Stock to be
issued under the Plan, but only to the extent of the number of shares of
Common Stock covered by the Stock Appreciation Right at the time of
exercise based on the value of the Stock Appreciation Right at such
time.
(g) Incentive Stock Option. A Stock Appreciation Right granted in
tandem with an Incentive Stock Option shall not be exercisable unless
the Fair Market Value of the Common Stock on the date of exercise
exceeds the Option Price. In no event shall any amount paid pursuant to
the Stock Appreciation Right exceed the difference between the Fair
Market Value on the date of exercise and the Option Price.
ARTICLE VIII
RESTRICTED STOCK
8.1 General. The Committee shall have authority to grant Restricted
Stock under the Plan at any time or from time to time. Shares of Restricted
Stock may be awarded either alone or in addition to other Awards granted under
the Plan. The Committee shall determine the persons to whom and the time or
times at which grants of Restricted Stock will be awarded, the number of
shares of Restricted Shares to be awarded to any Participant, the time or
times within which such Awards may be subject to forfeiture and any other
terms and conditions of the Awards. Each Award shall be confirmed by, and be
subject to the terms of, an Agreement. The Committee may condition the grant
of Restricted Stock upon the attainment of specified performance goals by the
Participant or by the Company or an Affiliate (including a division or
department of the Company or an Affiliate) for or within which the Participant
is primarily employed or upon such other factors or criteria as the Committee
shall determine. The provisions of Restricted Stock Awards need not be the
same with respect to any Participant.
8.2 Awards and Certificates. Notwithstanding the limitations on issuance
of shares of Common Stock otherwise provided in the Plan, each Participant
receiving an Award of Restricted Stock shall be issued a certificate in
respect of such shares of Restricted Stock. Such certificate shall be
registered in the name of such Participant and shall bear an appropriate
legend referring to the terms, conditions, and restrictions applicable to such
Award as determined by the Committee. The Committee may require that the
certificates evidencing such shares be held in custody by the Company until
the restrictions thereon shall have lapsed and that, as a condition of any
Award of Restricted Stock, the Participant shall have delivered a stock power,
endorsed in blank, relating to the Common Stock covered by such Award.
8.3 Terms and Conditions. Shares of Restricted Stock shall be subject to
the following terms and conditions:
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(a) Limitations on Transferability. Subject to the provisions of
the Plan and except as provided in an Agreement, during a period set by
the Committee, commencing with the date of such Award (the "Restriction
Period"), the Participant shall not be permitted to sell, assign,
transfer, pledge or otherwise encumber any interest in shares of
Restricted Stock.
(b) Rights. Except as provided in Section 8.3(a), the Participant
shall have, with respect to the shares of Restricted Stock, all of the
rights of a shareholder of the Company holding the class of Common Stock
that is the subject of the Restricted Stock, including, if applicable,
the right to vote the shares and the right to receive any cash
dividends. Unless otherwise determined by the Committee and subject to
the Plan, cash dividends on the class of Common Stock that is the
subject of the Restricted Stock shall be automatically deferred and
reinvested in additional Restricted Stock, and dividends on the class of
Common Stock that is the subject of the Restricted Stock payable in
Common Stock shall be paid in the form of Restricted Stock of the same
class as the Common Stock on which such dividend was paid.
(c) Criteria. Based on service, performance by the Participant or
by the Company or the Affiliate, including any division or department
for which the Participant is employed or such other factors or criteria
as the Committee may determine, the Committee may provide for the lapse
of restrictions in installments and may accelerate the vesting of all or
any part of any Award and waive the restrictions for all or any part of
such Award.
(d) Forfeiture. Unless otherwise provided in an Agreement or
determined by the Committee, if the Participant incurs a Termination of
Employment during the Restriction Period due to death or Disability, the
restrictions shall lapse and the Participant shall be fully vested in
the Restricted Stock. Except to the extent otherwise provided in the
applicable Agreement and the Plan, upon a Participant's Termination of
Employment for any reason during the Restriction Period other than death
or Disability, all shares of Restricted Stock still subject to
restriction shall be forfeited by the Participant, except the Committee
shall have the discretion to waive in whole or in part any or all
remaining restrictions with respect to any or all of such Participant's
shares of Restricted Stock.
(e) Delivery. If and when the Restriction Period expires without a
prior forfeiture of the Restricted Stock subject to such Restriction
Period, unlegended certificates for such shares shall be delivered to
the Participant.
(f) Election. A Participant may elect to further defer receipt of
the Restricted Stock for a specified period or until a specified event,
subject in each case to the Committee's approval and to such terms as
are determined by the Committee. Subject to any exceptions adopted by
the Committee, such election must be made one (1) year prior to
completion of the Restriction Period.
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ARTICLE IX
DEFERRED STOCK
9.1 General. The Committee shall have authority to grant Deferred Stock
under the Plan at any time or from time to time. Shares of Deferred Stock may
be awarded either alone or in addition to other Awards granted under the Plan.
The Committee shall determine the persons to whom and the time or times at
which Deferred Stock will be awarded, the number of shares of Deferred Stock
to be awarded to any Participant, the duration of the period (the "Deferral
Period") prior to which the Common Stock will be delivered, and the conditions
under which receipt of the Common Stock will be deferred and any other terms
and conditions of the Awards. Each Award shall be confirmed by, and be
subject to the terms of, an Agreement. The Committee may condition the grant
of Deferred Stock upon the attainment of specified performance goals by the
Participant or by the Company or an Affiliate, including a division or
department of the Company or an Affiliate for or within which the Participant
is primarily employed or upon such other factors or criteria as the Committee
shall determine. The provisions of Deferred Stock Awards need not be the same
with respect to any Participant.
9.2 Terms and Conditions. Deferred Stock Awards shall be subject to the
following terms and conditions:
(a) Limitations on Transferability. Subject to the provisions of
the Plan and except as provided in an Agreement, Deferred Stock Awards,
or any interest therein, may not be sold, assigned, transferred, pledged
or otherwise encumbered during the Deferral Period. At the expiration
of the Deferral Period (or Elective Deferral Period as defined in
Section 9.2(e), where applicable), the Committee may elect to deliver
Common Stock, cash equal to the Fair Market Value of such Common Stock
or a combination of cash and Common Stock, to the Participant for the
shares covered by the Deferred Stock Award.
(b) Rights. Unless otherwise determined by the Committee and
subject to the Plan, cash dividends on the Common Stock that is the
subject of the Deferred Stock Award shall be automatically deferred and
reinvested in additional Deferred Stock, and dividends on the Common
Stock that is the subject of the Deferred Stock Award payable in Common
Stock shall be paid in the form of Deferred Stock of the same class as
the Common Stock on which such dividend was paid.
(c) Criteria. Based on service, performance by the Participant or
by the Company or the Affiliate, including any division or department
for which the Participant is employed or such other factors or criteria
as the Committee may determine, the Committee may provide for the lapse
of deferral limitations in installments and may accelerate the vesting
of all or any part of any Award and waive the deferral limitations for
all or any part of such Award.
(d) Forfeiture. Unless otherwise provided in an Agreement or
determined by the Committee, if the Participant incurs a Termination of
Employment during the Deferral Period due to death or Disability, the
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restrictions shall lapse and the Participant shall be fully vested in
the Deferred Stock. Unless otherwise provided in an Agreement or
determined by the Committee, upon a Participant's Termination of
Employment for any reason during the Deferral Period other than death or
Disability, the rights to the shares still covered by the Award shall be
forfeited by the Participant, except the Committee shall have the
discretion to waive in whole or in part any or all remaining deferral
limitations with respect to any or all of such Participant's Deferred
Stock.
(e) Election. A Participant may elect to further defer receipt of
the Deferred Stock payable under an Award (or an installment of an
Award) for a specified period or until a specified event, subject in
each case to the Committee's approval and to such terms as are
determined by the Committee. Subject to any exceptions adopted by the
Committee, such election must be made at one (1) year prior to
completion of the Deferral Period for the Award.
ARTICLE X
CHANGE IN CONTROL PROVISIONS
10.1 Impact of Event. Notwithstanding any other provision of the Plan to
the contrary, in the event of a Change in Control (as defined in
Section 10.2):
(a) Any Stock Appreciation Rights and Stock 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) The restrictions and deferral limitations applicable to any
Restricted Stock and Deferred Stock shall lapse, and such Restricted
Stock and Deferred Stock shall become free of all restrictions and
become fully vested and transferable to the full extent of the original
grant.
(c) Notwithstanding any other provision of the Plan, unless the
Committee shall provide otherwise in an Agreement, a Participant shall
have the right, whether or not the Award is fully exercisable or may be
otherwise realized by the Participant, by giving notice during the 60-
day period from and after a Change in Control to the Company, to elect
to surrender all or part of the Award to the Company and to receive
cash, within 30 days of such notice, in an amount equal to the amount by
which the "Change in Control Price" (as defined in Section 10.3) per
share of Common Stock on the date of such election shall exceed the
amount which the Participant must pay to exercise the Award per share of
Common Stock under the Award (the "Spread") multiplied by the number of
shares of Common Stock granted under the Award as to which the right
granted hereunder shall have been exercised; provided, however, that if
the end of such 60-day period from and after a Change in Control is
within six months of the date of grant of the Award held by a
Participant (except a Participant who has died during such six month
period) who is an officer or director of the Company (within the meaning
of Section 16(b) of the Exchange Act), such Award shall be cancelled in
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exchange for a payment to the Participant at the time of the
Participant's Termination of Employment, equal to the Spread multiplied
by the number of shares of Common Stock granted under the Award, plus
interest on such amount at the prime rate compounded annually and
determined from time to time. With respect to any Participant who is an
officer or director of the Company (within the meaning of
Section 16(b) of the Exchange Act), the 60-day period shall be extended,
if necessary, to include the "window period" of Rule 16(b)-3 which first
commences on or after the date of the Change in Control, and the
Committee shall have sole discretion, if necessary, to approve the
Participant's exercise hereunder and the date in which the Spread is
calculated may be adjusted, if necessary, to a later date if necessary
to avoid liability to such Participant under Section 16(b).
10.2 Definition of Change in Control. For purposes of the Plan, a
"Change in Control" shall mean 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
election of directors, as a result of a tender or exchange offer, open
market purchases, privately negotiated purchases or otherwise; or
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(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.
10.3 Change in Control Price. For purposes of the Plan, "Change in
Control Price" means the higher of (a) the highest reported sales price of a
share of Common Stock in any transaction reported on the principal exchange on
which such shares are listed or on NASDAQ during the 60 day period prior to
and including the date of a Change in Control or (b) if the Change in Control
is the result of a tender or exchange offer or a Corporate Transaction, the
highest price per share of Common Stock paid in such tender or exchange offer
or a Corporate Transaction, except that, in the case of Incentive Stock
Options and Stock Appreciation Rights relating to Incentive Stock Options,
such price shall be based only on the Fair Market Value of the Common Stock on
the date such Incentive Stock Option or Stock Appreciation Right is exercised.
To the extent that the consideration paid in any such transaction described
above consists all or in part of securities or other non-cash consideration,
the value of such securities or other non-cash consideration shall be
determined in the sole discretion of the Committee.
ARTICLE XI
MISCELLANEOUS
11.1 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) impair the rights
of a Participant under a Stock Option, Stock Appreciation Right, Restricted
Stock Award or Deferred Stock Award 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.
The Committee may amend the Plan at any time provided that (a) no
amendment shall impair the rights of any Participant under any Award
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.
The Committee may amend the terms of any Award or other Award
theretofore granted, 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 Award to qualify for the
exemption provided by Rule 16b-3. The Committee may also substitute new Stock
Options or Stock Appreciation Rights for previously granted Stock Options,
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including previously granted Stock Options or Stock Appreciation Rights having
higher Option Prices but no such substitution shall be made which would impair
the rights of Participants under such Stock Option or Stock Appreciation Right
theretofore granted without the Participant's consent.
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 Awards which qualify for beneficial
treatment under such rules without shareholder approval.
11.2 Unfunded Status of Plan. It is intended that the Plan be an
"unfunded" plan for incentive and deferred compensation. The Committee may
authorize the creation of trusts or other arrangements to meet the obligations
created under the Plan to deliver Common Stock or make payments; provided,
however, that, unless the Committee otherwise determines, the existence of
such trusts or other arrangements is consistent with the "unfunded" status of
the Plan.
11.3 General Provisions.
(a) Representation. The Committee may require each person
purchasing or receiving shares pursuant to an Award 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 its 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 Award, 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 Award 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.
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(d) Reinvestment. The reinvestment of dividends in additional
Deferred or Restricted Stock at the time of any dividend payment shall
only be permissible if sufficient shares of Common Stock are available
for such reinvestment (taking into account then outstanding Options and
other Awards).
(e) 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.
(f) Controlling Law. The Plan and all Awards 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.
(g) 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.
11.4 Mitigation of Excise Tax. If any payment or right accruing to a
Participant under this Plan (without the application of this Section 11.4),
either alone or together with other payments or rights accruing to the
Participant from the Company or an Affiliate ("Total Payments") would
constitute a "parachute payment" (as defined in Section 280G of the Code and
regulations thereunder), such payment or right shall be reduced to the largest
amount or greatest right that will result in no portion of the amount payable
or right accruing under the Plan being subject to an excise tax under
Section 4999 of the Code or being disallowed as a deduction under Section 280G
of the Code. The determination of whether any reduction in the rights or
payments under this Plan is to apply shall be made by the Committee in good
faith after consultation with the Participant, and such determination shall be
conclusive and binding on the Participant. The Participant shall cooperate in
good faith with the Committee in making such determination and providing the
necessary information for this purpose. The foregoing provisions of this
Section 11.4 shall apply with respect to any person only if after reduction
for any applicable federal excise tax imposed by Section 4999 of the Code and
federal income tax imposed by the Code, the Total Payments accruing to such
person would be less than the amount of the Total Payments as reduced, if
applicable, under the foregoing provisions of the Plan and after reduction for
only federal income taxes.
11.5 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 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 service relationship
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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.
11.6 Awards in Substitution for Awards Granted by Other Corporations.
Awards 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 officers, directors or employees 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 Awards 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.
11.7 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 employees as of the
date specified in the board resolution.
11.8 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. If the Participant disposes of shares of Common Stock acquired
pursuant to an Incentive Stock Option in any transaction considered to be a
disqualifying transaction under the Code, the Participant must give written
notice of such transfer and the Company shall have the right to deduct any
taxes required by law to be withheld from any amounts otherwise payable to the
Participant.
11.9 Delay. If at the time a Participant incurs a Termination of
Employment (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, or the period for exercise of a Stock Appreciation Right as
provided in the Agreement, whichever is shorter. 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.
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11.10 Headings. The headings contained in this Plan are for reference
purposes only and shall not affect the meaning or interpretation of this Plan.
11.11 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.
11.12 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.
11.13 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 the Agreement shall control.
Executed on this 14th day of September, 1994.
PARKER DRILLING COMPANY
By /s/ Robert L. Parker Jr.
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