EXHIBIT 10.19
PLAINS EXPLORATION & PRODUCTION COMPANY
2002 STOCK INCENTIVE PLAN
STOCK APPRECIATION RIGHTS AGREEMENT
THIS AGREEMENT, entered into as of September 3, 2002, with respect to the
following grant of Stock Appreciation Rights, such grant to be effective on the
effective date (the "Grant Date") of the initial public offering (the "IPO") of
common stock of Plains Exploration & Production Company, a Delaware corporation
(the "Company"), by and between the Company and Xxxxxxx Xxxxxxxxxx ("Grantee").
WHEREAS, the Company has adopted the Plains Exploration & Production
Company 2002 Stock Incentive Plan (the "Plan") in order to provide additional
incentives to certain employees, officers, consultants and directors of the
Company and its Subsidiaries, Affiliates and Divisions; and
WHEREAS, pursuant to the Employment Agreement, dated as of August 20, 2002,
between Grantee and the Company, the Company has agreed to grant an Award of
Stock Appreciation Rights under the Plan to Grantee.
NOW, THEREFORE, the Committee has acted as follows:
1. Grant of Stock Appreciation Rights ("SARs").
1.1 The Company hereby grants to Grantee during the period commencing on
the Grant Date of this agreement (the "Agreement") and ending on the close of
business on September 3, 2007 (the "Termination Date") an Award of 300,000 SARs.
1.2 The "Exercise Price" per SAR is equal to the price per Share in the
IPO, which has been determined to be the Fair Market Value of a Share on the
Grant Date.
1.3 This Agreement shall be construed in accordance and consistent with,
and subject to, the provisions of the Plan (the provisions of which are
incorporated herein by reference) and, except as otherwise expressly set forth
herein, the capitalized terms used in this Agreement shall have the same
definitions as set forth in the Plan.
2. Duration of Award.
The Award shall be exercisable to the extent and in the manner provided
herein from the Grant Date until the Termination Date (the "Exercise Term");
provided, however, that the Award may be earlier terminated as provided in
Section 5 hereof.
3. Exercisability of Award.
Unless otherwise provided in this Agreement or the Plan, the Award shall
entitle Grantee to exercise, in whole at any time or in part from time to time,
one-third of the total number of SARs covered by this Award on September 3,
2003, and an additional one-third of the total number of SARs covered by this
Award on each of September 3, 2004 and September 3, 2005; provided, however,
that if Grantee dies, or is terminated by the Company for any reason other than
Cause, the unvested portion of the Award shall vest and be immediately
exercisable. Each right of exercise shall be cumulative and shall continue,
unless sooner exercised or terminated as herein provided, during the remaining
period of the Exercise Term.
4. Manner of Exercise.
4.1 Subject to the terms and conditions of this Agreement and the Plan, the
SARs may be exercised by delivery in person, by telecopy or by mail of written
notice to the Company, at its principal executive office. Such notice shall
state that Grantee is electing to exercise a specific number of SARs and shall
be signed by the person or persons exercising the SARs. If requested by the
Committee, such person or persons shall (i) deliver this Agreement to the
Secretary of the Company who shall endorse thereon a notation of such exercise
and (ii) provide satisfactory proof as to the right of such person or persons to
exercise the Award.
4.2 Upon the exercise of SARs, Grantee shall be entitled to receive an
amount determined by multiplying (A) the Appreciation Value of a Share, by (B)
the number of SARs being exercised. Payment of such amount shall be made in
cash.
4.3 Grantee shall not be deemed to be the holder of, or to have any of the
rights of a holder with respect to, any Shares as a result of the grant or
exercise of this Award.
5. Termination of Employment.
5.1 Termination for any Reason other than Cause. If Grantee's employment is
terminated for any reason other than by the Company for Cause, or due to
Grantee's death, the Award shall continue to be exercisable for the duration of
the Exercise Term. In the event of Grantee's death, the Award shall be
exercisable by the legatee or legatees under his or her will, or by his or her
personal representatives or distributees and such person or persons shall be
substituted for Grantee each time Grantee is referred to herein.
5.2 Termination for Cause. If the employment of Grantee is terminated for
Cause, any unexercised portion of the Award shall terminate on the date of
Grantee's termination of employment (whether or not exercisable).
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6. Effect of Change in Control.
Notwithstanding anything contained in this Agreement to the contrary, in
the event of a Change in Control, Grantee will be permitted to surrender for
cancellation within ninety (90) days after such Change in Control, this Award or
any portion of this Award to the extent not yet exercised and Grantee shall be
entitled to receive immediately a cash payment in an amount equal to the
Appreciation Value of this Award, if any, on the date of surrender.
7. Nontransferability.
This Award shall not be transferable other than by will or by the laws of
descent and distribution or pursuant to a domestic relations order (as
contemplated by the Plan). This Award shall be exercisable only by Grantee or
Grantee's guardian or legal representative during the lifetime of Grantee.
8. No Right to Continued Employment.
Nothing in this Agreement or the Plan shall be interpreted or construed to
confer upon Grantee any right with respect to continuance of employment by the
Company, nor shall this Agreement or the Plan interfere in any way with the
right of the Company to terminate Grantee's employment at any time.
9. Adjustments.
In the event of a Change in Capitalization, the Committee may make
appropriate adjustments to the number and class of Shares or other stock or
securities subject to this Award and the exercise price for such Shares or other
stock or securities. The Committee's adjustment shall be made in accordance with
the provisions of Section 14 of the Plan and shall be effective and final,
binding and conclusive for all purposes of the Plan and this Agreement.
10. Effect of a Merger, Consolidation or Liquidation.
Subject to Section 6 hereof, upon the effective date of a Transaction, (i)
this Award shall be treated as provided for in the agreement entered into in
connection with the Transaction, or (ii) if not so provided in such agreement,
Grantee shall be entitled to receive in respect of each unexercised SAR, upon
exercise, the same number and kind of stock, securities, cash, property or other
consideration that each holder of a Share was entitled to receive in the
Transaction in respect of a Share; provided, however, that such stock,
securities, cash, property, or other consideration shall remain subject to all
of the conditions, restrictions and performance criteria applicable to this
Award prior to such Transaction.
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11. Withholding of Taxes.
The Company shall have the right to deduct from any distribution of cash to
Grantee an amount equal to the federal, state and local income taxes and other
amounts as may be required by law to be withheld (the "Withholding Taxes") with
respect to this Award.
12. Grantee Bound by the Plan.
Grantee hereby acknowledges receipt of a copy of the Plan and agrees to be
bound by all the terms and provisions thereof.
13. Modification of Agreement.
This Agreement may be modified, amended, suspended or terminated, and any
terms or conditions may be waived, but only by a written instrument executed by
the parties hereto.
14. Severability.
Should any provision of this Agreement be held by a court of competent
jurisdiction to be unenforceable or invalid for any reason, the remaining
provisions of this Agreement shall not be affected by such holding and shall
continue in full force in accordance with their terms.
15. Governing Law.
The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of Delaware without giving
effect to the conflicts of laws principles thereof.
16. Successors in Interest.
This Agreement shall inure to the benefit of and be binding upon any
successor to the Company. This Agreement shall inure to the benefit of Grantee's
legal representatives. All obligations imposed upon Grantee and all rights
granted to the Company under this Agreement shall be final, binding and
conclusive upon Grantee's heirs, executors, administrators and successors.
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17. Resolution of Disputes.
Any dispute or disagreement which may arise under, or as a result of, or in
any way relate to, the interpretation, construction or application of this
Agreement shall be determined by the Committee. Any determination made hereunder
shall be final, binding and conclusive on Grantee and Company for all purposes.
PLAINS EXPLORATION & PRODUCTION
COMPANY
By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
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Title: Chairman and Chief Executive Officer
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