WHITING PETROLEUM CORPORATION RESTRICTED STOCK AGREEMENT
Exhibit
10.1
XXXXXXX
PETROLEUM CORPORATION
THIS
RESTRICTED STOCK AGREEMENT (this “Agreement”) is made and
entered into as of _____________________ by and between Xxxxxxx Petroleum
Corporation, a Delaware corporation with its principal offices at Denver,
Colorado (the “Company”), and the executive
officer of the Company or one of its affiliates whose signature is set forth on
the signature page hereof (the “Participant”).
W
I T N E S S E T H :
WHEREAS,
the Company has adopted the Xxxxxxx Petroleum Corporation 2003 Equity Incentive
Plan (as amended, the “Plan”) to permit shares of
the Company’s common stock (the “Stock”), to be awarded to
certain key salaried employees and non-employee directors of the Company and any
affiliate of the Company; and
WHEREAS,
the Participant is an executive officer of the Company, and the Company desires
such person to remain in such capacity and to further an opportunity for his or
her stock ownership in the Company in order to increase his or her proprietary
interest in the success of the Company;
NOW,
THEREFORE, in consideration of the premises and of the covenants and agreements
herein set forth, the parties hereby mutually covenant and agree as
follows:
1. Award of Restricted
Stock. Subject to the terms and conditions set forth herein,
the Company hereby awards the Participant the number of shares of Stock set
forth on the signature page hereof (the “Restricted
Stock”).
2. Restrictions. (a) Except
as otherwise provided herein, Restricted Stock may not be sold, transferred,
pledged, assigned, encumbered or otherwise alienated or hypothecated until the
date of release (the “Release
Date”) determined as follows:
(i) the
Release Date with respect to one-third of the shares of Restricted Stock shall
be the first anniversary of the Grant Date specified on the signature page
hereof (the “Grant
Date”) if the Compensation Committee of the Board of Directors of the
Company (the “Committee”) determines the
Performance Contingency (as defined below) has been satisfied with respect to
the Company’s fiscal year immediately preceding the first anniversary of the
Grant Date;
(ii) the
Release Date with respect to two-thirds of the shares of Restricted Stock (less
any shares of Restricted Stock for which there already has been a Release Date)
shall be the second anniversary of the Grant Date if the Committee determines
the Performance Contingency has been satisfied with respect to the Company’s two
fiscal years immediately preceding the second anniversary of the Grant Date;
and
(iii) the
Release Date with respect to all of the shares of Restricted Stock (less any
shares of Restricted Stock for which there already has been a Release Date)
shall be the third anniversary of the Grant Date if the Committee determines the
Performance Contingency has been satisfied with respect to the Company’s three
fiscal years immediately preceding the third anniversary of the Grant
Date.
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If the
Committee determines that the Performance Contingency has not been satisfied
with respect to the Company’s fiscal year immediately preceding the third
anniversary of the Grant Date, then all Restricted Stock that previously has not
been released shall be forfeited to the Company on the date the Committee makes
such determination.
(b) Within
six weeks after the end of each of the Company’s fiscal years preceding the
first three anniversaries of the Grant Date, the Committee will determine
whether the Performance Contingency has been satisfied with respect to such
fiscal year based on the criteria set forth in this Section 2. The
“Performance
Contingency” will be satisfied with respect to such a fiscal year (i) if
the Company Stock Price Percentage (as defined below) at the end of such fiscal
year is a positive number and either (A) the Peer Group Stock Price Percentage
(as defined below) at the end of such fiscal year is a positive number and such
Company Stock Price Percentage is greater than such Peer Group Stock Price
Change or (B) the Peer Group Stock Price Percentage is a negative number or (ii)
if the Company Stock Price Percentage at the end of such fiscal year is a
negative number and the Peer Group Stock Price Percentage at the end of such
fiscal year is a negative number and the absolute value of such Company Stock
Price Percentage is less than the absolute value of such Peer Group Stock Price
Percentage.
(c) “Company Stock Price
Percentage” means the percentage (whether positive or negative) equal to
the quotient of (i) the amount determined by subtracting (A) $57.66 (i.e., the closing price of
the Stock on December 31, 2007), which shall be adjusted equitably for any stock
split, stock dividend, special cash dividend or similar event affecting the
Stock (the “Company
Base Price”), from (B)
the closing price of the Stock on each of the fiscal year ends (or the last
trading day of each such year) preceding the first three anniversaries, as
applicable, of the Grant Date divided by (ii) the Company Base
Price.
(d) “Peer Group” means Xxxx
Xxxxxxx Corporation, Cabot Oil & Gas Corporation, Cimarex Energy Company,
Delta Petroleum Corporation, Denbury Resources, Inc., Encore Acquisition
Company, Forest Oil Corporation, Newfield Exploration Company, Petrohawk Energy
Corporation, Plains Petroleum & Production Company, Range Resources
Corporation and St. Mary’s Land & Exploration Company. If any of
the foregoing companies is no longer a publicly traded company at any time
during a fiscal year, then such company shall be removed from the Peer Group and
the remaining companies shall make up the Peer Group for purposes of determining
the Peer Group Stock Price Percentage and whether the Performance Contingency
has been satisfied for such fiscal year and any applicable future fiscal
years.
(e) “Peer Group Stock Price
Percentage” means the percentage (whether negative or positive) equal to
the average of the percentages determined for each company in Peer Group by
calculating the quotient of (i) the amount determined by subtracting (A) the
closing price of the common stock of such Peer Group company on December 31,
2007, which shall be adjusted equitably for any stock split, stock dividend,
special cash dividend or similar event affecting the common stock of such Peer
Group company (the “Peer Group
Company Base Price”), from (B) closing price of the common stock of such
Peer Group company on each of the fiscal year ends (or the last trading day of
each such year) preceding the first three anniversaries, as applicable, of the
Grant Date divided by (ii) the Peer Group Company Base Price.
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3. Initial
Issuance. The Restricted Stock shall be issued as soon as
practicable in the name of the Participant but shall be held in a segregated
account by the transfer agent of the Company. Unless forfeited as
provided herein, Restricted Stock eligible for release pursuant to the terms
hereof shall cease to be held in such segregated account and certificates for
such Restricted Stock shall be delivered or such Restricted Stock shall be
transferred electronically to the Participant on the applicable Release
Date.
4. Transfer After Release Date;
Securities Law Restrictions. On the applicable Release Date as
determined in accordance with Paragraph 2, that portion of Restricted Stock
shall become free of the restrictions of Paragraph 2 and be freely transferable
by the Participant. Notwithstanding the foregoing or anything to the
contrary herein, the Participant agrees and acknowledges with respect to any
Restricted Stock that has not been registered under the Securities Act of 1933,
as amended (the “Act”)
(i) he or she will not sell or otherwise dispose of such Stock except pursuant
to an effective registration statement under the Act and any applicable state
securities laws, or in a transaction which, in the opinion of counsel for the
Company, is exempt from such registration, and (ii) a legend will be placed on
the certificates for the Restricted Stock to such effect.
5. Termination of Employment or
Death. If the Participant’s employment with the Company (as
applicable) is terminated for any reason (including death) prior to the Release
Date, all Restricted Stock that has not been released shall be forfeited to the
Company on the date on which such termination of status occurs.
6. Certificate
Legend. In addition to any legends placed on certificates for
Restricted Stock under Paragraph 4 hereof, each certificate for shares of
Restricted Stock may bear the following legend:
“THE SALE
OR OTHER TRANSFER OF THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE,
WHETHER VOLUNTARY, INVOLUNTARY OR BY OPERATION OF LAW, IS SUBJECT TO CERTAIN
RESTRICTIONS SET FORTH IN THE XXXXXXX PETROLEUM CORPORATION 2003 EQUITY
INCENTIVE PLAN AND A RESTRICTED STOCK AGREEMENT BETWEEN XXXXXXX PETROLEUM
CORPORATION AND THE REGISTERED OWNER HEREOF. A COPY OF SUCH PLAN AND
SUCH AGREEMENT MAY BE OBTAINED FROM THE CORPORATE SECRETARY OF XXXXXXX PETROLEUM
CORPORATION.”
When the
restrictions imposed by Paragraph 2 hereof terminate, the Participant shall be
entitled to have the foregoing legend removed from the certificates representing
such Restricted Stock.
7. Voting Rights; Dividends and
Other Distributions. (a) While the Restricted Stock
is subject to restrictions under Paragraph 2 and prior to any forfeiture
thereof, the Participant may exercise full voting rights for the Restricted
Stock registered in his or her name and held in a segregated account
hereunder.
(b) While the
Restricted Stock is subject to the restrictions under Paragraph 2 and prior to
any forfeiture thereof, the Participant shall be entitled to receive all
dividends and other distributions paid with respect to the Restricted
Stock. If any such dividends or distributions are paid in Stock, such
shares shall be subject to the same terms, conditions and restrictions as the
shares of Restricted Stock with respect to which they were paid, including the
requirement that Restricted Stock be held in a segregated account pursuant to
Paragraph 3 hereof.
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(c) Subject
to the provisions of this Agreement, the Participant shall have, with respect to
the Restricted Stock, all other rights of holders of Stock.
8. Tax
Withholding. (a) It shall be a condition of the
obligation of the Company to issue or release from the segregated account
Restricted Stock to the Participant, and the Participant agrees, that the
Participant shall pay to the Company upon demand such amount as may be requested
by the Company for the purpose of satisfying its liability to withhold federal,
state, or local income or other taxes incurred by reason of the award of the
Restricted Stock or as a result of the termination of the restrictions on such
Stock hereunder.
(b) If the
Participant does not make an election under Section 83(b) of the Internal
Revenue Code of 1986, as amended, with respect to the Restricted Stock awarded
hereunder, the Participant may satisfy the Company’s withholding tax
requirements by electing to have the Company withhold that number of shares of
Restricted Stock otherwise deliverable to the Participant from the segregated
account hereunder or to deliver to the Company a number of shares of Stock, in
each case, having a Fair Market Value (as defined in the Plan) on the Tax Date
(as defined below) equal to the minimum amount required to be withheld as a
result of the termination of the restrictions on such Restricted
Stock. The election must be made in writing and must be
delivered to the Company prior to the Tax Date. If the number of
shares so determined shall include a fractional share, the Participant shall
deliver cash in lieu of such fractional share. All elections shall be
made in a form approved by the Committee and shall be subject to disapproval, in
whole or in part, by the Committee. As used herein, “Tax Date” means the date on
which the Participant must include in his or her gross income for federal income
tax purposes the fair market value of the Restricted Stock over the purchase
price therefor, if any.
9. Powers of Company Not
Affected. The existence of the Restricted Stock shall not
affect in any way the right or power of the Company or its stockholders to make
or authorize any combination, subdivision or reclassification of the Stock or
any reorganization, merger, consolidation, business combination, exchange of
shares, or other change in the Company’s capital structure or its business, or
any issue of bonds, debentures or stock having rights or preferences equal,
superior or affecting the Restricted Stock or the rights thereof, or dissolution
or liquidation of the Company, or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding, whether of a
similar character or otherwise. Nothing in this Agreement shall
confer upon the Participant any right to continue in the employment of the
Company, or interfere with or limit in any way the right of the Company to
terminate the Participant’s employment at any time.
10. Interpretation by
Committee. The Participant agrees that any dispute or
disagreement which may arise in connection with this Agreement shall be resolved
by the Committee, in its sole discretion, and that any interpretation by the
Committee of the terms of this Agreement or the Plan and any determination made
by the Committee under this Agreement or the Plan may be made in the sole
discretion of the Committee and shall be final, binding, and conclusive.
Any such determination need not be uniform and may be made differently
among Participants awarded Restricted Stock.
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11. Miscellaneous. (a) This
Agreement shall be governed and construed in accordance with the internal laws
of the State of Delaware applicable to contracts made and to be performed
therein between residents thereof.
(b) This
Agreement may not be amended or modified except by the written consent of the
parties hereto.
(c) The
captions of this Agreement are inserted for convenience of reference only and
shall not be taken into account in construing this Agreement.
(d) Any
notice, filing or delivery hereunder or with respect to Restricted Stock shall
be given to the Participant at either his or her usual work location or his or
her home address as indicated in the records of the Company, and shall be given
to the Committee or the Company at 0000 Xxxxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx
00000-0000, Attention: Corporate Secretary. All such
notices shall be given by first class mail, postage prepaid, or by personal
delivery.
(e) This
Agreement shall be binding upon and inure to the benefit of the Company and its
successors and assigns and shall be binding upon and inure to the benefit of the
Participant, except that the Participant may not transfer any interest in any
Restricted Stock prior to the release of the restrictions imposed by Paragraph
2.
(f) This
Agreement is subject in all respects to the terms and conditions of the
Plan.
12. Change of
Control. (a) Notwithstanding any other provision to
the contrary contained in this Agreement, effective upon a Change in Control of
the Company (as defined below), the restrictions imposed upon the Restricted
Stock (except for any such shares which were previously forfeited to the
Company) by Paragraph 2 of this Agreement shall immediately be deemed to have
lapsed and the Release Date shall be deemed to have occurred as of the date of
the Change in Control of the Company with respect to such Restricted
Stock.
(b) The
following terms shall have the following meanings when used in this Paragraph
12:
(i) “Act” means the Securities
Exchange Act of 1934, as amended.
(ii) “Affiliate” and “Associate” shall have the
respective meanings ascribed to such terms in Rule l2b-2 of the General Rules
and Regulations under the Act.
(iii) A
Person shall be deemed to be the “Beneficial Owner” of any
securities:
(A) which
such Person or any of such Person’s Affiliates or Associates has the right to
acquire (whether such right is exercisable immediately or only after the passage
of time) pursuant to any agreement, arrangement or understanding, or upon the
exercise of conversion rights, exchange rights, rights, warrants or options, or
otherwise; provided, however, that a Person shall not be deemed the Beneficial
Owner of, or to beneficially own, (i) securities tendered pursuant to a tender
or exchange offer made by or on behalf of such Person or any of such Person’s
Affiliates or Associates until such tendered securities are accepted for
purchase, or (ii) securities issuable upon exercise of rights issued pursuant to
the terms of any Rights Agreement of the Company, at any time before the
issuance of such securities;
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(B) which
such Person or any of such Person’s Affiliates or Associates, directly or
indirectly, has the right to vote or dispose of or has “beneficial ownership” of (as
determined pursuant to Rule l3d-3 of the General Rules and Regulations under the
Act), including pursuant to any agreement, arrangement or understanding;
provided, however, that a Person shall not be deemed the Beneficial Owner of, or
to beneficially own, any security under this clause (B) as a result of an
agreement, arrangement or understanding to vote such security if the agreement,
arrangement or understanding: (i) arises solely from a revocable proxy or
consent given to such Person in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the applicable rules and
regulations under the Act and (ii) is not also then reportable on a Schedule l3D
under the Act (or any comparable or successor report); or
(C) which are
beneficially owned, directly or indirectly, by any other Person with which such
Person or any of such Person’s Affiliates or Associates has any agreement,
arrangement or understanding for the purpose of acquiring, holding, voting
(except pursuant to a revocable proxy as described in clause (B) above) or
disposing of any voting securities of the Company.
(iv) “Board” means the Board of
Directors of the Company.
(v) “Change in Control” means
the occurrence of any of the following:
(A) any
Person (other than (i) the Company or any of its subsidiaries, (ii) a trustee or
other fiduciary holding securities under any employee benefit plan of the
Company or any of its subsidiaries, (iii) an underwriter temporarily holding
securities pursuant to an offering of such securities or (iv) a corporation
owned, directly or indirectly, by the shareholders of the Company in
substantially the same proportions as their ownership of stock in the Company
(“Excluded Persons”))
is or becomes the Beneficial Owner, directly or indirectly, of securities of the
Company (not including in the securities beneficially owned by such Person any
securities acquired directly from the Company or its Affiliates after the date
of this Agreement, pursuant to express authorization by the Board that refers to
this exception) representing 20% or more of either the then outstanding shares
of common stock of the Company or the combined Voting Power of the Company’s
then outstanding voting securities; or
(B) the
following individuals cease for any reason to constitute a majority of the
number of directors of the Company then serving: (i) individuals who,
on the date of this Agreement constituted the Board and (ii) any new director
(other than a director whose initial assumption of office is in connection with
an actual or threatened election contest, including but not limited to a consent
solicitation, relating to the election of directors of the Company) whose
appointment or election by the Board or nomination for election by the Company’s
shareholders was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors on the date of this
Agreement, or whose appointment, election or nomination for election was
previously so approved (collectively the “Continuing Directors”);
provided, however, that individuals who are appointed to the Board pursuant to
or in accordance with the terms of an agreement relating to a merger,
consolidation, or share exchange involving the Company (or any direct or
indirect subsidiary of the Company) shall not be Continuing Directors for
purposes of this definition until after such individuals are first nominated for
election by a vote of at least two-thirds (2/3) of the then Continuing Directors
and are thereafter elected as directors by the shareholders of the Company at a
meeting of shareholders held following consummation of such merger,
consolidation, or share exchange; and, provided further, that in the event the
failure of any such persons appointed to the Board to be Continuing Directors
results in a Change in Control of the Company, the subsequent qualification of
such persons as Continuing Directors shall not alter the fact that a Change in
Control of the Company occurred; or
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(C) the
shareholders of the Company approve a merger, consolidation or share exchange of
the Company with any other corporation or approve the issuance of voting
securities of the Company in connection with a merger, consolidation or share
exchange of the Company (or any direct or indirect subsidiary of the Company)
pursuant to applicable stock exchange requirements, other than (i) a merger,
consolidation or share exchange which would result in the voting securities of
the Company outstanding immediately prior to such merger, consolidation or share
exchange continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity or any parent thereof)
at least 50% of the combined Voting Power of the voting securities of the
Company or such surviving entity or any parent thereof outstanding immediately
after such merger, consolidation or share exchange, or (ii) a merger,
consolidation or share exchange effected to implement a recapitalization of the
Company (or similar transaction) in which no Person (other than an Excluded
Person) is or becomes the Beneficial Owner, directly or indirectly, of
securities of the Company (not including in the securities beneficially owned by
such Person any securities acquired directly from the Company or its Affiliates
after the date of this Agreement, pursuant to express authorization by the Board
that refers to this exception) representing 20% or more of either the then
outstanding shares of common stock of the Company or the combined Voting Power
of the Company’s then outstanding voting securities; or
(D) the
shareholders of the Company approve a plan of complete liquidation or
dissolution of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company’s assets (in one transaction
or a series of related transactions within any period of 24 consecutive months),
other than a sale or disposition by the Company of all or substantially all of
the Company’s assets to an entity at least 75% of the combined Voting Power of
the voting securities of which are owned by Persons in
substantially the same proportions as their ownership of the Company immediately
prior to such sale.
Notwithstanding
the foregoing, no “Change in
Control” shall be deemed to have occurred if there is consummated any
transaction or series of integrated transactions immediately following which the
record holders of the common stock of the Company immediately prior to such
transaction or series of transactions continue to own, directly or indirectly,
in the same proportions as their ownership in the Company, an entity that owns
all or substantially all of the assets or voting securities of the Company
immediately following such transaction or series of transactions.
(vi) “Person” means any
individual, firm, partnership, corporation or other entity, including any
successor (by merger or otherwise) of such entity, or a group of any of the
foregoing acting in concert.
(vii) “Voting Power” means the
voting power of the outstanding securities of the Company having the right under
ordinary circumstances to vote at an election of the Board.
IN
WITNESS WHEREOF, the Company has caused this instrument to be executed by its
duly authorized officer and the Participant has hereunto affixed his or her
signature, all as of the day and year first set forth above.
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COMPANY:
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PARTICIPANT:
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XXXXXXX
PETROLEUM CORPORATION
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By:
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Name:
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No.
of Shares of Restricted Stock:
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Title:
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Grant
Date:
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