ALLIS-CHALMERS ENERGY INC. EMPLOYEE PERFORMANCE AWARD AGREEMENT as amended and restated, effective March 3, 2010 Pursuant to the terms of the Allis-Chalmers Energy Inc. 2006 Incentive Plan
XXXXX-XXXXXXXX ENERGY
INC.
as
amended and restated, effective Xxxxx 0, 0000
Xxxxxxxx
to the terms of the Xxxxx-Xxxxxxxx Energy Inc. 2006 Incentive Plan
1. Grant of Performance
Award. Xxxxx-Xxxxxxxx Energy Inc., a Delaware corporation
(“Company”), hereby grants to _________________________ (“Participant”)
performance awards in the form of [xx,xxx] shares (the “Performance
Award”) of common stock, $0.01 par value per share, of the Company (“Common
Stock”), subject to meeting the Performance Objectives as described in Section 4
hereof, and in accordance with the terms and conditions of this
document. This Performance Award Agreement is dated as of [xx/xx/xx]. The Performance Award in
the form of Common Stock is awarded pursuant to and to implement in part the
Xxxxx-Xxxxxxxx Energy Inc. 2006 Incentive Plan (as amended and in effect from
time to time, the “Plan”) and is subject to the restrictions, forfeiture
provisions and other terms and conditions of the Plan, which is hereby
incorporated herein and is made a part hereof, and this Performance Award
Agreement. By execution of this Performance Award Agreement,
Participant agrees to be bound by all of the terms, provisions, conditions and
limitations of the Plan as implemented by the Performance Award Agreement,
together with all rules and determinations from time to time issued by the
Committee pursuant to the Plan. All capitalized terms have the
meanings set forth in the Plan unless otherwise specifically
provided. All references to specified paragraphs pertain to
paragraphs of this Performance Award Agreement unless otherwise
provided.
2.
Settlement of Performance
Award. The stock certificate(s) evidencing the Performance
Award shall not be issued or registered on the Company’s books and records until
the Performance Objectives set forth in paragraph 4 below have been met by the
Participant and approved by the Committee and all other restrictions contained
in this Performance Award Agreement have lapsed. Upon resolution by
the Committee that the Participant has achieved the Performance Objectives, and
subject to the other terms and conditions of this Performance Award Agreement,
the Company will promptly issue a stock certificate with respect to the vested
portion of the shares of the Performance Award for which the Performance
Objectives have been met. However, in no event shall such stock
certificate be issued to the Participant later than 90 days after such shares
have vested.
3. Risk of
Forfeiture. Participant shall immediately forfeit all rights
to any Performance Award which have not vested and with respect to which the
Performance Objectives have not been met or in the event of termination for
cause, resignation, or removal of Participant from employment with the Company
or any Affiliate under circumstances that do not cause Participant to become
fully vested, under the terms of the Plan.
4. Performance
Objectives. Subject to the provisions of this Performance
Award Agreement including, without limitation, the following provisions of this
Paragraph 4, the Performance Award shall vest upon Participant meeting
performance criteria based on any one or more of the Performance Objectives
described below, as more specifically determined by the Compensation Committee
and approved by the Board of Directors of the Company:
(i) increase
in earnings per share; (ii) increase in price per share,
(iii) increase in revenues; (iv) increase in cash flow;
(v) return on net assets; (vi) return on assets; (vii) return on
investment; (viii) return on equity; (ix) economic value added;
(x) gross margin; (xi) net income; (xii) pretax earnings;
(xiii) pretax earnings before interest, depreciation, depletion and
amortization; (xiv) pretax operating earnings after interest expense and before
incentives, service fees, and extraordinary or special items;
(xv) operating income; (xvi) total stockholder return;
(xvii) debt reduction
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Any of
the above goals may be determined on an absolute or relative basis or as
compared to the performance of a published or special index of companies as
determined by the Compensation Committee.
The
period from the date hereof until Performance Awards have become one hundred
percent (100%) vested and the Committee has determined that such Performance
Objectives have been met shall be referred to as the “Restricted
Period.”
5. Transferability. During
the Restricted Period, the Participant shall not sell, assign, transfer, pledge,
exchange, hypothecate, or otherwise dispose of any right, title or interest in
the Performance Award prior to vesting in accordance with this Performance Award
Agreement. Upon receipt by the Participant of stock certificate(s)
representing the vested shares pursuant to Paragraph 2 above, the Participant
may hold or dispose of the shares represented by such certificate(s), subject to
compliance with (i) the terms and conditions of the Plan and this Performance
Award Agreement, (ii) applicable federal or state securities laws or other
applicable law, (iii) applicable rules of any exchange on which the Company’s
securities are traded or listed, and (iv) the Company’s rules or policies as
established by the Company in its sole discretion.
6. No Ownership
Rights. Prior to the vesting of the Performance Award, the
Participant shall not have any rights with respect to the shares of Common Stock
represented by the Performance Award hereunder including the right to vote the
shares of Common Stock and the right to receive any dividends.
7. Termination of
Employment. If employment of Participant by the Company or any
Affiliate is terminated due to death or disability or in the event employment of
Participant is terminated without cause all Performance Awards outstanding at
the time of such termination and all rights thereunder shall immediately
vest.
8. Change
in Control.
(a) Change in
Control. Upon the occurrence of a Change in Control (as
defined in the Plan), all restrictions and conditions of the Performance Award
shall automatically be waived without any required action by the Company,
Committee or the Board with the result that the Performance Award shall be fully
vested and the restrictions thereon shall have lapsed.
(b) Right of Cash-Out. If
approved by the Board prior to or within thirty (30) days after such time as a
Change in Control shall be deemed to have occurred, the Board shall have the
right for a forty-five (45) day period immediately following the date that the
Change in Control is deemed to have occurred to require Participant to transfer
and deliver to Company all unvested shares of the Performance Award hereunder
with respect to which the restrictions have not lapsed in exchange for an amount
equal to the “cash value” (defined below) of such shares of the Performance
Award. Such right shall be exercised by written notice to
Participant. The cash value of such shares of the Performance Award
shall equal the “market value” (defined below) per share, multiplied by the
number of unvested shares of the Performance Award hereunder with respect to
which the restrictions have not lapsed. For purposes of the preceding sentence,
“market value” per share shall mean the higher of (i) the average of the Fair
Market Value per share of Common Stock on each of the five trading days
immediately following the date a Change in Control is deemed to have occurred or
(ii) the highest price, if any, offered in connection with the Change in
Control. The amount payable to Participant by Company pursuant to
this Section 8(b) shall be paid in cash or by certified check and shall be
reduced by any taxes required to be withheld.
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9. Reorganization of Company and
Subsidiaries. The existence of the Performance Awards shall
not affect in any way the right or power of the Company or its stockholders to
make or authorize any or all adjustments, recapitalizations, reorganizations or
other changes in the Company’s capital structure or its business, or any merger
or consolidation of the Company or any issue of bonds, debentures, preferred or
prior preference stock ahead of or affecting the Performance Award or the rights
thereof, or the dissolution or liquidation of 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.
10. Adjustment of
Shares. In the event of stock dividends, spin-offs of assets
or other extraordinary dividends, stock splits, combinations of shares,
recapitalizations, mergers, consolidations, reorganizations, liquidations,
issuances of rights or warrants and similar transactions or events involving
Company, the Committee shall, in such manner as it may deem equitable, make
adjustments to the terms and provisions of this Performance Award
Agreement.
11. Certain
Restrictions. By executing this Performance Award Agreement,
Participant agrees that if at the time of delivery of certificates representing
the Performance Award is not covered by an effective registration statement
filed under the Securities Act of 1933 (“Act”), the certificates so delivered
may contain such legends as the Company shall require and the Participant will
acquire the shares of the Performance Award for Participant’s own account and
without a view to resale or distribution in violation of the Act or any other
securities law, and upon any such acquisition Participant will enter into such
written representations, warranties and agreements as Company may reasonably
request in order to comply with the Act or any other securities law or with this
Performance Award Agreement. Participant agrees that the Company
shall not be obligated to take any affirmative action in order to cause the
issuance or transfer of shares of the Performance Award hereunder to comply with
any law, rule or regulation that applies to the shares of Common Stock subject
to this Performance Award Agreement.
12. Amendment and
Termination. The Performance Award Agreement may not be
terminated by the Board or the Committee at any time without the written consent
of Participant. This Performance Award Agreement may be amended in
writing by the Company and Participant, provided the Company may amend this
Performance Award Agreement unilaterally (i) if the amendment does not adversely
affect the Participant’s rights hereunder in any material respect, (ii) if the
Company determines that an amendment is necessary to comply with Rule 16b-3
under the Exchange Act or other applicable law, or (iii) if the Company
determines that an amendment is necessary to meet the requirements of the Code
or to prevent adverse tax consequences to the Participant. No
amendment or termination of the Plan will adversely affect the rights and
privileges of Participant under this Performance Award Agreement or to the
Common Stock granted hereunder without the written consent of
Participant.
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13. No Guarantee of
Employment. Neither this Performance Award Agreement nor the
Performance Award evidenced hereby shall confer upon Participant any right with
respect to continuance of employment or other service with the Company or any
Affiliate, nor shall it interfere in any way with any right Company or any
Affiliate would otherwise have to terminate such Participant’s employment or
other service at any time.
14. Tax Matters.
(a) Company
shall have the right to (i) make deductions from the number of shares of Common
Stock otherwise deliverable upon vesting of the Performance Award and
satisfaction of the conditions precedent under this Performance Award Agreement
in an amount sufficient to satisfy withholding of any federal, state or local
taxes required by law, or (ii) take such other action as may be necessary or
appropriate to satisfy any such tax withholding obligations.
(b) Under
Section 83 of the Code, the difference between the purchase price paid, if any,
for the shares of Performance ``Award and their fair market value on the date of
vesting when any forfeiture restrictions applicable to such shares lapse will be
reportable as ordinary income at that time. Participant may elect to
be taxed at the effective time of this award when the shares are acquired rather
than when such shares vest and cease to be subject to such forfeiture
restrictions by filing an election under Section 83(b) of the Code with the
Internal Revenue Service within thirty (30) days after the date
hereof. If such an election is made, Participant will have to make a
tax payment to the extent the purchase price, if any, is less than the fair
market value of the shares on the date hereof. No tax payment will
have to be made to the extent the purchase price, if any, is at least equal to
the fair market value of the shares on the date hereof. Failure to
make this filing within the thirty (30) day period will result in the
recognition of ordinary income by you as the shares of Restricted Stock vest and
the forfeiture restrictions lapse.
PARTICIPANT
ACKNOWLEDGES THAT IT IS PARTICIPANT’S SOLE RESPONSIBILITY, AND NOT THE
COMPANY’S, TO FILE A TIMELY ELECTION UNDER SECTION 83(b) IF PARTICIPANT ELECTS
TO DO SO, EVEN IF PARTICIPANT REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO
MAKE THIS FILING ON PARTICIPANT’S BEHALF. PARTICIPANT MUST AND IS RELYING SOLELY
ON PARTICIPANT’S OWN ADVISORS WITH RESPECT TO THE DECISION AS TO WHETHER OR NOT
TO FILE ANY SECTION 83(b) ELECTION.
(c) Neither
Company nor the Board or Committee makes any commitment or guarantee that any
federal or state tax treatment will apply or be available to any person eligible
for the benefits under this Performance Award Agreement.
15. Community Interest of
Spouse. The community interest, if any, of any spouse of
Participant in any Performance Award shall be subject to all of the terms,
conditions and restrictions of this Performance Award Agreement and the
Plan.
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16. Consent to Electronic Delivery;
Electronic Signature. In lieu of receiving documents in paper
format, Participant agrees, to the fullest extent permitted by law, to accept
electronic delivery of any documents that the Company may be required to deliver
(including,
but not
limited to, prospectuses, prospectus supplements, grant or award notifications
and agreements, account statements, annual and quarterly reports, and all other
forms of communications) in connection with this and any other award made or
offered by the Company. Electronic delivery may be via a Company electronic mail
system or by reference to a location on a Company intranet to which Participant
has access. Participant hereby consents to any and all procedures the
Company has established or may establish for an electronic signature system for
delivery and acceptance of any such documents that the Company may be required
to deliver, and agrees that his or her electronic signature is the same as, and
shall have the same force and effect as, his or her manual
signature.
17. Severability. In
the event that any provision of this Performance Award Agreement shall be held
illegal, invalid, or unenforceable for any reason, such provision shall be fully
severable, but shall not affect the remaining provisions of this Performance
Award Agreement, and this Performance Award Agreement shall be construed and
enforced as of the illegal, invalid, or unenforceable provision had never been
included herein.
18. Governing Law. This
Performance Award Agreement shall be construed in accordance with the laws of
the State of Delaware to the extent federal law does not supersede and preempt
Delaware law.
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COMPANY:
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XXXXX-XXXXXXXX
ENERGY INC.
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By:
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Printed Name:
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Title:
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PARTICIPANT:
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(signature)
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