4.0
PETROCORP INCORPORATED
2000 STOCK OPTION PLAN
STATEMENT OF PURPOSE
One purpose of the PetroCorp Incorporated 2000 Incentive Stock Compensation Plan
(the "Plan") is to encourage superior performance by employees of the Company's
management firm ("employees"), by allowing the Board of Directors of PetroCorp
Incorporated ("PEC") to award several forms of incentive compensation to
employees of the Company. By providing incentive compensation commensurate and
competitive with that provided by other companies, the Plan should also assist
in attracting and retaining the services of qualified and capable employees.
In order to further the identity of interest of employees with the stockholders
of PEC, all of the forms of compensation under the Plan relate to PEC Common
Stock. Employees' success in enhancing stockholder value will translate directly
into an enhanced benefit for the employee.
An additional purpose of the Plan is to encourage the Directors to own shares of
the Company's stock and thereby to align their interests more closely with the
interests of the other stockholders of PEC, to encourage the highest level of
Director performance by providing the Directors with a direct interest in PEC's
attainment of its financial goals, and to provide a financial incentive that
will help attract and retain the most qualified Directors.
I. DEFINITIONS
Unless the context indicates otherwise, the following terms have the meanings
set forth below:
"Acceleration Date" means the earliest date on which either of the following
events shall first have occurred: (i) the acquisition described in clause (a) of
the definition of "Change in Control" contained in this Section I, or (ii) the
stockholder approval or adoption described in clause (c) of such definition.
"Award" means a grant of Options, Director Options or Stock Appreciation Rights
pursuant to the Plan.
"Board" means the Board of Directors of PEC.
"Cause" means (a) the willful and continued failure by the Participant (other
than a Director) to substantially perform his duties with the Company (other
than any such failure resulting from his incapacity due to physical or mental
illness), or (b) the willful engaging by the Participant (other than a Director)
in conduct which is demonstrably and materially injurious to the Company,
monetarily or otherwise. For purposes of this definition, no act, or failure to
act, shall be deemed "willful" unless done, or omitted to be done, by the
Participant not in good faith and without reasonable belief that his action or
omission was in the best interest of the Company.
A "Change in Control" shall be deemed to have occurred if:
(a) any "person," as such term is used in Section 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), other
than any trustee or other fiduciary holding securities under an employee
benefit plan of PEC or any company owned, directly or indirectly, by the
stockholders of PEC in substantially the same proportions as their
ownership of stock of PEC, is or becomes the "beneficial owner" (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of PEC representing an additional 25 percentage points or more
of the combined voting power percentage of PEC's then outstanding
securities;
(b) the stockholders of PEC approve a merger or consolidation of PEC with any
other company other than (i) a merger or consolidation which would result
in the voting securities of PEC outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) more than 65% of
the combined voting power of the voting securities of PEC (or such
surviving entity) outstanding immediately after such merger or
consolidation, or (ii) a merger or consolidation effected to implement a
recapitalization of PEC (or similar transaction) in which no "person" (as
hereinabove defined) acquires more than an additional 25% ownership
percentage of the combined voting power of PEC's then outstanding
securities; or
(c) the stockholders of PEC adopt a plan of complete liquidation of PEC or
approve an agreement for the sale or disposition by PEC of all or
substantially all of PEC's assets. For purposes of this clause (c), the
term "the sale or disposition by PEC of all or substantially all of PEC's
assets" shall mean a sale or other disposition transaction or series of
related transactions involving assets of PEC or of any direct or indirect
subsidiary of PEC (including the stock of any direct or indirect subsidiary
of PEC) in which the value of the assets or stock being sold or otherwise
disposed of (as measured by the purchase price being paid therefor or by
such other method as the Board of Directors of PEC determines is
appropriate in a case where there is no readily ascertainable purchase
price) constitutes more than two-thirds of the fair market value of PEC (as
hereinafter defined). For purposes of the preceding sentence, the "fair
market value of PEC" shall be the aggregate market value of the outstanding
shares of common stock of PEC (on a fully diluted basis) plus the aggregate
market value of PEC's other outstanding equity securities. The aggregate
market value of the shares of common stock of PEC shall be determined by
multiplying the number of shares of PEC's common stock (on a fully diluted
basis) outstanding on the date of the execution and delivery of a
definitive agreement with respect to the transaction or series of related
transactions (the "Transaction Date") by the average closing price of the
shares of common stock of PEC for the ten trading days immediately
preceding the Transaction Date. The aggregate market value of any other
equity securities of PEC shall be determined in a manner similar to that
prescribed in the immediately preceding sentence for determining the
aggregate market value of the shares of common stock of PEC or by such
other method as the Board shall determine is appropriate.
"Code" means the Internal Revenue Code of 1986, as amended.
"Committee" means the Compensation and Benefits Committee of the Board.
"Common Stock" means the common stock, $0.01 par value, of PEC.
"Company" means collectively PEC and all companies in which PEC owns,
directly or indirectly, more than 50% of the voting stock.
"Director" means a member of the Board who is not also an employee of the
Company.
"Director Option" means an option to purchase shares of Common Stock
granted pursuant to Section XVII.
"Disability" means the inability of a Participant to continue to perform
the duties of his or her employment with respect to the Company or as a
member of the Board, as the case may be, as determined by the Committee.
"Fair Market Value" shall mean, other than with respect to a Director
Option, the value per share equal to the Market Price as of the date of
determination unless, with respect to an Award to a key employee, the Board
or the Committee shall, in good faith and using any fair and reasonable
means selected in its discretion, determine another value to be used for
such purpose. With respect to a Director Option, Fair Market Value shall
mean the average of the highest and lowest prices of the Common Stock as
reported by the consolidated tape of the American Stock Exchange on the
applicable date (or if there are no transactions on that date, the last
preceding date on which there were transactions).
"Grant Date" as used with respect to a particular Award means the date as
of which such Award is granted pursuant to the Plan.
"Option" means an option, other than a Director Option to purchase shares
of Common Stock granted by the Committee pursuant to the Plan.
"Incentive Stock Option" means an Option that is intended to qualify as an
Incentive Stock Option as described in Section 422 of the Code.
"Market Price" means the average of the daily closing prices per share of
the Common Stock for the 10 consecutive trading days immediately preceding
the day as of which "Market Price" is being determined. The closing price
for each day shall be the last sale price regular way or, in case no such
sale takes place on such day, the average of the closing bid and asked
prices regular way, in either case on the American Stock Exchange, or, if
shares of the Common Stock are not listed or admitted to trading on the
American Stock Exchange, on the principal national securities exchange on
which the shares are listed or admitted to trading, or if the shares are
not so listed or admitted to trading, the average of the highest reported
bid and lowest reported asked prices as furnished by the National
Association of Securities Dealers, Inc., through NASDAQ, or through a
similar organization if NASDAQ is no longer reporting such information. If
shares of Common Stock are not listed or admitted to trading on any
exchange or quoted through NASDAQ or any similar organization, the "Market
Price" shall be determined by the Board in good faith using any fair and
reasonable means selected in its discretion.
"Participant" means any key employee or Director who has an Award
outstanding under the Plan.
"Plan" means the PetroCorp Incorporated 2000 Incentive Stock Compensation
Plan as set forth herein and as may be amended from time to time.
"Restricted Period" means the period of time during which Options and Stock
Appreciation Rights are not exercisable.
"Retirement" means an employee's leaving the employment, other than for
Cause, before reaching age 65. With respect to a Director, "Retirement"
means ceasing to be a member of the Board on or after reaching age 65.
"Stock Appreciation Right" means the right, granted by the Committee
pursuant to the Plan, to receive a payment equal to the increase in the
Fair Market Value of a share of Common Stock subsequent to the Grant Date
of such Award.
II. STOCK AND PHANTOM UNITS SUBJECT TO THE PLAN
Subject to adjustment as provided in the Plan, the maximum aggregate number of
shares of Common Stock with respect to which Options, Directors Options and
Stock Appreciation Rights may be granted from time to time under the Plan is
600,000; provided, however, no more than 225,000 shares shall be subject to new
grants in any one year. The Common Stock issued under the Plan may be either
previously authorized but unissued shares or treasury shares acquired by PEC. In
the event that any Award expires, lapses, is forfeited or otherwise terminates,
any shares of Common Stock allocable to the terminated portion of such Award may
again be made subject to an Award under the Plan. Further, to the extent an
Award is paid in cash, rather than in Common Stock, or shares of Common Stock
are tendered to the Company, or withheld by the Company from an Award, as
payment of the exercise price of an Award or in satisfaction of any Company tax
withholding obligation, such shares of Common Stock may again be made subject to
an Award under the Plan.
III. ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Committee. The members of the Committee
shall not be eligible to participate in the Plan, except as provided in Section
XVII. The Committee shall select or may delegate to the President of the Company
the selection of, from time to time, those employees to be granted Awards under
the Plan. The Committee shall also determine the terms and provisions of Awards,
which need not be identical. The Committee shall construe the Plan, prescribe
and rescind rules and regulations relating to the Plan and make all other
determinations deemed necessary or advisable for the administration of the Plan,
subject to the limitations of Sections XXI and XXII.
IV. ELIGIBILITY
Subject to the discretion of the Committee, all officers and key employees of
the Company or the Company managing the Company who have responsibility for the
growth and profitability of the Company are eligible to receive Awards under the
Plan; provided, however, no employee may receive in any calendar year an Award
or Awards of Options and/or Stock Appreciation Rights with respect to more than
20,000 shares of Common Stock. Directors shall automatically participate in the
Plan as provided in Section XVII.
V. OPTIONS
The Committee may, from time to time and subject to the provisions of the Plan,
grant Awards of Options to employees to purchase shares of Common Stock. All
Options granted will be Incentive Stock Options and will be subject to the
requirements of Section VI of the Plan.
The purchase price of the Common Stock subject to any Options shall be
determined by the Committee. Such price shall be subject to adjustment as
provided in Section XIII of the Plan.
Options shall not be exercisable prior to the date that is twelve months after
the Grant Date. In addition, the Committee may include in each agreement
evidencing the Option grant a provision stating that the Option granted therein
may not be exercised in whole or in part for an additional period(s) of time
specified in such agreement, and may further limit the exercisability of the
Option in such manner as the Committee deems appropriate, including, without
limitation, the achievement of performance goals. The Committee may, in its
discretion, at any time and from time-to-time accelerate the exercisability of
all or part of any Option, provided that the Company's shareholders, by majority
vote have approved such acceleration unless such acceleration is specifically
provided for herein.
The period of any Option, which is the time period during which the Option may
be exercised, shall be determined by the Committee and shall not extend more
than ten years after the Grant Date.
Options shall not be transferable other than by will or the laws of descent and
distribution and during the Participant's lifetime shall be exercisable only by
the Participant.
Termination for Cause, as defined in Section I, shall result in forfeiture of
all outstanding Options. Termination for any reason other than Cause (including
terminations pursuant to formal severance programs sponsored by the Company or
an affiliate), or terminations by reason of death, Disability or Retirement,
shall result in a lapse of all or a proportion of the Restricted Period
applicable to any outstanding Award as set forth in Section XI.
A person electing to exercise an Option shall give written notice of such
election to the Company in such form as the Committee may require. Upon exercise
of an Option, the full option purchase price for the shares with respect to
which the Option is being exercised shall be payable to the Company (i) in cash
or by check payable and acceptable to the Company or (ii) subject to the
approval of the Committee, (a) by tendering to the Company shares of Common
Stock owned by such person having an aggregate Fair Market Value as of the date
of exercise and tender that is not greater than the full option purchase price
for the shares with respect to which the Option is being exercised and by paying
any remaining amount of the option purchase price as provided in (i) above
(provided that the Committee may, upon confirming that such person owns the
number of additional shares being tendered, authorize the issuance of a new
certificate for the number of shares being acquired pursuant to the exercise of
the Option less the number of shares being tendered upon the exercise and return
to such person (or not require surrender of) the certificate for the shares
being tendered upon the exercise) or (b) by such person delivering to the
Company a properly executed exercise notice together with irrevocable
instructions to a broker to promptly deliver to the Company cash or a check
payable and acceptable to the Company to pay the option purchase price and any
withholding taxes; provided that in the event such person chooses to pay the
option purchase price and withholding taxes as provided in (ii)(b) above, such
person and the broker shall comply with such procedures and enter into such
agreements of indemnity and other agreements as the Committee shall prescribe as
a condition of such payment procedure. Payment instruments will be received
subject to collection.
Notwithstanding any other provision in the Plan, if a Change in Control occurs
while unexercised Options, and Stock Appreciation Rights relating thereto,
remain outstanding under the Plan, then from and after the Acceleration Date,
all Options and Stock Appreciation Rights shall be exercisable in full, whether
or not otherwise exercisable; provided, however, that no Option or Stock
Appreciation Right shall become exercisable by reason of this paragraph to the
extent that such acceleration of exercisability, when aggregated with other
payments or benefits to the Participant pursuant to this Plan or any other plan,
arrangement or agreement with the Company, any person whose actions result in a
Change in Control or any person affiliated with the Company or such person,
would, as determined by tax counsel selected by the Company, result in "Excess
Parachute Payments" (as defined below) equal to or greater than three times
the"base amount" as defined in Section 280G of the Code. "Excess Parachute
Payments" shall mean "parachute payments" as defined in Section 280G of the Code
other than (1) health and life insurance benefits and (2) payments attributable
to any award, benefit or other compensation plan or program based upon the
number of full or fractional months of any restricted period (relating thereto)
which has elapsed prior to the date of the Change in Control. Furthermore, such
payments or benefits provided to a Participant under this Plan shall be reduced
to the extent necessary so that no portion thereof shall be subject to the
excise tax imposed by Section 4999 of the Code, but only if, by reason of such
reduction, the Participant's net after tax benefit shall exceed the net after
tax benefit if such reduction were not made. "Net after tax benefit" shall mean
the sum of (i) all payments and benefits which a Participant receives or is then
entitled to receive from the Company that would constitute a "parachute payment"
within the meaning of Section 280G of the Code, less (ii) the amount of federal
income taxes payable with respect to the payments and benefits described in (i)
above calculated at the maximum marginal income tax rate for each year in which
such payments and benefits shall be paid to the Participant (based upon the rate
for such year as set forth in the Code at the time of the first payment of the
foregoing), less (iii) the amount of excise taxes imposed with respect to the
payments and benefits described in (i) above by Section 4999 of the Code.
VI. INCENTIVE STOCK OPTIONS
An Option designated by the Committee as an "Incentive Stock Option" is intended
to qualify as an "incentive stock option" within the meaning of Section 422 of
the Code and shall satisfy, in addition to the conditions of Section V, the
conditions set forth in this Section VI.
The purchase price of the Common Stock subject to an Incentive Stock Option
shall be the greater of the Fair Market Value of the Common Stock on the Grant
Date or the "fair market value" of the Common Stock as such term is used for
purposes for Section 422(b)(4) of the Code.
An Incentive Stock Option shall not be granted to an employee who, on the Grant
Date, owns stock possessing more than ten percent of the total combined voting
power of all classes of stock of PEC, or of its parent or subsidiary
corporations.
VII. INTENTIONALLY LEFT BLANK
VIII. STOCK APPRECIATION RIGHTS
The Committee may, from time to time and subject to the provisions of the Plan,
grant Awards of Stock Appreciation Rights to employees of the Company subject to
the limitation in Section II. An Award of Stock Appreciation Rights, in the
Committee's discretion, may only be made in tandem with the grant of an Option;
however, there is no obligation for the committee to award any Stock
Appreciation Rights in tandem with any grant.
The period of any Stock Appreciation Right, which is the time period during
which the Stock Appreciation Right may be exercised, shall be determined by the
Committee and shall be in tandem with the period of such Option.
Stock Appreciation Rights shall not be transferable other than by will or the
laws of descent and distribution and during the Participant's lifetime shall be
exercisable only by the Participant.
Termination for Cause, as defined in Section I, shall result in forfeiture of
all outstanding Stock Appreciation Rights. Termination by the Company for any
reason other than Cause (including terminations pursuant to formal severance
programs sponsored by the Company or an affiliated company), or termination by
reason of death, Disability or Retirement, shall result in a lapse on all or a
portion of the Restricted Period applicable to any outstanding Award as set
forth in Section XI.
Subject to any restrictions or conditions imposed by the Committee, upon the
exercise of a Stock Appreciation Right, the Company shall pay the amount, if
any, by which the Fair Market Value of a share of Common Stock on the date of
exercise exceeds the Fair Market Value of a share of Common Stock on the Grant
Date. The amount payable by the Company upon the exercise of a Stock
Appreciation Right may be paid in cash less any required government withholdings
with respect to the Stock Appreciation Right and its tandem Option.
IX. INTENTIONALLY LEFT BLANK
X. CONTINUED EMPLOYMENT
Participation in the Plan shall confer no rights to continued employment with
the Company, nor shall it restrict the rights of the Company to terminate a
Participant's employment relationship at any time.
XI. TERMINATION OF EMPLOYMENT
In the event of a Participant's termination of employment with the Company by
reason of death, the Restricted Period shall lapse on all of the Participant's
outstanding Awards.
In the event of a Participant's termination of employment with the Company by
reason of Disability, Retirement or by the Company for any reason other than
Cause, a portion of all of the Participant's outstanding Awards shall be
immediately forfeited to the extent not then otherwise vested. The portion of an
Award forfeited shall be a fraction, the denominator of which is the total
number of months of any Restricted Period applicable to the Award (rounded up to
the nearest whole month) and the numerator of which is the number of months
remaining in such Restricted Period (rounded up to the nearest whole month) as
of the termination of employment.
Options and Stock Appreciation Rights which are or become exercisable at the
time of a Participant's termination of employment with the Company (i) by reason
of Disability or Retirement or by the Company for any reason other than Cause,
may be exercised by the Participant within three years following such
termination of employment and (ii) for any reason other than Cause, death or a
reason specified in (i), may be exercised by the Participant within three months
following such termination but, in either event, not after the expiration of the
period of the Option and Stock Appreciation Right. Options and Stock
Appreciation Rights which are or become exercisable at the time of a
Participant's termination of employment with the Company by reason of death, may
be exercised by the Participant's designated beneficiary, or in the absence of
such designation, by the person to whom the Participant's rights pass by will or
the laws of descent and distribution at any time within three years after the
Participant's death but not after the expiration of the period of the Option and
Stock Appreciation Right. Options and Stock Appreciation Rights that do not
become exercisable as provided above, or that are not otherwise vested, shall be
forfeited on termination.
In the event of a Participant's termination of employment with the Company for
any reason other than as provided above, all Awards not otherwise vested or
earned as of the date of such termination of employment shall be immediately
forfeited on termination.
Notwithstanding the foregoing however, the Committee may determine that
termination of employment by reasons of any other special circumstances not set
forth above shall not terminate an Award or a portion thereof.
XII. AWARD AGREEMENT
Each person granted an Award pursuant to the Plan shall sign an Award Agreement
which signifies the offer of the Award by the Company and the acceptance of the
Award by the person in accordance with the terms of the Award and the provisions
of the Plan. Each Award Agreement shall reflect the terms and conditions of the
Award.
XIII. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION
In the event of a change in the capitalization of PEC due to a stock split,
stock dividend, recapitalization, merger, consolidation, combination, or similar
event, the aggregate shares subject to the Plan and the terms of any existing
Awards shall be adjusted by the Committee to reflect such change.
XIV. INTENTIONALLY LEFT BLANK
XV. SECURITIES LAW AGREEMENT
If, at the time of the exercise of any Option and Stock Appreciation Right in
the opinion of counsel for the Company, it is necessary or desirable, in order
to comply with any then applicable laws or regulations relating to the sale of
securities, for the individual exercising the Option, agree to hold any shares
issued to the individual for investment and without intention to resell or
distribute the same and for the individual to agree to dispose of such shares
only in compliance with such laws and regulations, the individual will, upon the
request of the Company, execute and deliver to the Company a further agreement
to such effect.
XVI. WITHHOLDING FOR TAXES
Any cash payment under the Plan shall be reduced by any amounts required to be
withheld or paid with respect thereto under all present or future federal, state
and local taxes and other laws and regulations that may be in effect as of the
date of each such payment ("Tax Amounts"). Any issuance of Common Stock pursuant
to the exercise of an Option or other distribution of Common Stock under the
Plan shall not be made until appropriate arrangements have been made for the
payment of any amounts that may be required to be withheld or paid with respect
thereto. Such arrangements may, at the discretion of the Committee, include
allowing the Participant to tender to the Company shares of Common Stock owned
by the Participant, being part of the broker-cash less exercise procedure; or to
request the Company to withhold a portion of the shares of Common Stock being
acquired pursuant to the exercise or otherwise distributed to the Participant,
which have a Fair Market Value per share as of the date of such Award exercise,
tender or withholding that is not greater than the sum of all Tax Amounts,
together with payment of any remaining portion of all Tax Amounts in cash or by
check payable and acceptable to the Company.
XVII. AUTOMATIC DIRECTOR AWARDS
Each Director who served in such capacity the date this Plan was approved by the
Board shall automatically receive on the first of the month of the first fiscal
year following such date, a Director Option for 5,000 shares of Common Stock.
Each Director who is elected or appointed to the Board for the first time after
that initial grant date shall automatically receive, on the date of his or her
election or appointment, a Director Option for 5,000 shares of Common Stock.
On the date of the regular Annual Meeting of Stockholders of the Company in each
year that this Plan is in effect (commencing with the 2001 Annual Meeting of
Stockholders), each Director who is serving on that day, including a Director
who was elected for the first time at such annual meeting, shall automatically
receive the following:
1. Director Options. A Director Option grant for 5,000 shares of Common Stock.
Each Director Option will be subject to all of the limitations contained in
the following provisions:
(a) Each Director Option shall become exercisable (vested) on the earlier
of (i) the first day that is more than six months following its Grant
Date or (ii) an Acceleration Date occurring after the Grant Date,
provided that in no event shall any Director Option be exercisable
prior to the approval of this Plan by the Company's stockholders.
(b) The option purchase price of each Director Option shall be the Fair
Market Value of the Common Stock on its effective Grant Date.
(c) Each Director Option shall automatically include a Stock Appreciation
Right, as if granted pursuant to Section VIII.
(d) Each Director Option that is vested may be exercised in full at one
time or in part from time to time by giving written notice to the
Company, stating the number of shares of Common Stock with respect to
which the Director Option is being exercised, accompanied by payment
in full of the option purchase price for such shares, which payment
may be (i) in cash by check acceptable to the Company, (ii) by the
transfer to the Company of shares of Common Stock already owned by the
optionee having an aggregate Fair Market Value at the date of exercise
equal to the aggregate option purchase price, (iii) from the proceeds
of a sale through a broker of some or all of the shares to which such
exercise relates, or (iv) by a combination of such methods of payment.
(e) Each Director Option shall expire 10 years from the Grant Date
thereof, but shall be subject to earlier termination as follows: (1)
to the extent exercisable as of the date a Director ceases to serve as
a director of the Company (the "Resignation Date"), the Director
Option may be exercised only within three years of such Resignation
Date by the optionee or the optionee's legal representative or the
person to whom the Nonemployee Director's rights shall pass by will or
the laws of descent and distribution, as the case may be, and to the
extent not so exercised shall terminate on the third anniversary of
the Resignation Date and (2) to the extent not exercisable as of the
Resignation Date, the Director Option shall terminate on such
Resignation Date.
In the event that the number of shares of Common Stock available for Director
Awards under this Plan is insufficient to make all automatic Awards provided for
in this Section XVII on the applicable date, then all Directors who are entitled
to a grant on such date shall share ratably in the number of shares then
available for grant under this Plan and shall have no right to receive a grant
with respect to the deficiencies in the number of available shares and all
future grants under this Section XVII shall terminate.
Grants made pursuant to this Section XVII shall be subject to all of the terms
and conditions of this Plan; however, if there is a conflict between the terms
and conditions of this Section XVII and the terms and conditions of any other
Section, then the terms and conditions of this Section XVII shall control. The
Committee may not exercise any discretion with respect to this Section XVII
which would be inconsistent with the intent that this Plan meet the requirements
of Rule 16b-3.
XVIII. DESIGNATION OF BENEFICIARY
Each Participant to whom an Award has been made under this Plan may designate a
beneficiary or beneficiaries (which beneficiary may be an entity other than a
natural person) to exercise any rights or receive any payment that under the
terms of such Award may become exercisable or payable on or after the
Participant's death. At any time, and from time to time, any such designation
may be changed or canceled by the Participant without the consent of any such
beneficiary. Any such designation, change or cancellation must be on a form
provided for that purpose by the Committee and shall not be effective until
received by the Committee. If no beneficiary has been named by a deceased
Participant, or the designated beneficiaries have predeceased the Participant,
the beneficiary shall be the Participant's estate. If a Participant designates
more than one beneficiary, any such exercise or payment under this Plan shall be
made in equal shares unless the Participant has designated otherwise, in which
case the exercise or payment shall be made in the shares designated by the
Participant.
XIX. PREEMPTION BY APPLICABLE LAWS AND REGULATIONS
Anything in the Plan or any agreement entered into pursuant to the Plan to the
contrary notwithstanding, if, at any time specified herein or therein for the
making of any determination, the issuance or other distribution of shares of
Common Stock, the payment of consideration to an employee as a result of the
exercise of any Stock Appreciation Right, any law, regulation or requirement of
any governmental authority having jurisdiction in the premises shall require
either the Company or the Participant (or the Participant's beneficiary), as the
case may be, to take any action in connection with any such determination, the
shares then to be issued or distributed, or such payment, the issue or
distribution of such shares or the making of such determination or payment, as
the case may be, shall be deferred until such action shall have been taken.
XX. EFFECTIVE DATE AND DURATION OF PLAN
This Plan amendment and restatement shall become effective as of February 25,
2000 subject to its approval by the stockholders of PEC. Unless previously
terminated by the Board, the Plan shall terminate on the tenth anniversary of
its approval by the stockholders; provided, however, that such termination shall
not terminate any Award then outstanding. No Awards shall be made pursuant to
this Plan after December 31, 2005.
XXI. TERMINATION AND AMENDMENT
The Board may suspend, terminate, modify or amend the Plan, provided that any
amendment that would increase the aggregate number of shares which may be issued
under the Plan or materially modify the requirements as to eligibility for
participation in the Plan, shall be subject to the approval of PEC's
stockholders, except that any such increase or modification that may result from
adjustments authorized by Section XIII does not require such approval; provided,
further, that no amendment or modification shall be made to Section XVII more
than once every six months, other than to comport with changes in the Code or
the Employee Retirement Income Security Act of 1974, as amended, or rules
promulgated thereunder. No suspension, termination, modification or amendment of
the Plan may terminate a Participant's existing Award or materially adversely
affect a Participant's rights under such Award.
XXII. MISCELLANEOUS
(a) Nothing contained in the Plan shall be construed as conferring upon any
employee the right to continue in the employ of the Company.
(b) No person shall have any rights as a stockholder with respect to shares
covered by such person's Option, until the date of the issuance of shares
pursuant thereto. No adjustment will be made for dividends or other
distributions or rights for which the record date is prior to the date of
such issuance.
(c) Nothing contained in the Plan shall be construed as giving any person, such
person's beneficiaries or any other person any equity or other interest of
any kind in any assets of the Company or creating a trust of any kind or a
fiduciary relationship of any kind between the Company and any such person.
(d) Nothing contained in the Plan shall be construed to prevent the Company
from taking any corporate action that is deemed by the Company to be
appropriate or in its best interest, whether or not such action would have
an adverse effect on the Plan or any award made under the Plan. No
employee, beneficiary or other person shall have any claim against the
Company as a result of any such action.
(e) No grantee nor any beneficiary thereof shall have the power or right to
sell, exchange, pledge, transfer, assign or otherwise encumber or dispose
of any such grantee's or beneficiary's interest arising under the Plan or
in any Award received under the Plan; nor shall such interest be subject to
seizure for the payment of any grantee's or beneficiary's debts, judgments,
alimony, or separate maintenance or be transferable by operation of law in
the event of a grantee's or beneficiary's bankruptcy or insolvency and to
the extent any such interest arising under the Plan or Award received under
the Plan is awarded to a spouse pursuant to any divorce proceeding, such
interest shall be deemed to be terminated and forfeited notwithstanding any
vesting provisions or other terms herein or in the agreement evidencing
such award.
(f) All rights and obligations under the Plan shall be governed by, and the
Plan shall be construed in accordance with, the laws of the State of
Oklahoma without regard to the principles of conflicts of laws. Titles and
headings to Sections herein are for purposes of reference only, and shall
in no way limit, define or otherwise affect the meaning or interpretation
of any provisions of the Plan.