Exhibit 10.2
SUPERIOR ENERGY SERVICES, INC. 1999 STOCK INCENTIVE PLAN
1. PURPOSE. The purpose of the 1999 Stock Incentive Plan (the
"Plan") of Superior Energy Services, Inc. ("Superior") is to increase
stockholder value and to advance the interests of Superior and its
subsidiaries (collectively, the "Company") by furnishing a variety of
equity incentives (the "Incentives") designed to attract, retain and
motivate officers, directors, key employees, consultants and advisers and
to strengthen the mutuality of interests between such persons and Superior
stockholders. Incentives may consist of opportunities to purchase or
receive shares of common stock, $.001 par value per share, of Superior (the
"Common Stock"), on terms determined under the Plan.
2. ADMINISTRATION.
2.1. COMPOSITION. The Plan shall be administered by the
compensation committee of the Board of Directors of Superior, or by a
subcommittee of the compensation committee. The committee or
subcommittee that administers the Plan shall hereinafter be referred
to as the "Committee". The Committee shall consist of not fewer than
two members of the Board of Directors, each of whom shall (a) qualify
as a "disinterested person" under Rule 16b-3 under the Securities
Exchange Act of 1934 (the "1934 Act"), as currently in effect or any
successor rule, and (b) qualify as an "outside director" under Section
162(m) of the Internal Revenue Code (the "Code"), as currently in
effect or any successor provision.
2.2. AUTHORITY. The Committee shall have plenary authority to
award Incentives under the Plan, to interpret the Plan, to establish
any rules or regulations relating to the Plan that it determines to be
appropriate, to enter into agreements with participants as to the
terms of the Incentives (the "Incentive Agreements") and to make any
other determination that it believes necessary or advisable for the
proper administration of the Plan. Its decisions in matters relating
to the Plan shall be final and conclusive on the Company and
participants. The Committee may delegate its authority hereunder to
the extent provided in Section 3 hereof.
3. ELIGIBLE PARTICIPANTS.
3.1. OFFICERS, KEY EMPLOYEES, CONSULTANTS AND ADVISERS. Officers
(including officers who also serve as directors of the Company), key
employees, consultants and advisers to the Company shall become
eligible to receive Incentives under the Plan when designated by the
Committee. Participants may be designated individually or by groups
or categories, as the Committee deems appropriate. With respect to
participants not subject to Section 16 of the 1934 Act or Section
162(m) of the Code, the Committee may delegate to appropriate
personnel of the Company its authority to designate participants, to
determine the size and type of Incentives to be received by those
participants and to determine or modify performance objectives for
those participants.
3.2. OUTSIDE DIRECTORS. Members of the Board of Directors of
Superior who are not also full-time employees of the Company ("Outside
Directors") may receive awards under the Plan only as specifically
provided in Section 9 hereof.
4. SHARES SUBJECT TO THE PLAN.
4.1. NUMBER OF SHARES.
(A) Subject to adjustment as provided in Section 10.6, a
total of 5,929,327 shares of Common Stock are authorized to be
issued under the Plan. Awards that by their terms may be paid
only in cash shall not be counted against such share limit.
(B) Subject to adjustment as provided in Section 10.6,
Incentives with respect to no more than 1,000,000 shares of
Common Stock may be granted through the Plan to a single
participant in one calendar year.
(C) In the event that a stock option or other award granted
hereunder expires or is terminated or cancelled prior to exercise
or issuance of shares, any shares of Common Stock that were
issuable thereunder may again be issued under the Plan.
(D) In the event that shares of Common Stock are issued as
Incentives under the Plan and thereafter are forfeited or
reacquired by the Company pursuant to rights reserved upon
issuance thereof, such forfeited and reacquired shares may again
be issued under the Plan.
(E) The number of shares of Common Stock that may be issued
pursuant to incentive stock options under Section 422 of the Code
may not exceed 250,000 shares.
(F) Subject to the other provisions of this Section 4.1, the
maximum number of shares of Common Stock with respect to which
awards may be issued in the form of restricted stock and Other
Stock-Based Awards (as defined herein) payable in shares of
Common Stock shall be 250,000 shares.
(G) If the exercise price of any option is satisfied by
tendering shares of Common Stock to the Company, only the number
of shares issued net of the shares tendered shall be deemed
issued for purposes of determining the maximum number of shares
available for issuance under Section 4.1.A. However, all of the
shares issued upon exercise shall be deemed issued for purposes
of determining the maximum number of shares that may be issued
pursuant to incentive stock options under Section 4.1.E.
(H) Additional rules for determining the number of shares
granted under the Plan may be made by the Committee, as it deems
necessary or appropriate.
4.2. TYPE OF COMMON STOCK. Common Stock issued under the Plan
may be authorized and unissued shares or issued shares held as
treasury shares, including shares acquired in the open market or
otherwise obtained by the Company.
5. TYPES OF INCENTIVES. Incentives may be granted under the Plan to
eligible participants in any of the following forms, either individually or
in combination, (a) incentive stock options and non-qualified stock
options; (b) restricted stock; and (c) other stock-based awards.
6. STOCK OPTIONS. A stock option is a right to purchase shares of
Common Stock from Superior. Stock options granted under this Plan may be
incentive stock options under Section 422 of the Code, as amended (the
"Code") or non-qualified stock options. Any option that is designated as a
non-qualified stock option shall not be treated as an incentive stock
option. Each stock option granted by the Committee under this Plan shall
be subject to the following terms and conditions:
6.1. PRICE. The exercise price per share shall be determined by
the Committee, subject to adjustment under Section 10.6; provided that
in no event shall the exercise price be less than the Fair Market
Value of a share of Common Stock on the date of grant.
6.2. NUMBER. The number of shares of Common Stock subject to the
option shall be determined by the Committee, subject to Section 4.1
and subject to adjustment as provided in Section 10.6.
6.3. DURATION AND TIME FOR EXERCISE. The term of each stock
option shall be determined by the Committee. Subject to the automatic
acceleration of exercisability under Section 10.12, each stock option
shall become exercisable at such time or times during its term as
shall be determined by the Committee. Notwithstanding the foregoing,
the Committee may accelerate the exercisability of any stock option at
any time.
6.4. REPURCHASE. Upon approval of the Committee, the Company may
repurchase a previously granted stock option from a participant by
mutual agreement before such option has been exercised by payment to
the participant of the amount per share by which: (i) the Fair Market
Value (as defined in Section 10.13) of the Common Stock subject to the
option on the business day immediately preceding the date of purchase
exceeds (ii) the exercise price.
6.5. MANNER OF EXERCISE. A stock option may be exercised, in
whole or in part, by giving written notice to the Company, specifying
the number of shares of Common Stock to be purchased. The exercise
notice shall be accompanied by the full purchase price for such
shares. The option price shall be payable in United States dollars
and may be paid by (a) cash; (b) uncertified or certified check; (c)
unless otherwise determined by the Committee, by delivery of shares of
Common Stock held by the optionee for at least six months, which
shares shall be valued for this purpose at the Fair Market Value on
the business day immediately preceding the date such option is
exercised; (d) delivering a properly executed exercise notice together
with irrevocable instructions to a broker approved in advance by
Superior (with a copy to Superior) to promptly deliver to Superior the
amount of sale or loan proceeds to pay the exercise price; or (e) in
such other manner as may be authorized from time to time by the
Committee. In the case of delivery of an uncertified check upon
exercise of a stock option, no shares shall be issued until the check
has been paid in full. Prior to the issuance of shares of Common
Stock upon the exercise of a stock option, a participant shall have no
rights as a stockholder.
6.6. INCENTIVE STOCK OPTIONS. Notwithstanding anything in the
Plan to the contrary, the following additional provisions shall apply
to the grant of stock options that are intended to qualify as
incentive stock options (as such term is defined in Section 422 of the
Code):
(A) Any incentive stock option agreement authorized under
the Plan shall contain such other provisions as the Committee
shall deem advisable, but shall in all events be consistent with
and contain or be deemed to contain all provisions required in
order to qualify the options as incentive stock options.
(B) All incentive stock options must be granted within ten
years from the date on which this Plan is adopted by the Board of
Directors.
(C) Unless sooner exercised, all incentive stock options
shall expire no later than ten years after the date of grant.
(D) No incentive stock options shall be granted to any
participant who, at the time such option is granted, would own
(within the meaning of Section 422 of the Code) stock possessing
more than 10% of the total combined voting power of all classes
of stock of the employer corporation or of its parent or
subsidiary corporation.
(E) The aggregate Fair Market Value (determined with respect
to each incentive stock option as of the time such incentive
stock option is granted) of the Common Stock with respect to
which incentive stock options are exercisable for the first time
by a participant during any calendar year (under the Plan or any
other plan of Superior or any of its subsidiaries) shall not
exceed $100,000. To the extent that such limitation is exceeded,
such options shall not be treated, for federal income tax
purposes, as incentive stock options.
7. RESTRICTED STOCK
7.1. GRANT OF RESTRICTED STOCK. The Committee may award shares
of restricted stock to such persons as the Committee determines to be
eligible pursuant to the terms of Section 3. An award of restricted
stock may be subject to the attainment of specified performance goals
or targets, restrictions on transfer, forfeitability provisions and
such other terms and conditions as the Committee may determine,
subject to the provisions of the Plan. To the extent restricted stock
is intended to qualify as performance based compensation under Section
162(m) of the Code, it must meet the additional requirements imposed
thereby.
7.2. THE RESTRICTED PERIOD. The Committee shall establish a
period of time during which the transfer of the shares of restricted
stock shall be restricted (the "Restricted Period"). Each award of
restricted stock may have a different Restricted Period. The
expiration of the Restricted Period shall also occur under the
conditions described in Section 10.12 hereof and may occur upon death,
disability or retirement, if so determined by the Committee. A
Restricted Period of at least three years is required, except that if
vesting of the shares is subject to the attainment of specified
performance goals, a Restricted Period of one year or more is
permitted. The expiration of the Restricted Period shall also occur
as provided under Section 10.12.
7.3. ESCROW. The participant receiving restricted stock shall
enter into an Incentive Agreement with the Company setting forth the
conditions of the grant. Certificates representing shares of
restricted stock shall be registered in the name of the participant
and deposited with the Company, together with a stock power endorsed
in blank by the participant. Each such certificate shall bear a
legend in substantially the following form:
The transferability of this certificate and the shares of
Common Stock represented by it are subject to the terms and
conditions (including conditions of forfeiture) contained in
the Superior Energy Services, Inc. 1999 Stock Incentive Plan
(the "Plan"), and an agreement entered into between the
registered owner and Superior Energy Services, Inc.
thereunder. Copies of the Plan and the agreement are on
file at the principal office of the Company.
7.4. DIVIDENDS ON RESTRICTED STOCK. Any and all cash and stock
dividends paid with respect to the shares of restricted stock shall be
subject to any restrictions on transfer, forfeitability provisions or
reinvestment requirements as the Committee may, in its discretion,
prescribe in the Incentive Agreement.
7.5. FORFEITURE. In the event of the forfeiture of any shares of
restricted stock under the terms provided in the Incentive Agreement
(including any additional shares of restricted stock that may result
from the reinvestment of cash and stock dividends, if so provided in
the Incentive Agreement), such forfeited shares shall be surrendered
and the certificates cancelled. The participants shall have the same
rights and privileges, and be subject to the same forfeiture
provisions, with respect to any additional shares received pursuant to
Section 10.6 due to a recapitalization, merger or other change in
capitalization.
7.6. EXPIRATION OF RESTRICTED PERIOD. Upon the expiration or
termination of the Restricted Period and the satisfaction of any other
conditions prescribed by the Committee, the restrictions applicable to
the restricted stock shall lapse and a stock certificate for the
number of shares of restricted stock with respect to which the
restrictions have lapsed shall be delivered, free of all such
restrictions and legends, except any that may be imposed by law, to
the participant or the participant's estate, as the case may be.
7.7. RIGHTS AS A STOCKHOLDER. Subject to the terms and
conditions of the Plan and subject to any restrictions on the receipt
of dividends that may be imposed in the Incentive Agreement, each
participant receiving restricted stock shall have all the rights of a
stockholder with respect to shares of stock during any period in which
such shares are subject to forfeiture and restrictions on transfer,
including without limitation, the right to vote such shares.
7.8. PERFORMANCE-BASED RESTRICTED STOCK. The Committee shall
determine at the time of grant if a grant of restricted stock is
intended to qualify as "performance-based compensation" as that term
is used in Section 162(m) of the Code. Any such grant shall be
conditioned on the achievement of one or more performance measures.
The performance measures pursuant to which the restricted stock shall
vest shall be any or a combination of the following: earnings per
share, return on assets, an economic value added measure, stockholder
return, earnings, return on equity, return on investment, cash
provided by operating activities, increase in cash flow, or safety
performance of the Company, a division of the Company or a Subsidiary.
For any performance period, such performance objectives may be
measured on an absolute basis or relative to a group of peer companies
selected by the Committee, relative to internal goals or relative to
levels attained in prior years. For grants of restricted stock
intended to qualify as "performance-based compensation," the grants of
restricted stock and the establishment of performance measures shall
be made during the period required under Section 162(m).
8. OTHER STOCK-BASED AWARDS.
8.1. GRANT OF OTHER STOCK-BASED AWARDS. The Committee is
authorized to grant "Other Stock-Based Awards," which shall consist of
awards the value of which is based in whole or in part on the value of
shares of Common Stock, that is not an instrument or award specified
in Sections 6 of 7 of the Plan. Other Stock-Based Awards may be
awards of shares of Common Stock or may be denominated or payable in,
valued in whole or in part by reference to, or otherwise based on or
related to, shares of Common Stock (including, without limitation,
restricted stock units or securities convertible or exchangeable into
or exercisable for shares of Common Stock ), as deemed by the
Committee consistent with the purposes of the Plan. The Committee
shall determine the terms and conditions of any such Other Stock-Based
Award and may provide that such awards would be payable in whole or in
part in cash. An Other Stock-Based Award may be subject to the
attainment of such specified performance goals or targets as the
Committee may determine, subject to the provisions of the Plan. To
the extent that an Other Stock-Based Award is intended to qualify as
"performance-based compensation" under Section 162(m) of the Code, it
must meet the additional requirements imposed thereby. Except in the
case of an Other Stock-Based Award granted in assumption of or in
substitution for an outstanding award of a company acquired by the
Company or with which the Company combines, the price at which
securities may be purchased pursuant to any Other Stock-Based Award
granted under this Plan, or the provision, if any, of any such Award
that is analogous to the purchase or exercise price, shall not be less
than 100% of the fair market value of the securities to which such
Award relates on the date of grant. An Other-Stock Based Award,
including an outright grant of shares of Common Stock, may be made in
lieu of the payment of cash compensation otherwise due to a
participant.
8.2. PERFORMANCE-BASED OTHER STOCK-BASED AWARDS. The Committee
shall determine at the time of grant if the grant of an Other Stock-
Based Award is intended to qualify as "performance-based compensation"
as that term is used in Section 162(m) of the Code. Any such grant
shall be conditioned on the achievement of one or more performance
measures. The performance measures pursuant to which the Other Stock-
Based Award shall vest shall be any or a combination of the following:
earnings per share, return on assets, an economic value added measure,
stockholder return, earnings, return on equity, return on investment,
cash provided by operating activities, increase in cash flow, or the
safety of the Company, a division of the Company or a Subsidiary. For
any performance period, such performance objectives may be measured on
an absolute basis or relative to a group of peer companies selected by
the Committee, relative to internal goals or relative to levels
attained in prior years. For grants of Other Stock-Based Awards
intended to qualify as "performance-based compensation," the grants of
Other Stock-Based Awards and the establishment of performance measures
shall be made during the period required under Section 162(m) of the
Code.
9. STOCK OPTIONS FOR OUTSIDE DIRECTORS
9.1. ELIGIBILITY. Each person who serves as an Outside Director
shall be entitled to participate and automatically granted (a) a non-
qualified stock option to acquire 20,000 shares of Common Stock on the
day that such person first becomes a member of the Board and (b) a
non-qualified stock option to acquire 5,000 shares of Common Stock on
the day following the 2000 annual meeting of stockholders and
thereafter on the day following subsequent annual meetings of
stockholders, for as long as the Plan remains in effect and shares of
Common Stock remain available for grant under Section 4.1 hereof. The
exact number of shares with respect to which options shall be granted
each year to Outside Directors within the range specified above shall
be determined by the Committee.
9.2. EXERCISABILITY OF STOCK OPTIONS. The stock options granted
to Outside Directors under this Section 9 shall become exercisable as
follows:
25% of the total number of shares covered by the stock
options beginning one year after the date of grant;
50% of the total number of shares covered by the stock
options beginning two years after the date of grant,
less any shares previously issued;
75% of the total number of shares covered by the stock
options beginning three years after the date of grant,
less any shares previously issued;
100% of the total number of shares covered by the stock
options beginning four years after the date of grant,
less any shares previously issued;
provided, however, that such stock options shall become immediately
exercisable under <section>10.12 hereof and in the event of retirement
from the Board on or after reaching age 65, death or disability. No
stock option granted to an Outside Director under the terms of this
Section 9 may be exercised more than ten years after the date of
grant.
9.3. EXERCISE PRICE. The per share exercise price of stock
options granted to Outside Directors shall be equal to 100% of the
Fair Market Value as defined in the Plan, of a share of Common Stock
on the date of grant.
9.4. EXERCISE AFTER TERMINATION OF BOARD SERVICE. In the event
that an Outside Director ceases to serve on the Board of Directors for
any reason, the stock options granted hereunder must be exercised, to
the extent otherwise exercisable at the time of termination of
service, within one year from the date of termination of Board
service, but in no event later than ten years after the date of grant.
10. GENERAL.
10.1. DURATION. Subject to Section 10.11, the Plan shall remain
in effect until all Incentives granted under the Plan have either been
satisfied by the issuance of shares of Common Stock or terminated
under the terms of the Plan and all restrictions imposed on shares of
Common Stock in connection with their issuance under the Plan have
lapsed.
10.2. TRANSFERABILITY OF INCENTIVES. Options granted under the
Plan shall not be transferable except:
(A) by will;
(B) by the laws of descent and distribution; or
(C) in the case of stock options only, if permitted by the
Committee and so provided in the Incentive Agreement or an
amendment thereto, (i) pursuant to a domestic relations order, as
defined in the Code, (ii) to Immediate Family Members, (iii) to a
partnership in which Immediate Family Members, or entities in
which Immediate Family Members are the sole owners, members or
beneficiaries, as appropriate, are the only partners, (iv) to a
limited liability company in which Immediate Family Members, or
entities in which Immediate Family Members are the sole owners,
members or beneficiaries, as appropriate, are the only members,
or (v) to a trust for the sole benefit of Immediate Family
Members. "Immediate Family Members" shall be defined as the
spouse and natural or adopted children or grandchildren of the
participant and their spouses. To the extent that an incentive
stock option is permitted to be transferred during the lifetime
of the participant, it shall be treated thereafter as a non-
qualified stock option.
Any attempted assignment, transfer, pledge, hypothecation or other
disposition of an Incentive, or levy of attachment or similar process
upon the Incentive not specifically permitted herein, shall be null
and void and without effect.
10.3. DIVIDEND EQUIVALENTS. In the sole and complete discretion
of the Committee, an Incentive may provide the holder thereof with
dividends or dividend equivalents, payable in cash, shares, other
securities or other property on a current or deferred basis.
10.4. EFFECT OF TERMINATION OF EMPLOYMENT OR DEATH. In the event
that a participant, other than an Outside Director, ceases to be an
employee of the Company or to provide services to the Company for any
reason, including death, disability, early retirement or normal
retirement, any Incentives may be exercised, shall vest or shall
expire at such times as may be determined by the Committee in the
Incentive Agreement.
10.5. ADDITIONAL CONDITION. Anything in this Plan to the
contrary notwithstanding: (a) the Company may, if it shall determine
it necessary or desirable for any reason, at the time of award of any
Incentive or the issuance of any shares of Common Stock pursuant to
any Incentive, require the recipient of the Incentive, as a condition
to the receipt thereof or to the receipt of shares of Common Stock
issued pursuant thereto, to deliver to the Company a written
representation of present intention to acquire the Incentive or the
shares of Common Stock issued pursuant thereto for his own account for
investment and not for distribution; and (b) if at any time the
Company further determines, in its sole discretion, that the listing,
registration or qualification (or any updating of any such document)
of any Incentive or the shares of Common Stock issuable pursuant
thereto is necessary on any securities exchange or under any federal
or state securities or blue sky law, or that the consent or approval
of any governmental regulatory body is necessary or desirable as a
condition of, or in connection with the award of any Incentive, the
issuance of shares of Common Stock pursuant thereto, or the removal of
any restrictions imposed on such shares, such Incentive shall not be
awarded or such shares of Common Stock shall not be issued or such
restrictions shall not be removed, as the case may be, in whole or in
part, unless such listing, registration, qualification, consent or
approval shall have been effected or obtained free of any conditions
not acceptable to the Company.
10.6. ADJUSTMENT. In the event of any recapitalization, stock
dividend, stock split, combination of shares or other change in the
Common Stock, the number of shares of Common Stock then subject to the
Plan, including shares subject to outstanding Incentives, shall be
adjusted in proportion to the change in outstanding shares of Common
Stock. In the event of any such adjustments, the purchase price of
any option shall be adjusted as and to the extent appropriate, in the
reasonable discretion of the Committee, to provide participants with
the same relative rights before and after such adjustment.
10.7. INCENTIVE AGREEMENTS. The terms of each Incentive shall be
stated in an agreement or notice approved by the Committee. The
Committee may also determine to enter into agreements with holders of
options to reclassify or convert certain outstanding options, within
the terms of the Plan, as incentive stock options or as non-qualified
stock options.
10.8. WITHHOLDING. At any time that a participant is required to pay
to the Company an amount required to be withheld under the applicable
tax laws in connection with the issuance of shares of Common Stock
under the Plan or upon the lapse of restrictions on shares of
restricted stock, the participant may, subject to the Committee's
right of disapproval, satisfy this obligation in whole or in part by
electing (the "Election") to have the Company withhold from the
distribution shares of Common Stock having a value equal to the amount
required to be withheld. The value of the shares withheld shall be
based on the Fair Market Value of the Common Stock on the date that
the amount of tax to be withheld shall be determined (the "Tax Date").
Each Election must be made prior to the Tax Date. The Committee
may disapprove of any Election or may suspend or terminate the right
to make Elections. If a participant makes an election under Section
83(b) of the Code with respect to shares of restricted stock or an
Other Stock-Based Award, an Election is not permitted to be made.
A participant may also satisfy his or her total tax liability
related to the Incentive by delivering shares of Common Stock that
have been owned by the participant for at least six months. The value
of the shares delivered shall be based on the Fair Market Value of the
Common Stock on the Tax Date.
10.9. NO CONTINUED EMPLOYMENT. No participant under the Plan
shall have any right, because of his or her participation, to continue
in the employ of the Company for any period of time or to any right to
continue his or her present or any other rate of compensation.
10.10. DEFERRAL PERMITTED. Distribution of shares of Common
Stock or cash to which a participant is entitled under any Incentive
shall be made as provided in the Incentive Agreement. Payment may be
deferred at the option of the participant if provided in the Incentive
Agreement.
10.11. AMENDMENT OF THE PLAN. The Board may amend or discontinue
the Plan at any time. In addition, no amendment or discontinuance
shall, subject to adjustments permitted under Section 10.6, materially
impair, without the consent of the recipient, an Incentive previously
granted, except that the Company retains the right to (a) convert any
outstanding incentive stock option to a non-qualified stock option, or
(b) exercise all rights under Section 10.12.
10.12. CHANGE OF CONTROL.
(A) A Change of Control shall mean:
(i) the acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the 1934
Act) of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the 1934 Act) of more than 30% of the
outstanding shares of the Common Stock; provided, however, that
for purposes of this subsection (i), the following acquisitions
shall not constitute a Change of Control:
a) any acquisition of Common Stock directly from
the Company,
b) any acquisition of Common Stock by the Company,
c) any acquisition of Common Stock by any employee
benefit plan (or related trust) sponsored or maintained by
the Company or any corporation controlled by the Company, or
d) any acquisition of Common Stock by any
corporation pursuant to a transaction that complies with
clauses a), b) and c) of subsection (iii) of this Section
10.12(A); or
(ii) individuals who, as of the date this Plan was
adopted by the Board of Directors (the "Approval Date"),
constitute the Board (the "Incumbent Board") cease for any reason
to constitute at least a majority of the Board; provided,
however, that any individual becoming a director subsequent to
the Approval Date whose election, or nomination for election by
the stockholders of the Company, was approved by a vote of at
least a majority of the directors then comprising the Incumbent
Board shall be considered a member of the Incumbent Board, unless
such individual's initial assumption of office occurs as a result
of an actual or threatened election contest with respect to the
election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a person
other than the Incumbent Board; or
(iii) consummation of a reorganization, merger or
consolidation, or sale or other disposition of all or
substantially all of the assets of the Company (a "Business
Combination"), in each case, unless, following such Business
Combination,
a) all or substantially all of the individuals and
entities who were the beneficial owners of the outstanding
Common Stock and the voting securities of the Company
entitled to vote generally in the election of directors
immediately prior to such Business Combination have direct
or indirect beneficial ownership, respectively, of more than
50% of the then outstanding shares of common stock, and more
than 50% of the combined voting power of the then
outstanding voting securities entitled to vote generally in
the election of directors, of the corporation resulting from
such Business Combination (which, for purposes of this
clause a) and clauses b) and c), shall include a corporation
that as a result of such transaction owns the Company or all
or substantially all of the assets of the Company either
directly or through one or more subsidiaries), and
b) except to the extent that such ownership
existed prior to the Business Combination, no person
(excluding any corporation resulting from such Business
Combination or any employee benefit plan or related trust of
the Company or such corporation resulting from such Business
Combination) beneficially owns, directly or indirectly, 20%
or more of the then outstanding shares of common stock of
the corporation resulting from such Business Combination or
20% or more of the combined voting power of the then
outstanding voting securities of such corporation, and
c) at least a majority of the members of the board
of directors of the corporation resulting from such Business
Combination were members of the Incumbent Board at the time
of the execution of the initial agreement, or of the action
of the Board, providing for such Business Combination; or
(iv) approval by the stockholders of the Company of a
plan of complete liquidation or dissolution of the Company.
(B) Upon a Change of Control, or immediately prior to the
closing of a transaction that will result in a Change of Control
if consummated, all outstanding options granted pursuant to the
Plan shall automatically become fully exercisable, all
restrictions or limitations on any Incentives shall lapse and all
performance criteria and other conditions relating to the payment
of Incentives shall be deemed to be achieved and waived by the
Company, without the necessity of action by any person.
(C) No later than 30 days after the approval by the Board of
a Change of Control of the types described in subsections (iii)
or (iv) of Section 10.12(A) and no later than 30 days after a
Change of Control of the type described in subsections (i) and
(ii) of Section 10.12(A), the Committee (as the Committee was
composed immediately prior to such Change of Control and
notwithstanding any removal or attempted removal of some or all
of the members thereof as directors or Committee members), acting
in its sole discretion without the consent or approval of any
participant, may act to effect one or more of the alternatives
listed below and such act by the Committee may not be revoked or
rescinded by persons not members of the Committee immediately
prior to the Change of Control:
(i) require that all outstanding options be exercised
on or before a specified date (before or after such Change
of Control) fixed by the Committee, after which specified
date all unexercised options shall terminate,
(ii) make such equitable adjustments to Incentives then
outstanding as the Committee deems appropriate to reflect
such Change of Control (provided, however, that the
Committee may determine in its sole discretion that no
adjustment is necessary),
(iii) provide for mandatory conversion of some or all
of the outstanding options held by some or all participants
as of a date, before or after such Change of Control,
specified by the Committee, in which event such options
shall be deemed automatically cancelled and the Company
shall pay, or cause to be paid, to each such participant an
amount of cash per share equal to the excess, if any, of the
Change of Control Value of the shares subject to such option
or, as defined and calculated below, over the exercise
price(s) of such options or, in lieu of such cash payment,
the issuance of Common Stock or securities of an acquiring
entity having a Fair Market Value equal to such excess, or
(iv) provide that thereafter upon any exercise of an
option the participant shall be entitled to purchase under
such option, in lieu of the number of shares of Common Stock
then covered by such option, the number and class of shares
of stock or other securities or property (including, without
limitation, cash) to which the participant would have been
entitled pursuant to the terms of the agreement providing
for the reorganization, merger, consolidation or asset sale,
if, immediately prior to such Change of Control, the
participant had been the holder of record of the number of
shares of Common Stock then covered by such options.
(v) For the purposes of paragraph (iii) of this Section
10.12(C) the "Change of Control Value" shall equal the
amount determined by whichever of the following items is
applicable:
a) the per share price to be paid to stockholders
of Superior in any such merger, consolidation or other
reorganization.
b) the price per share offered to stockholders of
Superior in any tender offer or exchange offer whereby
a Change of Control takes place, or
c) in all other events, the Fair Market Value per
share of Common Stock into which such options being
converted are exercisable, as determined by the
Committee as of the date determined by the Committee to
be the date of conversion of such options.
d) in the event that the consideration offered to
stockholders of Superior in any transaction described
in this Section 10.12 consists of anything other than
cash, the Committee shall determine the fair cash
equivalent of the portion of the consideration offered
that is other than cash.
10.13. DEFINITION OF FAIR MARKET VALUE. Whenever "Fair Market
Value" of Common Stock shall be determined for purposes of this Plan,
it shall be determined as follows: (i) if the Common Stock is listed
on an established stock exchange or any automated quotation system
that provides sale quotations, the closing sale price for a share of
the Common Stock on such exchange or quotation system on the
applicable date; (ii) if the Common Stock is not listed on any
exchange or quotation system, but bid and asked prices are quoted and
published, the mean between the quoted bid and asked prices on the
applicable date, and if bid and asked prices are not available on such
day, on the next preceding day on which such prices were available;
and (iii) if the Common Stock is not regularly quoted, the fair market
value of a share of Common Stock on the applicable date as established
by the Committee in good faith.
11. STOCKHOLDER APPROVAL. Adoption of this plan by the Board of
Directors is subject to approval by the holders of a majority of the Common
Stock present and voting at a meeting of the stockholders to be held no
later than the date of the first annual meeting after the date of the
adoption hereof by the Board of Directors.