Exhibit 10(b)
THE BEARD COMPANY
1994 PHANTOM STOCK UNITS PLAN
(As Amended Effective October 23, 1997)
THE BEARD COMPANY
1994 PHANTOM STOCK UNITS PLAN
(As Amended Effective October 23, 1997)
Table of Contents Page
ARTICLE I Name and Purpose of Plan. . . . . . . . . . 1
1.1 Name of Plan. . . . . . . . . . . . . 1
1.2 Purpose. . . . . . . . . . . . . . . 1
1.3 Type of Plan. . . . . . . . . . . . . 1
ARTICLE II Definitions and Construction. . . . . . . . 1
2.1 Definitions. . . . . . . . . . . . . 1
2.2 Construction. . . . . . . . . . . . . 4
ARTICLE III Participation. . . . . . . . . . . . . . . 4
3.1 Selection for Participation. . . . . 4
3.2 Participation in Consideration
For Future Services. . . . . . . . . 4
3.3 Award Agreements. . . . . . . . . . . 4
ARTICLE IV Phantom Stock Units Subject to the Plan. . 4
4.1 Number of Phantom Stock Units. . . . 4
4.2 Grant of Phantom Stock Units. . . . . 4
ARTICLE V The Awards. . . . . . . . . . . . . . . . . 5
5.1 Amount of Awards, Number of Units. . 5
5.2 Special Rules for Phantom Stock Units 5
5.3 Forfeiture of Award. . . . . . . . . 6
ARTICLE VI Payment of Award. . . . . . . . . . . . . . 7
6.1 Payment of Award. . . . . . . . . . . 7
6.2 Form of Payment. . . . . . . . . . . 7
6.3 Beneficiary Designation. . . . . . . 8
ARTICLE VII General Benefit Provisions. . . . . . . . . 9
7.1 Restriction on Alienation of Benefits 9
7.2 No Trust. . . . . . . . . . . . . . . 9
7.3 Withholding for Income and Employment
Taxes. . . . . . . . . . . . . . . . 9
7.4 No Interest on Awards. . . . . . . . 9
7.5 Payments by the Company or Subsidiary 9
7.6 Adjustment on Recapitalization. . . . 10
ARTICLE VIII Provisions Relating to Participants. . . . 10
8.1 Information Required of Participants. 10
8.2 Benefits Payable to Incompetents. . . 10
8.3 Conditions of Employment Not Affected
by Plan. . . . . . . . . . . . . . . 10
ARTICLE IX Acceleration of Awards on Change of Control 10
9.1 Change of Control. . . . . . . . . . 10
ARTICLE X Administration and Committee. . . . . . . . 12
10.1 Allocation of Responsibility for
Plan Administration. . . . . . . . . 12
10.2 Claims Procedure. . . . . . . . . . . 13
10.3 Review Procedure. . . . . . . . . . . 13
10.4 Records and Reports. . . . . . . . . 14
10.5 Other Committee Powers and Duties. . 14
10.6 Rules and Decisions. . . . . . . . . 14
ARTICLE XI Amendment and Termination. . . . . . . . . 14
11.1 Right to Amend or Alter Plan. . . . . 14
11.2 Right to Terminate Plan. . . . . . . 15
ARTICLE XII Miscellaneous Provisions. . . . . . . . . . 15
12.1 Articles and Section Titles and
Headings. . . . . . . . . . . . . . . 15
12.2 Laws of Oklahoma to Govern. . . . . . 15
12.3 Effective Date of Plan. . . . . . . . 15
THE BEARD COMPANY
1994 PHANTOM STOCK UNITS PLAN
(As Amended Effective October 23, 1997)
THE BEARD COMPANY, an Oklahoma corporation, hereby
adopts The Beard Company 1994 Phantom Stock Units Plan upon the
following terms and conditions:
ARTICLE I
Name and Purpose of Plan
1.1 Name of Plan. This Plan shall be hereafter known
as THE BEARD COMPANY 1994 PHANTOM STOCK UNITS PLAN.
1.2 Purpose. The purpose of the Plan is to provide
the Key Employees who are selected to be Participants under the
Plan an incentive to motivate and financially reward such
individuals who contribute to the long term growth and
profitability of the Company with such reward to be based on the
financial performance of the Company, including its
Subsidiaries, during the Award Period. Key Employees will have
the opportunity to earn their Awards with payment to be made
solely in cash.
1.3 Type of Plan. This Plan shall be considered as a
"bonus plan" which is to be sponsored by the Company solely for
the purpose of providing a supplemental income for certain Key
Employees who contribute materially to the continued growth,
development and future business success of the Company. It is
the intention of the Company that this Plan and any Agreements
entered into pursuant to the Plan be administered as a bonus
plan established and maintained for a select group of Key
Employees.
ARTICLE II
Definitions and Construction
2.1 Definitions. Where the following capitalized
words and phrases appear in this instrument, they shall have the
respective meanings set forth below unless a different context is
clearly expressed herein.
(a) Agreement: The word "Agreement" shall mean
that certain agreement which will be entered into by and between
the Company and the Participant which represents the
Participant's Award for a particular Award Period as provided in
Section 3.3 hereof.
(b) Award: The word "Award" shall mean, with
respect to any Participant, the number of Phantom Stock Units
granted to the Participant at the beginning of each Award
Period.
(c) Award Period: The words "Award Period"
shall mean a fixed period of time determined by the Committee
over which Awards may be earned by the Participant but in no
event may the Award Period exceed five years.
(d) Award Price: The words "Award Price" shall
mean the Market Value of the Common Stock on the date of the
Award.
(e) Beneficiary: The words "Beneficiary" shall
mean that person designated by the Participant pursuant to
Section 6.3 hereof who may be entitled to receive such
Participant's Award in the event of the death of the
Participant.
(f) Board: The word "Board" shall mean the
Board of Directors of the Company.
(g) Change of Control: The words "Change of
Control" shall mean the change in the control of the Company as
described in Section 9.1 hereof.
(h) Code: The word "Code" shall mean the
Internal Revenue Code of 1986, as amended.
(i) Committee: The word "Committee" shall mean
the committee appointed by the Board in accordance with Article
X herein to administer the Plan. Effective as of the date of
this amendment the Committee shall consist of at least two non-
employee directors as such term is defined in Rule 16b-3 of the
Securities Act of 1934.
(j) Common Stock: The words "Common Stock"
shall mean the shares of common stock of the Company, par value
$.001 per share.
(k) Company: The word "Company" shall mean The
Beard Company, or its successor.
(l) Disability: The word "Disability" shall
mean a physical or mental condition arising during employment
with the Employer whereby a Participant has become totally and
permanently disabled as defined under The Beard Company Long-
Term Disability Plan.
(m) Effective Date: The words "Effective Date"
shall mean the 1st day of November, 1994, which is the date that
this Plan shall be effective for all purposes.
(n) Eligible Spouse: The words "Eligible
Spouse" shall mean the spouse to whom the Participant is married
on his date of death.
(o) Employer: The word "Employer" shall mean
either the Company or any Subsidiary.
(p) Key Employee: The words "Key Employee"
shall mean any full time employee of the Company or a Subsidiary
who holds the position of Chairman, Chief Executive Officer,
President, Executive Vice President, Senior Vice President, Vice
President or any other key employee or director of the Company
or a Subsidiary who is selected for participation in the Plan.
(q) Market Value: The words "Market Value"
shall mean the closing price of the Common Stock of the Company
as reported on the American Stock Exchange or such other
securities exchange on which the Common Stock may be listed on
the trading day immediately preceding the date of the Award, the
Vesting Date or other relevant date. Provided, if the price of
such Common Stock is not reported or listed as aforesaid, the
"Market Value" of such Common Stock shall be determined by the
Committee as of the relevant date, and the Committee shall
utilize any reasonable and prudent method in determining such
Market Value, including, without limitation, the obtaining of
opinions of completely independent and well qualified experts.
(r) Participant: The word "Participant" shall
mean a Key Employee who has been selected by the Committee.
(s) Phantom Stock Units: The words "Phantom
Stock Units" shall mean those monetary units which represent
shares of Common Stock which a Participant may earn as provided
in Article V hereof.
(t) Plan: The word "Plan" shall mean the "The
Beard Company 1994 Phantom Stock Units Plan," as set forth in
this instrument, and as hereafter amended from time to time.
(u) Retirement: The word "Retirement" shall
mean a Participant's termination of employment with the Company
or a Subsidiary after attaining the age of 65 years or later or,
at the discretion of the Committee, after attaining the age of
55 years or later.
(v) Service Vesting Schedule. The words
"Service Vesting Schedule" shall mean the period of employment
service with the Employer established by the Committee which
must be met in order for a Participant to become vested in his
Award under the Service Vesting Schedule. Except as otherwise
specifically provided in the Plan or the Agreement, the Service
Vesting Schedule shall be no greater than 25% for each 12 month
period under the Award Period.
(w) Subsidiary: The word "Subsidiary" shall
mean any corporation with 80% or more of its voting common stock
being owned, directly or indirectly, by the Company.
(x) Vestina Date: The words "Vesting Date"
shall mean the date on which a Participant becomes vested under
the Service Vesting Schedule in his Award after satisfying the
requirements.
2.2 Construction: The masculine gender, wherever
appearing in the Plan, shall be deemed to include the feminine
gender, unless the context clearly indicates to the contrary.
Any word appearing herein in the plural shall include the
singular, where appropriate, and likewise the singular shall
include the plural, unless the context clearly indicates to the
contrary.
ARTICLE III
Participation
3.1 Selection for Participation. In order to be
eligible for participation in the Plan, a Key Employee of the
Company must be selected by the Committee. Selection for
participation in the Plan shall be in the sole and absolute
discretion of the Committee.
3.2 Participation In Consideration for Future
Services. Selection of a Key Employee by the Committee for
participation in the Plan and the granting of any Award will be
deemed to be for all purposes in consideration of future
services to be rendered by the Key Employee to the Company or
its Subsidiaries.
3.3 Award Agreements. Any Key Employee selected by
the Committee as a Participant, shall, as a condition of
participation, execute and return to the Committee an Agreement
evidencing the Key Employee's participation in the Plan, the
amount of his Award and his agreement to the terms and
conditions of the Plan and the Agreement. A separate Agreement
will be entered into by the Company and the Participant for each
Award Period.
ARTICLE IV
Phantom Stock Units Subject to the Plan
4.1 Number of Shares of Phantom Stock Units. The
number of Phantom Stock Units subject to Award under this Plan
in the form of Phantom Stock Units shall not exceed in the
aggregate Two Hundred Thousand (200,000). If any Phantom Stock
Units issued to a Participant are forfeited as provided in this
Plan or the Agreement, the Committee may reissue such Phantom
Stock Units to Participants.
4.2 Grant of Phantom Stock Units. The number of
Phantom Stock Units which may be awarded under the Plan is
subject to the sole discretion of the Committee but in no event
may the total number of Phantom Stock Units exceed Two Hundred
Thousand (200,000). For all purposes under the Plan, the value
of the Phantom Stock Units will be based upon the Market Value
of the Common Stock at the time of the Award, the Vesting Date
or any other relevant date. Provided, however, that the
Committee shall not award any Phantom Stock Units to any of its
own members while such member is serving as a member of the
Committee. Phantom Stock Units may be awarded to members of the
Committee as determined by the Board without any members of the
Committee participating in any discussion or vote regarding the
award of any such Phantom Stock Units to such member of the
Committee. In the event the Board is to award Phantom Stock
Units as provided herein to any member of the Committee, then,
in such event, the term "Board" shall mean the "Committee" as
that term is used herein and for the limited purpose of awarding
Phantom Stock Units to members of the Committee, the Board shall
have all rights, powers and duties which are otherwise vested in
the Committee.
ARTICLE V
The Awards
5.1 Amount of Awards, Number of Units. The Award
granted to each Participant for each Award Period, expressed as
a number of Phantom Stock Units is determined solely in the
discretion of the Committee. Payment of Awards of Phantom Stock
Units will be in cash. Each Award of Phantom Stock Units shall
contain such terms, restrictions and conditions as the Committee
may determlne, which terms, restrictions and conditions may or
may not be the same in each case.
5.2 Special Rules for Phantom Stock Units. Phantom
Stock Units are granted in the form of units equivalent to
shares of Common Stock. No certificates shall be issued with
respect to such units, but the Company shall maintain a
bookkeeping account in the name of the Participant to which such
units shall relate and such units shall otherwise be treated in
a comparable manner as if the Participant had been awarded
shares of Common Stock (except that no voting rights or other
stock ownership rights shall apply to such units). Each such
unit shall represent the right to receive a cash payment of
equivalent value at one time, in the manner and subject to the
restrictions set forth in this Plan. If, during the Award
Period, cash dividends or other cash distributions are paid with
respect to shares of Common Stock, the Company may elect to pay
to the Participant in cash an amount equal to the cash dividends
or cash distributions that he would have received if the Phantom
Stock Units had been granted in the form of shares of Common
Stock rather than units equivalent thereto. If, during the Award
Period, shares of Common Stock or other securities or property
are distributed with respect to the Common Stock, additional
units equivalent to such shares, securities or property shall be
added to the Participant's bookkeeping account as additional
units and shall be subject to forfeiture and all other
limitations and restrictions imposed upon the related units.
Upon the expiration of the Award Period or the occurrence of any
other event which may give rise to forfeiture under the Plan,
the Company may defer payment of dividend equivalents on Phantom
Stock Units until a determination is made as to the number of
such units, if any, to be forfeited, and no further dividend
equivalents shall be paid with respect to forfeited units after
the date of the forfeiture (regardless of whether the record
date of the dividend is before or after the date of the
forfeiture). In the event of the death of a Participant, the
Beneficiary shall have the same right to receive cash payments
equivalent to cash dividends and other cash distributions with
respect to the Phantom Stock Units which are not forfeited as
the Participant would have had if he had survived until payment
of the Phantom Stock Units is made to the Beneficiary pursuant
to Section 6.3 hereof.
5.3 Forfeiture of Award. In the event that the
Participant terminates employment or ceases to be a director at
any time during the Award Period, then, to the extent that the
Participant does not otherwise become vested in his Award, the
Participant shall then forfeit any remaining portion of his
Award in which he is not otherwise vested and nonforfeitable as
of the date of such termination of employment. It is the intent
of the Company in authorizing the adoption of this Plan that the
Participant must be in the employ of the Employer on the Vesting
Date as specified in the Agreement to be vested in that portion
of the Award. The only exception to the rule which provides that
the Participant must be in the employ of the Employer on the
Vesting Date in order to become vested in that incremental
portion of his Award will occur in the event the Participant's
termination from employment is due to death, Disability,
Retirement, or Change of Control. In this regard, in the event
that a Participant does terminate employment due to death or
Disability, then, the Participant shall then become 100% vested
and nonforfeitable with respect to that portion of his Award
which would otherwise become vested had the Participant
continued in the employ of the Employer until the applicable
Vesting Date in the year in which the Participant terminates
employment. In the event that a Participant terminates
employment due to Retirement or a Change of Control as provided
in Article IX hereof, then, in such event, such Participant
shall be deemed to be 100% vested and nonforfeitable in his
entire Award regardless of the fact that the Participant has not
continued in the employ of the Employer to the end of the Award
Period. Provided, in the event that the Participant has been (i)
discharged from employment service with the Employer for acts of
dishonesty, fraud, theft, embezzlement, (ii) upon the conviction
of a court of competent jurisdiction of a crime that is deemed
to be a felony under the laws of the State of Oklahoma (or any
other state or laws of the United States), or (iii) in the event
the Participant commits any act or acts which are injurious and
adversely impacts the Employer in any manner whatsoever, then,
in such event, the Committee, in its sole discretion, may
determine that any Award which has not otherwise been paid to
the Participant or his Beneficiary shall be forfeited in its
entirety and it shall thereafter be deemed as if the Participant
was never selected for participation in the Plan.
ARTICLE VI
Payment of Award
6.1 Payment of Award.
(a) General. With respect to each applicable
Award Period, after satisfaction of any Service Vesting Schedule
prescribed by the Committee, payment of Awards shall be made as
soon as practicable following the Vesting Date which relates to
the Award.
(b) Specia1 Rules for Payment.
(i) In the event a Participant terminates
employment or ceases being a director of the Employer due to
death, Disability, or if the Participant incurs a "hardship,"
then, the Committee may, in its sole discretion, accelerate
vesting and payment of any Award or take such other actions as
the Committee deems appropriate. For the purpose of the Plan,
the term "hardship" shall mean an extreme and continuing
financial hardship on the Participant, the continuation of which
will cause the Participant and/or the Company to suffer extreme
financial embarrassment. The Committee shall establish
additional criteria which it deems appropriate to determine
whether or not "hardship" has occurred. The decision of the
Committee as to whether the Participant has incurred a
"hardship" shall be final and conclusive. No member of the
Committee shall participate in the decision making process of
the Committee if such member is requesting a hardship payment.
(ii) In the event of Retirement or a Change
of Control as provided in Section 9.1 hereof, then, the
Participant's Award shall become automatically vested and 100%
nonforfeitable notwithstanding that the completion of the Award
Period has not occurred.
6.2 Form of Payment.
(a) General. At the time that the Participant
has been selected by the Committee to become a Participant in
the Plan, the Participant shall elect the time at which the
payment of his Award shall occur. Once made, this election shall
be irrevocable. All payments shall be made in a single lump sum
payment at the applicable point in time. In this regard, the
time of payment shall be as elected by the Participant under his
Agreement as provided under either Option A, Option B or Option
C below:
OPTION A: The Participant will receive his vested Award at a
reasonable time following each Vesting Date (or other date
specified herein) during the Award Period. Provided, if on such
Vesting Date the amount of payment for each Phantom Stock Unit
as calculated pursuant to Subsection 6.2(b) below is less than
$1.00, the Participant shall not receive his vested Award until
the earlier of (i) a subsequent Vesting Date on which the amount
to be paid under such Phantom Stock Unit is equal to or greater
than $1.00, (ii) the applicable date in the event of a
Participant's death, Disability, Retirement, hardship or a
Change of Control as provided in Section 6.1 herein, or (iii)
the last Vesting Date in the Award Period.
OPTION B: The Participant will receive his vested Award at a
reasonable time following the earlier of (i) the last Vesting
Date in his Award Period or (ii) the applicable date in the
event of a Participant's death, Disability, Retirement, hardship
or a Change of Control as provided in Section 6.1; and, to the
extent the Participant elects not to defer any portion of his
Award to such last Vesting Date, then, payment shall be made as
provided under Option A.
OPTION C: The Participant will receive 50% of each vested
Phantom Stock Unit pursuant to Option A and the other 50% of
each vested Phantom Stock Unit pursuant to Option B.
(b) Calculation of the Amount of Payment
OPTION A: If a Participant has elected Option A as provided in
Section 6.2(a) above, then on the applicable Vesting Date during
the Award Period, the Participant shall be paid an amount equal
to (1) the greater of (i) the average of the Market Value of the
Common Stock for the sixty day period prior to the applicable
Vesting Date or (ii) the average of the Market Value of the
Common Stock for the 12 month period prior to the applicable
Vesting Date less (2) the Award Price with such resulting amount
then multiplied by the number of Phantom Stock Units in the
Award which are vested.
OPTION B: If a Participant has elected Option B as provided in
Section 6.2(a) above, then, the amount to be paid to the
Participant shall be equal to (1) the greater of (i) the average
of the Market Value of the Common Stock for the sixty day period
prior to the first to occur of (A) the last Vesting Date during
the Award Period or (B) the applicable date in the event of a
Participant's death, Disability, Retirement, hardship or a
Change of Control as provided in Section 6.1, or (ii) the
average of the Market Value of the Common Stock for the 12 month
period prior to the earlier of (A) the last Vesting Date during
the Award Period or (B) the applicable date in the event of a
Participant's death, Disability, Retirement, hardship or a
Change of Control as provided in Section 6.1 less (2) the Award
Price with such resulting amount then multiplied by the number
of Phantom Stock Units in the Award which the Participant
elected to be calculated under Option B and which are currently
vested.
6.3 Beneficiary Designation. In the event of the
death of a Participant during a Award Period, then, the
Participant's Award, if any, shall be paid to the then
surviving Beneficiary designated by the Participant on a form
provided by the Committee, and, if there is no Beneficiary
then surviving, such benefits will automatically be paid to
the surviving Eligible Spouse of such Participant, otherwise
to the estate of such Participant.
ARTICLE VII
General Benefit Provisions
7.1 Restrictions on Alienation of Benefits. No
right or benefit under this Plan or the Agreement shall be
subject in any manner to garnishment, attachment,
anticipation, alienation, sale, transfer, assignment, gift,
pledge, encumbrance, disposition, hypothecation, levy,
execution or the claims of creditors, either voluntarily or
involuntarily, and any attempt to so garnish, attach,
anticipate, alienate, sell, transfer, assign, gift, pledge,
encumber, dispose, hypothecate, levy or execute on the same
shall be null and void, and neither shall such benefits or
beneficial interests be liable for or subject to the debts,
contracts, liabilities, engagements or torts of any person to
whom such benefits or funds are payable.
7.2 No Trust. Other than as specifically provided
in this Plan, no action under this Plan by the Company, its
parent or any subsidiary, its Board or the Committee shall be
construed as creating a trust, escrow or other secured or
segregated fund in favor of the Participant, his Beneficiary,
or any other persons otherwise entitled to his Award. The
status of the Participant and his Beneficiary with respect to
any liabilities assumed by the Company hereunder shall be
solely those of unsecured creditors of the Company who employs
such Participant. Any asset acquired or held by the Company in
connection with liabilities assumed by it hereunder, shall not
be deemed to be held under any trust, escrow or other secured
or segregated fund for the benefit of the Participant or his
Beneficiaries or to be security for the performance of the
obligations of the Company or any Subsidiary, but shall be,
and remain a general, unpledged, unrestricted asset of the
Company at all times subject to the claims of general
creditors of the Company, its parent or any subsidiary.
7.3 Withholding For Income and Employment Taxes.
Since all amounts to be paid under the Plan and the related
Agreement to a Participant are to be considered as supplemental
compensation paid for services rendered by the Participant, the
Company shall comply with all federal and state laws and
regulations respecting the withholding, deposit and payment of
any income, employment or other taxes relating to any payments
made under this Plan, and accordingly, all amounts of Awards
shall be subject to and reduced by the amount of such taxes.
7.4 No Interest on Awards. All Awards to be paid
hereunder will be paid without interest or investment earnings
of any kind whatsoever except as otherwise specifically provided
in the Plan.
7.5 Payments by the Company or Subsidiary. The
payments required to meet the cost of the Awards provided by the
Plan shall be made solely by the Company or any Subsidiary whose
Key Employees are participating in the Plan.
7.6 Adjustment on Recapitalization. In case of a
recapitalization, stock split, merger, stock dividend,
reorganization, combination, liquidation, or other change in the
Common Stock of the Company, the Committee shall make such
adjustment, if any, as it deems appropriate to the number of
Phantom Stock Units which represent shares of Common Stock.
ARTICLE VIII
Provisions Relating to Participants
8.1 Information Required of Participants. Payment of
Awards shall be made as provided in this Plan and no formal
claim shall be required therefor; provided, in the interests of
orderly administration of the Plan, the Committee may make
reasonable requests of Participants and Beneficiaries to furnish
information which is reasonably necessary and appropriate to the
orderly administration of the Plan, and, to that limited extent,
payments under the Plan are conditioned upon the Participants
and Beneficiaries promptly furnishing true, full and complete
information as the Committee may reasonably request.
8.2 Benefits Payable to Incompetents. Any benefits
payable hereunder to a minor or other person under legal
disability may be made, at the discretion of the Committee, (i)
directly to the said person, or (ii) to a parent, spouse,
relative by blood or marriage, or the legal representative of the
said person. The Committee shall not be required to see to the
application of any such payment, and the payee's receipt shall be
a full and final discharge of the Committee's responsibility
hereunder.
8.3 Conditions of Employment Not Affected by Plan.
The establishment and maintenance of the Plan shall not be
construed as conferring any legal rights upon any Participant to
the continuation of employment with the Employer, nor shall the
Plan interfere with the rights of the Employer to discharge any
Participant with or without cause.
ARTICLE IX
Acceleration of Awards on Change of Control
9.1 Change of Control. In the event that there has
been a Change of Control (as defined hereafter), any unvested
portion of an Award shall vest and become 100% nonforfeitable and
payable as of the date of the Change in Control. For the purpose
of this Plan, a "Change of Control" shall mean:
(a) The acquisition by any individual, entity or
group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"))
(a "Person") of beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of 20% or more of
either (i) the then outstanding shares of common stock of the
Company (the "Outstanding Company Common Stock") or (ii) the
combined voting power of the then outstanding voting securities
of the Company entitled to vote generally in the election of
directors (the "Outstanding Company Voting Securities");
provided, however, that the following acquisitions shall not
constitute a Change of Control: (i) any acquisition directly from
the Company, (ii) any acquisition by the Company; (iii) any
acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation
controlled by the Company; (iv) any acquisition by any
corporation pursuant to a transaction which complies with clauses
(i), (ii), and (iii) of subsection (c) of this Section 9; or (v)
any acquisition of the Outstanding Company Common Stock or the
Outstanding Company Voting Securities beneficially owned by W.M.
Beard (1) pursuant to the laws of descent and distribution, (2)
by a donee receiving the shares pursuant to an inter vivos gift,
(3) by a corporation, partnership or other entity which W.M.
Beard controls or (4) by operation of law, including by example
and not by limitation, pursuant to a divorce decree, pursuant to
a bankruptcy decree or pursuant to any foreclosure proceedings;
(b) Individuals who, as of the date hereof,
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 date hereof whose election, or nomination for election by the
Company's shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board
shall be considered as though such individual were a member of
the Incumbent Board, but excluding, for this purpose, any such
individual whose 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 Board; or
(c) Approval by the shareholders of the Company
of a reorganization, merger or consolidation (a "Business
Combination"), in each case, unless, following such Business
Combination, (i) all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding Company Voting
Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 70% of,
respectively, the then outstanding shares of common stock and
the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting from
such Business Combination (including, without limitation, a
corporation which as a result of such transaction owns the
Company through one or more subsidiaries) in substantially the
same proportions as their ownership, immediately prior to such
Business Combination of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the case may be, (ii)
no Person (excluding 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, respectively, the then outstanding shares of
common stock of the corporation resulting from such Business
Combination or the combined voting power of the then outstanding
voting securities of such corporation except to the extent that
such ownership existed prior to the Business Combination, and
(iii) 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
(d) Approval by the shareholders of the Company
of (i) a complete liquidation or dissolution of the Company or,
(ii) the sale or other disposition of all or substantially all
of the assets of the Company, other than to a corporation, with
respect to which following such sale or other disposition, (A)
more than 70% of, respectively, the then outstanding shares of
common stock of such corporation and the combined voting power
of the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors is then
beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities
immediately prior to such sale or other disposition in
substantially the same proportion as their ownership,
immediately prior to such sale or other disposition, of the
Outstanding Company Common Stock and Outstanding Company Voting
Securities, as the case may be, (B) less than 20% of,
respectively, the then outstanding shares of common stock of
such corporation and the combined voting power of the then
outstanding voting securities of such corporation entitled to
vote generally in the election of directors is then beneficially
owned, directly or indirectly, by any Person (excluding any
employee benefit plan (or related trust) of the Company or such
corporation), except to the extent that such Person owned 20% or
more of the Outstanding Company Common Stock or Outstanding
Company Voting Securities prior to the sale or disposition, and
(C) at least a majority of the members of the board of directors
of such corporation 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 sale or other disposition of
assets of the Company or were elected, appointed or nominated by
the Board.
ARTICLE X
Administration and Committee
10.1 Allocation of Responsibility for Plan Admini-
stration. The members of the Committee shall serve at the
pleasure of the Board and shall be the same as the Compensation
Committee appointed by the Board. Any member may serve
concurrently as a member of any other administrative committee of
any other plan of the Company or any of its affiliates entitling
participants therein to acquire stock, stock options or deferred
compensation rights (including stock appreciation rights). The
Committee shall have the power where consistent with the general
purpose and intent of the Plan to (i) modify the requirements of
the Plan to conform with the law or to meet in special
circumstances not anticipated or covered in the Plan, (ii)
suspend or discontinue the Plan, (iii) establish policies and
(iv) adopt rules and regulations and prescribe forms for carrying
out the purposes and provisions of the Plan including the form of
any Agreements. Unless otherwise provided in the Plan, the
Committee shall have the authority to interpret and construe the
Plan, and determine all questions arising under the Plan and any
Agreement made pursuant to the Plan. Any interpretation, decision
or determination made by the Committee shall be final, binding
and conclusive. A majority of the Committee shall constitute a
quorum, and an act of the majority of the members present at any
meeting at which a quorum is present shall be the act of the
Committee.
10.2 Claims Procedure. The Committee shall make all
determinations as to the right of any Participant or his
Beneficiary to an Award. If any request for a payment is wholly
or partially denied, the Committee shall notify the person
requesting the payments, in writing, of such denial, including in
such notification the following information:
(a) the specific reason or reasons for such
denial;
(b) the specific references to the pertinent
Plan provisions upon which the denial is based;
(c) a description of any additional material and
information which may be needed to clarify the request,
including an explanation of why such information is required;
and
(d) an examination of this Plan's review
procedure with respect to denial of benefits.
Provided, that any such notice to be delivered to any
Participant or Beneficiary shall be mailed by certified or
registered mail and shall be written to the best of the
Committee's ability in a manner that may be understood without
legal counsel.
10.3 Review Procedure. Any Participant or Beneficiary
whose claim has been denied in accordance with Section 10.2
herein may appeal to the Committee for review of such denial by
making a written request therefor within 60 days of receipt of
the notification of such denial, and such Participant or
Beneficiary may examine documents pertinent to the review and
may submit to the Committee written issues and comments. Within
60 days after receipt of the request for review, the Committee
shall communicate to the claimant, in writing, its decision, and
the communication shall set forth the reason or reasons for the
decision and specific reference to those Plan provisions upon
which the decision is based.
10.4 Records and Reports. The Committee shall
exercise such authority and responsibility as it deems
appropriate in order to comply with governmental laws and
regulations.
10.5 Other Committee Powers and Duties. The
Committee shall have such duties and powers as may be necessary
to discharge its duties hereunder, including, but not by way of
limitation, the following:
(a) to construe and interpret the Plan, decide
all questions of eligibility and determine the amount, manner
and time of payment of any Awards hereunder;
(b) to establish the Service Vesting Schedule as
such relates to the Awards;
(c) to prepare and distribute, in such manner as
the Committee determines to be appropriate, information
explaining the Plan;
(d) to receive from the Company and from
Participants and Beneficiaries such information as shall be
necessary for the proper administration of the Plan;
(e) to furnish the Company upon request, such
reports with respect to the administration of the Plan as are
reasonable and appropriate; and
(f) to appoint and employ individuals and any
other agents it deems advisable, including legal counsel, to
assist in the administration of the Plan and to render advice
with respect to any responsibility of the Committee, or any of
its individual members, under the Plan.
10.6 Rules and Decisions. The Committee may adopt
such rules as it deems necessary, desirable, or appropriate.
When making a determination or calculation, the Committee shall
be entitled to rely upon information furnished by a Participant
or Beneficiary, the Employer, the accountants of the Company or
the legal counsel of the Company.
ARTICLE XI
Amendment and Termination
11.1 Right to Amend or Alter Plan. The Plan may be
amended by the Company from time to time in any respect whatever
by resolution of the Board adopting such amendment. Any
amendments may be made, which in the judgment of the Committee
are necessary or advisable, provided that such amendments do not
deprive a Participant, without his consent, of a right to
receive his Award hereunder which has been previously granted to
the Participant at the applicable point in time. Provided
further, the amendment of the Plan shall not cause a termination
of any previously granted Award and such amendment shall not
accelerate the vesting of any Award which is not vested as of
such date.
11.2 Right to Terminate Plan. This Plan shall
continue until terminated as provided in this Section 11.2. The
Company expressly reserves the right to terminate this Plan in
whole or in part at any time. Unless sooner terminated, this
Plan shall terminate on October 31, 2004 (the "Termination
Date"). Provided, if the Company elects to terminate the Plan
prior to the Termination Date, the Company shall determine a
proposed date of termination, and the Committee shall notify the
Participants. Provided, further, the termination of the Plan
shall not cause a termination of any previously granted Award
and such termination shall not accelerate the vesting of any
Award which is not vested as of such date.
ARTICLE XII
Miscellaneous Provisions
12.1 Articles and Section Titles and Headings. The
titles and headings at the beginning of each Article and Section
shall not be considered in construing the meaning of any
provisions in this Plan.
12.2 Laws of Oklahoma to Govern. The provisions of
this Plan shall be construed, administered and enforced
according to the laws of the State of Oklahoma.
12.3 Effective Date of Plan. This Plan shall be
effective as of the Effective Date.
THE BEARD COMPANY, an Oklahoma
corporation
ATTEST:
REBECCA G. WITCHER By: HERB MEE, JR.
Rebecca G. Witcher, Secretary Herb Mee, Jr., President
[Seal]