EXHIBIT D
THE BEARD COMPANY
DEFERRED STOCK COMPENSATION PLAN
ARTICLE I
PURPOSE AND EFFECTIVE DATE
1.1 PURPOSE. The Beard Company Deferred Stock Compensation
Plan, as amended, (the "Plan") is intended to advance the interests of the
Company and its shareholders by providing a means to attract and retain
highly-qualified persons to serve as Officers and Directors and to promote
ownership by Officers and Directors of a greater proprietary interest in
the Company, thereby aligning such interests more closely with the
interests of shareholders of the Company.
1.2 EFFECTIVE DATE. This Plan first became effective November
1, 1995 and was approved by the shareholders of the Company by the
affirmative vote of a majority of shares of the Company present, or
represented, and entitled to vote on the subject matter, at the 1996 Annual
Meeting of Shareholders of the Company. The Plan, as amended, shall become
effective upon approval of the shareholders of the Company by the
affirmative vote of a majority of the shares of the Company present, or
represented, and entitled to vote on the subject matter, at the 1997 Annual
Meeting of Shareholders of the Company.
ARTICLE II
DEFINITIONS
The following terms shall be defined as set forth below:
2.1 "Board" means the Board of Directors of the Company.
2.2 "Compensation" means all or part of the cash remuneration
payable to an Officer in his or her capacity as an Officer.
2.3 "Committee" means the Compensation Committee of the Board.
2.4 "Company" means The Beard Company, an Oklahoma corporation,
or any successor thereto.
2.5 "Deferral Date" means the date Fees or Compensation would
otherwise have been paid to the Participant.
2.6 "Director" means any individual who is a member of the
Board.
2.7 "Exchange Act" means the Securities Exchange Act of 1934,
as amended. References to any provision of the Exchange Act include rules
thereunder and successor provisions and rules thereto.
2.8 "Fair Market Value" means the "Market Price" as defined in
the Certificate of Designations for the Company's outstanding Series A
Convertible Preferred Stock, but in no event shall Fair Market Value be
less than an amount below which would cause an adjustment to the number of
shares of the Company's common stock to be issued upon conversion of the
Series A Convertible Preferred Stock.
2.9 "Fees" means all or part of any retainer and/or fees
payable to a Director in his or her capacity as a Director.
2.10 "Officer" means any person so designated by the Board.
2.11 "Participant" means a Director or Officer who defers Fees
or Compensation under Article VI of this Plan.
2.12 "Reconciliation Events" means certain events which cause
the amount of Fees or Compensation actually paid during a period to differ
from the amount of Fees credited pursuant to Section 6.4, including, but
not limited to, the following: an increase or decrease in Fees paid,
additional meetings held, missed attendance at certain meetings, newly
elected directors and Terminations of Service.
2.13 "Secretary" means the Corporate Secretary or any Assistant
Corporate Secretary of The Beard Company.
2.14 "Shares" means shares of the common stock of The Beard
Company, par value $.001 per share, or of any successor corporation or
other legal entity adopting this Plan.
2.15 "Stock Units" means the credits to a Participant's Stock
Unit Account under Article VI of this Plan, each of which represents the
right to receive one Share upon settlement of the Stock Unit Account.
2.16 "Stock Unit Account" means the bookkeeping account
established by the Company pursuant to Section 6.4.
2.17 "Termination Date" means the date the Plan terminates
pursuant to Section 12.8.
2.18 "Termination of Service" means termination of service as a
Director or Officer in any of the following circumstances:
(a) Where the Participant voluntarily resigns or retires;
(b) Where a Director is not re-elected (or elected in the
case of an appointed Director) to the Board by the shareholders, or an
Officer is not re-elected as an Officer by the Board; or
(c) Where the Participant dies.
ARTICLE III
SHARES AVAILABLE UNDER THE PLAN
Subject to adjustment as provided in Article X, the maximum
number of Shares that may be distributed in settlement of Stock Unit
Accounts under this Plan shall not exceed 100,000. Such Shares may include
authorized but unissued Shares or treasury Shares.
ARTICLE IV
ADMINISTRATION
4.1 This Plan shall be administered by the Board's Compensation
Committee, or such other committee or individual as may be designated by
the Board. Notwithstanding the foregoing, no Director who is a Participant
under this Plan shall participate in any determination relating solely or
primarily to his or her own Shares, Stock Units or Stock Unit Account.
4.2 It shall be the duty of the Committee to administer this
Plan in accordance with its provisions and to make such recommendations of
amendments or otherwise as it deems necessary or appropriate.
4.3 The Committee shall have the authority to make all
determinations it deems necessary or advisable for administering this Plan,
subject to the limitations in Section 4.1 and other explicit provisions of
this Plan.
ARTICLE V
ELIGIBILITY
Each Director and Officer of the Company shall be eligible to
defer Fees and Compensation under Article VI of this Plan.
ARTICLE VI
DEFERRAL ELECTIONS IN LIEU OF CASH PAYMENTS
6.1 GENERAL RULE. Each Director or Officer may, in lieu of
receipt of Fees or Compensation, defer such Fees or Compensation in
accordance with this Article VI.
6.2 TIMING OF ELECTION. Each eligible Director or Officer who
wishes to defer Fees or Compensation under this Plan must make an
irrevocable written election at least six (6) months prior to the beginning
of the date on which the Fees or Compensation would otherwise be paid;
provided, however, that with respect to (a) any election made by a newly-
elected or appointed Director or Officer ("New Participant Elections") and
(b) elections made prior to shareholder approval for the Plan as provided
in Section 1.2 hereof ("Initial Elections"), the following special rules
shall apply: (i) with respect to any New Participant Elections, the
Company shall hold such deferred Fees or Compensation (without interest)
and credit them pursuant to Section 6.4 on or as of the date which follows
by six months such deferral election and (ii) with respect to any Initial
Elections, such elections shall be effective for any Fees or Compensation
paid on the date the election was made and the Company shall hold such
deferred Fees or Compensation (without interest) and credit them pursuant
to Section 6.4 on or as of the date on which the shareholders of the
Company approve the Plan in accordance with Section 1.2; provided, however,
the Fair Market Value used to determine the number of Stock Units to be
credited shall be the Fair Market Value as of the date the election was
made. An election by a Director or an Officer shall be deemed to be
continuing and therefore applicable to Fees or Compensation to be paid in
periods unless the Director or Officer revokes or changes such election by
filing a new election form to be effective at least six (6) months after
such election.
6.3 FORM OF ELECTION. An election shall be made in a manner
satisfactory to the Secretary. Generally, an election shall be made by
completing and filing the specified election form with the Secretary of the
Company within the period described in Section 6.2. At minimum, the form
shall require the Director or Officer to specify the following:
(a) a percentage (for Directors in 25% increments, and for
Officers not less than 10% and in 5% increments thereafter), not to exceed
an aggregate of 100% of the Fees or Compensation to be deferred under this
Plan; and
(b) the manner of settlement in accordance with Section
7.2.
6.4 ESTABLISHMENT OF STOCK UNIT ACCOUNT. The Company will
establish a Stock Unit Account for each Participant. All Fees or
Compensation deferred pursuant to this Article VI shall be credited to the
Participant's Stock Unit Account as of the Deferral Date and converted to
Stock Units as follows: The number of Stock Units shall equal the deferred
Fees or Compensation divided by the Fair Market Value of a Share on the
Deferral Date, with fractional units calculated to three (3) decimal
places.
6.5 CREDIT OF DIVIDEND EQUIVALENTS. As of each dividend
payment date with respect to Shares, each Participant shall have credited
to his or her Stock Unit Account an additional number of Stock Units equal
to: the per-share cash dividend payable with respect to a Share on such
dividend payment date multiplied by the number of Stock Units held in the
Stock Unit Account as of the close of business on the record date for such
dividend divided by the Fair Market Value of a Share on such dividend
payment date. If dividends are paid on Shares in a form other than cash,
then such dividends shall be notionally converted to cash, if their value
is readily determinable, and credited in a manner consistent with the
foregoing and, if their value is not readily determinable, shall be
credited "in kind" to the Participant's Stock Unit Account.
6.6 RECONCILIATIONS. The Company shall record all
Reconciliation Events and, as soon as reasonably practicable after the end
of each calendar quarter or after a Termination of Service, make
appropriate adjustments to each Participant's Stock Unit Account to reflect
such Reconciliation Events; provided, however, the Fair Market Value used
to determine such adjustments shall be the same Fair Market Value used to
determine the number of Stock Units credited to such Participant's Stock
Unit Account.
ARTICLE VII
SETTLEMENT OF STOCK UNITS
7.1 SETTLEMENT OF ACCOUNT. The Company will settle a
Participant's Stock Unit Account in the manner described in Section 7.2 as
soon as administratively feasible following the earlier of (i) notification
of such Participant's Termination of Service or (ii) the Termination Date.
7.2 PAYMENT OPTIONS. An election filed under Article VI shall
specify whether the Participant's Stock Unit Account is to be settled by
delivering to the Participant (or his or her beneficiary) the number of
Shares equal to the number of whole Stock Units then credited to the
Participant's Stock Unit Accounts, in (a) a lump sum, or (b) substantially
equal annual installments over a period not to exceed ten (10) years. If,
upon lump sum distribution or final distribution of an installment, less
than one whole Stock Unit is credited to a Participant's Stock Unit
Account, cash will be paid in lieu of fractional shares on the date of such
distribution.
7.3 CONTINUATION OF DIVIDEND EQUIVALENTS. If payment of Stock
Units is deferred and paid in installments, the Participant's Stock Unit
Account shall continue to be credited with dividend equivalents as provided
in Section 6.5.
7.4 IN KIND DIVIDENDS. If any "in kind" dividends were
credited to the Participant's Stock Unit Account under Section 6.5, such
dividends shall be payable to the Participant in full on the date of the
first distribution of Shares under Section 7.2.
ARTICLE VIII
UNFUNDED STATUS
The interest of each Participant in any Fees or Compensation
deferred under this Plan (and any Stock Units or Stock Unit Account
relating thereto) shall be that of a general creditor of the Company.
Stock Unit Accounts, and Stock Units (and, if any, "in kind" dividends)
credited thereto, shall at all times be maintained by the Company as
bookkeeping entries evidencing unfunded and unsecured general obligations
of the Company.
ARTICLE IX
DESIGNATION OF BENEFICIARY
Each Participant may designate, on a form provided by the
Committee, one or more beneficiaries to receive the Shares described in
Section 7.2 in the event of such Participant's death. The Company may rely
upon the beneficiary designation last filed with the Committee, provided
that such form was executed by the Participant or his or her legal
representative and filed with the Committee prior to the Participant's
death.
ARTICLE X
ADJUSTMENT PROVISIONS
In the event any recapitalization, reorganization, merger,
consolidation, spin-off, combination, repurchase, exchange of shares or
other securities of the Company, stock split or reverse split, or similar
corporate transaction or event affects Shares such that an adjustment is
determined by the Board or Committee to be appropriate to prevent dilution
or enlargement of Participants' rights under this Plan, then the Board or
Committee will, in a manner that is proportionate to the change to the
Shares and is otherwise equitable, adjust the number or kind of Shares to
be delivered upon settlement of Stock Unit Accounts under Article VII.
ARTICLE XI
COMPLIANCE WITH RULE 16B-3
Subject to Section 6.2, it is the intent of the Company that this
Plan comply in all respects with applicable provisions of Rule 16b-3 under
the Exchange Act in connection with the deferral of Fees and Compensation.
Thus, other provisions of this Plan notwithstanding, if any deferral of
Fees or Compensation would occur less than six (6) months after the
Participant filed an irrevocable election which would result in such
deferral and at a time that the Company's employee benefit plans are being
operated in conformity with Rule 16b-3 as adopted and in effect, such
deferral election may be modified in a manner consistent with the special
rule described in Section 6.2 or in any other manner consistent with Rule
16b-3 as then applicable to any transaction by a Participant subject to
Section 16 of the Exchange Act, or would cause any Participant or Director
to no longer be deemed a "disinterested person" within the meaning of Rule
16b-3, such provision will be construed or deemed amended to the extent
necessary to conform to such requirements with respect to such Participant
or Director.
ARTICLE XII
GENERAL PROVISIONS
12.1 NO RIGHT TO CONTINUE AS AN OFFICER OR DIRECTOR. Nothing
contained in this Plan will confer upon any Participant any right to
continue to serve as an Officer or Director.
12.2 NO SHAREHOLDER RIGHTS CONFERRED. Nothing contained in this
Plan will confer upon any Participant any rights of a shareholder of the
Company unless and until Shares are in fact issued or transferred to such
Participant in accordance with Article VII.
12.3 CHANGE TO THE PLAN. The Board may amend, alter, suspend,
discontinue, extend, or terminate the Plan without the consent of
shareholders or Participants, except that any such action will be subject
to the approval of the Company's shareholders at the next annual meeting of
shareholders having a record date after the date such action was taken if
such stockholder approval is required by any federal or state law or
regulation or the rules of any stock exchange or automated quotation system
on which the Shares may then be listed or quoted, or if the Board
determines in its discretion to seek such shareholder approval; provided,
however, that, without the consent of an affected Participant, no such
action may materially impair the rights of such Participant with respect to
any Stock Units credited to his or her Stock Unit Account; and provided,
however, that any "plan provision" referred to in Rule 16b-3(c)(2)(ii)(B)
under the Exchange Act, shall not be amended more than once every six
months, other than to comport with changes in the Internal Revenue Code or
the Exchange Act or the rules thereunder.
12.4 CONSIDERATION; AGREEMENTS. The consideration for Shares
issued or delivered in lieu of payment of Fees or Compensation will be the
service of the Officer or Director during the period to which the Fees or
Compensation paid in the form of Shares related.
12.5 COMPLIANCE WITH LAWS AND OBLIGATIONS. The Company will not
be obligated to issue or deliver Shares in connection with this Plan in a
transaction subject to the registration requirements of the Securities Act
of 1933, as amended, or any other federal or state securities law, any
requirement under any listing agreement between the Company and any
national securities exchange or automated quotation system or any other
laws, regulations, or contractual obligations of the Company, until the
Company is satisfied that such laws, regulations, and other obligations of
the Company have been complied with in full. Certificates representing
Shares delivered under the Plan will be subject to such stop-transfer
orders and other restrictions as may be applicable under such laws,
regulations, and other obligations of the Company, including any
requirement that a legend or legends be placed thereon.
12.6 LIMITATIONS ON TRANSFERABILITY. Stock Units and any other
right under the Plan that may constitute a "derivative security" as
generally defined in Rule 16a-1(c) under the Exchange Act will not be
transferable by a Participant except by will or the laws of descent and
distribution (or to a designated beneficiary in the event of a
Participant's death); provided, however, that such rights may be
transferred to one or more trusts or other beneficiaries during the
lifetime of the Participant in connection with the Participant's estate
planning, but only if and to the extent then permitted under Rule 16b-3 and
consistent with the registration of the offer and sale of Shares on Form S-
8 or a successor registration form of the Securities and Exchange
Commission. Stock Units and other rights under the Plan may not be
pledged, mortgaged, hypothecated, or otherwise encumbered, and shall not be
subject to the claims of creditors.
12.7 GOVERNING LAW. The validity, construction, and effect of
the Plan and any agreement hereunder will be determined in accordance with
the laws of the State of Oklahoma, without giving effect to principles of
conflicts of laws, and applicable federal law.
12.8 PLAN TERMINATION. Unless earlier terminated by action of
the Board or Executive Committee of the Board, the Plan will remain in
effect until the earlier of (i) such time as no Shares remain available for
delivery under the Plan and the Company has no further rights or
obligations under the Plan or (ii) June 30, 2006.