Exhibit 10.17
CHICAGO BRIDGE & IRON
1999 LONG-TERM INCENTIVE PLAN
CHICAGO BRIDGE & IRON COMPANY
ADOPTED MAY 1, 1999, AS AMENDED
THROUGH MAY 1, 2002
TABLE OF CONTENTS
CHICAGO BRIDGE & IRON LONG-TERM INCENTIVE PLAN.................................................... 1
ARTICLE 1 - ESTABLISHMENT, OBJECTIVES AND DURATION................................................ 1
1.1. ESTABLISHMENT OF THE PLAN............................................................... 1
1.2 OBJECTIVES OF THE PLAN.................................................................. 1
1.3. DURATION OF THE PLAN.................................................................... 1
ARTICLE 2. - DEFINITIONS.......................................................................... 1
2.1. "AFFILIATE"............................................................................. 1
2.2. "AWARD"................................................................................. 1
2.3. "AWARD AGREEMENT"....................................................................... 1
2.4. "BENEFICIAL OWNER" OR "BENEFICIAL OWNERSHIP"............................................ 2
2.5. "BOARD" OR "BOARD OF DIRECTORS"......................................................... 2
2.6. "CB&I".................................................................................. 2
2.7. "CHANGE IN CONTROL"..................................................................... 2
2.8. "CODE................................................................................... 2
2.9. "COMMITTEE"............................................................................. 2
2.10. "COMPANY"............................................................................ 2
2.11. "DIRECTOR"........................................................................... 3
2.12. "DISABILITY"......................................................................... 3
2.13. "EFFECTIVE DATE"..................................................................... 3
2.14. "EMPLOYEE"........................................................................... 3
2.15. "EXCHANGE ACT"....................................................................... 3
2.16. "FAIR MARKET VALUE".................................................................. 3
2.17. "FISCAL YEAR"........................................................................ 3
2.18. "INCENTIVE STOCK OPTION" OR "ISO".................................................... 3
2.19. "NAMED EXECUTIVE OFFICER"............................................................ 3
2.20. "NONEMPLOYEE DIRECTOR"............................................................... 3
2.21. "NONQUALIFIED STOCK OPTION" OR "NQSO"................................................ 3
2.22. "OPTION"............................................................................. 3
2.23. "OPTION PRICE"....................................................................... 3
2.24. "OPTIONEE"........................................................................... 4
2.25. "PARTICIPANT"........................................................................ 4
2.26. "PERFORMANCE-BASED EXCEPTION"........................................................ 4
2.27. "PERFORMANCE SHARE".................................................................. 4
2.28. "PERFORMANCE UNIT"................................................................... 4
2.29. "PERIOD OF RESTRICTION".............................................................. 4
2.30. "PERSON"............................................................................. 4
2.31. "RESTRICTED STOCK"................................................................... 4
2.32. "RESTRICTED STOCK SHARES"............................................................ 4
2.33. "RESTRICTED STOCK UNIT".............................................................. 4
2.34. "RETIREMENT"......................................................................... 4
2.35. "SHARES"............................................................................. 5
2.36. "SUBSIDIARY"......................................................................... 5
2.37. "SUPERVISORY BOARD".................................................................. 5
2.38. "VESTING DATE"....................................................................... 5
ARTICLE 3. - ADMINISTRATION....................................................................... 5
3.1. THE COMMITTEE........................................................................... 5
3.2. AUTHORITY OF THE COMMITTEE.............................................................. 5
3.3. DECISIONS BINDING....................................................................... 6
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ARTICLE 4. - SHARES SUBJECT TO THE PLAN AND MAXIMUM AWARDS........................................ 6
4.2. FORFEITED AND REACQUIRED SHARES......................................................... 6
4.3. ADJUSTMENTS IN AUTHORIZED SHARES........................................................ 6
4.4. FRACTIONAL SHARES....................................................................... 7
ARTICLE 5. - ELIGIBILITY AND PARTICIPATION........................................................ 7
5.1. ELIGIBILITY............................................................................. 7
5.2. ACTUAL PARTICIPATION.................................................................... 7
ARTICLE 6. - STOCK OPTIONS........................................................................ 7
6.1. GRANT OF OPTIONS........................................................................ 7
6.2. AWARD AGREEMENT......................................................................... 7
6.3. OPTION PRICE............................................................................ 7
6.4. DURATION OF OPTIONS..................................................................... 7
6.5. EXERCISE OF OPTIONS..................................................................... 7
6.6. PAYMENT................................................................................. 8
6.7. RESTRICTIONS ON SHARE TRANSFERABILITY................................................... 8
6.8. TERMINATION OF EMPLOYMENT............................................................... 8
6.9. NONTRANSFERABILITY OF OPTIONS........................................................... 8
(a) INCENTIVE STOCK OPTIONS.................................................................... 8
(b) NONQUALIFIED STOCK OPTIONS................................................................. 9
ARTICLE 7. - RESTRICTED STOCK..................................................................... 9
7.1. GRANT OF RESTRICTED STOCK............................................................... 9
7.2. RESTRICTED STOCK AGREEMENT.............................................................. 9
7.3. TRANSFERABILITY......................................................................... 9
7.4. OTHER RESTRICTIONS...................................................................... 9
7.5. VOTING RIGHTS........................................................................... 10
7.6. DIVIDEND AND OTHER DISTRIBUTIONS........................................................ 10
7.7. TERMINATION OF EMPLOYMENT............................................................... 10
7.8. RIGHTS PERSONAL TO PARTICIPANT.......................................................... 10
ARTICLE 8. - PERFORMANCE UNITS AND PERFORMANCE SHARES............................................. 11
8.1. GRANT OF PERFORMANCE UNITS/SHARES....................................................... 11
8.2. VALUE OF PERFORMANCE UNITS/SHARES....................................................... 11
8.3. EARNING OF PERFORMANCE UNITS/SHARES..................................................... 11
8.4. FORM AND TIMING OF PAYMENT OF PERFORMANCE UNITS/SHARES.................................. 11
8.5. TERMINATION OF EMPLOYMENT DUE TO DEATH, DISABILITY, OR RETIREMENT....................... 11
8.6. TERMINATION OF EMPLOYMENT FOR OTHER REASONS............................................. 12
8.7. NONTRANSFERABILITY...................................................................... 12
ARTICLE 9. - PERFORMANCE MEASURES................................................................. 12
ARTICLE 10. - BENEFICIARY DESIGNATION............................................................. 13
ARTICLE 11. - DEFERRALS........................................................................... 13
ARTICLE 12. - RIGHTS OF EMPLOYEES................................................................. 13
12.1. EMPLOYMENT........................................................................... 13
12.2. PARTICIPATION........................................................................ 13
ARTICLE 13. - CHANGE IN CONTROL................................................................... 13
13.1. TREATMENT OF OUTSTANDING AWARDS...................................................... 13
13.2. TERMINATION, AMENDMENT, AND MODIFICATIONS OF CHANGE-IN-CONTROL PROVISIONS............ 14
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ARTICLE 14. - AMENDMENT, MODIFICATION, AND TERMINATION............................................ 14
14.1. AMENDMENT, MODIFICATION, AND TERMINATION............................................. 14
14.2. ADJUSTMENT OF AWARDS UPON THE OCCURRENCE OF CERTAIN UNUSUAL OR NONRECURRING EVENTS... 14
14.3. AWARDS PREVIOUSLY GRANTED............................................................ 14
ARTICLE 15. - WITHHOLDING......................................................................... 14
15.1. TAX WITHHOLDING...................................................................... 14
15.2. SHARE WITHHOLDING.................................................................... 15
ARTICLE 16. - INDEMNIFICATION..................................................................... 15
ARTICLE 17. - SUCCESSORS.......................................................................... 15
ARTICLE 18. - LEGAL CONSTRUCTION.................................................................. 15
18.1. GENDER AND NUMBER.................................................................... 15
18.2. SEVERABILITY......................................................................... 15
18.3. REQUIREMENTS OF LAW.................................................................. 16
18.4. SECURITIES LAW COMPLIANCE............................................................ 16
18.5. GOVERNING LAW........................................................................ 16
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CHICAGO BRIDGE & IRON
1999 LONG-TERM INCENTIVE PLAN
ARTICLE 1 - ESTABLISHMENT, OBJECTIVES AND DURATION
1.1 ESTABLISHMENT OF THE PLAN. Chicago Bridge & Iron Company, a Delaware
corporation ("CB&I"), a wholly owned subsidiary of Chicago Bridge & Iron Company
N.V., a Netherlands corporation (the "Company"), hereby establishes an incentive
compensation plan to be known as the "Chicago Bridge & Iron 1999 Long-Term
Incentive Plan" (the "Plan"), as set forth in this document. The Plan permits
the grant of Nonqualified Stock Options, Incentive Stock Options, Restricted
Stock Shares, Restricted Stock Units, Performance Shares and Performance Units.
1.2 OBJECTIVES OF THE PLAN. The objectives of the Plan are to optimize the
profitability and growth of CB&I, the Company and their respective Subsidiaries,
through incentives which are consistent with CB&I's goals and which link the
personal interests of Participants to those of the Company's shareholders; to
provide Participants with an incentive for excellence in individual performance;
and to promote teamwork among Participants.
The Plan is further intended to provide flexibility to CB&I in its ability
to motivate, attract, and retain the services of Participants who make
significant contributions to CB&I's success and to allow Participants to share
in the success of CB&I.
1.3 DURATION OF THE PLAN. The Plan shall become effective as of May 1,
1999 (the "Effective Date"), subject to its approval by the shareholders of the
Company, and shall remain in effect, subject to the right of the Board of
Directors to amend or terminate the Plan at any time pursuant to Article 14
hereof, until all Shares subject to it shall have been purchased or acquired
according to the Plan's provisions.
ARTICLE 2. - DEFINITIONS
Whenever and wherever used in the Plan, the following terms shall have the
meanings set forth below, and when the meaning is intended, the initial letter
of the word shall be capitalized:
2.1 "AFFILIATE" shall have the meaning ascribed to such term in Rule 12b-2
of the General Rules and Regulations under the Exchange Act.
2.2 "AWARD" means, individually or collectively, a grant under this Plan
of Nonqualified Stock Options, Incentive Stock Options, Restricted Stock Shares,
Restricted Stock Units, Performance Shares or Performance Units.
2.3 "AWARD AGREEMENT" means an agreement setting forth the terms and
provisions applicable to an Award granted to a Participant under this Plan.
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2.4 "BENEFICIAL OWNER" or "BENEFICIAL OWNERSHIP" shall have the meaning
ascribed to such term in Rule 13d-3 of the General Rules and Regulations under
the Exchange Act.
2.5 "BOARD" or "BOARD OF DIRECTORS" means the Board of Directors of CB&I.
2.6 "CB&I" means Chicago Bridge & Iron Company, a Delaware corporation and
the sponsor of the Plan.
2.7 "CHANGE IN CONTROL," unless otherwise defined in the Award Agreement
or other written agreement between the Participant and the Company (or CB&I or
the Committee), will be deemed to have occurred:
(a) Any Person, other than the Company, any Subsidiary or any employee
benefit plan (or related trust) of the Company or any such Subsidiary,
becomes the Beneficial Owner of 25% or more of the total voting power of
the Company's outstanding securities;
(b) During any period of two years or less, individuals who at the
beginning of such period constituted the Supervisory Board of the Company
cease for any reason to constitute at least a majority thereof; provided
that any new member of the Supervisory Board who is nominated for election
to the Supervisory Board with the approval of at least 75% of the other
members then still in office who were members at the beginning of the
period shall be considered for purposes of this paragraph (b) as having
been a member at the beginning of such period; or
(c) Upon the consummation of (i) any merger or other business combination
of the Company with or into another corporation pursuant to which the
persons who were the shareholders of the Company immediately before such
consummation do not own, immediately after such consummation, more than
70% of the voting power and the value of the stock of the surviving
corporation in substantially the same respective proportions as their
ownership of the common stock of the Company immediately prior to such
consummation, or (ii) the sale, exchange or other disposition of all or
substantially all the consolidated assets of the Company.
2.8 "CODE" means the Internal Revenue Code of 1986, as amended from time
to time.
2.9 "COMMITTEE" means the Committee appointed by the Board to administer
the Plan as provided in Article 3 herein or, to the extent it functions as the
Committee as provided in Article 3 herein, the Organization and Compensation
Committee of the Supervisory Board.
2.10 "COMPANY" means Chicago Bridge & Iron Company N.V., a Netherlands
corporation, including, as may be applicable to the context, any and all
Subsidiaries and Affiliates, and any successor thereto.
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2.11 "DIRECTOR" means any individual who is a member of the Board of
Directors of CB&I or any Subsidiary or Affiliate.
2.12 "DISABILITY" shall mean a mental or physical condition of a
Participant which the Committee, on the basis of information satisfactory to it,
finds to be a permanent condition which renders such member unfit to perform the
duties of an Employee, as such duties shall be determined by the Committee. Any
determination of whether any condition of a Participant constitutes Disability
shall be made under rules uniformly applied to all Participants.
2.13 "EFFECTIVE DATE" shall have the meaning ascribed to such term in
Section 1.3 hereof.
2.14 "EMPLOYEE" means any employee of CB&I or the Company or their
respective Subsidiaries and Affiliates. Directors who are not employed by any of
the foregoing shall not be considered Employees under this Plan.
2.15 "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor act thereto.
2.16 "FAIR MARKET VALUE" of Shares as of any date shall be determined on
the basis of the closing sale price of Shares on the principal securities
exchange on which the Shares are traded or if there is no such sale on the
relevant date, then on the last previous day on which a sale was reported.
2.17 "FISCAL YEAR" means a fiscal year of CB&I.
2.18 "INCENTIVE STOCK OPTION" or "ISO" means an option to purchase Shares
which is designated as an Incentive Stock Option and which is intended to meet
the requirements of Code Section 422, granted to a Participant pursuant to
Article 6 herein.
2.19 "NAMED EXECUTIVE OFFICER" means a Participant who, as of the last
date of a taxable year of CB&I, is one of the group of "covered employees," as
defined in the regulations promulgated under Code Section 162(m), or any
successor statute.
2.20 "NONEMPLOYEE DIRECTOR" means an individual who is a member of the
Supervisory Board but who is not an Employee.
2.21 "NONQUALIFIED STOCK OPTION" or "NQSO" means an option to purchase
Shares which is not intended to meet the requirements of Code Section 422,
granted to a Participant pursuant to Article 6 herein.
2.22 "OPTION" means an Incentive Stock Option or a Nonqualified Stock
Option.
2.23 "OPTION PRICE" means the price at which a Share may be purchased by a
Participant pursuant to an Option.
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2.24 "OPTIONEE" means the Participant or, if the Participant has died, his
or her Beneficiary, or other person determined under Section 6.9, entitled to
exercise any Option.
2.25 "PARTICIPANT" means an Employee, Nonemployee Director or nonemployee
consultant to the Company who has outstanding an Award.
2.26 "PERFORMANCE-BASED EXCEPTION" means the performance-based exception
from the tax deductibility limitations of Code Section 162(m).
2.27 "PERFORMANCE SHARE" means an Award providing for the payment of a
variable number of Shares depending on the achievement of performance goals,
granted to a Participant pursuant to Article 8 herein.
2.28 "PERFORMANCE UNIT" means an Award providing for the payment of an
amount based on either the Fair Market Value of Shares or the appreciation in
Fair Market Value of Shares upon the achievement of performance goals, granted
to a Participant, pursuant to Article 8 herein.
2.29 "PERIOD OF RESTRICTION" means the period during which the transfer of
Restricted Stock Shares or Restricted Stock Units is limited in some way (based
on the passage of time, the achievement of performance goals, or upon the
occurrence of other events, as determined by the Committee, at its discretion),
and the Shares are subject to a substantial risk of forfeiture, as provided in
Article 7 herein.
2.30 "PERSON" shall have the meaning ascribed to such term in Section
3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof, and
shall include a "group" as defined in Section 13(d) thereof.
2.31 "RESTRICTED STOCK" means Restricted Stock Shares or Restricted Stock
Units.
2.32 "RESTRICTED STOCK SHARES" means Shares which are issued and awarded
to Participants subject to a substantial risk of forfeiture and restrictions on
such Shares during the Period of Restriction as provided in Article 7 herein.
2.33 "RESTRICTED STOCK UNIT" means a bookkeeping unit that represents the
right of a Participant to be issued and to receive a Share upon lapse of risks
of forfeiture and restrictions on such Units during the Period of Restriction,
or at such later time as shall be determined by the Committee in its discretion
upon grant of the Award or, with the consent of the Participant, after grant of
the Award, as provided in Article 7 herein.
2.34 "RETIREMENT" means (i) a termination of employment after age 55 and
at least a 10 year period of employment by CB&I or the Company or their
respective present or former Subsidiaries or Affiliates, or a 30-year period of
such employment, or age 65, or (ii) solely in the case of an individual who
terminates service as a Nonemployee Director or service as a nonemployee
consultant to the Company, such termination following the term of a Nonemployee
Director or a resignation required by
4
age limitation, or the expiration of the term of a consulting agreement;
provided, however, that the Committee as part of an Award Agreement or otherwise
may provide that for purposes of this Section, a Participant may be credited
with such additional years of age and employment as the Committee in its sole
discretion shall determine is appropriate, and may provide such additional or
different conditions for Retirement as the Committee in its sole discretion
shall determine is appropriate.
2.35 "SHARES" means shares of common stock of the Company.
2.36 "SUBSIDIARY" means any corporation in which CB&I or the Company owns
directly, or indirectly through subsidiaries, at least 50% of the total combined
voting power of all classes of stock, or any other entity (including, but not
limited to, partnerships and joint ventures) in which CB&I or the Company owns
at least 50% of the combined equity thereof.
2.37 "SUPERVISORY BOARD means the Supervisory Board of the Company.
2.38 "VESTING DATE means with respect to Restricted Stock and Restricted
Stock Units the date (if any) on which the risks of forfeiture and restrictions
on such Restricted Stock Shares or Units during the Period of Restriction have
terminated (by their terms or by other action of the Committee consistent with
this Plan) and all other conditions or restrictions applicable to such
Restricted Stock Shares or Units have been satisfied.
ARTICLE 3. - ADMINISTRATION
3.1 THE COMMITTEE. The Plan shall be administered by a Committee, the
members of which shall be appointed from time to time by, and shall serve at the
discretion of, the Board; provided, however, that (i) with respect to grants and
Awards made or to be made to or held by any member of such Committee or any
Named Executive Officer , the Plan shall be administered by the Organization and
Compensation Committee of the Supervisory Board; and (ii) the Organization and
Compensation Committee of the Supervisory Board may in its sole discretion
exercise directly any power, right, duty or function of the Committee, including
but not limited to the grant or amendment of an Award to any Employee,
Nonemployee Director or nonemployee consultant to the Company.
3.2 AUTHORITY OF THE COMMITTEE. Except as limited by law or by the
Certificate of Incorporation or Bylaws of CB&I, and subject to the provisions
herein, the Committee shall have full power to select Employees, Nonemployee
Directors and nonemployee consultants to the Company who shall participate in
the Plan; determine the sizes and types of Awards; determine the terms and
conditions of Awards in a manner consistent with the Plan; construe and
interpret the Plan and any agreement or instrument entered into under the Plan
as they apply to Employees; establish, amend, or waive rules and regulations for
the Plan administration as they apply to Employees; and (subject to the
provisions of Article 14 herein) amend the terms and conditions of any
outstanding Award to the extent such terms and conditions are within the
discretion of the Committee as provided in the Plan. Further, the Committee
shall make all other determinations
5
which may be necessary or advisable for the administration of the Plan. As
permitted by law, the Committee may delegate its authority as specified herein.
3.3 DECISIONS BINDING. All determinations and decisions made by the
Committee pursuant to the Plan and all related orders and resolutions of the
Board shall be final, conclusive and binding on all persons, including CB&I, the
Company, their respective shareholders, Directors, members of the Supervisory
Board, Employees, Participants, and their estates and beneficiaries.
ARTICLE 4. - SHARES SUBJECT TO THE PLAN AND MAXIMUM AWARDS
4.1 NUMBER OF SHARES AVAILABLE FOR GRANTS. Subject to adjustment as
provided in Section 4.3 herein, the number of Shares reserved for issuance to
Participants under the Plan is 2,930,000(1). The maximum aggregate number of
Shares with respect to which Awards may be granted in any fiscal year to any
Participant in the form of Stock Options is 250,000(2). The maximum aggregate
number of Shares with respect to which Awards may be granted in the form of
Restricted Stock Shares, Restricted Stock Units, Performance Shares and
Performance Units combined in any fiscal year to any Participant is 125,000(3).
Shares awarded or to be awarded as Restricted Stock or other Awards may be held
during the Period of Restriction or prior to transfer to the Participant in a
trust of the kind commonly known as a rabbi trust.
4.2 FORFEITED AND REACQUIRED SHARES. If any Shares subject to any Award
are forfeited or such Award otherwise terminates without the issuance of such
Shares or of other consideration in lieu of such Shares, the Shares subject to
such Award, to the extent of any such forfeiture or termination, shall again be
available for grant under the Plan. If Shares are applied to pay the Option
price upon exercise of an Option or to satisfy federal, state or local tax
withholding requirements pursuant Section 15.2, the Shares so applied shall be
added to the Shares permitted under the limitations of Section 4.1 in
determining the number of Shares remaining for issuance and for grants of Awards
with respect to such Shares under the Plan.
4.3 ADJUSTMENTS IN AUTHORIZED SHARES. In the event of any change in
corporate capitalization, such as a stock split, or a corporate transaction,
such as a merger, consolidation, separation, spin-off, or other distribution of
stock or property of the Company, or any reorganization (whether or not such
reorganization comes within the definition of such term in Code Section 368) or
any partial or complete liquidation of the Company, the Committee shall adjust
the number and class of Shares which may be issued under Section 4.1 and in the
limitation of Section 4.1 on grants of Awards with respect to Shares, in the
number, class and/or price of Shares subject to outstanding
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(1) Equivalent to 5,860,000 shares following the stock split effective as
of the close of business on February 3, 2003.
(2) Equivalent to 500,000 shares following the stock split effective as of
the close of business on February 3, 2003.
(3) Equivalent to 250,000 shares following the stock split effective as of
the close of business on February 3, 2003.
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Awards, as the Committee in its sole discretion determines to be appropriate and
equitable to prevent dilution or enlargement of rights; provided, however, that
the number of Shares subject to any Award shall always be a whole number.
4.4 FRACTIONAL SHARES. No fractional Shares shall be issued to
Participants under the Plan. If for any reason an Award or adjustment thereto
would otherwise result in the issuance of a fractional Share to a Participant,
the Company shall pay the Participant in cash the Fair Market Value of such
fractional Share.
ARTICLE 5. - ELIGIBILITY AND PARTICIPATION
5.1 ELIGIBILITY. Persons eligible to participate in this Plan include all
Employees, including Employees who are members of the Board, Nonemployee
Directors, and nonemployee consultants performing services for the Company.
5.2 ACTUAL PARTICIPATION. Subject to the terms and provisions of the Plan,
the Committee may, from time to time, select from all eligible individuals those
to whom Awards shall be granted and shall determine the nature and amount of
each Award.
ARTICLE 6. - STOCK OPTIONS.
6.1 GRANT OF OPTIONS. Subject to the terms and provisions of the Plan, the
Committee may grant Options to Participants in such number, and upon such terms,
and at any time and from time to time, as the Committee in its discretion may
determine; provided, however, that no Option intended to be an ISO may be
granted to a Nonemployee Director or nonemployee consultant to the Company. The
date an Option is granted shall be the day on which the Committee acts to award
a specific number of Shares to a Participant at a specific Option Price, and
shall be specified in each Award Agreement.
6.2 AWARD AGREEMENT. Each Option grant shall be evidenced by an Award
Agreement that shall specify the Option Price, the expiration date of the
Option, the number of Shares to which the Option pertains, and such other
provisions as the Committee shall determine. The Award Agreement also shall
specify whether or not the Option is intended to be an ISO.
6.3 OPTION PRICE. The Option Price for each grant of an Option under this
Plan shall be at least equal to 100% of the Fair Market Value of a Share on the
date the Option is granted.
6.4 DURATION OF OPTIONS. Each Option shall expire at such time (not later
than the 10th anniversary of its date of grant) as the Committee shall determine
at the time of grant. If an Award Agreement does not specify an expiration date,
the Option shall expire on the 10th anniversary of its date of grant.
6.5 EXERCISE OF OPTIONS. Options shall be exercisable at such times and be
subject to such restrictions and conditions as the Committee shall in each
instance approve, which need not be the same for each grant or for each
Participant.
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6.6 PAYMENT. If the Award Agreement does not otherwise specify the manner
of exercise, Options shall be exercised by the delivery of a written notice of
exercise to CB&I identifying the Option(s) being exercised, completed by the
Optionee and delivered during regular business hours to the office of the
Secretary of CB&I, or sent by certified mail to the Secretary of CB&I,
accompanied by a negotiable check or other cash equivalent in full payment for
the Shares. A copy of such notice of exercise shall also be delivered by the
Optionee to the office of the Secretary of the Company.
In the discretion of the Committee and as set forth in the Award
Agreement, the Optionee may pay the Option Price to CB&I upon exercise of any
Option by tendering previously acquired Shares which have been held by the
Optionee for at least six months and which have an aggregate Fair Market Value
at the time of exercise equal to the total Option Price, or by a combination of
such Shares and a check or other cash equivalent.
The Committee also may allow cashless exercise as permitted under Federal
Reserve Board's Regulation T, subject to applicable securities law restrictions,
or exercise by any other means which the Committee determines to be consistent
with the Plan's purpose and applicable law.
Subject to any governing rules or regulations, as soon as practicable
after receipt of a written notification of exercise and full payment, CB&I shall
deliver, or have delivered, to the Optionee, in the Optionee's name,
certificates for an appropriate number of Shares based upon the number of Shares
purchased under the Option(s).
6.7 RESTRICTIONS ON SHARE TRANSFERABILITY. The Committee may impose such
restrictions on any Shares acquired pursuant to the exercise of an Option under
this Article 6 as it may deem advisable, including, without limitation,
restrictions under applicable securities laws and under the requirements of any
stock exchange or market upon which such Shares are then listed and/or traded.
6.8 TERMINATION OF EMPLOYMENT. Each Participant's Option Award Agreement
shall set forth the extent to which the Participant shall have the right to
exercise the Option following termination of the Participant's employment as an
Employee or service as a Director or service as a nonemployee consultant to the
Company. Such provisions shall be determined in the sole discretion of the
Committee, shall be included in the Award Agreement entered into with each
Participant, need not be uniform among all Options issued pursuant to this
Article 6, and may reflect distinctions based on the reasons for termination of
employment.
6.9 NONTRANSFERABILITY OF OPTIONS.
(a) INCENTIVE STOCK OPTIONS. No ISO may be sold, transferred,
pledged, assigned, or otherwise alienated, other than by will or by
the laws of descent and distribution. Further, all ISOs granted to a
Participant under this Article 6 shall be exercisable during his or
her lifetime only by such Participant or by designation of a
Beneficiary in accordance with Article 10.
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(b) NONQUALIFIED STOCK OPTIONS. Except as otherwise provided in a
Participant's Award Agreement, no NQSO may be sold, transferred,
pledged, assigned or otherwise alienated or hypothecated, other than
by will or by the laws of descent and distribution. Further, except
as otherwise provided in a Participant's Award Agreement, all NQSOs
granted to a Participant under this Article 6 shall be exercisable
during his or her lifetime only by such Participant or by
designation of a Beneficiary in accordance with Article 10.
ARTICLE 7. - RESTRICTED STOCK.
7.1. GRANT OF RESTRICTED STOCK. Subject to the terms and provisions of the
Plan, the Committee may grant Awards of Restricted Stock Shares or Restricted
Stock Units to Participants in such amounts and upon such terms, and at any time
and from time to time, as the Committee shall in its discretion determine.
7.2. RESTRICTED STOCK AGREEMENT. Each Restricted Stock grant shall be
evidenced by a Restricted Stock Award Agreement that shall specify whether the
grant is an Award of Restricted Stock Shares or Restricted Stock Units, the
Period(s) of Restriction, the number of Shares or Units of Restricted Stock
granted, and such other provisions as the Committee shall determine.
7.3. TRANSFERABILITY. Except as otherwise provided in this Article 7,
Restricted Stock Units may not be sold, transferred, pledged, assigned, or
otherwise alienated or hypothecated; and Restricted Stock Shares may not be
sold, transferred, pledged, assigned, or otherwise alienated or hypothecated
until the end of the applicable Period of Restriction established by the
Committee and specified in the Restricted Stock Award Agreement, or upon earlier
satisfaction of any other conditions, as specified by the Committee in its sole
discretion and set forth in the Restricted Stock Award Agreement. Except as
otherwise provided in this Article 7, Restricted Stock Shares shall become
freely transferable by the Participant upon the Vesting Date, and Shares issued
in respect of Restricted Stock Units shall be freely transferable by the
Participant upon issuance to the Participant on or after the Vesting Date.
7.4. OTHER RESTRICTIONS. The Committee may impose such other conditions
and/or restrictions on any Shares or Units of Restricted Stock granted pursuant
to the Plan as it may deem advisable, including, without limitation, a
requirement that Participants pay a stipulated purchase price at a stipulated
time for each Share or Unit of Restricted Stock, restrictions and conditions of
vesting or forfeiture based upon the achievement of specific performance goals
(Company-wide, divisional, and/or individual), time-based restrictions on
vesting following the attainment of the performance goals, and/or restrictions
under applicable Federal or state securities laws.
If the Restricted Stock Award is made in Restricted Stock Shares, CB&I
shall retain the certificates representing Shares in CB&I's possession until the
Vesting Date. If the Restricted Stock Award is made in Restricted Stock Units,
no Shares shall be issued until the Vesting Date, but Shares shall be issued in
respect of such Units as of or after the Vesting Date. In either case,
certificates for Shares shall be delivered to the
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Participant on or as soon as practicable after the Vesting Date, or at such
later time or times as shall be determined by the Committee in its discretion
upon grant of the Award or, with the consent of the Participant, after grant of
the Award.
7.5. VOTING RIGHTS. Unless otherwise provided in the Award Agreement,
Participants awarded Restricted Stock Shares hereunder which have not been
forfeited may exercise full voting rights with respect to those Shares during
the Period of Restriction. Restricted Stock Units shall not confer any voting
rights (unless and until Shares are issued therefor on or after the Vesting
Date).
7.6. DIVIDEND AND OTHER DISTRIBUTIONS. Unless otherwise provided in the
Award Agreement, if during the Period of Restriction prior to a Vesting Date or
forfeiture of Restricted Stock:
(a) Cash dividends are paid on Shares, (i) the Company shall pay
Participants holding Restricted Stock Shares the regular cash dividends
paid with respect to the Shares; and (ii) the Company shall pay
Participants holding Restricted Stock Units an amount equal to the cash
dividends paid on an equivalent number of Shares;
(b) Dividends in Shares are paid in Shares, (i) Participants holding
Restricted Stock Shares shall be credited with such dividends as
additional Restricted Stock Shares subject to the same restrictions as the
underlying Shares; and (ii) Participants holding Restricted Stock Units
shall be credited with additional Restricted Stock Units equivalent to
such dividends, subject to the same restrictions as the underlying Units.
The Committee may in its discretion apply any restrictions to the dividends that
the Committee deems appropriate.
7.7 TERMINATION OF EMPLOYMENT. Except as otherwise provided in the Award
Agreement, if the Participant's employment as an Employee or service as a
Director or nonemployee consultant to CB&I or the Company or their respective
Subsidiaries and Affiliates terminates for any reason during the Period of
Restriction, all Restricted Stock as to which the Period of Restriction has not
yet expired or as to which a Vesting Date has not otherwise occurred shall be
forfeited. The Committee in its discretion may set forth in the Award Agreement
the extent to which the Participant shall nevertheless have the right to receive
vested unrestricted Shares at or after termination of the Participant's
employment as an Employee or service as a Director or nonemployee consultant.
Such provisions shall be determined in the sole discretion of the Committee,
shall be included in the Award Agreement entered into with each Participant,
need not be uniform among all Shares or Units of Restricted Stock issued
pursuant to the Plan, and may reflect distinctions based on the reasons for
termination of employment.
7.8 RIGHTS PERSONAL TO PARTICIPANT. All rights prior to the Vesting Date
with respect to the Restricted Stock granted to a Participant under the Plan
shall be available during his or her lifetime only to such Participant, or in
the event of the Participant's
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death prior to the Vesting Date, to the Beneficiary designated in accordance
with Article 10.
ARTICLE 8. - PERFORMANCE UNITS AND PERFORMANCE SHARES
8.1 GRANT OF PERFORMANCE UNITS/SHARES. Subject to the terms and provisions
of the Plan, the Committee may grant Awards of Performance Units and/or
Performance Shares to Participants in such amounts and upon such terms, and at
any time and from time to time, as the Committee shall in its discretion
determine.
8.2 VALUE OF PERFORMANCE UNITS/SHARES. Each Performance Unit shall have an
initial value that is established by the Committee at the time of grant. The
Committee shall set performance goals in its discretion which, depending on the
extent to which they are met, will determine the number and/or value of
Performance Units/Shares that will be paid out to the Participant. For purposes
of this Article 8, the time period during which the performance goals must be
met shall be called a "Performance Period."
8.3 EARNING OF PERFORMANCE UNITS/SHARES. Subject to the terms of this
Plan, after the applicable Performance Period has ended, the holder of
Performance Units/Shares shall be entitled to receive payout on the number and
value of Performance Units/Shares earned by the Participant over the Performance
Period, to be determined as a function of the extent to which the corresponding
performance goals have been achieved.
8.4 FORM AND TIMING OF PAYMENT OF PERFORMANCE UNITS/SHARES. Payment of
earned Performance Units/Shares shall be made in a single lump sum, as soon as
practicable after the Committee has certified the number of Performance
Units/Shares earned for the Performance Period, or at such later time or times
as shall be determined by the Committee in its discretion upon grant of the
Award or, with the consent of the Participant, after grant of the Award. Subject
to the terms of this Plan and except as otherwise provided in an Award
Agreement, the Committee shall pay earned Performance Shares in Shares but may
in its sole discretion pay earned Performance Units in the form of cash or in
Shares (or in a combination thereof) which have an aggregate Fair Market Value
equal to the value as of the date of distribution of the number of earned
Performance Units at the close of the applicable Performance Period. Such Shares
may be granted subject to any restrictions deemed appropriate by the Committee.
Unless otherwise provided in the Award Agreement, Participants shall be
entitled to receive any dividends paid with respect to Shares which have been
earned in connection with grants of Performance Units/Shares but not yet
distributed to Participants, such dividends to be subject to the same terms and
conditions as apply to dividends earned with respect to Restricted Stock, as set
forth in Section 7.6 herein.
8.5 TERMINATION OF EMPLOYMENT DUE TO DEATH, DISABILITY, OR RETIREMENT.
Unless determined otherwise by the Committee and set forth in the Participant's
Award Agreement, in the event the employment or service as a Director or
nonemployee consultant of a Participant is terminated by reason of death,
Disability, or Retirement
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during a Performance Period, the Participant shall receive a payout of the
Performance Units/Shares in a reduced amount prorated according to the ratio of
the length of Participant's employment or service in the Performance Period to
the length of the Performance Period, as specified by the Committee in its
discretion. Payment of earned Performance Units/Shares shall be made at a time
specified by the Committee in its sole discretion and set forth in the
Participant's Award Agreement. Notwithstanding the foregoing, with respect to
Named Executive Officers who retire during a Performance Period, payments shall
be made at the same time as payments are made to Participants who did not
terminate employment or service during the applicable Performance Period.
8.6 TERMINATION OF EMPLOYMENT FOR OTHER REASONS. In the event that a
Participant's employment or service terminates for any reason other than those
reasons set forth in Section 8.5 herein, all Performance Units/Shares shall be
forfeited by the Participant to CB&I unless determined otherwise by the
Committee, as set forth in the Participant's Award Agreement.
8.7 NONTRANSFERABILITY. Except as otherwise provided in a Participant's
Award Agreement, Performance Units/Shares may not be sold, transferred, pledged,
assigned, or otherwise alienated, other than by will or by the laws of descent
and distribution or by designation of a Beneficiary in accordance with Article
10. Further, except as otherwise provided in a Participant's Award Agreement, a
Participant's rights under the Plan shall be exercisable during the
Participant's lifetime only by the Participant or the Participant's legal
representative.
ARTICLE 9. - PERFORMANCE MEASURES.
The performance measure(s) to be used for purposes of Awards to Named
Executive Officers which are designed to qualify for the Performance-Based
Exception shall be chosen from among net income (either before or after
interests, taxes, depreciation and amortization), share price, earnings per
share, operating income, return on net assets, return on equity, return on
capital or investments, total shareholder return, savings in working capital,
reduction in expense levels, operating cash flow, free cash flow, or economic
value added, in each case where applicable determined either on a Company-wide
basis or in respect of any one or more business units.
The Committee shall have the discretion to adjust the determinations of
the degree of attainment of the pre-established performance goals; provided,
however, that Awards to Named Executive Officers, which are designed to qualify
for the Performance-Based Exception, may not be adjusted upward (the Committee
shall retain the discretion to adjust such Awards downward).
In the event that the Committee determines that it is advisable to grant
Awards which shall not qualify for the Performance-Based Exception, the
Committee may make such grants without satisfying the requirements of Code
Section 162(m).
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ARTICLE 10. - BENEFICIARY DESIGNATION
Each Participant under the Plan may, from time to time, name any
beneficiary or beneficiaries (who may be named contingently or successively) to
whom any benefit under the Plan is to be paid, to exercise any Stock Option, or
succeed to the ownership of any Restricted Stock Performance Units/Shares or
other Award as provided in this Plan, in case of his or her death before he or
she receives any or all of such benefit. Each such designation shall revoke all
prior designations by the same Participant, shall be in a form prescribed by the
Committee, and will be effective only when filed by the Participant in writing
with the Committee during the Participant's lifetime. In the absence of any such
designation, benefits remaining unpaid at the Participant's death shall be paid
to the Participant's estate.
ARTICLE 11. - DEFERRALS
The Committee may, subject to Section 14.3, in the Award Agreement or
otherwise, permit or require a Participant to defer such Participant's receipt
of the payment of cash or the delivery of Shares that would otherwise be due to
such Participant by virtue of the exercise of an Option, the lapse or waiver of
restrictions with respect to Restricted Stock, or the satisfaction of any
requirements or goals with respect to Performance Units/Shares. If any such
deferral election is required or permitted, the Committee shall, in its sole
discretion, establish rules and procedures for such payment deferrals.
ARTICLE 12. - RIGHTS OF EMPLOYEES
12.1 EMPLOYMENT. Nothing in the Plan shall interfere with or limit in any
way the right of CB&I to terminate any Participant's employment at any time, nor
confer upon any Participant any right to continue in the employ of CB&I.
12.2 PARTICIPATION. No Employee, Director or nonemployee consultant shall
have the right to be selected to receive an Award under this Plan, or, having
been so selected, to be selected to receive a future Award.
ARTICLE 13. - CHANGE IN CONTROL
13.1 TREATMENT OF OUTSTANDING AWARDS. Upon the occurrence of a Change in
Control, unless otherwise specifically prohibited under applicable laws, or by
the rules and regulations of any governing governmental agencies or national
securities exchanges, or unless otherwise provided in an Award Agreement or
other written agreement between a Participant and the Company (or CBI or the
Committee), then with respect to each Award outstanding on the date of the
Change in Control:
(a) Any and all Options granted hereunder shall become immediately
exercisable, and shall remain exercisable throughout their entire term;
(b) Any restriction periods and restrictions imposed on Restricted Shares
shall lapse;
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(c) The target payout opportunities attainable under all outstanding
Awards of Restricted Stock, Performance Units and Performance Shares shall
be deemed to have been fully earned for the entire Performance Period(s)
as of the effective date of the Change in Control. The vesting of all
Awards denominated in Shares shall be accelerated as of the effective date
of the Change in Control, and there shall be paid out in cash to
Participants within 30 days following the effective date of the Change in
Control an amount based upon an assumed achievement of all relevant
performance goals.
13.2. TERMINATION, AMENDMENT, AND MODIFICATIONS OF CHANGE-IN-CONTROL
PROVISIONS. Notwithstanding any other provision of this Plan or any provision of
any Award Agreement, the provisions of this Article 13 may not be terminated,
amended, or modified on or after the date of Change in Control to affect
adversely any Award theretofore granted without the prior written consent of the
Participant with respect to said Participant's outstanding Awards; provided,
however, the Board, upon recommendation of the Committee, may terminate, amend,
or modify this Article 13 at any time and from time to time prior to the date of
a Change of Control.
ARTICLE 14. AMENDMENT, MODIFICATION, AND TERMINATION
14.1. AMENDMENT, MODIFICATION, AND TERMINATION. The Board may at any time
and from time to time, alter, amend, suspend or terminate the Plan in whole or
in part.
14.2. ADJUSTMENT OF AWARDS UPON THE OCCURRENCE OF CERTAIN UNUSUAL OR
NONRECURRING EVENTS. The Committee may make adjustments in the terms and
conditions of, and the criteria included in, Awards in recognition of unusual or
nonrecurring events (including, without limitation, the events described in
Section 4.3 hereof) affecting CB&I or the Company, or the financial statements
of CB&I or the Company, or of changes in applicable laws, regulations or
accounting principles, whenever the Committee determines that such adjustments
are appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan.
14.3. AWARDS PREVIOUSLY GRANTED. The Committee may amend or modify any
outstanding Award Agreement in any manner consistent with this Plan for an
original Award Agreement, provided, however, that no amendment or modification
of an Award Agreement shall adversely affect in any material way the Award
previously granted without the written consent of the Participant holding such
Award. No termination, amendment or modification of the Plan shall adversely
affect in any material way any Award previously granted without the written
consent of the Participant holding such Award.
ARTICLE 15 - WITHHOLDING
15.1. TAX WITHHOLDING. CB&I shall have the power and the right to deduct
or withhold, or require a Participant to remit to CB&I, an amount sufficient to
satisfy
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Federal, state, and local taxes, domestic or foreign, required by law or
regulation to be withheld with respect to any taxable event arising as a result
of this Plan.
15.2. SHARE WITHHOLDING. With respect to withholding required upon the
exercise of Options, upon the lapse of restrictions on Restricted Stock, or upon
any other taxable event arising as a result of Awards granted hereunder,
Participants may elect, subject to the approval of the Committee, to satisfy the
withholding requirement, in whole or in part, by having CB&I withhold Shares
having a Fair Market Value on the date the tax is to be determined equal to the
minimum statutory total tax which could be imposed on the transaction. All such
elections shall be irrevocable, made in writing, and shall be subject to any
restrictions or limitations that the Committee, in its sole discretion, deems
appropriate.
ARTICLE 16. - INDEMNIFICATION
Each person who is or shall have been a member of the Committee, or of the
Board, shall be indemnified and held harmless by CB&I against and from any loss,
cost, liability, or expense that may be imposed upon or reasonably incurred by
him or her in connection with or resulting from any claim action, suit, or
proceeding to which he or she may be party or in which he or she may be involved
by reasons of any action taken or failure to act under the Plan and against and
from any and all amounts paid by him or her in settlement thereof, with CB&I's
approval, or paid by him or her in satisfaction of any judgment of any such
action, suit, or proceeding against him or her, provided he or she shall give
CB&I an opportunity, at its own expense, to handle and defend the same before he
or she undertakes to handle and defend it on his or her own behalf. The
foregoing right of indemnification shall not be exclusive of any other rights of
indemnification to which such persons may be entitled under the Company's
Articles of Association, CB&I's Certificate of Incorporation or Bylaws, any
agreement, as a matter of law, or otherwise, or any power that CB&I may have to
indemnify them or hold them harmless.
ARTICLE 17. - SUCCESSORS
All obligations of CB&I under the Plan with respect to Awards granted
hereunder shall be binding on any successor to CB&I, whether such successor
arises as a result of a direct or indirect purchase, merger, consolidation, or
otherwise, of all or substantially all of the business and/or assets of CB&I.
ARTICLE 18. - LEGAL CONSTRUCTION
18.1. GENDER AND NUMBER. Except where otherwise indicated by the context,
any masculine term used herein also shall include the feminine; the plural shall
include the singular and the singular shall include the plural.
18.2. SEVERABILITY. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Plan, and the Plan shall be construed and enforced as
if the illegal or invalid provision had not been included.
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18.3. REQUIREMENTS OF LAW. The granting of Awards and the issuance of
Shares under the Plan shall be subject to all applicable laws, rules and
regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required.
18.4. SECURITIES LAW COMPLIANCE. Transactions under this Plan are intended
to comply with all applicable conditions of Rule 16b-3 under the Exchange Act
(or any successor rule). To the extent any provision of the Plan or action by
the Committee fails to so comply, it shall be deemed null and void, to the
extent permitted by law and deemed advisable by the Committee.
18.5. GOVERNING LAW. To the extent not preempted by federal law, the Plan
and all agreements hereunder, shall be construed in accordance with and governed
by the laws of the state of Illinois, without regard to its provisions regarding
conflict of laws.
CERTIFICATE
________________________ certifies that __he is the duly appointed and
acting ____ Secretary of Chicago Bridge & Iron Company, a Delaware corporation,
and that the foregoing is a true and correct copy of the Chicago Bridge & Iron
1999 Long-Term Incentive Plan as amended and as in effect on the date hereof.
Dated: ____________________ __________________________________________
Secretary
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