PREMCOR 2002 EQUITY INCENTIVE PLAN
1. PURPOSE OF THE PLAN
The purpose of the Plan is to aid the Company and its Affiliates in
recruiting, retaining and rewarding key employees, directors or consultants of
outstanding ability and to motivate such employees, directors or consultants to
exert their best efforts on behalf of the Company and its Affiliates by
providing incentives through the granting of Awards. The Company expects that it
will benefit from the added interest which such key employees, directors or
consultants will have in the welfare of the Company as a result of their
proprietary interest in the Company's success.
2. DEFINITIONS
The following capitalized terms used in the Plan have the respective
meanings set forth in this Section:
(a) Act: The Securities Exchange Act of 1934, as amended, or any
successor thereto.
(b) Affiliate: Any entity directly or indirectly controlling,
controlled by, or under common control with, the Company or any
other entity designated by the Board in which the Company or an
Affiliate has an interest.
(c) Award: An Option, Stock Appreciation Right or Other Share-Based
Award granted pursuant to the Plan.
(d) Beneficial Owner: A "beneficial owner," as such term is defined
in Rule 13d-3 under the Act (or any successor rule thereto).
(e) Blackstone: The Blackstone Group, Blackstone Capital Partners III
Merchant Banking Fund L.P, Blackstone Offshore Partners III L.P.
and Blackstone Family Investment Partnership III L.P., and their
respective affiliates, subsidiaries and general partner.
(f) Board: The Board of Directors of the Company.
(g) Change in Control: A change in control shall be deemed to have
occurred if any "person" (as such term is used in Sections 13(d)
and 14(d) of the Act), other than Blackstone, is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Act),
directly or indirectly, of securities of the Company representing
50% or more of the combined voting power of its then outstanding
securities entitled to vote in the election of directors.
(h) Code: The Internal Revenue Code of 1986, as amended, or any
successor thereto.
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(i) Committee: The Compensation Committee of the Board, or such other
committee as may be appointed by the Board in accordance with
Section 4 of the Plan.
(j) Company: Premcor Inc., a Delaware corporation.
(k) Effective Date: The date the Board approves the Plan, or such
later date as is designated by the Board.
(l) Fair Market Value: If the Shares are traded on NASDAQ, the Fair
Market Value of the Shares as of any date shall be the closing
sale price on that date of a Share as reported in the NASDAQ
National Market Issues quotations of the Midwest Edition of the
Wall Street Journal. If the Shares are traded on the New York
Stock Exchange, the Fair Market Value of the Shares as of any
date shall be the closing sale price on that date of a Share as
reported on the New York Stock Exchange Composite Tape (or, if
the Shares are not traded on NASDAQ or the New York Stock
Exchange, as applicable, on such date, on the next preceding date
on which it was so traded; and if there should not be a public
market for the Shares on such date, the Fair Market Value shall
be the value established by the Committee in good faith.
(m) ISO: An Option that is also an incentive stock option, as
described in Section 422 of the Code, granted pursuant to Section
6(c) of the Plan.
(n) LSAR: A limited stock appreciation right granted pursuant to
Section 7(d) of the Plan.
(o) Option: A stock option granted pursuant to Section 6 of the Plan.
(p) Option Price: The purchase price per Share under the terms of an
Option, as determined pursuant to Section 6(a) of the Plan.
(q) Other Share-Based Awards: Awards granted pursuant to Section 8 of
the Plan.
(r) Participant: An employee, director or consultant of the Company
or an Affiliate who is selected by the Committee to participate
in the Plan.
(s) Person: A "person," as such term is used for purposes of Section
13(d) or 14(d) of the Act (or any successor section thereto).
(t) Plan: The Premcor 2002 Equity Incentive Plan.
(u) RSU: A restricted stock unit, granted pursuant to Section 8 of
the Plan, that represents the right to receive a Share.
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(v) Shares: Shares of common stock of the Company, subject to
coordination with Section 9 hereof.
(w) Stock Appreciation Right: A stock appreciation right granted
pursuant to Section 7 of the Plan.
(x) Subsidiary: Any entity that, directly or indirectly, is
controlled by the Company, and any entity in which the Company
has an equity interest, in either case as determined by the
Committee.
3. SHARES SUBJECT TO THE PLAN
The total number of Shares of common stock that may be used to satisfy
Awards under the Plan initially is 1,500,000. The Shares may consist, in whole
or in part, of unissued Shares or previously-issued Shares. The issuance of
Shares upon the exercise or payment of an Award shall reduce the total number of
Shares available under the Plan, as applicable. Shares which are subject to
Awards which terminate, lapse or are cancelled may again be used to satisfy
Awards under the Plan. If the Option Price of any Option granted under the Plan
is satisfied by delivering Shares to the Company, only the number of Shares
issued net of the Shares delivered shall be deemed delivered for purposes of
determining the maximum numbers of Shares available under the Plan. To the
extent any Shares subject to an Award are not delivered to a Participant because
such Shares are used to satisfy an applicable tax-withholding obligation, such
Shares shall not be deemed to have been delivered for purposes of determining
the maximum number of Shares available under the Plan.
4. ADMINISTRATION
The Plan shall be administered by the Committee, which may delegate its
duties and powers in whole or in part as it determines, including to a
subcommittee consisting solely of at least two individuals who are intended to
qualify as "non-employee directors" within the meaning of Rule 16b-3 under the
Act (or any successor rule thereto). The Committee may grant Awards under this
Plan only to Participants; provided that Awards may also, in the discretion of
the Committee, be made under the Plan in assumption of, or in substitution for,
outstanding awards previously granted by the Company or its Affiliates or a
company that becomes an Affiliate. The number of Shares underlying such
substitute Awards shall be counted against the aggregate number of Shares
available for Awards under the Plan. The Committee is authorized to interpret
the Plan, to establish, amend and rescind any rules and regulations relating to
the Plan, and to make any other determinations that it deems necessary or
desirable for the administration of the Plan. The Committee may correct any
defect or supply any omission or reconcile any inconsistency in the Plan in the
manner and to the extent the Committee deems necessary or desirable. Any
decision of the Committee in the interpretation and administration of the Plan,
as described herein, shall lie within its sole and absolute discretion and shall
be final, conclusive and binding on all parties concerned (including, but not
limited to, Participants and their beneficiaries or successors). The Committee
shall have the full power and authority to establish the terms and conditions of
any Award consistent with the provisions of the Plan and to waive any such terms
and conditions at any time, in its sole discretion (including, without
limitation, accelerating or waiving any vesting conditions and/or accelerating
any payment). The
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Committee shall require payment of any amount it may determine to be necessary
to withhold for federal, state, local or other taxes of any relevant
jurisdiction as a result of the granting, vesting or exercise of an Award, or
upon the sale of Shares acquired by the granting, vesting or exercise of an
Award. For avoidance of doubt, if at any time the Committee determines that it
has not received or required sufficient payment in respect of such withholding,
the Committee is authorized to require such additional payments as it determines
are necessary, and may withhold from such sources as it determines are
necessary, including by payroll deductions.
5. LIMITATIONS
No Award may be granted under the Plan after the tenth anniversary of
the Effective Date, but Awards theretofore granted may extend beyond that date.
6. TERMS AND CONDITIONS OF OPTIONS
Options granted under the Plan shall be, as determined by the
Committee, non-qualified stock options or ISOs for United States federal income
tax purposes (or other types of Options in jurisdictions outside the United
States), as evidenced by the related Award, and shall be subject to the
foregoing and the following terms and conditions and to such other terms and
conditions, not inconsistent therewith, as the Committee shall determine:
(a) Option Price; Exercisability. Options granted under the Plan
shall have an Option Price, and shall be exercisable at such time
and upon such terms and conditions, as may be determined by the
Committee.
(b) Exercise of Options. Except as otherwise provided in the Plan or
in an Award, an Option may be exercised for all, or from time to
time any part, of the Shares for which it is then exercisable.
For purposes of this Section 6 of the Plan, the exercise date of
an Option shall be the later of the date a notice of exercise is
received by the Company and, if applicable, the date payment is
received by the Company pursuant to clauses (i), (ii) or (iii) in
the following sentence. Except as otherwise provided in an Award,
the purchase price for the Shares as to which an Option is
exercised shall be paid in full at the time of exercise at the
election of the Participant (i) in cash or its equivalent (e.g.,
by check), (ii) to the extent permitted by the Committee, in
Shares having a Fair Market Value equal to the aggregate Option
Price for the Shares being purchased and satisfying such other
requirements as may be imposed by the Committee, provided, that
such Shares have been held by the Participant for no less than
six months (or such other period as established from time to time
by the Committee or generally accepted accounting principles),
(iii) partly in cash and, to the extent permitted by the
Committee, partly in such Shares, provided, that such Shares have
been held by the Participant for no less than six months (or such
other period as established from time to time by the Committee or
generally accepted accounting principles), or (iv) through the
delivery of irrevocable instructions to a broker to sell Shares
obtained upon the exercise of the Option and deliver promptly to
the Company an amount
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out of the proceeds of such sale equal to the aggregate Option
Price for the Shares being purchased. The Committee may authorize
the Company to make or facilitate loans to Participants to enable
them to exercise Options. The Committee may permit Participants
to exercise Options in joint-tenancy with the Participant's
spouse. No Participant shall have any rights to dividends or
other rights of a shareholder with respect to Shares subject to
an Option until the Participant has given written notice of
exercise of the Option, the Participant has paid in full for such
Shares, the Shares in question have been recorded in the
Company's register of shareholders, and, if applicable, the
Participant has satisfied any other conditions imposed by the
Committee pursuant to the Plan.
(c) ISOs. The Committee may grant Options under the Plan that are
intended to be ISOs. No ISO shall have a per Share Option Price
of less than the Fair Market Value of a Share on the date granted
or have a term in excess of ten years; provided, however, that no
ISO may be granted to any Participant who at the time of such
grant, owns more than ten percent of the total combined voting
power of all classes of shares of the Company or of any
Subsidiary, unless (i) the Option Price for such ISO is at least
110% of the Fair Market Value of a Share on the date the ISO is
granted and (ii) the date on which such ISO terminates is a date
not later than the day preceding the fifth anniversary of the
date on which the ISO is granted. Any Participant who disposes of
Shares acquired upon the exercise of an ISO either (A) within two
years after the date of grant of such ISO or (B) within one year
after the transfer of such Shares to the Participant, shall
notify the Company of such disposition and of the amount realized
upon such disposition.
(d) Attestation. Wherever in this Plan or any agreement evidencing an
Award a Participant is permitted to pay the Option Price by
delivering Shares, the Participant may, subject to procedures
satisfactory to the Committee, satisfy such delivery requirement
by presenting proof of record ownership of such Shares, or, to
the extent permitted by the Committee, beneficial ownership of
such Shares, in which case the Company shall treat the Option as
exercised without further payment and shall withhold such number
of Shares from the Shares acquired by the exercise of the Option.
7. TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS
(a) Grants. The Committee also may grant (i) a Stock Appreciation
Right independent of an Option or (ii) a Stock Appreciation Right
in connection with an Option, or a portion thereof. A Stock
Appreciation Right granted pursuant to clause (ii) of the
preceding sentence (A) may be granted at the time the related
Option is granted or at any time prior to the exercise or
cancellation of the related Option, (B) shall cover the same
Shares covered by an Option (or such lesser number of Shares as
the Committee may determine) and (C) shall be subject to the same
terms and conditions as
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such Option except for such additional limitations as are
contemplated by this Section 7 (or such additional limitations as
may be included in a Stock Appreciation Right Award).
(b) Terms. The exercise price per Share of a Stock Appreciation Right
shall be an amount determined by the Committee. Each Stock
Appreciation Right granted independent of an Option shall entitle
a Participant upon exercise to a payment from the Company of an
amount equal to (i) the excess of (A) the Fair Market Value on
the exercise date of one Share over (B) the exercise price per
Share, times (ii) the number of Shares covered by the Stock
Appreciation Right. Each Stock Appreciation Right granted in
conjunction with an Option, or a portion thereof, shall entitle a
Participant to surrender to the Company the unexercised Option,
or any portion thereof, and to receive from the Company in
exchange therefor an amount equal to (I) the excess of (x) the
Fair Market Value on the exercise date of one Share over (y) the
Option Price per Share, times (II) the number of Shares covered
by the Option, or portion thereof, which is surrendered. The date
a notice of exercise is received by the Company shall be the
exercise date. Payment shall be made in Shares or in cash, or
partly in Shares and partly in cash (any such Shares valued at
such Fair Market Value), all as shall be determined by the
Committee. Stock Appreciation Rights may be exercised from time
to time upon actual receipt by the Company of written notice of
exercise stating the number of Shares with respect to which the
Stock Appreciation Right is being exercised. No fractional Shares
will be issued in payment for Stock Appreciation Rights, but
instead cash will be paid for a fraction or, if the Committee
should so determine, the number of Shares will be rounded
downward to the next whole Share.
(c) Limitations. The Committee may impose, in its discretion, such
conditions upon the exercisability or transferability of Stock
Appreciation Rights as it may deem fit.
(d) Limited Stock Appreciation Rights. The Committee may grant LSARs
that are exercisable upon the occurrence of specified contingent
events. Such LSARs may provide for a different method of
determining appreciation, specify that payment will be made only
in cash and provide that any related Awards are not exercisable
while such LSARs are exercisable. Unless the context otherwise
requires, whenever the term "Stock Appreciation Right" is used in
the Plan, such term shall include LSARs.
8. OTHER SHARE-BASED AWARDS
The Committee, in its sole discretion, may grant Awards of Shares,
Awards of restricted Shares, Awards of RSUs and other Awards that are valued in
whole or in part by reference to, or are otherwise based on the Fair Market
Value, of Shares ("Other Share-Based
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Awards"). Such Other Share-Based Awards shall be in such form, and dependent on
such conditions, as the Committee shall determine, including, without
limitation, the right to receive one or more Shares (or the equivalent cash
value of such Shares) upon the completion of a specified period of service, the
occurrence of an event and/or the attainment of performance objectives. Other
Share-Based Awards may be granted alone or in addition to any other Awards
granted under the Plan. Subject to the provisions of the Plan, the Committee
shall determine: (i) to whom and when Other Share-Based Awards will be made;
(ii) the number of Shares to be awarded under (or otherwise related to) such
Other Share-Based Awards; (iii) whether such Other Share-Based Awards shall be
settled in cash, Shares or a combination of cash and Shares; and (iv) all other
terms and conditions of such Other Share-Based Awards (including, without
limitation, the vesting provisions thereof and provisions ensuring that all
Shares so awarded and issued shall be fully paid and non-assessable)
9. ADJUSTMENTS UPON CERTAIN EVENTS
Notwithstanding any other provisions in the Plan to the contrary, the
following provisions shall apply to all Awards granted under the Plan:
(a) Generally. In the event of any change in the outstanding Shares
after the Effective Date by reason of any Share dividend or
split, reorganization, recapitalization, merger, consolidation,
spin-off or combination transaction or exchange of Shares or
other corporate exchange, or any distribution to shareholders of
Shares other than regular cash dividends or any transaction
similar to the foregoing, the Committee in its sole discretion
and without liability to any person may make such substitution or
adjustment, if any, as it deems to be equitable, as to (i) the
number or kind of Shares or other securities issued or reserved
for issuance pursuant to the Plan or pursuant to outstanding
Awards, (ii) the Option Price or exercise price of any Stock
Appreciation Right, and/or (iii) any other affected terms of any
Award.
(b) Change in Control. In the event of a Change in Control after the
Effective Date, the Committee may, in its sole discretion,
provide for: (i) the accelerated vesting or exercisability of any
outstanding Awards then held by Participants that are otherwise
unexercisable or unvested, as the case may be, to the extent
determined by the Committee and as of a date selected by the
Committee; (ii) the termination of an Award upon the consummation
of the Change in Control, and the payment of a cash amount in
exchange for the cancellation of an Award which, in the case of
Options and Stock Appreciation Rights, may equal the excess, if
any, of the Fair Market Value of the Shares subject to such
Options or Stock Appreciation Rights over the aggregate exercise
price of such Options or Stock Appreciation Rights; and/or (iii)
the issuance of substitute Awards that will substantially
preserve the otherwise applicable terms of any affected Awards
previously granted hereunder.
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10. NO RIGHT TO EMPLOYMENT OR AWARDS
The granting of an Award under the Plan shall impose no obligation on the
Company or any Affiliate to continue the employment or service or consulting
relationship of a Participant and shall not lessen or affect the Company's or
Affiliate's right to terminate the employment or service or consulting
relationship of such Participant. No Participant or other person shall have any
claim to be granted any Award, and there is no obligation for uniformity of
treatment of Participants, or holders or beneficiaries of Awards. The terms and
conditions of Awards and the Committee's determinations and interpretations with
respect thereto need not be the same with respect to each Participant (whether
or not such Participants are similarly situated).
11. SUCCESSORS AND ASSIGNS
The Plan shall be binding on all successors and assigns of the Company and
a Participant, including without limitation, the estate of such Participant and
the executor, administrator or trustee of such estate, or any receiver or
trustee in bankruptcy or representative of the Participant's creditors.
12. NONTRANSFERABILITY OF AWARDS
Unless otherwise determined by the Committee, an Award shall not be
transferable or assignable by the Participant other than by will or by the laws
of descent and distribution. An Award exercisable after the death of a
Participant may be exercised by the legatees, personal representatives or
distributees of the Participant.
13. AMENDMENTS OR TERMINATION
The Board may amend, alter or discontinue the Plan, but no amendment,
alteration or discontinuation shall be made which would (i) increase the maximum
number of shares available for Awards under the Plan (other than amendments
having such purpose that may be approved by the Board prior to the effective
date of the Company's initial public offering of Shares pursuant to an effective
registration statement filed under the Act) or (ii) without the consent of a
Participant, diminish any of the rights of the Participant under any Award
theretofore granted to such Participant under the Plan; provided, however, that
the Committee may amend the Plan in such manner as it deems necessary to permit
Awards to meet the requirements of the Code or other applicable laws.
14. INTERNATIONAL PARTICIPANTS
With respect to Participants, if any, who reside or work outside the United
States of America, the Committee may, in its sole discretion, amend the terms of
the Plan or Awards with respect to such Participants in order to conform such
terms with the provisions of local law, and the Committee may, where
appropriate, establish one or more sub-plans to reflect such amended or varied
provisions.
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15. CHOICE OF LAW
The Plan shall be governed by and construed in accordance with the laws of
the State of New York without regard to conflicts of laws.
16. EFFECTIVENESS OF THE PLAN
The Plan shall be effective as of the Effective Date, subject to the
approval of the shareholders of the Company.