Exhibit 10
SOUTHWEST BANCORP, INC.
1999 STOCK OPTION PLAN
As Amended and Restated as of April 22, 2004
1. Purpose of the Plan.
The purpose of this Southwest Bancorp, Inc. 1999 Stock Option Plan (the
"Plan") is to advance the interests of Southwest by providing directors and
selected key Employees of Stillwater National, Southwest, and their Affiliates
with the opportunity to acquire shares of Southwest's' common stock. By
encouraging stock ownership, Southwest seeks to attract, retain and motivate the
best available personnel for positions of substantial responsibility; to provide
additional incentive to directors and key Employees of Southwest or any
Affiliate to promote the success of the business as measured by the value of its
shares; and generally to increase the commonality of interests among directors,
key employees and other shareholders.
The Plan is intended to replace the Southwest Bancorp, Inc. 1994 Stock
Option Plan (the "1994 Plan") upon this Plan's approval by shareholders of
Southwest. Options issued under the 1994 Plan will continue in effect and will
be subject to the requirements of the 1994 Plan, but no new options will be
granted under the 1994 Plan after this Plan is approved by shareholders.
The Plan is not intended as an agreement or promise of employment.
Neither the Plan, nor any Option granted pursuant to the Plan, confers on any
person any right to continue in the employ of Southwest. The right of Southwest,
Stillwater National, or any of their affiliates to terminate the employment of
an Employee is not limited by the Plan or by any Option granted pursuant to the
Plan unless such right is specifically described by the terms of any such
Option.
2. Definitions.
(a) "Affiliate" shall mean any "parent corporation" or "subsidiary
corporation" of Southwest, as such terms are defined in Section 424(e) and (f),
respectively, of the Code.
(b) "Agreement" shall mean a written agreement entered into in
accordance with Paragraph 5(c).
(c) "Awards" shall mean, collectively, Options, SARs, and Restricted
Stock, unless the context clearly indicates a different meaning.
(d) "Board" shall mean the Board of Directors of Southwest.
(e) "Change in Control" shall mean any one of the following events
occurring after the Effective Date: (1) the acquisition of ownership, holding or
power to vote more than 51% of any class if voting securities of Stillwater
National or Southwest, (2) the acquisition of the power to control the election
of a majority of Stillwater National's or Southwest's directors, (3) the
exercise of a controlling influence over the management or policies of
Stillwater National or Southwest by any person or by persons acting as a "group"
(within the meaning of Section 13(d) of the Securities Exchange Act of 1934), or
(4) the failure of Continuing Directors to constitute at least two-thirds of the
Board of Directors of Southwest or Stillwater National (the "Southwest Board")
during any period of two consecutive years. For purposes of this Plan,
"Continuing Directors" shall include only those individuals who were members of
Southwest Board at the Effective Date and those other individuals whose election
or nomination for election as a member of Southwest Board was approved by a vote
of at least two-thirds of the Continuing Directors then in office. For purposes
of this subparagraph only, the term "person" refers to an individual or a
corporation, partnership, trust, association, joint venture, pool, syndicate,
sole proprietorship, unincorporated organization, or any other form of entity
not specifically listed herein. The decision of the Committee as to whether a
change in control has occurred shall be conclusive and binding.
(f) "Code" shall mean the Internal Revenue Code of 1986, as amended.
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As amended and restated as of April 22, 2004.
(g) "Committee" shall mean the Stock Option Committee appointed by the
Board in accordance with Paragraph 5(a) hereof.
(h) "Common Stock" shall mean the common stock, par value $1.00 per
share, of Southwest.
(i) "Continuous Service" shall mean the absence of any interruption or
termination of service as an Employee of Southwest or any present or future
Affiliate. Continuous Service shall not be considered interrupted in the case of
sick leave, military leave or any other leave of absence approved by Southwest
or in the case of transfers between payroll locations of Southwest or among
Southwest, Stillwater National, or any other Affiliate.
(j) "Effective Date" shall mean the date specified in Paragraph 14
hereof.
(k) "Employee" shall mean any person employed by Southwest or by an
Affiliate.
(l) "Exercise Price" shall mean the price per Optioned Share at which
an Option or SAR may be exercised.
(m) "Independent Director" shall have the meaning established in the
listing standards of the NASDAQ Stock Market, Inc., or of such exchange on which
the Common Stock is principally traded.
(n) "ISO" means an option to purchase Common Stock which meets the
requirements set forth in the Plan, and which is intended to be and is
identified as an "incentive stock option" within the meaning of Section 422 of
the Code.
(o) "Market Value" shall mean the fair market value of the Common
Stock, as determined under Paragraph 7(b) hereof.
(p) "Non-Employee Director" means any member of the Board who, at the
time discretion under the Plan is exercised, is a "Non-Employee Director" within
the meaning of Rule 16b-3.
(q) "Non-ISO" means an option to purchase Common Stock which meets the
requirements set forth in the Plan but which is not intended to be and is not
identified as an ISO, except in the circumstance described in Section 6(b) of
the Plan.
(r) "Option" means an ISO and/or a Non-ISO.
(s) "Optioned Shares" shall mean Shares subject to an Option granted
pursuant to this Plan.
(t) "Outstanding Shares" shall mean the total shares of Common Stock
which have been issued and which (a) are not held as treasury shares, and (b)
have not been cancelled or retired by Southwest.
(u) "Parent" shall mean any present or future corporation that would be
a "parent corporation" as defined in Subsections 424(e) and (g) of the Code.
(v) "Participant" shall mean any person who receives an Award pursuant
to the Plan.
(w) "Performance Based Award" shall mean an award, the Restriction
Period or vesting period of which is based on specific corporate, divisional, or
individual performance standards or goals.
(x) "Plan" shall mean the Southwest Bancorp, Inc. 1999 Stock Option
Plan.
(y) "Restricted Stock" means Common Stock which is subject to
restrictions against transfer and forfeiture and such other terms and conditions
determined by the Committee, as provided in Paragraph 10.
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As amended and restated as of April 22, 2004.
(z) "Rule 16b-3" shall mean Rule 16b-3 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended.
(aa) "SAR" (or "Stock Appreciation Right") means a right to receive the
appreciation in value, or a portion of the appreciation in value, of a specified
number of shares of Common Stock.
(bb) "Share" shall mean one share of Common Stock.
(cc) "Southwest" shall mean Southwest Bancorp, Inc.
(cc) "Stillwater National" shall mean Stillwater National Bank & Trust
Company.
(ee) "Subsidiary" shall mean any present or future corporation which
would be a "subsidiary corporation" as defined in Subsections 424(f) and (g) of
the Code.
(ff) "Transaction" means (i) the liquidation or dissolution of the
Company, (ii) a merger or consolidation in which the Company is not the
surviving entity; or (iii) the sale or disposition of all or substantially all
of the Company's assets.
3. Term of the Plan and Awards.
(a) Term of the Plan. The Plan shall continue in effect for a term of
ten years from the Effective Date, unless sooner terminated pursuant to
Paragraph 18 hereof. No Award shall be granted under the Plan after ten years
from the Effective Date.
(b) Term of Awards. The term of each Award granted under the Plan shall
be established by the Committee, but shall not exceed 10 years; provided,
however, that in the case of an Employee who owns Shares representing more than
10% of the outstanding shares of Common Stock at the time an ISO is granted, the
term of such ISO shall not exceed five years.
4. Shares Subject to the Plan.
(a) General Rule. Except as otherwise required by the provisions of
Paragraph 12 hereof, the aggregate number of Shares deliverable pursuant to
Awards shall not exceed 1,760,000 Shares. Optioned Shares may either be
authorized but unissued Shares or Shares held in treasury. If Awards should
expire, become unexercisable or be forfeited for any reason without having been
exercised or become vested in full, the Optioned Shares shall, unless the Plan
shall have been terminated, be available for the grant of additional Awards
under the Plan.
(b) Special Rule for SARs. The number of Shares with respect to which
an SAR is granted, but not the number of Shares which Southwest delivers or
could deliver to an Employee or individual upon exercise of an SAR, shall be
charged against the aggregate number of Shares remaining available under the
Plan; provided, however, that in the case of an SAR granted in conjunction with
an Option, under circumstances in which the exercise of the SAR results in
termination of the Option and vice versa, only the number of Shares subject to
the Option shall be charged against the aggregate number of Shares remaining
available under the Plan. The Shares involved in an Option as to which option
rights have terminated by reason of the exercise of a related SAR, as provided
in Paragraph 9 hereof, shall not be available for the grant of further Options
under the Plan.
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As amended and restated as of April 22, 2004.
5. Administration of the Plan.
(a) Composition of the Committee. The Plan shall be administered by the
Committee, which shall consist of not less than three (3) Directors appointed by
the Board. All members of the Committee must be Independent Directors. Members
of the Committee shall serve at the pleasure of the Board. In the absence at any
time of a duly appointed Committee, the Plan shall be administered by the
members of the Board who are Independent Directors, acting as the Committee.
(b) Powers of the Committee. Except as limited by the express
provisions of the Plan or by resolutions adopted by the Board, the Committee
shall have sole and complete authority and discretion (i) to select Participants
and grant Awards, (ii) to determine the form and content of Awards to be issued
in the form of Agreements under the Plan, (iii) to interpret the Plan, (iv) to
prescribe, amend and rescind rules and regulations relating to the Plan, and (v)
to make other determinations necessary or advisable for the administration of
the Plan. The Committee shall have and may exercise such other power and
authority as may be delegated to it by the Board from time to time. A majority
of the entire Committee shall constitute a quorum and the action of a majority
of the members present at any meeting at which a quorum is present, or acts
approved in writing by a majority of the Committee without a meeting, shall be
deemed the action of the Committee.
(c) Agreement. Each Award shall be evidenced by a written agreement
containing such provisions as may be approved by the Committee. Each such
Agreement shall constitute a binding contract between Southwest and the
Participant, and every Participant, upon acceptance of such Agreement, shall be
bound by the terms and restrictions of the Plan and of such Agreement. The terms
of each such Agreement shall be in accordance with the Plan, but each Agreement
may include such additional provisions and restrictions determined by the
Committee, in its discretion, provided that such additional provisions and
restrictions are not inconsistent with the terms of the Plan. In particular, the
Committee shall set forth in each Agreement (i) the Exercise Price of an Option
or SAR, (ii) the number of Shares subject to, and the expiration date of, the
Award, (iii) the manner, time and rate (cumulative or otherwise) of exercise or
vesting of such Award, and (iv) the restrictions, if any, to be placed upon such
Award, or upon Shares which may be issued upon exercise of such Award.
The Chairman of the Committee and such other officers as shall be
designated by the Committee are hereby authorized to execute Agreements on
behalf of Southwest and to cause them to be delivered to the recipients of
Awards.
(d) Effect of the Committee's Decisions. All decisions, determinations,
and interpretations of the Committee shall be final and conclusive on all
persons affected thereby.
(e) Indemnification. In addition to such other rights of
indemnification as they may have, the members of the Committee shall be
indemnified by Southwest in connection with any claim, action, suit or
proceeding relating to any action taken or failure to act under or in connection
with the Plan or any Award, granted hereunder to the full extent provided for
under Southwest's Certificate of Incorporation or Bylaws with respect to the
indemnification of Directors.
6. Grant of Options.
(a) General Rule. The Committee, in its sole discretion, may grant
ISO's or Non-ISOs to Employees of the Company or its Affiliates and may grant
Non-ISOs to Directors or directors of Affiliates.
(b) Special Rules for ISOs. The aggregate Market Value, as of the date
the Option is granted, of the Shares with respect to which ISOs are exercisable
for the first time by an Employee during any calendar year (under all incentive
stock option plans, as defined in Section 422 of the Code, of Southwest or any
present or future Parent or Subsidiary of Southwest) shall not exceed $100,000.
Notwithstanding the prior provisions of this paragraph, the Committee may grant
Options in excess of the foregoing limitations, in which case such Options
granted in excess of such limitation shall be Options which are Non-ISOs.
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As amended and restated as of April 22, 2004.
7. Exercise Price for Options.
(a) Limits on Committee Discretion. The Exercise Price as to any
particular Option granted under the Plan shall not be less than the Market Value
of the Optioned Shares on the date of grant. In the case of an Employee who owns
Shares representing more than 10% of Southwest's Outstanding Shares of Common
Stock at the time an ISO is granted, the Exercise Price shall not be less than
110% of the Market Value of the Optioned Shares at the time the ISO is granted.
(b) Standards for Determining Exercise Price. If the Common Stock is
listed on a national securities exchange (including the NASDAQ National Market)
on the date in question, then the Market Value per Share shall be not less than
the average of the highest and lowest selling price on such exchange on such
date, or if there were no sales on such date, then the Exercise Price shall be
not less than the mean between the bid and asked price on such date. If the
Common Stock is traded otherwise than on a national securities exchange on the
date in question, then the Market Value per Share shall be not less than the
mean between the bid and asked price on such date, or, if there is no bid and
asked price on such date, then on the next prior business day on which there was
a bid and asked price. If no such bid and asked price is available, then the
Market Value per Share shall be its fair market value as determined by the
Committee, in its sole and absolute discretion.
(c) Reissuance of Options and SARs. Notwithstanding anything herein to
the contrary, the Committee shall have the authority to cancel outstanding
Options and/or SARs with the consent of the Participant and to reissue new
Options and/or SARs at a lower Exercise Price equal to the then Market Value per
share of Common Stock in the event that the Market Value per share of Common
Stock at any time prior to the date of exercise of outstanding Options and/or
SARs falls below the Exercise Price provided that no such repricing transaction
shall be effective unless specifically approved or ratified by the affirmative
votes of the holders of a majority of the Common Stock present or represented
and entitled to vote at a meeting duly held on date no later than the next
annual meeting of shareholders.
8. Exercise of Options.
(a) Generally. Any Option granted hereunder shall be exercisable at
such times and under such conditions as shall be permissible under the terms of
the Plan and of the Agreement granted to a Participant. An Option may not be
exercised for a fractional Share.
(b) Procedure for Exercise. A Participant may exercise Options, subject
to provisions relative to its termination and limitations on its exercise, only
by (1) written notice of intent to exercise the Option with respect to a
specified number of Shares, and (2) payment to Southwest (contemporaneously with
delivery of such notice) in cash, in Common Stock, or a combination of cash and
Common Stock, of the amount of the Exercise Price for the number of Shares with
respect to which the Option is then being exercised. Each such notice (and
payment where required) shall be delivered, or mailed by prepaid registered or
certified mail, addressed to the Treasurer of Southwest at Southwest's executive
offices. Common Stock utilized in full or partial payment of the Exercise Price
for Options shall be valued at its Market Value at the date of exercise.
(c) Notwithstanding the provisions of any Option that provides for its
exercise in installments as designated by the Committee, such Option shall
become immediately exercisable upon the Optionee's death or Permanent and Total
Disability.
(d) Period of Exercisability-ISOs. An ISO may be exercised by an
Optionee only while the Optionee is an Employee and has maintained Continuous
Service from the date of the grant of the ISO, or within three months after
termination of such Continuous Service (but not later than the date on which the
Option would otherwise expire), except if the Employee's Continuous Service
terminates by reason of -
(1) "Just Cause" which for purposes hereof shall have the meaning
set forth in any unexpired employment or severance agreement between
the Optionee and the Company or any Affiliate (and, in the absence of
any such agreement, means termination because of the Employee's
personal dishonesty, incompetence, willful misconduct, breach of
fiduciary duty involving personal profit, intentional failure to
perform stated duties, willful violation of any law, rule or regulation
(other than traffic violations or similar offenses) or final
cease-and-desist order), then the Optionee's rights to exercise such
ISO shall expire on the date of such termination;
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As amended and restated as of April 22, 2004.
(2) Death, then an ISO of the deceased Optionee may be exercised
within two years from the date of his death (but not later than the
date on which the Option would otherwise expire) by the personal
representatives of his estate or person or persons to whom his rights
under such ISO shall have passed by will or by laws of descent and
distribution;
(3) Permanent and Total Disability (as such term is defined in
Section 22(e)(3) of the Code), then an ISO may be exercised within one
year from the date of such Permanent and Total Disability, but not
later than the date on which the ISO would otherwise expire.
(e) Period of Exercisability-Non-ISOs. Except to the extent otherwise
provided in the terms of an Agreement, a Non-ISO may be exercised by an Optionee
only while such Optionee is an Employee, a Director, or a director of an
Affiliate, or within three months after termination of such service (but not
later than the date on with the Option would otherwise expire), except if the
Optionee's service terminates by reason of -
(1) "Just Cause" which for purposes hereof shall have the meaning
set forth in any unexpired employment or severance agreement
between the Optionee and the Company or any Affiliate (and, in the
absence of any such agreement, means termination because of the
Optionee's personal dishonesty, incompetence, willful misconduct,
breach of fiduciary duty involving personal profit, intentional
failure to perform stated duties, willful violation of any law,
rule or regulation (other than traffic violations or similar
offenses) or final cease-and-desist order), then the Optionee's
rights to exercise such Non-ISO shall expire on the date of such
termination; or
(2) Removal from the Board or the Bank Board pursuant to the
respective Articles of Incorporation, then the Optionee's rights to
exercise such Non-ISO shall expire on the date of such removal.
(3) Death, then a Non-ISO of the deceased Optionee may be exercised
within two years from the date of his death (but not later than the
date on which the Option would otherwise expire) by the personal
representatives of his estate or person or persons to whom his
rights under such Non-ISO shall have passed by will or by laws of
descent and distribution or otherwise shall have transferred
pursuant to this Plan;
(4) Permanent and Total Disability (as such term is defined in
Section 22(e)(3) of the Code), then a Non-ISO may be exercised
within one year from the date of such Permanent and Total
Disability, but not later than the date on which the ISO would
otherwise expire.
(f) Effect of the Committee's Decisions. The Committee's determination
whether a Participant's Continuous Service has ceased, and the effective date
thereof shall be final and conclusive on all persons affected thereby.
9. SARs (Stock Appreciation Rights)
(a) Granting of SARs. In its sole discretion, the Committee may from
time to time grant SARs to Employees either in conjunction with, or
independently of, any Options granted under the Plan. An SAR granted in
conjunction with an Option may be an alternative right wherein the exercise of
the Option terminates the SAR to the extent of the number of shares purchased
upon exercise of the Option and, correspondingly, the exercise of the SAR
terminates the Option to the extent of the number of Shares with respect to
which the SAR is exercised. Alternatively, an SAR granted in conjunction with an
Option may be an additional right wherein both the SAR and the Option may be
exercised. An SAR may not be granted in conjunction with an ISO under
circumstances in which the exercise of the SAR affects the right to exercise the
ISO or vice versa, unless the SAR, by its terms, meets all of the following
requirements:
(1) The SAR will expire no later than the ISO;
(2) The SAR may be for no more than the difference between the
Exercise Price of the ISO and the Market Value of the Shares
subject to the ISO at the time the SAR is exercised;
(3) The SAR is transferable only when the ISO is transferable, and
under the same conditions;
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As amended and restated as of April 22, 2004.
(4) The SAR may be exercised only when the ISO may be exercised;
and
(5) The SAR may be exercised only when the Market Value of the
Shares subject to the ISO exceeds the Exercise Price of the
ISO.
(b) Exercise Price. The Exercise Price as to any particular SAR shall
not be less than the Market Value of the Optioned Shares on the date of grant.
(c) Timing of Exercise. Any election by a Participant to exercise SARs
shall be made during the period beginning on the 3rd business day following the
release for publication of quarterly or annual financial information and ending
on the 12th business day following such date. This condition shall be deemed to
be satisfied when the specified financial data is first made publicly available.
In no event, however, may an SAR be exercised within the six-month period
following the date of its grant.
(d) Exercise of SARs. An SAR granted hereunder shall be exercisable at
such times and under such conditions as shall be permissible under the terms of
the Plan and of the Agreement granted to a Participant, provided that an SAR may
not be exercised for a fractional Share. Upon exercise of an SAR, the
Participant shall be entitled to receive, without payment to Southwest except
for applicable withholding taxes, an amount equal to the excess of (or, in the
discretion of the Committee if provided in the Agreement, a portion of) the
excess of the then aggregate Market Value of the number of Optioned Shares with
respect to which the Participant exercises the SAR, over the aggregate Exercise
Price of such number of Optioned Shares. This amount shall be payable by
Southwest, in the discretion of the Committee, in cash or in Shares valued at
the then Market Value thereof, or any combination thereof. The provisions of
Paragraphs 8(c) and 8(e) regarding the period of exercisability of Options are
incorporated by reference herein, and shall determine the period of
exercisability of SARs.
(e) Procedure for Exercising SARs. To the extent not inconsistent
herewith, the provisions of Paragraph 8(b) as to the procedure for exercising
Options are incorporated by reference, and shall determine the procedure for
exercising SARs.
10. Restricted Stock Awards.
Any Share of Restricted Stock which the Committee may grant to key
Employees shall be subject to the following terms and conditions, and otherwise
to such other terms and conditions as are either applicable generally to Awards
or prescribed by the Committee in the applicable Agreement:
(a) Restriction Period. At the time of each award of Restricted Stock,
there shall be established for the Restricted Stock a restriction period, which
shall be no less than 12 months and no greater than 5 years (the "Restriction
Period"). Such Restriction Period may differ among Participants and may have
different expiration dates with respect to portions of shares of Restricted
Stock covered by the same award. In no event (i) may the goal or standard
measurement date for a Performance Based Award of Restricted Stock be less than
one year from the date of grant; or (ii) may the Restriction Period for any
other award of Restricted Stock be less than 3 years, provided that restrictions
may terminate ratably over the vesting period.
(b) Vesting Restrictions. The Committee shall determine the
restrictions applicable to the award of Restricted Stock, including, but not
limited to, requirements of Continuous Service for a specified term, or, for
Performance Based Awards of Restricted Stock, the attainment of specific
corporate, divisional, or individual performance standards or goals, which
restrictions may differ with respect to each Participant. The Agreement shall
provide for forfeiture of Shares covered thereby if the specified restrictions
are not met during the Restriction Period.
(c) Vesting upon Death, Disability, or Retirement. The Committee shall
set forth in the Agreement the percentage of the award of Restricted Stock which
shall vest in the Participant in the event of death, disability, or retirement
prior to the expiration of the Restriction Period or the satisfaction of the
restrictions applicable to an award of Restricted Stock.
(d) Acceleration of Vesting. Notwithstanding the Restriction Period and
the restrictions imposed on the Restricted Stock, as set forth in any Agreement,
the Committee may shorten the Restriction Period or waive any restrictions, if
the Committee concludes that it is in the best interests of Southwest to do so,
provided that any such actions not done in connection with a Change in Control
or the death, disability, retirement, or termination of employment of a
Participant shall not be effective unless specifically approved or ratified by
the affirmative votes of the holders of a majority of the Common Stock present
or represented and entitled to vote at a meeting duly held on date no later than
the next annual meeting of shareholders.
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As amended and restated as of April 22, 2004.
(e) Ownership; Voting. Stock certificates shall be issued in respect of
Restricted Stock awarded hereunder and shall be registered in the name of the
Participant, whereupon the Participant shall become a shareholder of Southwest
with respect to such Restricted Stock and shall, to the extent not inconsistent
with express provisions of the Plan, have all the rights of a shareholder,
including but not limited to the right to receive all dividends paid on such
Shares and the right to vote such Shares. Said stock certificates shall be
deposited with Southwest or its designee, together with a stock power endorsed
in blank, and the following legend shall be placed upon such certificates
reflecting that the shares represented thereby are subject to restrictions
against transfer and forfeiture:
"The transferability of this certificate and the shares of stock
represented thereby are subject to the terms and conditions (including
forfeiture) contained in the 1999 Stock Option Plan of Southwest
Bancorp, Inc., and an agreement entered into between the registered
owner and Southwest Bancorp, Inc.. Copies of such Plan and Agreement
are on file in the offices of the Secretary of Southwest Bancorp, Inc.,
608 South Main Street, Stillwater, Oklahoma 74074.
(f) Lapse of Restrictions. At the expiration of the Restricted Period
applicable to the Restricted Stock, Southwest shall deliver to the Participant,
or the legal representative of the Participant's estate, or if the personal
representative of the Participant's estate shall have assigned the estate's
interest in the Restricted Stock, to the person or persons to whom his rights
under such Stock shall have passed by assignment pursuant to his will or to the
laws of descent and distribution, the stock certificates deposited with it or
its designee and as to which the Restricted Period has expired and the
requirements of the restrictions have been met. If a legend has been placed on
such certificates, Southwest shall cause such certificates to be reissued
without the legend.
(g) Forfeiture of Restricted Stock. The Agreement shall provide for
forfeiture of any Restricted Stock which is not vested in the Participant or for
which the restrictions have not been satisfied during the Restriction Period.
11. Effect of Changes in Control and Changes in Common Stock Subject to
the Plan.
(a) Effects of Change in Control.
(1) Notwithstanding the provisions of any Award that provides for
its exercise or vesting in installments, all Awards shall be
immediately exercisable and fully vested upon a Change in Control.
(2) At the time of a Change in Control, each Optionee shall, at the
sole and absolute discretion of the Committee, be entitled to
receive a cash payment in an amount equal to the excess of the
Market Value of the Shares subject to such Option over the Exercise
Price of such Option, provided that in no event may an Option be
cancelled in exchange for cash within the six-month period
following the date of its grant. For purposes of calculating this
payment, the Market Value shall be the Market Value at the date of
the Change in Control as determined by the Committee.
(3) In the event there is a Transaction, all outstanding Awards
shall be surrendered. With respect to each Award so surrendered,
the Committee shall in its sole and absolute discretion determine
whether the holder of each Award so surrendered shall receive--
(A) For each Share then subject to an outstanding Award, an
Award for the number and kind of shares into which each
Outstanding Share (other than Shares held by dissenting
shareholders) is changed or exchanged, together with an
appropriate adjustment to the Exercise Price in the case of
Options and SARs; or
(B) With respect to Options, the number and kind of shares into
which each Outstanding Share (other than Shares held by
dissenting shareholders) is changed or exchanged in the
Transaction that are equal in market value to the excess of the
Market Value on the date of the Transaction of the Shares
subject to the Option, over the Exercise Price of the Option;
or
(C) A cash payment (from the Company or the successor
corporation), in an amount equal to the excess of the Market
Value on the date of the Transaction of the Shares subject to
the Award, less the Exercise Price of the Award in the case of
Options and SARs.
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As amended and restated as of April 22, 2004.
(4) The decision of the Committee as to whether a Change in Control
has occurred shall be conclusive and binding.
(b) Recapitalizations, Stock Splits, Etc. The number and kind of shares
reserved for issuance under the Plan, and the number and kind of shares subject
to outstanding Options and the Exercise Price thereof, shall be proportionately
adjusted for any increase, decrease, change or exchange of Shares for a
different number or kind of shares or other securities of the Company which
results from a merger, consolidation, recapitalization, reorganization,
reclassification, stock dividend, split-up, combination of shares, or similar
event in which the number or kind of shares is changed without the receipt or
payment of consideration by the Company.
(c) Special Rule for ISOs. Any adjustment made pursuant to
subparagraphs (a)(3)(A) or (b) of this Paragraph shall be made in such a manner
as not to constitute a modification, within the meaning of Section 424(h) of the
Code, of outstanding ISOs.
(d) Conditions and Restrictions on New, Additional, or Different Shares
or Securities. If, by reason of any adjustment made pursuant to this Paragraph,
an Optionee becomes entitled to new, additional, or different shares of stock or
securities, such new, additional, or different shares of stock or securities
shall thereupon be subject to all of the conditions and restrictions which were
applicable to the Shares pursuant to the Option before the adjustment was made.
(e) Other Issuances. Except as expressly provided in this Paragraph,
the issuance by the Company or an Affiliate of shares of stock of any class, or
of securities convertible into Shares or stock of another class, for cash or
property or for labor or services either upon direct sale or upon the exercise
of rights or warrants to subscribe therefor, shall not affect, and no adjustment
shall be made with respect to, the number, class, or Exercise Price of Shares
then subject to Options or reserved for issuance under the Plan.
12. Non-Transferability of Options.
(a) ISOs may not be sold, pledged, assigned, hypothecated, transferred
or disposed of in any manner other than by will or by the laws of descent and
distribution, or pursuant to the terms of a "qualified domestic relations order"
(within the meaning of Section 414(p) of the Code and the regulations and
rulings thereunder).
(b) Awards other than ISO's may not be sold, pledged, assigned,
hypothecated, transferred or disposed of in any manner other than by will or by
the laws of descent and distribution, pursuant to the terms of a "qualified
domestic relations order" (within the meaning of Section 414(p) of the Code and
the regulations and rulings thereunder), or, in the sole discretion of the
Committee, in connection with a transfer for estate or retirement planning
purposes to a trust established for such purposes.
A-9
As amended and restated as of April 22, 2004.
13. Time of Granting Awards.
The date of grant of an Award shall, for all purposes, be the later of
the date on which the Committee makes the determination of granting such Award,
and the Effective Date. Notice of the determination shall be given to each
Participant to whom an Award is so granted within a reasonable time after the
date of such grant.
14. Effective Date.
The Plan shall be effective as of February 18, 1999. Awards may be made
prior to approval of the Plan by the shareholders of Southwest if the exercise
of Awards in the form of Options and/or SARs, and the vesting of Awards in the
form of Restricted Stock, are conditioned upon shareholder approval of the Plan.
15. Approval by Shareholders.
The Plan shall be approved by shareholders of Southwest within twelve
(12) months before or after the Effective Date.
16. Modification of Awards.
At any time, and from time to time, the Board may authorize the
Committee to direct execution of an instrument providing for the modification of
any outstanding Award, provided no such modification shall confer on the holder
of said Award any right or benefit which could not be conferred on him by the
grant of a new Award at such time, or impair the Award without the consent of
the holder of the Award.
17. Amendment and Termination of the Plan.
The Board may from time to time amend the terms of the Plan and, with
respect to any Shares at the time not subject to Awards, suspend or terminate
the Plan; provided that the provisions of Paragraph 9 may not be amended more
than once every six months (other than to comport with changes in the Code, the
Employee Retirement Income Security Act of 1974, as amended, or the rules
thereunder), and provided further that any amendment that is "material" within
the meaning of Rule 16b-3 shall be subject to shareholder approval.
No amendment, suspension or termination of the Plan shall, without the
consent of any affected holders of an Award, alter or impair any rights or
obligations under any Award theretofore granted.
18. Conditions Upon Issuance of Shares.
(a) Compliance with Securities Laws. Shares of Common Stock shall not
be issued with respect to any Award unless the issuance and delivery of such
Shares shall comply with all relevant provisions of law, including, without
limitation, the Securities Act of 1933, as amended, the rules and regulations
promulgated thereunder, any applicable state securities law, and the
requirements of any stock exchange upon which the Shares may then be listed. The
Plan is intended to comply with Rule 16b-3, and any provision of the Plan which
the Committee determines in its sole and absolute discretion to be inconsistent
with said Rule shall, to the extent of such inconsistency, be inoperative and
null and void, and shall not affect the validity of the remaining provisions of
the Plan.
(b) Special Circumstances. The inability of Southwest to obtain
approval from any regulatory body or authority deemed by Southwest's counsel to
be necessary to the lawful issuance and sale of any Shares hereunder shall
relieve Southwest of any liability in respect of the non-issuance or sale of
such Shares. As a condition to the exercise of an Option or SAR, Southwest may
require the person exercising the Option or SAR to make such representations and
warranties as may be necessary to assure the availability of an exemption from
the registration requirements of federal or state securities law.
A-10
As amended and restated as of April 22, 2004.
(c) Committee Discretion. The Committee shall have the discretionary
authority to impose in Agreements such restrictions on Shares as it may deem
appropriate or desirable, including but not limited to the authority to impose a
right of first refusal or to establish repurchase rights or both of these
restrictions.
19. Reservation of Shares.
Southwest, during the term of the Plan, will reserve and keep available
a number of Shares sufficient to satisfy the requirements of the Plan.
20. Withholding Tax.
Southwest's obligation to deliver dividends on Restricted Stock, or to
deliver Shares upon exercise of Options and/or SARs or upon the vesting of
Restricted Stock (or such earlier time that the Participant makes an election
under Section 83(b) of the Code) shall be subject to the Participant's
satisfaction of all applicable federal, state and local income and employment
tax withholding obligations. The Committee, in its discretion, may permit the
Participant to satisfy the obligation, in whole or in part, by irrevocably
electing to have Southwest withhold Shares, or to deliver to Southwest Shares
that he already owns, having a value equal to the amount required to be
withheld. The value of Shares to be withheld, or delivered to Southwest, shall
be based on the Market Value of the Shares on the date the amount of tax to be
withheld is to be determined. As an alternative, Southwest may retain, or sell
without notice, a number of such Shares sufficient to cover the amount required
to be withheld.
21. No Employment or Other Rights.
In no event shall an Employee's eligibility to participate or
participation in the Plan create or be deemed to create any legal or equitable
right of the Employee or any other party to continue service with Southwest,
Stillwater National, or any Affiliate of such corporations. No Employee shall
have a right to be granted an Award or, having received an Award, the right to
again be granted an Award. However, an Employee who has been granted an Award
may, if otherwise eligible, be granted an additional Award or Awards.
22. Governing Law.
The Plan shall be governed by and construed in accordance with the laws
of the State of Oklahoma, except to the extent that federal law shall be deemed
to apply.
23. Successors and Assigns. The Plan shall be binding upon the
Company's successors and assigns.
* * *
A-11
As amended and restated as of April 22, 2004.