Exhibit 10.1
ALLIS-CHALMERS
ENERGY INC.
EMPLOYEE
PERFORMANCE AWARD AGREEMENT
Pursuant to the terms of the Allis-Chalmers Energy Inc. 2006
Incentive Plan
Amended and Restated Effective March 11,
2009
1. Grant
of Performance Award. Allis-Chalmers
Energy Inc., a Delaware corporation (“Company”), hereby
grants to Munawar H. Hidayatallah (“Participant”)
performance awards in the form of 685,000 shares (the
“Performance Award”) of common stock, $0.01 par value
per share, of the Company (“Common Stock”), subject to
meeting the Performance Objectives as described in Section 4
hereof, and in accordance with the terms and conditions of this
document. This Performance Award Agreement is dated as of
September 17, 2007 . The Performance Award in the form
of Common Stock is awarded pursuant to and to implement in part the
Allis-Chalmers Energy Inc. 2006 Incentive Plan (as amended and in
effect from time to time, the “Plan”) and is subject to
the restrictions, forfeiture provisions and other terms and
conditions of the Plan, which is hereby incorporated herein and is
made a part hereof, and this Performance Award Agreement. By
execution of this Performance Award Agreement, Participant agrees
to be bound by all of the terms, provisions, conditions and
limitations of the Plan as implemented by the Performance Award
Agreement, together with all rules and determinations from time to
time issued by the Committee pursuant to the Plan. All capitalized
terms have the meanings set forth in the Plan unless otherwise
specifically provided. All references to specified paragraphs
pertain to paragraphs of this Performance Award Agreement unless
otherwise provided.
2. Settlement
of Performance Award. The stock
certificate(s) evidencing the Performance Award shall not be issued
or registered on the Company’s books and records until the
Performance Objectives set forth in paragraph 4 below have been met
by the Participant and approved by the Committee and all other
restrictions contained in this Performance Award Agreement have
lapsed. Upon resolution by the Committee that the Participant has
achieved the Performance Objectives, and subject to the other terms
and conditions of this Performance Award Agreement, the Company
will promptly issue a stock certificate with respect to the vested
portion of the shares of the Performance Award for which the
Performance Objectives have been met. However, in no event shall
such stock certificate be issued to the Participant later than
90 days after such shares have vested.
3. Risk
of Forfeiture. Participant
shall immediately forfeit all rights to any Performance Award which
have not vested and with respect to which the Performance
Objectives have not been met or in the event of termination,
resignation, or removal of Participant from employment with the
Company or any Affiliate under circumstances that do not cause
Participant to become fully vested, under the terms of the Plan and
except as set forth in Section 7 hereof.
4. Performance
Objectives. Subject to the
provisions of this Performance Award Agreement including, without
limitation, the following provisions of this Paragraph 4, the
Performance Award shall vest upon meeting the Performance
Objectives described as follows:
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(a)
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If the Total Shareholder Return (as
defined below) as of April 1, 2008 (or upon any of the 30
subsequent trading days following such date) is no less than twelve
percent (12%), then one-third (1/3) of the Performance Award shall
immediately be vested and freely transferable and nonforfeitable.
If the Total Shareholder Return as of April 1, 2009 (or upon
any of the 30 subsequent trading days following such date) is no
less than twelve percent (12%), then an additional one-third (1/3)
of such Performance Award shall immediately be vested and freely
transferable and nonforfeitable. If the Total Shareholder Return as
of April 1, 2010 (or upon any of the 30 subsequent trading
days following such date) is no less than twelve percent (12%), the
remaining one-third (1/3) of such Performance Award shall
immediately be vested and freely transferable and
nonforfeitable.
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(b)
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Alternatively, if on April 1,
2011 or within thirty (30) subsequent trading days of such
date, the Cumulative Total Shareholder Return is no less than
twenty-four percent (24%), then all such unvested Performance
Awards hereunder shall immediately be vested and
nonforfeitable.
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(c)
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For purposes of this Performance
Award Agreement, the following terms shall have the meanings
described as follows:
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The
“Value” of the Company shall mean the closing price of
the Common Stock of the Company on the New York Stock Exchange on
such date, if a trading date, or if not, on the last previous
trading date, multiplied by the number of shares of such stock then
outstanding, plus the value of any other shares of the Company then
outstanding (valued in accordance with any reasonable valuation
method, including the valuation methods described in Treas. Reg.
§ 20.2031-2).
The
“Total Shareholder Return” shall mean the sum of
(I) the increase, if any, of ( 1 ) the Value of the
Company as of the applicable vesting review date over ( 2 )
the Value of the Company as of the previous vesting review date (or
April 1, 2007, in the case of the first vesting review date)
plus (II) dividends on all shares of the Company paid during
the period from the previous vesting review date (or April 1,
2007, in the case of the first vesting review date) to the
applicable vesting review date, such sum expressed as a plus or
minus percentage of the Value of the Company as of the previous
vesting review date (or April 1, 2007, in the case of the
first vesting review date).
The
“Cumulative Total Shareholder Return” shall mean the
sum of (i) the increase, if any, of (1) the Value of the
Company as of April 1, 2011 (or any of the thirty
(30) subsequent trading days of such date) over (2) the
Value of the Company as of April 1, 2009, plus
(ii) dividends on all shares of the Company paid during the
period from April 1, 2009 to April 1, 2011, such sum
expressed as a plus or minus percentage of the Value of the Company
as of April 1, 2009.
The period from
the date hereof until Performance Awards have become one hundred
percent (100%) vested and the Committee has determined that such
Performance Objectives have been met shall be referred to as the
“Restricted Period.”
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5. Transferability.
During the
Restricted Period, the Participant shall not sell, assign,
transfer, pledge, exchange, hypothecate, or otherwise dispose of
any right, title or interest in the Performance Award prior to
vesting in accordance with this Performance Award Agreement. Upon
receipt by the Participant of stock certificate(s) representing the
vested shares pursuant to Paragraph 2 above, the Participant
may hold or dispose of the shares represented by such
certificate(s), subject to compliance with (i) the terms and
conditions of the Plan and this Performance Award Agreement,
(ii) applicable federal or state securities laws or other
applicable law, (iii) applicable rules of any exchange on
which the Company’s securities are traded or listed, and
(iv) the Co
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