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 August 5,
2009
1. Grant
of Performance Award. Allis-Chalmers
Energy Inc., a Delaware corporation (“Company”), hereby
grants to Victor M. Perez (“Participant”) performance
awards in the form of 25,000 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 August 3,
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.
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 Participant
meeting the Performance Objectives described as follows on the
vesting schedule set forth below:
(a) Following
and subject to approval by the Compensation Committee
that:
(1) Participant
has achieved controllable financial accounting and auditing
expenses of the Company; and
(2) the
Company’s Common Stock has increased by at least 5% per year
from the previous vesting date (or from the date of this Agreement
for the initial vesting date) or for any day within the 15 trading
day period following each such vesting date then:
(i) 5,000
shares will vest on August 3, 2008;
(ii) 5,000
shares will vest on August 3, 2009; and
(iii) 15,000
shares will vest on August 3, 2010.
(b) Alternatively,
if on August 3, 2011 (or any day within the 30 trading day
period following such date) the Compensation Committee finds that
Participant has met the objectives set forth in (a)(1) above and
the Company’s Common Stock has increased by at least 15% from
August 3, 2009 to such date, then 100% of the Performance
Award shall vest on August 3, 2011 (or the first day within
the 30 trading day period following such date such objective was
met).
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.”
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 Company’s rules or policies as established by
the Company in its sole discretion.
6. No
Ownership Rights. Prior to
the vesting of the Performance Award, the Participant shall not
have any rights with respect to the shares of Common Stock
represented by the Performance Award hereunder including the right
to vote the shares of Common Stock and the right to receive any
dividends.
7. Termination
of Employment. If
employment of Participant by the Company or any Affiliate is
terminated for any reason, including death, disability or
retirement, all Performance Awards outstanding at the time of such
termination and all rights thereunder shall be forfeited and no
further vesting shall occur.
(a)
Change in Control. Upon the occurrence of a Change in
Control (as defined in the Plan), all restrictions and conditions
of the Performance Award shall automatically be waived without any
required action by the Company, Committee or the Board with the
result that the Performance Award shall be fully vested and the
restrictions thereon shall have lapsed.
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