EXHIBIT 4.5
ENERGY PARTNERS,
LTD.
2009 LONG TERM INCENTIVE
PLAN
1. Purpose . The
purpose of the Energy Partners, Ltd. 2009 Long Term Incentive Plan
(the “ Plan ”) is to attract and retain
directors, officers and other key employees for Energy Partners,
Ltd., a Delaware corporation (the “ Company ”),
and its Subsidiaries (as defined below) and to provide to such
persons incentives and rewards for superior performance. The Plan
will be effective September 21, 2009 (the “ Effective
Date ”).
2. Definitions . As
used in the Plan,
“ Appreciation Right
” means a right granted pursuant to Section 5 of this
Plan, and shall include both Tandem Appreciation Rights and
Free-Standing Appreciation Rights.
“ Award ” means a
grant of Option Rights, Appreciation Rights, Deferred Shares,
Performance Shares, Performance Units, Performance Awards,
Restricted Stock Units, a grant or sale of Restricted Shares or
Bonus Stock.
“ Base Price ”
means the price used as the basis for determining the Spread upon
the exercise of an Appreciation Right.
“ Board ” means
the Board of Directors of the Company.
“ Change in Control
” means the occurrence of any of the following
events:
(i) The acquisition by any
individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “
Person ”) of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of 40% or more of
either (x) the then outstanding shares of Common Stock of the
Company (the “ Outstanding Company Stock ”) or
(y) the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the
election of directors (the “ Outstanding Company Voting
Securities ”); provided, however, that for purposes of
this subsection (i), the following acquisitions shall not
constitute a Change in Control: (A) any acquisition directly
from the Company, (B) any acquisition by the Company,
(C) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any corporation
controlled by the Company or (D) any acquisition by any
corporation pursuant to a transaction that complies with clauses
(A), (B) and (C) of paragraph (iii) below;
or
(ii) A majority of the members of
the Board (the “ Incumbent Board ”) is replaced
during any 12-month period by directors whose appointment or
election is not endorsed by a majority of the members constituting
the Board prior to the date of the appointment or election;
or
(iii) Consummation of a
reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the
Company or an acquisition of assets of another corporation (a
“ Business Combination ”), in each case, unless,
following such Business Combination, (A) all or substantially
all of the individuals and entities who were the
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beneficial owners, respectively, of the
Outstanding Company Stock and Outstanding Company Voting Securities
immediately prior to such Business Combination beneficially own,
directly or indirectly, more than 50% of, respectively, the then
outstanding shares of common stock and the combined voting power of
the then outstanding voting securities entitled to vote generally
in the election of directors, as the case may be, of the
corporation resulting from such Business Combination (including,
without limitation, a corporation that as a result of such
transaction owns the Company or all or substantially all of the
Company’s assets either directly or through one or more
subsidiaries) in substantially the same proportions to each other
as their ownership, immediately prior to such Business Combination
of the Outstanding Company Stock and Outstanding Company Voting
Securities, as the case may be, (B) no Person (excluding any
employee benefit plan (or related trust) of the Company or the
corporation resulting from such Business Combination) beneficially
owns, directly or indirectly, 40% or more of, respectively, the
then outstanding shares of common stock of the corporation
resulting from such Business Combination or the combined voting
power of the then outstanding voting securities of such corporation
except to the extent that such ownership results solely from
ownership of the Company that existed prior to the Business
Combination and (C) at least a majority of the members of the
board of directors of the corporation resulting from such Business
Combination were members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action of the Board,
providing for such Business Combination; or
(iv) Approval by the stockholders of
the Company of a complete liquidation or dissolution of the
Company.
Notwithstanding the provisions of
Section 14 and the foregoing provisions of this definition of
“Change in Control,” no Award subject to the
Nonqualified Deferred Compensation Rules (a “ 409A
Award ”) shall become exercisable, or be settled or
otherwise paid or distributed, pursuant to the Plan or the
applicable Award agreement governing such 409A Award as a result of
a Change in Control unless the event constituting such Change in
Control also constitutes a “change in the ownership or
effective control” or “in the ownership of a
substantial portion of the assets” of the Company within the
meaning of the Nonqualified Deferred Compensation Rules;
provided, however, that, to the extent permitted under the
Nonqualified Deferred Compensation Rules, the time of exercise,
payment or settlement of a 409A Award shall be accelerated, or
payment shall be made under the Plan in respect of such Award, upon
the occurrence of a Change in Control, as determined by the
Committee in its discretion, to the extent necessary to pay income,
withholding, employment or other taxes imposed on such 409A Award.
To the extent any 409A Award does not become exercisable or is not
settled or otherwise payable upon a Change in Control as a result
of the limitations described in the preceding sentence, such 409A
Award shall become exercisable or be settled or payable upon the
earliest-occurring event that qualifies as a permissible time of
distribution in respect of such 409A Award under the Nonqualified
Deferred Compensation Rules, the Plan and the terms of the
agreement governing such 409A Award.
“ Code ” means
the Internal Revenue Code of 1986, as amended from time to
time.
“ Committee ”
means the Compensation Committee of the Board and, to the extent
the administration of the Plan has been assumed by the Board
pursuant to Section 15 of the Plan, the Board.
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“ Common Stock ”
or “ Shares ” means the shares of common stock,
par value $0.001 per share, of the Company or any security into
which such shares of common stock may be changed by reason of any
transaction or event of the type referred to in Section 13 or
14 of the Plan.
“ Date of Grant ”
means the date specified by the Committee on which the grant of an
Award is effective.
“ Deferral Period
” means the period of time during which Deferred Shares are
subject to deferral limitations under Section 7 of this
Plan.
“ Deferred Shares
” means the award made pursuant to Section 7 of this
Plan of the right to receive shares of Common Stock at the end of a
specified Deferral Period.
“ Exchange Act ”
means the Securities Exchange Act of 1934, as amended from time to
time, including rules thereunder and successor provisions and rules
thereto.
“ Free-Standing
Appreciation Right ” means an Appreciation Right granted
pursuant to Section 5 of this Plan that is not granted in
tandem with an Option Right.
“ Incentive Stock
Options ” means Option Rights that are intended to
qualify as “incentive stock options” under
Section 422 of the Code or any successor provision.
“ Management Objectives
” means the measurable performance objective or objectives
established, when so determined by the Committee, that are to be
achieved with respect to an Award. Management Objectives may be
described in terms of Company-wide objectives or objectives that
are related to the performance of the individual Participant or of
the Subsidiary, division, department, region or function within the
Company or Subsidiary in which the Participant is employed or on
which the Participant’s efforts have the most influence. The
Management Objectives may be made relative to the performance of
other corporations or businesses.
If the Committee determines that a
change in the business, operations, corporate structure or capital
structure of the Company, or the manner in which it conducts its
business, or other events or circumstances render the Management
Objectives unsuitable, the Committee may in its discretion modify
such Management Objectives or the related minimum acceptable level
of achievement, in whole or in part, as the Committee deems
appropriate and equitable, except where such action would result in
the loss of the otherwise available exemption of the Award under
Section 162(m) of the Code. In such case, the Committee will
not make any modification of the Management Objectives or minimum
acceptable level of achievement, in each such case to the extent it
would cause such a result.
“ Market Value Per
Share ” means, as of any particular date, (i)
the closing sale price per share of Common Stock as
reported on the principal securities exchange, association or
quotation system on which the shares of Common Stock are then
trading or, if there are no sales on such day, on the next
preceding trading day during which a sale occurred, or (ii)
if clause (i) does not apply, the fair market
value of a share of Common Stock as determined by the
Committee.
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“ Nonqualified Deferred
Compensation Rules ” means the limitations or
requirements of Section 409A of the Code and the regulations
promulgated thereunder.
“ Option Price ”
means the purchase price payable on exercise of an Option
Right.
“ Option Right ”
means the right to purchase shares of Common Stock upon exercise of
an option granted pursuant to Section 4 of the
Plan.
“ Participant ”
means a person who is selected by the Committee to receive an Award
under the Plan and who is at the time a director, officer or other
key employee of the Company or any one or more of its
Subsidiaries.
“ Performance Award
” means the grant, pursuant to Section 8(h) of the Plan,
of an Award subject to performance criteria specified by the
Committee.
“ Performance Period
” means, in respect of a Performance Award, Performance Share
or Performance Unit, a period of time established pursuant to
Section 8 of this Plan within which the Management Objectives
or pre-established performance goals relating to such Performance
Award, Performance Share or Performance Unit are to be
achieved.
“ Performance Share
” means a bookkeeping entry that records the equivalent of
one share of Common Stock awarded pursuant to Section 8 of
this Plan.
“ Performance Unit
” means a bookkeeping entry that records a unit equivalent to
$1.00 (or such other value as the Committee determines) awarded
pursuant to Section 8 of this Plan.
“ Public Offering
” means an underwritten public offering of the
Company’s equity securities registered under the Securities
Act of 1933, as amended, or any successor statute thereof, and the
rules and regulations promulgated thereunder, or such other event
as a result of which outstanding equity securities of the Company
(or any successor entity) are publicly traded.
“ Restricted Shares
” means shares of Common Stock granted or sold pursuant to
Section 5 of the Plan as to which neither the substantial risk
of forfeiture nor the restrictions on transfers referred to therein
have expired.
“ Restricted Stock
Units ” means an award pursuant to Section 9 of this
Plan of the right to receive shares of Common Stock, cash or other
consideration at the end of a specified Deferral Period.
“ Rule 16b-3 ”
means Rule 16b-3 under Section 16 of the Exchange Act (or any
successor rule to the same effect), as in effect from time to
time.
“ Securities Act
” means the Securities Act of 1933 and the rules and
regulations promulgated thereunder, or any successor law, as it may
be amended from time to time.
“ Subsidiary ”
means a corporation, company or other entity (i) more than 50%
of whose outstanding shares or securities (representing the right
to vote for the election of directors
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or other managing authority) are, or
(ii) which does not have outstanding shares or securities (as
may be the case in a partnership, limited liability company, joint
venture or unincorporated association), but more than 50% of whose
ownership interest representing the right generally to make
decisions for such other entity is, now or hereafter, owned or
controlled, directly or indirectly, by the Company except that for
purposes of determining whether any person may be a Participant for
purposes of any grant of Incentive Stock Options,
“Subsidiary” means any corporation in which at the time
the Company owns or controls, directly or indirectly, more than 50%
of the total combined voting power represented by all classes of
stock issued by such corporation.
“ Tandem Appreciation
Right ” means an Appreciation Right granted pursuant to
Section 5 of this Plan that is granted in tandem with an
Option Right.
“ Ten Percent Employee
” means an employee of the Company or any of its Subsidiaries
who owns Common Stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company or any
of its Subsidiaries.
3. Shares Available Under the
Plan . (a) Subject to adjustment as provided in
Section 3(b) and Section 13 of this Plan, the number of
shares of Common Stock that may be issued or transferred
(i) upon the exercise of Option Rights or Appreciation Rights,
(ii) as Restricted Shares and released from substantial risks
of forfeiture thereof, (iii) as Deferred Shares, (iv) in
payment of Performance Shares, Performance Units or Restricted
Stock Units that have been earned shall not exceed in the aggregate
1,237,000 shares of Common Stock, plus any shares described in
Section 3(b). Such shares may be shares of original issuance
or treasury shares or a combination of the foregoing.
(b) The number of shares available
in Section 3(a) above shall be adjusted to account for shares
relating to awards that expire, are forfeited or are transferred,
surrendered or relinquished upon the payment of any Option Price by
the transfer to the Company of shares of Common Stock or upon
satisfaction of any withholding amount. Upon payment in cash of the
benefit provided by any award granted under this Plan, any shares
that were covered by that award shall again be available for
issuance or transfer hereunder.
(c) In each calendar year during any
part of which this Plan is in effect, a “Covered
Employee” (as defined within the meaning of
Section 162(m) of the Code and regulations thereunder,
including Treasury Regulation §1.162-27 and successor
regulations thereto) may not be granted (i) Awards (other than
Awards designated to be paid only in cash or the settlement of
which is not based on a number of shares of Common Stock) relating
to more than 400,000 shares of Common Stock, subject to adjustment
in a manner consistent with any adjustment made pursuant to
Section 13, and (ii) Awards designated to be paid only in
cash, or the settlement of which is not based on a number of shares
of Common Stock, having a value determined on the date of grant in
excess of $5,000,000.00.
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4. Option Rights . The
Committee may, from time to time and upon such terms and conditions
as it may determine, authorize grants to Participants of options to
purchase shares of Common Stock. Each such grant may utilize any or
all of the authorizations, and will be subject to all of the
requirements, contained in the following provisions:
(a) Each grant will be evidenced by
an agreement executed on behalf of the Company by an authorized
officer and delivered to the Participant and containing such terms
and provisions, consistent with the Plan, as the Committee may
approve.
(b) Option Rights granted under this
Section 4 may be Incentive Stock Options, options that are not
intended to be Incentive Stock Options, or combinations of the
foregoing. Incentive Stock Options may be granted only to
individuals who are employees of the Company or a Subsidiary that
is a “subsidiary corporation” within the meaning of
Section 424 of the Code.
(c) Each grant will specify the
number of shares of Common Stock to which it pertains. The Market
Value Per Share of Common Stock subject to an Incentive Stock
Option and the aggregate Market Value Per Share of the
Company’s Common Stock, or a Subsidiary’s common stock
if that Subsidiary is considered a “subsidiary
corporation” within the meaning of Section 424 of the
Code, that is subject to any other Incentive Stock Option that
first becomes purchasable by a Participant in any calendar year may
not, with respect to that Participant, exceed $100,000, or such
other amount as may be prescribed under Section 422 of the
Code or applicable regulations or rulings from time to
time.
(d) Each grant will specify the
Option Price, which will not be less than 100% of the Market Value
Per Share on the Date of Grant. The Option Price of Incentive Stock
Options issued to a Ten Percent Employee may not be less than 110%
of the Market Value Per Share on the Date of Grant.
(e) Each grant will specify the
period or periods of continuous service by the Participant with the
Company or any Subsidiary that are necessary before the Option
Rights or installments thereof will become exercisable.
(f) Any grant may provide for the
earlier exercise of the Stock Options in the event of a Change in
Control of the Company.
(g) Each grant will specify whether
the Option Price will be payable (i) in cash or by check
acceptable to the Company, (ii) by the actual or constructive
transfer to the Company of shares of Common Stock owned by the
Participant for at least six months (or, with the consent of the
Committee, for less than six months) having an aggregate Market
Value Per Share at the date of exercise equal to the aggregate
Option Price, (iii) with the consent of the Committee, by
authorizing the Company to withhold a number of shares of Common
Stock otherwise issuable to the Participant having an aggregate
Market Value Per Share on the date of exercise equal to the
aggregate Option Price, or (iv) by a combination of such
methods of payment; provided, however , that the payment
methods described in clauses (ii), (iii) and
(iv) will not be available at any time that the Company is
prohibited from purchasing or acquiring such shares of Common
Stock.
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(h) To the extent permitted by law,
a grant may provide for deferred payment of the Option Price from
the proceeds of sale through a bank or broker of some or all of the
shares to which such exercise relates.
(i) Successive grants may be made to
the same Participant whether or not any Option Rights previously
granted to such Participant remain unexercised.
(j) A grant may specify Management
Objectives that must be achieved as a condition to the exercise of
such rights.
(k) No Option Right will be
exercisable more than 10 years from the Date of Grant (five years
with respect to Incentive Stock Options granted to a Ten Percent
Employee).
(l) Any grant may provide for the
effect on the Option Rights (or any shares of Common Stock issued
with respect to the Option Rights) of any conduct of the
Participant determined by the Committee to be injurious,
detrimental or prejudicial to any significant interest of the
Company or any Subsidiary.
(m) For purposes of any provision in
the Plan or an agreement evidencing a Participant’s award of
Option Rights that relates to the effect on an Option Right of a
Participant’s ceasing to perform services for the Company or
any Subsidiary, a termination of employment or other separation
from service will occur when the Participant permanently ceases to
perform services for the Company and all Subsidiaries or when the
entity for which the Participant is performing services ceases to
be a Subsidiary, unless the Participant immediately becomes
employed by the Company or another Subsidiary.
(n) The exercise of an Option Right
shall result in the cancellation on a share-for-share basis of any
Tandem Appreciation Right authorized under Section 5 of this
Plan.
5. Appreciation Rights
. (a) The Committee may authorize the granting (i) to any
Participant, of Tandem Appreciation Rights in respect of Option
Rights granted hereunder, and (ii) to any Participant, of
Free-Standing Appreciation Rights. A Tandem Appreciation Right
shall be a right of the Participant, exercisable by surrender of
the related Option Right, to receive from the Company an amount
determined by the Committee, which shall be expressed as a
percentage of the Spread (not exceeding 100%) at the time of
exercise. Tandem Appreciation Rights may be granted at any time
prior to the exercise or termination of the related Option Rights;
provided, however, that a Tandem Appreciation Right awarded
in relation to an Incentive Stock Option must be granted
concurrently with such Incentive Stock Option. A Free-Standing
Appreciation Right shall be a right of the Participant to receive
from the Company an amount determined by the Committee, which shall
be expressed as a percentage of the Spread (not exceeding 100%) at
the time of exercise.
(b) Each grant of Appreciation
Rights may utilize any or all of the authorizations, and shall be
subject to all of the requirements, contained in the following
provisions:
(i) Any grant may specify that the
amount payable on exercise of an Appreciation Right may be paid by
the Company in cash, in shares of Common Stock or in any
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combination thereof and may either grant to the
Participant or retain in the Committee the right to elect among
those alternatives.
(ii) Any grant may specify that the
amount payable on exercise of an Appreciation Right may not exceed
a maximum specified by the Committee at the Date of
Grant.
(iii) Any grant may specify waiting
periods before exercise and permissible exercise dates or
periods.
(iv) Any grant may specify that such
Appreciation Right may be exercised only in the event of, or
earlier in the event of, a Change in Control.
(v) Any grant may provide for the
payment to the Participant of dividend equivalents thereon in cash
or shares of Common Stock on a current, deferred or contingent
basis.
(vi) Any grant of Appreciation
Rights may specify Management Objectives that must be achieved as a
condition of the exercise of such Appreciation Rights.
(vii) Each grant of Appreciation
Rights shall be evidenced by an agreement executed on behalf of the
Company by an officer and delivered to and accepted by the
Participant, which agreement shall describe such Appreciation
Rights, identify the related Option Rights (if applicable), state
that such Appreciation Rights are subject to all the terms and
conditions of this Plan, and contain such other terms and
provisions, consistent with this Plan, as the Committee may
approve.
(c) Any grant of Tandem Appreciation
Rights shall provide that such Tandem Appreciation Rights may be
exercised only at a time when the related Option Right is also
exercisable and at a time when the Spread is positive, and by
surrender of the related Option Right for cancellation.
(d) Regarding Free-Standing
Appreciation Rights only:
(i) Each grant shall specify in
respect of each Free-Standing Appreciation Right a Base Price,
which shall be equal to or greater or less than the Market Value
Per Share on the Date of Grant;
(ii) Successive grants may be made
to the same Participant regardless of whether any Free-Standing
Appreciation Rights previously granted to the Participant remain
unexercised; and
(iii) No Free-Standing Appreciation
Right granted under this Plan may be exercised more than 10 years
from the Date of Grant.
6. Restricted Shares .
The Committee may, from time to time and upon such terms and
conditions as it may determine, authorize the grant or sale of
Restricted Shares to Participants. Each such grant or sale will
constitute an immediate transfer of the ownership of shares of
Common Stock to the Participant in consideration of the performance
of services,
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entitling such Participant to voting and other
ownership rights, but subject to the restrictions set forth in this
Section 6. Each such grant or sale may utilize any or all of
the authorizations, and will be subject to all of the requirements,
contained in the following provisions:
(a) Each grant or sale of Restricted
Shares will be evidenced by an agreement executed on behalf of the
Company by an authorized officer and delivered to the Participant
and will contain such terms and provisions, consistent with the
Plan, as the Committee may approve.
(b) Each such grant or sale may be
made without additional consideration, in consideration of a
payment by the Participant that is less than Market Value Per Share
at the Date of Grant or in consideration of services rendered to
the Company or a Subsidiary, except as may otherwise be required by
the Delaware General Corporation Law.
(c) Each such grant or sale will
provide that the Restricted Shares covered by such grant or sale
will be subject to a “substantial risk of forfeiture”
within the meaning of Section 83 of the Code for a period to
be determined by the Committee at the Date of Grant.
(d) Each such grant or sale will
provide that during the period for which such substantial risk of
forfeiture is to continue, the transferability of the Restricted
Shares will be prohibited or restricted in the manner and to the
extent prescribed by the Committee at the Date of Grant (which
restrictions may include, without limitation, rights of repurchase
or first refus
