PARKER DRILLING COMPANY
INCENTIVE COMPENSATION PLAN
(As Amended and Restated
Effective January 1, 2008)
The
Compensation Committee of the Board of Directors of Parker Drilling
Company (“ Company ”) has approved this
Incentive Compensation Plan (the “ Plan ”) to
motivate and to reward executive officers and key personnel who
contribute materially to the economic profit of the Company and its
Affiliates and thereby to aid the Company in attracting, retaining
and motivating personnel. The Company recognizes the important
contribution of its employees to its success, and adopts this Plan
to reward such contributions and sustain the incentive for making
such contributions in the future. The Company reserves the right to
amend, modify or revoke the Plan at its discretion, without prior
notice to Participants; provided, however, any amendments,
modifications or revocations shall not be retroactive as to a Bonus
that was awarded in a prior Plan Year. This is a discretionary plan
and no contractual right or property interest to any benefit
described herein is intended to be created by this document or any
related action of the Company, and none should be inferred from the
descriptions of the Plan or any Plan Year.
The
Plan is a sub-plan of the Parker Drilling Company 2005 Long-Term
Incentive Plan (the “ LTIP ”), and, in
particular, Section 5 of the LTIP (“Cash Awards”)
and Section 6 of the LTIP (“Performance-Based Awards and
Performance Standards”). The LTIP is incorporated by
reference into the Plan including, without limitation, the
Performance Criteria in Section 6 of the LTIP. A Bonus payable
under the Plan is intended to qualify as a Performance-Based Award
(as defined in the LTIP) unless otherwise expressly noted, and
shall be construed in accordance with the terms of the LTIP and
Code Section 162(m) to comply as performance-based compensation for
purposes of Code Section 162(m).
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2.1
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“Affiliate” shall mean
any person or entity that is a member of a controlled group of
corporations or other entities with the Company, as described in
Code Section 414.
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2.2
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“Base Salary” shall mean
the aggregate amount of base wages and/or salary (but excluding any
bonus, disability pay, severance pay and other non-base
compensation) that is earned by a Participant during the applicable
Plan Year in which the Participant was eligible to participate in
the Plan, as determined in accordance with Section 3
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2.3
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“Beneficiary” shall mean
the beneficiary or beneficiaries designated by the Participant, on
a form provided by the Company, to receive any Bonus amount
distributable under the terms and conditions of the Plan after the
Participant’s death.
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2.4
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“Board of Directors” or
“Board” shall mean the Board of Directors of the
Company.
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Parker Drilling
Company ICP 1-1-08
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2.5
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“Bonus” shall mean the
amount of incentive compensation earned by a Participant under the
Plan for a Plan Year, as determined in accordance with
Section 4 .
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2.6
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“Cause” shall mean
(a) the Participant’s conviction by a court of competent
jurisdiction as to which no further appeal can be taken of a crime
involving moral turpitude or a felony or entering the plea of
nolo contedere to such crime by the Participant;
(b) the commission by the Participant of a material and
demonstrable act of fraud or misrepresentation of or upon the
Company or any Affiliate; (c) the Participant’s gross
negligence or willful misconduct in the performance or
nonperformance of Participant’s duties and responsibilities
as an employee of the Company or any of its Affiliates;
(d) the knowing engagement by the Participant, without the
written approval of the Board or Committee, in any material
activity that violates (i) a confidentiality,
non-solicitation, non-competition or other similar restrictive
covenant entered into between the Company (or one of its
Affiliates) and such Participant, or (ii) any Company policy
or procedure that could result in a material adverse financial or
operational effect or expose the Company or its Affiliate to civil
or criminal liability, including without limitation, policies and
procedures regarding compliance with anti-bribery laws and other
laws and regulations; but only under clauses (a), (b), (c) or
(d) (above), after (1) Participant has received written notice from
the Company of such breach or nonperformance (which notice must
specifically identify the manner and set forth specific facts,
circumstances and examples of which the Company believes
Participant has breached the restrictive covenants or not
substantially performed Participant’s duties) and (2)
Participant’s continued failure to cure such breach or
nonperformance within the time period set by the Board or
Committee, but in no event less than 10 calendar days after
Participant’s receipt of such notice.
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2.7
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“Change in Control” of
the Company means the occurrence of any one or more of the
following events:
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(a) The
acquisition by any individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act
of 1934, as amended (the “ Exchange Act ”) (a
“ Person ”)) of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of fifty
percent (50%) or more of either (i) the then outstanding
shares of common stock of the Company (the “ Outstanding
Company Stock ”) or (ii) 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 the following acquisitions shall not constitute a
Change in Control: (i) any acquisition directly from the
Company or any subsidiary, (ii) any acquisition by the Company
or any subsidiary or by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any subsidiary, or
(iii) any acquisition by any corporation pursuant to a
reorganization, merger, consolidation or similar business
combination involving the Company (a “ Merger
”), if, following such Merger, the conditions described in
(c) (below) are satisfied;
Parker Drilling
Company ICP 1-1-08
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(b) Individuals
who, as of January 1, 2008, constitute the Board of Directors
of the Company (the “ Incumbent Board ”) cease
for any reason to constitute at least a majority of the Board;
provided, however, that any individual becoming a director
subsequent to the January 1, 2008 whose election, or
nomination for election by the Company’s shareholders, was
approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for
this purpose, any such individual whose initial assumption of
office occurs as a result of either an actual or threatened
election contest (as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act) or other
actual or threatened solicitation of proxies or consents by or on
behalf of a Person other than the Board;
(c) Approval by
the shareholders of the Company of a Merger, unless immediately
following such Merger, (i) substantially all of the holders of
the Outstanding Company Voting Securities immediately prior to
Merger beneficially own, directly or indirectly, more than 50% of
the common stock of the corporation resulting from such Merger (or
its parent corporation) in substantially the same proportions as
their ownership of Outstanding Company Voting Securities
immediately prior to such Merger and (ii) at least a majority
of the members of the board of directors of the corporation
resulting from such Merger (or its parent corporation) were members
of the Incumbent Board at the time of the execution of the initial
agreement providing for such Merger;
(d) The sale or
other disposition of all or substantially all of the assets of the
Company, unless immediately following such sale or other
disposition, (i) substantially all of the holders of the
Outstanding Company Voting Securities immediately prior to the
consummation of such sale or other disposition beneficially own,
directly or indirectly, more than 50% of the common stock of the
corporation acquiring such assets in substantially the same
proportions as their ownership of Outstanding Company Voting
Securities immediately prior to the consummation of such sale or
disposition and (ii) at least a majority of the members of the
board of directors of such corporation (or its parent corporation)
were members of the Incumbent Board at the time of execution of the
initial agreement or action of the Board providing for such sale or
other disposition of assets of the Company;
(e) The adoption
of any plan or proposal for the liquidation or dissolution of the
Company; or
(f) Any other
event that a majority of the Board, in its sole discretion,
determines to constitute a Change in Control hereunder.
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2.8
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“Code” shall mean the
Internal Revenue Code of 1986, as amended.
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2.9
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“Committee” shall mean
the Compensation Committee of the Board.
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Parker Drilling
Company ICP 1-1-08
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2.10
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“Company” shall mean
Parker Drilling Company or its successor in interest.
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2.11
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“Disability” shall mean
that the Participant is entitled to receive long-term disability
(“LTD”) income benefits under the LTD plan or policy
maintained by the Company that covers the Participant. If, for any
reason, the Participant is not covered under such LTD plan or
policy, then “Disability” shall mean a “permanent
and total disability” as defined in Code
Section 22(e)(3) and Treasury regulations thereunder. Evidence
of such Disability shall be certified by a physician acceptable to
both the Company and the Participant. In the event that the parties
are not able to agree on the choice of a physician, each shall
select one physician who, in turn, shall select a third physician
to render such certification.
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2.12
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“Employee” shall mean an
individual who is designated on the payroll records of the Company
or its Affiliate as an employee.
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2.13
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“Participant” shall mean
any officer or employee of the Company or its Affiliate who is
designated by the Committee as eligible to participate in the Plan
for a Plan Year.
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2.14
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“Plan” shall mean this
Parker Drilling Company Incentive Compensation Plan, as it may be
amended
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