EXHIBIT 5
CONTINENTAL SOUTHERN RESOURCES, INC.
RESTRICTED STOCK AWARD AGREEMENT
THIS RESTRICTED STOCK AGREEMENT (this "AGREEMENT") is made and entered
into by and between Continental Southern Resources, Inc. (the "COMPANY") and
___________, an Employee of the Company ("GRANTEE") effective as of the grant
date(s) shown in APPENDIX A attached hereto.
WHEREAS, effective February 26, 2004 Grantee shall be an employee of
Continental Southern Resources, Inc. (the "Company") and as an inducement for
such employment, the Company desires to grant to Grantee a number of restricted
shares of the Company's common stock, par value $.001 per share (the "COMMON
STOCK"), subject to the terms and conditions of this Agreement, with a view to
increasing Grantee's interest in the Company's welfare and growth; and
WHEREAS, Grantee desires to receive shares of the Common Stock as
inducement stock pursuant to the employment agreement between Grantee and
Company dated February 26, 2004.
NOW, THEREFORE, in consideration of the premises, mutual covenants and
agreements contained herein, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto,
intending to be legally bound hereby, agree as follows:
1. GRANT OF COMMON STOCK. Subject to the restrictions, forfeiture
provisions and other terms and conditions set forth herein (a) the Company
hereby grants to Grantee the number of shares of Common Stock ("RESTRICTED
SHARES") as set out in Appendix A hereto, and (b) subject to the terms hereof,
Grantee shall have and may exercise rights and privileges of ownership of such
Restricted Shares, including, without limitation, the voting rights of such
shares and the right to receive dividends declared in respect thereof. This
Agreement and the grant of Restricted Shares are subject to administration by
and the rules and procedures established by the Board of Directors of the
Company (the "Board") or a committee appointed by the Board to administer this
Agreement (the "Committee") and the Board or the Committee, if so appointed,
shall have the authority to construe and interpret the terms of this Agreement
and to provide omitted terms to carry out this Agreement. Except with respect to
Section 3(v), any authority provided to the Company, the Board or Committee
herein shall also be provided to the Committee, if one is appointed by the
Board. The Committee shall have the authority to take all actions that it deems
advisable for the administration of this Agreement.
2. TRANSFER RESTRICTIONS; VESTING.
(a) Generally. Grantee shall not sell, assign, transfer, exchange,
pledge, encumber, gift, devise, hypothecate or otherwise dispose of
(collectively, "TRANSFER") any Restricted Shares prior to their vesting in
accordance with the Vesting Schedule set out in Appendix A. Further, even after
such Restricted Shares become vested, such vested Restricted Shares may not
be sold or otherwise disposed of in any manner which would constitute a
violation of any applicable federal or state securities or other applicable law
or Company policies as determined by Company on advice of counsel chosen by the
Company in its sole discretion. Restricted Shares shall vest as of each of the
Vesting Dates set out in Appendix A provided that Grantee remains an Employee
through the Vesting Date, except as may otherwise be provided herein.
(b) Dividends, etc. If the Company (i) declares a dividend or
makes a distribution on Common Stock in shares of Common Stock or (ii)
subdivides or reclassifies outstanding shares of Common Stock into a greater
number of shares of Common Stock or (iii) combines or reclassifies outstanding
shares of Common Stock into a smaller number of shares of Common Stock, then the
number of shares of Grantee's Common Stock subject to the transfer restrictions
in this Agreement shall be proportionally increased or reduced as to prevent
enlargement or dilution of Grantee's rights and duties hereunder. The
determination of the Company's Board of Directors regarding such adjustment
should be final and binding.
3. VESTING ON CHANGE IN CONTROL. Notwithstanding the provisions
in Section 2, on the date immediately preceding the date of a Change in Control
of the Company (as defined below), the Restricted Shares shall be 100% vested.
For purposes of this Agreement, a "CHANGE IN CONTROL" shall mean the occurrence
of any of the following events:
(i) the Company (A) shall not be the surviving entity in
any merger, consolidation or other reorganization (or survives only as
a subsidiary of an entity other than a previously wholly-owned
subsidiary of the Company) or (B) is to be dissolved and liquidated,
and as a result of or in connection with such transaction, the persons
who were directors of the Company before such transaction shall cease
to constitute a majority of the Board, or
(ii) any person or entity, including a "group" as
contemplated by Section 13(d)(3) of the Securities Exchange Act of
1934, as amended, acquires or gains ownership or control (including,
without limitation, power to vote) of 30% or more of the outstanding
shares of the Company's voting stock (based upon voting power), and as
a result of or in connection with such transaction, the persons who
were directors of the Company before such transaction shall cease to
constitute a majority of the Board, or
(iii) the Company sells all or substantially all of the
assets of the Company to any other person or entity (other than a
wholly-owned subsidiary of the Company) in a transaction that requires
shareholder approval pursuant to applicable corporate law; or
(iv) During a period of two consecutive calendar years,
individuals who at the beginning of such period constitute the Board,
and any new director(s) whose election by the Board or nomination for
election by the Company's stockholders was approved by a vote of at
least a majority of the directors then still in office, who either were
directors at the beginning of the two (2) year period or whose election
or nomination for election was previously so approved, cease for any
reason to constitute a majority of the Board; or
(v) any other event that a majority of the Board, in its
sole discretion, shall determine constitutes a Change in Control
hereunder.
2
4. FORFEITURE.
(a) Termination of Employment. If Grantee's employment with the
Company is terminated by the Company or Grantee for any reason, then Grantee
shall immediately forfeit all Restricted Shares which are unvested unless the
Board of Directors, in its sole discretion, determines that any or all of such
unvested Restricted Shares shall not be so forfeited.
(b) Forfeited Shares. Any Restricted Shares forfeited under this
Section 5 shall automatically revert to the Company and become canceled. Any
certificate(s) representing Restricted Shares which include forfeited shares
shall only represent that number of Restricted Shares which have not been
forfeited hereunder. Upon the Company's request, Grantee agrees for himself and
any other holder(s) to tender to the Company any certificate(s) representing
Restricted Shares which include forfeited shares for a new certificate
representing the unforfeited number of Restricted Shares.
5. ISSUANCE OF CERTIFICATE.
(a) The Company shall cause to be issued a stock certificate,
registered in the name of the Grantee, evidencing the Restricted Shares upon
receipt of a stock power duly endorsed in blank with respect to such shares. In
addition to any other legends that may be required by the Shareholders'
Agreement or otherwise, each such stock certificate shall bear the following
legend:
THE TRANSFERABILITY OF THIS CERTIFICATE AND THE SHARES OF
STOCK REPRESENTED HEREBY ARE SUBJECT TO THE RESTRICTIONS,
TERMS AND CONDITIONS (INCLUDING FORFEITURE AND RESTRICTIONS
AGAINST TRANSFER) CONTAINED IN THE RESTRICTED STOCK AGREEMENT
ENTERED INTO BETWEEN THE REGISTERED OWNER OF SUCH SHARES AND
CONTINENTAL SOUTHERN RESOURCES, INC.. COPIES OF THE RESTRICTED
STOCK AGREEMENT ARE ON FILE IN THE OFFICE OF THE SECRETARY OF
CONTINENTAL SOUTHERN RESOURCES, INC., LOCATED AT 0000 XXXXXX,
XXXXX 0000, XXXXXXX, XXXXX 00000.
Such legend shall not be removed from the certificate evidencing Restricted
Shares until such time as the restrictions thereon have lapsed.
(b) The certificate issued pursuant to this Section 6, together
with the stock powers relating to the Restricted Shares evidenced by such
certificate, shall be held by the Company. The Company may issue to the Grantee
a receipt evidencing the certificates held by it which are registered in the
name of the Grantee.
6. TAX REQUIREMENTS.
(a) Tax Withholding. The Company shall have the power and the
right to deduct or withhold, or require the Participant to remit to the Company,
an amount sufficient to satisfy
3
federal, state, and local taxes, domestic or foreign, required by law or
regulation to be withheld with respect to any taxable event arising as a result
of this grant.
(b) Share Withholding. With respect to tax withholding required
upon any taxable event arising as a result of this grant, Participant may elect,
subject to the approval of the Board or Committee in its sole discretion, to
satisfy the withholding requirement, in whole or in part, by having the Company
withhold shares of common stock having a Fair Market Value on the date the tax
is to be determined equal to the statutory total tax which could be imposed on
the transaction. All such elections shall be made in writing, signed by the
Participant, and shall be subject to any restrictions or limitations that the
Committee, in its discretion, deems appropriate. Any fraction of a share of
common stock required to satisfy such obligation shall be disregarded and the
amount due shall instead be paid in cash by the Participant.
7. MISCELLANEOUS.
(a) Certain Transfers Void. Any purported transfer of Restricted
Shares in breach of any provision of this Agreement shall be void and
ineffectual, and shall not operate to transfer any interest or title in the
purported transferee.
(b) No Fractional Shares. All provisions of this Agreement concern
whole shares of Common Stock. If the application of any provision hereunder
would yield a fractional share, the value of such fractional share shall be paid
to the Grantee in cash.
(c) Not an Employment Agreement. This Agreement is not an
employment agreement, and this Agreement shall not be, and no provision of this
Agreement shall be construed or interpreted to create any employment
relationship or right to continued employment with the Company, Company
affiliates, parent, subsidiary or their affiliates.
(d) Dispute Resolution.
(i) Arbitration. All disputes and controversies of every
kind and nature between any parties hereto arising out of or in
connection with this Agreement or the transactions described herein as
to the construction, validity, interpretation or meaning, performance,
non-performance, enforcement, operation or breach, shall be submitted
to arbitration pursuant to the following procedures:
(1) After a dispute or controversy arises, any
party may, in a written notice delivered to the other parties to the
dispute, demand such arbitration. Such notice shall designate the name
of the arbitrator (who shall be an impartial person) appointed by such
party demanding arbitration, together with a statement of the matter in
controversy.
(2) Within 30 days after receipt of such demand,
the other parties shall, in a written notice delivered to the first
party, name such parties' arbitrator (who shall be an impartial
person). If such parties fail to name an arbitrator, then the second
arbitrator shall be named by the American Arbitration Association (the
"AAA"). The two arbitrators so selected shall name a third arbitrator
(who shall be an impartial person) within 30 days, or in lieu of such
agreement on a third arbitrator by the two arbitrators so appointed,
the third arbitrator shall be appointed by the AAA. If any arbitrator
appointed
4
hereunder shall die, resign, refuse or become unable to act before an
arbitration decision is rendered, then the vacancy shall be filled by
the method set forth in this Section for the original appointment of
such arbitrator.
(3) Each party shall bear its own arbitration
costs and expenses. The arbitration hearing shall be held in Houston,
Texas at a location designated by a majority of the arbitrators. The
Commercial Arbitration Rules of the American Arbitration Association
shall be incorporated by reference at such hearing and the substantive
laws of the State of Texas (excluding conflict of laws provisions)
shall apply.
(4) The arbitration hearing shall be concluded
within ten (10) days unless otherwise ordered by the arbitrators and
the written award thereon shall be made within fifteen (15) days after
the close of submission of evidence. An award rendered by a majority of
the arbitrators appointed pursuant to this Agreement shall be final and
binding on all parties to the proceeding, shall resolve the question of
costs of the arbitrators and all related matters, and judgment on such
award may be entered and enforced by either party in any court of
competent jurisdiction.
(5) Except as set forth in Section 7(d)(ii), the
parties stipulate that the provisions of this Section shall be a
complete defense to any suit, action or proceeding instituted in any
federal, state or local court or before any administrative tribunal
with respect to any controversy or dispute arising out of this
Agreement or the transactions described herein. The arbitration
provisions hereof shall, with respect to such controversy or dispute,
survive the termination or expiration of this Agreement.
No party to an arbitration may disclose the existence or results of any
arbitration hereunder without the prior written consent of the other
parties; nor will any party to an arbitration disclose to any third
party any confidential information disclosed by any other party to an
arbitration in the course of an arbitration hereunder without the prior
written consent of such other party.
(ii) Emergency Relief. Notwithstanding anything in this
Section 7(d) to the contrary, any party may seek from a court any
provisional remedy that may be necessary to protect any rights or
property of such party pending the establishment of the arbitral
tribunal or its determination of the merits of the controversy or to
enforce a party's rights under Section 7(d).
(e) Notices. Any notice, instruction, authorization, request or
demand required hereunder shall be in writing, and shall be delivered either by
personal in-hand delivery, by telecopy or similar facsimile means, by certified
or registered mail, return receipt requested, or by courier or delivery service,
addressed to the Company at the address indicated beneath its signature on the
execution page of this Agreement, and to Grantee at his address indicated on the
Company's stock records, or at such other address and number as a party shall
have previously designated by written notice given to the other party in the
manner herein set forth. Notices shall be deemed given when received, if sent by
facsimile means (confirmation of such receipt by confirmed facsimile
transmission being deemed receipt of communications sent by facsimile means),
and when delivered and receipted for (or upon the date of attempted delivery
where
5
delivery is refused), if hand-delivered, sent by express courier or delivery
service, or sent by certified or registered mail, return receipt requested.
(f) Amendment and Waiver. This Agreement may be amended, modified
or superseded only by written instrument executed by the Company and Grantee.
Any waiver of the terms or conditions hereof shall be made only by a written
instrument executed and delivered by the party waiving compliance. Any amendment
or waiver agreed to by the Company shall be effective only if executed and
delivered by a duly authorized executive officer of the Company other than
Grantee. The failure of any party at any time or times to require performance of
any provisions hereof shall in no manner effect the right to enforce the same.
No waiver by any party of any term or condition in this Agreement, or breach
thereof, in one or more instances shall be deemed a continuing waiver of any
such condition or breach, a waiver of any other condition, or the breach of any
other term or condition.
(g) Independent Legal and Tax Advice. The Grantee has been advised
and Grantee hereby acknowledges that he or she has been advised to obtain
independent legal and tax advice regarding this grant of Restricted Shares and
the disposition of such shares, including, without limitation, the election
available under Section 83(b) of the Internal Revenue Code.
(h) Governing Law and Severability. This Agreement shall be
governed by the internal laws, and not the laws of conflict, of the State of
Texas. The invalidity of any provision of this Agreement shall not affect any
other provision of this Agreement which shall remain in full force and effect.
(i) Successors and Assigns. Subject to the limitations which this
Agreement imposes upon transferability of Restricted Shares, this Agreement
shall bind, be enforceable by and inure to the benefit of the Company and its
successors and assigns, and Grantee, and, upon his death, on his estate and
beneficiaries thereof (whether by will or the laws of descent and distribution).
(j) Community Property. Each spouse individually is bound by, and
such spouse's interest, if any, in any shares is subject to, the terms of this
Agreement. Nothing in this Agreement shall create a community property interest
where none otherwise exists.
(k) Entire Agreement. This Agreement supersedes any and all other
prior understandings and agreements, either oral or in writing, between the
parties with respect to the subject matter hereof and constitute the sole and
only agreements between the parties with respect to the said subject matter. All
prior negotiations and agreements between the parties with respect to the
subject matter hereof are merged into this Agreement. Each party to this
Agreement acknowledges that no representations, inducements, promises, or
agreements, orally or otherwise, have been made by any party or by anyone acting
on behalf of any party, which are not embodied in this Agreement and that any
agreement, statement or promise that is not contained in this Agreement shall
not be valid or binding or of any force or effect.
[SIGNATURE PAGE FOLLOWS]
6
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed on the date first above written.
COMPANY:
CONTINENTAL SOUTHERN RESOURCES, INC.
By: /s/ XXXXXXX X. XXXXXXXXXX
----------------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: President
Address: Continental Southern Resources, Inc.
0000 Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Telecopy No.: (000) 000-0000
Attention: Secretary
GRANTEE:
*
---------------------------------------------
* A form of this Agreement was executed by
each of Xxxxxxx X. Xxxxxxxx and Xxxx X. Xxxxx
7
APPENDIX A TO
RESTRICTED STOCK AGREEMENT
GRANTEE'S NAME: _____________________
NUMBER OF
GRANT DATE: RESTRICTED SHARES GRANTED
----------- -------------------------
February 26, 2004 250,000
VESTING SCHEDULE:
DATE NUMBER OF SHARES VESTED
---- -----------------------
January 1, 2005 33-1/3 of Restricted Shares
January 1, 2006 33-1/3 of Restricted Shares
January 1, 2007 33-1/3 of Restricted Shares
Note: All vesting is subject to the terms and conditions of the Agreement.
8
