RESTRICTED STOCK AGREEMENT
THIS AGREEMENT, made as of this ____ day of _____, 2000, by and between
Southwestern Energy Company, a corporation (the "Company") and ________________
(the "Participant").
WITNESSETH:
WHEREAS, the Participant is now serving as an officer or key employee
of the Company and the Company desires to afford the Participant the opportunity
to acquire, or enlarge, the Participant's stock ownership in the Company so that
the Participant may have a direct proprietary interest in the Company's success;
NOW, THEREFORE, in consideration of the covenants and agreement herein
contained, the parties hereto hereby agree as follows:
1. Grant of Restricted Stock
The Company hereby grants to the Participant, subject to the terms and
conditions herein set forth, the right to receive from the Company ____ shares
of Restricted Stock ($.10 par value) of the Company to be issued from treasury
shares separate and apart from the Southwestern Energy Company 2000 Stock
Incentive Plan.
2. Definitions
(a) "Change in Control" shall mean the occurrence of any of the
following:
(i) any "person" (as such term is used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934 (the "Exchange Act"), an
"Acquiring Person") becomes the "beneficial owner" (as such term is
defined in Rule 13d-3 promulgated under the Exchange Act), directly or
indirectly, of securities of Southwestern representing 20% or more of
the combined voting power of Southwestern's then outstanding
securities, provided, however, that any acquisition by (A) Southwestern
or any of its subsidiaries, or any employee benefit plan (or related
trust) sponsored or maintained by Southwestern or any of its
subsidiaries or (B) any corporation with respect to which, immediately
following such acquisition, more than 60% of, respectively, the then
outstanding shares of Common Stock of such corporation and the combined
voting power of the then outstanding voting securities of such
corporation entitled to vote generally in the election of directors is
then beneficially owned, directly or indirectly, in the aggregate by
all or substantially all of the individuals and entities who were the
beneficial owners, respectively, of the outstanding Southwestern Common
Stock and Southwestern voting securities immediately prior to such
acquisition in substantially the same proportion as their ownership,
immediately prior to
such acquisition, of the outstanding Southwestern Common Stock and
Southwestern voting securities, as the case may be, shall not
constitute a Change in Control;
(ii) consummation by Southwestern of a reorganization, merger or
consolidation (a "Business Combination"), in each case, with respect to
which all or substantially all of the individuals and entities who were
their respective beneficial owners of the outstanding Southwestern
Common Stock and Southwestern voting securities immediately prior to
such Business Combination do not in the aggregate, immediately
following such Business Combination, beneficially own, directly or
indirectly, more than 60% 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 in substantially the same proportion as their
ownership immediately prior to such Business Combination of the
outstanding Southwestern Common Stock and Southwestern voting
securities, as the case may be;
(iii) any individual who is nominated by the Board for election to
the Board on any date fails to be so elected as a direct or indirect
result of any proxy fight or contested election for positions on the
Board;
(iv) a "change in control" of Southwestern of a nature that would
be required to be reported in response to Item 6(e) of Schedule 14A of
Regulation 14A promulgated under the Exchange Act occurs;
(v) (A) a complete liquidation or dissolution of Southwestern or
(B) a sale or other disposition of all or substantially all of the
assets of both the Exploration and Production and the Utility business
segments of Southwestern other than to a corporation with respect to
which, immediately following such sale or disposition, more than 80%
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 is then
beneficially owned, directly or indirectly, in the aggregate by all or
substantially all of the individuals and entities who were the
beneficial owners, respectively, of the outstanding Southwestern Common
Stock and Southwestern voting securities immediately prior to such sale
or disposition in substantially the same proportion as their ownership
of the outstanding Southwestern Common Stock and Southwestern voting
securities, as the case may be, immediately prior to such sale or
disposition;
(vi) other than with respect to a person who is employed in the
Utility business segment of Southwestern, the sale or other disposition
of all or substantially all the assets of the Exploration and
Production business segment other than to a corporation with respect to
which, immediately following such sale or disposition, more than 80%
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
2
directors is then beneficially owned, directly or indirectly, in the
aggregate by all or substantially all of the individuals and entities
who were the beneficial owners, respectively, of the outstanding
Southwestern Common Stock and Southwestern voting securities
immediately prior to such sale or disposition in substantially the same
proportion as their ownership of the outstanding Southwestern Common
Stock and Southwestern voting securities, as the case may be,
immediately prior to such sale or disposition; or
(vii) a majority of the Board determines in its sole and absolute
discretion that there has been a Change in Control of Southwestern or
that there will be a Change in Control of Southwestern upon the
occurrence of certain specified events and such events occur.
(b) "Committee" shall mean the Compensation Committee of the Board of
Directors or such other committee as the Board of Directors shall
appoint from time to time to administer this agreement and to
otherwise exercise and perform the authority and functions
assigned to the Committee under the terms of hereto.
(c) "Common Stock" shall mean Southwestern's Common Stock, $.10 par
value per share, or any other security into which the common stock
shall be changed pursuant to the adjustment provisions of Section
4 hereto.
(d) "Company" shall mean Southwestern and each of its Subsidiaries.
(e) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(f) "Issue Date" shall mean the date established by the Committee on
which certificates representing shares of Restricted Stock shall
be issued by Southwestern pursuant to the terms hereto.
(g) "Person" shall mean a "person," as such term is used in Sections
13(d) and 14(d) of the Exchange Act.
(h) "Restricted Stock" shall mean a share of Common Stock which is
granted pursuant to Section 3 hereto and which is subject to the
restrictions set forth hereto for so long as such restrictions
continue to apply to such share.
(i) "Securities Act" shall mean the Securities Act of 1933, as
amended.
(j) "Vesting Date" shall mean the date established by the Committee on
which a share of Restricted Stock may vest.
3
3. Term and Restrictions
(a) Issue Date and Vesting Date
The Issue Date of the Restricted Stock granted hereunder shall be the
effective date of this agreement. Except as provided in Sections 3(c) and 3(f),
stock certificates representing the shares of Restricted Stock granted hereunder
shall be issued in accordance with Section 3(d) hereof. Such shares shall vest
ratably over a three year period from the date hereof (the "Vesting Dates").
Except as provided in Sections 3(c) and 3(f), and provided that all conditions
to the vesting of a share of Restricted Stock imposed pursuant to Section 3(b)
hereof are satisfied, upon the occurrence of the Vesting Date with respect to a
share of Restricted Stock, such share shall vest and the restrictions of Section
3(c) hereof shall cease to apply to such share.
(b) Conditions to Vesting
Except for continuation of employment with the Company as provided in
Section 3(f) hereof, there are no conditions to the vesting of the shares of
Restricted Stock granted hereunder.
(c) Restrictions on Transfer Prior to Vesting
Prior to the vesting of a share of Restricted Stock, such share of
Restricted Stock shall not be transferable under any circumstances and no
transfer of a Participant's rights with respect to such share, whether voluntary
or involuntary, by operation of law or otherwise, shall vest the transferee with
any interest or right in or with respect to such share, but immediately upon any
attempt to transfer such rights, such share, and all of the rights related
thereto, shall be cancelled and shall be forfeited by the Participant and the
transfer shall be of no force or effect.
(d) Issuance of Certificates
(1) Except as provided in Section 3(c) or 3(f) hereof, reasonably
promptly after the Issue Date with respect to shares of Restricted Stock, the
Company shall cause to be issued stock certificates, registered in the name of
the Participant to whom such shares were granted, evidencing such shares;
provided, that the Company shall not cause to be issued such a stock certificate
unless it has received a stock power duly endorsed in blank with respect to such
shares. 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 provisions and
restrictions against transfer) contained in an Agreement
entered into between the registered owner of such shares and
Southwestern Energy Company. A copy of the Agreement is on
file in the office of the
4
Secretary of Southwestern Energy Company, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
Such legend shall not be removed from the certificate evidencing such shares
unless and until such shares become vested and the restrictions on the transfer
thereof lapse pursuant to the terms hereof and any agreement evidencing such
Restricted Stock.
(2) Each certificate issued pursuant to Section 3(d)(1) hereof,
together with the stock powers relating to the shares of Restricted Stock
evidenced by such certificate, shall be deposited by the Company with a
custodian designated by the Company. The Company shall cause such custodian to
issue to the Participant a receipt evidencing the certificates held by it which
are registered in the name of the Participant.
(e) Consequences Upon Vesting
Upon the vesting of a share of Restricted Stock pursuant to the terms
hereof, the restrictions of Section 3(c) hereof shall cease to apply to such
share. Reasonably promptly after a share of Restricted Stock vests pursuant to
the terms hereof, the Company shall cause to be issued and delivered to the
Participant, a certificate evidencing such share, free of the legend set forth
in Section 3(d)(1) hereof, together with any other property of the Participant
held by the custodian pursuant to Section 3(d)(2) hereof.
(f) Effect of Termination of Employment
In the event that the employment of a Participant with the Company
shall terminate for any reason prior to the vesting of shares of Restricted
Stock, all shares of Restricted Stock granted to the Participant hereunder which
have not vested as of the date of such termination shall be immediately
forfeited.
(g) Effect of Change in Control
Upon the occurrence of a Change in Control, all shares of Restricted
Stock granted hereunder which have not theretofore vested, or been canceled or
forfeited pursuant to any provision hereof, shall immediately vest.
4. Adjustment Upon Changes in Common Stock
(a) Outstanding Restricted Stock
Unless the Committee in its absolute discretion otherwise determines,
any securities or other property (including dividends paid in cash) received by
the Participant with respect to a share of Restricted Stock, the Issue Date with
respect to which occurs prior to such event, but which has not vested as of the
date of such event, as a result of any dividend, stock split, reverse
5
stock split, recapitalization, merger, consolidation, combination, exchange of
shares or otherwise will not vest until such share of Restricted Stock vests,
and shall be promptly deposited with the custodian designated pursuant to
Paragraph 3(d)(2) hereof. The Committee has determined that the right to receive
cash dividends paid on the shares of Restricted Stock shall vest on the Issue
Date.
The Committee may, in its absolute discretion, adjust the grant of
shares of Restricted Stock made hereunder, provided the Issue Date has not
occurred as of the date of the occurrence of any of the following events, to
reflect any dividend, stock split, reverse stock split, recapitalization,
merger, consolidation, combination, exchange of shares or similar corporate
change as the Committee may deem appropriate to prevent the enlargement or
dilution of rights of the Participant under the grant.
(b) No Other Rights
Except as expressly provided herein, the Participant shall have no
rights by reason of any subdivision or consolidation of shares of stock of any
class, the payment of any dividend, any increase or decrease in the number of
shares of stock of any class or any dissolution, liquidation, merger or
consolidation of the Company or any other corporation. Except as expressly
provided herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number of shares
of Common Stock subject to the Restricted Stock granted hereunder.
5. Rights as a Shareholder
No person shall have any rights as a stockholder with respect to any
shares of Common Stock covered by or relating to the Restricted Stock granted
hereunder until the date of the issuance of a stock certificate with respect to
such shares. Except as otherwise expressly provided in Section 4 hereof, no
adjustment to the Restricted Stock shall be made for dividends or other rights
for which the record date occurs prior to the date such stock certificate is
issued.
6. No Special Employment Rights; No Right To Restricted Stock
Nothing contained herein shall confer upon the Participant any right
with respect to continuation of the Participant's employment by the Company or
interfere in any way with the right of the Company, subject to the terms of any
separate employment agreement to the contrary, at any time to terminate such
employment or to increase or decrease the compensation of the Participant from
the rate in existence on the date hereof. The grant of the Restricted Stock
hereunder shall neither require or prevent the granting of any subsequent
Restricted Stock to the Participant or any other person.
6
7. Securities Matters
Southwestern shall be under no obligation to effect the registration
pursuant to the Securities Act of any shares of Common Stock to be issued
hereunder or to effect similar compliance under any state laws. Notwithstanding
anything herein to the contrary, Southwestern shall not be obligated to cause to
be issued or delivered any certificates evidencing shares of Common Stock
pursuant to this agreement unless and until Southwestern is advised by its
counsel that the issuance and delivery of such certificates is in compliance
with all applicable laws, regulations of governmental authority and the
requirements of any securities exchange on which shares of Common Stock are
traded. The Committee may require, as a condition to the issuance and delivery
of certificates evidencing shares of Common Stock pursuant to the terms hereof,
that the recipient of such shares make such covenants, agreements and
representations, and that such certificates bear such legends, as the Committee
deems necessary or desirable.
8. Withholding Taxes
(a) Cash Remittance
Whenever shares of Common Stock are to be issued upon the occurrence of
the Issue Date or the Vesting Date and whenever dividends are paid in respect of
non-vested shares of restricted stock, the Company shall have the right to
require the Participant to remit to the Company in cash an amount sufficient to
satisfy federal, state and local withholding tax requirements, if any,
attributable to such occurrence prior to the delivery of any certificate or
certificates for such shares.
(b) Stock Remittance
Subject to Section 8(a) hereof, at the election of the Participant,
subject to the approval of the Committee, when shares of Common Stock are to be
issued upon the occurrence of the Issue Date or the Vesting Date, in lieu of the
remittance required by Section 8(a) hereof, the Participant may tender to the
Company a number of shares of Common Stock owned by the Participant for at least
six months having a Fair Market Value at the tender date determined by the
Committee to be sufficient to satisfy the federal, state and local withholding
tax requirements, if any, attributable to such exercise and not greater than the
Participant's estimated total federal, state and local tax obligations
associated with such exercise.
(c) Stock Withholding
The Company shall have the right, when shares of Common Stock are to be
issued upon the occurrence of the Issue Date or the Vesting Date, in lieu of
requiring the remittance required by Section 8(a) hereof, to withhold a number
of such shares, the Fair Market Value of which at the exercise date the
Committee determines to be sufficient to satisfy the federal, state and local
7
withholding tax requirements, if any, attributable to such occurrence and is not
greater than the Participant's estimated total federal, state and local tax
obligations associated with such exercise.
(d) Timing and Method of Elections
Notwithstanding any other provisions hereof, if the Participant is
subject to Section 16(b) of the Exchange Act, the Participant may only make the
election described in Section 8(b) hereof provided that the Participant is in
compliance with the Southwestern Energy Company Statement of Company Policy on
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and the Southwestern Energy Company Policy Regarding Special
Trading Procedures.
9. Transfers Upon Death
No transfer by Will or the laws of descent and distribution of the
Restricted Stock granted hereunder, shall be effective to bind the Company
unless the Committee shall have been furnished with (a) written notice thereof
and with a copy of the Will and/or such evidence as the Committee may deem
necessary to establish the validity of the transfer and (b) an agreement by the
transferee to comply with all the terms and conditions of this Agreement that
are or would have been applicable to the Participant and to be bound by the
acknowledgments made by the Participant in connection with the grant of the
Restricted Stock.
10. Failure to Comply
In addition to the remedies of the Company elsewhere provided for
herein, failure by the Participant (or beneficiary) to comply with any of the
terms and conditions of this Agreement, unless such failure is remedied by the
Participant (or beneficiary) within ten days after having been notified of such
failure by the Committee, shall be grounds for the cancellation and forfeiture
of the Restricted Stock, in whole or in part as the Committee, in its absolute
discretion, may determine.
11. Applicable Law
Except to the extent preempted by any applicable federal law, this
Agreement will be construed and administered in accordance with the laws of the
State of Arkansas, without reference to the principles of conflicts of law.
12. Notices
Any notice hereunder to the Company shall be addressed to it at its
office, P. O. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇: Attention: Secretary, and
any notice hereunder to the Participant shall be addressed to the Participant at
__________________________________________. Either party may designate at any
time hereafter in writing some other address.
8
IN WITNESS WHEREOF, Southwestern Energy Company has caused this
Agreement to be executed by its undersigned duly authorized officer as of the
___ day of _____, 2000.
SOUTHWESTERN ENERGY COMPANY
ATTEST: (Seal) By:____________________________
President and Chief
Executive Officer
By:____________________________
Executive Vice President and
Chief Financial Officer
____________________________
(Participant)
9
