Exhibit 4.4
CHILES OFFSHORE INC.
2000 STOCK OPTION PLAN
I. PURPOSE. The Chiles Offshore Inc. 2000 Stock Option Plan (the "Plan")
is intended to provide incentives which will attract, retain and
motivate select officers, key employees and other persons providing
services to Chiles Offshore Inc. (the "Company") and its subsidiaries
and affiliates, by providing them opportunities to acquire shares of
the Company's common stock, par value $.01 per share ("Common
Stock"), or to receive monetary payments based on the value of such
shares pursuant to the Benefits (as defined below) described herein.
Furthermore, the Plan is intended to assist in aligning the interests
of the Company's officers, key employees and other persons providing
services to those of the Company's stockholders.
II. ADMINISTRATION.
A. The Plan will be administered by a committee (the
"Committee") appointed by the Board of Directors of the
Company from among its members (which may be the
Compensation Committee) and shall be comprised, unless
otherwise determined by the Board of Directors, of not
less than two members who shall be (i) "Non-Employee
Directors" within the meaning of Rule 16b-3(b)(3) (or any
successor rule) promulgated under the Securities Exchange
Act of 1934, as amended (the "Exchange Act") and (ii)
"outside directors" within the Treasury Regulation Section
1.162-27(e)(3) under Section 162(m) of the Internal
Revenue Code of 1986, as amended (the "Code"). The
Committee is authorized, subject to the provisions of the
Plan, to establish such rules and regulations as it deems
necessary for the proper administration of the Plan and to
make such determinations and interpretations and to take
such action in connection with the Plan and any Benefits
granted hereunder as it deems necessary or advisable. In
particular, the Committee may establish or waive the terms
and conditions applicable to any Benefit awarded under the
Plan and may waive any or all of such terms and
conditions. All determinations and interpretations made by
the Committee shall be binding and conclusive on all
participants and their legal representatives. No member of
the Board of the Directors, no member of the Committee and
no employee of the Company shall be liable for any act or
failure to act hereunder, except in circumstances
involving his or her bad faith, gross negligence or
willful misconduct, or for any act or failure to act
hereunder by any other member or employee or by any agent
to whom duties in connection with the administration of
this Plan have been delegated. The Company shall indemnify
members of the Committee and any agent of the Committee
who is an employee of the Company, a subsidiary or an
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affiliate against any and all liabilities or expenses to
which they may be subjected by reason of any act or
failure to act with respect to their duties on behalf of
the Plan, except in circumstances involving such person's
bad faith, gross negligence or willful misconduct.
B. The Committee may delegate to one or more of its members,
or to one or more agents, such administrative duties as it
may deem advisable, and the Committee, or any person to
whom it has delegated duties as aforesaid, may employ one
or more persons to render advice with respect to any
responsibility the Committee or such person may have under
the Plan. The Committee may employ such legal or other
counsel, consultants and agents as it may deem desirable
for the administration of the Plan and may rely upon any
opinion or computation received from any such counsel,
consultant or agent. Expenses incurred by the Committee in
the engagement of such counsel, consultant or agent shall
be paid by the Company, or the subsidiary or affiliate
whose employees have benefited from the Plan, as
determined by the Committee.
III. PARTICIPANTS. Participants will consist of such officers, key
employees and other persons providing services to the Company and its
subsidiaries and affiliates as the Committee in its sole discretion
determines to be significantly responsible for the success and future
growth and profitability of the Company and whom the Committee may
designate from time to time to receive Benefits under the Plan.
Designation of a participant in any year shall not require the
Committee to designate such person to receive a Benefit in any other
year or, once designated, to receive the same type or amount of
Benefit as granted to the participant in any other year. The
Committee shall consider such factors as it deems pertinent in
selecting participants and in determining the type and amount of
their respective Benefits.
IV. TYPE OF BENEFITS. Benefits under the Plan may be granted in any one
or a combination of (a) Stock Options, (b) Stock Appreciation Rights,
(c) Stock Awards, (d) Performance Awards and (e) Stock Units (each as
described below, and collectively, the "Benefits"). Benefits shall be
evidenced by agreements (which need not be identical) in such forms
as the Committee may from time to time approve; provided, however,
that in the event of any conflict between the provisions of the Plan
and any such agreements, the provisions of the Plan shall prevail.
The maximum number of shares of Common Stock with respect to which
Benefits may be granted or measured to any individual participant
under the Plan during any two calendar years shall not exceed
200,000, subject to any adjustments made in accordance with Section
12.
V. COMMON STOCK AVAILABLE UNDER THE PLAN. The aggregate number of shares
of Common Stock that may be subject to Benefits, including Stock
Options, granted under this Plan shall be the lesser of 1.1 million
shares of Common Stock or five percent (5%) of the outstanding Common
Stock on a fully diluted basis as of the date of the completion of an
initial public offering of Common Stock, subject to any adjustments
made in accordance with Section 12 hereof. Shares of Common Stock
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subject to the Plan may be authorized and unissued shares or treasury
shares. Any shares of Common Stock subject to a Stock Option or Stock
Appreciation Right which for any reason is canceled or terminated
without having been exercised, any shares subject to Stock Awards,
Performance Awards or Stock Units which are forfeited, any shares
subject to Benefits settled in cash or any shares delivered to the
Company as part or full payment for the exercise of a Benefit shall
again be available for Benefits under the Plan. The preceding
sentence shall apply only for purposes of determining the aggregate
number of shares of Common Stock subject to Benefits but shall not
apply for purposes of determining the maximum number of shares of
Common Stock with respect to which Benefits (including the maximum
number of shares of Common Stock subject to Stock Options and Stock
Appreciation Rights) that may be grated to any individual participant
under the Plan.
VI. STOCK OPTIONS. Stock Options will consist of awards from the Company
that will enable the holder to purchase a specific number of shares
of Common Stock, at set terms and at a fixed purchase price. Stock
Options may be "incentive stock options" ("Incentive Stock Options"),
within the meaning of Section 422 of the Code, or Stock Options which
do not constitute Incentive Stock Options ("Nonqualified Stock
Options"). The Committee will have the authority to grant to any
participant one or more Incentive Stock Options, Nonqualified Stock
Options, or both types of Stock Options (in each case with or without
Stock Appreciation Rights); provided that Stock Options granted to
any person who is not an employee of the Company or any parent or
subsidiary corporation thereof (as defined in Section 424 of the
Code) shall not be traded as Incentive Stock Options. Each Stock
Option shall be subject to such terms and conditions consistent with
the Plan as the Committee may impose from time to time, subject to
the following limitations:
A. EXERCISE PRICE. Each Stock Option granted hereunder shall
have such per-share exercise price as the Committee may
determine at the date of grant; provided, however, subject
to subsection (d) below that the per-share exercise price
shall not be less than 90% of the Fair Market Value (as
defined below) of the Common Stock on the date the Stock
Option is granted.
B. PAYMENT OF EXERCISE PRICE. The option exercise price may
be paid in cash or, in the discretion of the Committee, by
the delivery of shares of Common Stock then owned by the
participant, or by a combination of these methods. In the
discretion of the Committee, payment may also be made by
delivering a properly executed exercise notice to the
Company together with a copy of irrevocable instructions
to a broker to deliver promptly to the Company the amount
of sale or loan proceeds to pay the exercise price. To
facilitate the foregoing, the Company may enter into
agreements for coordinated procedures with one or more
brokerage firms. The Committee may prescribe any other
method of paying the exercise price that it determines to
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be consistent with applicable law and the purpose of the
Plan, including, without limitation, in lieu of the
exercise of a Stock Option by delivery of shares of Common
Stock of the Company then owned by a participant,
providing the Company with a notarized statement attesting
to the number of shares owned, where upon verification by
the Company, the Company would issue to the participant
only the number of incremental shares to which the
participant is entitled upon exercise of the Stock Option.
The Committee may, at the time of grant, provide for the
grant of a subsequent Restoration Stock Option if the
exercise price is paid for by delivering previously owned
shares of Common Stock of the Company. Restoration Stock
Options (i) may be granted in respect of no more than the
number of shares of Common Stock tendered in exercising
the predecessor Stock Option, (ii) shall have an exercise
price equal to the Fair Market Value on the date the
Restoration Stock Option is granted, and (iii) may have an
exercise period that does not extend beyond the remaining
term of the predecessor Stock Option. In determining which
methods a participant may utilize to pay the exercise
price, the Committee may consider such factors as it
determines are appropriate.
C. EXERCISE PERIOD. Stock Options granted under the Plan
shall be exercisable at such time or times and subject to
such terms and conditions as shall be determined by the
Committee; provided, however, that no Stock Option shall
be exercisable later than ten years after the date it is
granted except in the event of a participant's death, in
which case, the exercise period of such participant's
Stock Options may be extended beyond such period but no
later than one year after the participant's death. All
Stock Options shall terminate at such earlier times and
upon such conditions or circumstances as the Committee
shall in its discretion set forth in such option agreement
at the date of grant; provided, however, the Committee
may, in its sole, discretion, later wave any such
condition.
D. LIMITATIONS ON INCENTIVE STOCK OPTIONS. Incentive Stock
Options may be granted only to participants who are
employees of the Company or one of its subsidiaries
(within the meaning of Section 424(f) of the Code) at the
date of grant. The per share exercise price of an
Incentive Stock Option shall not be less than the Fair
Market Value (determined as of the date of grant of such
option) of a share of Common Stock. The aggregate Fair
Market Value (determined as of the time the option is
granted) of the Common Stock with respect to which
Incentive Stock Options are exercisable for the first time
by a participant during any calendar year (under all
option plans of the Company and of any parent corporation
or subsidiary corporation (as defined in Sections 424(e)
and (f) of the Code, respectively)) shall not exceed
$100,000. For purposes of the preceding sentence,
Incentive Stock Options will be taken into account in the
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order in which they are granted. Incentive Stock Options
may not be granted to any participant who, at the time of
grant, owns stock possessing (after the application of the
attribution rules of Section 424(d) of the Code) more than
10% of the total combined voting power of all classes of
stock of the Company or any parent or subsidiary
corporation of the Company, unless the option price is
fixed at not less than 110% of the Fair Market Value of
the Common Stock on the date of grant and the exercise of
such option is prohibited by its terms after the
expiration of five years from the date of grant of such
option. Notwithstanding anything to the contrary contained
herein, no Incentive Stock Option may be exercised later
than ten years after the date it is granted.
E. POST-EMPLOYMENT EXERCISES. The exercise of any Stock
Option after termination of employment shall be in
accordance with the terms and subject to the conditions
established by the Committee pursuant to Section 6(c)
hereof and, in any case, shall be further subject to
satisfaction of the conditions precedent that the
Participant neither (i) competes with, or takes other
employment with or renders services to a competitor of,
the Company, its subsidiaries or affiliates without the
written consent of the Company, nor (ii) conducts himself
or herself in a manner adversely affecting the
Corporation; provided, however, that the Committee, in its
sole discretion, may wave any conditions imposed in the
grant letter or as set forth in (i) and (ii) above
relating to the exercise of options after the date of
termination of employment during the terms of the option.
VII. STOCK APPRECIATION RIGHTS.
A. The Committee may, in its discretion, grant Stock
Appreciation Rights to the holders of any Stock Options
granted hereunder. In addition, Stock Appreciation Rights
may be granted independently of, and without relation to,
Stock Options. A Stock Appreciation Right means a right to
receive a payment, in cash, Common Stock or a combination
thereof, in an amount equal to the excess of (x) the Fair
Market Value, or other specified valuation, of a specified
number of shares of Common Stock on the date the right is
exercised over (y) the Fair Market Value, or other
specified valuation (which shall be no less than the Fair
Market Value), of such shares of Common Stock on the date
the right is granted, all as determined by the Committee;
provided, however, that if a Stock Appreciation Right is
granted retroactively in tandem with or in substitution
for a Stock Option, the designated Fair Market Value in
the award agreement may be the Fair Market Value on the
date such Stock Option was granted. Each Stock
Appreciation Right shall be subject to such terms and
conditions as the Committee shall impose from time to
time.
B. Stock Appreciation Rights granted under the Plan shall be
exercisable at such time or times and subject to such
terms and conditions as shall be determined by the
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Committee; provided, however, that no Stock Appreciation
Rights shall be exercisable later than ten years after the
date it is granted except in the event of a participant's
death, in which case, the exercise period of such
participant's Stock Appreciation Rights may be extended
beyond such period but no later than one year after the
participant's death. All Stock Appreciation Rights shall
terminate at such earlier times and upon such conditions
or circumstances as the Committee shall in its discretion
set forth in such option at the date of grant.
C. The exercise of any Stock Appreciation Right after
termination of employment shall be subject to satisfaction
of the conditions precedent that the Participant neither
(i) competes with, or takes other employment with or
renders services to a competitor of, the Company, its
subsidiaries or affiliates without the written consent of
the Company, nor (ii) conducts himself or herself in a
manner adversely affecting the Corporation; provided,
however, that the Committee, in its sole discretion, may
wave any conditions imposed in the grant letter or as set
forth in (i) and (ii) above relating to the exercise of
options after the date of termination of employment during
the terms of the option.
VIII. STOCK AWARDS. The Committee may, in its discretion, grant Stock
Awards (which may include mandatory payment of bonus incentive
compensation in stock) consisting of Common Stock issued or
transferred to participants with or without other payments therefor.
Stock Awards may be subject to such terms and conditions as the
Committee determines appropriate, including, without limitation,
restrictions on the sale or other disposition of such shares, the
right of the Company to reacquire such shares for no consideration
upon termination of the participant's employment within specified
periods, and conditions requiring that the shares be earned in whole
or in part upon the achievement of performance goals established by
the Committee over a designated period of time. The Committee may
require the participant to deliver a duly signed stock power,
endorsed in blank, relating to the Common Stock covered by such an
Award. The Committee may also require that the stock certificates
evidencing such shares be held in custody or bear restrictive legends
until the restrictions thereon shall have lapsed. The Stock Award
shall specify whether the participant shall have, with respect to the
shares of Common Stock subject to a Stock Award, all of the rights of
a holder of shares of Common Stock of the Company, including the
right to receive dividends and to vote the shares.
IX. PERFORMANCE AWARDS.
A. Performance Awards may be granted to participants at any
time and from time to time, as shall be determined by the
Committee. The Committee shall have complete discretion in
determining the number, amount and timing of awards
granted to each participant. Such Performance Awards may
be in the form of shares of Common Stock or Stock Units.
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Performance Awards may be awarded as short-term or
long-term incentives. The Committee shall set performance
targets at its discretion which, depending on the extent
to which they are met, will determine the number and/or
value of Performance Awards that will be paid out to the
participants, and may attach to such Performance Awards
one or more restrictions. Performance targets may be based
upon, without limitation, Company-wide, divisional and/or
individual performance.
B. The Committee shall have the authority at any time to make
adjustments to performance targets for any outstanding
Performance Awards which the Committee deems necessary or
desirable unless at the time of establishment of such
targets the Committee shall have precluded its authority
to make such adjustments.
C. Payment of earned Performance Awards shall be made in
accordance with terms and conditions prescribed or
authorized by the Committee. The participant may elect to
defer, or the Committee may require or permit the deferral
of, the receipt of Performance Awards upon such terms as
the Committee deems appropriate.
X. STOCK UNITS.
A. The Committee may, in its discretion, grant Stock Units to
participants hereunder. The Committee shall determine the
criteria for the vesting of Stock Units. A Stock Unit
granted by the Committee shall provide payment in shares
of Common Stock at such time as the award agreement shall
specify. Shares of Common Stock issued pursuant to this
Section 10 may be issued with or without other payments
therefor as may be required by applicable law or such
other consideration as may be determined by the Committee.
The Committee shall determine whether a participant
granted a Stock Unit shall be entitled to a Dividend
Equivalent Right (as defined below).
B. Upon vesting of a Stock Unit, unless the Committee has
determined to defer payment with respect to such unit or a
participant has elected to defer payment under subsection
(c) below, shares of Common Stock representing the Stock
Units shall be distributed to the participant unless the
Committee provides for the payment of the Stock Units in
cash or partly in cash and partly in shares of Common
Stock equal to the value of the shares of Common Stock
which would otherwise be distributed to the participant.
C. Prior to the year with respect to which a Stock Unit may
vest, the participant may elect not to receive a
distribution upon the vesting of such Stock Unit and for
the Company to continue to maintain the Stock Unit on its
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books of account. In such event, the value of a Stock Unit
shall be payable in shares of Common Stock pursuant to the
agreement of deferral.
D. A "Stock Unit" means a notional account representing one
share of Common Stock. A "Dividend Equivalent Right" means
the right to receive the amount of any dividend paid on
the share of Common Stock underlying a Stock Unit, which
shall be payable in cash or in the form of additional
Stock Units.
XI. FOREIGN OPTIONS AND RIGHTS.
A. The Committee may grant Benefits to individual
participants who are subject to the tax laws of nations
other than the United States, which Benefits may have
terms and conditions as determined by the Committee as
necessary to comply with applicable foreign laws. The
Committee may take any action which it deems advisable to
obtain approval of such Benefits by the appropriate
foreign governmental entity; provided, however, that no
such Benefits may be granted pursuant to this Section 11
and no action may be taken which would result in a
violation of the Exchange Act, the Code or any other
applicable law.
XII. ADJUSTMENT PROVISIONS; CHANGE IN CONTROL.
A. If there shall be any change in the Common Stock of the
Company, or the capitalization of the Company through
merger, consolidation, reorganization, recapitalization,
stock dividend, stock split, reverse stock split, split
up, spinoff, combination of shares, exchange of shares,
dividend in kind or other like change in capital structure
or distribution (other than normal cash dividends) to
stockholders of the Company, an adjustment shall be made
to each outstanding Stock Option and Stock Appreciation
Right such that each such Stock Option and Stock
Appreciation Right shall thereafter be exercisable for
such securities, cash and/or other property as would have
been received in respect of the Common Stock subject to
such Stock Option or Stock Appreciation Right had such
Stock Option or Stock Appreciation Right been exercised in
full immediately prior to such change or distribution, and
such an adjustment shall be made successively each time
any such change shall occur. In addition, in the event of
any such change or distribution, in order to prevent
dilution or enlargement of participants' rights under the
Plan, the Committee will have authority to adjust, in an
equitable manner, the number and kind of shares that may
be issued under the Plan, the number and kind of shares
subject to outstanding Benefits, the exercise price
applicable to outstanding Benefits, and the Fair Market
Value of the Common Stock and other value determinations
applicable to outstanding Benefits. Appropriate
adjustments may also be made by the Committee in the terms
of any Benefits under the Plan to reflect such changes or
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distributions and to modify any other terms of outstanding
Benefits on an equitable basis, including modifications of
performance targets and changes in the length of
performance periods. In addition, the Committee is
authorized to make adjustments to the terms and conditions
of, and the criteria included in, Benefits in recognition
of unusual or nonrecurring events affecting the Company or
the financial statements of the Company, or in response to
changes in applicable laws, regulations, or accounting
principles. Notwithstanding the foregoing, (i) each such
adjustment with respect to an Incentive Stock Option shall
comply with the rules of Section 424(a) of the Code, and
(ii) in no event shall any adjustment be made which would
render any Incentive Stock Option granted hereunder other
than an incentive stock option for purposes of Section 422
of the Code.
B. Notwithstanding any other provision of this Plan, if there
is a Change in Control of the Company, all then
outstanding Stock Options and Stock Appreciation Rights
shall immediately become exercisable. For purposes of this
Section 12(b), a "Change in Control" of the Company shall
be deemed to have occurred upon any of the following
events:
1. A change in control of the Company that would
be required to be reported in response to Item
6(e) of Schedule 14A of Regulation 14A
promulgated under the Exchange Act; or
2. During any period of two (2) consecutive years,
the individuals who at the beginning of such
period constitute the Company's Board of
Directors or any individuals who would be
"Continuing Directors" (as hereinafter defined)
cease for any reason to constitute at least a
majority thereof; or
3. The Company's Common Stock shall cease to be
publicly traded; or
4. The Company's Board of Directors shall approve
a sale of all or substantially all of the
assets of the Company, and such transaction
shall have been consummated; or
5. The Company's Board of Directors shall approve
any merger, consolidation, or like business
combination or reorganization of the Company,
the consummation of which would result in the
occurrence of any event described in Section
12(b)(ii) or (iii) above, and such transaction
shall have been consummated.
Notwithstanding the foregoing, (A) any spin-off of a division or
subsidiary of the Company to its stockholders and (B) any event listed in (i)
through (v) above that the Board of Directors determines not to be a Change in
Control of the Company, shall not constitute a Change in Control of the Company.
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For purposes of this Section 12(b), "Continuing Directors" shall mean
(x) the directors of the Company in office on the Effective Date (as defined
below) and (y) any successor to any such director and any additional director
who after the Effective Date was nominated or selected by a majority of the
Continuing Directors in office at the time of his or her nomination or
selection.
The Committee, in its discretion, may determine that, upon the
occurrence of a Change in Control of the Company, each Stock Option and Stock
Appreciation Right outstanding hereunder shall terminate within a specified
number of days after notice to the holder, and such holder shall receive, with
respect to each share of Common Stock subject to such Stock Option or Stock
Appreciation Right, an amount equal to the excess of the Fair Market Value of
such shares of Common Stock immediately prior to the occurrence of such Change
in Control over the exercise price per share of such Stock Option or Stock
Appreciation Right; such amount to be payable in cash, in one or more kinds of
property (including the property, if any, payable in the transaction) or in a
combination thereof, as the Committee, in its discretion, shall determine. The
provisions contained in the preceding sentence shall be inapplicable to a Stock
Option or Stock Appreciation Right granted within six (6) months before the
occurrence of a Change in Control if the holder of such Stock Option or Stock
Appreciation Right is subject to the reporting requirements of Section 16(a) of
the Exchange Act and no exception from liability under Section 16(b) of the
Exchange Act is otherwise available to such holder.
XIII. NONTRANSFERABILITY. Each Benefit granted under the Plan to a
participant shall not be transferable otherwise than by will or the
laws of descent and distribution, and shall be exercisable, during
the participant's lifetime, only by the participant. In the event of
the death of a participant, each Stock Option or Stock Appreciation
Right theretofore granted to him or her shall be exercisable during
such period after his or her death as the Committee shall in its
discretion set forth in such option or right at the date of grant and
then only by the executor or administrator of the estate of the
deceased participant or the person or persons to whom the deceased
participant's rights under the Stock Option or Stock Appreciation
Right shall pass by will or the laws of descent and distribution.
XIV. OTHER PROVISIONS. The award of any Benefit under the Plan may also be
subject to such other provisions (whether or not applicable to the
Benefit awarded to any other participant) as the Committee determines
appropriate, including, without limitation, for the installment
purchase of Common Stock under Stock Options, for the installment
exercise of Stock Appreciation Rights, to assist the participant in
financing the acquisition of Common Stock, for the forfeiture of, or
restrictions on resale or other disposition of, Common Stock acquired
under any form of Benefit, for the acceleration of exercisability or
vesting of Benefits in the event of a change in control of the
Company, for the payment of the value of Benefits to participants in
the event of a change in control of the Company, or to comply with
federal and state securities laws, or understandings or conditions as
to the participant's employment in addition to those specifically
provided for under the Plan.
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XV. FAIR MARKET VALUE. For purposes of this Plan and any Benefits awarded
hereunder, Fair Market Value shall be the closing price of the Common
Stock on the date of calculation (or on the last preceding trading
date if Common Stock was not traded on such date) if the Common Stock
is readily tradeable on a national securities exchange or other
market system, and if the Common Stock is not readily tradeable, Fair
Market Value shall mean the amount determined in good faith by the
Committee as the fair market value of the Common Stock.
XVI. WITHHOLDING. All payments or distributions of Benefits made pursuant
to the Plan shall be net of any amounts required to be withheld
pursuant to applicable federal, state and local tax withholding
requirements. If the Company proposes or is required to distribute
Common Stock pursuant to the Plan, it may require the recipient to
remit to it or to the corporation that employs such recipient an
amount sufficient to satisfy such tax withholding requirements prior
to the delivery of any certificates for such Common Stock. In lieu
thereof, the Company or the employing corporation shall have the
right to withhold the amount of such taxes from any other sums due or
to become due from such corporation to the recipient as the Committee
shall prescribe. The Committee may, in its discretion and subject to
such rules as it may adopt (including any as may be required to
satisfy applicable tax and/or non-tax regulatory requirements),
permit an optionee or award or right holder to pay all or a portion
of the federal, state and local withholding taxes arising in
connection with any Benefit consisting of shares of Common Stock by
electing to have the Company withhold shares of Common Stock having a
Fair Market Value equal to the amount of tax to be withheld, such tax
calculated at rates required by statute or regulation.
XVII. TENURE. A participant's right, if any, to continue to serve the
Company or any of its subsidiaries or affiliates as an officer,
employee, or otherwise, shall not be enlarged or otherwise affected
by his or her designation as a participant under the Plan.
XVIII. UNFUNDED PLAN. Participants shall have no right, title, or interest
whatsoever in or to any investments which the Company may make to aid
it in meeting its obligations under the Plan. Nothing contained in
the Plan, and no action taken pursuant to its provisions, shall
create or be construed to create a trust of any kind, or a fiduciary
relationship between the Company and any participant, beneficiary,
legal representative or any other person. To the extent that any
person acquires a right to receive payments from the Company under
the Plan, such right shall be no greater than the right of an
unsecured general creditor of the Company. All payments to be made
hereunder shall be paid from the general funds of the Company and no
special or separate fund shall be established and no segregation of
assets shall be made to assure payment of such amounts except as
expressly set forth in the Plan. The Plan is not intended to be
subject to the Employee Retirement Income Security Act of 1974, as
amended.
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XIX. NO FRACTIONAL SHARES. No fractional shares of Common Stock shall be
issued or delivered pursuant to the Plan or any Benefit. The
Committee shall determine whether cash, or Benefits, or other
property shall be issued or paid in lieu of fractional shares or
whether such fractional shares or any rights thereto shall be
forfeited or otherwise eliminated.
XX. DURATION, AMENDMENT AND TERMINATION. No Benefit shall be granted more
than ten years after the Effective Date; provided, however, that the
terms and conditions applicable to any Benefit granted prior to such
date may thereafter be amended or modified by mutual agreement
between the Company and the participant or such other persons as may
then have an interest therein. Also, by mutual agreement between the
Company and a participant hereunder, under this Plan or under any
other present or future plan of the Company, Benefits may be granted
to such participant in substitution and exchange for, and in
cancellation of, any Benefits previously granted such participant
under this Plan, or any other present or future plan of the Company.
The Board of Directors may amend the Plan from time to time or
suspend or terminate the Plan at any time. However, no action
authorized by this Section 20 shall reduce the amount of any existing
Benefit or change the terms and conditions thereof without the
participant's consent. No amendment of the Plan shall, without
approval of the stockholders of the Company, (i) materially increase
the total number of shares which may be issued under the Plan; (ii)
materially increase the amount or type of Benefits that may be
granted under the Plan; or (iii) materially modify the requirements
as to eligibility for Benefits under the Plan.
XXI. GOVERNING LAW. This Plan, Benefits granted hereunder and actions
taken in connection herewith shall be governed and construed in
accordance with the laws of the State of New York (regardless of the
law that might otherwise govern under applicable New York principles
of conflict of laws).
XXII. EFFECTIVE DATE.
A. The Plan was adopted by the Board of Directors and
approved by the stockholders of the Company as of June 22,
2000, but shall be effective immediately prior to the date
of completion of an initial public offering of Common
Stock (the "Effective Date").
B. This Plan shall terminate on June 21, 2010 (unless sooner
terminated by the Board of Directors).
12
<PAGE>
AMENDMENT NO. 1 TO
CHILES OFFSHORE INC. 2000 STOCK OPTION PLAN
AMENDMENT NO. 1, dated as of November 13, 2000 (this
"Amendment"), to the Chiles Offshore Inc. 2000 Stock Option Plan (the "Plan").
W I T N E S S E T H
WHEREAS, the Plan was adopted by the Board of Directors of
the Company (the "Board") and approved by the stockholders of Chiles Offshore
Inc. (the "Company") as of June 22, 2000 and became effective on September 22,
2000; and
WHEREAS, Section XX of the Plan authorizes the Board to
amend the Plan and the Board has agreed to amend the Plan as set forth herein;
NOW, THEREFORE, the Board has agreed as follows:
1. Section VI of the Plan was amended by adding the
following new subsection "F.":
"F. OTHER OPTIONS. In connection with an acquisition of
any business by the Company or any of its affiliates or
with the assumption and/or substitution of options
existing under the Company's 1998 Equity Option Plan (the
"1998 Plan"), and notwithstanding the provisions of
Section VI.A. above, any outstanding grants, awards or
sales of options, stock or other similar rights pertaining
to such business and of any options granted under the 1998
Plan, may be assumed, substituted or replaced by Stock
Options or other Benefits under the Plan upon such terms
and conditions as the Board of Directors or the Committee
determines. The date of any such grant, award or sale
shall relate back to the date of the initial grant, award
or sale being assumed, substituted or replaced and service
with the acquired business or the Company under the 1998
Plan, as applicable, shall constitute service with the
Company and its affiliates under the Plan for purposes of
such grant, award or sale. Any shares underlying any
grant, award or sale pursuant to any acquisition of a
business shall be disregarded for purposes of applying,
and shall not reduce the number of shares of Common Stock
available under the Plan pursuant to Section V above."
2. Except as amended hereby, the Plan remains in full force
and effect in accordance with its terms.
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