As filed with the Securities and Exchange Commission on November ___, 1997
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
DAWSON PRODUCTION SERVICES, INC.
(Exact name of issuer as specified in its charter)
TEXAS 74-2231546
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
112 E. PECAN ST., SUITE 1000, SAN ANTONIO, TEXAS 78205
(Address of Principal Executive Offices)
DAWSON PRODUCTION SERVICES, INC.
AMENDED AND RESTATED 1995 INCENTIVE PLAN
OPTION AGREEMENT FOR MICHAEL LITTLE
OPTION AGREEMENT FOR JOSEPH EUSTACE
OPTION AGREEMENT FOR PAUL MCCOLLAM
OPTION AGREEMENT FOR J. MICHAEL BELL
OPTION AGREEMENT FOR WARD GREENWOOD
OPTION AGREEMENT FOR DOUGLAS D. LEWIS
P. MARK STARK
DAWSON PRODUCTION SERVICES, INC.
112 E. PECAN ST., SUITE 1000
SAN ANTONIO, TEXAS 78205
(210) 476-0420
FAX: (210) 476-0444
Copies to:
J. ROWLAND COOK, ESQ.
JULIE FREY, ESQ.
JENKENS & GILCHRIST, A PROFESSIONAL CORPORATION
600 CONGRESS AVENUE, SUITE 2200
AUSTIN, TEXAS 78701
(512) 499-3800
FAX: (512) 404-3520
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==================================================================================================================
Proposed Maximum Proposed Maximum Amount of
Title of Securities Amount to be Registered Offering Price Per Share Aggregate Offering Registration Fee
to be Registered (1) (2)(3) Price(2)(3) (3)
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
$.01 par value 1,300,000 $18.9375 $18,049,111 $5,469.42
==================================================================================================================
</TABLE>
(1) Shares (including related rights to acquire shares) issuable pursuant to
incentive stock options, non-qualified stock options, stock appreciation
rights, restricted stock awards, and performance units under the Dawson
Production Services, Inc. 1995 Amended and Restated Incentive Plan and
the individual stock option agreements listed above (the "Option
Agreements"). Pursuant to Rule 416, this registration statement also
covers additional shares of Common Stock as may become issuable pursuant
to the anti-dilution provisions of that Plan.
(2) Estimated solely for the purpose of calculating the registration fee.
(3) Calculated pursuant to Rule 457(c) and (h). The prices per share of the
Common Stock offered hereunder pursuant to the 1995 Amended and Restated
Incentive Plan (the "Plan") is based on (i) 652,734 shares of Common
Stock allocated for issuance under the Plan, but not yet subject to an
award, at a price per share of $18.9375, which is the average of the high
and low selling price per share of Common Stock on the National
Association of Securities Dealers Automated Quotation System National
Market System on November 6, 1997; and (ii) the following shares of
Common Stock reserved for issuance under the Plan and under the Option
Agreements and subject to options granted thereunder at the following
exercise prices:
No. of Shares of Common Stock Exercise Price Per Share
----------------------------- ------------------------
107,500 $4.65
120,400 $7.44
25,800 $10.75
272,690 $11.375
34,400 $12.25
86,476 $17.25
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
ITEM 1. PLAN INFORMATION*
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION*
*Information required by Part I is omitted from this Registration Statement in
accordance with Rule 428 under the Securities Act of 1933, as amended, and the
Note to Part I of Form S-8.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The documents listed in (a) through (c) below are hereby incorporated by
reference into this Registration Statement. All documents subsequently filed by
the Company or the Dawson Production Services, Inc. 1995 Incentive Plan (the
"Plan") pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") after the date of this
Registration Statement and prior to the filing of any post-effective amendment
to the Registration Statement which indicate that all shares of the Company's
Common Stock, $.01 par value per share, offered hereunder have been sold or that
deregister all such shares then remaining unsold shall be deemed to be
incorporated herein by reference and to be a part hereof from the date of filing
of such documents.
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
March 31, 1997.
(b) All other reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act since March 31, 1997.
(c) The description of the Common Stock contained in the Company's Form
8-A filed on February 8, 1996 for registration of the Common Stock pursuant to
Section 12(g) of the Exchange Act, including any amendment or report filed for
the purpose of updating such description.
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable.
ITEM 5. INTEREST OF NAMED EXPERTS AND COUNSEL
None.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article 2.02-1 of the Texas Business Corporation Act provides that a
corporation may indemnify its officers, directors, employees and agents for
expenses and costs incurred in certain proceedings arising out of actions taken
in their official capacity only if such persons were acting in good faith and in
a manner reasonably believed to be in or not opposed to the best interests of
the corporation, except in relation to matters in which they have been found
liable (i) to the corporation, or (ii) on the basis that personal benefit was
improperly received regardless of whether or not the benefit resulted from
action taken in their official capacity. In the case of any criminal proceeding,
such persons must also have had no reasonable cause to believe such conduct was
unlawful. Article 2.02-1 further provides that a corporation shall indemnify its
officers and
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directors against reasonable expenses incurred in connection with proceedings
arising out of actions taken in their official capacity in which such persons
have been wholly successful, on the merits or otherwise, in the defense of such
actions. The Bylaws of the Company, as amended, provide for indemnification of
the Company's directors, officers, and employees to the fullest extent permitted
by Article 2.02-1. Additionally, the Company amended its Articles of
Incorporation, with shareholder approval, to confirm that the Company has the
power to indemnify certain persons in such circumstances as are provided in its
Bylaws. The amendment further enables the Company to enter into additional
insurance and indemnity arrangements at the discretion of the board of
directors. The Company has entered into Indemnification Agreements with each of
its officers and directors, the form of which was approved by the shareholders
of the Company, that essentially indemnify such individuals to the fullest
extent permitted by law.
Article 7.06 of the Texas Miscellaneous Corporation Laws Act provides that
a corporation's articles of incorporation may provide for the elimination or
limitation of a director's liability. The Company's Articles of Incorporation
eliminate the liability of directors to the corporation or its shareholders for
monetary damages for an act or omission in his capacity as a director, with
certain specified exceptions to the Company and its shareholders to the fullest
extent permitted by Article 7.06 of the Texas Miscellaneous Corporation Laws
Act.
The Company maintains insurance, the general effect of which is to provide
coverage for the Company with respect to amounts that it is required to pay
officers and directors under the indemnity provisions described above and
coverage for officers and directors against certain liabilities, including
certain liabilities under the federal securities law.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Restricted securities to be reoffered or resold pursuant to this
registration statement were offered and sold in reliance upon Section 4(2) of
the Securities Act as not involving any public offering. Such securities were
offered and sold to a limited number of persons, each of whom was an officer,
director or employee of the Company.
ITEM 8. EXHIBITS
3.1 Amended and Restated Articles of Incorporation (incorporated by
reference to Exhibit 3.1 of the Registration Statement on Form S-1
effective March 20, 1996, SEC File No. 333-00452)
3.2 Bylaws and Amendment to Bylaws (incorporated by reference to Exhibit
3.2 to the Registration Statement on Form S-1 effective March 20,
1996, SEC File No. 333- 00452)
4.2* Dawson Production Services, Inc. Amended and Restated 1995 Incentive
Plan;
2
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4.3 Rights Agreement dated September 11, 1997 between Dawson Production
Services, Inc. and Harris Trust Company of New York (incorporated by
reference to Exhibit 1 to the Form 8-A filed with the SEC on
September 18, 1997).
4.4* Option Agreement between Dawson Well Servicing, Inc., now known as
Dawson Production Services, Inc., and Michael Little dated
October 1, 1994.
4.5* Option Agreement between Dawson Well Servicing, Inc., now known as
Dawson Production Services, Inc., and Joe Eustace dated October 1,
1994.
4.6* Option Agreement between Dawson Well Servicing, Inc., now known as
Dawson Production Services, Inc., and Paul McCollam dated October 1,
1994.
4.7* Option Agreement between Dawson Well Servicing, Inc., now known as
Dawson Production Services, Inc., and J. Michael Bell dated October
1, 1994.
4.8* Option Agreement between Dawson Well Servicing, Inc., now known as
Dawson Production Services, Inc., and Ward Greenwood dated
October 1, 1994.
4.9* Option Agreement between Dawson Well Servicing, Inc., now known as
Dawson Production Services, Inc., and Douglas D. Lewis dated October
1, 1994.
5* Opinion of Jenkens & Gilchrist, A Professional Corporation.
23.1* Consent of Jenkens & Gilchrist, A Professional Corporation (see
Exhibit 5).
23.2* Consent of KPMG Peat Marwick LLP.
25* Power of Attorney (included on the signature page of the
Registration Statement).
* filed herewith
ITEM 9. UNDERTAKINGS.
A. The undersigned registrant hereby undertakes the following:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(a) to include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(b) to reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in
3
<PAGE>
the aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which
was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more
than a 20% change in the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table in the effective
registration statement.
(c) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement.
Provided, however, that paragraphs A.1(a) and A.1.(b) do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by the
registration pursuant to Section 13 or Section 15(d) of the Exchange Act that
are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933 (the "Securities Act"), each such post-effective
amendment shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof;
and
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered that remain unsold at the
termination of the offering.
B. The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
C. The undersigned registrant undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent or
given, the latest annual report to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Exchange Act; and, where
interim financial information required to be presented by Article 3 of
Regulation S-X are not set forth in the prospectus, to deliver, or cause to be
delivered to each person to whom the prospectus
4
<PAGE>
is sent or given, the latest quarterly report that is specifically incorporated
by reference in the prospectus to provide such interim financial information.
D. Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
5
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of San Antonio, State of Texas, on this 26th day of
November 1997.
DAWSON PRODUCTION SERVICES, INC.
(registrant)
By:/s/ MICHAEL E. LITTLE
Michael E. Little,
Chairman of the Board, President
and Chief Executive Officer
POWER OF ATTORNEY
The Company and each person whose signature appears below hereby
designates and appoints P. Mark Stark and Michael E. Little and each of them, as
its or his attorneys-in-fact (the "Attorneys-in-Fact") with full power to act
alone, and to execute in the name and on behalf of the Company and each such
person, individually in each capacity stated below, one or more amendments
(including post-effective amendments) to this Registration Statement, which
amendments may make such changes in this Registration Statement as either
Attorney-in-Fact deems appropriate, and to file each such amendment to this
Registration Statement together with all exhibits thereto and any and all
documents in connection therewith.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURES TITLE DATE
- ---------- ----- ----
/s/ MICHAEL E. LITTLE Chairman of the Board, President, November 26, 1997
Michael E. Little Chief Executive Officer, and Director
(Principal Executive Officer)
/s/ P. MARK STARK Chief Financial Officer (Principal November 26, 1997
P. Mark Stark Accounting and Financial Officer)
/s/ WM. WARD GREENWOOD Director November 26, 1997
Wm. Ward Greenwood
/s/ J. MICHAEL BELL Director November 26, 1997
J. Michael Bell
_________________ Director November __, 1997
Douglas D. Lewis
/s/ PAUL E. McCOLLAM Director November 26, 1997
Paul E. McCollam
_________________ Director November __, 1997
Stephen F. Oakes
6
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SIGNATURES TITLE DATE
- ---------- ----- ----
/s/ RUSSELL BANKS Director November 26, 1997
Russell Banks
/s/ LAWRENCE C. PETRUCCI Director November 26, 1997
Lawrence C. Petrucci
INDEX TO EXHIBITS
EXHIBIT SEQUENTIALLY
NUMBER EXHIBIT NUMBERED PAGE
------ ------- -------------
3.1 Restated Articles of Incorporation (incorporated by
reference to Exhibit 3.1 to the Registration Statement on
Form S-1 effective March 20, 1996, SEC File No. 333-
00452)
3.2 Bylaws (incorporated by reference to Exhibit 3.2 of the
Registration Statement on Form S-1 effective March 20,
1996, SEC File No. 333-00452)
4.2 Dawson Production Services, Inc., 1995 Incentive Plan (incorporated
by reference to Exhibit 10.1 to the Registration Statement on Form
S-1 effective March 20, 1996, SEC File No. 333-00452).
4.3 Rights Agreement dated September 11, 1997 between Dawson Production
Services, Inc., and Harris Trust Company of New York (incorporated
by reference to Exhibit 1 to the Form 8-A filed with the SEC on
September 18, 1997).
4.4 Option Agreement between Dawson Production Services,
Inc., and Michael Little dated October 1, 1994.
4.5 Option Agreement between Dawson Production Services,
Inc., and Joe Eustace dated October 1, 1994
4.6 Option Agreement between Dawson Production Services,
Inc., and Paul McCollam dated October 1, 1994.
4.7 Option Agreement between Dawson Production Services,
Inc., and J. Michael Bell dated October 1, 1994.
4.8 Option Agreement between Dawson Production Services,
Inc., and Ward Greenwood dated October 1, 1994.
4.9 Option Agreement between Dawson Production Services,
Inc., and Douglas D. Lewis dated October 1, 1994.
5.1 Opinion of Jenkens & Gilchrist, A Professional Corporation
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23.1 Consent of Jenkens & Gilchrist, A Professional Corporation (See
Exhibit 5.1).
23.2* Consent of KPMG Peat Marwick LLP.
25* Power of Attorney (included on the signature page of the
Registration Statement).
8
EXHIBIT 4.2
DAWSON PRODUCTION
SERVICES, INC.
AMENDED AND RESTATED
1995 INCENTIVE PLAN
(AMENDED AS OF JULY 31, 1997)
<PAGE>
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS......................................................1
SECTION 2. SHARES OF STOCK SUBJECT TO THE PLAN..............................7
2.1 Maximum Number of Shares.........................................7
2.2 Limitation of Shares.............................................8
2.3 Description of Shares............................................9
2.4 Registration and Listing of Shares...............................9
SECTION 3. ADMINISTRATION OF THE PLAN.......................................9
3.1 Committee........................................................9
3.2 Duration, Removal, Etc..........................................10
3.3 Meetings and Actions of Committee...............................10
3.4 Committee's Powers..............................................10
SECTION 4. ELIGIBILITY AND PARTICIPATION...................................11
4.1 Eligible Individuals............................................11
4.2 Grant of Awards.................................................11
4.3 Date of Grant...................................................11
4.4 Award Agreements................................................12
4.5 Limitation for Incentive Options................................12
4.6 No Right to Award...............................................12
SECTION 5. TERMS AND CONDITIONS OF OPTIONS.................................12
5.1 Number of Shares................................................12
5.2 Vesting.........................................................12
5.3 Expiration of Options...........................................13
5.4 Exercise Price..................................................13
5.5 Method of Exercise..............................................13
5.6 Incentive Option Exercises......................................13
5.7 Medium and Time of Payment......................................13
5.8 Payment with Sale Proceeds......................................14
5.9 Payment of Taxes................................................14
5.10 Limitation on Aggregate Value of Shares That May Become First
Exercisable During Any Calendar Year Under an Incentive Option..14
5.11 No Fractional Shares............................................15
5.12 Modification, Extension, and Renewal of Options.................15
5.13 Other Agreement Provisions......................................15
SECTION 6. STOCK APPRECIATION RIGHTS.......................................16
6.1 Form of Right...................................................16
6.2 Rights Related to Options.......................................16
(a) Exercise and Transfer.....................................16
(b) Value of Right............................................16
<PAGE>
6.3 Right Without Option............................................16
(a) Number of Shares..........................................17
(b) Vesting...................................................17
(c) Expiration of Rights......................................17
(d) Value of Right............................................17
6.4 Limitations on Rights...........................................17
6.5 Payment of Rights...............................................17
6.6 Payment of Taxes................................................17
6.7 Other Agreement Provisions......................................18
SECTION 7. RESTRICTED STOCK AWARDS.........................................18
7.1 Restrictions....................................................18
(a) Transferability...........................................18
(b) Conditions to Removal of Restrictions.....................18
(c) Legend....................................................18
(d) Possession................................................19
(e) Other Conditions..........................................19
7.2 Expiration of Restrictions......................................19
7.3 Rights as Shareholder...........................................19
7.4 Payment of Taxes................................................19
7.5 Other Agreement Provisions......................................20
SECTION 8. AWARDS TO NON-EMPLOYEE DIRECTORS................................20
8.1 Ineligibility for Other Awards..................................20
8.2 Automatic Grant of Awards.......................................20
8.3 Available Stock.................................................20
8.4 Exercisability..................................................21
SECTION 9. ADJUSTMENT PROVISIONS...........................................21
9.1 Adjustment of Awards and Authorized Stock.......................21
9.2 Changes in Control..............................................22
9.3 Restructuring Without Change in Control.........................22
9.4 Notice of Restructuring.........................................24
SECTION 10. ADDITIONAL PROVISIONS..........................................24
10.1 Termination of Employment.......................................24
10.2 Other Loss of Eligibility - Non-Employees.......................25
10.3 Death...........................................................25
10.4 Disability......................................................25
10.5 Leave of Absence................................................26
10.6 Transferability of Awards.......................................26
10.7 Forfeiture and Restrictions on Transfer.........................26
10.8 Delivery of Certificates of Stock...............................26
10.9 Conditions to Delivery of Stock.................................27
10.10 Certain Directors and Officers..................................27
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10.11 Securities Act Legend...........................................27
10.12 Legend for Restrictions on Transfer.............................28
10.13 Rights as a Shareholder.........................................28
10.14 Furnish Information.............................................29
10.15 Obligation to Exercise..........................................29
10.16 Adjustments to Awards...........................................29
10.17 Remedies........................................................29
10.18 Information Confidential........................................29
10.19 Consideration...................................................29
SECTION 11. DURATION AND AMENDMENT OF PLAN.................................30
11.1 Duration........................................................30
11.2 Amendment.......................................................30
SECTION 12. GENERAL........................................................30
12.1 Application of Funds............................................30
12.2 Right of the Corporation and Subsidiaries to Terminate
Employment......................................................30
12.3 No Liability for Good Faith Determinations......................30
12.4 Other Benefits..................................................31
12.5 Exclusion From Pension and Profit-Sharing Compensation..........31
12.6 Execution of Receipts and Releases..............................31
12.7 Unfunded Plan...................................................31
12.8 No Guarantee of Interests.......................................32
12.9 Payment of Expenses.............................................32
12.10 Corporation Records.............................................32
12.11 Information.....................................................32
12.12 No Liability of Corporation.....................................32
12.13 Corporation Action..............................................32
12.14 Severability....................................................32
12.15 Notices.........................................................33
12.16 Successors......................................................33
12.17 Headings........................................................33
12.18 Governing Law...................................................33
12.19 Word Usage......................................................34
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DAWSON PRODUCTION SERVICES, INC.
AMENDED AND RESTATED
1995 INCENTIVE PLAN
(AMENDED AS OF JULY 31, 1997)
SCOPE AND PURPOSE OF PLAN
Dawson Production Services, Inc., a Texas corporation (formerly Dawson
Well Servicing, Inc.) ("Dawson" or the "Corporation"), has adopted a 1995
Incentive Plan effective as of October 6, 1995; Dawson now desires to amend and
restate such plan as of July 31, 1997 (the "Plan") to provide for the granting
of:
(a) Incentive Options (hereafter defined) to certain Key Employees
(hereafter defined);
(b) Nonstatutory Options (hereafter defined) to certain Key Employees,
Non-Employee Directors (hereafter defined) and other Persons;
(c) Restricted Stock Awards (hereafter defined) to certain Key Employees
and other Persons; and
(d) Stock Appreciation Rights (hereafter defined) to certain Key
Employees and other Persons.
The purpose of the Plan is to provide an incentive for Key Employees and
directors of the Corporation or its Subsidiaries (hereafter defined) to aid the
Corporation in attracting able Persons to enter the service of the Corporation
and its Subsidiaries, to extend to them the opportunity to acquire a proprietary
interest in the Corporation so that they will apply their best efforts for the
benefit of the Corporation, and to remain in the service of the Corporation or
its Subsidiaries. This Plan has been originally adopted by the Board of
Directors and shareholders of the Corporation prior to the registration of any
securities of the Corporation under the Exchange Act (hereafter defined) and
accordingly amounts paid under the Plan, as originally adopted by the Board of
Directors and shareholders of the Corporation, are exempt from the provisions of
Section 162(m) of the Code (hereafter defined).
SECTION 1. DEFINITIONS
1.1 "Acquiring Person" means any Person other than the Corporation, any
Subsidiary of the Corporation, any employee benefit plan of the Corporation or
of a Subsidiary of the Corporation or of a corporation owned directly or
indirectly by the shareholders of the Corporation in substantially the same
proportions as their ownership of Stock of the Corporation, or any trustee or
other fiduciary holding securities under an employee benefit plan of the
Corporation or of a Subsidiary of the Corporation or of a corporation owned
directly or indirectly
<PAGE>
by the shareholders of the Corporation in substantially the same proportions as
their ownership of Stock of the Corporation.
1.2 "Affiliate" means (a) any Person who is directly or indirectly the
beneficial owner of at least 10% of the voting power of the Voting Securities or
(b) any Person controlling, controlled by, or under common control with the
Company or any Person contemplated in clause (a) of this Subsection 1.2.
1.3 "Award" means the grant of any form of Option, Restricted Stock Award,
or Stock Appreciation Right under the Plan, whether granted individually, in
combination, or in tandem, to a Holder pursuant to the terms, conditions, and
limitations that the Committee may establish in order to fulfill the objectives
of the Plan.
1.4 "Award Agreement" means the written agreement between the Corporation
and a Holder evidencing the terms, conditions, and limitations of the Award
granted to that Holder.
1.5 "Board of Directors" means the board of directors of the Corporation.
1.6 "Business Day" means any day other than a Saturday, a Sunday, or a day
on which banking institutions in the State of Texas are authorized or obligated
by law or executive order to close.
1.7 "Change in Control" means the event that is deemed to have occurred
if:
(a) any Acquiring Person is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Corporation representing fifty percent or more of the
combined voting power of the then outstanding Voting Securities of the
Corporation; or
(b) members of the Incumbent Board cease for any reason to
constitute at least a majority of the Board of Directors; or
(c) a public announcement is made of a tender or exchange offer by
any Acquiring Person for fifty percent or more of the outstanding Voting
Securities of the Corporation, and the Board of Directors approves or
fails to oppose that tender or exchange offer in its statements in
Schedule 14D-9 under the Exchange Act; or
(d) the shareholders of the Corporation approve a merger or
consolidation of the Corporation with any other corporation or partnership
(or, if no such approval is required, the consummation of such a merger or
consolidation of the Corporation), other than a merger or consolidation
that would result in the Voting Securities of the Corporation outstanding
immediately before the consummation thereof continuing to represent
(either by remaining outstanding or by being converted into Voting
Securities of the surviving entity or of a parent of the surviving entity)
a majority of the combined voting power of
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the Voting Securities of the surviving entity (or its parent) outstanding
immediately after that merger or consolidation; or
(e) the shareholders of the Corporation approve a plan of complete
liquidation of the Corporation or an agreement for the sale or disposition
by the Corporation of all or substantially all the Corporation's assets
(or, if no such approval is required, the consummation of such a
liquidation, sale, or disposition in one transaction or series of related
transactions) other than a liquidation, sale, or disposition of all or
substantially all the Corporation's assets in one transaction or a series
of related transactions to a corporation owned directly or indirectly by
the shareholders of the Corporation in substantially the same proportions
as their ownership of Stock of the Corporation.
1.8 "Code" means the Internal Revenue Code of 1986, as amended.
1.9 "Committee" means the Committee, which Committee shall administer this
Plan and is further described under Section 3.
1.10 "Convertible Securities" means evidences of indebtedness, shares of
capital stock, or other securities that are convertible into or exchangeable for
shares of Stock, either immediately or upon the arrival of a specified date or
the happening of a specified event.
1.11 "Corporation" has the meaning given to it in the first paragraph
under "Scope and Purpose of Plan."
1.12 "Date of Grant" has the meaning given it in Subsection 4.3.
1.13 "Disability" has the meaning given it in Subsection 10.4.
1.14 "Disinterested Person" has the meaning given it in Rule 16b-3(c)(2)
(i).
1.15 "Effective Date" means October 6, 1995.
1.16 "Eligible Individuals" means (a) Key Employees, (b) Non-Employee
Directors only for purposes of Nonstatutory Options pursuant to Section 8, (c)
any other Person that the Committee designates as eligible for an Award (other
than for Incentive Options) because the Person performs, or has performed,
valuable services for the Corporation or any of its Subsidiaries (other than
services in connection with the offer or sale of securities in a capital-raising
transaction) and the Committee determines that the Person has a direct and
significant effect on the financial development of the Corporation or any of its
Subsidiaries, and (d) for Nonstatutory Options or Incentive Options that cease
to be classified as such pursuant to Section 5.6, any transferee of an Award if
the transfer has been approved in advance by the written consent of a majority
of the Committee members. Notwithstanding the foregoing provisions of this
Subsection 1.16, to ensure that the requirements of the fourth sentence of
Subsection 3.1 are satisfied, the Board of Directors may from time to time
specify individuals who shall not be eligible for the grant of Awards or equity
securities under any plan of the Corporation or its
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Affiliates. Nevertheless, the Board of Directors may at any time determine that
an individual who has been so excluded from eligibility shall become eligible
for grants of Awards and grants of such other equity securities under any plans
of the Corporation or its Affiliates so long as that eligibility will not impair
the Plan's satisfaction of the conditions of Rule 16b-3.
1.17 "Employee" means any employee of the Corporation or of any of its
Subsidiaries, including officers and directors of the Corporation who are also
employees of the Corporation or of any of its Subsidiaries.
1.18 "Exchange Act" means the Securities Exchange Act of 1934 and the
rules and regulations promulgated thereunder, or any successor law, as it may be
amended from time to time.
1.19 "Exercise Notice" has the meaning given it in Subsection 5.5.
1.20 "Exercise Price" has the meaning given it in Subsection 5.4.
1.21 "Fair Market Value" means, for a particular day:
(a) If shares of Stock of the same class are listed or admitted to
unlisted trading privileges on any national or regional securities
exchange at the date of determining the Fair Market Value, then the last
reported sale price, regular way, on the composite tape of that exchange
on the last Business Day before the date in question or, if no such sale
takes place on that Business Day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities
listed or admitted to unlisted trading privileges on that securities
exchange; or
(b) If shares of Stock of the same class are not listed or admitted
to unlisted trading privileges as provided in Subsection 1.21(a) and sales
prices for shares of Stock of the same class in the over-the-counter
market are reported by the National Association of Securities Dealers,
Inc. Automated Quotations, Inc. ("NASDAQ") National Market System (or such
other system then in use) at the date of determining the Fair Market
Value, then the last reported sales price so reported on the last Business
Day before the date in question or, if no such sale takes place on that
Business Day, the average of the high bid and low asked prices so
reported; or
(c) If shares of Stock of the same class are not listed or admitted
to unlisted trading privileges as provided in Subsection 1.21(a) and sales
prices for shares of Stock of the same class are not reported by the
NASDAQ National Market System (or a similar system then in use) as
provided in Subsection 1.21(b), and if bid and asked prices for shares of
Stock of the same class in the over-the-counter market are reported by
NASDAQ (or, if not so reported, by the National Quotation Bureau
Incorporated) at the date of determining the Fair Market Value, then the
average of the high bid and low asked prices on the last Business Day
before the date in question; or
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(d) If shares of Stock of the same class are not listed or admitted
to unlisted trading privileges as provided in Subsection 1.21(a) and sales
prices or bid and asked prices therefor are not reported by NASDAQ (or the
National Quotation Bureau Incorporated) as provided in Subsection 1.21(b)
or Subsection 1.21(c) at the date of determining the Fair Market Value,
then the value determined in good faith by the Committee, which
determination shall be conclusive for all purposes; or
(e) If shares of Stock of the same class are listed or admitted to
unlisted trading privileges as provided in Subsection 1.21(a) or sales
prices or bid and asked prices therefor are reported by NASDAQ (or the
National Quotation Bureau Incorporated) as provided in Subsection 1.22(b)
or Subsection 1.22(c) at the date of determining the Fair Market Value,
but the volume of trading is so low that the Board of Directors determines
in good faith that such prices are not indicative of the fair value of the
Stock, then the value determined in good faith by the Committee, which
determination shall be conclusive for all purposes notwithstanding the
provisions of Subsections 1.21(a), (b), or (c).
For purposes of valuing Incentive Options, the Fair Market Value of Stock shall
be determined without regard to any restriction other than one that, by its
terms, will never lapse. For purposes of the redemption provided for in
Subsection 9.3(d)(v), Fair Market Value shall have the meaning and shall be
determined as set forth above; provided, however, that the Committee, with
respect to any such redemption, shall have the right to determine that the Fair
Market Value for purposes of the redemption should be an amount measured by the
value of the shares of Stock, other securities, cash, or property otherwise
being received by holders of shares of Stock in connection with the
Restructuring and upon that determination the Committee shall have the power and
authority to determine Fair Market Value for purposes of the redemption based
upon the value of such shares of stock, other securities, cash, or property. Any
such determination by the Committee, as evidenced by a resolution of the
Committee, shall be conclusive for all purposes.
1.22 "Fiscal Year" means the fiscal year of the Corporation ending on
March 31 of each year.
1.23 "Holder" means an Eligible Individual to whom an outstanding Award
has been granted, or, pursuant to the terms of the Plan, the permitted
transferee of a Holder.
1.24 "Incumbent Board" means the individuals who, as of the Effective
Date, constitute the Board of Directors and any other individual who becomes a
director of the Corporation after that date and whose election or appointment by
the Board of Directors or nomination for election by the Corporation's
shareholders was approved by a vote of at least a majority of the directors then
comprising the Incumbent Board.
1.25 "Incentive Option" means an incentive stock option as defined under
Section 422 of the Code and regulations thereunder.
1.26 "Key Employee" means any Employee whom the Committee identifies as
having a direct and significant effect on the performance of the Corporation or
any of its Subsidiaries.
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1.27 "Non-Employee Director" means a director of the Corporation who while
a director is not an Employee.
1.28 "Nonstatutory Option" means a stock option that does not satisfy the
requirements of Section 422 of the Code or that is designated at the Date of
Grant or in the applicable Award Agreement to be an option other than an
Incentive Option.
1.29 "Non-Surviving Event" means an event of Restructuring as described in
either Subsection 1.36(b) or Subsection 1.36(c).
1.30 "Normal Retirement" means the separation of the Holder from
employment with the Corporation and its Subsidiaries with the right to receive
an immediate benefit under a retirement plan approved by the Corporation. If no
such plan exists, Normal Retirement shall mean separation of the Holder from
employment with the Corporation and its Subsidiaries at age 62 or later.
1.31 "Option" means either an Incentive Option or a Nonstatutory Option,
or both.
1.32 "Person" means any person or entity of any nature whatsoever,
specifically including (but not limited to) an individual, a firm, a company, a
corporation, a partnership, a trust, or other entity. A Person, together with
that Person's affiliates and associates (as "affiliate" and "associate" are
defined in Rule 12b-2 under the Exchange Act for purposes of this definition
only), and any Persons acting as a partnership, limited partnership, joint
venture, association, syndicate, or other group (whether or not formally
organized), or otherwise acting jointly or in concert or in a coordinated or
consciously parallel manner (whether or not pursuant to any express agreement),
for the purpose of acquiring, holding, voting, or disposing of securities of the
Corporation with that Person, shall be deemed a single "Person."
1.33 "Plan" means the Corporation's 1995 Incentive Plan, as it may be
amended or restated from time to time.
1.34 "Restricted Stock" means Stock that is nontransferable or subject to
substantial risk of forfeiture until specific conditions are met.
1.35 "Restricted Stock Award" means the grant or purchase, on the terms
and conditions of Section 7 or that the Committee otherwise determines, of
Restricted Stock.
1.36 "Restructuring" means the occurrence of any one or more of the
following:
(a) The merger or consolidation of the Corporation with any Person,
whether effected as a single transaction or a series of related
transactions, with the Corporation remaining the continuing or surviving
entity of that merger or consolidation and the Stock remaining outstanding
and not changed into or exchanged for stock or other securities of any
other Person or of the Corporation, cash, or other property;
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(b) The merger or consolidation of the Corporation with any Person,
whether effected as a single transaction or a series of related
transactions, with (i) the Corporation not being the continuing or
surviving entity of that merger or consolidation or (ii) the Corporation
remaining the continuing or surviving entity of that merger or
consolidation but all or a part of the outstanding shares of Stock are
changed into or exchanged for stock or other securities of any other
Person or the Corporation, cash, or other property; or
(c) The transfer, directly or indirectly, of all or substantially
all of the assets of the Corporation (whether by sale, merger,
consolidation, liquidation, or otherwise) to any Person, whether effected
as a single transaction or a series of related transactions.
1.37 "Rule 16b-3" means Rule 16b-3 under Section 16(b) of the Exchange Act
as adopted in Exchange Act Release No. 34-37260 (May 31, 1996), or any successor
rule, as it may be amended from time to time.
1.38 "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.
1.39 "Stock" means the common stock, $0.01 par value per share, of Dawson,
or any other securities that are substituted for the Stock as provided in
Section 9.
1.40 "Stock Appreciation Right" means the right to receive an amount equal
to the excess of the Fair Market Value of a share of Stock (as determined on the
date of exercise) over, as appropriate, the Exercise Price of a related Option
or the Fair Market Value of the Stock on the Date of Grant of the Stock
Appreciation Right.
1.41 "Subsidiary" means, with respect to any Person, any corporation, or
other entity of which a majority of the Voting Securities is owned, directly or
indirectly, by that Person.
1.42 "Total Shares" has the meaning given it in Subsection 9.2.
1.43 "Voting Securities" means any securities that are entitled to vote
generally in the election of directors, in the admission of general partners or
in the selection of any other similar governing body.
SECTION 2. SHARES OF STOCK SUBJECT TO THE PLAN
2.1 MAXIMUM NUMBER OF SHARES. Subject to the provisions of Subsection 2.2
and Section 9, the aggregate number of shares of Stock that may be issued or
transferred pursuant to Awards under the Plan shall be 537,500 (after giving
effect to a 4.3-for-1 stock split effective March 1, 1996); provided, however,
the number of shares of Stock shall be increased automatically effective April
1, 1997 (and on each April 1 thereafter for the duration of the Plan), by an
amount equal to the lesser of: (a) an additional 1.5% of the total shares of
Stock then issued and outstanding, added to the number of shares then available
under the Plan, up to a maximum of 200,000 additional shares of Stock per year,
or (b) 5% of the total shares of Stock issued and
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outstanding as of July 31, 1997; provided, further, the number of shares of
Stock available for grant under the Plan shall not exceed 200,000 after allowing
for grants anticipated by the Corporation for the then current fiscal year.
2.2 LIMITATION OF SHARES. For purposes of the limitations specified in
Subsection 2.1, the following principles shall apply:
(a) the following shall count against and decrease the number of
shares of Stock that may be issued for purposes of Subsection 2.1: (i)
shares of Stock subject to outstanding Options, outstanding shares of
Restricted Stock, and shares subject to outstanding Stock Appreciation
Rights granted independent of Options (based on a good faith estimate by
the Corporation or the Committee of the maximum number of shares for which
the Stock Appreciation Right may be settled (assuming payment in full in
shares of Stock)), and (ii) in the case of Options granted in tandem with
Stock Appreciation Rights, the greater of the number of shares of Stock
that would be counted if one or the other alone was outstanding
(determined as described in clause (i) above);
(b) the following shall be added back to the number of shares of
Stock that may be issued for purposes of Subsection 2.1: (i) shares of
Stock with respect to which Options, Stock Appreciation Rights granted
independent of Options, or Restricted Stock Awards expire, are cancelled,
or otherwise terminate without being exercised, converted, or vested, as
applicable, and (ii) in the case of Options granted in tandem with Stock
Appreciation Rights, shares of Stock as to which an Option has been
surrendered in connection with the exercise of a related ("tandem") Stock
Appreciation Right, to the extent the number surrendered exceeds the
number issued upon exercise of the Stock Appreciation Right; provided
that, in any case, the holder of such Awards did not receive any dividends
or other benefits of ownership with respect to the underlying shares being
added back, other than voting rights and the accumulation (but not
payment) of dividends of Stock;
(c) shares of Stock subject to Stock Appreciation Rights granted
independent of Options (calculated as provided in clause (a) above) that
are exercised and paid in cash shall be added back to the number of shares
of Stock that may be issued for purposes of Subsection 2.1, provided that
the Holder of such Stock Appreciation Right did not receive any dividends
or other benefits of ownership, other than voting rights and the
accumulation (but not payment) of dividends, of the shares of Stock
subject to the Stock Appreciation Right;
(d) shares of Stock that are transferred by a Holder of an Award (or
withheld by the Corporation) as full or partial payment to the Corporation
of the purchase price of shares of Stock subject to an Option or the
Corporation's or any Subsidiary's tax withholding obligations shall not be
added back to the number of shares of Stock that may be issued for
purposes of Subsection 2.1 and shall not again be subject to Awards; and
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(e) if the number of shares of Stock counted against the number of
shares that may be issued for purposes of Subsection 2.1 is based upon an
estimate made by the Corporation or the Committee as provided in clause
(a) above and the actual number of shares of Stock issued pursuant to the
applicable Award is greater or less than the estimated number, then, upon
such issuance, the number of shares of Stock that may be issued pursuant
to Subsection 2.1 shall be further reduced by the excess issuance or
increased by the shortfall, as applicable.
Notwithstanding the provisions of this Subsection 2.2, no Stock shall be treated
as issuable under the Plan to Eligible Individuals subject to Section 16 of the
Exchange Act if otherwise prohibited from issuance under Rule 16b-3.
2.3 DESCRIPTION OF SHARES. The shares to be delivered under the Plan shall
be made available from (a) authorized but unissued shares of Stock, (b) Stock
held in the treasury of the Corporation, or (c) previously issued shares of
Stock reacquired by the Corporation, including shares purchased on the open
market, in each situation as the Board of Directors or the Committee may
determine from time to time at its sole option.
2.4 REGISTRATION AND LISTING OF SHARES. From time to time, the Board of
Directors and appropriate officers of the Corporation shall and are authorized
to take whatever actions are necessary to file required documents with
governmental authorities, stock exchanges, and other appropriate Persons to make
shares of Stock available for issuance pursuant to the exercise of Awards.
SECTION 3. ADMINISTRATION OF THE PLAN
3.1 COMMITTEE. The Committee shall administer the Plan with respect to all
Eligible Individuals who are subject to Section 16(b) of the Exchange Act, but
shall not have the power to appoint members of the Committee or to terminate,
modify, or amend the Plan. The Board of Directors may administer the Plan with
respect to all other Eligible Individuals, or may delegate all or part of that
duty to the Committee. Except for references in Subsections 3.1, 3.2 and 3.3,
and unless the context otherwise requires, references herein to the Committee
shall also refer to the Board of Directors as administrator of the Plan for
Eligible Individuals who are subject to Section 16(b) of the Exchange Act. The
Committee shall be constituted so that, as long as Stock is registered under
Section 12 of the Exchange Act, each member of the Committee shall be a
Disinterested Person and so that the Plan in all other applicable respects will
qualify transactions related to the Plan for the exemptions from Section 16(b)
of the Exchange Act provided by Rule 16b-3, to the extent exemptions thereunder
may be available. No discretion regarding Awards to Eligible Individuals who are
subject to Section 16(b) of the Exchange Act shall be afforded to a Person who
is not a Disinterested Person. The number of Persons that shall constitute the
Committee shall be determined from time to time by a majority of all the members
of the Board of Directors and, unless that majority of the Board of Directors
determines otherwise or Rule 16b- 3 is amended to require otherwise, shall be no
less than two Persons. Persons elected to serve on the Committee as
Disinterested Persons shall not be eligible to receive Awards or equity
securities under any plan of the Corporation or its Affiliates while they are
serving as members of the
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Committee; shall not have received Awards or such equity securities under any
plan of the Corporation or its Affiliates within one year before their
appointment to the Committee becomes effective; and shall not be eligible to
receive Awards or such equity securities under any plan of the Corporation or
its Affiliates for such period following service on the Committee as may be
required by Rule 16b-3 for that Person to remain a Disinterested Person, in each
case except for Awards or equity securities granted as provided in paragraphs
(c)(2)(i)(A), (B), (C), or (D) of Rule 16b-3. Notwithstanding the foregoing, the
Board of Directors may designate the Compensation Committee (regardless of its
composition) of the Board of Directors to serve as the Committee hereunder,
provided that the Stock is not registered under Section 12 of the Exchange Act.
3.2 DURATION, REMOVAL, ETC. The members of the Committee shall serve at
the discretion of the Board of Directors, which shall have the power, at any
time and from time to time, to remove members from or add members to the
Committee. Removal from the Committee may be with or without cause. Any
individual serving as a member of the Committee shall have the right to resign
from membership in the Committee by at least three days' written notice to the
Board of Directors. The Board of Directors, and not the remaining members of the
Committee, shall have the power and authority to fill all vacancies on the
Committee. The Board of Directors shall promptly fill any vacancy that causes
the number of members of the Committee to be below two or any other number that
Rule 16b-3 may require from time to time.
3.3 MEETINGS AND ACTIONS OF COMMITTEE. The Board of Directors shall
designate which of the Committee members shall be the chairman of the Committee.
If the Board of Directors fails to designate a Committee chairman, the members
of the Committee shall elect one of the Committee members as chairman, who shall
act as chairman until he ceases to be a member of the Committee or until the
Board of Directors elects a new chairman. The Committee shall hold its meetings
at those times and places as the chairman of the Committee may determine. At all
meetings of the Committee, a quorum for the transaction of business shall be
required and a quorum shall be deemed present if at least a majority of the
members of the Committee are present. At any meeting of the Committee, each
member shall have one vote. All decisions and determinations of the Committee
shall be made by the majority vote or majority decision of all of its members
present at a meeting at which a quorum is present; provided, however, that any
decision or determination reduced to writing and signed by all of the members of
the Committee shall be as fully effective as if it had been made at a meeting
that was duly called and held. The Committee may make any rules and regulations
for the conduct of its business that are not inconsistent with the provisions of
the Plan, the Articles or Certificate of Incorporation of the Corporation, the
bylaws of the Corporation, and Rule 16b-3 so long as it is applicable, as the
Committee may deem advisable.
3.4 COMMITTEE'S POWERS. Subject to the express provisions of the Plan and
Rule 16b-3, the Committee shall have the authority, in its sole and absolute
discretion, to (a) adopt, amend, and rescind administrative and interpretive
rules and regulations relating to the Plan; (b) determine the Eligible
Individuals to whom, and the time or times at which, Awards shall be granted;
(c) determine the amount of cash and the number of shares of Stock, Stock
Appreciation Rights, or Restricted Stock Awards, or any combination thereof,
that shall be the subject of each Award; (d)
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determine the terms and provisions of each Award Agreement (which need not be
identical), including provisions defining or otherwise relating to (i) the term
and the period or periods and extent of exercisability of the Options, (ii) the
extent to which the transferability of shares of Stock issued or transferred
pursuant to any Award is restricted, (iii) the effect of termination of
employment of the Holder on the Award, and (iv) the effect of approved leaves of
absence (consistent with any applicable regulations of the Internal Revenue
Service); (e) accelerate, pursuant to Section 9, the time of exercisability of
any Option that has been granted; (f) construe the respective Award Agreements
and the Plan; (g) make determinations of the Fair Market Value of the Stock
pursuant to the Plan; (h) delegate its duties under the Plan to such agents as
it may appoint from time to time, provided that the Committee may not delegate
its duties with respect to making Awards to, or otherwise with respect to Awards
granted to, Eligible Individuals who are subject to Section 16(b) of the
Exchange Act; and (i) make all other determinations, perform all other acts, and
exercise all other powers and authority necessary or advisable for administering
the Plan, including the delegation of those ministerial acts and
responsibilities as the Committee deems appropriate. Subject to Rule 16b-3, the
Committee may correct any defect, supply any omission, or reconcile any
inconsistency in the Plan, in any Award, or in any Award Agreement in the manner
and to the extent it deems necessary or desirable to carry the Plan into effect,
and the Committee shall be the sole and final judge of that necessity or
desirability. The determinations of the Committee on the matters referred to in
this Subsection 3.4 shall be final and conclusive.
SECTION 4. ELIGIBILITY AND PARTICIPATION
4.1 ELIGIBLE INDIVIDUALS. Awards may be granted pursuant to the Plan only
to Persons who are Eligible Individuals at the time of the grant thereof.
4.2 GRANT OF AWARDS. Subject to the express provisions of the Plan, the
Committee shall determine which Eligible Individuals shall be granted Awards
from time to time. In making grants, the Committee shall take into consideration
the contribution the potential Holder has made or may make to the success of the
Corporation or its Subsidiaries and such other considerations as the Board of
Directors may from time to time specify. The Committee shall also determine the
number of shares subject to each of the Awards and shall authorize and cause the
Corporation to grant Awards in accordance with those determinations.
4.3 DATE OF GRANT. The date on which the Committee completes all action
resolving to offer an Award to an individual, including the specification of the
number of shares of Stock to be subject to the Award, shall be the date on which
the Award covered by an Award Agreement is granted (the "Date of Grant"), even
though certain terms of the Award Agreement may not be determined at that time
and even though the Award Agreement may not be executed until a later time. In
no event shall a Holder gain any rights in addition to those specified by the
Committee in its grant, regardless of the time that may pass between the grant
of the Award and the actual execution of the Award Agreement by the Corporation
and the Holder. Notwithstanding the above provisions of this Subsection 4.3, the
Date of Grant of an Award granted pursuant to Subsection 8.2(a) shall be the
Effective Date, the Date of Grant of an Award granted pursuant to
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Subsection 8.2(b) and Subsection 8.2(c) shall be the date on which such Award is
granted as provided in such Subsections.
4.4 AWARD AGREEMENTS. Each Award granted under the Plan shall be evidenced
by an Award Agreement that is executed by the Corporation and the Eligible
Individual to whom the Award is granted and incorporating those terms that the
Committee shall deem necessary or desirable. More than one Award may be granted
under the Plan to the same Eligible Individual and be outstanding concurrently.
In the event an Eligible Individual is granted both one or more Incentive
Options and one or more Nonstatutory Options, those grants shall be evidenced by
separate Award Agreements, one for each of the Incentive Option grants and one
for each of the Nonstatutory Option grants.
4.5 LIMITATION FOR INCENTIVE OPTIONS. Notwithstanding any provision
contained herein to the contrary, (a) a Person shall not be eligible to receive
an Incentive Option unless he is an Employee of the Corporation or a corporate
Subsidiary (but not a partnership Subsidiary) and (b) a Person shall not be
eligible to receive an Incentive Option if, immediately before the time the
Option is granted, that Person owns (within the meaning of Sections 422 and
424(d) of the Code) stock possessing more than ten percent of the total combined
voting power or value of all classes of outstanding stock of the Corporation or
a Subsidiary. Nevertheless, Subsection 4.5(b) shall not apply if, at the time
the Incentive Option is granted, the Exercise Price of the Incentive Option is
at least one hundred ten percent of Fair Market Value and the Incentive Option
is not, by its terms, exercisable after the expiration of five years from the
Date of Grant.
4.6 NO RIGHT TO AWARD. The adoption of the Plan shall not be deemed to
give any Person a right to be granted an Award.
SECTION 5. TERMS AND CONDITIONS OF OPTIONS
All Options granted under the Plan shall comply with, and the related
Award Agreements shall be deemed to include and be subject to, the terms and
conditions set forth in this Section 5 (to the extent each term and condition
applies to the form of Option) and also to the terms and conditions set forth in
Sections 9 and 10; provided, however, that the Committee may authorize an Award
Agreement that expressly contains terms and provisions that differ from the
terms and provisions set forth in Subsections 9.2, 9.3, and 9.4 and any of the
terms and provisions of Section 10 (other than Subsections 10.9 and 10.10).
5.1 NUMBER OF SHARES. Each Award Agreement shall state the total number of
shares of Stock to which it relates.
5.2 VESTING. Each Award Agreement shall state the time or periods in
which, or the conditions upon satisfaction of which, the right to exercise the
Option or a portion thereof shall vest and the number of shares of Stock for
which the right to exercise the Option shall vest at each such time, period, or
fulfillment of condition.
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5.3 EXPIRATION OF OPTIONS. No Option shall be exercised after the
expiration of a period of ten years commencing on the Date of Grant of the
Option; provided, however, that any portion of a Nonstatutory Option that
pursuant to the terms of the Award Agreement under which such Nonstatutory
Option is granted shall not become exercisable until the date which is the tenth
anniversary of the Date of Grant of such Nonstatutory Option may be exercisable
for a period of 30 days following the date on which such portion becomes
exercisable.
5.4 EXERCISE PRICE. Each Award Agreement shall state the exercise price
per share of Stock (the "Exercise Price"); provided, however, that the exercise
price per share of Stock subject to an Incentive Option shall not be less than
the greater of (a) the par value per share of the Stock or (b) 100% of the Fair
Market Value per share of the Stock on the Date of Grant of the Option.
5.5 METHOD OF EXERCISE. The Option shall be exercisable only by written
notice of exercise (the "Exercise Notice") delivered to the Corporation during
the term of the Option, which notice shall (a) state the number of shares of
Stock with respect to which the Option is being exercised, (b) be signed by the
Holder of the Option or, if the Holder is dead or becomes affected by a
Disability, by the Person authorized to exercise the Option pursuant to
Subsections 10.3 and 10.4, (c) be accompanied by the Exercise Price for all
shares of Stock for which the Option is being exercised, and (d) include such
other information, instruments, and documents as may be required to satisfy any
other condition to exercise contained in the Award Agreement. The Option shall
not be deemed to have been exercised unless all of the requirements of the
preceding provisions of this Subsection 5.5 have been satisfied.
5.6 INCENTIVE OPTION EXERCISES. Except as otherwise provided in Subsection
10.3, during the Holder's lifetime, only the Holder may exercise an Incentive
Option; provided, however, if a Holder wishes to transfer an Option that is
currently an Incentive Option to a permitted transferee, as approved by the
written consent of a majority of the Committee members, then immediately prior
to the transfer, the Option shall cease to be an Incentive Option and such
Option shall be exercised by such transferee as a Nonstatutory Option.
5.7 MEDIUM AND TIME OF PAYMENT. The Exercise Price of an Option shall be
payable in full upon the exercise of the Option (a) in cash or by an equivalent
means acceptable to the Committee, (b) on the Committee's prior consent, with
shares of Stock owned by the Holder (including shares received upon exercise of
the Option or restricted shares already held by the Holder) and having a Fair
Market Value at least equal to the aggregate Exercise Price payable in
connection with such exercise, or (c) by any combination of clauses (a) and (b).
If the Committee elects to accept shares of Stock in payment of all or any
portion of the Exercise Price, then (for purposes of payment of the Exercise
Price) those shares of Stock shall be deemed to have a cash value equal to their
aggregate Fair Market Value determined as of the date the certificate for such
shares is delivered to the Corporation. If the Committee elects to accept shares
of restricted Stock in payment of all or any portion of the Exercise Price, then
an equal number of shares issued pursuant to the exercise shall be restricted on
the same terms and for the restriction period remaining on the shares used for
payment.
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5.8 PAYMENT WITH SALE PROCEEDS. In addition, at the request of the Holder
and to the extent permitted by applicable law, the Committee may (but shall not
be required to) approve arrangements with a brokerage firm under which that
brokerage firm, on behalf of the Holder, shall pay to the Corporation the
Exercise Price of the Option being exercised and the Corporation shall promptly
deliver the exercised shares of Stock to the brokerage firm. To accomplish this
transaction, the Holder must deliver to the Corporation an Exercise Notice
containing irrevocable instructions from the Holder to the Corporation to
deliver the Stock certificates representing the shares of Stock directly to the
broker. Upon receiving a copy of the Exercise Notice acknowledged by the
Corporation, the broker shall sell that number of shares of Stock or loan the
Holder an amount sufficient to pay the Exercise Price and any withholding
obligations due. The broker then shall deliver to the Corporation that portion
of the sale or loan proceeds necessary to cover the Exercise Price and any
withholding obligations due. The Committee shall not approve any transaction of
this nature if the Committee believes that the transaction would give rise to
the Holder's liability for short-swing profits under Section 16(b) of the
Exchange Act.
5.9 PAYMENT OF TAXES. The Committee may, in its discretion, require a
Holder to pay to the Corporation (or the Corporation's Subsidiary if the Holder
is an employee of a Subsidiary of the Corporation), at the time of the exercise
of an Option or thereafter, the amount that the Committee deems necessary to
satisfy the Corporation's or its Subsidiary's current or future obligation to
withhold federal, state, or local income or other taxes that the Holder incurs
by exercising an Option. In connection with the exercise of an Option requiring
tax withholding, a Holder may (a) direct the Corporation to withhold from the
shares of Stock to be issued to the Holder the number of shares necessary to
satisfy the Corporation's obligation to withhold taxes, that determination to be
based on the shares' Fair Market Value as of the date of exercise; (b) deliver
to the Corporation sufficient shares of Stock (based upon the Fair Market Value
as of the date of such delivery) to satisfy the Corporation's tax withholding
obligations, which tax withholding obligation is based on the shares' Fair
Market Value as of the later of the date of exercise or the date as of which the
shares of Stock issued in connection with such exercise become includible in the
income of the Holder; or (c) deliver sufficient cash to the Corporation to
satisfy its tax withholding obligations. Holders who elect to use such a Stock
withholding feature must make the election at the time and in the manner that
the Committee prescribes. The Committee may, at its sole option, deny any
Holder's request to satisfy withholding obligations through Stock instead of
cash. In the event the Committee subsequently determines that the aggregate Fair
Market Value (as determined above) of any shares of Stock withheld or delivered
as payment of any tax withholding obligation is insufficient to discharge that
tax withholding obligation, then the Holder shall pay to the Corporation,
immediately upon the Committee's request, the amount of that deficiency in the
form of payment requested by the Committee.
5.10 LIMITATION ON AGGREGATE VALUE OF SHARES THAT MAY BECOME FIRST
EXERCISABLE DURING ANY CALENDAR YEAR UNDER AN INCENTIVE OPTION. Except as is
otherwise provided in Subsection 9.3, with respect to any Incentive Option
granted under this Plan, the aggregate Fair Market Value of shares of Stock
subject to an Incentive Option and the aggregate Fair Market Value of shares of
Stock or stock of any Subsidiary (or a predecessor of the Corporation or a
Subsidiary) subject to any other incentive stock option (within the meaning of
Section 422 of the Code) of the Corporation or its Subsidiaries (or a
predecessor corporation of any such corporation)
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that first become purchasable by a Holder in any calendar year may not (with
respect to that Holder) 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. As used in the previous sentence, Fair Market Value shall be
determined as of the Date of Grant of the Incentive Option. For purposes of this
Subsection 5.10, "predecessor corporation" means (a) a corporation that was a
party to a transaction described in Section 424(a) of the Code (or which would
be so described if a substitution or assumption under that Section had been
effected) with the Corporation, (b) a corporation which, at the time the new
incentive stock option (within the meaning of Section 422 of the Code) is
granted, is a Subsidiary of the Corporation or a predecessor corporation of any
such corporations, or (c) a predecessor corporation of any such corporations.
Failure to comply with this provision shall not impair the enforceability or
exercisability of any Option, but shall cause the excess amount of shares to be
reclassified in accordance with the Code.
5.11 NO FRACTIONAL SHARES. The Corporation shall not in any case be
required to sell, issue, or deliver a fractional share with respect to any
Option. In lieu of the issuance of any fractional share of Stock, the
Corporation shall pay to the Holder an amount in cash equal to the same fraction
(as the fractional Stock) of the Fair Market Value of a share of Stock
determined as of the date of the applicable Exercise Notice.
5.12 MODIFICATION, EXTENSION, AND RENEWAL OF OPTIONS. Subject to the terms
and conditions of and within the limitations of the Plan, Rule 16b-3, and any
consent required by the last sentence of this Subsection 5.12, the Committee may
(a) modify, extend, or renew outstanding Options granted under the Plan, (b)
accept the surrender of Options outstanding hereunder (to the extent not
previously exercised) and authorize the granting of new Options in substitution
for outstanding Options (to the extent not previously exercised), and (c) amend
the terms of an Incentive Option at any time to include provisions that have the
effect of changing the Incentive Option to a Nonstatutory Option. Nevertheless,
without the consent of the Holder, the Committee may not modify any outstanding
Options so as to specify a higher or lower Exercise Price or accept the
surrender of outstanding Incentive Options and authorize the granting of new
Options in substitution therefor specifying a higher or lower Exercise Price. In
addition, no modification of an Option granted hereunder shall, without the
consent of the Holder, alter or impair any rights or obligations under any
Option theretofore granted to such Holder under the Plan except, with respect to
Incentive Options, as may be necessary to satisfy the requirements of Section
422 of the Code or as permitted in clause (c) of this Subsection 5.12.
5.13 OTHER AGREEMENT PROVISIONS. The Award Agreements relating to Options
shall contain such provisions in addition to those required by the Plan
(including without limitation restrictions or the removal of restrictions upon
the exercise of the Option and the retention or transfer of shares thereby
acquired) as the Committee may deem advisable. Each Award Agreement shall
identify the Option evidenced thereby as an Incentive Option or Nonstatutory
Option, as the case may be, and no Award Agreement shall cover both an Incentive
Option and a Nonstatutory Option. Each Award Agreement relating to an Incentive
Option granted hereunder shall contain such limitations and restrictions upon
the exercise of the Incentive Option to which it relates as shall be necessary
for the Incentive Option to which such Award Agreement relates to constitute an
incentive stock option, as defined in Section 422 of the Code.
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SECTION 6. STOCK APPRECIATION RIGHTS
All Stock Appreciation Rights granted under the Plan shall comply with,
and the related Award Agreements shall be deemed to include and be subject to,
the terms and conditions set forth in this Section 6 (to the extent each term
and condition applies to the form of Stock Appreciation Right) and also the
terms and conditions set forth in Sections 9 and 10; provided, however, that the
Committee may authorize an Award Agreement related to a Stock Appreciation Right
that expressly contains terms and provisions that differ from the terms and
provisions set forth in Subsections 9.2, 9.3, and 9.4 and any of the terms and
provisions of Section 10 (other than Subsections 10.9 and 10.10).
6.1 FORM OF RIGHT. A Stock Appreciation Right may be granted to an
Eligible Individual (a) in connection with an Option, either at the time of
grant or at any time during the term of the Option, or (b) independent of an
Option.
6.2 RIGHTS RELATED TO OPTIONS. A Stock Appreciation Right granted pursuant
to an Option shall entitle the Holder, upon exercise, to surrender that Option
or any portion thereof, to the extent unexercised, and to receive payment of an
amount computed pursuant to Subsection 6.2(b). That Option shall then cease to
be exercisable to the extent surrendered. Stock Appreciation Rights granted in
connection with an Option shall be subject to the terms of the Award Agreement
governing the Option, which shall comply with the following provisions in
addition to those applicable to Options:
(a) EXERCISE AND TRANSFER. Subject to Subsection 10.9, a Stock
Appreciation Right granted in connection with an Option shall be
exercisable only at such time or times and only to the extent that the
related Option is exercisable and shall not be transferable except to the
extent that the related Option is transferable.
(b) VALUE OF RIGHT. Upon the exercise of a Stock Appreciation Right
related to an Option, the Holder shall be entitled to receive payment from
the Corporation of an amount determined by multiplying:
(i) The difference obtained by subtracting the Exercise Price
of a share of Stock specified in the related Option from the Fair
Market Value of a share of Stock on the date of exercise of the
Stock Appreciation Right, by
(ii) The number of shares as to which that Stock Appreciation
Right has been exercised.
6.3 RIGHT WITHOUT OPTION. A Stock Appreciation Right granted independent
of an Option shall be exercisable as determined by the Committee and set forth
in the Award Agreement governing the Stock Appreciation Right, which Award
Agreement shall comply with the following provisions:
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(a) NUMBER OF SHARES. Each Award Agreement shall state the total
number of shares of Stock to which the Stock Appreciation Right relates.
(b) VESTING. Each Award Agreement shall state the time or periods in
which the right to exercise the Stock Appreciation Right or a portion
thereof shall vest and the number of shares of Stock for which the right
to exercise the Stock Appreciation Right shall vest at each such time or
period.
(c) EXPIRATION OF RIGHTS. Each Award Agreement shall state the date
at which the Stock Appreciation Rights shall expire if not previously
exercised.
(d) VALUE OF RIGHT. Each Stock Appreciation Right shall entitle the
Holder, upon exercise thereof, to receive payment of an amount determined
by multiplying:
(i) The difference obtained by subtracting the Fair Market
Value of a share of Stock on the Date of Grant of the Stock
Appreciation Right from the Fair Market Value of a share of Stock on
the date of exercise of that Stock Appreciation Right, by
(ii) The number of shares as to which the Stock Appreciation
Right has been exercised.
6.4 LIMITATIONS ON RIGHTS. Notwithstanding Subsections 6.2(b) and 6.3(d),
the Committee may limit the amount payable upon exercise of a Stock Appreciation
Right. Any such limitation must be determined as of the Date of Grant and be
noted on the Award Agreement evidencing the Holder's Stock Appreciation Right.
6.5 PAYMENT OF RIGHTS. Payment of the amount determined under Subsection
6.2(b) or 6.3(d) and Subsection 6.4 may be made, in the sole discretion of the
Committee unless specifically provided otherwise in the Award Agreement, solely
in whole shares of Stock valued at Fair Market Value on the date of exercise of
the Stock Appreciation Right, solely in cash, or in a combination of cash and
whole shares of Stock. If the Committee decides to make full payment in shares
of Stock and the amount payable results in a fractional share, payment for the
fractional share shall be made in cash.
6.6 PAYMENT OF TAXES. The Committee may, in its discretion, require a
Holder to pay to the Corporation (or the Corporation's Subsidiary if the Holder
is an employee of a Subsidiary of the Corporation), at the time of the exercise
of a Stock Appreciation Right or thereafter, the amount that the Committee deems
necessary to satisfy the Corporation's or its Subsidiary's current or future
obligation to withhold federal, state, or local income or other taxes that the
Holder incurs by exercising a Stock Appreciation Right. In connection with the
exercise of a Stock Appreciation Right requiring tax withholding, a Holder may
(a) direct the Corporation to withhold from the shares of Stock to be issued to
the Holder the number of shares necessary to satisfy the Corporation's
obligation to withhold taxes, that determination to be based on the shares' Fair
Market Value as of the date of exercise; (b) deliver to the Corporation
sufficient shares of Stock
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(based upon the Fair Market Value as of the date of such delivery) to satisfy
the Corporation's tax withholding obligations, which tax withholding obligation
is based on the shares' Fair Market Value as of the later of the date of
exercise or the date as of which the shares of Stock issued in connection with
such exercise become includible in the income of the Holder; or (c) deliver
sufficient cash to the Corporation to satisfy its tax withholding obligations.
Holders who elect to have Stock withheld pursuant to (a) or (b) above must make
the election at the time and in the manner that the Committee prescribes. The
Committee may, in its sole discretion, deny any Holder's request to satisfy
withholding obligations through Stock instead of cash. In the event the
Committee subsequently determines that the aggregate Fair Market Value (as
determined above) of any shares of Stock withheld or delivered as payment of any
tax withholding obligation is insufficient to discharge that tax withholding
obligation, then the Holder shall pay to the Corporation, immediately upon the
Committee's request, the amount of that deficiency in the form of payment
requested by the Commission.
6.7 OTHER AGREEMENT PROVISIONS. The Award Agreements relating to Stock
Appreciation Rights shall contain such provisions in addition to those required
by the Plan (including without limitation restrictions or the removal of
restrictions upon the exercise of the Stock Appreciation Right and the retention
or transfer of shares thereby acquired) as the Committee may deem advisable.
SECTION 7. RESTRICTED STOCK AWARDS
All Restricted Stock Awards granted under the Plan shall comply with and
be subject to, and the related Award Agreements shall be deemed to include, the
terms and conditions set forth in this Section 7 and also to the terms and
conditions set forth in Sections 9 and 10; provided, however, that the Committee
may authorize an Award Agreement related to a Restricted Stock Award that
expressly contains terms and provisions that differ from the terms and
provisions set forth in Subsections 9.2, 9.3, and 9.4 and the terms and
provisions set forth in Section 10 (other than Subsections 10.9 and 10.10).
7.1 RESTRICTIONS. All shares of Restricted Stock Awards granted or sold
pursuant to the Plan shall be subject to the following conditions:
(a) TRANSFERABILITY. The shares may not be sold, transferred, or
otherwise alienated or hypothecated until the restrictions are removed or
expire.
(b) CONDITIONS TO REMOVAL OF RESTRICTIONS. Conditions to removal or
expiration of the restrictions may include, but are not required to be
limited to, continuing employment or service as a director, officer, or
Key Employee or achievement of performance objectives described in the
Award Agreement.
(c) LEGEND. Each certificate representing Restricted Stock Awards
granted pursuant to the Plan shall bear a legend making appropriate
reference to the restrictions imposed.
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(d) POSSESSION. The Committee may require the Corporation to retain
physical custody of the certificates representing Restricted Stock Awards
during the restriction period and may require the Holder of the Award to
execute stock powers in blank for those certificates and deliver those
stock powers to the Corporation, or the Committee may require the Holder
to enter into an escrow agreement providing that the certificates
representing Restricted Stock Awards granted or sold pursuant to the Plan
shall remain in the physical custody of an escrow holder until all
restrictions are removed or expire.
(e) OTHER CONDITIONS. The Committee may impose other conditions on
any shares granted or sold as Restricted Stock Awards pursuant to the Plan
as it may deem advisable, including without limitation (i) restrictions
under the Securities Act or Exchange Act, (ii) the requirements of any
securities exchange upon which the shares or shares of the same class are
then listed, and (iii) any state securities law applicable to the shares.
7.2 EXPIRATION OF RESTRICTIONS. The restrictions imposed in Subsection 7.1
on Restricted Stock Awards shall lapse as determined by the Committee and set
forth in the applicable Award Agreement, and the Corporation shall promptly
deliver to the Holder of the Restricted Stock Award a certificate representing
the number of shares for which restrictions have lapsed, free of any restrictive
legend relating to the lapsed restrictions. Each Restricted Stock Award may have
a different restriction period as determined by the Committee in its sole
discretion. The Committee may, in its discretion, prospectively reduce the
restriction period applicable to a particular Restricted Stock Award.
7.3 RIGHTS AS SHAREHOLDER. Subject to the provisions of Subsections 7.1
and 10.10, the Committee may, in its discretion, determine what rights, if any,
the Holder shall have with respect to the Restricted Stock Awards granted or
sold, including the right to vote the shares and receive all dividends and other
distributions paid or made with respect thereto.
7.4 PAYMENT OF TAXES. The Committee may, in its discretion, require a
Holder to pay to the Corporation (or the Corporation's Subsidiary if the Holder
is an employee of a Subsidiary of the Corporation) the amount that the Committee
deems necessary to satisfy the Corporation's or its Subsidiary's current or
future obligation to withhold federal, state, or local income or other taxes
that the Holder incurs by reason of the Restricted Stock Award. The Holder may
(a) direct the Corporation to withhold from the shares of Stock to be issued to
the Holder the number of shares necessary to satisfy the Corporation's
obligation to withhold taxes, that determination to be based on the shares' Fair
Market Value as of the date on which tax withholding is to be made; (b) deliver
to the Corporation sufficient shares of Stock (based upon the Fair Market Value
as of the date of such delivery) to satisfy the Corporation's tax withholding
obligations, which tax withholding obligation is based on the shares' Fair
Market Value as of the later of the date of issuance or the date as of which the
shares of Stock issued become includible in the income of the Holder; or (c)
deliver sufficient cash to the Corporation to satisfy its tax withholding
obligations. Holders who elect to have Stock withheld pursuant to (a) or (b)
above must make the election at the time and in the manner that the Committee
prescribes. The Committee may, in its sole discretion, deny any Holder's request
to satisfy withholding obligations through Stock instead of cash. In the event
the Committee subsequently determines that the aggregate Fair Market Value
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(as determined above) of any shares of Stock withheld or delivered as payment of
any tax withholding obligation is insufficient to discharge that tax withholding
obligation, then the Holder shall pay to the Corporation, immediately upon the
Committee's request, the amount of that deficiency.
7.5 OTHER AGREEMENT PROVISIONS. The Award Agreements relating to
Restricted Stock Awards shall contain such provisions in addition to those
required by the Plan as the Committee may deem advisable.
SECTION 8. AWARDS TO NON-EMPLOYEE DIRECTORS
Except as otherwise provided in this Section 8 or the applicable Award
Agreement, Awards granted pursuant to this Section 8 shall be subject to the
conditions of Section 5 to the extent permitted under Rule 16b-3.
8.1 INELIGIBILITY FOR OTHER AWARDS. Non-Employee Directors shall not be
eligible to receive any Awards under the Plan other than the Awards specified in
this Section 8.
8.2 AUTOMATIC GRANT OF AWARDS. Unless any Non-Employee Director (or
director nominee) shall have given written notice to the Corporation that he or
she declines to accept any Award pursuant to this Subsection 8.2 on or prior to
the Date of Grant of such Award,
(a) each Non-Employee Director who is a director on the close of
business of the Effective Date of this Plan automatically shall be
granted, as of the Effective Date, Options to purchase 4,300 shares of
Stock (after giving effect to a 4.3-for-1 stock split effective March 1,
1996), which Options shall have a per share Exercise Price equal to $7.44
(after giving effect to a 4.3-for-1 stock split effective March 1, 1996);
(b) commencing on April 1, 1996, and on each April 1 thereafter
through and including April 1, 1997, each Person who is a Non-Employee
Director on such date automatically shall be granted Options to purchase
4,300 shares of Stock, which Options shall have a per share Exercise Price
equal to the Fair Market Value of the Stock on the Date of Grant;
(c) commencing on April 1, 1998 and on each April 1 thereafter
through and including April 1, 2005, each Person who is a Non-Employee
Director on such date automatically shall be granted Options to purchase
5,000 shares of Stock, which Options shall have a per share Exercise Price
equal to the Fair Market Value of the Stock on the Date of Grant.
8.3 AVAILABLE STOCK. The automatic Awards specified in Subsection 8.2
shall be made in the amounts specified in Subsection 8.2 only if the number of
shares of Stock available to be issued, transferred or exercised pursuant to
Awards under this Plan (as calculated in Section 2) is sufficient to make all
automatic grants required to be made by Subsection 8.2 on the Date of Grant of
those automatic Awards. In the event that the number of shares of Stock that are
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available to be issued, transferred, or exercised pursuant to Awards under the
Plan on the Date of Grant of the automatic Awards described in Subsection 8.2 is
insufficient to permit the grant of the entire number of shares specified in
Subsection 8.2, then the number of available shares shall be apportioned equally
among the automatic Awards made on that date, and the number of shares
apportioned to each automatic Award shall be the amount of shares automatically
subject to that automatic Award.
8.4 EXERCISABILITY. Options granted pursuant to Subsection 8.2 shall vest
immediately upon their grant, and shall be exercisable for a period of ten years
from the Date of Grant.
SECTION 9. ADJUSTMENT PROVISIONS
9.1 ADJUSTMENT OF AWARDS AND AUTHORIZED STOCK. The terms of an Award and
the number of shares of Stock authorized pursuant to Subsection 2.1 and Section
8 for issuance under the Plan shall be subject to adjustment from time to time,
in accordance with the following provisions:
(a) If at any time, or from time to time, the Corporation shall
subdivide as a whole (by reclassification, by a Stock split, by the
issuance of a distribution on Stock payable in Stock, or otherwise) the
number of shares of Stock then outstanding into a greater number of shares
of Stock, then (i) the maximum number of shares of Stock available for the
Plan as provided in Subsection 2.1 shall be increased proportionately, and
the kind of shares or other securities available for the Plan shall be
appropriately adjusted, (ii) the number of shares of Stock (or other kind
of shares or securities) that may be acquired under any Award shall be
increased proportionately, and (iii) the price (including Exercise Price)
for each share of Stock (or other kind of shares or securities) subject to
then outstanding Awards shall be reduced proportionately, without changing
the aggregate purchase price or value as to which outstanding Awards
remain exercisable or subject to restrictions.
(b) If at any time, or from time to time, the Corporation shall
consolidate as a whole (by reclassification, reverse Stock split, or
otherwise) the number of shares of Stock then outstanding into a lesser
number of shares of Stock, then (i) the maximum number of shares of Stock
available for the Plan as provided in Subsection 2.1 shall be decreased
proportionately, and the kind of shares or other securities available for
the Plan shall be appropriately adjusted, (ii) the number of shares of
Stock (or other kind of shares or securities) that may be acquired under
any Award shall be decreased proportionately, and (iii) the price
(including Exercise Price) for each share of Stock (or other kind of
shares or securities) subject to then outstanding Awards shall be
increased proportionately, without changing the aggregate purchase price
or value as to which outstanding Awards remain exercisable or subject to
restrictions.
(c) Whenever the number of shares of Stock subject to outstanding
Awards and the price for each share of Stock subject to outstanding Awards
are required to be adjusted as provided in this Subsection 9.1, the
Committee shall promptly prepare a notice setting
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forth, in reasonable detail, the event requiring adjustment, the amount of
the adjustment, the method by which such adjustment was calculated, and
the change in price and the number of shares of Stock, other securities,
cash, or property purchasable subject to each Award after giving effect to
the adjustments. The Committee shall promptly give each Holder such a
notice.
(d) Adjustments under Subsections 9(a) and (b) shall be made by the
Committee, and its determination as to what adjustments shall be made and
the extent thereof shall be final, binding, and conclusive. No fractional
interest shall be issued under the Plan on account of any such
adjustments.
9.2 CHANGES IN CONTROL. Any Award Agreement may provide that, upon the
occurrence of a Change in Control, one or more of the following apply: (a) each
Holder of an Option shall immediately be granted corresponding Stock
Appreciation Rights; (b) all outstanding Stock Appreciation Rights and Options
shall immediately become fully vested and exercisable in full, including that
portion of any Stock Appreciation Right or Option that pursuant to the terms and
provisions of the applicable Award Agreement had not yet become exercisable (the
total number of shares of Stock as to which a Stock Appreciation Right or Option
is exercisable upon the occurrence of a Change in Control is referred to herein
as the "Total Shares"); and (c) the restriction period of any Restricted Stock
Award shall immediately be accelerated and the restrictions shall expire. An
Award Agreement does not have to provide for any of the foregoing. If a Change
in Control involves a Restructuring or occurs in connection with a series of
related transactions involving a Restructuring and if such Restructuring is in
the form of a Non-Surviving Event and as a part of such Restructuring shares of
stock, other securities, cash, or property shall be issuable or deliverable in
exchange for Stock, then the Holder of an Award shall be entitled to purchase or
receive (in lieu of the Total Shares that the Holder would otherwise be entitled
to purchase or receive), as appropriate for the form of Award, the number of
shares of Stock, other securities, cash, or property to which that number of
Total Shares would have been entitled in connection with such Restructuring
(and, for Options, at an aggregate exercise price equal to the Exercise Price
that would have been payable if that number of Total Shares had been purchased
on the exercise of the Option immediately before the consummation of the
Restructuring). Nothing in this Subsection 9.2 shall impose on a Holder the
obligation to exercise any Award immediately before or upon the Change of
Control, or cause a Holder to forfeit the right to exercise the Award during the
remainder of the original term of the Award because of a Change in Control.
9.3 RESTRUCTURING WITHOUT CHANGE IN CONTROL. In the event a Restructuring
shall occur at any time while there is any outstanding Award hereunder and the
Restructuring does not occur in connection with a Change in Control or a series
of related transactions involving a Change in Control, then:
(a) no outstanding Option or Stock Appreciation Right shall
immediately become fully vested and exercisable in full merely because of
the occurrence of the Restructuring;
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(b) no Holder of an Option shall automatically be granted
corresponding Stock Appreciation Rights;
(c) the restriction period of any Restricted Stock Award shall not
immediately be accelerated and the restrictions expire merely because of
the occurrence of the Restructuring; and
(d) at the option of the Committee, the Committee may (but shall not
be required to) cause the Corporation to take any one or more of the
following actions:
(i) accelerate in whole or in part the time of the vesting
and exercisability of any one or more of the outstanding Stock
Appreciation Rights and Options so as to provide that those Stock
Appreciation Rights and Options shall be exercisable before, upon,
or after the consummation of the Restructuring;
(ii) grant each Holder of an Option corresponding Stock
Appreciation Rights;
(iii) accelerate in whole or in part the expiration of some or
all of the restrictions on any Restricted Stock Award;
(iv) if the Restructuring is in the form of a Non-Surviving
Event, cause the surviving entity to assume in whole or in part any
one or more of the outstanding Awards upon such terms and provisions
as the Committee deems desirable; or
(v) redeem in whole or in part any one or more of the
outstanding Awards (whether or not then exercisable) in
consideration of a cash payment, as such payment may be reduced for
tax withholding obligations as contemplated in Subsections 5.9, 6.6,
or 7.4, as applicable, in an amount equal to:
(A) for Options and Stock Appreciation Rights granted in
connection with Options, the excess of (1) the Fair Market
Value, determined as of the date immediately preceding the
consummation of the Restructuring, of the aggregate number of
shares of Stock subject to the Award and as to which the Award
is being redeemed over (2) the Exercise Price for that number
of shares of Stock;
(B) for Stock Appreciation Rights not granted in
connection with an Option, the excess of (1) the Fair Market
Value, determined as of the date immediately preceding the
consummation of the Restructuring, of the aggregate number of
shares of Stock subject to the Award and as to which the Award
is being redeemed over (2) the Fair Market Value of that
number of shares of Stock on the Date of Grant; and
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(C) for Restricted Stock Awards, the Fair Market Value,
determined as of the date immediately preceding the
consummation of the Restructuring, of the aggregate number of
shares of Stock subject to the Award and as to which the Award
is being redeemed.
The Corporation shall promptly notify each Holder of any election or action
taken by the Corporation under this Subsection 9.3. In the event of any election
or action taken by the Corporation pursuant to this Subsection 9.3 that requires
the amendment or cancellation of any Award Agreement as may be specified in any
notice to the Holder thereof, that Holder shall promptly deliver that Award
Agreement to the Corporation in order for that amendment or cancellation to be
implemented by the Corporation and the Committee. The failure of the Holder to
deliver any such Award Agreement to the Corporation as provided in the preceding
sentence shall not in any manner affect the validity or enforceability of any
action taken by the Corporation and the Committee under this Subsection 9.3,
including without limitation any redemption of an Award as of the consummation
of a Restructuring. Any cash payment to be made by the Corporation pursuant to
this Subsection 9.3 in connection with the redemption of any outstanding Awards
shall be paid to the Holder thereof currently with the delivery to the
Corporation of the Award Agreement evidencing that Award; provided, however,
that any such redemption shall be effective upon the consummation of the
Restructuring notwithstanding that the payment of the redemption price may occur
subsequent to the consummation. If all or any portion of an outstanding Award is
to be exercised or accelerated upon or after the consummation of a Restructuring
that does not occur in connection with a Change in Control and is in the form of
a Non-Surviving Event, and as a part of that Restructuring shares of stock,
other securities, cash, or property shall be issuable or deliverable in exchange
for Stock, then the Holder of the Award shall thereafter be entitled to purchase
or receive (in lieu of the number of shares of Stock that the Holder would
otherwise be entitled to purchase or receive) the number of shares of Stock,
other securities, cash, or property to which such number of shares of Stock
would have been entitled in connection with the Restructuring (and, for Options,
upon payment of the aggregate exercise price equal to the Exercise Price that
would have been payable if that number of Total Shares had been purchased on the
exercise of the Option immediately before the consummation of the Restructuring)
and such Award shall be subject to adjustments that shall be as nearly
equivalent as may be practical to the adjustments provided for in this Section
9.
9.4 NOTICE OF RESTRUCTURING. The Corporation shall attempt to keep all
Holders informed with respect to any Restructuring or of any potential
Restructuring to the same extent that the Corporation's shareholders are
informed by the Corporation of any such event or potential event.
SECTION 10. ADDITIONAL PROVISIONS
10.1 TERMINATION OF EMPLOYMENT. If a Holder is an Eligible Individual
because the Holder is an Employee and if that employment relationship is
terminated for any reason other than (a) that Holder's death or (b) that
Holder's Disability (hereafter defined), then any and all Awards held by such
Holder in such Holder's capacity as an Employee as of the date of the
termination that are not yet exercisable (or for which restrictions have not
lapsed) shall become null and void
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as of the date of such termination; provided, however, that the portion, if any,
of such Awards that are exercisable as of the date of termination shall be
exercisable for a period of the lesser of (a) the remainder of the term of the
Award or (b) the date which is 30 days following the date of termination. Any
portion of an Award not exercised upon the expiration of the lesser of the
periods specified above shall be null and void unless the Holder dies during
such period, in which case the provisions of Subsection 10.3 shall govern.
10.2 OTHER LOSS OF ELIGIBILITY - NON-EMPLOYEES. If a Holder is an Eligible
Individual because the Holder is serving in a capacity other than as an Employee
and if that capacity is terminated for any reason other than the Holder's death
or Disability, then that portion, if any, of any and all Awards held by the
Holder that were granted because of that capacity which are not yet exercisable
(or for which restrictions have not lapsed) as of the date of the termination
shall become null and void as of the date of the termination; provided, however,
that the portion, if any, of any and all Awards held by the Holder that are then
exercisable as of the date of the termination shall be exercisable for a period
of the lesser of (a) the remainder of the term of the Award or (b) 30 days
following the date such capacity is terminated. If a Holder is an Eligible
Individual because the Holder is serving in a capacity other than as an Employee
and if that capacity is terminated by reason of the Holder's death or
Disability, then the portion, if any, of any and all Awards held by the Holder
that are not yet exercisable (or for which restrictions have not lapsed) as of
the date of termination for death or Disability shall become exercisable (and
the restrictions thereon, if any, shall lapse) and all such Awards held by that
Holder as of the date of termination that are exercisable (either as a result of
this sentence or otherwise) shall be exercisable for a period of the lesser of
(a) the remainder of the term of the Award or (b) the date which is 30 days
following the date of termination. Any portion of an Award not exercised upon
the expiration of the periods specified in (a) or (b) of the preceding two
sentences shall be null and void upon the expiration of such period, as
applicable.
10.3 DEATH. Upon the death of a Holder, any and all Awards held by the
Holder that are not then exercisable (or for which restrictions have not lapsed)
shall become immediately exercisable (and any restrictions shall immediately
lapse) and such Awards shall be exercisable by that Holder's legal
representatives, heirs, legatees, or distributees for a period of 90 days
following the date of the Holder's death. Any portion of an Award not exercised
upon the expiration of such period shall be null and void. Except as expressly
provided in this Subsection 10.3, no Award held by a Holder shall be exercisable
after the death of that Holder.
10.4 DISABILITY. If a Holder is an Eligible Individual because the Holder
is an Employee and if that employment relationship is terminated by reason of
the Holder's Disability, then the portion, if any, of any and all Awards held by
the Holder that are not then exercisable (or for which restrictions have not
lapsed) shall become immediately exercisable (and any restrictions shall
immediately lapse) and such Awards shall be exercisable by the Holder, his
guardian or his legal representative for a period of 30 days following the date
of such termination. Any portion of an Award not exercised upon the expiration
of such period shall be null and void unless the Holder dies during such period,
in which event the provisions of Subsection 10.3 shall govern. "Disability"
shall have the meaning given it in the employment agreement of the Holder;
provided, however, that if the Holder has no employment agreement, "Disability"
shall mean, as
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determined by the Board of Directors in the sole discretion exercised in good
faith of the Board of Directors, a physical or mental impairment of sufficient
severity that either the Holder is unable to continue performing the duties he
performed before such impairment or the Holder's condition entitles him to
disability benefits under any insurance or employee benefit plan of the
Corporation or its Subsidiaries and that impairment or condition is cited by the
Corporation as the reason for termination of the Holder's employment.
10.5 LEAVE OF ABSENCE. With respect to an Award, the Committee may, in its
sole discretion, determine that any Holder who is on leave of absence for any
reason will be considered to still be in the employ of the Corporation or any of
its Subsidiaries, as applicable, for any or all purposes of the Plan and the
Award Agreement of such Holder.
10.6 TRANSFERABILITY OF AWARDS. In addition to such other terms and
conditions as may be included in a particular Award Agreement, an Award
requiring exercise shall be exercisable during a Holder's lifetime only by that
Holder or by that Holder's guardian or legal representative. An Award requiring
exercise shall not be transferable other than (i) by will or the laws of descent
and distribution, or (ii) in accordance with the terms of Subsection 5.6.
10.7 FORFEITURE AND RESTRICTIONS ON TRANSFER. Each Award Agreement may
contain or otherwise provide for conditions giving rise to the forfeiture of the
Stock acquired pursuant to an Award or otherwise and may also provide for those
restrictions on the transferability of shares of the Stock acquired pursuant to
an Award or otherwise that the Committee in its sole and absolute discretion may
deem proper or advisable. The conditions giving rise to forfeiture may include,
but need not be limited to, the requirement that the Holder render substantial
services to the Corporation or its Subsidiaries for a specified period of time.
The restrictions on transferability may include, but need not be limited to,
options and rights of first refusal in favor of the Corporation and shareholders
of the Corporation other than the Holder of such shares of Stock who is a party
to the particular Award Agreement or a subsequent Holder of the shares of Stock
who is bound by that Award Agreement.
10.8 DELIVERY OF CERTIFICATES OF STOCK. Subject to Subsection 10.9, the
Corporation shall promptly issue and deliver a certificate representing the
number of shares of Stock as to which (a) an Option has been exercised after the
Corporation receives an Exercise Notice and upon receipt by the Corporation of
the Exercise Price and any tax withholding as may be requested, (b) a Stock
Appreciation Right has been exercised (to the extent the Committee determines to
pay such Stock Appreciation Right in shares of Stock pursuant to Subsection 6.5)
and upon receipt by the Corporation of any tax withholding as may be requested,
and (c) restrictions have lapsed with respect to a Restricted Stock Award and
upon receipt by the Corporation of any tax withholding as may be requested. The
value of the shares of Stock or cash transferable because of an Award under the
Plan shall not bear any interest owing to the passage of time, except as may be
otherwise provided in an Award Agreement. If a Holder is entitled to receive
certificates representing Stock received for more than one form of Award under
the Plan, separate Stock certificates shall be issued with respect to Incentive
Options and Nonstatutory Options.
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10.9 CONDITIONS TO DELIVERY OF STOCK. Nothing herein or in any Award
granted hereunder or any Award Agreement shall require the Corporation to issue
any shares with respect to any Award if that issuance would, in the opinion of
counsel for the Corporation, constitute a violation of the Securities Act or any
similar or superseding statute or statutes, any other applicable statute or
regulation, or the rules of any applicable securities exchange or securities
association, as then in effect. At the time of any exercise of an Option or
Stock Appreciation Right, or at the time of any grant of a Restricted Stock
Award, the Corporation may, as a condition precedent to the exercise of such
Option or Stock Appreciation Right or vesting of any Restricted Stock Award,
require from the Holder of the Award (or in the event of his death, his legal
representatives, heirs, legatees, or distributees) such written representations,
if any, concerning the Holder's intentions with regard to the retention or
disposition of the shares of Stock being acquired pursuant to the Award and such
written covenants and agreements, if any, as to the manner of disposal of such
shares as, in the opinion of counsel to the Corporation, may be necessary to
ensure that any disposition by that Holder (or in the event of the Holder's
death, his legal representatives, heirs, legatees, or distributees) will not
involve a violation of the Securities Act or any similar or superseding statute
or statutes, any other applicable state or federal statute or regulation, or any
rule of any applicable securities exchange or securities association, as then in
effect.
10.10 CERTAIN DIRECTORS AND OFFICERS. With respect to Holders who are
directors or officers of the Corporation or any of its Subsidiaries and who are
subject to Section 16(b) of the Exchange Act, Awards and all rights under the
Plan shall be exercisable during the Holder's lifetime only by the Holder or the
Holder's guardian or legal representative, but not for at least six months after
grant, unless (a) the Board of Directors expressly authorizes that an Award
shall be exercisable before the expiration of the six-month period or (b) the
death or Disability of the Holder occurs before the expiration of the six-month
period. In addition, no such officer or director shall exercise any Stock
Appreciation Right or have shares of Stock withheld to pay tax withholding
obligations within the first six months of the term of an Award. Any election by
any such officer or director to have tax withholding obligations satisfied by
the withholding of shares of Stock shall be irrevocable and shall be
communicated to the Committee during the period beginning on the third day
following the date of release of quarterly or annual summary statements of sales
and earnings and ending on the twelfth business day following such date (the
"Window Period") or by an irrevocable election communicated to the Committee at
least six months before the date of exercise of the Award for which such
withholding is desired. Any election by an officer or director to receive cash
in full or partial settlement of a Stock Appreciation Right, as well as any
exercise by such individual of a Stock Appreciation Right for cash, in either
case to the extent permitted under the applicable Award Agreement or otherwise
permitted by the Committee, shall be made during the Window Period or within any
other periods that the Committee shall specify from time to time.
10.11 SECURITIES ACT LEGEND. Certificates for shares of Stock, when
issued, may have the following legend, or statements of other applicable
restrictions (including, without limitation, restrictions required under any
federal, state or foreign law), endorsed thereon and may not be immediately
transferable:
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THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS. THE SHARES MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED,
TRANSFERRED, OR OTHERWISE DISPOSED OF UNTIL THE HOLDER HEREOF PROVIDES
EVIDENCE SATISFACTORY TO THE ISSUER (WHICH, IN THE DISCRETION OF THE
ISSUER, MAY INCLUDE AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER) THAT
SUCH OFFER, SALE, PLEDGE, TRANSFER, OR OTHER DISPOSITION WILL NOT VIOLATE
APPLICABLE FEDERAL OR STATE LAWS.
This legend shall not be required for shares of Stock issued pursuant to an
effective registration statement under the Securities Act.
10.12 LEGEND FOR RESTRICTIONS ON TRANSFER. Each certificate representing
shares issued to a Holder pursuant to an Award granted under the Plan shall, if
such shares are subject to any transfer restriction, including a right of first
refusal, provided for under this Plan or an Award Agreement, bear a legend that
complies with applicable law with respect to the restrictions on transferability
contained in this Subsection 10.12, such as:
THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY IMPOSED BY THAT CERTAIN INSTRUMENT
ENTITLED "DAWSON PRODUCTION SERVICES, INC. AMENDED AND RESTATED 1995
INCENTIVE PLAN" AS ADOPTED BY THE CORPORATION, AND AN AGREEMENT THEREUNDER
BETWEEN THE CORPORATION AND THE INITIAL HOLDER THEREOF DATED
________________, 199__, AND MAY NOT BE TRANSFERRED, SOLD, OR OTHERWISE
DISPOSED OF EXCEPT AS THEREIN PROVIDED. THE CORPORATION WILL FURNISH A
COPY OF SUCH INSTRUMENT AND AGREEMENT TO THE RECORD HOLDER OF THIS
CERTIFICATE WITHOUT CHARGE ON REQUEST TO THE CORPORATION AT ITS PRINCIPAL
PLACE OF BUSINESS OR REGISTERED OFFICE.
10.13 RIGHTS AS A SHAREHOLDER. A Holder shall have no right as a
shareholder with respect to any shares covered by his Award until a certificate
representing those shares is issued in his name. No adjustment shall be made for
dividends (ordinary or extraordinary, whether in cash or other property) or
distributions or other rights for which the record date is before the date that
certificate is issued, except as contemplated by Section 9 hereof. Nevertheless,
dividends, dividend equivalent rights and voting rights may be extended to and
made part of any Award denominated in Stock or units of Stock, subject to such
terms, conditions and restrictions as the Committee may establish. The Committee
may also establish rules and procedures for the crediting of interest on
deferred cash payments and dividend equivalents for deferred payment denominated
in Stock or units of Stock.
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10.14 FURNISH INFORMATION. Each Holder shall furnish to the Corporation
all information requested by the Corporation to enable it to comply with any
reporting or other requirement imposed upon the Corporation by or under any
applicable statute or regulation.
10.15 OBLIGATION TO EXERCISE. The granting of an Award hereunder shall
impose no obligation upon the Holder to exercise the same or any part thereof.
10.16 ADJUSTMENTS TO AWARDS. Subject to the general limitations set forth
in Sections 5, 6, and 9, the Committee may make any adjustment in the Exercise
Price of, the number of shares subject to, or the terms of a Nonstatutory Option
or Stock Appreciation Right by canceling an outstanding Nonstatutory Option or
Stock Appreciation Right and regranting a Nonstatutory Option or Stock
Appreciation Right. Such adjustment shall be made by amending, substituting, or
regranting an outstanding Nonstatutory Option or Stock Appreciation Right. Such
amendment, substitution, or regrant may result in terms and conditions that
differ from the terms and conditions of the original Nonstatutory Option or
Stock Appreciation Right. The Committee may not, however, impair the rights of
any Holder of previously granted Nonstatutory Options or Stock Appreciation
Rights without that Holder's consent. If such action is effected by amendment,
such amendment shall be deemed effective as of the Date of Grant of the amended
Award.
10.17 REMEDIES. The Corporation shall be entitled to recover from a Holder
reasonable attorneys' fees incurred in connection with the enforcement of the
terms and provisions of the Plan and any Award Agreement whether by an action to
enforce specific performance or for damages for its breach or otherwise.
10.18 INFORMATION CONFIDENTIAL. As partial consideration for the granting
of each Award hereunder, the Holder shall agree with the Corporation that he
will keep confidential all information and knowledge that he has relating to the
manner and amount of his participation in the Plan; provided, however, that such
information may be disclosed as required by law and may be given in confidence
to the Holder's spouse, tax or financial advisors, or to a financial institution
to the extent that such information is necessary to secure a loan. In the event
any breach of this promise comes to the attention of the Committee, it shall
take into consideration that breach in determining whether to recommend the
grant of any future Award to that Holder, as a factor mitigating against the
advisability of granting any such future Award to that Person.
10.19 CONSIDERATION. No Option or Stock Appreciation Right shall be
exercisable and no restriction on any Restricted Stock Award shall lapse with
respect to a Holder unless and until the Holder thereof shall have paid cash or
property to, or performed services for, the Corporation or any of its
Subsidiaries that the Committee believes is equal to or greater in value than
the par value of the Stock subject to such Award.
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SECTION 11. DURATION AND AMENDMENT OF PLAN
11.1 DURATION. No Awards may be granted hereunder after the date that is
ten years from the earlier of (a) the date the Plan was initially adopted by the
Board of Directors or (b) the date the Plan was initially approved by the
shareholders of the Corporation.
11.2 AMENDMENT. The Board of Directors may, insofar as permitted by law,
with respect to any shares which, at the time, are not subject to Awards,
suspend or discontinue the Plan or revise or amend it in any respect whatsoever
and may amend any provision of the Plan or any Award Agreement to make the Plan
or the Award Agreement, or both, comply with Section 16(b) of the Exchange Act
and the exemptions from that Section in the regulations thereunder. The Board of
Directors may also amend, modify, suspend, or terminate the Plan for the purpose
of meeting or addressing any changes in other legal requirements applicable to
the Corporation or the Plan or for any other purpose permitted by law. The Plan
may not be amended without the consent of the holders of a majority of the
shares of Stock then outstanding to (a) increase materially the aggregate number
of shares of Stock that may be issued under the Plan (except for adjustments
pursuant to Section 9 hereof), (b) increase materially the benefits accruing to
Eligible Individuals under the Plan, or (c) modify materially the requirements
about eligibility for participation in the Plan; provided, however, that such
amendments may be made without the consent of shareholders of the Corporation if
changes occur in law or other legal requirements (including Rule 16b-3) that
would permit such changes. In connection with any amendment of the Plan, the
Board of Directors shall be authorized to incorporate such provisions as shall
be necessary for amounts paid under the Plan to be exempt from Section 162(m) of
the Code.
SECTION 12. GENERAL
12.1 APPLICATION OF FUNDS. The proceeds received by the Corporation from
the sale of shares pursuant to Awards may be used for any general corporate
purpose.
12.2 RIGHT OF THE CORPORATION AND SUBSIDIARIES TO TERMINATE EMPLOYMENT.
Nothing contained in the Plan or in any Award Agreement shall confer upon any
Holder the right to continue in the employ of the Corporation or any Subsidiary
or interfere in any way with the rights of the Corporation or any Subsidiary to
terminate the Holder's employment at any time.
12.3 NO LIABILITY FOR GOOD FAITH DETERMINATIONS. Neither the members of
the Board of Directors nor any member of the Committee shall be liable for any
act, omission or determination taken or made in good faith with respect to the
Plan or any Award granted under it; and members of the Board of Directors and
the Committee shall be entitled to indemnification and reimbursement by the
Corporation in respect of any claim, loss, damage, or expense (including
attorneys' fees, the costs of settling any suit, provided such settlement is
approved by independent legal counsel selected by the Corporation, and amounts
paid in satisfaction of a judgment, except a judgment based on a finding of bad
faith) arising therefrom to the full extent permitted by law and under any
directors' and officers' liability or similar insurance coverage that may from
time to time be in effect. This right to indemnification shall be in addition
to, and not a limitation on,
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any other indemnification rights any member of the Board of Directors or the
Committee may have.
12.4 OTHER BENEFITS. Participation in the Plan shall not preclude the
Holder from eligibility in any other stock or stock option plan of the
Corporation or any Subsidiary or any old age benefit, insurance, pension, profit
sharing retirement, bonus, or other extra compensation plans that the
Corporation or any Subsidiary has adopted, or may, at any time, adopt for the
benefit of its Employees. Neither the adoption of the Plan by the Board of
Directors nor the submission of the Plan to the shareholders of the Corporation
for approval shall be construed as creating any limitations on the power of the
Board of Directors to adopt such other incentive arrangements as it may deem
desirable, including, without limitation, the granting of stock options and the
awarding of Stock and cash otherwise than under the Plan and such arrangements
may be either generally applicable or applicable only in specific cases.
12.5 EXCLUSION FROM PENSION AND PROFIT-SHARING COMPENSATION. By acceptance
of an Award (regardless of form), as applicable, each Holder shall be deemed to
have agreed that the Award is special incentive compensation that will not be
taken into account in any manner as salary, compensation, or bonus in
determining the amount of any payment under any pension, retirement, or other
employee benefit plan of the Corporation or any Subsidiary, unless any pension,
retirement, or other employee benefit plan of the Corporation or Subsidiary
expressly provides that such Award shall be so considered for purposes of
determining the amount of any payment under any such plan. In addition, each
beneficiary of a deceased Holder shall be deemed to have agreed that the Award
will not affect the amount of any life insurance coverage, if any, provided by
the Corporation or a Subsidiary on the life of the Holder that is payable to the
beneficiary under any life insurance plan covering Employees of the Corporation
or any Subsidiary.
12.6 EXECUTION OF RECEIPTS AND RELEASES. Any payment of cash or any
issuance or transfer of shares of Stock to the Holder, or to his legal
representative, heir, legatee, or distributee, in accordance with the provisions
hereof, shall, to the extent thereof, be in full satisfaction of all claims of
such Persons hereunder. The Committee may require any Holder, legal
representative, heir, legatee, or distributee, as a condition precedent to such
payment, to execute a release and receipt therefor in such form as it shall
determine.
12.7 UNFUNDED PLAN. Insofar as it provides for Awards of cash and Stock,
the Plan shall be unfunded. Although bookkeeping accounts may be established
with respect to Holders who are entitled to cash, Stock, or rights thereto under
the Plan, any such accounts shall be used merely as a bookkeeping convenience.
The Corporation shall not be required to segregate any assets that may at any
time be represented by cash, Stock, or rights thereto, nor shall the Plan be
construed as providing for such segregation, nor shall the Corporation nor the
Board of Directors nor the Committee be deemed to be a trustee of any cash,
Stock, or rights thereto to be granted under the Plan. Any liability of the
Corporation to any Holder with respect to a grant of cash, Stock, or rights
thereto under the Plan shall be based solely upon any contractual obligations
that may be created by the Plan and any Award Agreement; no such obligation of
the Corporation shall be deemed to be secured by any pledge or other encumbrance
on any property of the Corporation.
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Neither the Corporation nor the Board of Directors nor the Committee shall be
required to give any security or bond for the performance of any obligation that
may be created by the Plan.
12.8 NO GUARANTEE OF INTERESTS. Neither the Committee nor the Corporation
guarantees the Stock of the Corporation from loss or depreciation.
12.9 PAYMENT OF EXPENSES. All expenses incident to the administration,
termination, or protection of the Plan, including, but not limited to, legal and
accounting fees, shall be paid by the Corporation or its Subsidiaries; provided,
however, the Corporation or a Subsidiary may recover any and all damages, fees,
expenses, and costs arising out of any actions taken by the Corporation to
enforce its right to purchase Stock under this Plan.
12.10 CORPORATION RECORDS. Records of the Corporation or its Subsidiaries
regarding the Holder's period of employment, termination of employment and the
reason therefor, leaves of absence, re-employment, and other matters shall be
conclusive for all purposes hereunder, unless determined by the Committee to be
incorrect.
12.11 INFORMATION. The Corporation and its Subsidiaries shall, upon
request or as may be specifically required hereunder, furnish or cause to be
furnished all of the information or documentation which is necessary or required
by the Committee to perform its duties and functions under the Plan.
12.12 NO LIABILITY OF CORPORATION. The Corporation assumes no obligation
or responsibility to the Holder or his legal representatives, heirs, legatees,
or distributees for any act of, or failure to act on the part of, the Committee.
12.13 CORPORATION ACTION. Any action required of the Corporation shall be
by resolution of its Board of Directors or by a Person authorized to act by
resolution of the Board of Directors.
12.14 SEVERABILITY. In the event that any provision of this Plan, or the
application hereof to any Person or circumstance, is held by a court of
competent jurisdiction to be invalid, illegal, or unenforceable in any respect
under present or future laws effective during the effective term of any such
provision, such invalid, illegal, or unenforceable provision shall be fully
severable; and this Plan shall then be construed and enforced as if such
invalid, illegal, or unenforceable provision had not been contained in this
Plan; and the remaining provisions of this Plan shall remain in full force and
effect and shall not be affected by the illegal, invalid, or unenforceable
provision or by its severance from this Plan. Furthermore, in lieu of each such
illegal, invalid, or unenforceable provision, there shall be added automatically
as part of this Plan a provision as similar in terms to such illegal, invalid,
or unenforceable provision as may be possible and be legal, valid, and
enforceable. If any of the terms or provisions of this Plan conflict with the
requirements of Rule 16b-3 (as those terms or provisions are applied to Eligible
Individuals who are subject to Section 16(b) of the Exchange Act), then those
conflicting terms or provisions shall be deemed inoperative to the extent they
so conflict with the requirements of Rule 16b-3 and, in lieu of such conflicting
provision, there shall be added automatically as part of this Plan a provision
as similar in terms to such conflicting provision as may be possible and not
conflict with
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the requirements of Rule 16b-3. If any of the terms or provisions of this Plan
conflict with the requirements of Section 422 of the Code (with respect to
Incentive Options), then those conflicting terms or provisions shall be deemed
inoperative to the extent they so conflict with the requirements of Section 422
of the Code and, in lieu of such conflicting provision, there shall be added
automatically as part of this Plan a provision as similar in terms to such
conflicting provision as may be possible and not conflict with the requirements
of Section 422 of the Code. With respect to Incentive Options, if this Plan does
not contain any provision required to be included herein under Section 422 of
the Code, that provision shall be deemed to be incorporated herein with the same
force and effect as if that provision had been set out at length herein;
provided, however, that, to the extent any Option that is intended to qualify as
an Incentive Option cannot so qualify, that Option (to that extent) shall be
deemed a Nonstatutory Option for all purposes of the Plan.
12.15 NOTICES. Whenever any notice is required or permitted hereunder,
such notice must be in writing and personally delivered or sent by mail. Any
notice required or permitted to be delivered hereunder shall be deemed to be
delivered on the date on which it is actually received by the Corporation
addressed to the attention of the Corporate Secretary at the Corporation's
office as specified in the applicable Award Agreement. The Corporation or a
Holder may change, at any time and from time to time, by written notice to the
other, the address which it or he had previously specified for receiving
notices. Until changed in accordance herewith, the Corporation and each Holder
shall specify as its and his address for receiving notices the address set forth
in the Award Agreement pertaining to the shares to which such notice relates.
Any Person entitled to notice hereunder may waive such notice.
12.16 SUCCESSORS. The Plan shall be binding upon the Holder, his legal
representatives, heirs, legatees, and distributees, upon the Corporation, its
successors and assigns and upon the Committee and its successors.
12.17 HEADINGS. The titles and headings of Sections and Subsections are
included for convenience of reference only and are not to be considered in
construction of the provisions hereof.
12.18 GOVERNING LAW. All questions arising with respect to the provisions
of the Plan shall be determined by application of the laws of the State of
Texas, without giving effect to any conflict of law provisions thereof, except
to the extent Texas law is preempted by federal law. Questions arising with
respect to the provisions of an Award Agreement that are matters of contract law
shall be governed by the laws of the state specified in the Award Agreement,
except to the extent that Texas corporate law subconflicts with the contract law
of such state, in which event Texas corporate law shall govern irrespective of
any conflict of law laws. The obligation of the Corporation to sell and deliver
Stock hereunder is subject to applicable federal, state and foreign laws and to
the approval of any governmental authority required in connection with the
authorization, issuance, sale, or delivery of such Stock.
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12.19 WORD USAGE. Words used in the masculine shall apply to the feminine
where applicable, and wherever the context of this Plan dictates, the plural
shall be read as the singular and the singular as the plural.
IN WITNESS WHEREOF, Dawson, acting by and through its officers hereunto
duly authorized, has executed this Amended and Restated 1995 Incentive Plan, to
be effective as of July 31, 1997.
DAWSON PRODUCTION SERVICES, INC.,
a Texas corporation
By:_______________________________
Michael E. Little, President
34
EXHIBIT 4.4
OPTION AGREEMENT
Grantor: Dawson Well Servicing, Inc. Number of Shares: 15,000
Grantee: Michael E. Little Termination: On or before June 30, 2002
Date of Grant: October 1, 1994
THE SECURITIES REPRESENTED BY THIS INVESTMENT OR DOCUMENT HAVE BEEN
ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE. WITHOUT SUCH
REGISTRATION, SUCH SECURITIES MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR
OTHERWISE TRANSFERRED EXCEPT UPON DELIVERY TO DAWSON WELL SERVICING, INC. (THE
CORPORATION), IF IT SO REQUESTS, OF AN OPINION OF COUNSEL SATISFACTORY TO THE
CORPORATION THAT REGISTRATION IS NOT REQUIRED FOR SUCH TRANSFER OR THE
SUBMISSION TO THE CORPORATION OF SUCH OTHER EVIDENCE AS MAY BE SATISFACTORY TO
THE CORPORATION TO THE EFFECT THAT ANY SUCH TRANSFER SHALL NOT BE IN VIOLATION
OF THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS
OR ANY RULE OR REGULATION PROMULGATED THEREUNDER.
The undersigned, DAWSON WELL SERVICING, INC. (the "Corporation"), a Texas
corporation, for and in consideration of good and valuable consideration,
receipt of which is hereby acknowledged, hereby certifies and warrants that
Michael E. Little (the "Option Holder") is entitled, subject to the terms and
conditions hereof, and at such times and in such amounts as are provided herein,
to purchase on or before the close of business on the date five years following
vesting (but in no event later than June 30, 2002), an aggregate of 15,000
shares of common stock ($1.00 par value) of the Corporation (the "Stock") upon
presentation of this option (the "Option") and payment of the purchase price
(the "Purchase Price") as hereinafter provided.
1. EXERCISE OF OPTION. Subject to the other terms and conditions of this
Agreement, the Option granted hereby shall vest and become exercisable on the
earlier of: (i) the dates set forth below as to the number of shares set forth
opposite such dates; (ii) the date on which the Stock becomes a class of
securities that is registered pursuant to Sections 12 or 15(d) of the Securities
Exchange Act of 1934, as amended (the "1934 Act"); or (iii) upon a Change of
Control (as hereinafter defined).
VESTING DATES NUMBER OF SHARES VESTED
June 30, 1995 5,000
June 30, 1996 5,000
June 30, 1997 5,000
<PAGE>
For purposes of this Option, the term "Change of Control" shall mean the
occurrence of any one or more of the following events:
a. any corporation (other than the Corporation or a Subsidiary),
person or group (within the meaning of Sections 13(d) or 14(d)(2) of the
1934 Act) makes a tender or exchange offer which, if consummated, would
make such corporation, person or group the beneficial owner (within the
meaning of Rule l3d-3 under the 1934 Act) of voting securities of the
Corporation representing more than 50% of the total number of votes
eligible to be cast at any election of directors of the Corporation and,
pursuant to such offer, purchases are made (an "Offer");
b. the shareholders of the Corporation approve an agreement to merge
or consolidate the Corporation with or into another corporation or to
sell, lease or otherwise dispose of all or substantially all of its
assets, or adopt a plan of liquidation;
c. any corporation, person or group (within the meaning of Sections
13(d) and 14(d)(2) of the 1934 Act) becomes the beneficial owner (within
the meaning of Rule 13d-3 under the 1934 Act) of voting securities of the
Corporation representing more than 50% of the total number of votes
eligible to be cast at any election of directors of the Corporation; or
d. those persons who constitute the Directors at the beginning of
any two-year period cease to constitute a majority of the Board at any
time during such two-year period;
provided, however, that in no event shall a Change of Control be deemed to have
occurred if the Board, by written action taken prior to, and with respect to, an
event otherwise constituting a Change of Control, determines in its discretion
that such event shall not constitute a Change of Control for purposes of this
Option.
2. RESERVATION OF STOCK. The Corporation covenants that, while this Option
is exercisable, it will reserve from its authorized and unissued common stock a
sufficient number of shares to provide for the issuance and delivery of stock
pursuant to the exercise hereof.
3. PROTECTION AGAINST DILUTION. In any of the following events occurring
after the date of this Option, appropriate adjustment shall be made in the
number of shares deliverable upon the exercise of this Option or the price per
share to be paid, so as to maintain the proportionate interest of the Option
Holder:
a. Recapitalization of the Corporation through a stock split or a
reverse stock split; or
2
<PAGE>
b. Declaration of a dividend on the stock, payable in shares of
stock or securities convertible into stock.
4. MERGERS. In the event the Corporation shall be merged or consolidated
with another corporation during the term of this Option, or substantially all of
its assets shall be sold to another company in exchange for stock of such other
company, or stock of any company related to such other company, with a view to
distributing such stock to the stockholders of the Corporation, the Corporation,
at its option, may invoke the provisions described in Section 6 hereof; however,
if the Corporation consummates any such transaction without having invoked the
provisions of Section 6, each share of Stock purchasable by this Option shall,
upon consummation of any such transaction, be replaced for the purposes hereof
by the securities or property issuable or distributable pursuant to such
transaction in respect of one share of Stock of the Corporation.
5. PROPOSED REGISTERED OFFERING OF SECURITIES. In the event the
Corporation shall propose to make a public offering of its securities, to be
registered under the Securities Act of 1933, the Corporation, at its option, may
invoke the provisions described in Section 6 hereof; however, if the Corporation
consummates any such transaction without having invoked the provisions described
in Section 6, this Option shall continue to be valid and exercisable, subject to
all other applicable provisions hereof.
6. SPECIAL PROVISIONS. If the Corporation, in good faith, believes a
transaction as described in Sections 4 or 5 hereof (hereinafter referred to as
"Transaction") shall be consummated or closed by the Corporation, it may elect
to notify the Holder of the pendency of the Transaction and to specify a date,
at least twenty days following such notice ("Notice"), by which time the Option
Holder may, in his discretion, evidence his intent conditionally to exercise
this Option (subject to the consummation of the Transaction) by depositing funds
into a separate escrow account, to be identified in the Notice, or by delivering
to the Corporation an irrevocable bank letter of credit in a form acceptable to
the Corporation, with such funds or letter of credit being in an amount equal to
the exercise price for any or all Options the Option Holder determines
conditionally to exercise. If such funds or letter of credit are not received or
deposited by the deadline date specified in the Notice, or if by such date the
Option Holder has not given notice of exercise as described in Section 9 hereof,
this Option shall not be exercisable (otherwise than in accordance with this
Section 6) until the Corporation notifies the Option Holder that the Transaction
will not be consummated or closed (such notice hereinafter being referred to as
a "Transaction Termination Notice"). The Corporation hereby covenants and agrees
that if it has issued a Notice with respect to a Transaction, it will provide a
Transaction Termination Notice promptly at such time as it becomes reasonably
certain that the Transaction will not be consummated or closed. At such times as
the Corporation invokes the procedures of this Section 6, the following
additional conditions shall apply:
a. If the Option Holder deposits funds to the escrow account or
delivers a letter of credit to the Corporation and the Transaction is
consummated or closed, the Option,
3
<PAGE>
upon the date of such consummation or closing, is deemed irrevocably
exercised to the extent of such funds or letter of credit, and any
unexercised Options thereupon shall lapse and be null and void, and shall
not thereafter be exercisable. If a Transaction Termination Notice is
sent, the Option Holder's escrow funds or letter of credit shall be
promptly returned and Option shall be exercisable as otherwise provided
herein.
b. If an Option Holder does not deposit funds to the escrow account
or deliver a letter of credit to the Corporation, and the Transaction is
consummated or closed, the Option, upon and as of the date of such
consummation or closing, is deemed to have lapsed and to be null and void
and shall not thereafter be exercisable. If a Transaction Termination
Notice is sent, the Option thereupon shall be exercisable as otherwise
provided herein.
7. STOCKHOLDERS' RIGHTS. Until the valid exercise of this Option, Option
Holder, by virtue of this Option, shall not be entitled to any rights of a
stockholder of the Corporation; but immediately upon the exercise of this Option
and upon payment as provided herein, the Option Holder shall be deemed a record
holder of the Stock with respect to which this Option is exercised.
8. EXERCISE OF OPTION AND PURCHASE PRICE. The Option hereinbefore
granted shall be exercisable and vested (to the extent that it is exercisable in
accordance with its terms) according to the vesting dates as set forth in
Section 1. The Purchase Price for each share of Common Stock purchased hereunder
shall be Twenty Dollars ($20.00).
Upon the death of the Option Holder, this Option may be exercised by said
Option Holder's heirs, executors, administrators, or estate in accordance with
the provisions herein within 120 days following the death of said Option Holder.
The Options may be divided into Options of one share or multiples thereof, upon
surrender at the offices of the Corporation. The Option Holder may exercise this
Option, to the extent otherwise provided herein, for all or less than all stock
subject hereof.
9. METHOD OF EXERCISING OPTION. Except as otherwise provided by Section 6
hereof, the Option Holder (or his heirs, executors or administrators) shall
deliver to the Corporation written notice of his election to exercise the
Option, which notice shall specify the date and time of the exercise of the
Option and the number of shares of Stock in respect of which the Option is to be
exercised. The date specified in such notice shall be not less than five nor
more than forty-five days from the date the notice of exercise is given, and
shall be on a business day, and the time specified shall be during the regular
business hours of the Corporation. Any such notice shall be irrevocable, except
upon the written consent of the Corporation and the Option Holder.
10. PAYMENT AND DELIVERY OF SHARES. The Option Holder shall, at the date
and time specified in the notice described in Section 9, deliver a bank
cashier's or treasurer's
4
<PAGE>
check or checks payable in the amount of the Option exercise price for the
shares of Stock in respect of which the Option is being exercised. Such delivery
shall be made to the Corporation at its principal office in San Antonio or at
such other place as the Corporation may specify in writing and such check or
checks shall be drawn to the order of the Corporation. Contemporaneously with
such payments, the Corporation shall deliver to the Option Holder, duly endorsed
and in proper form for transfer, certificates representing the shares of Stock
in respect of which the Option is being exercised. The Option Holder
acknowledges and agrees that the certificates may bear restrictive legends,
generally in the form set forth at the beginning of this Agreement.
11. RESTRICTIONS. Unless the offering and sale of the Stock to be issued
upon the particular exercise of the Option shall have been effectively
registered under the Securities Act of 1933, as amended, or any successor
legislation (the "Act"), the Corporation shall be under no obligation to issue
the Stock covered by such exercise unless and until the following, conditions
have been fulfilled.
The person(s) who exercise the Option shall represent to the Corporation,
at the time of such exercise, that such person(s) are acquiring such Stock for
his or her own account, for investment and not with a view to, or for sale in
connection with, the distribution of any such Stock, in which event the
person(s) acquiring such Stock shall be bound by the restrictions concerning
transfers set forth in the boldface legend at the beginning of this Agreement.
12. TERMINATION. In the event the Option Holder's employment is terminated
by the Corporation, with or without cause, the Option Holder's right to exercise
any unvested portion of this Option shall cease immediately, and this Option
shall thereupon terminate.
13. NOTICE. All notices and other communications hereunder shall be in
writing and shall be deemed to have been fully given if delivered or mailed by
certified or registered mail, return receipt requested, postage prepaid:
a. If to the Corporation, at: 901 N.E. Loop 410, Suite 700
San Antonio, Texas 78209
b. If to the Option Holder, at: ____________________________
____________________________
____________________________
14. MODIFICATION. No modification or amendment of this Agreement shall be
effective unless such modification or amendment shall be in writing and signed
by the parties hereto.
5
<PAGE>
15. CONSTRUCTION. This Agreement shall be deemed to be made under and
shall be construed in accordance with the internal laws, and not the laws of
conflict, of the State of Texas.
16. BENEFIT. This Agreement shall not be transferable by the Option Holder
otherwise than by will or by the laws of descent and distribution and shall be
exercisable, during the Option Holder's lifetime, only by the Option Holder or
his or her guardian or legal representative. The Option shall not be assigned,
pledged or hypothecated in any way (whether by operation of law or otherwise)
and shall not be subject to execution, attachment or similar process. Any
attempted transfer, assignment, pledge, hypothecation or other disposition of
the Option or of any rights granted hereunder contrary to the provisions of this
paragraph, or the levy of any attachment or similar process upon the Option or
such rights, shall be null and void. This Agreement shall be binding upon and
inure to the benefit of the Corporation and its successors and assigns and the
Option Holder and its heirs, executors and administrators.
17. TERM. This Option as to the right to purchase a certain number of
shares shall become void for such number of shares unless the rights hereunder
are exercised and payment made prior to the close of business on the date five
years from the date of vesting for such shares as such dates are set forth in
Section 1.
Dated effective as of October 1, 1994.
DAWSON WELL, SERVICING, INC.
ATTEST: /s/ JOE EUSTACE By: /s/ MICHAEL E. LITTLE
Name: JOE EUSTACE Name: MICHAEL E. LITTLE
Title: VICE PRESIDENT Title: PRESIDENT
OPTION HOLDER:
By: ________________
Name: ________________
6
EXHIBIT 4.5
OPTION AGREEMENT
Grantor: Dawson Well Servicing, Inc. Number of Shares: 5,000
Grantee: Joe Eustace Termination: On or before
Date of Grant: October 1, 1994 June 30, 2002
THE SECURITIES REPRESENTED BY THIS INVESTMENT OR DOCUMENT HAVE BEEN
ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE. WITHOUT SUCH
REGISTRATION, SUCH SECURITIES MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR
OTHERWISE TRANSFERRED EXCEPT UPON DELIVERY TO DAWSON WELL SERVICING, INC. (THE
"CORPORATION") , IF IT SO REQUESTS, OF AN OPINION OF COUNSEL SATISFACTORY TO THE
CORPORATION THAT REGISTRATION IS NOT REQUIRED FOR SUCH TRANSFER OR THE
SUBMISSION TO THE CORPORATION OF SUCH OTHER EVIDENCE AS MAY BE SATISFACTORY TO
THE CORPORATION TO THE EFFECT THAT ANY SUCH TRANSFER SHALL NOT BE IN VIOLATION
OF THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS
OR ANY RULE OR REGULATION PROMULGATED THEREUNDER.
The undersigned, DAWSON WELL SERVICING, INC. (the "Corporation"), a Texas
corporation, for and in consideration of good and valuable consideration,
receipt of which is hereby acknowledged, hereby certifies and warrants that Joe
Eustace (the "Option Holder") is entitled, subject to the terms and conditions
hereof, and at such times and in such amounts as are provided herein, to
purchase on or before the close of business on the date five years following
vesting (but in no event later than June 30, 2002), an aggregate of 5,000 shares
of common stock ($1.00 par value) of the Corporation (the "Stock") upon
presentation of this option (the "Option") and payment of the purchase price
(the "Purchase Price") as hereinafter provided.
1. EXERCISE OF OPTION. Subject to the other terms and conditions of this
Agreement, the Option granted hereby shall vest and become exercisable on the
earlier of: (i) the dates set forth below as to the number of shares set forth
opposite such dates; (ii) the date on which the Stock becomes a class of
securities that is registered pursuant to Sections 12 or 15(d) of the Securities
Exchange Act of 1934, as amended (the "1934 Act"); or (iii) upon a Change of
Control (as hereinafter defined).
VESTING DATES NUMBER OF SHARES VESTED
June 30, 1995 1,700
June 30, 1996 1,650
June 30, 1997 1,650
<PAGE>
For purposes of this Option, the term "Change of Control" shall mean the
occurrence of any one or more of the following events:
a. any corporation (other than the Corporation or a Subsidiary),
person or group (within the meaning of Sections 13(d) or 14(d)(2) of the
1934 Act) makes a tender or exchange offer which, if consummated, would
make such corporation, person or group the beneficial owner (within the
meaning of Rule l3d-3 under the 1934 Act) of voting securities of the
Corporation representing more than 50% of the total number of votes
eligible to be cast at any election of directors of the Corporation and,
pursuant to such offer, purchases are made (an "Offer");
b. the shareholders of the Corporation approve an agreement to merge
or consolidate the Corporation with or into another corporation or to
sell, lease or otherwise dispose of all or substantially all of its
assets, or adopt a plan of liquidation;
c. any corporation, person or group (within the meaning of Sections
13(d) and 14(d)(2) of the 1934 Act) becomes the beneficial owner (within
the meaning of Rule 13d-3 under the 1934 Act) of voting securities of the
Corporation representing more than 50% of the total number of votes
eligible to be cast at any election of directors of the Corporation; or
d. those persons who constitute the Directors at the beginning of
any two-year period cease to constitute a majority of the Board at any
time during such two-year period;
provided, however, that in no event shall a Change of Control be deemed to have
occurred if the Board, by written action taken prior to, and with respect to, an
event otherwise constituting a Change of Control, determines in its discretion
that such event shall not constitute a Change of Control for purposes of this
Option.
2. RESERVATION OF STOCK. The Corporation covenants that, while this Option
is exercisable, it will reserve from its authorized and unissued common stock a
sufficient number of shares to provide for the issuance and delivery of stock
pursuant to the exercise hereof.
3. PROTECTION AGAINST DILUTION. In any of the following events occurring
after the date of this Option, appropriate adjustment shall be made in the
number of shares deliverable upon the exercise of this Option or the price per
share to be paid, so as to maintain the proportionate interest of the Option
Holder:
a. Recapitalization of the Corporation through a stock split or a
reverse stock split; or
b. Declaration of a dividend on the stock, payable in shares of
stock or securities convertible into stock.
2
<PAGE>
4. MERGERS. In the event the Corporation shall be merged or consolidated
with another corporation during the term of this Option, or substantially all of
its assets shall be sold to another company in exchange for stock of such other
company, or stock of any company related to such other company, with a view to
distributing such stock to the stockholders of the Corporation, the Corporation,
at its option, may invoke the provisions described in Section 6 hereof; however,
if the Corporation consummates any such transaction without having invoked the
provisions of Section 6, each share of Stock purchasable by this Option shal1,
upon consummation of any such transaction, be replaced for the purposes hereof
by the securities or property issuable or distributable pursuant to such
transaction in respect of one share of Stock of the Corporation.
5. PROPOSED REGISTERED OFFERING OF SECURITIES. In the event the
Corporation shall propose to make a public offering of its securities, to be
registered under the Securities Act of 1933, the Corporation, at its option, may
invoke the provisions described in Section 6 hereof; however, if the Corporation
consummates any such transaction without having invoked the provisions described
in Section 6, this Option shall continue to be valid and exercisable, subject to
all other applicable provisions hereof.
6. SPECIAL PROVISIONS. If the Corporation, in good faith, believes a
transaction as described in Sections 4 or 5 hereof (hereinafter referred to as
"Transaction") shall be consummated or closed by the Corporation, it may elect
to notify the Holder of the pendency of the Transaction and to specify a date,
at least twenty days following such notice ("Notice"), by which time the Option
Holder may, in his discretion, evidence his intent conditionally to exercise
this Option (subject to the consummation of the Transaction) by depositing funds
into a separate escrow account, to be identified in the Notice, or by delivering
to the Corporation an irrevocable bank letter of credit in a form acceptable to
the Corporation, with such funds or letter of credit being in an amount equal to
the exercise price for any or all Options the Option Holder determines
conditionally to exercise. If such funds or letter of credit are not received or
deposited by the deadline date specified in the Notice, or if by such date the
Option Holder has not given notice of exercise as described in Section 9 hereof,
this Option shall not be exercisable (otherwise than in accordance with this
Section 6) until the Corporation notifies the Option Holder that the Transaction
will not be consummated or closed (such notice hereinafter being referred to as
a "Transaction Termination Notice"). The Corporation hereby covenants and agrees
that if it has issued a Notice with respect to a Transaction, it will provide a
Transaction Termination Notice promptly at such time as it becomes reasonably
certain that the Transaction will not be consummated or closed. At such times as
the Corporation invokes the procedures of this Section 6, the following
additional conditions shall apply:
a. If the Option Holder deposits funds to the escrow account or
delivers a letter of credit to the Corporation and the Transaction is
consummated or closed, the Option, upon the date of such consummation or
closing, is deemed irrevocably exercised to the extent of such funds or
letter of credit, and any unexercised Options thereupon shall lapse and be
null and void, and shall not thereafter be exercisable. If a Transaction
Termination
3
<PAGE>
Notice is sent, the Option Holder's escrow funds or letter of credit shall
be promptly returned and Option shall be exercisable as otherwise provided
herein.
b. If an Option Holder does not deposit funds to the escrow account
or deliver a letter of credit to the Corporation, and the Transaction is
consummated or closed, the Option, upon and as of the date of such
consummation or closing, is deemed to have lapsed and to be null and void
and shall not thereafter be exercisable. If a Transaction Termination
Notice is sent, the Option thereupon shall be exercisable as otherwise
provided herein.
7. STOCKHOLDER'S RIGHTS. Until the valid exercise of this Option, Option
Holder, by virtue of this Option, shall not be entitled to any rights of a
stockholder of the Corporation; but immediately upon the exercise of this Option
and upon payment as provided herein, the Option Holder shall be deemed a record
holder of the Stock with respect to which this Option is exercised.
8. EXERCISE OF OPTION AND PURCHASE PRICE. The Option hereinbefore
granted shall be exercisable and vested (to the extent that it is exercisable in
accordance with its terms) according to the vesting dates as set forth in
Section 1. The Purchase Price for each share of Common Stock purchased hereunder
shall be Twenty Dollars ($20.00).
Upon the death of the Option Holder, this Option may be exercised by said
Option Holder's heirs, executors, administrators, or estate in accordance with
the provisions herein within 120 days following the death of said Option Holder.
The Options may be divided into Options of one share or multiples thereof, upon
surrender at the offices of the Corporation. The Option Holder may exercise this
Option, to the extent otherwise provided herein, for all or less than all stock
subject hereof.
9. METHOD OF EXERCISING OPTION. Except as otherwise provided by
Section 6 hereof, the Option Holder (or his heirs, executors or administrators)
shall deliver to the Corporation written notice of his election to exercise the
Option, which notice shall specify the date and time of the exercise of the
Option and the number of shares of Stock in respect of which the Option is to be
exercised. The date specified in such notice shall be not less than five nor
more than forty-five days from the date the notice of exercise is given, and
shall be on a business day, and the time specified shall be during the regular
business hours of the Corporation. Any such notice shall be irrevocable, except
upon the written consent of the Corporation and the Option Holder.
10. PAYMENT AND DELIVERY OF SHARES. The Option Holder shall, at the date
and time specified in the notice described in Section 9, deliver a bank
cashier's or treasurer's check or checks payable in the amount of the Option
exercise price for the shares of Stock in respect of which the Option is being
exercised. Such delivery shall be made to the Corporation at its principal
office in San Antonio or at such other place as the Corporation may specify in
writing and such check or checks shall be drawn to the order of the Corporation.
4
<PAGE>
Contemporaneously with such payments, the Corporation shall deliver to the
Option Holder, duly endorsed and in proper form for transfer, certificates
representing the shares of Stock in respect of which the Option is being
exercised. The Option Holder acknowledges and agrees that the certificates may
bear restrictive legends, generally in the form set forth at the beginning of
this Agreement.
11. RESTRICTIONS. Unless the offering and sale of the Stock to be issued
upon the particular exercise of the Option shall have been effectively
registered under the Securities Act of 1933, as amended, or any successor
legislation (the "Act"), the Corporation shall be under no obligation to issue
the Stock covered by such exercise unless and until the following conditions
have been fulfilled.
The person(s) who exercise the Option shall represent to the Corporation,
at the time of such exercise, that such person(s) are acquiring such Stock for
his or her own account, for investment and not with a view to, or for sale in
connection with, the distribution of any such Stock, in which event the
person(s) acquiring such Stock shall be bound by the restrictions concerning
transfers set forth in the boldface legend at the beginning of this Agreement.
12. TERMINATION. In the event the Option Holder's employment is terminated
by the Corporation, with or without cause, the Option Holder's right to exercise
any unvested portion of this Option shall cease immediately, and this Option
shall thereupon terminate.
13. NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed to have been fully given if delivered or mailed by
certified or registered mail, return receipt requested, postage prepaid:
a. If to the Corporation, at: 901 N.E. Loop 410, Suite 700
San Antonio, Texas 78209
b. If to the Option Holder, at: ____________________________
____________________________
____________________________
14. MODIFICATION. No modification or amendment of this Agreement shall be
effective unless such modification or amendment shall be in writing and signed
by the parties hereto.
15. CONSTRUCTION. This Agreement shall be deemed to be made under and
shall be construed in accordance with the internal laws, and not the laws of
conflict, of the State of Texas.
16. BENEFIT. This Agreement shall not be transferable by the Option Holder
otherwise than by will, or by the laws of descent and distribution and shall be
exercisable, during the Option Holder's lifetime, only by the Option Holder or
his or her guardian or legal
5
<PAGE>
representative. The Option shall not be assigned, pledged or hypothecated in any
way (whether by operation of law or otherwise) and shall not be subject to
execution, attachment or similar process. Any attempted transfer, assignment,
pledge, hypothecation or other disposition of the Option or of any rights
granted hereunder contrary to the provisions of this paragraph, or the levy of
any attachment or similar process upon the Option or such rights, shall be null
and void. This Agreement shall be binding upon and inure to the benefit of the
Corporation and its successors and assigns and the Option Holder and its heirs,
executors and administrators.
17. TERM. This Option as to the right to purchase a certain number of
shares shall become void for such number of shares unless the rights hereunder
are exercised and payment made prior to the close of business on the date five
years from the date of vesting for such shares as such dates are set forth in
Section 1.
Dated effective as of October 1, 1994.
DAWSON WELL SERVICING, INC.
ATTEST: /s/ JOE EUSTACE By: /s/ MICHAEL E. LITTLE
Name: JOE EUSTACE Name: MICHAEL E. LITTLE
Title: VICE PRESIDENT Title: PRESIDENT
OPTION HOLDER:
By: ________________
Name: ________________
6
EXHIBIT 4.6
OPTION AGREEMENT
Grantor: Dawson Well Servicing, Inc. Number of Shares: 1,000
Grantee: Paul McCollam Termination: On or before October 1, 1999
Date of Grant: October 1, 1994
THE SECURITIES REPRESENTED BY THIS INVESTMENT OR DOCUMENT HAVE BEEN
ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE. WITHOUT SUCH
REGISTRATION, SUCH SECURITIES MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR
OTHERWISE TRANSFERRED EXCEPT UPON DELIVERY TO DAWSON WELL SERVICING, INC. (THE
"CORPORATION"), IF IT SO REQUESTS, OF AN OPINION OF COUNSEL SATISFACTORY TO THE
CORPORATION THAT REGISTRATION IS NOT REQUIRED FOR SUCH TRANSFER OR THE
SUBMISSION TO THE CORPORATION OF SUCH OTHER EVIDENCE AS MAY BE SATISFACTORY TO
THE CORPORATION TO THE EFFECT THAT ANY SUCH TRANSFER SHALL NOT BE IN VIOLATION
OF THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS
OR ANY RULE OR REGULATION PROMULGATED THEREUNDER.
The undersigned, DAWSON WELL SERVICING, INC. (the "Corporation"), a Texas
corporation, for and in consideration of good and valuable consideration,
receipt of which is hereby acknowledged, hereby certifies and warrants that Paul
McCollam (the "Option Holder") is entitled, subject to the terms and conditions
hereof, to purchase on or before the close of business on October 1, 1999, 1,000
shares of common stock ($1.00 par value) of the Corporation (the "Stock") upon
presentation of this option (the "Option") and payment of the purchase price
(the "Purchase Price") as hereinafter provided.
1. EXERCISE OF OPTION. Subject to the other terms and conditions of this
Agreement, the Option granted hereby shall vest and become exercisable on
October 1, 1994.
2. RESERVATION OF STOCK. The Corporation covenants that, while this Option
is exercisable, it will reserve from its authorized and unissued common stock a
sufficient number of shares to provide for the issuance and delivery of stock
pursuant to the exercise hereof.
3. PROTECTION AGAINST DILUTION. In any of the following events occurring
after the date of this Option, appropriate adjustment shall be made in the
number of shares deliverable upon the exercise of this Option or the price per
share to be paid, so as to maintain the proportionate interest of the Option
Holder:
a. Recapitalization of the Corporation through a stock split or a
reverse stock split; or
<PAGE>
b. Declaration of a dividend on the stock, payable in shares of
stock or securities convertible into stock.
4. MERGERS. In the event the Corporation shall be merged or consolidated
with another corporation during the term of this Option, or substantially all of
its assets shall be sold to another company in exchange for stock of such other
company, or stock of any company related to such other company, with a view to
distributing such stock to the stockholders of the Corporation, the Corporation,
at its option, may invoke the provisions described in Section 6 hereof; however,
if the Corporation consummates any such transaction without having invoked the
provisions of Section 6, each share of Stock purchasable by this Option shall,
upon consummation of any such transaction, be replaced for the purposes hereof
by the securities or property issuable or distributable pursuant to such
transaction in respect of one share of Stock of the Corporation.
5. PROPOSED REGISTERED OFFERING OF SECURITIES. In the event the
Corporation shall propose to make a public offering of its securities, to be
registered under the Securities Act of 1933, the Corporation, at its option, may
invoke the provisions described in Section 6 hereof; however, if the Corporation
consummates any such transaction without having invoked the provisions described
in Section 6, this Option shall continue to be valid and exercisable, subject to
all other applicable provisions hereof.
6. SPECIAL PROVISIONS. If the Corporation, in good faith, believes a
transaction as described in Sections 4 or 5 hereof (hereinafter referred to as
"Transaction") shall be consummated or closed by the Corporation, it may elect
to notify the Holder of the pendency of the Transaction and to specify a date,
at least twenty days following such notice ("Notice"), by which time the Option
Holder may, in his discretion, evidence his intent conditionally to exercise
this Option (subject to the consummation of the Transaction) by depositing funds
into a separate escrow account, to be identified in the Notice, or by delivering
to the Corporation an irrevocable bank letter of credit in a form acceptable to
the Corporation, with such funds or letter of credit being in an amount equal to
the exercise price for any or all Options the Option Holder determines
conditionally to exercise. If such funds or letter of credit are not received or
deposited by the deadline date specified in the Notice, or if by such date the
Option Holder has not given notice of exercise as described in Section 9 hereof,
this Option shall not be exercisable (otherwise than in accordance with this
Section 6) until the Corporation notifies the Option Holder that the Transaction
will not be consummated or closed (such notice hereinafter being referred to as
a "Transaction Termination Notice"). The Corporation hereby covenants and agrees
that if it has issued a Notice with respect to a Transaction, it will provide a
Transaction Termination Notice promptly at such time as it becomes reasonably
certain that the Transaction will not be consummated or closed. At such times as
the Corporation invokes the procedures of this Section 6, the following
additional conditions shall apply:
a. If the Option Holder deposits funds to the escrow account or
delivers a letter of credit to the Corporation and the Transaction is
consummated or closed, the Option, upon the date of such consummation or
closing, is deemed irrevocably exercised to the extent of such funds or letter
of credit, and any unexercised Options thereupon shall lapse and be null and
void, and
2
<PAGE>
shall not thereafter be exercisable. If a Transaction Termination Notice is
sent, the Option Holder's escrow funds or letter of credit shall be promptly
returned and Option shall be exercisable as otherwise provided herein.
b. If an Option Holder does not deposit funds to the escrow account
or deliver a letter of credit to the Corporation, and the Transaction is
consummated or closed, the Option, upon and as of the date of such consummation
or closing, is deemed to have lapsed and to be null and void and shall not
thereafter be exercisable. If a Transaction Termination Notice is sent, the
Option thereupon shall be exercisable as otherwise provided herein.
7. STOCKHOLDERS' RIGHTS. Until the valid exercise of this Option, Option
Holder, by virtue of this Option, shall not be entitled to any rights of a
stockholder of the Corporation; but immediately upon the exercise of this Option
and upon payment as provided herein, the Option Holder shall be deemed a record
holder of the Stock with respect to which this Option is exercised.
8. EXERCISE OF OPTION AND PURCHASE PRICE. The Option hereinbefore
granted shall be exercisable and vested (to the extent that it is exercisable in
accordance with its terms) according to the vesting date as set forth in Section
1. The Purchase Price for each share of Common Stock purchased hereunder shall
be Twenty Dollars ($20.00).
Upon the death of the Option Holder, this Option may be exercised by said
Option Holder's heirs, executors, administrators, or estate in accordance with
the provisions herein within 120 days following the death of said Option Holder.
The Options may be divided into Options of one share or multiples thereof, upon
surrender at the offices of the Corporation. The Option Holder may exercise this
Option, to the extent otherwise provided herein, for all or less than all stock
subject hereof.
9. METHOD OF EXERCISING OPTION. Except as otherwise provided by Section 6
hereof, the Option Holder (or his heirs, executors or administrators) shall
deliver to the Corporation written notice of his election to exercise the
Option, which notice shall specify the date and time of the exercise of the
Option and the number of shares of Stock in respect of which the Option is to be
exercised. The date specified in such notice shall be not less than five nor
more than forty-five days from the date the notice of exercise is given, and
shall be on a business day, and the time specified shall be during the regular
business hours of the Corporation. Any such notice shall be irrevocable, except
upon the written consent of the Corporation and the Option Holder.
10. PAYMENT AND DELIVERY OF SHARES. The Option Holder shall, at the date
and time specified in the notice described in Section 9, deliver a bank
cashier's or treasurer's check or checks payable in the amount of the Option
exercise price for the shares of Stock in respect of which the Option is being
exercised. Such delivery shall be made to the Corporation at its principal
office in San Antonio or at such other place as the Corporation may specify in
writing and such check or checks shall be drawn to the order of the Corporation.
Contemporaneously with such payments, the Corporation shall deliver to the
Option Holder, duly
3
<PAGE>
endorsed and in proper form for transfer, certificates
representing the shares of Stock in respect of which the Option is being
exercised. The Option Holder acknowledges and agrees that the certificates may
bear restrictive legends, generally in the form set forth at the beginning of
this Agreement.
11. RESTRICTIONS. Unless the offering and sale of the Stock to be issued
upon the particular exercise of the Option shall have been effectively
registered under the Securities Act of 1933, as amended, or any successor
legislation (the "Act"), the Corporation shall be under no obligation to issue
the Stock covered by such exercise unless and until the following conditions
have been fulfilled.
The person(s) who exercise the Option shall represent to the Corporation,
at the time of such exercise, that such person(s) are acquiring such Stock for
his or her own account, for investment and not with a view to, or for sale in
connection with, the distribution of any such Stock, in which event the
person(s) acquiring such Stock shall be bound by the restrictions concerning
transfers set forth in the boldface legend at the beginning of this Agreement.
12. NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed to have been fully given if delivered or mailed by
certified or registered mail, return receipt requested, postage prepaid:
a. If to the Corporation, at: 901 N.E. Loop 410, Suite 700
San Antonio, Texas 78209-1306
b. If to the Option Holder, at: _____________________________
_____________________________
_____________________________
13. MODIFICATION. No modification or amendment of this Agreement shall be
effective unless such modification or amendment shall be in writing and signed
by the parties hereto.
14. CONSTRUCTION. This Agreement shall be deemed to be made under and
shall be construed in accordance with the internal laws, and not the laws of
conflict, of the State of Texas.
15. BENEFIT. This Agreement shall not be transferable by the Option Holder
otherwise than by will or by the laws of descent and distribution and shall be
exercisable, during the Option Holder's lifetime, only by the Option Holder or
his or her guardian or legal representative. The Option shall not be assigned,
pledged or hypothecated in any way (whether by operation of law or otherwise)
and shall not be subject to execution, attachment or similar process. Any
attempted transfer, assignment, pledge, hypothecation or other disposition of
the Option or of any rights granted hereunder contrary to the provisions of this
paragraph, or the levy of any attachment or similar process upon the Option or
such rights, shall be null and void. This
4
<PAGE>
Agreement shall be binding upon and inure to the benefit of the Corporation and
its successors and assigns and the Option Holder and its heirs, executors and
administrators.
16. TERM. This Option to purchase the Stock shall become void unless the
rights hereunder are exercised and payment made prior to the close of business
on October 1, 1999.
Dated effective as of October 1, 1994.
DAWSON WELL SERVICING, INC.
ATTEST: /s/ JOE EUSTACE By: /s/ MICHAEL E. LITTLE
Name: JOE EUSTACE Name: MICHAEL E. LITTLE
Title: VICE PRESIDENT Title: PRESIDENT
OPTION HOLDER:
By: _________________
Name: _________________
5
EXHIBIT 4.7
OPTION AGREEMENT
Grantor: Dawson Well Servicing, Inc. Number of Shares: 1,000
Grantee: Michael Bell Termination: On or before October 1, 1999
Date of Grant: October 1, 1994
THE SECURITIES REPRESENTED BY THIS INVESTMENT OR DOCUMENT HAVE BEEN
ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE. WITHOUT SUCH
REGISTRATION, SUCH SECURITIES MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR
OTHERWISE TRANSFERRED EXCEPT UPON DELIVERY TO DAWSON WELL SERVICING, INC. (THE
"CORPORATION"), IF IT SO REQUESTS, OF AN OPINION OF COUNSEL SATISFACTORY TO THE
CORPORATION THAT REGISTRATION IS NOT REQUIRED FOR SUCH TRANSFER OR THE
SUBMISSION TO THE CORPORATION OF SUCH OTHER EVIDENCE AS MAY BE SATISFACTORY TO
THE CORPORATION TO THE EFFECT THAT ANY SUCH TRANSFER SHALL NOT BE IN VIOLATION
OF THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS
OR ANY RULE OR REGULATION PROMULGATED THEREUNDER.
The undersigned, DAWSON WELL SERVICING, INC. (the "Corporation"), a Texas
corporation, for and in consideration of good and valuable consideration,
receipt of which is hereby acknowledged, hereby certifies and warrants that
Michael Bell (the "Option Holder") is entitled, subject to the terms and
conditions hereof, to purchase on or before the close of business on October 1,
1999, 1,000 shares of common stock ($1.00 par value) of the Corporation (the
"Stock") upon presentation of this option (the "Option") and payment of the
purchase price (the "Purchase Price") as hereinafter provided.
1. EXERCISE OF OPTION. Subject to the other terms and conditions of this
Agreement, the Option granted hereby shall vest and become exercisable on
October 1, 1994.
2. RESERVATION OF STOCK. The Corporation covenants that, while this Option
is exercisable, it will reserve from its authorized and unissued common stock a
sufficient number of shares to provide for the issuance and delivery of stock
pursuant to the exercise hereof.
3. PROTECTION AGAINST DILUTION. In any of the following events occurring
after the date of this Option, appropriate adjustment shall be made in the
number of shares deliverable upon the exercise of this Option or the price per
share to be paid, so as to maintain the proportionate interest of the Option
Holder:
a. Recapitalization of the Corporation through a stock split or a
reverse stock split; or
<PAGE>
b. Declaration of a dividend on the stock, payable in shares of
stock or securities convertible into stock.
4. MERGERS. In the event the Corporation shall be merged or consolidated
with another corporation during the term of this Option, or substantially all of
its assets shall be sold to another company in exchange for stock of such other
company, or stock of any company related to such other company, with a view to
distributing such stock to the stockholders of the Corporation, the Corporation,
at its option, may invoke the provisions described in Section 6 hereof; however,
if the Corporation consummates any such transaction without having invoked the
provisions of Section 6, each share of Stock purchasable by this Option shall,
upon consummation of any such transaction, be replaced for the purposes hereof
by the securities or property issuable or distributable pursuant to such
transaction in respect of one share of Stock of the Corporation.
5. PROPOSED REGISTERED OFFERING OF SECURITIES. In the event the
Corporation shall propose to make a public offering of its securities, to be
registered under the Securities Act of 1933, the Corporation, at its option, may
invoke the provisions described in Section 6 hereof; however, if the Corporation
consummates any such transaction without having invoked the provisions described
in Section 6, this Option shall continue to be valid and exercisable, subject to
all other applicable provisions hereof.
6. SPECIAL PROVISIONS. If the Corporation, in good faith, believes a
transaction as described in Sections 4 or 5 hereof (hereinafter referred to as
"Transaction") shall be consummated or closed by the Corporation, it may elect
to notify the Holder of the pendency of the Transaction and to specify a date,
at least twenty days following such notice ("Notice"), by which time the Option
Holder may, in his discretion, evidence his intent conditionally to exercise
this Option (subject to the consummation of the Transaction) by depositing funds
into a separate escrow account, to be identified in the Notice, or by delivering
to the Corporation an irrevocable bank letter of credit in a form acceptable to
the Corporation, with such funds or letter of credit being in an amount equal to
the exercise price for any or all Options the Option Holder determines
conditionally to exercise. If such funds or letter of credit are not received or
deposited by the deadline date specified in the Notice, or if by such date the
Option Holder has not given notice of exercise as described in Section 9 hereof,
this Option shall not be exercisable (otherwise than in accordance with this
Section 6) until the Corporation notifies the Option Holder that the Transaction
will not be consummated or closed (such notice hereinafter being referred to as
a 'Transaction Termination Notice"). The Corporation hereby covenants and agrees
that if it has issued a Notice with respect to a Transaction, it will provide a
Transaction Termination Notice promptly at such time as it becomes reasonably
certain that the Transaction will not be consummated or closed. At such times as
the Corporation invokes the procedures of this Section 6, the following
additional conditions shall apply:
a. If the Option Holder deposits funds to the escrow account or
delivers a letter of credit to the Corporation and the Transaction is
consummated or closed, the Option,
<PAGE>
upon the date of such consummation or closing, is deemed irrevocably
exercised to the extent of such funds or letter of credit, and any
unexercised Options thereupon shall lapse and be null and void, and shall
not thereafter be exercisable. If a Transaction Termination Notice is
sent, the Option Holder's escrow funds or letter of credit shall be
promptly returned and Option shall be exercisable as otherwise provided
herein.
b. If a Option Holder does not deposit funds to the escrow account
or deliver a letter of credit to the Corporation, and the Transaction is
consummated or closed, the Option, upon and as of the date of such
consummation or closing, is deemed to have lapsed and to be null and void
and shall not thereafter be exercisable. If a Transaction Termination
Notice is sent, the Option thereupon shall be exercisable as otherwise
provided herein.
7. STOCKHOLDERS' RIGHTS. Until the valid exercise of this Option, Option
Holder, by virtue of this Option, shall not be entitled to any rights of a
stockholder of the Corporation; but immediately upon the exercise of this Option
and upon payment as provided herein, the Option Holder shall be deemed a record
holder of the Stock with respect to which this Option is exercised.
8. EXERCISE OF OPTION AND PURCHASE PRICE. The Option hereinbefore
granted shall be exercisable and vested (to the extent that it is exercisable in
accordance with its terms) according to the vesting date as set forth in Section
1. The Purchase Price for each share of Common Stock purchased hereunder shall
be Twenty Dollars ($20.00).
Upon the death of the Option Holder, this Option may be exercised by said
Option Holder's heirs, executors, administrators, or estate in accordance with
the provisions herein within 120 days following the death of said Option Holder.
The Options may be divided into Options of one share or multiples thereof, upon
surrender at the offices of the Corporation. The Option Holder may exercise this
Option, to the extent otherwise provided herein, for all or less than all stock
subject hereof.
9. METHOD OF EXERCISING OPTION. Except as otherwise provided by Section 6
hereof, the Option Holder (or his heirs, executors or administrators) shall
deliver to the Corporation written notice of his election to exercise the
Option, which notice shall specify the date and time of the exercise of the
Option and the number of shares of Stock in respect of which the Option is to be
exercised. The date specified in such notice shall be not less than five nor
more than forty-five days from the date the notice of exercise is given, and
shall be on a business day, and the time specified shall be during the regular
business hours of the Corporation. Any such notice shall be irrevocable, except
upon the written consent of the Corporation and the Option Holder.
<PAGE>
10. PAYMENT AND DELIVERY OF SHARES. The Option Holder shall, at the date
and time specified in the notice described in Section 9, deliver a bank
cashier's or treasurer's check or checks payable in the amount of the Option
exercise price for the shares of Stock in respect of which the Option is being
exercised. Such delivery shall be made to the Corporation at its principal
office in San Antonio or at such other place as the Corporation may specify in
writing and such check or checks shall be drawn to the order of the Corporation.
Contemporaneously with such payments, the Corporation shall deliver to the
Option Holder, duly endorsed and in proper form for transfer, certificates
representing the shares of Stock in respect of which the Option is being
exercised. The Option Holder acknowledges and agrees that the certificates may
bear restrictive legends, generally in the form set forth at the beginning of
this Agreement.
11. RESTRICTIONS. Unless the offering and sale of the Stock to be issued
upon the particular exercise of the Option shall have been effectively
registered under the Securities Act of 1933, as amended, or any successor
legislation (the "Act"), the Corporation shall be under no obligation to issue
the Stock covered by such exercise unless and until the following conditions
have been fulfilled.
The person(s) who exercise the Option shall represent to the Corporation,
at the time of such exercise, that such person(s) are acquiring such Stock for
his or her own account, for investment and not with a view to, or for sale in
connection with, the distribution of any such Stock, in which event the
person(s) acquiring such Stock shall be bound by the restrictions concerning
transfers set forth in the boldface legend at the beginning of this Agreement.
12. NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed to have been fully given if delivered or mailed by
certified or registered mail, return receipt requested, postage prepaid:
a. If to the Corporation, at: 901 N.E. Loop 410, Suite 700
San Antonio, Texas 78209-1306
b. If to the Option Holder, at: ____________________________
____________________________
13. MODIFICATION. No modification or amendment of this Agreement shall be
effective unless such modification or amendment shall be in writing and signed
by the parties hereto.
14. CONSTRUCTION. This Agreement shall be deemed to be made under and
shall be construed in accordance with the internal laws, and not the laws of
conflict, of the State of Texas.
<PAGE>
15. BENEFIT. This Agreement shall not be transferable by the Option Holder
otherwise than by will or by the laws of descent and distribution and shall be
exercisable, during the Option Holder's lifetime, only by the Option Holder or
his or her guardian or legal representative. The Option shall not be assigned,
pledged or hypothecated in any way (whether by operation of law or otherwise)
and shall not be subject to execution, attachment or similar process. Any
attempted transfer, assignment, pledge, hypothecation or other disposition of
the Option or of any rights granted hereunder contrary to the provisions of this
paragraph, or the levy of any attachment or similar process upon the Option or
such rights, shall be null and void. This Agreement shall be binding upon and
inure to the benefit of the Corporation and its successors and assigns and the
Option Holder and its heirs, executors and administrators.
16. TERM. This Option to purchase the Stock shall become void unless the
rights hereunder are exercised and payment made prior to the close of business
on October 1, 1999.
Dated effective as of October 1, 1994.
DAWSON WELL SERVICING, INC.
ATTEST: /s/ JOE EUSTACE By: /s/ MICHAEL E. LITTLE
Name: JOE EUSTACE Name: MICHAEL E. LITTLE
Title: VICE PRESIDENT Title: PRESIDENT
OPTION HOLDER:
By: ____________________
Name: ____________________
EXHIBIT 4.8
OPTION AGREEMENT
Grantor: Dawson Well Servicing, Inc. Number of Shares: 1,000
Grantee: Ward Greenwood Termination: On or before October 1, 1999
Date of Grant: October 1, 1994
THE SECURITIES REPRESENTED BY THIS INVESTMENT OR DOCUMENT HAVE BEEN
ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE. WITHOUT SUCH
REGISTRATION, SUCH SECURITIES MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR
OTHERWISE TRANSFERRED EXCEPT UPON DELIVERY TO DAWSON WELL SERVICING, INC. (THE
"CORPORATION"), IF IT SO REQUESTS, OF AN OPINION OF COUNSEL SATISFACTORY TO THE
CORPORATION THAT REGISTRATION IS NOT REQUIRED FOR SUCH TRANSFER OR THE
SUBMISSION TO THE CORPORATION OF SUCH OTHER EVIDENCE AS MAY BE SATISFACTORY TO
THE CORPORATION TO THE EFFECT THAT ANY SUCH TRANSFER SHALL NOT BE IN VIOLATION
OF THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS
OR ANY RULE OR REGULATION PROMULGATED THEREUNDER.
The undersigned, DAWSON WELL SERVICING, INC. (the "Corporation"), a Texas
corporation, for and in consideration of good and valuable consideration,
receipt of which is hereby acknowledged, hereby certifies and warrants that Ward
Greenwood (the "Option Holder") is entitled, subject to the terms and conditions
hereof, to purchase on or before the close of business on October 1, 1999, 1,000
shares of common stock ($1.00 par value) of the Corporation (the "Stock") upon
presentation of this option (the "Option") and payment of the purchase price
(the "Purchase Price") as hereinafter provided.
1. EXERCISE OF OPTION. Subject to the other terms and conditions of this
Agreement, the Option granted hereby shall vest and become exercisable on
October 1, 1994.
2. RESERVATION OF STOCK. The Corporation covenants that, while this Option
is exercisable, it will reserve from its authorized and unissued common stock a
sufficient number of shares to provide for the issuance and delivery of stock
pursuant to the exercise hereof.
3. PROTECTION AGAINST DILUTION. In any of the following events occurring
after the date of this Option, appropriate adjustment shall be made in the
number of shares deliverable upon the exercise of this Option or the price per
share to be paid, so as to maintain the proportionate interest of the Option
Holder:
a. Recapitalization of the Corporation through a stock split or a
reverse stock split; or
<PAGE>
b. Declaration of a dividend on the stock, payable in shares of
stock or securities convertible into stock.
4. MERGERS. In the event the Corporation shall be merged or consolidated
with another corporation during the term of this Option, or substantially all of
its assets shall be sold to another company in exchange for stock of such other
company, or stock of any company related to such other company, with a view to
distributing such stock to the stockholders of the Corporation, the Corporation,
at its option, may invoke the provisions described in Section 6 hereof; however,
if the Corporation consummates any such transaction without having invoked the
provisions of Section 6, each share of Stock purchasable by this Option shall,
upon consummation of any such transaction, be replaced for the purposes hereof
by the securities or property issuable or distributable pursuant to such
transaction in respect of one share of Stock of the Corporation.
5. PROPOSED REGISTERED OFFERING OF SECURITIES. In the event the
Corporation shall propose to make a public offering of its securities, to be
registered under the Securities Act of 1933, the Corporation, at its option, may
invoke the provisions described in Section 6 hereof; however, if the Corporation
consummates any such transaction without having invoked the provisions described
in Section 6, this Option shall continue to be valid and exercisable, subject to
all other applicable provisions hereof.
6. SPECIAL PROVISIONS. If the Corporation, in good faith, believes a
transaction as described in Sections 4 or 5 hereof (hereinafter referred to as
"Transaction") shall be consummated or closed by the Corporation, it may elect
to notify the Holder of the pendency of the Transaction and to specify a date,
at least twenty days following such notice ("Notice"), by which time the Option
Holder may, in his discretion, evidence his intent conditionally to exercise
this Option (subject to the consummation of the Transaction) by depositing funds
into a separate escrow account, to be identified in the Notice, or by delivering
to the Corporation an irrevocable bank letter of credit in a form acceptable to
the Corporation, with such funds or letter of credit being in an amount equal to
the exercise price for any or all Options the Option Holder determines
conditionally to exercise. If such funds or letter of credit are not received or
deposited by the deadline date specified in the Notice, or if by such date the
Option Holder has not given notice of exercise as described in Section 9 hereof,
this Option shall not be exercisable (otherwise than in accordance with this
Section 6) until the Corporation notifies the Option Holder that the Transaction
will not be consummated or closed (such notice hereinafter being referred to as
a 'Transaction Termination Notice"). The Corporation hereby covenants and agrees
that if it has issued a Notice with respect to a Transaction, it will provide a
Transaction Termination Notice promptly at such time as it becomes reasonably
certain that the Transaction will not be consummated or closed. At such times as
the Corporation invokes the procedures of this Section 6, the following
additional conditions shall apply:
a. If the Option Holder deposits funds to the escrow account or
delivers a letter of credit to the Corporation and the Transaction is
consummated or closed, the Option,
<PAGE>
upon the date of such consummation or closing, is deemed irrevocably
exercised to the extent of such funds or letter of credit, and any
unexercised Options thereupon shall lapse and be null and void, and shall
not thereafter be exercisable. If a Transaction Termination Notice is
sent, the Option Holder's escrow funds or letter of credit shall be
promptly returned and Option shall be exercisable as otherwise provided
herein.
b. If a Option Holder does not deposit funds to the escrow account
or deliver a letter of credit to the Corporation, and the Transaction is
consummated or closed, the Option, upon and as of the date of such
consummation or closing, is deemed to have lapsed and to be null and void
and shall not thereafter be exercisable. If a Transaction Termination
Notice is sent, the Option thereupon shall be exercisable as otherwise
provided herein.
7. STOCKHOLDERS' RIGHTS. Until the valid exercise of this Option, Option
Holder, by virtue of this Option, shall not be entitled to any rights of a
stockholder of the Corporation; but immediately upon the exercise of this Option
and upon payment as provided herein, the Option Holder shall be deemed a record
holder of the Stock with respect to which this Option is exercised.
8. EXERCISE OF OPTION AND PURCHASE PRICE. The Option hereinbefore
granted shall be exercisable and vested (to the extent that it is exercisable in
accordance with its terms) according to the vesting date as set forth in Section
1. The Purchase Price for each share of Common Stock purchased hereunder shall
be Twenty Dollars ($20.00).
Upon the death of the Option Holder, this Option may be exercised by said
Option Holder's heirs, executors, administrators, or estate in accordance with
the provisions herein within 120 days following the death of said Option Holder.
The Options may be divided into Options of one share or multiples thereof, upon
surrender at the offices of the Corporation. The Option Holder may exercise this
Option, to the extent otherwise provided herein, for all or less than all stock
subject hereof.
9. METHOD OF EXERCISING OPTION. Except as otherwise provided by Section 6
hereof, the Option Holder (or his heirs, executors or administrators) shall
deliver to the Corporation written notice of his election to exercise the
Option, which notice shall specify the date and time of the exercise of the
Option and the number of shares of Stock in respect of which the Option is to be
exercised. The date specified in such notice shall be not less than five nor
more than forty-five days from the date the notice of exercise is given, and
shall be on a business day, and the time specified shall be during the regular
business hours of the Corporation. Any such notice shall be irrevocable, except
upon the written consent of the Corporation and the Option Holder.
<PAGE>
10. PAYMENT AND DELIVERY OF SHARES. The Option Holder shall, at the date
and time specified in the notice described in Section 9, deliver a bank
cashier's or treasurer's check or checks payable in the amount of the Option
exercise price for the shares of Stock in respect of which the Option is being
exercised. Such delivery shall be made to the Corporation at its principal
office in San Antonio or at such other place as the Corporation may specify in
writing and such check or checks shall be drawn to the order of the Corporation.
Contemporaneously with such payments, the Corporation shall deliver to the
Option Holder, duly endorsed and in proper form for transfer, certificates
representing the shares of Stock in respect of which the Option is being
exercised. The Option Holder acknowledges and agrees that the certificates may
bear restrictive legends, generally in the form set forth at the beginning of
this Agreement.
11. RESTRICTIONS. Unless the offering and sale of the Stock to be issued
upon the particular exercise of the Option shall have been effectively
registered under the Securities Act of 1933, as amended, or any successor
legislation (the "Act"), the Corporation shall be under no obligation to issue
the Stock covered by such exercise unless and until the following conditions
have been fulfilled.
The person(s) who exercise the Option shall represent to the Corporation,
at the time of such exercise, that such person(s) are acquiring such Stock for
his or her own account, for investment and not with a view to, or for sale in
connection with, the distribution of any such Stock, in which event the
person(s) acquiring such Stock shall be bound by the restrictions concerning
transfers set forth in the boldface legend at the beginning of this Agreement.
12. NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed to have been fully given if delivered or mailed by
certified or registered mail, return receipt requested, postage prepaid:
a. If to the Corporation, at: 901 N.E. Loop 410, Suite 700
San Antonio, Texas 78209-1306
b. If to the Option Holder, at: _____________________________
_____________________________
13. MODIFICATION. No modification or amendment of this Agreement shall be
effective unless such modification or amendment shall be in writing and signed
by the parties hereto.
14. CONSTRUCTION. This Agreement shall be deemed to be made under and
shall be construed in accordance with the internal laws, and not the laws of
conflict, of the State of Texas.
<PAGE>
15. BENEFIT. This Agreement shall not be transferable by the Option Holder
otherwise than by will or by the laws of descent and distribution and shall be
exercisable, during the Option Holder's lifetime, only by the Option Holder or
his or her guardian or legal representative. The Option shall not be assigned,
pledged or hypothecated in any way (whether by operation of law or otherwise)
and shall not be subject to execution, attachment or similar process. Any
attempted transfer, assignment, pledge, hypothecation or other disposition of
the Option or of any rights granted hereunder contrary to the provisions of this
paragraph, or the levy of any attachment or similar process upon the Option or
such rights, shall be null and void. This Agreement shall be binding upon and
inure to the benefit of the Corporation and its successors and assigns and the
Option Holder and its heirs, executors and administrators.
16. TERM. This Option to purchase the Stock shall become void unless the
rights hereunder are exercised and payment made prior to the close of business
on October 1, 1999.
Dated effective as of October 1, 1994.
DAWSON WELL SERVICING, INC.
ATTEST: /s/ JOE EUSTACE By: /s/ MICHAEL E. LITTLE
Name: JOE EUSTACE Name: MICHAEL E. LITTLE
Title: VICE PRESIDENT Title: PRESIDENT
OPTION HOLDER:
By: ____________________
Name: ____________________
EXHIBIT 4.9
OPTION AGREEMENT
Grantor: Dawson Well Servicing, Inc. Number of Shares: 1,000
Grantee: Doug Lewis Termination: On or before October 1, 1999
Date of Grant: October 1, 1994
THE SECURITIES REPRESENTED BY THIS INVESTMENT OR DOCUMENT HAVE BEEN
ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE. WITHOUT SUCH
REGISTRATION, SUCH SECURITIES MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR
OTHERWISE TRANSFERRED EXCEPT UPON DELIVERY TO DAWSON WELL SERVICING, INC. (THE
"CORPORATION"), IF IT SO REQUESTS, OF AN OPINION OF COUNSEL SATISFACTORY TO THE
CORPORATION THAT REGISTRATION IS NOT REQUIRED FOR SUCH TRANSFER OR THE
SUBMISSION TO THE CORPORATION OF SUCH OTHER EVIDENCE AS MAY BE SATISFACTORY TO
THE CORPORATION TO THE EFFECT THAT ANY SUCH TRANSFER SHALL NOT BE IN VIOLATION
OF THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS
OR ANY RULE OR REGULATION PROMULGATED THEREUNDER.
The undersigned, DAWSON WELL SERVICING, INC. (the "Corporation"), a Texas
corporation, for and in consideration of good and valuable consideration,
receipt of which is hereby acknowledged, hereby certifies and warrants that Doug
Lewis (the "Option Holder") is entitled, subject to the terms and conditions
hereof, to purchase on or before the close of business on October 1, 1999, 1,000
shares of common stock ($1.00 par value) of the Corporation (the "Stock") upon
presentation of this option (the "Option") and payment of the purchase price
(the "Purchase Price") as hereinafter provided.
1. EXERCISE OF OPTION. Subject to the other terms and conditions of this
Agreement, the Option granted hereby shall vest and become exercisable on
October 1, 1994.
2. RESERVATION OF STOCK. The Corporation covenants that, while this Option
is exercisable, it will reserve from its authorized and unissued common stock a
sufficient number of shares to provide for the issuance and delivery of stock
pursuant to the exercise hereof.
3. PROTECTION AGAINST DILUTION. In any of the following events occurring
after the date of this Option, appropriate adjustment shall be made in the
number of shares deliverable upon the exercise of this Option or the price per
share to be paid, so as to maintain the proportionate interest of the Option
Holder:
a. Recapitalization of the Corporation through a stock split or a
reverse stock split; or
<PAGE>
b. Declaration of a dividend on the stock, payable in shares of
stock or securities convertible into stock.
4. MERGERS. In the event the Corporation shall be merged or consolidated
with another corporation during the term of this Option, or substantially all of
its assets shall be sold to another company in exchange for stock of such other
company, or stock of any company related to such other company, with a view to
distributing such stock to the stockholders of the Corporation, the Corporation,
at its option, may invoke the provisions described in Section 6 hereof; however,
if the Corporation consummates any such transaction without having invoked the
provisions of Section 6, each share of Stock purchasable by this Option shall,
upon consummation of any such transaction, be replaced for the purposes hereof
by the securities or property issuable or distributable pursuant to such
transaction in respect of one share of Stock of the Corporation.
5. PROPOSED REGISTERED OFFERING OF SECURITIES. In the event the
Corporation shall propose to make a public offering of its securities, to be
registered under the Securities Act of 1933, the Corporation, at its option, may
invoke the provisions described in Section 6 hereof; however, if the Corporation
consummates any such transaction without having invoked the provisions described
in Section 6, this Option shall continue to be valid and exercisable, subject to
all other applicable provisions hereof.
6. SPECIAL PROVISIONS. If the Corporation, in good faith, believes a
transaction as described in Sections 4 or 5 hereof (hereinafter referred to as
"Transaction") shall be consummated or closed by the Corporation, it may elect
to notify the Holder of the pendency of the Transaction and to specify a date,
at least twenty days following such notice ("Notice"), by which time the Option
Holder may, in his discretion, evidence his intent conditionally to exercise
this Option (subject to the consummation of the Transaction) by depositing funds
into a separate escrow account, to be identified in the Notice, or by delivering
to the Corporation an irrevocable bank letter of credit in a form acceptable to
the Corporation, with such funds or letter of credit being in an amount equal to
the exercise price for any or all Options the Option Holder determines
conditionally to exercise. If such funds or letter of credit are not received or
deposited by the deadline date specified in the Notice, or if by such date the
Option Holder has not given notice of exercise as described in Section 9 hereof,
this Option shall not be exercisable (otherwise than in accordance with this
Section 6) until the Corporation notifies the Option Holder that the Transaction
will not be consummated or closed (such notice hereinafter being referred to as
a 'Transaction Termination Notice"). The Corporation hereby covenants and agrees
that if it has issued a Notice with respect to a Transaction, it will provide a
Transaction Termination Notice promptly at such time as it becomes reasonably
certain that the Transaction will not be consummated or closed. At such times as
the Corporation invokes the procedures of this Section 6, the following
additional conditions shall apply:
a. If the Option Holder deposits funds to the escrow account or
delivers a letter of credit to the Corporation and the Transaction is
consummated or closed, the Option,
<PAGE>
upon the date of such consummation or closing, is deemed irrevocably
exercised to the extent of such funds or letter of credit, and any
unexercised Options thereupon shall lapse and be null and void, and shall
not thereafter be exercisable. If a Transaction Termination Notice is
sent, the Option Holder's escrow funds or letter of credit shall be
promptly returned and Option shall be exercisable as otherwise provided
herein.
b. If a Option Holder does not deposit funds to the escrow account
or deliver a letter of credit to the Corporation, and the Transaction is
consummated or closed, the Option, upon and as of the date of such
consummation or closing, is deemed to have lapsed and to be null and void
and shall not thereafter be exercisable. If a Transaction Termination
Notice is sent, the Option thereupon shall be exercisable as otherwise
provided herein.
7. STOCKHOLDERS' RIGHTS. Until the valid exercise of this Option, Option
Holder, by virtue of this Option, shall not be entitled to any rights of a
stockholder of the Corporation; but immediately upon the exercise of this Option
and upon payment as provided herein, the Option Holder shall be deemed a record
holder of the Stock with respect to which this Option is exercised.
8. EXERCISE OF OPTION AND PURCHASE PRICE. The Option hereinbefore
granted shall be exercisable and vested (to the extent that it is exercisable in
accordance with its terms) according to the vesting date as set forth in Section
1. The Purchase Price for each share of Common Stock purchased hereunder shall
be Twenty Dollars ($20.00).
Upon the death of the Option Holder, this Option may be exercised by said
Option Holder's heirs, executors, administrators, or estate in accordance with
the provisions herein within 120 days following the death of said Option Holder.
The Options may be divided into Options of one share or multiples thereof, upon
surrender at the offices of the Corporation. The Option Holder may exercise this
Option, to the extent otherwise provided herein, for all or less than all stock
subject hereof.
9. METHOD OF EXERCISING OPTION. Except as otherwise provided by Section 6
hereof, the Option Holder (or his heirs, executors or administrators) shall
deliver to the Corporation written notice of his election to exercise the
Option, which notice shall specify the date and time of the exercise of the
Option and the number of shares of Stock in respect of which the Option is to be
exercised. The date specified in such notice shall be not less than five nor
more than forty-five days from the date the notice of exercise is given, and
shall be on a business day, and the time specified shall be during the regular
business hours of the Corporation. Any such notice shall be irrevocable, except
upon the written consent of the Corporation and the Option Holder.
<PAGE>
10. PAYMENT AND DELIVERY OF SHARES. The Option Holder shall, at the date
and time specified in the notice described in Section 9, deliver a bank
cashier's or treasurer's check or checks payable in the amount of the Option
exercise price for the shares of Stock in respect of which the Option is being
exercised. Such delivery shall be made to the Corporation at its principal
office in San Antonio or at such other place as the Corporation may specify in
writing and such check or checks shall be drawn to the order of the Corporation.
Contemporaneously with such payments, the Corporation shall deliver to the
Option Holder, duly endorsed and in proper form for transfer, certificates
representing the shares of Stock in respect of which the Option is being
exercised. The Option Holder acknowledges and agrees that the certificates may
bear restrictive legends, generally in the form set forth at the beginning of
this Agreement.
11. RESTRICTIONS. Unless the offering and sale of the Stock to be issued
upon the particular exercise of the Option shall have been effectively
registered under the Securities Act of 1933, as amended, or any successor
legislation (the "Act"), the Corporation shall be under no obligation to issue
the Stock covered by such exercise unless and until the following conditions
have been fulfilled.
The person(s) who exercise the Option shall represent to the Corporation,
at the time of such exercise, that such person(s) are acquiring such Stock for
his or her own account, for investment and not with a view to, or for sale in
connection with, the distribution of any such Stock, in which event the
person(s) acquiring such Stock shall be bound by the restrictions concerning
transfers set forth in the boldface legend at the beginning of this Agreement.
12. NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed to have been fully given if delivered or mailed by
certified or registered mail, return receipt requested, postage prepaid:
a. If to the Corporation, at: 901 N.E. Loop 410, Suite 700
San Antonio, Texas 78209-1306
b. If to the Option Holder, at: _____________________________
_____________________________
13. MODIFICATION. No modification or amendment of this Agreement shall be
effective unless such modification or amendment shall be in writing and signed
by the parties hereto.
14. CONSTRUCTION. This Agreement shall be deemed to be made under and
shall be construed in accordance with the internal laws, and not the laws of
conflict, of the State of Texas.
<PAGE>
15. BENEFIT. This Agreement shall not be transferable by the Option Holder
otherwise than by will or by the laws of descent and distribution and shall be
exercisable, during the Option Holder's lifetime, only by the Option Holder or
his or her guardian or legal representative. The Option shall not be assigned,
pledged or hypothecated in any way (whether by operation of law or otherwise)
and shall not be subject to execution, attachment or similar process. Any
attempted transfer, assignment, pledge, hypothecation or other disposition of
the Option or of any rights granted hereunder contrary to the provisions of this
paragraph, or the levy of any attachment or similar process upon the Option or
such rights, shall be null and void. This Agreement shall be binding upon and
inure to the benefit of the Corporation and its successors and assigns and the
Option Holder and its heirs, executors and administrators.
16. TERM. This Option to purchase the Stock shall become void unless the
rights hereunder are exercised and payment made prior to the close of business
on October 1, 1999.
Dated effective as of October 1, 1994.
DAWSON WELL SERVICING, INC.
ATTEST: ____________________ By: ____________________
Name: ____________________ Name: ____________________
Title: ____________________ Title: ____________________
OPTION HOLDER:
By: ____________________
Name: ____________________
EXHIBIT 5.1
[LETTERHEAD OF JENKENS & GILCHRIST]
November 12, 1997
Dawson Production Services, Inc.
112 E. Pecan St., Suite 1000
San Antonio, Texas 78205
Ladies and Gentlemen:
We have acted as counsel to Dawson Production Services, Inc., a Texas
corporation (the "Company"), in connection with the registration under the
Securities Act of 1933, as amended (the "Act"), of 1,300,000 shares of the
Company's Common Stock, $.01 par value per share (the "Shares"), issued or
issuable upon the exercise of options granted under the Company's Amended and
Restated 1995 Incentive Plan and under certain option agreements (the "Option
Agreements"), pursuant to a Registration Statement on Form S-8, as filed with
the Securities and Exchange Commission on November 12, 1997 (the "Registration
Statement").
In connection with this opinion, we have examined and are familiar with
originals or copies, certified or otherwise, of such documents and records of
the Company and such statutes, regulations and other instruments as we have
deemed necessary or advisable for the purposes of this opinion, including (i)
the Registration Statement, (ii) the Restated Articles of Incorporation of the
Company, as filed with the Secretary of State of the State of Texas and (iii)
the Bylaws of the Company.
We have assumed that all signatures on all documents presented to us are
genuine, that all documents submitted to us as originals are accurate and
complete, that all documents submitted to us as copies are true and correct
copies of the originals thereof, that all information submitted to us was
accurate and complete and that all persons executing and delivering originals or
copies of documents examined by us were competent to execute and deliver such
documents.
Based on this firm's examination, consideration of, and reliance on the
documents and other matters described above, and subject to the assumptions
noted below, this firm is of the opinion that the Company presently has
available at least 8,873,716 shares of authorized but unissued Common Stock from
which may be issued the 1,300,00 shares of Common Stock issued or proposed to be
issued pursuant to the exercise of options granted under the Plan or under the
Option Agreements.
Assuming that:
(1) the outstanding shares are duly granted, and the shares to be granted
in the future will be duly granted in accordance with the terms of the Plan or,
if applicable, the Option Agreements;
(2) the Company maintains an adequate number of authorized but unissued
shares or treasury shares available for issuance to those persons granted shares
of Common Stock under the Plan and under the Option Agreements; and
<PAGE>
(3) the consideration for Common Stock issued pursuant to the Plan or the
Option Agreements is actually received by the Company as provided in the Plan
(or the agreements executed in connection with the Plan) or, if applicable, in
the Option Agreements, and exceeds the par value of such shares;
then the 1,300,000 shares of Common Stock that may be issued in accordance with
the terms of the Plan and the Option Agreements will be, when and if issued,
duly and validly issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to references to our firm included in or made a part
of the Registration Statement. In giving this consent, we do not admit that we
come within the category of persons whose consent is required under Section 7 of
the Securities Act or the Rules and Regulations of the Securities and Exchange
Commission thereunder.
Sincerely,
JENKENS & GILCHRIST,
A Professional Corporation
By: KATHRYN K. LINDAUER
Kathryn K. Lindauer
For the Corporation
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Dawson Production Services, Inc.:
We consent to the incorporation by reference in this Registration
Statement on Form S-8 of Dawson Production Services, Inc., of our report dated
June 23, 1997 with respect to the consolidated financial statements of Dawson
Production Services, Inc. and subsidiaries as of March 31, 1997 and 1996, and
for each of the years in the three-year period ended March 31, 1997,
incorporated herein by reference from the Company's annual report on Form 10-K
for the year ended March 31, 1997 and to the reference to our firm under the
heading "Experts" in the prospectus.
/s/ KPMG PEAT MARWICK LLP
KPMG Peat Marwick LLP
San Antonio, Texas
November 5, 1997
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