<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 19, 1996
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------------------
DRILEX INTERNATIONAL INC.
(Exact Name of Registrant as Specified in Its Charter)
<TABLE>
<S> <C> <C>
DELAWARE 15151 SOMMERMEYER 76-0438889
(State or Other Jurisdiction of HOUSTON, TEXAS (I.R.S. Employer
Incorporation or Organization) (Address of Principal Executive Offices) Identification No.)
77041
(Zip Code)
- ------------------------------------------------------------------------------------------------
</TABLE>
DRILEX INTERNATIONAL INC. STOCK OPTION PLAN
(Full title of the plan)
- --------------------------------------------------------------------------------
JOHN FORREST
PRESIDENT AND CHIEF EXECUTIVE OFFICER
DRILEX INTERNATIONAL INC.
15151 SOMMERMEYER
HOUSTON, TEXAS 77041
(Name and Address of Agent for Service)
Telephone Number, Including Area Code,
of Agent for Service:
(713) 937-8888
copy to:
J. DAVID KIRKLAND, JR.
BAKER & BOTTS, L.L.P.
3000 ONE SHELL PLAZA
HOUSTON, TEXAS 77002-4995
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
==========================================================================================
Proposed
Title of Amount Proposed Maximum Maximum Amount of
Securities to be to be Offering Price Aggregate Registration
Registered Registered Per Offering Price(1) Fee
Share(1)
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock (par value 440,000 $16.00 $7,040,000.00 $2,427.59
$.01 per share)
===========================================================================================
(1) Estimated in accordance with Rule 457(c) and (h) solely for the purpose of
calculating the registration fee and based upon the average of the high and
low sales price of the shares of Common Stock of Drilex International Inc.
quoted on the NASDAQ National Market on July 18, 1996.
===========================================================================================
</TABLE>
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
Note: The document(s) containing the employee benefit plan
information required by Item 1 of Form S-8 and the statement of availability of
registrant information and any other information required by Item 2 of Form S-8
will be sent or given to participants as specified by Rule 428 under the
Securities Act of 1933, as amended (the "Securities Act"). In accordance with
Rule 428 and the requirements of Part I of Form S-8, such documents are not
being filed with the Securities and Exchange Commission (the "Commission")
either as part of this Registration Statement or as prospectuses or prospectus
supplements pursuant to Rule 424 under the Securities Act. The registrant shall
maintain a file of such documents in accordance with the provisions of Rule 428.
Upon request, the registrant shall furnish to the Commission or its staff a copy
or copies of all of the documents included in such file.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
This Registration Statement incorporates herein by reference the following
documents which have been filed with the Commission by Drilex International
Inc., a Delaware corporation (the "Company"):
1. The Company's prospectus dated July 2, 1996, as filed with the
Commission pursuant to Rule 424(b) of the Securities Act;
2. The description of the Company's common stock, par value $.01 per
share ("Common Stock") contained in the Company's Registration Statement on Form
8-A, as amended, as filed with the Commission on June 27, 1996, pursuant to the
Securities Exchange Act of 1934, as amended ("Exchange Act").
Each document filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Registration Statement
and prior to the filing of a post-effective amendment which indicates that all
securities offered have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference in this
Registration Statement and to be a part hereof from the date of filing such
documents.
Any statement incorporated by reference herein shall be deemed to be
modified or superseded for purposes of this Registration Statement to the extent
that a statement contained herein or in any subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not Applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Delaware General Corporation Law
Section 145(a) of the General Corporation Law of the State of Delaware (the
"DGCL") provides that a corporation may indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a
II-1
<PAGE>
plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
Section 145(b) of the DGCL states that a corporation may indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that he is
or was a director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection with the defense or settlement of such action or
suit if he acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of the corporation and except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the Court of Chancery or the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which the Court of Chancery or such other court shall deem proper.
Section 145(c) of the DGCL provides that to the extent that a director,
officer, employee or agent of a corporation has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred to in
subsections (a) and (b) of Section 145, or in defense of any claim, issue or
matter therein, he shall be indemnified against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection therewith.
Section 145(d) of the DGCL states that any indemnification under
subsections (a) and (b) of Section 145 (unless ordered by a court) shall be made
by the corporation only as authorized in the specific case upon a determination
that indemnification of the director, officer, employee or agent is proper in
the circumstances because he has met the applicable standard of conduct set
forth in subsections (a) and (b). Such determination shall be made (1) by the
board of directors by a majority vote of a quorum consisting of directors who
were not parties to such action, suit or proceeding, or (2) if such a quorum is
not obtainable, or, even if obtainable, a quorum of disinterested directors so
directs, by independent legal counsel in a written opinion, or (3) by the
stockholders.
Section 145(e) of the DGCL provides that expenses (including attorneys'
fees) incurred by an officer or director in defending any civil, criminal,
administrative or investigative action, suit or proceeding may be paid by the
corporation in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of such director or
officer to repay such amount if it shall ultimately be determined that he is not
entitled to be indemnified by the corporation as authorized in Section 145.
Such expenses (including attorneys' fees) incurred by other employees and agents
may be so paid upon such terms and conditions, if any, as the board of directors
deems appropriate.
Section 145(f) of the DGCL states that the indemnification and advancement
of expenses provided by, or granted pursuant to, the other subsections of
Section 145 shall not be deemed exclusive of any other rights to which those
seeking indemnification or advancement of expenses may be entitled under any
bylaw, agreement, vote of stockholders or disinterested directors or otherwise,
both as to action in his official capacity and as to action in another capacity
while holding such office.
Section 145(g) of the DGCL provides that a corporation shall have the power
to purchase and maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against any liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such, whether or not the corporation
would have the power to indemnify him against such liability under the
provisions of Section 145.
Section 145(j) of the DGCL states that the indemnification and advancement
of expenses provided by, or granted pursuant to, Section 145 shall, unless
otherwise provided when authorized or ratified, continue as to a person who has
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<PAGE>
ceased to be a director, officer, employee or agent and shall inure to the
benefit of the heirs, executors and administrators of such a person.
Certificate of Incorporation
The Restated Certificate of Incorporation of the Company provides that a
director of the Company shall not be personally liable to the Company or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability (i) for any breach of the director's duty of loyalty to the
Company or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the DGCL, or (iv) for any transaction from which the director
derived an improper personal benefit. If the DGCL is amended to authorize the
further elimination or limitation of the liability of directors, then the
liability of a director of the Company, in addition to the limitation on
personal liability described above, shall be limited to the fullest extent
permitted by the amended DGCL. Further, any repeal or modification of such
provision of the Restated Certificate of Incorporation by the stockholders of
the Company shall be prospective only, and shall not adversely affect any
limitation on the personal liability of a director of the Company existing at
the time of such repeal or modification.
Bylaws
The Bylaws of the Company provide that each person who was or is made a
party or is threatened to be made a party to or is involved in any action, suit
or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he or she or a person of whom he or she is the legal
representative, is or was or has agreed to become a director or officer of the
Company or is or was serving or has agreed to serve at the request of the
Company as a director, officer, employee or agent of another corporation or of a
partnership, joint venture, trust or other enterprise, including service with
respect to employee benefit plans, whether the basis of such proceeding is
alleged action in an official capacity as a director or officer or in any other
capacity while serving or having agreed to serve as a director or officer, shall
be indemnified and held harmless by the Company to the fullest extent authorized
by the DGCL, as the same exists or may thereafter be amended (but, in the case
of any such amendment, only to the extent that such amendment permits the
Company to provide broader indemnification rights than said law permitted the
Company to provide prior to such amendment) against all expense, liability and
loss (including without limitation, attorneys' fees, judgments, fines, ERISA
excise taxes or penalties and amounts paid or to be paid in settlement)
reasonably incurred or suffered by such person in connection therewith and such
indemnification shall continue as to a person who has ceased to serve in the
capacity which initially entitled such person to indemnity thereunder and shall
inure to the benefit of his or her heirs, executors and administrators;
provided, however, that the Company shall indemnify any such person seeking
indemnification in connection with a proceeding (or part thereof) initiated by
such person only if such proceeding (or part thereof) was authorized by the
board of directors of the Company. The Bylaws further provide that the right to
indemnification conferred thereby shall be a contract right and shall include
the right to be paid by the Company the expenses incurred in defending any such
proceeding in advance of its final disposition; provided, however, that, if the
DGCL requires, the payment of such expenses incurred by a current, former or
proposed director or officer in his or her capacity as a director or officer or
proposed director or officer (and not in any other capacity in which service was
or is or has been agreed to be rendered by such person while a director or
officer, including, without limitation, service to an employee benefit plan) in
advance of the final disposition of a proceeding, shall be made only upon
delivery to the Company of an undertaking, by or on behalf of such indemnified
person, to repay all amounts so advanced if it shall ultimately determine that
such indemnified person is not entitled to be indemnified under the Bylaws or
otherwise. In addition, the Bylaws provide that the Company may, by action of
its board of directors, provide indemnification to employees and agents of the
Company, individually or as a group, with the same scope and effect as the
indemnification of directors and officers provided for in the Bylaws.
Indemnification Agreements
The Company has entered into Indemnification Agreements with each of its
directors. The Indemnification Agreements provide that the Company shall
indemnify the director and hold him harmless from any losses and expenses which,
in type or amount, are not insured under the directors and officers' liability
insurance maintained by the Company, and generally indemnifies the director
against losses and expenses as a result of a claim or claims made
II-3
<PAGE>
against him for any breach of duty, neglect, error, misstatement, misleading
statement, omission or other act done or wrongfully attempted by the director or
any of the foregoing alleged by any claimant or any claim against the director
solely by reason of him being a director or officer of the Company, subject to
certain exclusions. The Indemnification Agreements also provide certain
procedures regarding the right to indemnification and for the advancement of
expenses.
Underwriting Agreement
The Purchase Agreement dated July 2, 1996 among the Company, the Selling
Stockholder referred to therein and the underwriters listed in Schedule I
thereto, a form of which Purchase Agreement was filed as Exhibit 1.1 to the
Company's Registration Statement on Form S-1 (Registration No. 333-03405),
provides for the indemnification of the directors and officers of the Company in
certain circumstances.
Insurance
The Company has obtained a policy of liability insurance to insure its
officers and directors against losses resulting from certain acts committed by
them in their capacities as officers and directors of the Company, including
certain liabilities under the securities laws.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not Applicable.
ITEM 8. EXHIBITS
The following documents are filed as a part of this registration statement
or incorporated by reference herein:
Exhibit
No. Description
- ------- -----------
4.1* -- Restated Certificate of Incorporation of the Company
(incorporated by reference to Exhibit 3.1 to the Company's
Registration Statement on Form S-1 (Registration No. 333-03405))
4.2* -- Bylaws of the Company, as amended (incorporated by reference to
Exhibit 3.2 to the Company's Registration Statement on Form S-1
(Registration No. 333-03405))
4.3* -- Form of Certificate representing Common Stock (incorporated by
reference to Exhibit 4.1 to the Company's Registration Statement
on Form S-1 (Registration No. 333-03405))
4.4 -- The Drilex International Inc. Stock Option Plan
5 -- Opinion of Baker & Botts, L.L.P.
23.1 -- Consent of Deloitte & Touche LLP
23.2 -- Consent of Baker & Botts, L.L.P. (included in Exhibit 5)
24 -- Powers of Attorney (included on the signature page of this
Registration Statement)
- -----------------
* Incorporated herein by reference as indicated.
II-4
<PAGE>
ITEM 9. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) 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 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) of the Securities Act 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;
(iii) 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 the undertakings set forth in paragraphs (a)(1)(i) and
(a)(1)(ii) above do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic reports
filed by the registrant 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, 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.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which 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 of 1933, 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 this 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) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers, and controlling persons of
the registrant pursuant to the provisions described under Item 6 above, 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 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.
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<PAGE>
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 Houston, State of Texas, on the 19th day of July,
1996.
DRILEX INTERNATIONAL INC.
By: /s/ John Forrest
-------------------
John Forrest
President and Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below appoints John Forrest and G.
Bruce Broussard, and each of them, each of whom may act without the joinder of
the other, as his true and lawful attorneys-in-fact and agents, with full power
of substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities to sign any and all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto and all other documents in connection therewith, with the
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and necessary
to be done, as fully and for all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them or their substitutes, may lawfully do or cause to be done
by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated on the 19th day of July, 1996.
Signature Title
--------- -----
/s/ John Forrest President, Chief Executive Officer and Director
- ------------------------ (Principal Executive Officer)
John Forrest
/s/ G. Bruce Broussard Vice President--Finance and Administration and
- ------------------------ Secretary (Principal Financial and Accounting
G. Bruce Broussard Officer)
/s/ L.E. Simmons Chairman of the Board
- ------------------------
L.E. Simmons
/s/ David C. Baldwin Director
- ------------------------
David C. Baldwin
/s/ Robert P. Peebler Director
- ------------------------
Robert P. Peebler
Director
- ------------------------
Sam S. Sorrell
/s/ Andrew L. Waite Director
- ------------------------
Andrew L. Waite
Director
- ------------------------
A. Clark Johnson
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<PAGE>
EXHIBIT INDEX
Exhibit
No. Description
- ------- -----------
4.1* -- Restated Certificate of Incorporation of the Company
(incorporated by reference to Exhibit 3.1 to the Company's
Registration Statement on Form S-1 (Registration No. 333-
03405))
4.2* -- Bylaws of the Company, as amended (incorporated by reference to
Exhibit 3.2 to the Company's Registration Statement on Form S-1
(Registration No. 333-03405))
4.3* -- Form of Certificate representing Common Stock (incorporated by
reference to Exhibit 4.1 to the Company's Registration Statement
on Form S-1 (Registration No. 333-03405))
4.4 -- The Drilex International Inc. Stock Option Plan
5 -- Opinion of Baker & Botts, L.L.P.
23.1 -- Consent of Deloitte & Touche LLP
23.2 -- Consent of Baker & Botts, L.L.P. (included in Exhibit 5)
24 -- Powers of Attorney (included on the signature page of this
Registration Statement)
- ----------------------
* Incorporated herein by reference as indicated.
II-7
<PAGE>
DRILEX INTERNATIONAL INC.
STOCK OPTION PLAN
(AS AMENDED AND RESTATED MAY 7, 1996)
I. PURPOSE OF THE PLAN
The Drilex International Inc. Stock Option Plan (the "Plan") is intended to
provide a means whereby certain employees of Drilex International Inc., a
Delaware corporation (the "Company"), and its subsidiaries, and certain non-
employee directors of the Company, may develop a sense of proprietorship and
personal involvement in the development and financial success of the Company,
and to encourage them to remain with and devote their best efforts to the
business of the Company, thereby advancing the interests of the Company and its
stockholders. The Plan was originally established March 31, 1994 as the Drilex
Holding Corp. 1994 Stock Option Plan and was amended and restated in July 1994.
Under the Plan, the Company may grant to certain employees (and, with respect to
grants pursuant to Paragraph XII, shall grant to non-employee directors) the
option ("Option") to purchase shares of Common Stock, $.01 par value, of the
Company ("Stock"), as hereinafter set forth. Options granted under the Plan may
be either incentive stock options, within the meaning of section 422(b) of the
Internal Revenue Code of 1986, as amended (the "Code") ("Incentive Stock
Options"), or options which do not constitute Incentive Stock Options, provided,
that options granted pursuant to Paragraph XII shall not constitute Incentive
Stock Options.
II. ADMINISTRATION
The Plan shall be administered by a committee (the "Committee") of two or
more directors of the Company appointed by the Board of Directors of the Company
(the "Board"). Each member of the Committee shall be a "disinterested person"
within the meaning of Rule 16b-3(c) under the Securities Exchange Act of 1934,
as amended (the "1934 Act"). Subject to the terms of this Plan (including,
without limitation, the provisions governing participation in this Plan by non-
employee directors), the Committee shall have sole discretion and authority to
select the individuals who are to be granted Options from among those eligible
hereunder and to establish the number of shares which may be issued under each
Option. The Committee is authorized to interpret the Plan and may from time to
time adopt such rules and regulations, consistent with the provisions of the
Plan, as it may deem advisable to carry out the Plan. The Committee may, in its
discretion, provide for the extension of the exercisability of an Option or
Stock Appreciation Rights (as defined herein) (an Option, Stock Appreciation
Rights or any combination thereof being referred to at times herein as an
"Award"), accelerate the vesting or exercisability of an Award, eliminate or
make less restrictive any restrictions contained in an Award, waive any
restriction or other provision of this Plan or an Award or otherwise amend or
modify an Award in any manner that is either (i) not adverse to the optionee
holding such Award or (ii) consented to by such optionee. The Committee may
correct any defect or supply any omission or reconcile any inconsistency in this
Plan or in any Award in the
1
<PAGE>
manner and to the extent the Committee deems necessary or desirable to carry it
into effect. Any decision of the Committee in the interpretation and
administration of this Plan shall lie within its sole and absolute discretion
and shall be final, conclusive and binding on all parties concerned. No member
of the Committee or officer of the Company to whom it has delegated authority
shall be liable for anything done or omitted to be done by him or her, by any
member of the Committee or by any officer of the Company in connection with the
performance of any duties under this Plan, except for his or her own willful
misconduct or as expressly provided by statute.
III. OPTION AGREEMENTS
Each Option shall be evidenced by an Option Agreement and shall contain
such terms and conditions, and may be exercisable for such periods and upon such
events, as may be approved by the Committee, subject to the terms of this Plan.
The terms and conditions of the respective Option Agreements need not be
identical. Specifically, an Option Agreement may provide for the surrender, in
whole or in part, of the right to purchase shares under the Option in return for
a payment in cash or shares of Stock or a combination of cash and shares of
Stock equal in value to the excess of the fair market value of the shares with
respect to which the right to purchase is surrendered over the option price
therefor ("Stock Appreciation Rights"), on such terms and conditions as the
Committee in its sole discretion may prescribe; provided, however, that, except
as provided in subparagraph VIII(c) hereof, the Committee shall retain final
authority (i) to determine the form in which payment of Stock Appreciation
Rights will be made or (ii) to approve an election by an optionee to receive
cash in whole or in part in settlement of Stock Appreciation Rights. Stock
Appreciation Rights as provided herein may be granted at the time an Option is
granted or at any time or from time to time thereafter. Moreover, an Option
Agreement may provide for the payment of the option price, in whole or in part,
by the delivery of a number of shares of Stock (plus cash if necessary) having a
fair market value equal to such option price. For all purposes under the Plan,
the fair market value of a share of Stock on a particular date shall mean (i) if
the shares of Stock are listed on a national securities exchange, the mean
between the highest and lowest sales price per share of Stock on the
consolidated transaction reporting system for the principal such national
securities exchange on that date, or, if there shall have been no such sale so
reported on that date, on the last preceding date on which such a sale was so
reported, (ii) if the shares of Stock are not so listed but are quoted in the
NASDAQ National Market (or any successor to such market), the mean between the
highest and lowest sales price per share of Stock on the NASDAQ National Market
on that date, or, if there shall have been no such sale so reported on that
date, on the last preceding date on which such a sale was so reported or (iii)
if the Stock is not so listed or quoted, the mean between the closing bid and
asked price on that date, or, if there are no quotations available for such
date, on the last preceding date on which such quotations shall be available, as
reported by NASDAQ, or, if not reported by NASDAQ, by the National Quotation
Bureau, Inc. In the event Stock is not listed or quoted at the time a
determination of its value is required to be made hereunder, the determination
of its fair market value shall be made by the Committee in such manner as it
deems appropriate. Each Option and all rights granted thereunder shall not be
transferable other than by will or the laws of descent and distribution or
pursuant to a qualified domestic relations order as defined by the Code or Title
I of the Employee
2
<PAGE>
Retirement Income Security Act, or the rules thereunder, and shall be
exercisable during the optionee's lifetime only by the optionee or the
optionee's guardian or legal representative. Notwithstanding anything herein to
the contrary, no optionee may be granted, during any year, awards consisting of
Options or Stock Appreciate Rights exercisable for more than 200,000 shares of
Stock.
IV. ELIGIBILITY OF OPTIONEE
Options may be granted only to (i) individuals who are full-time or part-
time employees (including officers and directors who are also full-time or part-
time employees) of the Company or any subsidiary corporation (as defined in
section 424 of the Code) of the Company at the time the Option is granted
(subject to any limitation on the grant of Incentive Stock Options to part-time
employees imposed by the Code) and (ii) pursuant to Paragraph XII only,
individuals who are directors of the Company and who are not employees of the
Company or of any subsidiary corporation of the Company (as defined in Section
424 of the Code) (each such individual described in this clause (ii) being
referred to as a "non-employee director"). Options may be granted to the same
individual on more than one occasion. No Incentive Stock Option shall be
granted to an individual if, at the time the Option is granted, such individual
owns stock possessing more than 10% of the total combined voting power of all
classes of stock of the Company or of its parent or subsidiary corporation,
within the meaning of section 422(b)(6) of the Code, unless (x) at the time such
Option is granted the option price is at least 110% of the fair market value of
the Stock subject to the Option and (y) such Option by its terms is not
exercisable after the expiration of five years from the date of grant. To the
extent that the aggregate fair market value (determined at the time the
respective Incentive Stock Option is granted) of stock with respect to which
Incentive Stock Options are exercisable for the first time by an individual
during any calendar year under all incentive stock option plans of the Company
and its parent and subsidiary corporations exceeds $100,000, such excess
Incentive Stock Options shall be treated as options which do not constitute
Incentive Stock Options. The Committee shall determine, in accordance with
applicable provisions of the Code, Treasury Regulations and other administrative
pronouncements, which of an optionee's Incentive Stock Options will not
constitute Incentive Stock Options because of such limitation and shall notify
the optionee of such determination as soon as practicable after such
determination.
V. SHARES SUBJECT TO THE PLAN
The aggregate number of shares which may be issued under Options granted
under the Plan shall not exceed 440,000 shares of Stock, which shall be the
limitation applicable after taking into account the Stock split approved by the
Board of Directors of the Company on May 7, 1996 (the "Stock Split"). Such
shares may consist of authorized but unissued shares of Stock or previously
issued shares of Stock reacquired by the Company. Any of such shares which
remain unissued and which are not subject to outstanding Options at the
termination of the Plan shall cease to be subject to the Plan, but, until
termination of the Plan, the Company shall at all times make available a
sufficient number of shares to meet the requirements of the Plan. Should any
Option hereunder
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<PAGE>
expire or terminate prior to its exercise in full, the shares theretofore
subject to such Option may again be subject to an Option granted under the Plan
to the extent permitted under Rule 16b-3. The aggregate number of shares which
may be issued under the Plan shall be subject to adjustment in the same manner
as provided in Paragraph VIII hereof with respect to shares of Stock subject to
Options then outstanding. Exercise of an Option in any manner, including an
exercise involving a Stock Appreciation Right, shall result in a decrease in the
number of shares of Stock which may thereafter be available, both for purposes
of the Plan and for sale to any one individual, by the number of shares as to
which the Option is exercised. Separate stock certificates shall be issued by
the Company for those shares acquired pursuant to the exercise of an Incentive
Stock Option and for those shares acquired pursuant to the exercise of any
Option which does not constitute an Incentive Stock Option.
VI. OPTION PRICE
The purchase price of Stock issued under each Option shall be determined by
the Committee (except with respect to options granted pursuant to Paragraph
XII), but (i) in the case of an Incentive Stock Option, such purchase price
shall not be less than the fair market value of Stock subject to the Option on
the date the Option is granted and (ii) in the case of an Option that does not
constitute an Incentive Stock Option and is not granted pursuant to Paragraph
XII, such purchase price shall not be less than 50% of the fair market value of
Stock subject to the Option on the date the Option is granted, and (iii) in the
case of an Option granted pursuant to Paragraph XII, such purchase price shall
be as set in Paragraph XII, but in no event shall any such purchase price be
less than the par value of the Stock.
VII. TERM OF PLAN
The Plan became effective on March 31, 1994, the date of its adoption by
the Board, and was approved by the stockholders of the Company within twelve
months thereafter. Except with respect to Options then outstanding, if not
sooner terminated under the provisions of Paragraph IX, the Plan shall terminate
upon and no further Options shall be granted after the expiration of ten years
from the date of its adoption by the Board.
VIII. RECAPITALIZATION OR REORGANIZATION
a. The existence of the Plan and the Options granted hereunder shall not
affect in any way the right or power of the Board or the stockholders of the
Company to make or authorize any adjustment, recapitalization, reorganization or
other change in the Company's capital structure or its business, any merger or
consolidation of the Company, any issue of debt or equity securities ahead of or
affecting stock or rights thereof, the dissolution or liquidation of the Company
or any sale, lease, exchange or other disposition of all or any part of its
assets or business or any other corporate act or proceeding.
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<PAGE>
b. The shares with respect to which Options may be granted are shares of
Stock as presently constituted, but if, and whenever, prior to the expiration of
an Option theretofore granted, the Company shall effect a subdivision or stock
split or consolidation of shares of Stock or the payment of a stock dividend on
Stock without receipt of consideration by the Company, the number of shares of
Stock with respect to which such Option may thereafter be exercised (i) in the
event of an increase in the number of outstanding shares, shall be
proportionately increased, and the purchase price per share shall be
proportionately reduced, and (ii) in the event of a reduction in the number of
outstanding shares, shall be proportionately reduced, and the purchase price per
share shall be proportionately increased.
c. If the Company recapitalizes, or reclassifies its capital stock, or
otherwise changes or reorganizes its capital structure (a "recapitalization"),
thereafter upon any exercise of an Option theretofore granted the optionee shall
be entitled to purchase under such Option, in lieu of the number of shares of
Stock then covered by such Option, the number and class of shares of stock and
securities to which the optionee would have been entitled pursuant to the terms
of the recapitalization if, immediately prior to such recapitalization, the
optionee had been the holder of record of the number of shares of Stock then
covered by such Option. If (i) the Company shall not be the surviving entity in
any merger or consolidation (or survives only as a subsidiary of an entity other
than a previously wholly owned subsidiary of the Company), (ii) the Company
sells, leases or exchanges (or agrees to sell, lease or exchange) all or
substantially all of its assets to any other person or entity (other than a
wholly owned subsidiary of the Company), (iii) the Company is to be dissolved
and liquidated, (iv) any person or entity, including a "group" as contemplated
by Section 13(d)(3) of the 1934 Act (other than DRLX Partners, L.P. or its
partners or any group including DRLX Partners, L.P. or its partners), acquires
or gains ownership or control (including, without limitation, power to vote) of
more than 50% of the outstanding shares of the Company's voting stock (based
upon voting power), or (v) as a result of or in connection with a contested
election of directors, the persons who were directors of the Company before such
election shall cease to constitute a majority of the Board (each such event is
referred to herein as a "Corporate Change"), then (except with respect to
Options granted pursuant to Paragraph XII) effective as of a date (selected by
the Committee) within (a) ten days after the approval by the stockholders of the
Company of such merger, consolidation, sale, lease or exchange of assets or
dissolution or such election of directors or (b) thirty days of such change of
control referred to in clause (iv) above, the Committee, acting in its sole
discretion without the consent or approval of any optionee, shall effect one or
more of the following alternatives, which may vary among individual optionees:
(1) accelerate the time at which Options then outstanding may be exercised so
that such Options may be exercised in full for a limited period of time on or
before a specified date (before or after such Corporate Change) fixed by the
Committee, after which specified date all unexercised Options and all rights of
optionees thereunder shall terminate, (2) require the mandatory surrender to the
Company by selected optionees of some or all of the outstanding Options held by
such optionees (irrespective of whether such Options are then exercisable under
the provisions of the Plan) as of a date, before or after such Corporate Change,
specified by the Committee, in which event the Committee shall thereupon cancel
such Options and cause the Company to pay to each optionee an
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<PAGE>
amount of cash per share equal to the excess of the amount calculated in
Subparagraph (d) below (the "Change of Control Value") of the shares subject to
such Option over the exercise price(s) under such Options for such shares, (3)
make such adjustments to Options then outstanding as the Committee deems
appropriate to reflect such Corporate Change (provided, however, that the
Committee may determine in its sole discretion that no adjustment is necessary
to Options then outstanding) or (4) provide that thereafter upon any exercise of
an Option theretofore granted the optionee shall be entitled to purchase under
such Option, in lieu of the number of shares of Stock then covered by such
Option, the number and class of shares of stock or other securities or property
(including, without limitation, cash) to which the optionee would have been
entitled pursuant to the terms of the agreement of merger, consolidation or sale
of assets or dissolution if immediately prior to such merger, consolidation or
sale of assets or dissolution the optionee had been the holder of record of the
number of shares of Stock then covered by such Option. If a Corporate Change
occurs, then (x) on the date of approval by the stockholders of the Company of
such merger, consolidation, sale, lease or exchange of assets or dissolution or
such election of directors or (y) on the date of such change of control referred
to in clause (iv) above, all Options granted pursuant to Paragraph XII shall be
mandatorily surrendered to the Company (irrespective of whether such Options are
then exercisable under the provisions of the Plan) as of the date specified in
clause (x) or (y) above, as applicable, and such Options shall thereupon
automatically be canceled and the Company shall pay to each optionee an amount
of cash per share equal to the excess of the Change of Control Value of the
shares subject to such Option over the exercise price(s) under such Options for
such shares.
d. For the purposes of clause (2) and the last sentence in Subparagraph
(c) above, the "Change of Control Value" shall equal the amount determined in
clause (i), (ii) or (iii), whichever is applicable, as follows: (i) the per
share price offered to stockholders of the Company in any such merger,
consolidation, sale of assets or dissolution transaction, (ii) the per share
price offered to stockholders of the Company in any tender offer or exchange
offer whereby a Corporate Change takes place or (iii) if such Corporate Change
occurs other than pursuant to a tender or exchange offer, the fair market value
per share of the shares into which such Options being surrendered are
exercisable, as determined by the Committee as of the date determined by the
Committee (or required by the last sentence in Subparagraph (c) above, as the
case may be) to be the date of cancellation and surrender of such Options. In
the event that the consideration offered to stockholders of the Company in any
transaction described in this Subparagraph (d) or Subparagraph (c) above
consists of anything other than cash, the Committee shall determine the fair
cash equivalent of the portion of the consideration offered which is other than
cash.
e. Any adjustment provided for in Subparagraphs (b) or (c) above shall be
subject to any required stockholder action.
f. Except as hereinbefore expressly provided, (i) the issuance by the
Company of shares of stock of any class or securities convertible into shares of
stock of any class, for cash, property, labor or services, upon direct sale,
upon the exercise of rights or warrants to subscribe therefor, or upon
conversion of shares or obligations of the Company convertible into such shares
or other
6
<PAGE>
securities, (ii) the payment of a dividend in property other than Stock or (iii)
the occurrence of any similar transaction, and in any case whether or not for
fair value, shall not affect, and no adjustment by reason thereof shall be made
with respect to, the number of shares of Stock subject to Options theretofore
granted or the purchase price per share, unless otherwise determined by the
Board in its sole discretion.
IX. AMENDMENT OR TERMINATION OF THE PLAN
The Board of Directors of the Company may amend, modify, alter,
suspend or terminate this Plan, except that (a) no amendment or alteration that
would impair the rights of any optionee under any Option that he has been
granted shall be made without his consent, (b) no amendment or alteration shall
be effective prior to approval by the Company's stockholders to the extent such
approval is then required pursuant to Rule 16b-3 (or any successor provision)
under the 1934 Act in order to preserve the applicability of any exemption
provided by such rule to any Option then outstanding (unless the holder of such
Option consents) or to the extent stockholder approval is otherwise required by
Section 422 of the Code or other applicable legal requirements, and (c)
subparagraph XII(a) and XII(c) shall not be amended more than once every six
months to the extent such limitation is required by Rule 16b-3(c)(2)(ii) (or any
successor provision) under the 1934 Act as then in effect.
X. SECURITIES LAWS
a. The Company shall not be obligated to issue any Stock pursuant to
any Option granted under the Plan at any time when the shares covered by such
Option have not been registered under the Securities Act of 1933 and such other
state and federal laws, rules or regulations as the Company or the Committee
deems applicable and, in the opinion of legal counsel for the Company, there is
no exemption from the registration requirements of such laws, rules or
regulations available for the issuance and sale of such shares.
b. It is intended that the Plan and any grant of an Option made to a
person subject to Section 16 of the 1934 Act meet all of the requirements of
Rule 16b-3 thereunder. If any provision of the Plan or any such Option would
disqualify the Plan or such Option under, or would otherwise not comply with,
Rule 16b-3, such provision or Option shall be construed or deemed amended to
conform to Rule 16b-3.
XI. WITHHOLDING AND CASH BONUSES
Except with respect to Options granted pursuant to Paragraph XII, the
Committee may permit an optionee to elect (which election shall be subject to
the Committee's sole discretion to consent to or disapprove of, shall be
irrevocable and, if the optionee is subject to Section 16 of the 1934 Act, shall
be subject to such administrative rules as the Committee shall determine to
assure compliance with Rule 16b-3 under the 1934 Act) to deliver to the Company
(or have the Company withhold
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<PAGE>
upon exercise of an Option) such shares of Stock as the Company may require to
meet its obligation under applicable tax laws and regulations to the extent the
exercise of an Option or the disposition of shares of Stock acquired by exercise
of an Option results in compensation income to the optionee for federal or state
income tax purposes. Except with respect to Options granted pursuant to
Paragraph XII, the Committee may, at any time and in its discretion, grant to
any optionee whose Option is not an Incentive Stock Option (or whose Incentive
Stock Option fails to quality for the favorable tax treatment afforded to
Incentive Stock Options) the right to receive, at such time and in such amounts
as determined by the Committee, a cash amount ("Cash Award") which is intended
to reimburse the optionee for (i) all or a portion of the federal, state and
local income taxes imposed upon such optionee as a consequence of the exercise
for Stock of such Option (or Stock Appreciation Right), or as a consequence of a
disqualifying disposition of Stock obtained upon exercise of an Incentive Stock
Option, or of the Committee's taking any action permitted under this Plan
(including the receipt of the Cash Award) and/or (ii) all or a portion of an
assumed interest cost for borrowing the amount of such taxes not reimbursed by
the Company during the period prior to the sale of the Stock received upon
exercise of the Option (or Stock Appreciation Right).
XII. AUTOMATIC OPTION GRANTS TO NON-EMPLOYEE DIRECTORS
Notwithstanding any other provision of this Plan, non-employee
directors shall participate in this Plan only to the extent set forth in this
Paragraph XII.
a. Automatic Grant of Options. Prior to the date of amendment and
restatement of this Plan in May 1996, Options had been awarded to two non-
employee directors. The Options previously awarded to such non-employee
directors are not Incentive Stock Options, and were awarded on the dates, at the
option price, and to purchase the number of shares of Stock indicated on Exhibit
A. Effective as of the date of consummation of the initial public offering of
the Company's Stock (the "Offering"), the non-employee directors identified on
Exhibit A will be entitled to receive an additional Option to purchase 1,200
shares of Stock, taking into account the Stock Split, at an exercise price equal
to the initial public offering price per share of Stock. Pursuant to the
amendment and restatement of this Plan in May 1996, the definition of a non-
employee director was revised such that the three directors identified on
Exhibit B are eligible to receive Options pursuant to this Section XII.
Effective as of the date of consummation of the Offering, the non-employee
directors identified on Exhibit B will be entitled to receive an Option to
purchase 3,620 shares of Stock, taking into account the Stock Split, at an
exercise price equal to the initial public offering price per share of Stock.
Each other non-employee director elected at any meeting of stockholders of the
Company who has not previously received a grant under this Section XII of the
Plan shall automatically receive, as of the date of the later of the
consummation of the Offering or the stockholders' meeting at which the director
is elected, the grant of an Option (which shall not be an Incentive Stock
Option) to purchase 3,620 shares of Stock, taking into account the Stock Split.
Options granted to non-employee directors shall become exercisable in
installments of one-third of the shares of Stock subject to the Option on each
of the first three anniversaries of the date of grant.
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<PAGE>
b. Term. The term of each Option granted to a non-employee director
shall be ten years from its date of grant, unless sooner terminated in
accordance with Subparagraph XII (d) below.
c. Option Price. The purchase price of Stock under each Option
granted to a non-employee director shall be the fair market value of the Stock
subject to the Option on the date the Option is granted, or such price as is
more specifically described in Subparagraph XII(a).
d. Exercise After Death or Other Termination. Each Option granted to
a non-employee director may be exercised only by such director during such
director's lifetime and while such director remains a member of the Board,
except that
(i) if a non-employee director ceases to be a member of the Board by
reason of disability (within the meaning of section 22(e)(3) of the Code), such
non-employee director's Option may be exercised by such non-employee director
(or his or her estate or the person who acquires such Option by will or the laws
of descent and distribution or otherwise by reason of the death of such non-
employee director) at any time during the period of one year following such
cessation, but only as to the number of shares such director was entitled to
purchase under such Option as of the date such director ceased to be a member of
the Board;
(ii) if a non-employee director dies while a member of the Board, such
non-employee director's estate, or the person who acquires such non-employee
director's Option by will or the laws of descent and distribution or otherwise
by reason of the death of such non-employee director, may exercise such Option
at any time during the period of one year following the date of such non-
employee director's death, but only as to the number of shares such director was
entitled to purchase under such Option as of the date of such director's death;
and
(iii) if a non-employee director ceases to be a member of the Board
for any reason other than as described in clauses (i) or (ii) above, unless such
non-employee director voluntarily resigns his directorship without the written
consent of a majority of the remaining members of the Board or is removed from
the Board by the stockholders of the Company, such non-employee director's
Option may be exercised by such director at any time during the period of three
months following such cessation, or by such director's estate (or the person who
acquires such Option by will or the laws of decent and distribution or otherwise
by reason of the death of such director) during a period of one year following
such director's death if such director dies during such three-month period, but
in each case only as to the number of shares such director was entitled to
purchase under such Option as of the date such director ceases to be a member of
the Board.
In the event that a non-employee director voluntarily resigns his directorship
without the written consent of a majority of the remaining members of the Board
or is removed by the stockholders of the Company, any unexercised Options held
by such director on the date of such resignation or
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<PAGE>
removal, as the case may be, shall be forfeited as of such date and thereafter
shall be unexercisable. No such Option shall be exercisable in any event after
the expiration of ten years from the date of grant thereof.
e. Agreement in Writing. Each Option granted to a non-employee director
shall be evidenced by an Option Agreement consistent with the terms and
conditions of the Plan (including this Article XII).
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<PAGE>
EXHIBIT A
<TABLE>
<CAPTION>
Option Option
Stock Subject Exercise Stock Subject Exercise
to Option Price to Option Price
Date of Grant Director (Pre-Split) (Pre-Split) (Post-Split) (Post-Split)
- --------------- ----------------- -------------- ----------- -------------- ------------
<S> <C> <C> <C> <C> <C>
7/26/94 Robert P. Peebler 1,337 $10 2,420 $5.53
2/24/95 Sam S. Sorrell 1,337 $10 2,420 $5.53
</TABLE>
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<PAGE>
EXHIBIT B
Additional Non-employee Directors
---------------------------------
David C. Baldwin
Andrew L. Waite
L.E. Simmons
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<PAGE>
NON-EMPLOYEE DIRECTOR'S STOCK OPTION AGREEMENT
AGREEMENT made as of the ____ day of ___________, 199__, between Drilex
International Inc., a Delaware corporation (the "Company") and
____________________ ("Director"), a non-employee director of the Company.
To carry out the purposes of the DRILEX INTERNATIONAL INC. STOCK OPTION
PLAN (as amended and restated, and as it may be further amended from time to
time, the "Plan"), by affording Director the opportunity to purchase shares of
Stock (as defined in the Plan) of the Company, and in consideration of the
mutual agreements and other matters set forth herein and in the Plan, the
Company and Director hereby agree as follows:
a. Grant of Option. The Company hereby irrevocably grants to Director the
right and option ("Option") to purchase all or any part of an aggregate of
_____________ shares of Stock, on the terms and conditions set forth herein and
in the Plan, which Plan is incorporated herein by reference as a part of this
Agreement. This Option shall not be treated as an incentive stock option within
the meaning of section 422(b) of the Internal Revenue Code of 1986, as amended
(the "Code").
b. Purchase Price. The purchase price of Stock purchased pursuant to the
exercise of this Option shall be $___ per share, subject to adjustment as set
forth herein.
c. Exercise of Option. Subject to the earlier expiration of this Option
as herein provided, this Option may be exercised, by written notice to the
Company at its principal executive office addressed to the attention of its
Chief Executive Officer, at any time and from time to time after the date of
grant hereof, but, except as otherwise provided below, this Option shall not be
exercisable for more than a percentage of the aggregate number of shares offered
by this Option determined by the number of full years from the date of grant
hereof to the date of such exercise, in accordance with the following schedule:
PERCENTAGE OF SHARES
THAT MAY
NUMBER OF FULL YEARS BE PURCHASED
------------------------ -------------------------
Less than one year 0%
1 year 33-1/3%
2 years 66-2/3%
3 years or more 100%
This Option is not transferable by Director otherwise than by will or
the laws of descent and distribution or pursuant to a qualified domestic
relations order as defined in the Code or Title I of
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<PAGE>
the Employee Retirement Income Security Act, or the rules thereunder, and may be
exercised only by Director during Director's lifetime and while Director remains
a member of the Board of Directors of the Company, except that:
(a) if Director ceases to be a member of the Board of Directors of the Company
by reason of disability (within the meaning of section 22(e)(3) of the
Code), this Option may be exercised by Director (or Director's estate or
the person who acquires this Option by will or the laws of descent and
distribution or otherwise by reason of the death of Director) at any time
during the period of one year following such cessation, but only as to the
number of shares Director was entitled to purchase hereunder as of the date
Director ceases to be a member of the Board of Directors of the Company;
(b) if Director dies while a member of the Board of Directors of the Company,
Director's estate, or the person who acquires this Option by will or the
laws of descent and distribution or otherwise by reason of the death of
Director, may exercise this Option at any time during the period of one
year following the date of Director's death, but only as to the number of
shares Director was entitled to purchase hereunder as of the date of
Director's death; and
(c) if Director ceases to be a member of the Board of Directors of the Company
for any reason other than as described in clauses (a) or (b) above, unless
Director voluntarily resigns his directorship without the written consent
of a majority of the remaining members of the Board of Directors of the
Company or is removed from such Board of Directors by the stockholders of
the Company, this Option may be exercised by Director at any time during
the period of three months following such cessation, or by Director's
estate (or the person who acquires this Option by will or the laws of
descent and distribution or otherwise by reason of the death of Director)
during a period of one year following Director's death if Director dies
during such three-month period, but in each case only as to the number of
shares Director was entitled to purchase hereunder as of the date Director
ceases to be a member of the Board of Directors of the Company.
In the event that Director voluntarily resigns his directorship without the
written consent of a majority of the remaining members of the Board of Directors
of the Company or is removed by the stockholders of the Company, any unexercised
portion of this Option held by Director on the date of such resignation or
removal, as the case may be, shall be forfeited as of such date and thereafter
shall be unexercisable. This Option shall not be exercisable in any event after
the expiration of ten years from the date of grant hereof. The purchase price
of shares as to which this Option is exercised shall be paid in full at the time
of exercise in cash (including check, bank draft or money order payable to the
order of the Company). Director shall exercise this Option for whole shares of
Stock only. Unless and until a certificate or certificates representing such
shares shall have been issued by the Company to Director, Director (or the
person permitted to exercise this Option in the event of Director's death) shall
not be or have any of the rights or privileges of a stockholder of the Company
with respect to shares acquirable upon an exercise of the Option.
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<PAGE>
d. Withholding of Tax. To the extent that the exercise of this
Option results in compensation income to Director for federal or state income
tax purposes, Director shall deliver to the Company at the time of such exercise
such amount of money as the Company may require to meet its obligation
underapplicable tax laws or regulations, and, if Director fails to do so, the
Company is authorized to withhold from any cash or Stock remuneration then or
thereafter to Director any tax required to be withheld by reason of such
resulting compensation income.
e. Status of Stock. If the shares of Stock acquirable upon the
exercise of this Option have not been registered under the Securities Act of
1933, as amended (the "Act"), the Company will not issue such shares unless the
holder of the Option provides the Company with a written opinion of legal
counsel, who shall be satisfactory to the Company, addressed to the Company and
satisfactory in form and substance to the Company's counsel, to the effect that
the proposed issuance of such shares to such Option holder may be made without
registration under the Act. In the event exemption from registration under the
Act is available upon an exercise of this Option, Director (or the person
permitted to exercise this Option in the event of Director's death), if
requested by the Company to do so, will execute and deliver to the Company in
writing an agreement containing such provisions as the Company may require to
assure compliance with applicable securities laws.
Director agrees that the shares of Stock which Director may acquire by
exercising this Option will not be sold or otherwise disposed of in any manner
which would constitute a violation of any applicable securities laws, whether
federal or state.
In addition, Director agrees (i) that the certificates representing
the shares of Stock purchased under this Option may bear such legend or legends
as the Company deems appropriate in order to assure compliance with applicable
securities laws, (ii) that the Company may refuse to register the transfer of
the shares of Stock purchased under this Option on the stock transfer records of
the Company if such proposed transfer would in the opinion of counsel
satisfactory to the Company constitute a violation of any applicable securities
law and (iii) that the Company may give related instructions to its transfer
agent, if any, to stop registration of the transfer of the shares of Stock
purchased under this Option.
f. Board of Directors. Director understands and agrees that nothing
contained in this Agreement shall be deemed to confer on any person any rights
other than as expressly provided herein, including but not limited to any right
to continue to be nominated to, or to serve as a member of, the Board of
Directors of the Company, and acknowledges and agrees that neither the execution
of this Agreement nor any acquisition of Stock by Director creates any
obligation whatsoever by any person to nominate or vote for Director (or refrain
from removing Director) as a member of the Board of Directors of the Company.
g. Binding Effect. This Agreement shall be binding upon and inure to
the benefit of any successors to the Company and all persons lawfully claiming
under Director.
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<PAGE>
h. Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Delaware.
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed by its officer thereunto duly authorized, and Director has executed
this Agreement, all as of the day and year first above written.
DRILEX INTERNATIONAL INC.
By:______________________________
Name:___________________________
Title:__________________________
DIRECTOR
_________________________________
Name:___________________________
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[LETTERHEAD OF BAKER & BOTTS APPEARS HERE]
July 19, 1996
Drilex International Inc.
15151 Sommermeyer
Houston, Texas 77041
Gentlemen:
In connection with the Registration Statement on Form S-8 (the
"Registration Statement") being filed by Drilex International Inc., a Delaware
corporation (the "Company"), with the Securities and Exchange Commission under
the Securities Act of 1933, as amended, relating to 440,000 shares of common
stock of the Company, par value $.01 per share ("Common Stock"), that may be
issued pursuant to the Drilex International Inc. Stock Option Plan (the "Plan"),
certain legal matters in connection with such shares are being passed upon for
the Company by us. At your request, this opinion is being furnished for filing
as Exhibit 5 to the Registration Statement.
In our capacity as your counsel in the connection referred to above,
we have examined the Company's Restated Certificate of Incorporation and Bylaws,
each as amended to date, and the originals, or copies certified or otherwise
identified, of corporate records of the Company, certificates of public
officials and of representatives of the Company, statutes and other instruments
and documents as a basis for the opinions hereinafter expressed. In giving such
opinions, we have relied upon certificates of officers of the Company with
respect to the accuracy of material factual matters contained in or covered by
such certificates.
On the basis of the foregoing, we are of the opinion that:
1. The Company is a corporation duly organized and validly existing in
good standing under the laws of the State of Delaware.
2. Upon the issuance and sale of shares of Common Stock pursuant to the
provisions of the Plan and the related option agreements authorized and approved
by the Compensation Committee of the Board of Directors of the Company for
consideration at least equal to the par value of such shares, such shares of
Common Stock will be duly authorized by all necessary corporate action on the
part of the Company, validly issued, fully paid and nonassessable.
<PAGE>
Drilex International Inc. -2- July 19, 1996
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
Baker & Botts, L.L.P.
<PAGE>
EXHIBIT 23.1
Independent Auditors' Consent
We consent to the incorporation by reference in this
Registration Statement on Form S-8 of Drilex International Inc. (the "Company")
of our reports dated April 26, 1996 with respect to the (i) consolidated
financial statements of the Company as of December 31, 1995 and 1994 and for the
year ended December 31, 1995 and the period from March 30, 1994 (inception) to
December 31, 1994, (ii) consolidated statements of operations and cash flows of
Drilex Systems, Inc. and subsidiaries for the three-month period ended March 30,
1994 and the year ended December 31, 1993, (iii) consolidated statements of
income and cash flows of Ensco Technology Company and subsidiary for the nine-
month period ended September 30, 1995 and the year ended December 31, 1994, and
of our report dated June 24, 1996 with respect to the consolidated statements of
operations and cash flows of Sharewell, Inc. and subsidiaries for the one month
ended April 30, 1995 and each of the two years in the period ended March 31,
1995, appearing in the Company's prospectus dated July 2, 1996, related to the
Company's Registration Statement on Form S-1 (Reg. No. 333-03405).
DELOITTE & TOUCHE LLP
Houston, Texas
July 19, 1996
