As filed with the Securities and Exchange Commission on December 30, 1996.
Registration No. ________________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
----------------------
DI INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
TEXAS 74-2144774
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
----------------------
450 GEARS ROAD, SUITE 625
HOUSTON, TEXAS 77067
(713) 874-0202
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
----------------------
1996 EMPLOYEE STOCK OPTION PLAN
(Full title of the plan)
----------------------
T. Scott O'Keefe, Senior Vice President and Chief Financial Officer
450 Gears Road, Suite 625
Houston, Texas 77067
(713) 874-0202
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
----------------------
COPIES TO:
John R. Boyer, Jr. Casey W. Doherty
Boyer, Ewing & Harris Incorporated Cokinos, Bosien & Young
Nine Greenway Plaza, Suite 3100 1500 Liberty Tower
Houston, Texas 77046 2919 Allen Parkway
(713) 871-2025 Houston, Texas 77019
(713) 535-5500
----------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of Each Amount Proposed Maximum Proposed Maximum Amount of
Class of Securities to be Offering Aggregate Registration
to be Registered Registered Price Per Share (1) Offering Price (1) Fee
- -------------------------------------------- ------------------- ------------------- -------------------- --------------------
<S> <C> <C> <C> <C>
Common Stock, $0.10 par value per share (2) 7,000,000 $2.5625 $17,937,500.00 $5,435.61
- -------------------------------------------- ------------------- ------------------- -------------------- --------------------
</TABLE>
(1) For all shares issued pursuant to the 1996 Employee Stock Option
Plan, estimated pursuant to Rule 457(c) and Rule 457(h) based on the average of
the high and low prices of the common stock as reported on the American Stock
Exchange on December 24, 1996.
(2) The shares registered pursuant to this registration statement are
available for grant as of the date of this registration statement under DI
Industries, Inc.'s 1996 Employee Stock Option Plan and available for issuance
pursuant to certain stock option agreements which are attached as exhibits to
this registration statement.
================================================================================
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which have been filed by DI Industries, Inc.
(the "Company") with the Commission pursuant to the Securities Exchange Act of
1934, as amended (the "Exchange Act"), are incorporated herein by reference and
made a part of this Prospectus:
1. The Company's Annual Report on Form 10-K/A for the fiscal year
ended December 31, 1995.
2. The Company's Definitive Proxy Statement for the 1996 Annual
Meeting of Shareholders held on August 27, 1996.
3. The Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1996.
4. The Company's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1996.
5. The Company's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1996.
6. The Company's Current Report on Form 8-K dated June 24, 1996.
7. The Company's Current Report on Form 8-K dated October 2, 1996.
8. The Company's Current Report on Form 8-K dated November 4, 1996.
9. The description of the Common Stock, contained in the Company's
Registration Statement on Form 8-A dated June 26, 1981.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date of any Prospectus delivered
under this Registration Statement and prior to the termination of the offering
of the Common Stock covered hereby shall be deemed to be incorporated by
reference into this Prospectus and to be a part hereof from the respective dates
of filing of such documents. All information appearing in this Prospectus or in
any document incorporated herein by reference is not necessarily complete and is
qualified in its entirety by the information and financial statements (including
notes thereto) appearing in the documents incorporated herein by reference and
should be read together with such information and documents. Any statement
contained in a document or information incorporated or deemed to be incorporated
herein by reference shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or in any
subsequently filed document that also is, or is deemed to be, incorporated
herein by reference, modifies or supersedes such statement. Any such statement
so modified or superseded shall not be deemed, expect as so modified or
superseded, to constitute a part of this Prospectus.
ITEM 4. DESCRIPTION OF SECURITIES
Not Applicable
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<PAGE>
ITEM 5. INTEREST OF NAMED EXPERTS AND COUNSEL
Not Applicable
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Under Article 1302-7.06 of the Texas Miscellaneous Corporation Laws Act,
the articles of incorporation of a Texas corporation may provide that a director
of that corporation shall not be liable, or shall be liable only to the extent
provided in the articles of incorporation, to the corporation or its
shareholders for monetary damages for acts or omissions in the director's
capacity as a director, except that the articles of incorporation cannot provide
for the elimination or limitation of liability of a director to the extent that
the director is found liable for (i) a breach of the director's duty of loyalty
to the corporation or its shareholders, (ii) acts or omissions not in good faith
that constitutes a breach of duty of the director to the corporation or an act
or omission that involves intentional misconduct or a knowing violation of the
law, (iii) any transaction from which the director received an improper personal
benefit, or (iv) an act or omission for which the liability of a director is
expressly provided by an applicable statute. Article XII of the Company's
Articles of Incorporation, as amended, states that a director of the Company
shall not be liable to the Company or its shareholders for monetary damages
except to the extent otherwise expressly provided by the statutes of the State
of Texas.
In addition, Article 2.02-1 of the TBCA authorizes a Texas corporation
to indemnify a person who was, is, or is threatened to be made a named defendant
or respondent in a proceeding, including any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative,
arbitrative, or investigative because the person is or was a director. The
indemnification is permitted only if it is determined that the person (1)
conducted himself in good faith; (2) reasonably believed (a) in the case of
conduct in his official capacity as a director of the corporation, that his
conduct was in the corporation's best interests; and (b) in all other cases,
that his conduct was at least not opposed to the corporation's best interests;
and (3) in the case of any criminal proceeding, had no reasonable cause to
believe his conduct was unlawful. A person may be indemnified under Article
2.02-1 against judgments, penalties (including excise and similar taxes), fines,
settlements, and reasonable expenses actually incurred by the person (including
court costs and attorneys' fees), but if the person is found liable to the
corporation or is found liable on the basis that personal benefit was improperly
received by him, the indemnification is limited to reasonable expenses actually
incurred and may not be made in respect of any proceeding in which the person
has been found liable for willful or intentional misconduct in the performance
of his duty to the corporation. A corporation is obligated under Article 2.02-1
to indemnify a director or officer against reasonable expenses incurred by him
in connection with a proceeding in which he is named defendant or respondent
because he is or was a director or officer if he has been wholly successful, on
the merits or otherwise, in the defense of the proceeding. Under Article 2.02-1
a corporation may (i) indemnify and advance expenses to an officer, employee,
agent or other person who are or were serving at the request of the corporation
as a director, officer, partner venturer, proprietor, trustee, employee, agent
or similar functionary of another entity to the same extent that it may
indemnify and advance expenses to directors, (ii) indemnify and advance expenses
to directors and such other persons to such further extent, consistent with law,
as may be provided in the corporation's articles of incorporation, bylaws,
action of its board of directors, or contract or as permitted by common law and
(iii) purchase and maintain insurance or another arrangement on behalf of
directors and such other persons against any liability asserted against him and
incurred by him in such a capacity or arising out of his status as such a
person. The Bylaws of the Company set forth specific provisions for
indemnification of directors, officers, agents and other persons
-2-
<PAGE>
which are substantially identical to the provisions of Article 2.02-1 described
above. The Company maintains directors and officers insurance.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not Applicable.
ITEM 8. EXHIBITS
(A) EXHIBITS
The exhibits listed in the Exhibit Index below are filed as part of the
Registration Statement:
Exhibit
Number Description
------ -----------
4.1 -- DI Industries, Inc. 1996 Employee Stock Option Plan.
4.2 -- Form of Incentive Stock Option Agreement.
4.3 -- Form of Non-Qualified Stock Option Agreement.
5.1 -- Opinion of Cokinos, Bosien & Young.
23.1 -- Consent of Deloitte & Touche LLP.
23.2 -- Consent of Cokinos, Bosien & Young contained in their
opinion filed as Exhibit 5.1.
24 -- Powers of Attorney (included as part of signature page
filed herewith).
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 (the "Securities Act");
(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; and
(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 clauses (a)(1)(i) and (a)(1)(ii) of this
paragraph do not apply if the information required to be included in a
post-effective amendment by those clauses is contained in periodic
reports filed by the Registrant pursuant to Section 13 or Section 15(d)
of the Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement.
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<PAGE>
(2) That, for the purpose of determining any liability under 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 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
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) 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) 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 Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by 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.
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 DECEMBER 20, 1996.
DI INDUSTRIES, INC.
By: /s/ T. SCOTT O'KEEFE
T. Scott O'Keefe,
Senior Vice President and Chief Financial
Officer
-4-
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints T. Scott O'Keefe with power to act as his
true and lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any or all subsequent pre- and post-effective amendments and
supplements to this Registration Statement, and to file the same, or cause to be
filed the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully to
all intents and purposes as he might or could do in person, hereby ratifying and
confirming all that any said attorney-in-fact and agent or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
SIGNATURES
IN ACCORDANCE WITH THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
<S> <C> <C>
/S/ THOMAS P. RICHARDS President and Chief December 20, 1996
(THOMAS P. RICHARDS) Executive Officer
/S/ T. SCOTT O'KEEFE Senior Vice President and December 20, 1996
(T. SCOTT O'KEEFE) Chief Financial Officer
/S/ DAVID W. WEHLMANN Vice President and December 20, 1996
(DAVID W. WEHLMANN) Controller
Director December ___, 1996
(IVAR SIEM)
Director December ___, 1996
(ROY T. OLIVER, JR.)
/S/ STEVEN A. WEBSTER Director December 23, 1996
(STEVEN A. WEBSTER)
/S/ WILLIAM R. ZIEGLER Director December 23, 1996
(WILLIAM R. ZIEGLER)
/S/ PETER M. HOLT Director December 23, 1996
(PETER M. HOLT)
</TABLE>
-5-
EXHIBIT 4.1
DI INDUSTRIES, INC.
1996 EMPLOYEE STOCK OPTION PLAN
THIS 1996 EMPLOYEE STOCK OPTION PLAN (this "Plan") is adopted by the
Board of Directors (the "Board of Directors") of DI INDUSTRIES, INC., a Texas
corporation (the "Corporation"), effective the 29th day of July, 1996 (the
"Adoption Date").
W I T N E S S E T H:
WHEREAS, the Corporation believes that allowing certain employees to
obtain shares of common stock, $0.10 par value ("Common Stock"), of the
Corporation by granting stock options as hereinafter provided is beneficial to
the initial and continued success of the Corporation;
NOW, THEREFORE, the Corporation agrees to provide for the granting and
exercising of stock options to certain employees of the Corporation, subject to
the following conditions and provisions:
1. PURPOSE. The purpose of this Plan is to secure for the Corporation
and its shareholders the benefits that flow from providing certain employees
with the incentive inherent in common stock ownership. The Corporation
recognizes that an employee stock option plan may aid in attracting and
retaining employees of exceptional ability because of the opportunity offered to
acquire a proprietary interest in the business of the Corporation.
2. AMOUNT OF STOCK. The total number of shares of Common Stock to be
subject to options granted pursuant to this Plan may not exceed 7,000,000
shares. This total number of shares will be subject to appropriate increase or
decrease under Section 13 of this Plan in the event of a stock dividend, or upon
a subdivision, split-up, combination or reclassification of, the shares
purchasable under such options. In the event that options granted under this
Plan lapse or terminate without being exercised, additional options may be
granted covering the shares not purchased under such options.
3. STOCK OPTION COMMITTEE. The Board of Directors will from time to
time appoint a Stock Option Committee (hereinafter called the "Committee") to,
among other duties, serve under this Plan. Members of the Committee will serve
for such period of time as the Board of Directors may determine and will be
subject to removal by the Board of Directors at any time. The initial members of
the Committee will consist of either:
(i) two or more persons, each of whom are disinterested
persons within the meaning of Paragraph (c)(2) of Rule 16b-3 (or any
successor rule) ("Rule 16b-3") promulgated by the Securities and
Exchange Commission under the Securities Exchange Act of 1934, as
amended, as such term is interpreted from time to time; OR
(ii) the entire Board of Directors of the Corporation, so long
as each member of the Board of Directors is an individual who qualifies
as a disinterested person.
- 1 -
<PAGE>
The Board of Directors may, at any time, terminate the functions of the
Committee and reassume all powers and authority previously delegated to the
Committee; provided, however, that the Committee will have sole and exclusive
authority to grant options under this Plan to eligible employees, officers or
directors of the Corporation during any and all periods of time when any member
of the Board of Directors does not qualify as a disinterested person.
The Board of Directors will, in its discretion, establish such rules
and regulations as it may deem appropriate for the proper administration of the
Plan and will have full authority and power to interpret and construe any
provision of the Plan or the terms and conditions of any option outstanding
under the Plan. Decisions of the Board of Directors will be final, binding and
conclusive on all persons who have an interest in the Plan or any option
outstanding under the Plan.
4. STOCK OPTIONS. Any option granted under this Plan may be either an
"Incentive Stock Option" or a "Non-qualified Stock Option." An Incentive Stock
Option is any option granted under this Plan that is intended to qualify as an
incentive stock option under Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code"), or any equivalent successor provision of the Code, if
applicable. A Non-qualified Stock Option is any option granted under this Plan
that is not an Incentive Stock Option. Except as specifically provided herein,
the provisions of this Plan apply in the same manner to Incentive Stock Options
and the Non-qualified Stock Options. Notwithstanding the foregoing, in no event
shall an Incentive Stock Option be granted to an individual who is not an
employee of the Company. Notwithstanding the foregoing, in no event shall an
Incentive Stock Option be granted to an individual who is not an employee of the
Company.
5. ELIGIBILITY AND PARTICIPATION. Options may be granted pursuant to
this Plan only to employees of the Corporation or any parent or a subsidiary of
the Corporation (such employees being hereinafter sometimes called "employees").
For purposes of this Plan, the term "employee" shall be defined to include
individuals who perform personal services for the Corporation on a contract
basis. From time to time, the Committee may select the employees to whom options
may be granted and will determine the number of shares to be covered by each
option so granted. The aggregate fair market value (determined at the time an
option is granted) of the Common Stock with respect to which Incentive Stock
Options are exercisable for the first time by any employee in any calendar year
(under all such plans of the Corporation and a parent or subsidiary corporation)
may not exceed One Hundred Thousand Dollars ($100,000) or such greater or lesser
limit that may hereafter be imposed by the Code or other applicable law. Future
as well as present employees (including employees who are directors) will be
eligible to participate in this Plan. Directors who are not employees of the
Corporation or a parent or a subsidiary of the Corporation are not eligible to
participate in this Plan. No Incentive Stock Option may be granted under this
Plan to an employee who, immediately before such option is granted, owns (or is
attributed by the Code as owning) stock possessing more than ten percent (10%)
of the total combined voting power of all classes of stock of the Corporation or
any parent or subsidiary corporation, if any, unless (i) such option price is
specially valued as provided in Section 7 of this Plan and (ii) the term of such
option is limited as provided in Section 9 of this Plan. The holder of any
option granted pursuant to this Plan will not have any of the rights of a
shareholder with respect to the shares covered by the option until one or more
certificates for such shares are delivered to such holder upon the due exercise
of the option.
For purposes of this Agreement, the fair market value of a share of
Common Stock on any particular date shall be the last sales price of the Common
Stock on that date as reported on a
- 2 -
<PAGE>
national securities exchange or on the NASDAQ National Market System or, if last
sale reporting quotation is not available for the Common Stock, the average of
the bid and ask prices for the Common Stock at the end of the trading day, as
reported by NASDAQ or in the National Quotation Bureau, Inc.'s "Pink Sheets" or,
if such quotations are not available, such fair market value will be determined
by the Committee, in accordance with its discretion in making a bona fide, good
faith determination of fair market value, without regard to any restriction
other than a restriction that, by its terms, will never lapse.
6. OPTION AGREEMENT. The terms and provisions of each option granted
under this Plan will be set forth in an appropriate Stock Option Agreement
(hereinafter called an "Option Agreement") between the Corporation and the
employee receiving such option in a form to be approved by the Committee. Each
Option Agreement will state the number of shares of Common Stock purchasable
thereunder and will identify the option granted thereby as an Incentive Stock
Option or a Non-qualified Stock Option.
7. PRICE. The purchase price per share of Common Stock purchasable
under options granted pursuant to this Plan will be determined by the Committee
but, in the case of an Incentive Stock Option, may not be less than one hundred
percent (100%) of the fair market value of a share of Common Stock at the time
the Incentive Stock Options are granted. In the event an employee, immediately
before an Incentive Stock Option is granted to such employee, owns (or is
attributed by the Code as owning) stock possessing more than ten percent (10%)
of the total combined voting power of all classes of stock of the Corporation or
of its parent or subsidiary corporations, if any, then the purchase price per
share of Common Stock purchasable under the Incentive Stock Options granted to
such employee under this Plan may not be less than one hundred and ten percent
(110%) of the fair market value at the time the options are granted. The full
purchase price of shares purchased must be paid upon exercise of the option.
Under certain circumstances, such purchase price per share may be subject to
adjustment as referred to in Section 13 of this Plan.
8. EXERCISE PERIOD. The Committee will determine when each option may
be exercised in whole or in part, such exercise period to be contained in the
applicable Option Agreement. The Committee may, however, at any time, in its
sole discretion, amend any outstanding Option Agreement to shorten the time that
the option governed thereby is exercisable or to provide that the time for
exercising such option will be shortened upon the occurrence of a specified
event.
9. OPTION PERIOD. The Committee will determine the maximum period of
time within which options granted under this Plan must be exercised after the
granting of such option, which period must terminate by the terms of Option
Agreement pertaining to such option no later than ten (10) years from the date
that such option is granted. Notwithstanding the preceding sentence, in the
event that an employee, immediately before an Incentive Stock Option is granted
to such employee, owns (or is deemed under applicable attribution rules
prescribed by the Code to own) stock possessing more than ten percent (10%) of
the total combined voting power of all classes of stock of the Corporation or
any parent or subsidiary corporations, then no Incentive Stock Option granted to
such employee may be exercisable after the expiration of five (5) years from the
date that the Incentive Stock Option is granted. The actual expiration date
stated in an Option Agreement is hereinafter called the "Expiration Date".
Notwithstanding any other provision of this Plan to the contrary, no option may
be granted under this Plan after the tenth anniversary of the Adoption Date.
- 3 -
<PAGE>
10. METHOD OF EXERCISING THE OPTION. Each Option Agreement will provide
that the option governed thereby may be exercised by the employee by delivering
to the Secretary of the Corporation (i) written notice from the employee
designating the number of shares of Common Stock with respect to which the
option is being exercised and (ii) the total purchase price for those shares of
Common Stock, which purchase price must be in the form of (a) cash or a
cashier's or certified check payable to the order of the Corporation, or (b) the
tender to the Corporation of such number of shares of Common Stock owned by the
employee having an aggregate fair market value as of the date of exercise that
is not greater than the total purchase price for the shares of Common Stock with
respect to which the option is being exercised and by paying the remaining
amount of the purchase price as provided in (a) above. The Board of Directors
will have the sole and exclusive discretion to determine whether or not property
other than cash or shares of Common Stock may be used to purchase shares of
Common Stock upon exercise of an option and, if so, to determine the value of
the property received.
11. TERMINATION. Each Option Agreement will provide that:
(a) If the employee for any reason whatsoever, other than
death or permanent and total disability, as defined in (b) below,
ceases to be employed by the Corporation, or a parent or subsidiary
corporation of the Corporation, and prior to such cessation, the
employee was employed at all times from the date of the granting of
such option until the date of such cessation, the option must be
exercised by the employee (to the extent that the employee is entitled
to do so at the date of cessation) within three (3) months following
the date of cessation of employment, subject to the Expiration Date;
provided, however, that if the employee is terminated for cause, the
option will immediately terminate. Notwithstanding the foregoing, the
Board of Directors may, in its sole discretion, extend for a reasonable
period the time in which an employee may exercise any Non-qualified
Stock Option after the date of cessation of employment, subject to the
Expiration Date.
(b) If the employee becomes permanently and totally disabled,
as hereinafter defined, while employed by the Corporation or a parent
or subsidiary corporation of the Corporation, and prior to such
disability the employee was employed at all times from the date of the
granting of the option until the date of disability, the option must be
exercised by the employee (to the extent that the employee is entitled
to do so at the date of disability) at any time within one (1) year
after the date of disability or the Expiration Date, whichever is
earlier.
"Permanently and totally disabled" means being unable to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to
result in death or which has lasted or can be expected to last for a
continuous period of not less than twelve (12) months. Such
determination of permanent and total disability must be made in
accordance with the requirements of Section 22(e)(3), and applicable
regulations, of the Code, or any other applicable method necessary for
the continued qualification of this Plan under Section 422 of the Code,
or any equivalent successor provision, if applicable. In the absence of
any specific requirements for this determination, the decision of the
Committee, as aided by any physicians designated by the Committee shall
be conclusive and the Board of Directors shall send written notice to
the employee of the determination that he has become permanently and
totally disabled.
- 4 -
<PAGE>
(c) In the event that the employee dies while employed by the
Corporation or a parent or subsidiary corporation of the Corporation,
and prior to death the employee was employed at all times from the date
of the granting of the option until the date of death, the option must
be exercised (to the extent that the employee is entitled to do so at
the date of death) by a legatee or legatees of the employee under his
will, or by his personal representatives or distributes, at any time
within one (1) year after the date of death or the Expiration Date,
whichever is earlier.
Nothing in (a), (b) or (c) shall extend the time for
exercising any option granted pursuant to this Plan beyond the
Expiration Date.
12. ASSIGNABILITY. Each Option Agreement will provide that the option
granted thereby may not be transferable or assignable by the employee in any
form or fashion, other than by will or by the laws of decent and distribution,
and that the option may be exercised, during the lifetime of the employee, only
by the employee.
13. CHANGES IN CAPITAL STRUCTURE. Each Option Agreement will provide
that, subject to the provisions set forth in Section 14, if the option is
exercised subsequent to any stock split, reverse stock split, split-up,
recapitalization, merger, consolidation, combination or exchange of shares,
reorganization, or liquidation occurring after the date of the grant of the
option, as a result of which shares of any class have been issued in respect of
outstanding Common Stock or Common Stock has been changed into the same or a
different number of shares of the same or another class or classes, then the
employee so exercising the option will receive, for the aggregate price paid
upon such exercise, the aggregate number and class of shares that, if Common
Stock (as authorized at the date of the grant of the option) had been purchased
at the date of the grant of the option for the same aggregate price (on the
basis of the price per share set forth in Section 7 hereof) and had not been
disposed of, such employee would be holding, at the time of such exercise, as a
result of such purchase and all such stock splits, reverse stock splits,
split-ups, recapitalizations, mergers, consolidations, combinations or exchanges
of shares, reorganizations, or liquidations; provided, however, that no
fractional share may be issued upon any such exercise, and the aggregate price
paid will be appropriately reduced on account of any fractional share not
issued.
14. CORPORATE MERGER, CONSOLIDATION, ETC. In the event of a
dissolution or liquidation of the Corporation or a merger or consolidation in
which the Corporation is not the surviving corporation, any outstanding options
hereunder may be terminated by the Corporation as of the effective date of such
dissolution, liquidation, merger or consolidation by giving notice to each
holder thereof of its intention to do so not less than ten (10) days preceding
such effective date and permitting the exercise of all of outstanding options
until such effective date, or the Expiration Date if earlier. Notwithstanding
the preceding sentence, if the Corporation is not the surviving corporation as a
result of the Corporation being reorganized or merged or consolidated with
another corporation while unexercised options are outstanding under this Plan,
the surviving corporation may assume the unexercised options outstanding under
this Plan or substitute new options in the surviving corporation for the
outstanding options; provided, however, that the excess of the aggregate fair
market value of the securities subject to the options immediately after the
substitution or assumption over the aggregate option price of such shares is not
less than the excess of the aggregate fair market value of the Common Stock
subject to the outstanding option immediately before such substitution or
assumption over the aggregate option price of such Common Stock. The
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existence of this Plan or of options granted hereunder will not in any way
prevent any transaction described herein and no holder of options granted under
this Plan will have the right to prevent any such transaction.
15. PAYMENT OF TAXES UPON EXERCISE. If the Committee so requires, the
Option Agreement governing any Non-qualified Stock Option will include (i) an
acknowledgment by the employee receiving such Non-qualified Stock Option that
under currently applicable law, the employee's taxable income may include, at
the time of exercise of the option, the amount by which the fair market value of
the shares purchased pursuant to the option exceeds the purchase price paid and
(ii) the employee's authorization of the Corporation to withhold shares of
Common Stock purchased by the employee pursuant to the exercise of such option
of a value equivalent to the amount of tax required to be withheld by the
Corporation out of any taxable income derived by the employee upon exercise of
the option unless the employee delivers to the Corporation cash or other shares
of Common Stock owned by the employee in such amount.
16. REGISTRATION RIGHTS. The employees have no registration rights with
respect to the shares of Common Stock issuable upon exercise of the options
granted under this Plan.
17. SALE OF STOCK AFTER EXERCISE OF OPTION. Any employee exercising any
option under the terms of this Plan will be required to agree that, unless the
shares obtained as a result of such exercise have been registered under the
Securities Act of 1933, as amended (the "Securities Act"), or may otherwise be
sold pursuant to an available exemption from such registration under the
Securities Act, such employee will not dispose of any such shares thereafter
without the prior approval of the Company. The Company intends to file a
registration statement with respect to the shares issuable under the Plan in its
fiscal year ending December 31, 1996, but has no obligation to do so.
Any employee exercising any Incentive Stock Option under this Plan will
be required to agree that such employee will not dispose of the shares obtained
as a result of such exercise within two (2) years from the date of the grant of
the applicable option nor within one (1) year after the exercise of the
applicable option.
The restrictions on transfer set forth in this Section 17 will apply to
any new, additional or different securities the employee may receive or become
entitled to receive with respect to any shares received by such employee
pursuant to the exercise of any option granted under this Plan, including (but
not limited to) securities received by virtue of a share dividend, stock split,
reverse stock split, split-up, recapitalization, merger, consolidation,
combination or exchange of shares, reorganization, dissolution, liquidation or
any other change in the corporate or capital structure of the Corporation.
The Corporation will require that a legend be placed on any share
certificates issued through the exercise of any option granted under this Plan.
Such legend will be placed either on the front or back of such share
certificates and will note that the shares are governed by this Plan.
This Plan will be kept at the registered office of the Corporation and
will be available for inspection by any appropriate party.
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18. AMENDMENT OF THE PLAN. The Board of Directors may from time to time
alter, amend, suspend or discontinue this Plan and make rules for its
administration, except that the Board of Directors may not amend this Plan in
any manner that would have the effect of preventing Incentive Stock Options
granted under this Plan from being considered "incentive stock options" as
defined in section 422 of the Code.
19. OPTIONS DISCRETIONARY. The granting of options under this Plan will
be entirely discretionary and nothing in this Plan will be deemed to give any
employee of the Corporation or any parent or subsidiary of the Corporation any
right to participate in this Plan or to receive options. No provision of this
Plan or any Option Agreement evidencing any options granted under this Plan will
confer any right upon any employee to be employed by the Corporation or any
parent or subsidiary of the Corporation for any period of specific duration.
20. STOCKHOLDER APPROVAL. This Plan will be submitted to the
shareholders of the Corporation (the "Shareholders") for approval and must be
approved by a majority vote of the Shareholders on or within twelve (12) months,
before or after, of the Adoption Date.
21. TERMINATION OF PLAN. Unless terminated earlier, this Plan shall
terminate ten (10) years from the Adoption Date. Any option outstanding under
this Plan at the time of the termination of this Plan will remain in effect
until such option is exercised or the Expiration Date thereof occurs, whichever
is earlier.
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EXHIBIT 4.2
DI INDUSTRIES, INC.
FORM OF
INCENTIVE STOCK OPTION AGREEMENT
THIS INCENTIVE STOCK OPTION AGREEMENT (this "Agreement") made as of
_________________, _____, by and between DI INDUSTRIES, INC., a corporation
organized under the laws of the State of Texas (the "Corporation"), and
_______________________, an individual (the "Optionee");
W I T N E S S E T H:
WHEREAS, the Optionee is currently employed by the Corporation or by a
parent or a subsidiary of the Corporation;
WHEREAS, in consideration of the Optionee's record of employment with
the Corporation and to provide the Optionee with additional incentive to further
the business of the Corporation, the Corporation has agreed to grant the
Optionee options to purchase shares of common stock, $0.10 par value ("Common
Stock"), of the Corporation; and
WHEREAS, by granting the Optionee options to purchase shares of Common
Stock pursuant to the terms of this Agreement, the Corporation intends to carry
out the purposes set forth in the 1995 Employee Stock Option Plan of the
Corporation (the "Plan") adopted by the Board of Directors of the Corporation
(the "Board of Directors") effective as of July 29, 1996 and the shareholders of
the Corporation effective as of August 27, 1996; and
WHEREAS, it is intended that the options granted to Optionee pursuant to
this Agreement constitute incentive stock options under Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"); and
WHEREAS, the Corporation and the Optionee desire to set forth the terms
and conditions of such options to purchase Common Stock;
NOW, THEREFORE, in consideration of the mutual promises contained
herein, and other good and valuable consideration, the receipt, adequacy and
sufficiency of which are hereby acknowledged, the parties hereto do hereby agree
as follows:
1. GRANT OF OPTION. Subject to the terms and conditions hereinafter set
forth, the Corporation hereby grants to the Optionee an option (the "Option") to
purchase all or any part of an aggregate number of ____ shares of Common Stock
(such shares, as increased or decreased in accordance with Section 8 hereof,
being referred to hereinafter as the "Option Shares") at an exercise price of
$____ per share (hereinafter the "Exercise Price").
2. EXERCISE PERIOD. The Option shall be exercisable by Optionee [in full
at any time after the date of this Agreement] [as to twenty percent (20%) of the
Option Shares one (1) year after the date of this Agreement, as to an additional
twenty percent (20%) of the Option Shares two (2)
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<PAGE>
years after the date of this Agreement, (iii) as to an additional twenty percent
(20%) of the Option Shares three (3) years after the date of this Agreement,
(iv) as to an additional twenty percent (20%) of the Option Shares four (4)
years after the date of this Agreement until the fifth anniversary of the date
of this Agreement, after which time the Option shall be exercisable in full].
The Option shall expire and terminate as to any Option Shares not purchased by
the Optionee on or before the tenth anniversary of the date of this Agreement
(the "Expiration Date"), subject to earlier termination as set forth herein.
Except as provided in Section 10 hereof, the Option may not be exercised
at any time unless the Optionee shall have been in the continuous employ of the
Corporation, or a parent or a subsidiary corporation, from the date hereof to
the date of the exercise of the Option.
3. METHOD OF EXERCISING THE OPTION. The Option shall be exercised by the
Optionee delivering to the Corporation (i) written notice from the Optionee
stating that the Optionee is exercising the Option and specifying the number of
Option Shares that the Optionee is entitled to purchase (the "Notice"), which
shall be in form and content identical to ANNEX I hereto and (ii) the aggregate
Exercise Price (the "Payment") for the number of Option Shares that the Optionee
is entitled to purchase, which Exercise Price must be in the form of (a) cash or
a cashier's or certified check payable to the order of the Corporation, or (b)
the tender to the Corporation of such number of shares of Common Stock owned by
the Optionee having an aggregate fair market value as of the date of exercise
that is not greater than the total Exercise Price for the shares of Common Stock
with respect to which the Option is being exercised and by paying the remaining
amount of the Exercise Price.
4. TRANSFERABILITY OF OPTION. The Option shall not be transferable or
assignable, in whole or in part, and except as otherwise provided in Section 10
of this Agreement, the Option shall be exercisable (i) only by the Optionee
during his lifetime, or (ii) in the event of his death, by his heirs,
representatives, distributees, or legatees in accordance with his will or the
laws of descent and distribution (but only to the extent that the Option would
be exercisable by the Optionee under Section 2).
5. INVESTMENT REPRESENTATION. The Optionee represents that the Option
Shares available for purchase by the Optionee under this Agreement will be
acquired only for investment and not with a view toward resale or distribution.
6. SECURITIES LAW REQUIREMENTS; LEGENDS. The Optionee agrees and
understands that the Option Shares may be restricted securities as defined in
Rule 144 promulgated under the Securities Act of 1933, as amended (the
"Securities Act"), and may not be sold, assigned or transferred, unless the
sale, assignment or transfer of such shares is registered under the Securities
Act and applicable blue sky laws, as now in effect or hereafter amended, or
there is furnished an opinion of counsel in form and substance satisfactory to
the Corporation from counsel acceptable to the Corporation that such
registrations are not required. The Optionee further understands and agrees
that, unless issued pursuant to an effective registration statement under the
Securities Act, the
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<PAGE>
following legend shall be set forth on each certificate representing Option
Shares:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 OR UNDER THE BLUE SKY LAWS OF ANY
STATE, AND MAY NOT BE SOLD, ASSIGNED OR TRANSFERRED EXCEPT UPON SUCH
REGISTRATION OR UPON RECEIPT BY THE CORPORATION OF AN OPINION OF COUNSEL
FOR THE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED FOR SUCH
SALE, ASSIGNMENT OR TRANSFER."
In addition, the following legend shall be placed on each certificate
representing Option Shares:
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE GOVERNED BY THE TERMS OF
THE 1996 EMPLOYEE STOCK OPTION PLAN OF THE CORPORATION, DATED JULY 29,
1996, WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THE CORPORATION AND A
COPY OF WHICH WILL BE PROVIDED FOR INSPECTION UPON WRITTEN REQUEST."
7. NO RIGHTS AS SHAREHOLDER. The Optionee shall not have any rights as a
shareholder with respect to any of the Option Shares until the date of issuance
by the Corporation to the Optionee of a stock certificate representing such
Option Shares. Except as otherwise provided in Section 8 hereof, the Optionee
shall not be entitled to any dividends, cash or otherwise, or any adjustment of
the Option Shares for such dividends, if the record date therefor is prior to
the date of issuance of such stock certificate. Upon valid exercise of the
Option by the Optionee, the Corporation agrees to cause a valid stock
certificate for the number of Option Shares then purchased to be issued and
delivered to the Optionee within seven (7) business days thereafter.
8. CORPORATE PROCEEDINGS OF THE CORPORATION.
(a) The existence of the Option shall not affect in any way the
right or power of the Corporation or its officers, directors and
shareholders, as the case may be, to (i) make or authorize any
adjustments, recapitalizations, reorganizations or other changes in the
capital structure or business of the Corporation, (ii) participate in
any merger or consolidation of the Corporation, (iii) issue any Common
Stock, bonds, debentures, preferred or prior preference stock or any
other securities affecting the Common Stock or the rights of holders
thereof, (iv) dissolve or liquidate the Corporation, (v) sell or
transfer all or any part of the assets or business of the Corporation,
or (vi) perform any other corporate act or proceedings, whether of a
similar character or otherwise.
(b) If the Corporation merges into or with or consolidates with
(such events collectively referred herein as a "Merger") any corporation
or corporations and is not the surviving corporation, then the surviving
corporation may assume the Option or substitute a new option of the
surviving corporation for the Option; provided, however, that the excess
of the aggregate fair market value of the securities subject to the
Option immediately after such assumption, or the new option immediately
after such substitution, over the aggregate Exercise Price of such
shares must be, based upon a good faith determination by the Board
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<PAGE>
of Directors of the Corporation, not less than the excess of the
aggregate fair market value of the Common Stock subject to the Option
immediately before such substitution or assumption over the aggregate
Exercise Price of such Common Stock.
(c) In the event that the surviving corporation does not utilize
the provisions of (b) above, or in the event of a dissolution or
liquidation of the Corporation, the Corporation shall cause written
notice of such Merger or dissolution or liquidation (and the material
terms and conditions thereof) to be delivered to the Optionee at least
ten (10) days prior to the proposed effective date (the "Effective
Date") of such event. The Optionee shall be entitled to exercise the
Option until the Effective Date, or until the Expiration Date if
earlier. To the extent that the Merger or liquidation is consummated
after the Effective Date, the Option shall terminate and the Corporation
shall have no further obligations of any type hereunder. The provisions
of this paragraph shall not apply to any merger or reorganization, the
principal purpose of which is to change the jurisdiction of the domicile
of the Corporation.
(d) If, while the Option is outstanding, the Corporation shall
effect a subdivision or consolidation of the shares of Common Stock or
other capital readjustment, the payment of a common stock dividend, or
other increase or reduction of the number of shares of Common Stock
outstanding, without receiving compensation therefor in money, services
or property, then (i) in the event of an increase in the number of
shares of Common Stock outstanding, the number of Option Shares shall be
proportionately increased, and the per share Exercise Price shall be
proportionately reduced, and (ii) in the event of a reduction in the
number of shares of Common Stock outstanding, the number of Option
Shares shall be proportionately reduced, and the per share Exercise
Price shall be proportionately increased. No fractional share of Common
Stock shall be issued upon any such exercise and the Exercise Price
shall be appropriately reduced on account of any fractional share not
issued.
(e) The issuance by the Corporation of shares of stock of any
class of securities convertible into shares of stock of any class,
including Common Stock, for cash, property, labor or services rendered,
either upon direct sale or upon the exercise of rights, options, or
warrants to subscribe therefor, or upon conversion of shares or
obligations of the Corporation convertible into such shares or other
securities, shall not affect, and no adjustment by reason thereof shall
be made with respect to, the number of Option Shares or the Exercise
Price.
9. REGISTRATION RIGHTS. The Optionee shall have no registration rights
with respect to the Option Shares.
10. TERMINATION.
(a) If the Optionee for any reason whatsoever, other than death
or permanent and total disability, as defined in (b) below, ceases to be
employed by the Corporation, or a parent or subsidiary corporation of
the Corporation, and prior to such cessation, the Optionee was employed
at all times from the date of the granting of the Option until the date
of such cessation, the Option must be exercised by the Optionee (to the
extent that the Optionee is entitled to do so at the date of cessation)
within three (3) months following the date of cessation of employment,
subject to the Expiration Date; provided, however, that if the
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<PAGE>
Optionee is terminated for cause, the Option will immediately terminate.
(b) If the Optionee becomes permanently and totally disabled, as
hereinafter defined, while employed by the Corporation or a parent or
subsidiary corporation of the Corporation, and prior to such disability
the Optionee was employed at all times from the date of the granting of
the Option until the date of disability, the Option must be exercised by
the Optionee (to the extent that the Optionee is entitled to do so at
the date of disability) at any time within one (1) year after the date
of disability or the Expiration Date, whichever is earlier.
"Permanently and totally disabled" means being unable to engage
in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to
result in death or which has lasted or can be expected to last for a
continuous period of not less than twelve (12) months. Such
determination of permanent and total disability must be made in
accordance with the requirements of Section 22(e)(3), and applicable
regulations, of the Code, or any other applicable method necessary for
the continued qualification of this Plan under Section 422 of the Code,
or any equivalent successor provision, if applicable. In the absence of
any specific requirements for this determination, the decision of the
Corporation, as aided by any physicians designated by the Corporation
shall be conclusive and the Corporation shall send written notice to the
Optionee of the determination that the Optionee has become permanently
and totally disabled.
(c) In the event that the Optionee dies while employed by the
Corporation or a parent or subsidiary corporation of the Corporation,
and prior to death the Optionee was employed at all times from the date
of the granting of the Option until the date of death, the Option must
be exercised (to the extent that the Optionee is entitled to do so at
the date of death) by a legatee or legatees of the Optionee under the
Optionee's will, or by the Optionee's personal representatives or
distributes, at any time within one (1) year after the date of death or
the Expiration Date, whichever is earlier, and if not so exercised, the
Option shall thereupon terminate.
Nothing in (a), (b) or (c) shall extend the time for exercising
the Option granted pursuant to this Agreement beyond the Expiration Date.
11. DISPOSITION OF STOCK AFTER EXERCISE OF OPTION. Notwithstanding any
other provision of this Agreement to the contrary, in consideration of the
granting of the Option, the Optionee agrees (i) not to dispose of any Option
Shares within two (2) years after the date of this Agreement nor within one (1)
year after the date of exercise of the Option and (ii) not to dispose of any
Option Shares thereafter without the prior approval of the Corporation unless
such shares have been registered under the Securities Act.
12. NOTICES. All notices, demands, requests and other communications
required or permitted hereunder shall be in writing and shall be deemed to be
delivered when actually received through U.S. Express Mail or any private
express service (as evidenced by a written receipt), or, if earlier, and
regardless of whether actually received (except where receipt is specified in
this Agreement), four (4) days following deposit in a regularly maintained
receptacle for the United States mail, registered or certified, return receipt
requested, postage fully prepaid, addressed to the
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<PAGE>
addressee at its address set forth below or at such other address as such party
may have specified theretofore by notice delivered in accordance with this
Section:
If to the Corporation: DI Industries, Inc.
450 Gears Road, Suite 625
Houston, Texas 77067
Attn: President
If to Optionee: ___________________________
___________________________
___________________________
13. TRANSFERABILITY; BINDING EFFECT. The Option shall be transferable
only as set forth in Section 4. Subject to the foregoing, all covenants, terms,
agreements and conditions of this Agreement shall be binding upon, inure to the
benefit of, and be enforceable by, the Corporation and the Optionee and their
respective successors and assigns.
14. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the Corporation and the Optionee relating to the subject
matter hereof.
15. PARENT AND SUBSIDIARY. As used herein, the terms "parent" and
"subsidiary" shall mean any present or future corporation which would be a
"parent corporation" or a "subsidiary corporation" of the Corporation, as such
term is defined in Section 425 of the Internal Revenue Code.
16. GOVERNING LAW. This Agreement shall be governed by the laws of the
State of Texas.
17. CAPTIONS. The section and paragraph headings in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
18. COUNTERPARTS. This Agreement may be executed in multiple original
counterparts, each of which shall be deemed an original, but all of which
together shall constitute but one and the same instrument.
IN WITNESS WHEREOF, this Agreement has been executed and delivered as of
the date first written above.
CORPORATION:
DI INDUSTRIES, INC.
By: _____________________________
Name: _____________________________
Title: _____________________________
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<PAGE>
OPTIONEE:
-----------------------------------
(Signature)
-----------------------------------
(Name)
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<PAGE>
ACKNOWLEDGMENT OF SPOUSE TO
TERMS OF INCENTIVE STOCK OPTION AGREEMENT
I, __________________________, am the spouse of ______________________,
("Optionee"), and I am fully aware of, understand, and fully consent and agree
to the provisions of the Incentive Stock Option Agreement, dated __________,
_____ executed by Optionee and DI Industries, Inc. (the "Corporation"). I
understand the binding effect of this Agreement and its binding effect upon any
interest, community or otherwise, I may now or hereafter own, and I agree that
the termination for any reason of my marital relationship with Optionee shall
not have the effect of removing any stock of the Corporation otherwise subject
to the terms of this Agreement from the coverage hereof.
Signed this day of ______________, _____.
--------------------------------
Spouse of ______________________
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<PAGE>
ANNEX I
DI INDUSTRIES, INC.
EXERCISE NOTICE
------------------, -----
DI Industries, Inc.
450 Gears Road, Suite 625
Houston, Texas 77067
Gentlemen:
I hereby acknowledge that I am acquiring _____________ shares ("Shares")
of common stock, $0.10 par value, of DI Industries, Inc. ("Corporation")
pursuant to that certain Incentive Stock Option Agreement dated __________, ____
(the "Agreement").
I understand that the Shares have not been registered under the
Securities Act of 1933 (the "Act") on the grounds that the transfer to me is
exempt from registration pursuant to Section 4(2) of the Act.
By executing this letter, I represent that I am acquiring the Shares for
investment for my own account and not as a nominee or agent or with a view to,
or for resale in connection with, any distribution of such Shares within the
meaning of the Act. I further represent that I do not have any contract,
undertaking, agreement, or arrangement with any person to sell, transfer or
grant participations in any of the Shares to any third persons.
By executing this letter, I also represent that, unless indicated
otherwise, as of the date of the Agreement I did not own, or was attributed as
owning under the Internal Revenue Code of 1986, stock of the Corporation
possessing more than 10% of the total combined voting power or value of all
classes of stock of the Corporation or of its parent or any subsidiary
corporations.
I understand that I may experience adverse tax consequences if I dispose
of the Shares within two years after the date of the Agreement or dispose of the
Shares within one year from the date of receiving them.
I also understand that I may not dispose of the Shares within two years
after the date of receiving them and that, unless the Shares are then registered
under the Act, that I may only dispose of the Shares thereafter with the prior
written consent of the Corporation unless the Shares have been registered
pursuant to the Act.
I also understand that, unless the Shares are issued pursuant to an
effective registration statement under the Act, a legend substantially in the
form set below shall be placed on each certificate representing the Shares and
on any substitutes thereof:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 OR UNDER THE BLUE
<PAGE>
SKY LAWS OF ANY STATE, AND MAY NOT BE SOLD, ASSIGNED OR TRANSFERRED
EXCEPT UPON SUCH REGISTRATION OR UPON RECEIPT BY THE CORPORATION OF AN
OPINION OF COUNSEL FOR THE CORPORATION THAT SUCH REGISTRATION IS NOT
REQUIRED FOR SUCH SALE, ASSIGNMENT OR TRANSFER."
I also understand that the Corporation may issue stop transfer
instructions to the Corporation's transfer agent, if any, with respect to the
Shares or, if the Corporation transfers its own securities, it may make a
notation in the appropriate records that the Shares cannot be transferred
without an opinion of counsel in the form required by this paragraph.
I also understand that a legend as set forth below shall be placed on
each certificate representing the Shares or any substitutes thereof:
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE GOVERNED BY THE TERMS OF
THE 1996 EMPLOYEE STOCK OPTION PLAN OF THE CORPORATION, DATED JULY 29,
1996, WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THE CORPORATION AND A
COPY OF WHICH WILL BE PROVIDED FOR INSPECTION UPON WRITTEN REQUEST."
I understand the nature of the Shares and the financial risks thereof. I
do not desire any further information or data concerning the Corporation.
Very truly yours,
--------------------------------
(Signature)
--------------------------------
(Name)
Date:___________________________
EXHIBIT 4.3
DI INDUSTRIES, INC.
FORM OF
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS NON-QUALIFIED STOCK OPTION AGREEMENT (this "Agreement") made as of
__________________, _______, by and between DI INDUSTRIES, INC., a corporation
organized under the laws of the State of Texas (the "Corporation"), and
_______________________, an individual (the "Optionee");
W I T N E S S E T H:
WHEREAS, as an inducement to Optionee to enter into a contract of
employment with the Corporation under the terms of an Employment Agreement dated
of even date herewith by and between the Optionee and the Corporation (the
"Employment Agreement") and to further provide the Optionee with additional
incentive to further the business of the Corporation, the Corporation has agreed
to grant the Optionee options to purchase shares of common stock, $0.10 par
value ("Common Stock"), of the Corporation; and
WHEREAS, by granting the Optionee options to purchase shares of Common
Stock pursuant to the terms of this Agreement, the Corporation intends to carry
out the purposes set forth in the 1996 Employee Stock Option Plan of the
Corporation (the "Plan") adopted by the Board of Directors of the Corporation
(the "Board of Directors") effective July 29, 1996 and the shareholders of the
Corporation effective as of August 27, 1996; and
WHEREAS, the Corporation and the Optionee desire to set forth the terms
and conditions of such options to purchase Common Stock;
NOW, THEREFORE, in consideration of the mutual promises contained
herein, and other good and valuable consideration, the receipt, adequacy and
sufficiency of which are hereby acknowledged, the parties hereto do hereby agree
as follows:
1. GRANT OF OPTION. Subject to the terms and conditions hereinafter set
forth, the Corporation hereby grants to the Optionee an option (the "Option") to
purchase all or any part of an aggregate number of _______________ shares of
Common Stock (such shares, as increased or decreased in accordance with Section
9 hereof, being referred to hereinafter as the "Option Shares") at an exercise
price of $________ per share (hereinafter the "Exercise Price").
2. EXERCISE PERIOD. The Option shall be exercisable [in full at any time
after the date of this Agreement] [as to twenty percent (20%) of the Option
Shares one (1) year after the date of this Agreement, as to an additional twenty
percent (20%) of the Option Shares two (2) years after the date of this
Agreement, (iii) as to an additional twenty percent (20%) of the Option Shares
three (3) years after the date of this Agreement, (iv) as to an additional
twenty percent (20%) of the Option Shares four (4) years after the date of this
Agreement until the fifth anniversary of the date of this Agreement, after which
time the Option shall be exercisable in full]. The Option shall expire and
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<PAGE>
terminate as to any Option Shares not purchased by the Optionee on or before the
tenth anniversary of the date of this Agreement (the "Expiration Date"), subject
to earlier termination as set forth herein.
3. METHOD OF EXERCISING THE OPTION. The Option shall be exercised by the
Optionee delivering to the Corporation (i) written notice from the Optionee
stating that the Optionee is exercising the Option and specifying the number of
Option Shares that the Optionee is entitled to purchase (the "Notice"), which
shall be in form and content identical to ANNEX I hereto and (ii) the aggregate
Exercise Price (the "Payment") for the number of Option Shares that the Optionee
is entitled to purchase, which Exercise Price must be in the form of (a) cash or
a cashier's or certified check payable to the order of the Corporation, or (b)
the tender to the Corporation of such number of shares of Common Stock owned by
the Optionee having an aggregate fair market value as of the date of exercise
that is not greater than the total Exercise Price for the shares of Common Stock
with respect to which the Option is being exercised and by paying the remaining
amount of the Exercise Price.
4. TRANSFERABILITY OF OPTION. The Option shall not be transferable or
assignable, in whole or in part, and except as otherwise provided in Section 11
of this Agreement, the Option shall be exercisable (i) only by the Optionee
during his lifetime, or (ii) in the event of his death, by his heirs,
representatives, distributees, or legatees in accordance with his will or the
laws of descent and distribution (but only to the extent that the Option would
be exercisable by the Optionee under Section 2).
5. PAYMENT OF TAXES UPON EXERCISE. The Optionee understands and
acknowledges that under currently applicable law, the Optionee may be required
to include in the Optionee's taxable income, at the time of exercise of the
Option, the amount by which the value of the Option Shares purchased (the
"Exercise Shares") exceeds the Exercise Price paid. The Optionee hereby
authorizes the Corporation to withhold Exercise Shares of a value equivalent to
the amount of tax required to be withheld by the Corporation out of any taxable
income derived by the Optionee upon exercise of the Option; provided, however,
that the Optionee may, in the alternative, in order to satisfy such withholding
requirement, deliver to the Corporation cash or other shares of Common Stock
owned by the Optionee.
6. INVESTMENT REPRESENTATION. The Optionee represents that the Option
Shares available for purchase by the Optionee under this Agreement will be
acquired only for investment and not with a view toward resale or distribution.
7. SECURITIES LAW REQUIREMENTS; LEGENDS. The Optionee agrees and
understands that the Option Shares may be restricted securities as defined in
Rule 144 promulgated under the Securities Act of 1933, as amended (the
"Securities Act"), and may not be sold, assigned or transferred, unless the
sale, assignment or transfer of such shares is registered under the Securities
Act and applicable blue sky laws, as now in effect or hereafter amended, or
there is furnished an opinion of counsel in form and substance satisfactory to
the Corporation from counsel acceptable to the Corporation that such
registrations are not required. The Optionee further understands and agrees
that, unless issued pursuant to an effective registration statement under the
Securities Act, the following legend shall be set forth on each certificate
representing Option Shares:
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<PAGE>
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 OR UNDER THE BLUE SKY LAWS OF ANY
STATE, AND MAY NOT BE SOLD, ASSIGNED OR TRANSFERRED EXCEPT UPON SUCH
REGISTRATION OR UPON RECEIPT BY THE CORPORATION OF AN OPINION OF COUNSEL
FOR THE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED FOR SUCH
SALE, ASSIGNMENT OR TRANSFER."
In addition, the following legend shall be placed on each certificate
representing Option Shares:
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE GOVERNED BY THE TERMS OF
THE 1996 EMPLOYEE STOCK OPTION PLAN OF THE CORPORATION, DATED JULY 29,
1996, WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THE CORPORATION AND A
COPY OF WHICH WILL BE PROVIDED FOR INSPECTION UPON WRITTEN REQUEST."
8. NO RIGHTS AS SHAREHOLDER. The Optionee shall not have any rights as a
shareholder with respect to any of the Option Shares until the date of issuance
by the Corporation to the Optionee of a stock certificate representing such
Option Shares. Except as otherwise provided in Section 9 hereof, the Optionee
shall not be entitled to any dividends, cash or otherwise, or any adjustment of
the Option Shares for such dividends, if the record date therefor is prior to
the date of issuance of such stock certificate. Upon valid exercise of the
Option by the Optionee, the Corporation agrees to cause a valid stock
certificate for the number of Option Shares then purchased to be issued and
delivered to the Optionee within seven (7) business days thereafter.
9. CORPORATE PROCEEDINGS OF THE CORPORATION.
(a) The existence of the Option shall not affect in any way the
right or power of the Corporation or its officers, directors and
shareholders, as the case may be, to (i) make or authorize any
adjustments, recapitalizations, reorganizations or other changes in the
capital structure or business of the Corporation, (ii) participate in
any merger or consolidation of the Corporation, (iii) issue any Common
Stock, bonds, debentures, preferred or prior preference stock or any
other securities affecting the Common Stock or the rights of holders
thereof, (iv) dissolve or liquidate the Corporation, (v) sell or
transfer all or any part of the assets or business of the Corporation,
or (vi) perform any other corporate act or proceedings, whether of a
similar character or otherwise.
(b) If the Corporation merges into or with or consolidates with
(such events collectively referred herein as a "Merger") any corporation
or corporations and is not the surviving corporation, then the surviving
corporation may assume the Option or substitute a new option of the
surviving corporation for the Option; provided, however, that the excess
of the aggregate fair market value of the securities subject to the
Option immediately after such assumption, or the new option immediately
after such substitution, over the aggregate Exercise Price of such
shares must be, based upon a good faith determination by the Board of
Directors of the Corporation, not less than the excess of the aggregate
fair market value
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<PAGE>
of the Common Stock subject to the Option immediately before such
substitution or assumption over the aggregate Exercise Price of such
Common Stock.
(c) In the event that the surviving corporation does not utilize
the provisions of (b) above, or in the event of a dissolution or
liquidation of the Corporation, the Corporation shall cause written
notice of such Merger or dissolution or liquidation (and the material
terms and conditions thereof) to be delivered to the Optionee at least
ten (10) days prior to the proposed effective date (the "Effective
Date") of such event. The Optionee shall be entitled to exercise the
Option until the Effective Date, or until the Expiration Date if
earlier. To the extent that the Merger or liquidation is consummated
after the Effective Date, the Option shall terminate and the Corporation
shall have no further obligations of any type hereunder. The provisions
of this paragraph shall not apply to any merger or reorganization, the
principal purpose of which is to change the jurisdiction of the domicile
of the Corporation.
(d) If, while the Option is outstanding, the Corporation shall
effect a subdivision or consolidation of the shares of Common Stock or
other capital readjustment, the payment of a common stock dividend, or
other increase or reduction of the number of shares of Common Stock
outstanding, without receiving compensation therefor in money, services
or property, then (i) in the event of an increase in the number of
shares of Common Stock outstanding, the number of Option Shares shall be
proportionately increased, and the per share Exercise Price shall be
proportionately reduced, and (ii) in the event of a reduction in the
number of shares of Common Stock outstanding, the number of Option
Shares shall be proportionately reduced, and the per share Exercise
Price shall be proportionately increased. No fractional share of Common
Stock shall be issued upon any such exercise and the Exercise Price
shall be appropriately reduced on account of any fractional share not
issued.
(e) The issuance by the Corporation of shares of stock of any
class of securities convertible into shares of stock of any class,
including Common Stock, for cash, property, labor or services rendered,
either upon direct sale or upon the exercise of rights, options, or
warrants to subscribe therefor, or upon conversion of shares or
obligations of the Corporation convertible into such shares or other
securities, shall not affect, and no adjustment by reason thereof shall
be made with respect to, the number of Option Shares or the Exercise
Price.
10. REGISTRATION RIGHTS. The Optionee shall have no registration rights
with respect to the Option Shares.
11. TERMINATION.
(a) Except as otherwise provided in this Section 11, if the
Optionee for any reason whatsoever, other than death or permanent and
total disability, as defined in (b) below, ceases to be employed by the
Corporation, or a parent or subsidiary corporation of the Corporation,
and prior to such cessation, the Optionee was employed at all times from
the date of the granting of the Option until the date of such cessation,
the Option must be exercised by the Optionee (to the extent that the
Optionee is entitled to do so at the date of cessation) within three (3)
months following the date of cessation of employment, subject to the
Expiration Date; provided, however, that if the Optionee is terminated
for cause (as defined in the Employment Agreement), the Option will
immediately terminate.
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<PAGE>
Notwithstanding the foregoing, the Corporation may, in its sole
discretion, extend for a reasonable period the time in which the
Optionee may exercise the Option after the date of cessation of
employment, subject to the Expiration Date.
(b) If the Optionee becomes permanently and totally disabled, as
hereinafter defined, while employed by the Corporation or a parent or
subsidiary corporation of the Corporation, and prior to such disability
the Optionee was employed at all times from the date of the granting of
the Option until the date of disability, the Option must be exercised by
the Optionee (to the extent that the Optionee is entitled to do so at
the date of disability) at any time within one (1) year after the date
of disability or the Expiration Date, whichever is earlier.
"Permanently and totally disabled" means being unable to engage
in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to
result in death or which has lasted or can be expected to last for a
continuous period of not less than twelve (12) months. In the absence of
any specific requirements for this determination, the decision of the
Corporation, as aided by any physicians designated by the Corporation
shall be conclusive and the Corporation shall send written notice to the
Optionee of the determination that the Optionee has become permanently
and totally disabled.
(c) In the event that the Optionee dies while employed by the
Corporation or a parent or subsidiary corporation of the Corporation,
and prior to death the Optionee was employed at all times from the date
of the granting of the Option until the date of death, the Option must
be exercised (to the extent that the Optionee is entitled to do so at
the date of death) by a legatee or legatees of the Optionee under the
Optionee's will, or by the Optionee's personal representatives or
distributes, at any time within one (1) year after the date of death or
the Expiration Date, whichever is earlier, and if not so exercised, the
Option shall thereupon terminate.
Nothing in (a), (b) or (c) shall extend the time for exercising
the Option granted pursuant to this Agreement beyond the Expiration Date.
12. DISPOSITION OF STOCK AFTER EXERCISE OF OPTION. Notwithstanding any
other provision of this Agreement to the contrary, in consideration of the
granting of the Option, the Optionee agrees not to dispose of any Option Shares
without the prior approval of the Corporation unless such shares have been
registered under the Securities Act.
13. NOTICES. All notices, demands, requests and other communications
required or permitted hereunder shall be in writing and shall be deemed to be
delivered when actually received through U.S. Express Mail or any private
express service (as evidenced by a written receipt), or, if earlier, and
regardless of whether actually received (except where receipt is specified in
this Agreement), four (4) days following deposit in a regularly maintained
receptacle for the United States mail, registered or certified, return receipt
requested, postage fully prepaid, addressed to the addressee at its address set
forth below or at such other address as such party may have specified
theretofore by notice delivered in accordance with this Section:
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<PAGE>
If to the Corporation: DI Industries, Inc.
450 Gears Road, Suite 625
Houston, Texas 77067
Attn: President
If to Optionee: ___________________________
___________________________
___________________________
14. TRANSFERABILITY; BINDING EFFECT. The Option shall be transferable
only as set forth in Section 4. Subject to the foregoing, all covenants, terms,
agreements and conditions of this Agreement shall be binding upon, inure to the
benefit of, and be enforceable by, the Corporation and the Optionee and their
respective successors and assigns.
15. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the Corporation and the Optionee relating to the subject
matter hereof.
16. GOVERNING LAW. This Agreement shall be governed by the laws of the
State of Texas.
17. CAPTIONS. The section and paragraph headings in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
19. COUNTERPARTS. This Agreement may be executed in multiple original
counterparts, each of which shall be deemed an original, but all of which
together shall constitute but one and the same instrument.
IN WITNESS WHEREOF, this Agreement has been executed and delivered as of
the date first written above.
CORPORATION:
DI INDUSTRIES, INC.
By: _____________________________
Name: _____________________________
Title: _____________________________
OPTIONEE:
-----------------------------------
(Signature)
-----------------------------------
(Name)
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<PAGE>
ACKNOWLEDGMENT OF SPOUSE TO
TERMS OF NON-QUALIFIED STOCK OPTION AGREEMENT
I, ______________, am the spouse of ______________________ ("Optionee"),
and I am fully aware of, understand, and fully consent and agree to the
provisions of the Non-Qualified Stock Option Agreement, dated _______________,
______ executed by Optionee and DI Industries, Inc. (the "Corporation"). I
understand the binding effect of this Agreement and its binding effect upon any
interest, community or otherwise, I may now or hereafter own, and I agree that
the termination for any reason of my marital relationship with Optionee shall
not have the effect of removing any stock of the Corporation otherwise subject
to the terms of this Agreement from the coverage hereof.
Signed this day of ______________, ______.
--------------------------------
Spouse of _____________
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<PAGE>
ANNEX I
DI INDUSTRIES, INC.
EXERCISE NOTICE
------------------, -----
DI Industries, Inc.
450 Gears Road, Suite 625
Houston, Texas 77067
Gentlemen:
I hereby acknowledge that I am acquiring _____________ shares ("Shares")
of common stock, $0.10 par value, of DI Industries, Inc. ("Corporation")
pursuant to that certain Non-Qualified Stock Option Agreement dated
_______________, _____ (the "Agreement").
I understand that the Shares have not been registered under the
Securities Act of 1933 (the "Act") on the grounds that the transfer to me is
exempt from registration pursuant to Section 4(2) of the Act.
By executing this letter, I represent that I am acquiring the Shares for
investment for my own account and not as a nominee or agent or with a view to,
or for resale in connection with, any distribution of such Shares within the
meaning of the Act. I further represent that I do not have any contract,
undertaking, agreement, or arrangement with any person to sell, transfer or
grant participations in any of the Shares to any third persons.
I understand that, unless the Shares are then registered under the Act,
I may only dispose of the Shares with the prior written consent of the
Corporation.
I also understand that, unless the Shares are issued pursuant to an
effective registration statement under the Act, a legend substantially in the
form set below shall be placed on each certificate representing the Shares and
on any substitutes thereof:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 OR UNDER THE BLUE SKY LAWS OF ANY
STATE, AND MAY NOT BE SOLD, ASSIGNED OR TRANSFERRED EXCEPT UPON SUCH
REGISTRATION OR UPON RECEIPT BY THE CORPORATION OF AN OPINION OF COUNSEL
FOR THE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED FOR SUCH
SALE, ASSIGNMENT OR TRANSFER."
Annex I - Page 1
<PAGE>
I also understand that the Corporation may issue stop transfer
instructions to the Corporation's transfer agent, if any, with respect to the
Shares or, if the Corporation transfers its own securities, it may make a
notation in the appropriate records that the Shares cannot be transferred
without an opinion of counsel in the form required by this paragraph.
I also understand that a legend as set forth below will be placed on
each certificate representing the Shares or any substitutes thereof:
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE GOVERNED BY THE TERMS OF
THE 1996 EMPLOYEE STOCK OPTION PLAN OF THE CORPORATION, DATED JULY 29,
1996, WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THE CORPORATION AND A
COPY OF WHICH WILL BE PROVIDED FOR INSPECTION UPON WRITTEN REQUEST."
I understand that I may be required to include in my taxable income the
amount by which the value of the Shares exceeds the exercise price paid and I
hereby authorizes the Corporation to withhold Shares of a value equivalent to
the amount of tax required to be withheld by the Corporation out of any taxable
income derived by me; provided, however, that I may, in the alternative, in
order to satisfy such withholding requirement, deliver to the Corporation cash
or other shares of the Corporation's common stock owned by me.
I understand the nature of the Shares and the financial risks thereof. I
do not desire any further information or data concerning the Corporation.
Very truly yours,
________________________________
________________________________
Date:___________________________
EXHIBIT 5.1
December 30, 1996
DI Industries, Inc.
450 Gears Road, Suite 625
Houston, Texas 77067
RE: Registration with the Securities & Exchange Commission of
certain shares of the Common Stock of DI Industries, Inc.
Ladies and Gentlemen:
We have acted as counsel to DI Industries, Inc., a Texas corporation
(the "Company"), in connection with the adoption of the 1996 Employee Stock
Option Plan of the Company (the "Plan").
The Company is registering 7,000,000 shares of its Common Stock which
are issuable pursuant to the Plan (the "Shares") pursuant to a Registration
Statement on Form S-8 filed with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Registration
Statement"). As set forth in the Registration Statement, certain legal matters
are being passed on for the Company by us. This opinion is being furnished to
the Company for filing as Exhibit 5.1 to the Registration Statement.
In connection with rendering this opinion, we have examined copies of
the Plan, each represented to us to be in the form executed and delivered by the
Company. Further, we have examined and relied upon a copy of the articles of
incorporation of the Company, as amended, certified by the Secretary of State of
Texas, and a copy of the bylaws of the Company, certified by the secretary of
the Company.
In such examination, we have assumed, without any independent
verification or investigation, (i) the genuineness and authenticity of all
signatures on documents and instruments we have examined and reviewed, and (ii)
the genuineness and authenticity of all documents submitted to us as originals,
and the conformity with the original documents of all documents submitted to us
as certified or photostatic copies. We have also examined such certificates of
officers of the Company and public officials and such other documents and
records as we deem necessary as the basis for the opinions set forth below.
Based solely upon our examination of the documents described above and
having regard for such legal considerations as we deem relevant, and subject to
the qualifications set forth below, we are of the opinion that when the Shares
have been issued and paid for in accordance with the terms of the Plan, the
Shares will be legally issued, fully paid, and nonassessable shares of the
Common Stock, par value $0.10 per share, of the Company.
<PAGE>
DI Industries, Inc.
Page 2
December 30, 1996
We are not licensed to practice law in any jurisdiction other than the
state of Texas. We express no opinion as to the laws of any jurisdiction other
than the state of Texas.
This opinion is governed by, and shall be interpreted in accordance
with, the Legal Opinion Accord (the "Accord") of the ABA Section of Business Law
(1991). As a consequence, it is subject to a number of qualifications,
exceptions, definitions, limitations on coverage, and other limitations, all as
more particularly described in the Accord, and this opinion should be read in
conjunction therewith. To the extent, however, that any of the express
qualifications, exceptions, definitions, or limitations set forth in this
opinion shall conflict with the Accord, the express provisions of this opinion
shall control.
This opinion is solely for the use by the Company in filing the
Registration Statement and may not be relied upon for any other purpose without
the express written consent of the undersigned firm. This opinion is given as of
the date hereof, and we undertake no, and hereby disclaim any, obligation to
advise you of any change in any matter set forth herein.
Yours very truly,
COKINOS, BOSIEN & YOUNG
BY:/S/ CASEY DOHERTY
CASEY DOHERTY
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
DI Industries Inc. on Form S-8 of our report dated March 28, 1996 (June 10, 1996
as to Note 13) appearing in DI Industries Inc.'s Definitive Proxy Statement for
the 1996 Annual Meeting of Shareholders for the year ended December 31, 1995.
/s/ DELOITTE & TOUCHE LLP
Deloitte & Touche LLP
Houston, Texas
December 13, 1996
