<PAGE>
As Filed with the Securities and Exchange Commission on June 5, 1996
Registration No. 333-________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
------------------
TUBOSCOPE VETCO INTERNATIONAL
CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 76-0252850
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
------------------
2835 Holmes Road
Houston, Texas 77051
(Address of Principal Executive Offices including Zip Code)
------------------
D.O.S. LTD.
1993 STOCK OPTION PLAN
(Full title of the plan)
------------------
JAMES F. MARONEY, III, ESQ. Copy to:
Vice President, Secretary PATRICK T. SEAVER, ESQ.
and General Counsel LATHAM & WATKINS
TUBOSCOPE VETCO 650 Town Center Drive, Twentieth Floor
INTERNATIONAL CORPORATION Costa Mesa, California 92626
2835 Holmes Road (714) 540-1235
Houston, Texas 77051
(713) 799-5100
(Name and address, including zip code, and telephone
number, including area code, of agent for service)
------------------
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------
CALCULATION OF REGISTRATION FEE
- ---------------------------------------------------------------------------------
Proposed
Proposed Maximum
Amount Maximum Aggregate Amount of
Title of Securities to be Offering Price Offering Registration
to be Registered Registered Per Share (1) Price (1) Fee
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------
Common Stock 991,952 $13.1875 $13,081,367.00 $4,515.00
- ---------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(h). The Proposed Maximum Aggregate Offering Price is
the average of the high and low sales price of the Common Stock in the
over-the-counter market, as reported on the Nasdaq National Market, on May
30, 1996 (which were $13.375 and $13.00, respectively).
================================================================================
Proposed sale to take place as soon after the effective date of the Registration
Statement as options granted under the Option Plan are exercised.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
---------------------------------------
The following documents filed with the Securities and Exchange Commission
(the "Commission") are incorporated herein by reference:
(a) Annual Report on Form 10-K for the fiscal year ended December 31, 1995,
filed by Tuboscope Vetco International Corporation (the "Company") with the
Commission.
(b) Quarterly Report on Form 10-Q for the fiscal quarter ended March 31,
1996, filed by the Company with the Commission.
(c) The description of the Common Stock contained in the Company's
Registration Statement on Form S-4 (File No. 333-01869) dated March 21, 1996,
including any subsequently filed amendments and reports updating such
description.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
after the date of this Registration Statement and prior to the filing of 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 of it
from the respective dates of filing such documents. Any statement contained in
a document incorporated or deemed to be 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 other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such 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
-----------------------------------------
Statutory Provisions
Section 102(b)(7) of the General Corporation Law of the State of Delaware
(the "DGCL") enables a corporation in its certificate of incorporation to
eliminate or limit the personal liability of members of its board of directors
to the corporation or its stockholders for monetary damages for violations of a
director's fiduciary duty of care. Such a provision would have no effect on the
availability of equitable remedies, such as an injunction or rescission, for
breach of fiduciary duty. In addition, no such provision may eliminate or limit
the liability of a director for breaching his duty of loyalty, failing to act in
good faith, engage in intentional misconduct or knowingly violating a law,
paying an unlawful dividend or approving an illegal stock repurchase, or
obtaining an improper personal benefit.
Section 145 of the DGCL empowers a corporation to 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, by reason of the fact that he is, or was a director, officer,
employee or
2
<PAGE>
agent of the corporation, against expenses (including attorney's 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. 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 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
shall deem proper. Additionally, a corporation is required to indemnify its
directors and officers against expenses to the extent that such directors or
officers have been successful on the merits or otherwise in any action, suit or
proceeding or in defense of any claim, issue or matter therein.
Indemnification can be made by the corporation only upon a determination that
indemnification is proper in the circumstances because the party seeking
indemnification has met the applicable standard of conduct as set forth in the
DGCL. The indemnification provided by the DGCL shall not be deemed exclusive of
any other rights to which those seeking indemnification may be entitled under
any by-law, agreement, vote of stockholders or disinterested directors, or
otherwise. A corporation also has the power to purchase and maintain insurance
on behalf of any person, whether or not the corporation would have the power to
indemnify him against such liability. The indemnification provided by the DGCL
shall, unless otherwise provided when authorized or ratified, continue as to a
person who has 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.
The Tuboscope Certificate of Incorporation and Tuboscope Bylaws
The Tuboscope Certificate of Incorporation limits the directors' liability
for monetary damages to Tuboscope and its stockholders for breaches of fiduciary
duty except under the circumstances outlined in Section 102(b)(7) of the DGCL as
described above under "--Statutory Provisions."
The Tuboscope Bylaws extend indemnification rights to the fullest extent
authorized by the DGCL to directors and officers involved in any action, suit or
proceeding where the basis of such involvement is such persons' alleged action
in an official capacity or in another capacity while serving as a director or
officer of Tuboscope. The Tuboscope Bylaws also permit Tuboscope to maintain
insurance to protect itself and any of its directors, officers, employees or
agents against any expense, liability or loss incurred as a result of any
action, suit or proceeding whether or not Tuboscope would have the power to
indemnify such person under the DGCL.
Item 7. Exemption From Registration Claimed
-----------------------------------
Not applicable.
Item 8. Exhibits
--------
See Index to Exhibits on page 7.
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, as amended (the "Securities Act");
3
<PAGE>
(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 this Registration Statement or any
material change to such information in this Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) 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, 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 termination of the
offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Act, each filing of the Registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference
in 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 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for 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.
4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, 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 this 31st day of May, 1996.
TUBOSCOPE VETCO INTERNATIONAL
CORPORATION
a Delaware corporation
By: /s/ James F. Maroney, III
---------------------------------
James F. Maroney, III
Vice President, General Counsel
and Secretary
5
<PAGE>
POWER OF ATTORNEY
Each person whose signature appears below hereby authorizes and appoints
James F. Maroney, III and Joseph C. Winkler, or either one of them, as
attorneys-in-fact and agents, each acting alone, with full powers of
substitution to sign on his or her behalf, individually and in the capacities
stated below, and to file any and all amendments, including post-effective
amendments, to this Registration Statement and other documents in connection
therewith, with the Securities and Exchange Commission, granting to said
attorneys-in-fact and agents full power and authority to perform any other act
on behalf of the undersigned required to be done in the premises.
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- ------------------------- ----------------------------------------- --------------------
<S> <C> <C>
/s/ L. E. Simmons Chairman of the Board May 31 , 1996
- ------------------------- --------------------
L. E. Simmons
/s/ John F. Lauletta President, Chief Executive Officer and May 31 , 1996
- ------------------------- Director --------------------
John F. Lauletta
/s/ Joseph C. Winkler Executive Vice President, Chief May 31 , 1996
- ------------------------- Financial Officer and Treasurer --------------------
Joseph C. Winkler
/s/ Jerome R. Baier Director May 31 , 1996
- ------------------------- --------------------
Jerome R. Baier
/s/ J. S. Dickson Leach Director May 31 , 1996
- ------------------------- --------------------
J. S. Dickson Leach
/s/ Eric L. Mattson Director May 31 , 1996
- ------------------------- --------------------
Eric L. Mattson
/s/ Martin R. Reid Director May 31 , 1996
- ------------------------- --------------------
Martin R. Reid
</TABLE>
6
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT PAGE
- --------- ----
<S> <C> <C>
4.1 The D.O.S. Ltd. 1993 Stock Option Plan 8
4.2 The D.O.S. Ltd. Purchase Agreement 15
4.3 The Employee Stockholders' Agreement (Redemption and Buy-Sell) for 19
D.O.S. Ltd.
4.4 The D.O.S. Ltd. Nonstatutory Stock Option Agreement 33
5.1 Opinion of Latham & Watkins. 38
23.1 Consent of Latham & Watkins (included in Exhibit 5.1). __
23.2 Consent of Ernst & Young LLP. 39
24 Power of Attorney (included in the signature page to this __
Registration Statement).
</TABLE>
7
<PAGE>
Exhibit 4.1
-----------
DOS LTD.
1993 STOCK OPTION PLAN
I. PURPOSE OF THE PLAN
-------------------
The DOS Ltd. 1993 STOCK OPTION PLAN (the "Plan") is intended to provide a means
whereby certain employees of DOS Ltd., a Bermuda corporation (hereinafter
referred to as "DOSL"), and its subsidiaries may develop a sense of
proprietorship and personal involvement in the development and financial success
of DOSL, and to encourage them to remain with and devote their best effort to
the business of DOSL, thereby advancing the interests of DOSL and its
stockholders. Accordingly, DOSL may grant to certain employees the option
("Option") to purchase shares of the Class A Common Stock, $.01 par value, of
DOSL ("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 (Non-
Statutory Options). This Plan is not intended to replace or terminate any plan
which currently exists with regard to the option to purchase shares in Dynamic
Industries, Ltd. Any options held under a plan to purchase shares of Dynamic
Industries, Ltd. stock will be enforceable under the terms of that agreement.
II. ADMINISTRATION
--------------
The plan shall be administered by a committee (the "Committee") of three or more
individuals who shall be appointed by the Board of Directors of DOSL (the
"Board"). Members of the Committee shall not be eligible, and shall not have
been eligible at any time prior to one year prior to their appointment to the
Committee, to participate in the Plan or in any other stock, stock option or
stock appreciation rights plan of DOSL or any of its affiliates ("Company Stock
Plan"). The Committee shall have sole 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 has
the authority to designate whether all or a portion of the Options granted under
the Plan shall be Incentive Stock Options or nonqualified stock options. 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. All decisions made by the Committee
in selecting the individuals to whom Options shall be granted, in establishing
the number of shares which may be issued under each Option and in construing the
provisions of the Plan shall be final. If a Committee is not appointed by the
Board, the Board shall act as the Committee for purposes of the Plan, provided
that a majority of the members of the Board, and a majority of the Directors
acting in the matter, shall not be eligible, and shall not have been eligible at
any time within one year prior to their appointment to the Board, to participate
in the Stock Plan.
<PAGE>
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. 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 that with respect to Stock Appreciation Rights granted
--------
to employees who are subject to Section 16 of the Securities Exchange Act of
1934 (the "1934 Act"), except as provided in Subparagraph VIII(e) hereof, the
Committee shall retain final authority (i) to determine whether an optionee
shall be permitted, or (ii) to approve an election by an optionee, to receive
cash in full or partial 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 be equal to
the mean of the reported high and low sales prices of the Stock on the New York
Stock Exchange Composite Tape on that date, or if no prices are reported on that
date, on the last preceding date in which such prices of the Stock are so
reported. If the stock is traded over the counter at the time a determination
of its fair market value is required to be made hereunder, its fair market value
shall be deemed to be equal to the average between the reported high and low (or
if applicable, closing bid and asked) prices of Stock on the most recent date on
which Stock was publicly traded. In the event stock is not publicly traded 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, and shall be exercisable during the optionee's lifetime only by
the optionee or the optionee's guardian or legal representative.
IV. ELIGIBILITY OF THE OPTIONEE
---------------------------
Options may be granted only to individuals who are full-time or part-time
employees (including officers and directors who are also full-time or part-time
employees) of DOSL or any parent, its wholly owned subsidiary and any majority
owned subsidiary corporation (as defined in Section 424 of the Code) of DOSL at
the time the Option is granted; provided, however, that members of the Committee
-------- -------
shall not be eligible to be granted Options. 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 DOSL or of its parent, its wholly owned subsidiary and any
majority owned subsidiary corporation, within the parent, its wholly owned
subsidiary and any majority owned subsidiary corporation, within the meaning of
Section 422(b)(6) of the Code, unless (i) 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 (ii) such Option
2
<PAGE>
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 within the
meaning of Section 422(d)(l) of the Code with respect to which Incentive Stock
Options granted after 1986 are exercisable for the first time by an individual
during any calendar year under all incentive stock option plans of DOSL and its
parent, its wholly owned subsidiary and any majority owned subsidiary
corporations exceeds $100,000, such 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 2,000,000 shares of Stock. Such shares may consist of
authorized but unissued shares of Stock or previously issued shares of stock
acquired by DOSL. 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, DOSL shall at all times
make available a sufficient number of shares to meet the requirements of the
Plan. Should any Option hereunder 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. The aggregate number of shares which may, to the
extent they have not been exercised, 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 shall result in a decrease in the number of shares of Stock
which may thereafter be available, 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 DOSL 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 Option shall be determined by the
Committee on a semi-annual basis, 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) the case
of an option that does not constitute an Incentive Stock Option, such purchase
price shall not be less than the par value of the Stock. The Committee shall
have the terms of this Agreement or the Employee's Shareholders' Agreement, and
all decisions made by the Committee in setting the value of each share of Stock
shall be final.
3
<PAGE>
VII. TERM OF PLAN
------------
The Plan shall be effective upon the date of its adoption by the Board, provided
the plan is approved by the stockholders of DOSL 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 five 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 anyway the right or power of the Board of the stockholders of
DOSL to make or authorize any adjustment, recapitalization, reorganization
or other change in DOSL's capital structure or its business, any merger or
consolidation of DOSL, any issue of debt or equality securities ahead of or
affecting Stock or the rights thereof, the dissolution or liquidation of
DOSL 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.
(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, DOSL shall effect a subdivision or
consolidation of shares of Stock or the payment of a stock dividend on
Stock without receipt of consideration by DOSL, 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 DOSL recapitalizes or otherwise changes its capital structure, including
an Initial Public Offering ("IPO") (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 as to which such Option shall then be exercisable, 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 as to which such Option is then
exercisable. If (i) DOSL 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 or majority owned subsidiary of DOSL),
(ii) DOSL 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 or majority owned subsidiary of DOSL), (iii) DOSL 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, acquires or gains
ownership or control (including, without limitation, power to vote) of more
than 50% of the outstanding shares of Stock, or (v) as a result of or in
connection with a contested election of directors, the persons who were
directors of DOSL before such election shall cease to constitute a majority
of the Board (each such event is referred to herein as a "Corporate
Change"), then effective as of a date (selected by the Committee) within
(a) ten days after the approval by the stockholders of DOSL of such merger,
4
<PAGE>
consolidation, sale, lease or exchange of assets or dissolution or such
election of directors of (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 optionee(s):
(1) accelerate the time at which Options then outstanding 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 optionee(s)
thereunder shall terminate, (2) require the mandatory surrender to DOSL by
selected optionee(s) of some or all of the outstanding Options held by such
optionee(s) (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 DOSL to pay each optionee an
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 as to which such Option shall then be exercisable, the
number and class of shares of stock or other securities or property 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 as to which such Option is then exercisable. For purposes
hereof, the parties to those certain Stockholders Agreement and Employee
Stockholders Agreement among DOSL and certain of its stockholders shall
not, merely because such parties are parties to such agreements, be deemed
to acquire or gain ownership or control (or be part of a group which
acquires or gains ownership or control) of more than 50% of the outstanding
shares of Stock.
(d) For the purposes of clause (2) 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 DOSL in any such merger, consolidation, sale of
assets or dissolution transaction, (ii) the per share price offered to
stockholders of DOSL 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 to be the date determined by
the Committee to be the date of cancellation and surrender of such Options.
In the event that the consideration offered to stockholders of DOSL in any
transaction described in this Subparagraph 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 Subparagraph (b) or (c) above shall be
subject to any required stockholder action.
5
<PAGE>
(f) Except as hereinbefore expressly provided, (i) the issuance by DOSL 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 DOSL convertible into such shares or
other 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 hereof shall be made with respect to, the number of shares of stock
subject to Options theretofore granted or the purchase once per share,
unless otherwise determined by the Board in its sole discretion.
IX. AMENDMENT OR TERMINATION OF THE PLAN
------------------------------------
The Board in its discretion may terminate the Plan at any time with respect to
any shares for which Options have not heretofore been granted. The Board shall
have the right to later or amend the Plan or any part thereof from time to time;
provided, that no change in any Option theretofore granted may be made which
- --------
would impair the rights of options without the consent of such optionee; and
provided, further, that the Board may not make any alteration or amendment which
- -------- -------
would materially increase the benefits accruing to participants under the Plan,
increase the aggregate number of shares which may be issued pursuant to the
provisions of the Plan, change the class of individuals eligible to receive
Options under the Plan or extent the terms of the Plan, without the approval of
the stockholders of DOSL.
X. SECURITIES LAWS
---------------
DOSL 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 DOSL or the Committee deems applicable and, in the
opinion of legal counsel for DOSL, there is no exemption from the registration
requirements of such law, rules or regulations available for the issuance and
sale of such shares.
XI. WITHHOLDING AND CASH BONUSES
----------------------------
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 DOSL (or
have DOSL withholder upon exercise of the option) such shares of Stock as DOSL
may require to meet is 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. 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 qualify for the favorable tax
treatment afforded to Incentive Stock Options) the right to receive, at such
time an din 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 as
6
<PAGE>
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 DOSL during the period prior to the sale of the Stock received
upon exercise of the Option.
7
<PAGE>
Exhibit 4.2
-----------
DOS LTD.
PURCHASE AGREEMENT
This Purchase Agreement ("Agreement"), dated as of _______________, 199_,
is between DOS Ltd., (hereinafter referred to as "DOSL") and
________________________ ("Employee").
Recitals
--------
WHEREAS, Employee is a full time employee of DOSL or one of its majority-
held subsidiaries; and
WHEREAS, pursuant to the terms of the DOS Ltd. 1993 Stock Option Plan (the
"Plan") Employee has been awarded the right to purchase certain shares of Class
A Common Stock, $.01 par value, of DOSL (the "Common Stock"); and
WHEREAS, the Plan requires that, as a condition precedent to the sale of
Common Stock to Employee pursuant to the Plan Employee execute and deliver to
DOSL this Agreement;
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, DOSL and Employee agree as follows:
1. Purchase and Sale. Subject to the terms of this Agreement and Plan,
-----------------
DOSL agrees to sell to Employee, and Employee agrees to purchase from DOSL, that
number of shares of Common Stock ("Shares") set forth opposite Employee's name
on the signature page hereto, for a purchase price of $________ per share of
Common Stock. Such purchase and sale shall occur immediately subsequent to the
execution and delivery of this Agreement by DOSL and Employee. The purchase
price for the Shares hereunder shall be paid by Employee by delivery to DOSL of
a cashier's or other check acceptable to DOSL, payable to the order of DOSL, and
upon receipt thereof, DOSL shall deliver to Employee a certificate or
certificates representing the Shares, legended in accordance with the terms of
this Agreement, the Employee's Stockholders' Agreement (as defined below) and
applicable law.
2. Representations and Warranties of Employee. Employee represents and
------------------------------------------
warrants to DOSL as follows:
(a) Employee has received a copy of, and has reviewed carefully and
understands, the Employee Stockholders' Agreement to be entered into
among DOSL and certain of its stockholders, including Employee, and,
if applicable, his spouse (the "Employee Stockholders' Agreement").
(b) Employee is purchasing the Shares pursuant to the Plan for its own
account for investment and not with a view to or in connection with
resale or other distribution.
<PAGE>
(c) Employee is familiar with the business and financial condition,
properties, operations and prospects of DOSL, and its subsidiaries,
and has had adequate opportunity as questions of and receive answers
from DOSL's officers and directors to ask questions of and receive
answers from DOSL's officers and directors concerning the business,
financial condition, properties, operations and prospects of DOSL and
its subsidiaries and the terms of the Plan, the Employee Stockholders'
Agreement and the purchase and sale of the Shares contemplated hereby,
and has asked such questions as he desires to ask and all such
questions have been answered to the full satisfaction of Employee.
(d) Employee understands that, although the Plan is designed to compensate
Employee and motivate and provide Employee incentive, purchase of the
Shares invoices a high degree of risk (including those risks described
in the Confidential Memorandum) and may result in Employee losing all
or a portion of the purchase price of the Shares; and Employee is
capable of bearing the economic risk of such investment.
(e) Employee understands that the offer and sale of the Shares to Employee
pursuant to the Plan have not been registered under the Securities Act
of 1933, as amended (the "Act") or under any state securities laws,
that DOSL is relying on Employee's representation and warranties and
agreements contained in this Agreement for the purpose of determining
whether the purchase and sale of Shares contemplated hereby meet the
requirements of certain exemptions from registration under the Act and
such law, that the Shares shall constitute "restricted securities"
under applicable federal securities laws, that DOSL has no obligation
or current intent to register the Shares under the Act or such laws or
to take any actions which would permit Employee to resell such Shares
under the Act or such laws, that Employee must bear the economic risk
of an investment in Shares for an indefinite period of time, and that
the Shares cannot be sold or otherwise transferred or disposed of
without registration under the Act and such laws or pursuant to an
exemption therefrom.
(f) Employee understands that the Employee Stockholders' Agreement
contains substantial restrictions on the transferability of other
disposition of the Shares, including a right of first refusal granted
to DOSL and its designees, a right to repurchase the Shares under
certain circumstances at the purchase price paid hereunder and, in
certain cases, a prohibition on the transfer or other disposition of
the Shares.
(g) Employee has all requisite capacity to enter into this Agreement and
to perform all his obligations hereunder.
(h) Employee is a full-time or part-time employee of DOSL or one of its
majority owned subsidiaries.
2
<PAGE>
3. Agreements of Employee. Employee agrees as follows:
----------------------
(a) Concurrently with Employee's purchase of the Shares hereunder,
Employee (and, if requested by DOSL, Employee's spouse) will execute
and deliver to DOSL the Employee Stockholders' Agreement.
(b) Employee agrees that he will not sell, assign, pledge, give, transfer
or otherwise dispose of the Shares or any interest therein, or make
any offer or attempt to do any of the foregoing, except pursuant to an
effective registration statement under the Act and all applicable
state securities laws covering such transaction or in a transaction
which is exempt from the registration provision of the Act and all
applicable state securities laws, and in any event in accordance with
the Employee Stockholders' Agreement; that the certificate or
certificates representing the Shares will bear a legend making
reference to the foregoing restrictions and also to the restrictions
imposed by Employee Stockholders' Agreement, and that DOSL or any
transfer agent for the Shares shall not be required to give effect to
any purported transfer of any of the Shares except upon compliance
with the foregoing restrictions.
(c) Employee, by his execution hereof, does not adopt, accept and agree to
be bound by all the terms and provisions of the Employee Stockholders'
Agreement and to perform all of his obligations therein imposed upon
Stockholder (as defined therein).
(d) Employee acknowledges and agrees that neither the execution of this
Agreement nor any acquisition of Common Stock by Employee creates any
obligation whatsoever by DOSL or any of its subsidiaries to continue
Employee's employment or otherwise affects DOSL's right, which
Employee hereby acknowledges, to terminate Employee's employment at
will, with or without cause in the sole discretion of DOSL or any of
its subsidiaries which is an employer of Employee.
(e) To the extent that Employee's purchase of Shares hereunder results in
compensation income to Employee for federal or state income tax
purposes, Employee shall, upon request of DOSL, pay to DOSL such
amount of money as DOSL may require to meet its obligations with
respect to such compensation income under applicable tax laws or
regulations.
4. Miscellaneous.
-------------
(a) This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original and all of which shall be
deemed to be a single agreement.
(b) This Agreement is made in the State of Texas and shall for all
purposes be construed in accordance with the laws of the State of
Texas. Any cause of action based upon or relating to this Agreement
in any way must be brought in Montgomery County, Texas within one (1)
year of the accrual of the cause of
3
<PAGE>
action. The prevailing party in any suit will be entitled to an award
of its attorney's fees.
(c) The representations and warranties of Employee shall survive the
purchase and sale of the Shares contemplated hereby and shall continue
to survive thereafter.
(d) This Agreement shall not be assignable by Employee, and shall be
binding upon and accrue to the benefit of the parties hereto and their
respective heirs, legal representatives, successors and (in the case
of DOSL) assigns.
(e) This Agreement may not be modified, amended or terminated except in a
writing signed by the party to be charged thereby.
(f) Any notice or communication given by any party hereto to the other
party shall be in writing and delivered by hand or by registered or
certified mail (return receipt requested) postage prepaid, and may be
given to DOSL at its principal executive offices and to the Employee
at his address set forth opposite his name on the signature page
hereto, or at such other address as either party shall have specified
by notice in writing complying with the terms hereof.
(g) Any party to this Agreement who is the prevailing party in any legal
proceeding brought under or with relation to this Agreement or
transaction shall be entitled to recover court costs and reasonable
attorney's fees from the nonprevailing party.
IN WITNESS WHEREOF, the parties to this Agreement have executed this
Agreement as of the date first above written.
COMPANY:
DOS LTD.
By: ___________________________________
Name: _________________________________
Title: ________________________________
Number of Shares: EMPLOYEE:
________________________________ _______________________________________
(Signature)
Employee's Address:
________________________________
________________________________
4
<PAGE>
Exhibit 4.3
EMPLOYEE STOCKHOLDERS' AGREEMENT
(Redemption and Buy-Sell)
FOR
DOS LTD.
THIS AGREEMENT, made as of this ____ day of ______________, 1993, by and
among DOS, Ltd., a Bermuda corporation (hereinafter referred to as "DOSL"), and
__________________ (hereinafter referred to as the "Shareholder").
W I T N E S S E T H:
WHEREAS, for good and valuable consideration, DOSL and the Shareholder have
agreed to impose certain restrictions on said capital stock: and
WHEREAS, the Shareholder agrees that it is to his benefit and in the best
interests of DOSL to restrict the assignability of the capital stock of DOSL
issued pursuant to the DOS Ltd. 1993 Stock Option Plan, to provide for the
control and disposition of DOSL, to provide for the orderly transition of
ownership in the event of death, disability or retirement of a Shareholder, or
other termination of a Shareholder's capital stock under certain specified
conditions, and to provide the funds necessary to carry out such purchases.
NOW, THEREFORE, in consideration of the mutual agreements contained herein
and for other valuable consideration, the sufficiency and receipt of which is
hereby acknowledged, it is mutually agreed by and among the parties to this
Agreement as follows:
I. DEFINITIONS
-----------
The following definitions shall control the meanings of the respective
terms:
A. "Termination" or "Terminating" means to the extent applicable
according to the provisions hereof, retirement, loss of
employment from Corporation or its wholly owned subsidiaries,
death, or Assignment or other transfer of an Ownership Interest
(or any part thereof), and includes dissolution of marriage or
permanent separation. A call to military services shall be a
"termination" only to the extent allowed under the Solders and
Sailors Relief Act.
B. "Assignment or other transfer" includes, but is not limited to,
sale, exchange, hypothecation, collateral assignment, subjecting
the ownership interest to a security interest, attachment,
judgment, creditor execution, bankruptcy, or other similar
occurrence sanctioned by the law, without the advance consent in
writing of the Committee.
C. "Committee" means the group of three or more individuals
appointed by the Board of Directors of DOSL. The Committee shall
have sole
<PAGE>
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
has the authority to designate whether all or a portion of the
Options granted under the Plan shall be Incentive Stock options
or nonqualified stock options. 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. All decisions made by
the Committee in selecting the individuals to whom Options shall
be granted, in establishing the number of shares which may be
issued under each Option and in construing the provisions of the
Plan shall be final. If a Committee is not appointed by the
Board, the Board shall act as the Committee for purposes of the
Plan.
D. "Terminating Shareholder" or "Offering Shareholder" means the
Shareholder who is terminating his interest in DOSL. It
includes, as required, the estate of a deceased Shareholder
acting through its personal representative, which shall also be
referred to as "Deceased Shareholder", or the Trustee (by trust,
or in bankruptcy), receiver, or other legal representative of the
Terminating Shareholder who has the power to act.
E. "Ownership Interest" means the equity interest that each
Shareholder has in DOSL which is reflected by stock ownership,
regardless of class or series.
F. "Debt" means the obligation of DOSL to repay a loan made to DOSL
by a Shareholder. Unless otherwise expressly stated herein, the
debt shall be repaid according to its terms at the interest rate,
interest dates, and maturity date fixed in the note, but if the
note is payable on demand, is in default at the termination date,
or past maturity, the debt shall be repaid upon the terms, at the
interest rate, and upon the dates on which the payments in
exchange for the Terminating Shareholder's Ownership Interest are
made: being, for example, prorated over the installments due for
the Terminating Shareholder's Ownership Interest.
G. "Receipt" or "Received" refers to the date received. In the
event of a dispute as to the date received, if mailed by ordinary
mail, the date of receipt is three days after the postmark date;
otherwise it is the date shown on the return receipt.
Unless otherwise stated specifically herein, any time period
shall commence, run, and expire at 12:00 midnight, central
standard time, within the stated days or months, whether the
offer acceptance, or other act is to or by the Terminating
Shareholder, DOSL, or the Continuing Shareholders, acting jointly
or separately, simultaneously or
2
<PAGE>
consecutively, and regardless of which party or parties is
entitled to the first offer. All "days" shall refer to calendar
days.
H. "Closing" or "Closing Date" shall mean the first business day
after the tenth day after the acceptance of an offer hereunder.
II. GENERAL TERMS
-------------
A. Delegation to Other Contractual Agreements
------------------------------------------
Unless expressly provided herein otherwise, nothing contained in
this Agreement shall discharge, release, or otherwise change,
amend, or alter any sums due, or rights under any employment
contract or other employment arrangement between DOSL and any
Shareholder. Further, no other contractual relationship between
DOSL and a Shareholder or among any or all of them shall be
affected by this Agreement save one that attempts to define or
speak to the terms of this Agreement, in which case the other
contract shall be null and void unless it is in writing, it
expressly indicates that it is amending this Agreement, and it is
signed by DOSL.
B. Redemption Agreement
--------------------
This Agreement is intended to be a redemption agreement, and all
offers required to be made hereunder shall first be made to DOSL.
If DOSL is willing to accept the offer but does not have the
financial means to accomplish the acceptance, then the remaining
Shareholders shall have the right, but not the duty, to provide
to DOSL sufficient funding, in the amounts and in the manner
agreed upon between themselves, so that DOSL may accept the offer
in the first instance. If DOSL is for any reason unable or
unwilling to accept the offer, the offer shall next be made to
any other third party, subject to the restrictions, terms and
conditions as provided herein.
C. Status of Assignees, Transferees, etc.
--------------------------------------
All (i) assignees, transferees, trustees, receivers, or others
who obtain an interest in the shares, whether by attachment,
execution, bankruptcy law, receivership law, or otherwise by
operation of law, and (ii) assignees, transferees, secured
parties, creditors, and other who obtain an interest in the
shares, whether or not said Assignment or other transfer occurred
with the consent of the Continuing Shareholders, take subject to
the terms and conditions of this Agreement and subject to
qualifications under any applicable provision of the Securities
Exchange Commission and/or any state securities agency. Any such
act of Assignment or other transfer, whether by operation of law,
voluntarily or involuntarily, or by act of a
3
<PAGE>
Shareholder if not consented to, any act, demand, or attempt to
realize upon the collateral security of the shares, shall result
in the party succeeding to or attempting to succeed to the
Ownership of such Shareholder, becoming a Terminating
Shareholder, and the act, as described in this sentence, shall
constitute a Termination Event, so that the terms and conditions
of this Agreement shall apply.
D. Offers, Acceptances and Communications
--------------------------------------
All offers, acceptances, communications, and the like between
DOSL and a Terminating Shareholder shall be in writing. Such
writing shall contain all pertinent particulars, including, as
applicable, selling price, dates, terms and conditions.
E. Status of Spouse.
----------------
It is recognized that inasmuch as some the Shareholders are
married, and inasmuch as some of the Shareholders may become
married, their respective spouses may have an interest in any or
all shares of capital stock of DOSL held by the Shareholder to
the extent such shares constitute or become community property,
or are held in joint tenancy or as tenants by the entireties
(included herein as "Community Property") by reason of their
respective spouses' rights to acquire, manage, control, or
dispose of Community Property. Therefore, each of the
Shareholders hereby agree and consent to the requirement that if
they are currently married, or upon their marriage, they will
cause their respective spouses to consent to the terms hereof, as
such may affect the interest of their respective spouses and
evidence such consent in writing by executing a copy of this
Agreement. In the event that circumstances cause the terms of
this Agreement to be operative, whereby a Terminating Shareholder
is required to offer his Ownership Interest to DOSL, the spouse
of the Terminating Shareholder shall in like manner and upon the
same terms and conditions as provided herein offer any Ownership
Interest in said shares.
III. CERTAIN TERMINATING EVENTS
--------------------------
The following terms and conditions shall control upon the occurrence
of any of the following Terminating events with respect to a
Shareholder:
A. Retirement
----------
If a Shareholder is at the date hereof an employee of DOSL or any
of its wholly owned subsidiaries, or thereafter becomes an
employee of DOSL and subsequently retires from such employment,
he must offer (or be deemed to have offered automatically) to
DOSL his Ownership Interest within thirty (30) days after his
retirement; provided, however,
4
<PAGE>
notwithstanding any other provisions hereof, the purchase of a
Retired Shareholder's interest by DOSL shall be optional and
evidence of DOSL's decision to accept or decline such purchase
shall be communicated to the Retired Shareholder pursuant to part
three (3.) hereof, and the following provisions shall apply:
1. The purchase price, the terms of purchase, the interest
rate, the security, and the like shall be as provided in
Section VII hereof.
2. Unless the Retired Shareholder shall consent otherwise,
DOSL, if it elects to purchase, shall purchase all 100% of
the Retired Shareholder's Ownership Interest.
3. Acceptance of the offer by DOSL shall be delivered to the
Retired Shareholder on or before the sixtieth (60th) day
next succeeding the date DOSL receives the Retired
Shareholder's offer. If no written offer is given to DOSL
within the thirty day period, DOSL will be deemed to have
received notice on the 30th day following the retirement.
4. If DOSL does not accept the offer by the 60th day,
Shareholder may sell his shares to any party he/she desires
at any price.
B. Severance of Employment
-----------------------
If a Shareholder is at the date hereof an employee of DOSL or
thereafter becomes an employee of DOSL and subsequently such
employment is severed for reasons other than retirement, whether
or not the severance is by mutual consent or otherwise, the
Terminating Shareholder shall offer (or be deemed to have offered
automatically) his Ownership Interest to DOSL. The offer period
shall be measured from the date of the last day of his
employment, and the same terms and conditions as are provided in
respect of the Retirement of a Shareholder in subparagraphs 1-4
of Paragraph A to this Section III shall apply, with the term
"Terminating Shareholder" being substituted for the term "Retired
Shareholder."
C. Divorce or Permanent Separation
-------------------------------
In the event that a petition is filed in a court of competent
jurisdiction seeking a divorce or permanent separation, by or
against a Shareholder, such Terminating Shareholder shall offer
(or be deemed to have offered automatically) his Ownership
Interest to DOSL. The offer period shall be measured from the
date of the filing of such petition, or the date the Terminating
Shareholder shall have received notice of same, whichever is
later, and the same terms and conditions as are provided in
respect of the Retirement of a Shareholder in subparagraphs 1-4
of Paragraph A
5
<PAGE>
of this Section III shall apply with the term "Terminating
Shareholder" being substituted for the term "Retired
Shareholder."
IV. ASSIGNMENT OR OTHER TRANSFER
----------------------------
Prior to the occurrence of a Terminating Event, the Ownership Interest
held by Shareholder is not transferable or assignable in any way other
than by will or the laws of descent and distribution unless agreed to
by DOSL in writing and signed by an officer of DOSL. Any such
transfer or assignment shall also be subject to the recipient of such
shares qualifying with any applicable provision of the Securities
Exchange Commission or any applicable state securities agency.
V. DEATH AS A TERMINATING EVENT
----------------------------
If a Shareholder dies, the Deceased Shareholder, through this personal
representative, shall offer (or be deemed to have offered
automatically) to DOSL his Ownership Interest in DOSL, and the
following provisions shall apply:
A. Offer
-----
The offer shall be made as soon as practical after the
appointment of the decedent's personal representative, but in no
event later than one hundred and twenty (120) days after the
decedent's death.
B. Purchase Price
--------------
The purchase price, the terms of purchase, the interest, the
security, and the like shall be as provided in Section VII
hereof.
C. Purchase
--------
Unless the Deceased Shareholder, through his personal
representative, shall consent otherwise, DOSL, if it elects to
purchase, shall purchase all (1005) of the Deceased Shareholder's
Ownership Interest.
D. Acceptance
----------
Acceptance of the offer by DOSL shall be delivered to the
personal representative of the Deceased Shareholder on or before
the thirtieth (30th) day next succeeding the later of (a) the
date DOSL received the Deceased Shareholder's offer, through his
personal representative, or (b) one hundred and twenty (120) days
after the death of the Shareholder.
VI. Restrictions
------------
6
<PAGE>
The share certificates shall bear the following legend or a
legend to the following effect:
"The transfer of these shares is restricted. These shares may be
restricted under the terms of the Securities Act of 1933, the
Securities and Exchange Act of 1934, or the Securities Act of
Texas (collectively called the "Securities Acts"). The
restriction may involve limitations required under an exemption
from said Security Acts, such as an investment representation, a
residence requirement, or a holding period requirement under the
Intrastate Offering exemption."
"Further, the transfer of these shares is restricted under the
terms of a Stock Redemption and Buy-Sell Agreement (also referred
to as the "Employee Stockholders' Agreement") between the holder
of this certificate and DOSL or other shareholders, or both.
Said shares may be not sold, transferred, assigned, given away,
pledged, encumbered, or otherwise disposed of except in strict
accordance with the terms of that agreement, and no transfer will
be recognized by DOS Ltd., until, as the case may be, counsel to
DOS Ltd. is satisfied there is no violation of the Security Acts,
the other shareholders consent to the transfer, or both."
B. Additionally, the transfer of shares will be restricted as
follows:
After execution of the required Agreements, and upon issuance of
the shares, Optionee and his spouse will be prohibited form
selling, assigning or transferring in any way their interest in
the shares for a period of six months without the express written
approval from the Committee. The Committee will have the sole
authority to grant a waiver from the six month restriction and
its decision will be final. Request for waiver of the
restriction must be made in writing and notice delivered to the
Committee.
VII. PURCHASE PRICE AND TERMS
------------------------
A. Redemption Valuation
--------------------
The redemption value of the shares will be set by the Committee
on a semi-annual basis. The Committee shall have the sole
authority to establish the price at which any shares are
repurchased or redeemed under the terms of this Agreement, and
all decisions made by the Committee in setting the value of each
share of Stock shall be final.
If, after an option has been exercise, the shares are to be
redeemed and the shares have been publicly traded for at least 30
days, the redemption value of the shares will be the average
between the high
7
<PAGE>
and low (or if applicable, closing bid and asked price) price per
share for the last 20 trading days prior to the terminating
event.
B. Payment
-------
In the case of a Termination other than by reason of death, the
purchase price shall be paid as follows: fifteen percent (15%)
of the purchase price paid at Closing, with the balance paid in
five (5) equal and consecutive annual installments, to commence
on the first business day of the next succeeding fiscal year of
DOSL in after the Closing. The unpaid principal shall bear six
percent (6%) simple annual interest payable on each principal
installment date. In default of either a principal installment
or the interest due in respect thereof, the remaining balance of
the purchase price may become due and payable at the option of
the noteholder upon providing 30 days notice to DOSL and an
opportunity to cure. The entire principal balance or any part
thereof may be prepaid without penalty. All costs and expenses
which arise in connection with collection of any amounts due
shall be borne by the maker of the note, including a reasonable
attorney's fee. The note to be used shall be approved by DOSL's
attorney.
C. Escrow
------
The Ownership Interest being sold to DOSL and all indicia
thereof, shall, at the election of the Terminating Shareholder,
be retained in escrow by a disinterested third party selected by
mutual agreement between the Terminating Shareholder and DOSL
with appropriate escrow instructions to the effect that the
Ownership Interest shall be delivered to DOSL when the purchase
price, together with any accrued interest, has been paid in full,
and, in the event of default thereof, the Ownership Interest
amount equal to the percentage of the unpaid principal amount
shall revert to the Terminating Shareholder. However, so long as
no default occurs, any voting rights or other interests accruing
to DOSL by reason of its purchase of such stock shall be fully
exercisable by it.
D. Secured Transaction
-------------------
The terms of Article 9 of the Uniform Commercial Code, dealing
with default and the taking of collateral, then applying in the
State of Texas shall govern the Terminating Shareholder's and
DOSl's rights and remedies in the event of default.
E. Tax Status
----------
8
<PAGE>
All proceeds payable to a Terminating Shareholder shall be
regarded for income tax purposes as paid from the following
sources, in the order of priority shown:
1. First, to the extent thereof, the Terminating Shareholder
shall receive the balance of his salary or other employee
compensation, if any, including expense reimbursement but
excluding a qualified employee plan distribution, due and
owing to him for the period involved.
2. Second, as to the balance, the Terminating Shareholder shall
receive payment for his shares.
VIII. RESIGNATIONS
------------
Effective upon the occurrence of a Terminating event, the Terminating
Shareholder and his spouse will automatically be deemed to have
resigned as a director or officer of DOSL as the case may be, and such
resignation shall be effective without further act of the Terminating
Shareholder or his spouse. Each Shareholder confers a power of
attorney upon DOSL and agrees that upon the occurrence of the above
events, DOSL shall thereafter have the power to do the things and
perform the acts which may be necessary to reflect the fact that
neither the Terminating Shareholder nor his spouse is an officer or
director of DOSL.
Nothing herein, however, shall act as a waiver of or release of any
claim, demand, or assertion of the Terminating Shareholder against
DOSL for salary, expense reimbursement, or similar employee benefits,
to the extent he is entitled to the same.
IX. NON-INTERFERENCE
----------------
A. Covenants of Terminating Shareholder
------------------------------------
Notwithstanding that the balance of the purchase price may be due
and payable to the Terminating Shareholder and the Ownership
Interest is held in escrow as collateral security, the continuing
interest of the Terminating Shareholder shall be solely a secured
interest protecting a debt due. The Terminating Shareholder
shall be solely a secured interest protecting a debt due. The
Terminating Shareholder shall not have any say or right in
management, and he agrees to execute whatever documents,
instruments, and papers shall reasonably be required by the
attorney for DOSL to reflect the Terminating Shareholder has
severed all relationship and connection with DOSL save as a
creditor. DOSL and the Terminating Shareholder shall each have
the right to send notices of the severance of the relationship.
9
<PAGE>
B. Mutual Covenants
----------------
DOSL and the Terminating Shareholder hereby mutually exchange
covenants of non-interference and each agrees to refrain from any
conduct, by word or act, that will reflect negatively on the
character or conduct of the other.
C. Non-Competition
---------------
The Terminating Shareholder, recognizing that a covenant not to
compete is required to protect the business interests of DOSL
agrees that unless DOSL consents in writing to the contrary, such
Terminating Shareholder shall not engage in a competing business
within fifty (50) miles of the office or location where he most
recently employed by DOSL or its subsidiaries, for twelve months
(365 successive calendar days) after the Closing of the purchase
transaction. A "competing business" shall mean and include a
business similar or directly related to the active trade or
business of DOSL or any subsidiary of DOSL. It shall cover
employment, management, and investment in any such competing
business.
D. Reasonableness
--------------
DOSL and all the Shareholders expressly agree that because of the
nature of DOSL, the above restrictions in Paragraph C as to area
and time are reasonable.
E. Preservation of Name
--------------------
DOSL now has and shall continue to have, the sole and exclusive
right to use the name "DOS Ltd." as its corporate name and title.
This right shall not be affected by the termination of
association with DOSL of any Shareholder, either as a
shareholder, officer, director, or employee, nor by any other
cause. In the event that any Shareholder ceases to be associated
with or employed by DOSL or any of its subsidiaries for any
reason, they agree herein and hereby to not thereafter use or
permit the use of the name "DOS Ltd.", or any of its
subsidiaries, in the name or trademark of any Corporation,
partnership, or other business with which they are associated in
any capacity, directly or indirectly, and which is engaged in a
business similar in any respect to that conducted by DOSL or any
of its subsidiaries, unless such name or trademark includes other
words denoting that such business is a separate organization,
business, or entity entirely distinct from and not to be confused
with DOSL, and unless such name or trademark does not contain any
words stating or suggesting prior or current affiliate or
connection with, or comparison in age, business, or otherwise
with DOSL.
10
<PAGE>
F. Confidentiality
---------------
It is also recognized and acknowledged by the Shareholders that
confidential information pertaining to DOSL's customers and
manufacturing processes which may be available to them is valuable,
special and unique except as such may be in the public domain.
Accordingly, the Shareholders hereby agree that they will not at any
time disclose any of such information to any person, firm,
Corporation, association or other entity for any reason or purpose
whatsoever or make use in any other way to his advantage of such
information.
X. MISCELLANEOUS MATTERS
---------------------
A. Mutual Release
--------------
The Terminating Shareholder, for his part, and DOSL and the
Continuing Shareholders, for their part, do each release and
acquit the other of any and all claims that each may have against
the other, save and except the obligations set forth in the
Agreement. It is the intention of the parties hereto that once
this Agreement becomes effective, each of the parties will look
only to the rights that he or they have under this Agreement.
B. Insurance Policies
------------------
If DOSL is the owner and beneficiary of insurance policies on the
life of the Shareholder, DOSL may continue to maintain such
insurance in force and effect during the lifetime of each insured
Shareholder. DOSL shall have the right to obtain additional
insurance on the lives of the Shareholders whenever, in the
opinion of DOSL, additional insurance may be required for the
benefit of DOSL or to enable it to carry out its obligations
under this Agreement.
C. Rights to Purchase Policies
---------------------------
A Terminating Shareholder shall have the right to purchase the
policy or policies carried by DOSL on his own life by paying to
DOSL an amount equal to the then net cash surrender value of such
policy or policies plus the unearned portion of any premiums that
may have been paid thereon. Such right of purchase shall be
exercised by notice given to DOSL, in writing, within thirty (30)
days after the Closing Date of the purchase of such Terminating
Shareholder's Ownership Interest and the purchase price of the
issuance shall be paid in full, in cash, within such period of
time. On receipt of the entire purchase price, DOSL will deliver
the policies of insurance and will execute all necessary
instruments of transfer.
D. Entire Agreement
----------------
11
<PAGE>
This instrument contains the entire agreement of the parties
hereto and supersedes all prior agreements made between the
parties and DOSL affecting the capital stock of DOSL and all such
prior agreements are hereby terminated. No modification,
amendment, change, or discharge of any term or provision of the
Agreement shall be valid or binding unless the same is in writing
and signed by all the parties hereto. No waiver of any of the
terms of the Agreement shall be valid unless signed by the party
against whom such waiver is asserted.
E. Termination
-----------
This Agreement shall terminate on the occurrence of any of the
following events:
1. Bankruptcy, receivership, or dissolution of DOSL.
2. The voluntary agreement of all of the Shareholders.
F. Binding Effect
--------------
This Agreement shall be binding upon and inure to the benefit of
the parties and their heirs, legal representative, successors,
and assigns, and the parties agree for themselves and their
heirs, legal representatives, successors, and assigns to execute
any instruments in writing which may be necessary or proper in
carrying out the purposes of the Agreements.
G. Applicable Law
--------------
The parties mutually covenant and agree that this Agreement shall
be subject to and governed by the laws of the State of Texas,
irrespective of the fact that one or more of the parties now is
or may become a resident of a different state.
H. Invalidity
----------
The invalidity or uneforceability of any particular provision of
this Agreement shall not affect the other provisions hereof, and
the Agreement shall be construed in all respects as if such
invalid or unenforceable provisions were omitted.
I. Gender
------
Words of any gender used in this Agreement shall be held and
construed to include any other gender, and words in the singular
shall be held and construed to include the plural, unless the
context otherwise requires.
12
<PAGE>
J. Headings
--------
The captions or headings contained in this Agreement are inserted
and included solely for convenience and shall never be considered
or given any effect in construing the provisions hereof if any
question of intent should arise.
K. Repurchase After Divorce
------------------------
In the event a Shareholder's Ownership Interest is purchased by
DOSL by reason of the Terminating Shareholder's divorce or
permanent separation pursuant to the terms of the Agreement, such
Terminating Shareholder shall have the exclusive right to
repurchase his or her entire Ownership Interest, including that
of his spouse or any donees, following the entry of a final
judgment and decree of divorce and the lapse of time allowed for
any appeal thereof, provided no other terminating event occurs or
has occurred. Such purchase shall be effected by said
Terminating Shareholder giving written notice to DOSL of his
election to purchase all or any part of his Ownership Interest as
herein provided and written notice thereof is given as provided
above and actually received by DOSL within one (1) year from the
date of Termination (which for purposes of this paragraph shall
mean the date of Termination (which for purposes of this
paragraph shall mean the date of the filing of any legal action
regarding the Terminating Shareholder's divorce or permanent
separation), the purchase price shall be the greater of the price
originally paid by DOSL to the Terminating Shareholders, plus
interest at six (6%) per annum or the current value as
established by the committee. The current value shall be
determined as provided in Section VII, Paragraph A hereto, as of
the date of the written notice of election.
L. Exhibits
--------
All exhibits, attachments, annexed instruments and addenda
referred to herein shall be considered a part hereof for all
purposes with the same force and effect as if copied at full
length herein.
M. Venue and Applicable Law
------------------------
This Agreement is made in the State of Texas and shall for all
purposes be construed in accordance with the laws of the State of
Texas. Any cause of action based upon or relating to this
Agreement in any way must be brought in Montgomery County, Texas
within one (1) year of the accrual of the cause of action. The
prevailing party in any suit will be entitled to an award of its
attorney's fees.
N. Attorney's Fees
---------------
13
<PAGE>
Any party to this Agreement who is the prevailing party in any
legal proceeding brought under or with relation to this Agreement
or transaction shall be entitled to recover court costs and
reasonable attorney's fees from the nonprevailing party.
O. Certain Shares
--------------
This Agreement applies only to those shares which have been
purchased pursuant to the DOS Ltd. 1993 Stock Option Plan.
IN WITNESS WHEREOF, the parties hereto warrant each to the other that
they have read this Agreement in its entirety, understand all its terms, and
execute this Agreement and its duplicate originals as of the date first above
written with full knowledge of its significance.
SHAREHOLDERS: RESPECTIVE SPOUSES:
_________________________________ _________________________________
_________________________________ _________________________________
_________________________________ _________________________________
_________________________________ _________________________________
ATTEST:
By:
_________________________________ _________________________________
Secretary President
14
<PAGE>
Exhibit 4.4
-----------
DOS LTD.
NONSTATUTORY STOCK OPTION AGREEMENT
AGREEMENT is effective as of _______________________ between DOS Ltd., a
Bermuda corporation (hereinafter referred to as "DOSL") and
______________________ ("Employee").
To carry out the purposes of the DOS Ltd. STOCK OPTION PLAN (as amended and
as it may be further amended from time to time, the "Plan"), by affording
Employee the opportunity to purchase shares of Class A Common Stock, $.01 par
value, of DOSL ("Stock"), and in consideration of the mutual agreements and
other matters set forth herein and in the Plan, DOSL and Employee hereby agree
as follows:
1. Grant of Option. DOSL hereby irrevocably grants to Employee the right
---------------
and option ("Option") to purchase all or any part of an aggregate of
___________________ (spelled out) 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").
2. Purchase Price. The purchase price of Stock purchased pursuant to the
--------------
exercise of this Option shall be $_____________ per share.
3. Exercise of Option. Subject to the earlier expiration of this Option
------------------
as herein provided, this Option may be exercised, by written notice to DOSL at
its principal executive office addressed to the attention of its Chief Executive
Officer, which notice shall state the number of shares with respect to which the
Option is being exercised, and be accompanied by either Common Stock or a
cashier's check or money order payable to DOS Ltd. in the full amount of the
purchase price. 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 subject
to 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
Number of Years That May be Purchased
--------------- ---------------------
0-2 years 0%
3 years 33%
4 years 66%
5 years or more 100%
<PAGE>
This Option is not transferable by Employee otherwise than by will or the
laws of descent and distribution, and may be exercised only by employee during
Employee's lifetime and while employee remains an employee of DOSL, except that:
(a) If Employee's employment with DOSL terminates for any reason of
disability (within the meaning of section 22(e)(3) of the Code), this
option may be exercised by Employee (or Employee'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 Employee) at any
time during the period of one year following such termination, but
only as to the number of shares Employee was entitled to purchase
hereunder as of the date Employee's employment so terminates.
(b) If Employee dies while in the employ of DOSL, Employee'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 Employee, may
exercise this Option at any time during the period of one year
following the date of Employee's death, but only as to the number of
shares Employee was entitled to purchase hereunder as of the date of
Employee's death.
(c) If Employee's employment with DOSL terminates for any reason other
than as described in (a) or (b) above, unless Employee voluntarily
terminates without the written consent of DOSL or is terminated for
cause, this Option may be exercised by Employee at any time during the
period of three months following such termination, or by Employee'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
Employee) during a period of one year following Employee's death if
Employee dies during such three-month period, but in each case only as
to the number of shares Employee was entitled to purchase hereunder
upon exercise of this Option as of the date Employee's employment so
terminates. For purposes of this Agreement, "cause" will include, but
not be limited to, gross negligence, wilful misconduct, theft,
violation of a substance abuse policy/drug testing policy, and
insubordination. It shall also include employment, or Employee's
final conviction of a felony or of a misdemeanor involving moral
turpitude.
This Option shall not be exercisable in any event after the expiration of
seven years from the date of grant hereof, and, the purchase price of shares as
to which this Option is exercised shall be paid in full at the time of exercise
(a) in cash including check, bank draft or money order payable to the order of
DOS Ltd., (b) by delivering to DOSL shares of Stock having a fair market value
equal to the purchase price, or (c) any combination of cash or Stock. No
fraction of a share of Stock shall be issued by DOSL upon exercise of an Option
or accepted by DOSL in payment of the purchase price thereof; rather, Employee
shall provide a cash payment for such amount as is necessary to effect the
issuance and acceptance of only whole shares of Stock. Unless and until a
certificate or certificates representing such shares shall have been issued by
DOSL to Employee, Employee (or the person permitted to exercise this Option in
the event of Employee's death) shall not be or have any of the rights
2
<PAGE>
or privileges of a shareholder of DOSL with respect to shares acquirable upon an
exercise of this Option.
4. Withholding of Tax. To the extent that the exercise of this Option or
------------------
the disposition of shares of Stock acquired by exercise of this Option results
in compensation income to Employee for federal or state income tax purposes,
Employee shall deliver to DOSL at the time of such exercise or disposition such
amount of money or, if the Employee so elects (which election shall be subject
to the Committee's sole discretion to consent to or disapprove of, shall be
irrevocable and, if Employee is subject to Section 16 of the Securities Exchange
Act of 1934, as amended (the "1934 Act"), shall be subject to such
administrative rules as the committee shall determine to assure compliance with
Rule 16b-3 under the Exchange Act), shares of Stock, AS DOSL may require to meet
its obligation under applicable tax laws or regulations, and, if Employee fails
to do so, DOSL is authorized to withhold from any cash or Stock remuneration
then or thereafter payable to Employee any tax required to be withheld by reason
of such resulting compensation income. Upon an exercise of this Option, DOSL is
further authorized to satisfy any such withholding requirement out of any cash
or, if the Employee so elects (which election shall be subject to the
Committee's sole discretion to consent to or disapprove of, shall be irrevocable
and, if Employee 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), shares of Stock, distributable to Employee
upon such exercise.
5. Status of Stock. Employee understands that at the time of the
---------------
execution of this Agreement the shares of Stock to be issued upon exercise of
this Option have not been registered under the Securities Act of 1933, as
amended (the "Act"), or any state securities law, and that DOSL does not
currently intend to effect any such registration. Until the shares of Stock
acquirable upon the exercise of the Option have been registered under the Act,
DOSL will not issue such shares unless the holder of the Option provides DOSL
with a written opinion of legal counsel, who shall be satisfactory to DOSL,
addressed to DOSL and satisfactory in form and substance to DOSL's counsel, to
the effect that the proposed issuance of equal 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,
Employee (or the person permitted to exercise this Option in the event of
Employee's death), if requested by DOSL to do so, will execute and deliver to
DOSL in writing an agreement containing such provisions as DOSL may require to
assure compliance with applicable securities laws.
Employee agrees that the shares of Stock which employee may acquire by
exercising this Option shall be acquired for investment without a view to
distribution, within the meaning of the Act, and shall not be sold, transferred,
assigned, pledged or hypothecated in the absence of an effective registration
statement for the shares under the Act and applicable state securities laws or
an applicable exemption from the registration requirements of the Act and any
applicable state securities laws. Employee also agrees that the shares of Stock
which Employee 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.
3
<PAGE>
In addition, Employee agrees (i) that the certificates representing the
share of Stock purchased under this Option may bear such legend or legends as
the Committee deems appropriate in order to assure compliance with applicable
securities laws, (ii) that DOSL may refuse to register the transfer of the
shares of Stock purchased under this Option on the stock transfer records of
DOSL if such proposed transfer would in the opinion of counsel satisfactory to
DOSL constitute a violation of any applicable securities law and (iii) that DOSL
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.
6. In the event Employee desires to renounce his rights to the Options
granted hereunder, Employee may do so by providing notice of his intent to
renounce same within 30 days after the date of the grant (or such shorter period
as he is notified) to DOSL at its principal executive office addressed to the
attention of its Chief Executive Officer. Said Options will be immediately
revoked as if never granted. In the event Employee so renounces his rights to
any such Options, no further Options shall thereafter be granted to Employee for
a period of six (6) weeks following the date of the grant.
7. As a condition precedent to the sale of shares of Common Stock to
Employee (and, if requested by DOSL, the spouse of Employee), Employee shall be
required to execute and deliver to DOSL a Purchase Agreement and an Employee
Stockholders' Agreement in form and substance as may be approved from time to
time by the Board of Directors of DOSL. After execution of the required
Agreements, and upon issuance of the shares, Optionee and his spouse will be
prohibited from selling, assigning or transferring in any way their interest in
the shares for a period of six months without the express written approval from
the Committee. The Committee will have the sole authority to grant a waiver
from the six month restriction and its decision will be final. Request for
waiver of the restriction must be made in writing and notice delivered to the
Committee.
Each certificate issued in respect of shares of Common Stock sold pursuant
to the Plan shall be registered in the name of the Participant and shall bear a
legend in substantially the following form:
"The transfer of these shares is restricted. These shares may be
restricted under the terms of the Securities Act of 1933, the
Securities and Exchange Act of 1934, or the Securities Act of Texas
(collectively called the "Securities Acts"). The restriction may
involve limitations required under an exemption from said Security
Acts, such as an investment representation, a residence requirement,
or a holding period requirement under the Intrastate Offering
exemption."
"Further, the transfer of these shares is restricted under the terms
of a Stock Redemption and Buy-Sell Agreement (also referred to as the
"Employee Stockholders' Agreement") between the holder of this
certificate and the Corporation or other shareholders, or both. Said
shares may be not sold, transferred, assigned, given away, pledged,
encumbered, or otherwise disposed of except in strict accordance with
the terms of that agreement, and no transfer will be recognized by the
Corporation until, as the case may be, counsel to the
4
<PAGE>
Corporation is satisfied there is no violation of the Security Acts,
the other shareholders consent to the transfer, or both." Copies of
such Plan and Agreement are on file at the principal office of DOS
Ltd. and DOS Ltd. will furnish to the record holder of this
certificate, without charge, a copy of such Plan and Agreement."
8. Employment Relationship. For purposes of this Agreement, Employee
-----------------------
shall be considered to be in the employment of DOSL as long as Employee remains
a full-time or part-time employee of either DOSL, a parent or subsidiary
corporation (as defined in section 425 of the Code) of DOSL, or a corporation or
a parent or subsidiary of such corporation assuming or substituting a new option
for this Option. Any question as to whether and when there has been a
termination of such employment, and the cause of such termination, shall be
determined by the Committee, and its determination shall be final. Employee
understands and agrees that nothing contained in this Agreement or in the Plan
shall be deemed to confer on any person any rights other than as expressly
provided herein or therein, including but not limited to any right to
continuation of employment and acknowledges and agrees that neither the
execution of this Agreement nor any acquisition of Stock by Employee creates any
obligation whatsoever by DOSL or any of its subsidiaries to continue Employee's
employment or otherwise affects DOSL's right, which Employee hereby
acknowledges, to terminate Employee's employment at will, with or without cause
in the sole discretion of DOSL or any of its subsidiaries which is an employer
of Employee.
5
<PAGE>
EXHIBIT 5.1
[LETTERHEAD OF LATHAM & WATKINS]
June 5, 1996
Board of Directors
Tuboscope Vetco International
Corporation
2835 Holmes Road
Houston, Texas, 77051
Re: Registration Statement on Form S-8
----------------------------------
Gentlemen:
At your request we have examined the Registration Statement on Form S-8
(the "Registration Statement") to be filed by you with the Securities and
Exchange Commission in connection with the registration under the Securities Act
of 1933, as amended, of 991,952 shares (the "Shares") of common stock, $.01
par value, of Tuboscope Vetco International Corporation (the "Company"), none of
which are issued and outstanding as of the date hereof, but which are issuable
upon exercise of options previously granted under the D.O.S. Ltd. 1993 Stock
Option Plan (the "Plan") and assumed by the Company pursuant to the Agreement
and Plan of Merger among Tuboscope Vetco International Corporation, Grow
Acquisition Limited and D.O.S. Ltd. dated as of January 3, 1996.
We are familiar with the proceedings taken by you, and with the additional
proceedings proposed to be taken by you, in connection with the authorization
and proposed issuance and sale of the Shares. Based upon the foregoing, we are
of the opinion that, upon the exercise of options granted pursuant to the Plan
and the issuance and sale of the Shares, each in the manner contemplated by the
Registration Statement and the Summary of the Plan dated June 5, 1996, and each
in accordance with the terms of the Plan, the Shares will be legally and validly
issued, fully paid and nonassessable securities of the Company.
We are opining herein as to the effect on the subject transaction of only
the General Corporation Law of the State of Delaware and we assume no
responsibility as to the application to the subject transaction, or the effect
thereon, of any other laws, of the laws of any other jurisdiction or as to any
matters of municipal law or the laws of any other local agencies within any
other state.
We consent to your filing this opinion as an exhibit to the Registration
Statement.
Very Truly Yours,
/s/ Latham & Watkins
<PAGE>
Exhibit 23.2
------------
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-8) pertaining to the D.O.S. Ltd. 1993 Stock Option Plan of our report
dated February 17, 1996, with respect to the consolidated financial statements
and schedules of Tuboscope Vetco International Corporation included in its
Annual Report (Form 10-K) for the year ended December 31, 1995, filed with
the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Houston, Texas
May 30, 1996
