<PAGE> 1
As filed with the Securities and Exchange Commission on October 1, 1996
Registration No. 333-____________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
--------------------------
UTI ENERGY CORP.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 23-2037823
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
SUITE 112
485 DEVON PARK DRIVE
WAYNE, PENNSYLVANIA 19087
(Address of Principal Executive (Zip Code)
Offices)
</TABLE>
UTI ENERGY CORP. 1993 NON-QUALIFIED STOCK OPTION PLAN;
FIRST AMENDMENT TO TERMINATION AGREEMENT AND RELEASE;
UTI ENERGY CORP. 1996 EMPLOYEE STOCK OPTION PLAN; AND
UTI ENERGY CORP. NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
(Full title of the plans)
--------------------------
VAUGHN E. DRUM
UTI ENERGY CORP.
SUITE 112
485 DEVON PARK DRIVE
WAYNE, PENNSYLVANIA 19087
(Name and address of agent for service)
(610) 971-9600
(Telephone number, including area code, of agent for service)
With Copy to:
Curtis W. Huff
Fulbright & Jaworski L.L.P.
1301 McKinney, Suite 5100
Houston, Texas 77010-3095
(713) 651-5151
--------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
======================================================================================================================
Proposed maximum Proposed maximum
Title of securities Amount to be offering price per aggregate offering Amount of
to be registered registered share (1) price (1) registration fee
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.001
par value 901,600 shares(2) $15.875 $14,312,900 $4,936
======================================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) under the Securities Act of 1933 and based upon the
average of the high and low sales prices of a share of Common Stock as
reported by the American Stock Exchange, Inc. on September 27, 1996.
(2) Includes 486,600 shares to be issued upon the exercise of options granted
under the UTI Energy Corp. 1993 Non-Qualified Stock Option Plan; 15,000
shares to be issued upon the exercise of options granted pursuant to the
terms of the First Amendment to Termination Agreement and Release, dated
August 23, 1996, by and between UTI Energy Corp. and Eddie L. Nowell;
300,000 shares to be issued upon the exercise of options granted pursuant
to the UTI Energy Corp. 1996 Employee Stock Option Plan; and 100,000 shares
to be issued upon the exercise of options granted pursuant to the UTI
Energy Corp. Non-Employee Director Stock Option Plan. Also includes an
indeterminable number of shares of Common Stock issuable as a result of the
anti-dilution provisions of such plans.
================================================================================
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents are hereby incorporated by reference in
this Registration Statement:
1. The Annual Report on Form 10-K of UTI Energy Corp., a
Delaware corporation (the "Registrant"), for the fiscal year ended December 31,
1995;
2. The Quarterly Reports on Form 10-Q of the Registrant for
the quarterly period ended March 31, 1996 and for the quarterly period ended
June 30, 1996; and
3. The Current Report on Form 8-K of the Registrant dated
August 28, 1996;
4. The description of the Registrant's common stock, $.001 par
value, contained in a registration statement on Form 8-A (filed on November 8,
1993), including any amendment or report filed for the purpose of updating such
description.
All documents filed by the Registrant pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Securities Exchange Act of 1934 subsequent to the
date of the filing hereof and prior to the filing of a post-effective amendment
which indicates that all securities offered have been sold or which deregisters
all securities then remaining unsold, shall be deemed to be incorporated by
reference in this Registration Statement and to be a part hereof from the date
of filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Certain legal matters in connection with the securities offered
hereby are being passed upon for the Registrant by Fulbright & Jaworski L.L.P.,
Houston, Texas.
II-1
<PAGE> 3
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Under the Registrant's Restated Certificate of Incorporation, a
director of the Registrant has no liability for certain losses, damages or
expenses incurred by the Company as a result of such director's breach of
fiduciary duty, except for liability resulting from (i) breach of the duty of
loyalty, (ii) intentional misconduct or bad faith, (iii) approval of illegal
dividends or (iv) transactions from which the director has received impropoer
personal benefit. The Registrant's bylaws also provide that directors and
officers shall be indemnified against liabilities arising from their service as
directors or officers to the maximum extent allowed by law.
Section 145 of the Delaware General Corporation Law authorizes the
Registrant to indemnify each officer and director of the Registrant against
liabilities and expenses incurred by reason of the fact that he is or was an
officer or director of the Registrant 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
Registrant and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful.
Section 145 of the Delaware General Corporation Law also authorizes
the Registrant to purchase and maintain insurance on behalf of any person who
is or was an officer or director the Registrant against liability asserted
against or incurred by him in any such capacity, whether or not the Registrant
would have power to indemnify such officer or director against such liability
under the provisions of Section 145. The Registrant has purchased and
maintains a directors' and officers' liability policy for such purposes.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
4.1 Restated Certificate of Incorporation of the Registrant, as
amended (incorporated by reference to Amendment No. 1 to
the Registrant's Registration Statement on Form S-1 (Reg.
No. 33-69726) filed with the Securities and Exchange
Commission on November 9, 1993 and to the Registrant's
Annual Report on Form 10-K for the year ended December 31,
1995).
4.2 By-laws, as amended (incorporated by reference to the
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1993).
4.3 Form of Common Stock Certificate (incorporated by reference
to Amendment No. 1 to the Registrant's Registration
Statement on Form S-1 (Reg. No. 33-69726) filed with the
Securities and Exchange Commission on November 9, 1993).
4.4 UTI Energy Corp. 1993 Non-Qualified Stock Option Plan.
II-2
<PAGE> 4
4.5 First Amendment to Termination and Release dated August 23,
1996, between UTI Energy Corp. and Eddie L. Nowell.
4.6 UTI Energy Corp. 1996 Employee Stock Option Plan.
4.7 UTI Energy Corp. 1996 Non-Employee Director Stock Option
Plan.
5.1 Opinion of Fulbright & Jaworski L.L.P.
23.1 Consent of Ernst & Young LLP.
23.3 Consent of Fulbright & Jaworski L.L.P. (included in Exhibit
5.1).
24.1 Powers of Attorney (included on Page II-5 of this
Registration Statement).
ITEM 9. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of this Registration Statement (or the most
recent post-effective amendment hereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in this
Registration Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar volume of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range may
be reflected in the form of prospectus filed with the Securities and Exchange
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than a 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the effective
registration statement; 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 (1)(i) and (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 with or furnished to
the Securities and Exchange Commission by the Registrant pursuant to Section 13
or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in this Registration Statement.
II-3
<PAGE> 5
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered herein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act of 1933 and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer
or controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act of 1933 and will be governed by the final
adjudication of such issue.
II-4
<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the State of Pennsylvania, on September 30, 1996.
UTI ENERGY CORP.
By: /s/ Vaughn E. Drum
-----------------------------------
Vaughn E. Drum
President, Chief Executive
Officer and Director
(Principal Executive Officer)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints Vaughn E. Drum and Mark S. Siegel, or
either of them, his true and lawful attorney-in-fact and agent, with full power
of substitution and resubstitution, for him and in his name, place and stead,
in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same
and all exhibits thereto, and all documents in connection therewith, with the
Securities and Exchange Commission, granting said attorney-in-fact and agent,
and either of them, full power and authority to do and perform each and every
act and thing requisite and necessary to be done in and about the premises, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorney-in-fact and agent, or either of
them, or his or their substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Vaughn E. Drum President, Chief Executive September 30, 1996
------------------------------------ Officer and Director
Vaughn E. Drum (Principal Executive Officer)
/s/ P. Blake Dupuis Vice President and September 30, 1996
------------------------------------ Chief Financial Officer
(Principal Financial Officer and
Principal Accounting Officer)
/s/ Mark S. Siegel Chairman and Director September 26, 1996
------------------------------------
Mark S. Siegel
</TABLE>
II-5
<PAGE> 7
<TABLE>
<S> <C> <C>
/s/ Kenneth N. Berns Director September 26, 1996
------------------------------------
Kenneth N. Berns
/s/ Terry H. Hunt Director September 30, 1996
------------------------------------
Terry H. Hunt
Director
------------------------------------
Nadine C. Smith
/s/ Robert B. Spears Director September 30, 1996
- ------------------------------------
Robert B. Spears
</TABLE>
II-6
<PAGE> 8
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Page
Number Description Number
------ -------------------------------------------------------------- ------
<S> <C> <C>
4.1 Restated Certificate of Incorporation of the Registrant, as
amended (incorporated by reference to Amendment No. 1 to
the Registrant's Registration Statement on Form S-1 (Reg.
No. 33-69726) filed with the Securities and Exchange
Commission on November 9, 1993 and to the Registrant's Annual
Report on Form 10-K for the year ended December 31, 1995).
4.2 By-laws as amended (incorporated by reference to the
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1993).
4.3 Form of Stock Certificate (incorporated by reference to
Amendment No. 1 to the Registrant's Registration Statement
on Form S-1 (Reg. No. 33-69726) filed with the Securities
and Exchange Commission on November 9, 1993).
4.4 UTI Energy Corp. 1993 Non-Qualified Stock Option Plan.
4.5 First Amendment to Termination Agreement and Release dated
August 23, 1996, between UTI Energy Corp. and Eddie L.
Nowell.
4.6 UTI Energy Corp. 1996 Employee Stock Option Plan.
4.7 UTI Energy Corp. Non-Employee Director Stock Option Plan.
5.1 Opinion of Fulbright & Jaworski L.L.P.
23.1 Consent of Ernst & Young LLP.
23.3 Consent of Fulbright & Jaworski L.L.P. (included in Exhibit
5.1).
24.1 Powers of Attorney (included on Page II-5 of this Registration
Statement).
</TABLE>
II-6
<PAGE> 1
UTI ENERGY CORP.
1993 NON-QUALIFIED STOCK OPTION PLAN
1. PURPOSE AND DESIGN.
The purpose of this Plan is to assist the Company in securing,
motivating and retaining managerial talent by affording managers an opportunity
to purchase the Company's Stock under options.
2. DEFINITIONS.
Whenever used in this Plan, the following terms will have the
respective meanings set forth below:
(a) "Board" means the Company's Board of Directors as
constituted from time to time.
(b) "Change of Control" means the occurrence of any of
the following events:
(1) any individual, firm, corporation,
partnership or other entity, except the Participant,
his affiliates and associates (as such terms are
defined in Rule 12b-2 under the Securities Exchange
Act of 1934, as amended), the Company and any
Subsidiary, or any employee benefit plan of the
Company or of any Subsidiary ("Person"), together
with all affiliates and associates of such Person,
shall become the beneficial owner in the aggregate of
twenty percent ( 20%) or more of the common stock of
the Company then outstanding; or
<PAGE> 2
(2) during any twenty-four (24) month period,
individuals who at the beginning of such period
constituted the Board cease for any reason to
constitute a majority thereof, unless the election,
or the nomination for election by the Company's
shareholders, of at least seventy-five percent (75%)
of the directors who were not directors at the
beginning of such period was approved by a vote of at
least seventy-five percent (75%) of the directors in
office at the time of such election or nomination who
were directors at the beginning of such period.
(c) "Committee" means the Compensation and Management
Development Committee of the Board as constituted from time to time.
(d) "Company" means UTI Energy Corp., a Delaware
corporation, or any successor thereto by merger, consolidation or statutory
share exchange.
(e) "Disability" means the inability of a Participant to
perform substantially all of his duties and responsibilities under his
employment agreement (or if no written employment agreement exists, then the
duties and responsibilities of his employment) with the Company or a
Subsidiary, by reason of illness, injury or incapacity for six (6) consecutive
months.
(f) "Employee" means a regular full-time salaried
employee (including officers who are also employees) of the Company or any
Subsidiary of the Company.
(g) "Fair Market Value" of Stock means the fair market
value per share of Stock as determined in good faith by the Board.
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<PAGE> 3
(h) "Option" means the right to purchase Stock pursuant
to the relevant provisions of this Plan at the Option Price for a specified
period of time, not to exceed ten (10) years from date of grant, which period
of time shall be subject to earlier termination prior to exercise in accordance
with Section 10 of this Plan.
(i) "Option Price" means the Fair Market Value of the
Stock determined on the date of grant of an Option, to be payable upon exercise
of such Option.
(j) "Participant" means an Employee designated by the
Committee to participate in the Plan.
(k) "Retire" means the retirement by a Participant as an
Employee pursuant to the terms of Participant's written employment agreement
with the Company or a Subsidiary or, if there is no such written employment
agreement then in effect, then the retirement of Participant at any time on or
after the Participant attains the age of sixty-five (65) years.
(l) "Stock" means the Common Stock of the Company, par
value $0.001 per share, or such other securities of the Company as may be
substituted for Stock or such other securities pursuant to Section 12 of this
Plan.
(m) "Subsidiary" means any corporation at least eighty
percent (80%) of the outstanding voting stock or voting power of which is owned
by the Company or a Subsidiary.
(n) "Tax Payment Value" means the product of:
(1) the aggregate Fair Market Value of shares
with respect to which an Option has been exercised by
a Participant, determined
-3-
<PAGE> 4
on the date of exercise, less the aggregate Option
Price for such shares: and
(2) the difference between marginal ordinary
income and long term capital gains individual income
tax rates, expressed as a decimal, under the Internal
Revenue Code of 1986, as amended, or any successor
statute, assuming married filing jointly status and
an annual taxable income of Two Hundred Fifty
Thousand Dollars ($250,000.00) as adjusted on a
yearly basis by the percentage change in the All
Urban Consumer Price Index for Philadelphia,
Pennsylvania (1982-84 = 100) for all items, of the
Bureau of Labor Statistics of the U.S. Department of
Labor, or any replacement thereof (the "Index"),
between the first of the month next following the
date of adoption of this Plan and anniversaries
thereof, as of the date of exercise of the Option.
3. NUMBER AND SOURCE OF SHARES AVAILABLE FOR OPTIONS - MAXIMUM ALLOTMENT.
The number of shares of Stock which may be made the subject of Options
under this Plan at any one time may not exceed Five Hundred Fifty-One Thousand
Eight Hundred Fifty (551,850) shares in the aggregate, including shares
acquired by Participants through exercise of Options under this Plan, subject,
however, to the adjustment provisions of Section 13 below. If any Option
expires or terminates for any reason without having been exercised in full, the
unpurchased shares subject to the Option will again be available for the
purposes of the Plan. Shares which are the subject of Options may be previously
issued and outstanding shares of Stock reacquired
-4-
<PAGE> 5
by the Company and held in its treasury, or may be authorized but unissued
shares of Stock, or may be partly of each.
4. DURATION OF THE PLAN.
The Plan will remain in effect until all Stock subject to it has been
purchased pursuant to the exercise of Options. Notwithstanding the foregoing,
no Option may be granted after December 14 , 2003.
5. ADMINISTRATION.
The Plan will be administered by the Committee. If the Company has
registered any of its securities under the Securities Exchange Act of 1934 (the
"Exchange Act"), the Committee shall have at least three (3) members and each
member of the Committee shall be a "disinterested person" within the meaning of
Rule 16b-3 under the Exchange Act or successor rule or regulation. By
definition in Rule 16b-3, a "disinterested person" is one who shall not be, and
shall not have been, eligible to receive an Option under the Plan, or any
other-plan maintained by the Company or any Subsidiary to acquire stock, stock
options, stock appreciation rights or restricted stock of the Company or a
Subsidiary at any time within the one (1) year immediately preceding the
member's appointment to the Committee. The Board may exclude any director from
such eligibility by resolution. Subject to the express provisions of the Plan,
the Committee will have authority, in its discretion, to the Plan, the
Committee will have authority, in its discretion, to determine the Employees to
whom, and the time or times at which, Options will be granted, the number of
shares to be subject to each Option, the Option Price to be paid for the shares
upon the exercise of each Option, and the period within which each Option may
be exercised. In making such
-5-
<PAGE> 6
determinations, the Committee may take into account the nature of the services
rendered by an Employee, the present and potential contributions of the
Employee to the Company's success and such other factors as the Committee in
its discretion deems relevant. Subject to the express provisions of the Plan,
the Committee will also have authority to construe and interpret the Plan, to
prescribe, amend and rescind rules and regulations relating to it, to determine
the terms and provisions of the respective stock option agreements required by
Section 7.2 of the Plan (which need not be identical), and to make all other
determinations necessary or advisable for the orderly administration of the
Plan. All determinations made by the Committee in connection with
administration of the Plan shall be conclusive and binding on all parties.
6. ELIGIBILITY.
Options may be granted only to key management Employees who are
selected by the Committee, in its sole judgment, to participate in the Plan.
7. OPTIONS.
7.1 Grant of Options. Subject to the provisions of Section 3,
Options may be granted to Participants at any time and from time to time as may
be determined by the Committee. The Committee will have complete discretion in
determining the number of Options granted to each Participant and the number of
shares of Stock subject to such Options.
7.2 Option Agreement. As determined by the Committee on the date
of grant, each Option will be evidenced by a stock option agreement that shall,
among other things, specify the Option Price, the duration of the Option and
the number of shares of Stock to which the Option pertains.
-6-
<PAGE> 7
7.3 Exercise and Vesting. An Option shall become cumulatively
exercisable (in whole or in part and from time to time) based upon the number
of years of service as an Employee completed by the Participant to whom the
Option is granted after the date the Option is granted. An Option shall become
immediately exercisable according to the following table (with the completion
of years of service determined as of the anniversary of the date on which a
Participant was granted the Option):
<TABLE>
<CAPTION>
Percent of Shares Subject to Years of
Option Which are Exercisable Service Completed
---------------------------- -----------------
<S> <C>
20% 1
40% 2
60% 3
80% 4
100% 5
</TABLE>
If a Participant holding an Option (1) voluntarily terminates his employment
with the Company or a Subsidiary, or (2) is terminated for Cause, as defined in
Section 7.5 of this Plan, the Option held by such Participant shall be
exercisable only with respect to that number of shares of Stock for which the
Option is already exercisable on the date such Participant ceases to be an
Employee. If a Participant holding an Option Retires, the Option held by such
Participant shall be exercisable as to the greater of (1) that number of shares
of Stock for which the Option is already exercisable on the date such
Participant ceases to be an Employee, or (2) one-half (1/2) of the total shares
of Stock subject to the Option. However, if a Participant holding an Option
ceases to be an Employee by reason of (1) the Employee's Disability, or (2) a
termination of the
-7-
<PAGE> 8
Employee by the Company or a Subsidiary for reasons not constituting Cause, the
Option held by any such Participant shall be exercisable with respect to all
shares of Stock subject to the Option. Notwithstanding the foregoing, the
Committee shall have the power, in the event of a Change of Control, to amend
all outstanding Options to permit the exercise of all such Options prior to the
effectiveness of any such Change of Control. Notwithstanding anything contained
in this Section 7.3 to the contrary, no Option, to the extent that it has not
previously been exercised, shall be exercisable after it has terminated.
7.4 Payment of Option Price. The Option Price upon exercise of any
Option shall be payable to the Company in full (i) in cash or its equivalent,
(ii) by tendering shares of previously acquired Stock already beneficially
owned by the Participant for more than one (1) year and having a Fair Market
Value at the time of exercise equal to the total Option Price, or (iii) by a
combination of (i) and/or (ii). The cash proceeds from such payment will be
added to the general funds of the Company and shall be used for its general
corporate purposes. Any shares of previously acquired Stock tendered to the
Company in payment of the Option Price will be added by the Company to its
treasury stock to be used for its general corporate purposes.
7.5 Termination for Cause. For purposes of this Plan, "Cause"
shall have the same meaning as is contained in a Participant's written
employment agreement with the Company or a Subsidiary or, if there is no such
written employment agreement then in effect, then "Cause" shall mean the
failure of Participant to observe or perform (other than by reason of illness,
injury or incapacity) any of the duties of his employment, misconduct,
insubordination, habitual insobriety or substance abuse,
-8-
<PAGE> 9
embezzlement of funds, or other action on the part of the Participant that is
damaging or detrimental to the Company or a Subsidiary.
8. WRITTEN NOTICE, ISSUANCE OF STOCK CERTIFICATES, STOCKHOLDER
PRIVILEGES AND PARTIAL EXERCISE.
8.2 Written Notice. A Participant wishing to exercise an Option
must give written notice to the Company in the form and manner prescribed by
the Committee, indicating the date of award, the number of shares as to which
the Option is being exercised, and such other information as may be required by
the Committee. Full payment for the shares exercised pursuant to the Option
must accompany the written notice.
8.3 Issuance of Stock Certificates. As soon as practicable after
the receipt of written notice and payment, the Company will, without stock
transfer taxes to the Participant or to any other person entitled to exercise
an Option pursuant to this Plan, deliver to the Participant or such other
person certificates for the requisite number of shares of Stock.
8.4 Privileges of a Shareholder. A Participant or any other person
entitled to exercise an Option under this Plan will have no rights as a
shareholder with respect to any Stock covered by the Option until the date of
issuance of a share certificate for such Stock.
8.5 Partial Exercise. An Option granted under this Plan may be
exercised as to any lesser number of shares than the full amount for which it
could be exercised. Such a partial exercise of an Option will not affect the
right to exercise the Option from time to time in accordance with this Plan as
to the remaining shares subject to the Option.
-9-
<PAGE> 10
9. NON-TRANSFERABILITY OF OPTIONS.
No Option granted under the Plan shall be transferable otherwise than
by will or the laws of descent and distribution, and an Option may be
exercised, during the lifetime of the Participant, only by the Participant.
10. EXERCISE PERIOD UPON TERMINATION.
If a Participant's employment by the Company or a Subsidiary
terminates for any reason (other than by reason of death), the Option, to the
extent exercisable as of the date of such termination pursuant to the
provisions of Section 7.3, shall be exercisable at any time prior to the
expiration date of the Option. To the extent that the Option was not so
exercisable as of the date of such termination of employment, such Option or
the nonexercisable portion thereof will be forfeited and no longer subject to
any right to exercise.
11. DEATH OF PARTICIPANT.
In the event of the death of a Participant, the Option theretofore
granted to such Participant may be exercised by the estate of the Participant,
or by any person to whom Participant may have bequeathed the Option or whom the
Participant may have designated to exercise the Option under Participant's last
will, or by the Participant's personal representative, as follows (but in no
event later than the expiration date of the Option): (1) in the event of the
Participant's death while employed by the Company or a Subsidiary, to the
extent of all shares subject to the Option not previously exercised by the
Participant; or (2) in the event of a Participant's death after termination of
employment, to the extent that the Participant was entitled to exercise the
Option as of the date of such termination pursuant to the provisions of Section
7.3. To the extent
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that a previously terminated deceased Participant was not entitled to exercise
the Option as of the date of his termination, such Option or the
non-exercisable portion thereof will be forfeited and no longer subject to any
right of exercise. Upon the death of a Participant, the Company shall attempt
on a best efforts basis, to ascertain the identity and address of the personal
representative of the Participant and the heirs of Participant who are the
recipients of the Option, and shall notify such personal representative (if
Participant's estate is still open) and Option recipients:
(a) of the existence of and remaining shares of Stock
under an outstanding Option, the expiration date of the Option, and any future
Option vesting dates, as soon as reasonably practicable after the Participant's
death; and
(b) of the expiration date of the Option at least thirty
(30) but not more than sixty (60) days prior to such expiration date.
12. DISABILITY OF PARTICIPANT.
In the event a Participant becomes Disabled, and, due to his
Disability, is unable to properly manage funds, the Option theretofore granted
to such Participant may be exercised by the guardian of the Participant, or by
Participant's attorney-in-fact under a durable power of attorney executed by
Participant prior to the Disability, as follows (but in no event later than the
expiration date of the Option):
(a) in the event of the Participant's Disability while
employed by the Company or a Subsidiary, to the extent of all shares subject to
the Option not previously exercised by the Participant; or
(b) in the event of a Participant's Disability after
termination of employment, to the extent that the Participant was entitled to
exercise the Option as
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of the date of such termination pursuant to the provisions of Section 7.3. To
the extent that a previously terminated Participant who subsequently became
Disabled was not entitled to exercise the Option as of the date of his
termination, such Option or the non-exercisable portion thereof will be
forfeited and no longer subject to any right of exercise.
13. ADJUSTMENT OF NUMBER, KIND AND PRICE OF SHARES.
In the event any recapitalization, reorganization, merger,
consolidation, spin-off, combination, repurchase, exchange of shares or other
securities of the Company, stock split or reverse split, stock dividend,
extraordinary dividend, liquidation, dissolution, or other similar corporate
transaction or event affects the Stock such that an adjustment is determined by
the Committee to be appropriate in order to prevent dilution or enlargement of
a Participant's rights under the Plan, then the Committee will, in a manner
that is proportionate to the change to the Stock and is otherwise equitable,
adjust (i) any or all of the number or kind of shares of Stock reserved for
issuance under the Plan; (ii) the number or kind of shares of Stock to be
subject to Options thereafter granted under the Plan, and (iii) the number and
kind of shares of Stock issuable upon exercise of outstanding Options, or the
Option Price per share thereof, provided that the number of shares subject to
any Option will always be a whole number. Any such determination of adjustments
by the Committee will be conclusive for all purposes of the Plan and of each
Option, whether a stock option agreement with respect to a particular Option
has been theretofore or is thereafter executed.
14. LIMITATION OF RIGHTS.
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Nothing contained in this Plan shall be construed to give an Employee
any right to be granted an Option except as may be authorized in the discretion
of the Committee. The granting or exercise of an Option under this Plan shall
not constitute or be evidence of any agreement or understanding, expressed or
implied, that the Company or a Subsidiary will employ a Participant for any
specified period of time, in any specific position or at any particular rate or
remuneration. Nothing in this Plan shall affect (i) the Company's or a
Subsidiary's right to terminate a Participant's services at any time for any
reason whatsoever; or (ii) the right of any Participant to participate or
receive benefits under and in accordance with the provisions of any pension,
retirement, insurance or other employee welfare benefit plan or program of the
Company or a Subsidiary.
15. AMENDMENT OR TERMINATION OF PLAN.
No termination or amendment of this Plan may, without the consent of
the Participant to whom any Option has previously been granted, adversely
affect the rights of such Participant under such Option.
16. TAX WITHHOLDING AND PAYMENT.
Upon exercise of any Option under this Plan, the Company will require
the recipient of the Stock to remit to the Company an amount sufficient to
satisfy federal, state and local withholding tax requirements. Upon exercise of
any Option by a Participant, the Company will declare a tax equivalency payment
for the benefit of such Participant equal to the Tax Payment Value for such
Participant. The tax equivalency payment will not be paid to a Participant but
instead shall be retained by the Company as a credit against the amount of
taxes to be withheld by the Company which arise out
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of the delivery of the shares of Stock and declaration of the tax equivalency
payment. The Company will make a similar payment for the benefit of the estate,
heirs or personal representatives of a Participant receiving shares of Stock as
provided in Section 11. A Participant or other person receiving shares shall
pay the Company the amount of taxes in excess of the tax equivalency payment
which the Company is required to withhold and which arise out of the grant or
delivery of shares and the declaration of such tax equivalency payment to such
Participant or other person. To the extent authorized by rules and regulations
of the Committee, the Company may withhold or receive Stock and make additional
cash payments in respect thereof in satisfaction of a recipient's tax
obligations, including tax obligations in excess of mandatory withholding
requirements.
17. GOVERNMENTAL APPROVAL.
Each Option will be subject to the requirements that if at any time
the listing, registration or qualification of the shares covered thereby upon
any securities exchange, or under any state or federal law, or the consent or
approval of any governmental regulatory body, is necessary or desirable as a
condition of or in connection with the granting of such Option or the purchase
of shares thereunder, no such Option may be exercised in whole or in part
unless and until such listing, registration, qualification, consent or approval
has been effected or obtained free of any conditions not acceptable to the
Board.
18. EFFECTIVE DATE OF PLAN.
This Plan will become effective as of December 14 , 1993.
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IN WITNESS WHEREOF, and as evidence of the adoption of this Plan, the
appropriate officers of the Company have caused this Plan to be executed as of
the 14th day of December, 1993.
ATTEST: UTI ENERGY CORP.
/s/ VINCENT J. DONAHUE
- -------------------------------- By: /s/ VAUGHN E. DRUM
Secretary -----------------------
President
(Corporate Seal)
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<PAGE> 1
FIRST AMENDMENT TO
TERMINATION AGREEMENT AND RELEASE
This First Amendment, dated August 23, 1996 (this "Amendment"), amends
that certain Termination Agreement and Release (the "Termination Agreement and
Release"), dated effective September 29, 1995, by and between Eddie L. Nowell
("Nowell") and UTI Energy Corp., a Delaware corporation ("UTI").
Whereas Nowell is a former employee of UTI;
WHEREAS Nowell and UTI entered into the Termination Agreement and
Release providing for the terms and conditions of Nowell's termination of
employment with UTI and the vesting and granting of options to Nowell in
connection therewith; and
WHEREAS Nowell and UTI now wish to clarify certain provisions of
Section 7 of the Termination Agreement and Release relating to certain options
(the "Options") granted to Nowell to purchase shares of UTI common stock, par
value $.001 per share ("Common Stock"), and, to the extent the Termination
Agreement and Release may be construed contrary to such clarification, to amend
the Termination Agreement and Release;
NOW, THEREFORE, in consideration of the mutual promises contained
herein and intending to be legally bound hereby, UTI and Nowell hereby agree as
follows:
1. Options Covered. The parties acknowledge that the Options now
held by Nowell consist of (i) options to purchase 33,660 shares of Common
Stock, which options were granted under the terms of the UTI 1993 Non-Qualified
Stock Option Plan (the "Plan") and subject to a stock option agreement by and
between UTI and Nowell dated December 14, 1993 (the "Option Agreement") and
(ii) new options to purchase 15,000 shares of Common Stock (the "New Options")
granted on the Effective Date (as defined in the Termination Agreement and
Release), and that all of the above described options were fully vested on the
Effective Date.
2. Clarification of New Option. The parties agree that although
the New Options may not have been permitted under the express terms of the
Plan, it was the intent and understanding of both parties that the New Options
be subject to the same terms, conditions and provisions of an option granted
under the Plan and the Option Agreement, except that (i) the date of grant of
the New Options was to be September 29, 1995 and the exercise price of the New
Options was to be the fair market value of the Common Stock on September 29,
1995 (that is, $4 5/8 per share of Common Stock), (ii) the New Options were
fully vested on the date of grant and not subject to Nowell remaining in the
employment of UTI or any of its subsidiaries and (iii) the termination date of
the New Options is August 29, 2005.
3. UTI/Nowell Plan. The terms, conditions and provisions to
which the New Options shall be the same as an option granted under the Plan,
subject to the modifications described in the preceding paragraph, and such
options shall constitute an employee benefit plan for Nowell as defined by Rule
405 of the Rules and Regulations promulgated under the Securities Act of 1933,
as amended.
<PAGE> 2
4. Effect of Clarification. This Amendment shall amend the
Termination Agreement and Release only to the extent the Termination Agreement
and Release may be construed in conflict with this Amendment. The Termination
Agreement and Release shall remain in full force and effect in all other
respects.
EXECUTED as of the date first written above.
UTI ENERGY CORP.
By: /s/ Vaughn E. Drum
---------------------------------
Name: Vaughn E. Drum
Title: President
/s/ Eddie L. Nowell
---------------------------------------
Eddie L. Nowell
<PAGE> 1
UTI ENERGY CORP.
1996 EMPLOYEE STOCK OPTION PLAN
SECTION 1. PURPOSE
The purpose of the UTI Energy Corp. 1996 Employee Stock Option Plan is to
promote the interests of UTI Energy Corp. (the "Company") and its stockholders
by providing it with a mechanism to enable the Company and its subsidiaries to
attract, retain and motivate their key employees with compensatory arrangements
and benefits that make use of the Company's stock so as to provide for or
increase the proprietary interests of such employees in the Company.
SECTION 2. DEFINITIONS
(A) "AGREEMENT" shall mean a written agreement setting forth the terms of
an Award.
(B) "AWARD" shall mean an Option (which may be designated as an Incentive
Stock Option or a Non-Incentive Stock Option) granted under this Plan.
(C) "BOARD" shall mean the Board of Directors of the Company.
(D) "CODE" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
(E) "COMMITTEE" shall mean the committee appointed by the Board to
administer this Plan.
(F) "COMMON STOCK" shall mean the Company's Common Stock, $.001 par value
(or such other par value as may be designated by act of the Company's
stockholders).
(G) "COMPANY" shall mean UTI Energy Corp., a Delaware corporation.
(H) "DISABILITY" shall mean a mental or physical disability which, in the
opinion of a physician selected by the Committee, shall prevent the Employee
from earning a reasonable livelihood with the Company or any Subsidiary and
which can be expected to result in death or which has lasted or can be expected
to last for a continuous period of not less than 12 months and which: (a) was
not contracted, suffered or incurred while the Employee was engaged in, or did
not result from having engaged in, a felonious criminal enterprise; (b) did not
result from alcoholism or addiction to narcotics; and (c) did not result from
an injury incurred while a member of the Armed Forces of the United States for
which the Employee receives a military pension.
(I) "DISINTERESTED" shall mean disinterested within the meaning of
applicable regulatory requirements, including those promulgated under Section
16 of the Exchange Act.
(J) "EMPLOYEE" shall mean an officer or employee of the Company or a
Subsidiary.
(K) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
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(L) "FAIR MARKET VALUE" shall mean the closing sale price of a share of
Common Stock on that date as reported by the principal national securities
exchange on which the Common Stock is listed if the Common Stock is then listed
on a national securities exchange, or if the Common Stock is not so listed, the
average of the bid and asked price of a share of Common Stock on that date and
reported in the National Association of Securities Dealers Automated Quotation
system (the "NASDAQ System"); provided that if no such closing price or quotes
are so reported on that date or if in the discretion of the Committee another
means of determining the Fair Market Value of a share of stock at such date
shall be necessary or advisable, the Committee may provide for another means
for determining such Fair Market Value.
(M) "INCENTIVE STOCK OPTION" shall mean an Option that is intended by the
Committee to meet the requirements of Section 422 of the Code or any successor
provision.
(N) "NON-INCENTIVE STOCK OPTION" shall mean an Option granted pursuant to
this Plan which does not qualify as an Incentive Stock Option.
(O) "OPTION" shall mean the right to purchase Common Stock at a price to
be specified and upon terms to be designated by the Committee pursuant to this
Plan. An Option shall be designated by the Committee as an Incentive Stock
Option or a Non-Incentive Stock Option.
(P) "OPTION PRICE" shall mean the price at which shares may be purchased
pursuant to an Option.
(Q) "PLAN" shall mean this UTI Energy Corp. 1996 Employee Stock Option
Plan.
(R) "RETIRE" or "RETIREMENT" shall mean retirement in accordance with the
terms of a retirement plan that is qualified under Section 401(a) of the Code
and maintained by the Company or a Subsidiary in which the employee is a
participant.
(S) "SUBSIDIARY" shall mean any present or future subsidiary corporations,
as defined in Section 424 of the Code, of the Company.
SECTION 3. STOCK SUBJECT TO THE PLAN
The total amount of the Common Stock with respect to which Awards may be
granted shall not exceed in the aggregate 300,000 shares. The class and
aggregate number of shares which may be subject to the Options granted under
this Plan shall be subject to adjustment under Section 7. Shares may be
treasury shares or authorized but unissued shares. If any Award under the Plan
shall expire or terminate for any reason without having been exercised in full,
or if any Award shall be forfeited, the shares subject to the unexercised or
forfeited portion of such Award shall again be available for the purposes of
the Plan.
SECTION 4. ADMINISTRATION
The Plan shall be administered by a Committee the members of which shall be
Disinterested persons. The Committee shall consist of not less than two
members of the Board, who are not Employees. The Board shall have the power
from time to time to add or remove members of the Committee, and to fill
vacancies arising for any reason. The Committee shall designate a chairman
from among its members, who shall preside at all of its meetings, and shall
designate a secretary, without regard to whether that person is a member of the
Committee, who shall keep the minutes of the proceedings and all records,
documents, and data pertaining to its administration of the Plan. Meetings
shall be held at any time and place as it shall choose. A majority of the
members of the Committee shall constitute a quorum for the transaction of
business. The vote of a majority of those members present at any meeting shall
decide any question brought before that meeting. In addition, the Committee
may take any action otherwise proper under the Plan by the affirmative vote,
taken without a meeting, of a majority of its members. No member of the
Committee shall be liable for any act or omission of any other member of the
Committee or for any act or omission on his own part, including but not limited
to the
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exercise of any power or discretion given to him under the Plan, except those
resulting from his own gross negligence or willful misconduct. All questions
of interpretation and application of the Plan, or as to Awards granted under it
shall be subject to the determination of a majority of the Committee. The
Committee in exercising any power or authority granted under this Plan or in
making any determination under this Plan shall perform or refrain from
performing those acts using its sole discretion and judgment. Any decision
made by the Committee or any refraining to act or any act taken by the
Committee in good faith shall be final and binding on all parties. The
Committee's decision shall never be subject to de novo review. When
appropriate the Plan shall be administered in order to qualify certain of the
Options granted under it as Incentive Stock Options.
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SECTION 5. ELIGIBILITY
The individuals who shall be eligible to participate in the Plan shall be
those full-time key Employees, including directors if they are Employees, as
the Committee shall determine during the term of this Plan. No individual
shall be eligible to receive an Award under the Plan while that individual is a
member of the Committee.
No Employee who owns stock possessing more than 10% of the total combined
voting power of all classes of stock of the corporation employing the Employee
or of its parent or subsidiary corporation shall be eligible to receive an
Option which is an Incentive Stock Option unless at the time that the Option is
granted the option price is at least 110% of the Fair Market Value of the
Common Stock at the time the Option is granted and the Option by its own terms
is not exercisable after the expiration of five years from the date the Option
is granted.
An Employee will be considered as owning the stock owned, directly or
indirectly, by or for his brothers and sisters (whether by the whole or half
blood), spouse, ancestors, and lineal descendants. Stock owned, directly or
indirectly, by or for a corporation, partnership, estate or trust will be
considered as being owned proportionately by or for its stockholders, partners
or beneficiaries. For all purposes of this Plan, a parent corporation is any
corporation (other than the Company) in an unbroken chain of corporations
ending with the Company if, on the date of grant of the Option in question,
each of the corporations other than the Company owns stock possessing 50% or
more of the total combined voting power of all classes of stock in one of the
other corporations in that chain; and a subsidiary corporation is any
corporation (other than the Company) in an unbroken chain of corporations
beginning with the Company if, on the date of grant of the Option in question,
each of the corporations, other than the last corporation in the chain, owns
stock possessing 50% or more of the total combined voting power of all classes
of stock in one of the other corporations in that chain.
SECTION 6. MAXIMUM NUMBER OF SHARES SUBJECT TO AN AWARD
The maximum number of shares of Common Stock subject to Options that may be
awarded to any Employee under the Plan during any consecutive three year period
is 100,000.
SECTION 7. STOCK OPTIONS
A. AUTHORITY TO GRANT OPTIONS. The Committee may grant Incentive Stock
Options or Non-Incentive Stock Options at any time during the term of this Plan
to any eligible Employee that it chooses.
Each Option granted shall be approved by the Committee. Subject only to
any applicable limitations set forth in this Plan, the number of shares of
Common Stock to be covered by an Option shall be as determined by the
Committee.
B. OPTION PRICE. The price at which shares may be purchased pursuant to
an Option shall be fixed by the Committee, but such price for an Incentive
Stock Option shall be not less than the Fair Market Value of the shares of
Common Stock on the date the Option is granted. The Committee in its
discretion may provide that the price at which shares may be purchased shall be
more than the minimum price required.
C. DURATION OF OPTIONS. No Option which is an Incentive Stock Option
shall be exercisable after the expiration of ten years from the date such
Option is granted. The Committee in its discretion may provide that such
Option shall be exercisable throughout the ten year period or during any lesser
period of time commencing on or after the date of grant of such Option and
ending upon or before the expiration of the ten year period. If an Employee
owns stock possessing more than 10% of the total combined voting power of all
classes of stock of the corporation employing the Employee or of its parent or
subsidiary corporation, no Option which is an Incentive Stock Option shall be
exercisable after the expiration of five years from the date such Option is
granted. No Option which is a Non-Incentive Stock Option shall be exercisable
after the expiration of ten years from the date such Option is granted. The
Committee in its discretion may provide that such Option shall be
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exercisable throughout the ten year period or during any lesser period of time
commencing on or after the date of grant of such Option and ending upon or
before the expiration of the ten year period.
D. MAXIMUM VALUE OF STOCK SUBJECT TO OPTIONS WHICH ARE INCENTIVE STOCK
OPTIONS. To the extent that the aggregate Fair Market Value (determined as of
the date the Option is granted) of the stock with respect to which Incentive
Stock Options are exercisable for the first time by the Optionee in any
calendar year (under this Plan and any other incentive stock option plan(s) of
the Company and any parent and subsidiary corporation) exceeds $100,000, the
Options shall be treated as Non-Incentive Stock Options. In making this
determination, Options shall be taken into account in the order in which they
were granted.
E. AMOUNT EXERCISABLE. The Committee, in its discretion, may fix the
terms of exercise of any Option so that any Option may be exercised so long as
it is valid and outstanding from time to time in part or as a whole in such
manner and subject to such conditions as it may set. In addition, the
Committee, in its discretion, may accelerate the time in which any outstanding
Option may be exercised. But in no event shall any Option be exercisable after
the tenth anniversary of the date of the grant.
F. EXERCISE OF OPTIONS. An Optionee may exercise such optionee's Option
by delivering to the Company a written notice stating (i) that such optionee
wishes to exercise such Option on the date such notice is so delivered, (ii)
the number of shares of stock with respect to which the Option is to be
exercised and (iii) the address to which the certificate representing such
shares of stock should be mailed. In order to be effective, such written
notice shall be accompanied by (i) payment of the Option Price of such shares
of stock and (ii) payment of an amount of money necessary to satisfy any
withholding tax liability that may result from the exercise of such Option.
Each such payment shall be made by check drawn on a national banking
association and payable to the order of the Company in United States dollars or
other check acceptable to the Committee.
If, at the time of receipt by the Company of such written notice, (i) the
Company has unrestricted surplus in an amount not less than the Option Price of
such shares of stock, (ii) all accrued cumulative preferential dividends and
other current preferential dividends on all outstanding shares of preferred
stock of the Company have been fully paid, (iii) the acquisition by the Company
of its own shares of stock for the purpose of enabling such optionee to
exercise such Option is otherwise permitted by applicable law and without any
vote or consent of any stockholder of the Company, and (iv) there shall have
been adopted, and there shall be in full force and effect, a resolution of the
Board of Directors of the Company authorizing the acquisition by the Company of
its own shares of stock for such purpose, then such optionee may deliver to the
Company, in payment of the Option Price of the shares of stock with respect to
which such Option is exercised, (x) certificates registered in the name of such
optionee that represent a number of shares of stock legally and beneficially
owned by such optionee (free of all liens, claims and encumbrances of every
kind) and having a Fair Market Value on the date of receipt by the Company of
such written notice that is not greater than the Option Price of the shares of
stock with respect to which such Option is to be exercised, such certificates
to be accompanied by stock powers duly endorsed in blank by the record holder
of the shares of stock represented by such certificates, with the signature of
such record holder guaranteed by a national banking association (or, in lieu of
such certificates, other arrangements for the transfer of such shares to the
Company which are satisfactory to the Company) and (y) if the Option Price of
the shares of stock with respect to which such Options are to be exercised
exceeds such Fair Market Value, a check drawn on a national banking association
and payable to the order of the Company in an amount, in United States dollars,
equal to the amount of such excess plus the amount of money necessary to
satisfy any withholding tax liability that may result from the exercise of such
Option. Notwithstanding the provisions of the immediately preceding sentence,
the Committee, in its sole discretion, may refuse to accept shares of stock in
payment of the Option Price of the shares of stock with respect to which such
Option is to be exercised and, in that event, any certificates representing
shares of stock that were received by the Company with such written notice
shall be returned to such optionee, together with notice by the Company to such
optionee of the refusal of the Committee to accept such shares of stock. The
Company may, at its option and upon approval by the Board of Directors of the
Company, retain shares of Common Stock which would otherwise be issued upon
exercise of an Option to satisfy any withholding tax liability that may result
from the exercise of such Option, which shares shall be valued for such purpose
at their then Fair Market Value. If, at
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the expiration of seven business days after the delivery to such optionee of
such written notice from the Company, such optionee shall not have delivered to
the Company a cashier's check drawn on a national banking association and
payable to the order of the Company in an amount, in United States dollars,
equal to the Option Price of the shares of stock with respect to which such
Option is to be exercised, such written notice from the optionee to the Company
shall be ineffective to exercise such Option.
As promptly as practicable after the receipt by the Company of (i) such
written notice from the optionee, (ii) payment, in the form required by the
foregoing provisions of this Paragraph F, of the Option Price of the shares of
stock with respect to which such Option is to be exercised, and (iii) payment,
if required, in the form required by the foregoing provisions of this Paragraph
F, of an amount necessary to satisfy any withholding tax liability that may
result from the exercise of such Option, a certificate representing the number
of shares of stock with respect to which such Option has been so exercised,
reduced, to the extent applicable by the number of shares retained by the
Company to pay any required withholding tax, such certificate to be registered
in the name of such optionee, provided that such delivery shall be considered
to have been made when such certificate shall have been mailed, postage
prepaid, to such optionee at the address specified for such purpose in such
written notice from the optionee to the Company.
G. TRANSFERABILITY OF OPTIONS. Options shall not be transferable by the
optionee except by will or under the laws of descent and distribution, and
shall be exercisable, during his lifetime, only by him. Any attempted sale,
assignment, transfer, pledge or encumbrance of an Option in violation of this
Agreement shall be void and the Company shall not be bound thereby.
H. TERMINATION OF EMPLOYMENT OR DEATH OF OPTIONEE.
1. Except as may be otherwise expressly provided in the Option Agreement
with respect to an Option that is a Non-Incentive Stock Option, all Options
shall terminate on the earlier of the date of the expiration of the Option or
one day less than three months after the date of severance, upon severance of
the employment relationship between the Company and the optionee, whether with
or without cause, for any reason other than the death, Disability or, in the
case of Non-Incentive Stock Options only, Retirement of the optionee, during
which period the optionee shall be entitled to exercise the Option in respect
of the number of shares that the optionee would have been entitled to purchase
had the optionee exercised the Option on the date of such severance of
employment. Whether authorized leave of absence, or absence on military or
government service, shall constitute severance of the employment relationship
between the Company and the optionee for purposes of the Plan shall be
determined by the Committee at the time thereof. In the event of severance
because of the Disability of the holder of any Incentive Stock Option while in
the employ of the Company and before the date of expiration of such Incentive
Stock Option, such Incentive Stock Option shall terminate on the earlier of
such date of expiration or one year following the date of such severance
because of Disability, during which period the optionee shall be entitled to
exercise the Incentive Stock Option in respect to the number of shares that the
optionee would have been entitled to purchase had the optionee exercised the
Incentive Stock Option on the date of such severance because of Disability.
2. In the event of the death of the holder of any Incentive Stock Option
while in the employ of the Company and before the date of expiration of such
Incentive Stock Option, such Incentive Stock Option shall terminate on the
earlier of such date of expiration or one year following the date of death.
After the death of the optionee, his executors, administrators or any person or
persons to whom his Incentive Stock Option may be transferred by will or by the
laws of descent and distribution, shall have the right, at any time prior to
the termination of an Incentive Stock Option to exercise the Incentive Stock
Option, in respect to the number of shares that the optionee would have been
entitled to exercise if he had exercised the Incentive Stock Option on the date
of his death while in employment. For purposes of Incentive Stock Options
issued under this Plan, an employment relationship between the Company and the
optionee shall be deemed to exist during any period in which the optionee is
employed by the Company, a corporation issuing or assuming an option in a
transaction to which Section 424(a) of the Code applies, or a parent or
subsidiary corporation of such corporation issuing or assuming an option. For
this purpose, the phrase "corporation issuing or assuming an option" shall be
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substituted for the word "Company" in the definitions of parent and subsidiary
corporations in Section 5 and the parent-subsidiary relationship shall be
determined at the time of the corporate action described in Section 424(a) of
the Code.
3. In the event of the death, Disability, or Retirement of a holder of a
Non-Incentive Stock Option, before the date of expiration of such Non-Incentive
Stock Option, such Non-Incentive Stock Option shall continue fully in effect,
including provisions providing for subsequent vesting of such Option, and shall
terminate on the date of expiration of the Non-Incentive Stock Option. After
the death of the optionee, his executors, administrators or any person or
persons to whom his Non-Incentive Stock Option may be transferred by will or by
the laws of descent and distribution, shall have the right, at any time prior
to the termination of the Non-Incentive Stock Option to exercise the
Non-Incentive Stock Option, in respect to the number of shares that the
optionee would have been entitled to exercise if he were still alive.
Notwithstanding the foregoing provisions of this Section, in the case of a
Non-Incentive Stock Option the Committee may provide for a different option
termination date in the Option Agreement with respect to such Option.
I. NO RIGHTS AS STOCKHOLDER. No optionee shall have rights as a
stockholder with respect to shares covered by his Option until the date a stock
certificate is issued for the shares. Except as provided in the following
provisions of this Section 7, no adjustment for dividends, or other matters
shall be made if the record date is prior to the date the certificate is
issued.
J. CHANGES IN THE COMPANY'S CAPITAL STRUCTURE. The existence of
outstanding Options shall not affect in any way the right or power of the
Company or its stockholders to make or authorize any or all adjustments,
recapitalizations, reorganizations or other changes in the Company's capital
structure or its business, or any merger or consolidation of the Company, or
any issue of bonds, debentures, preferred or prior preference stock ahead of or
affecting the Common Stock or the rights thereof, or the dissolution or
liquidation of the Company, or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding, whether of a
similar character or otherwise.
If the Company shall effect a subdivision or consolidation of shares or
other capital adjustment of, or the payment of a dividend in capital stock or
other equity securities of the Company on, its Common Stock, or other increase
or reduction of the number of shares of the Common Stock without receiving
consideration therefor in money, services, or property, or the reclassification
of its Common Stock, in whole or in part, into other equity securities of the
Company, then (a) the number, class and per share price of shares of stock
subject to outstanding Options hereunder shall be appropriately adjusted (or in
the case of the issuance of equity securities as a dividend on, or in a
reclassification of, the Common Stock, the Options shall extend to such other
securities) in such a manner as to entitle an optionee to receive, upon
exercise of an Option, for the same aggregate cash compensation, the same total
number and class or classes of shares (or in the case of a dividend of, or
reclassification into, other equity securities, such other securities) he would
have held after such adjustment if he had exercised his Option in full
immediately prior to the event requiring the adjustment, or, if applicable, the
record date for determining stockholders to be affected by such adjustment; and
(b) the number and class of shares then reserved for issuance under the Plan
(or in the case of a dividend of, or reclassification into, other equity
securities, such other securities) shall be adjusted by substituting for the
total number and class of shares of stock then received, the number and class
or classes of shares of stock (or in the case of a dividend of, or
reclassification into, other equity securities, such other securities) that
would have been received by the owner of an equal number of outstanding shares
of Common Stock as the result of the event requiring the adjustment.
Comparable rights shall accrue to each optionee in the event of successive
subdivisions, consolidations, capital adjustment, dividends or
reclassifications of the character described above.
If the Company shall distribute to all holders of its shares of Common
Stock (including any such distribution made to non-dissenting stockholders in
connection with a consolidation or merger in which the Company is the surviving
corporation and in which holders of shares of Common Stock continue to hold
shares of Common Stock after such merger or consolidation) evidences of
indebtedness or cash or other assets (other than cash dividends payable out of
consolidated retained earnings not in excess of, in any one year period, the
greater of
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(a) $.10 per share of Common Stock and (b) two times the aggregate amount of
dividends per share paid during the preceding calendar year and dividends or
distributions payable in shares of Common Stock or other equity securities of
the Company described in the immediately preceding paragraph), then in each
case the Option Price shall be adjusted by reducing the Option Price in effect
immediately prior to the record date for the determination of stockholders
entitled to receive such distribution by the Fair Market Value, as determined
in good faith by the Board of Directors of the Company (whose determination
shall be described in a statement filed in the Company's corporate records and
be available for inspection by any holder of an Option) of the portion of the
evidence of indebtedness or cash or other assets so to be distributed
applicable to one share of Common Stock; provided that in no event shall the
Option Price be less than the par value of a share of Common Stock. Such
adjustment shall be made whenever any such distribution is made, and shall
become effective on the date of the distribution retroactive to the record date
for the determination of the stockholders entitled to receive such
distribution. Comparable adjustments shall be made in the event of successive
distributions of the character described above.
After the Company shall make a tender offer for, or grant to all of its
holders of its shares of Common Stock the right to require the Company to
acquire from such stockholders shares of, Common Stock, at a price in excess of
the Current Market Price (a "Put Right") or the Company shall grant to all of
its holders of its shares of Common Stock the right to acquire shares of Common
Stock for less than the Current Market Price (a "Purchase Right") then, in the
case of a Put Right, the Option Price shall be adjusted by multiplying the
Option Price in effect immediately prior to the record date for the
determination of stockholders entitled to receive such Put Right by a fraction,
the numerator of which shall be the number of shares of Common Stock then
outstanding minus the number of shares of Common Stock which could be purchased
at the Current Market Price for the aggregate amount which would be paid if all
Put Rights are exercised and the denominator of which is the number of shares
of Common Stock which would be outstanding if all Put Rights are exercised;
and, in the case of a Purchase Right, the Option Price shall be adjusted by
multiplying the Option Price in effect immediately prior to the record date for
the determination of the stockholders entitled to receive such Purchase Right
by a fraction, the numerator of which shall be the number of shares of Common
Stock then outstanding plus the number of shares of Common Stock which could be
purchased at the Current Market Price for the aggregate amount which would be
paid if all Purchase Rights are exercised and the denominator of which is the
number of shares of Common Stock which would be outstanding if all Purchase
Rights are exercised. In addition, the number of shares subject to the Option
shall be increased by multiplying the number of shares then subject to the
Option by a fraction which is the inverse of the fraction used to adjust the
Option Price. Notwithstanding the foregoing if any such Put Rights or Purchase
Rights shall terminate without being exercised, the Option Price and number of
shares subject to Option shall be appropriately readjusted to reflect the
Option Price and number of shares subject to the Option which would have been
in effect if such unexercised Rights had never existed. Comparable adjustments
shall be made in the event of successive transactions of the character
described above.
After the merger of one or more corporations into the Company, after any
consolidation of the Company and one or more corporations, or after any other
corporate transaction described in Section 424(a) of the Internal Revenue Code
of 1986, as amended (the "Code") in which the Company shall be the surviving
corporation, each optionee, at no additional cost, shall be entitled to
receive, upon any exercise of his Option, in lieu of the number of shares as to
which the Option shall then be so exercised, the number and class of shares of
stock or other equity securities to which the optionee would have been entitled
pursuant to the terms of the agreement of merger or consolidation if at the
time of such merger or consolidation such optionee had been a holder of a
number of shares of Common Stock equal to the number of shares as to which the
Option shall then be so exercised and, if as a result of such merger,
consolidation or other transaction, the holders of Common Stock are not
entitled to receive any shares of Common Stock pursuant to the terms thereof,
each optionee, at no additional cost, shall be entitled to receive, upon
exercise of his Option, such other assets and property, including cash, to
which he would have been entitled if at the time of such merger, consolidation
or other transaction he had been the holder of the number of shares of Common
Stock equal to the number of shares as to which the Option shall then be so
exercised. Comparable rights shall accrue to each optionee in the event of
successive mergers or consolidations of the character described above.
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<PAGE> 9
After a merger of the Company into one or more corporations, after any
consolidation of the Company and any one or more corporations, or after any
other corporate transaction described in Section 424(a) of the Code in which
the Company is not the surviving corporation, each optionee shall, at no
additional cost, be entitled at the option of the surviving corporation, (i) to
have his then existing Option assumed or to have a new option substituted for
the existing Option by the surviving corporation to the transaction which is
then employing him, or a parent or subsidiary of such corporation, on a basis
where the excess of the aggregate Fair Market Value of the shares subject to
the option immediately after the substitution or assumption over the aggregate
option price of such option is equal to the excess of the aggregate Fair Market
Value of all shares subject to the option immediately before such substitution
or assumption over the aggregate option price of such shares, provided that the
shares subject to the new option must be traded on the New York Stock Exchange
or the American Stock Exchange or quoted on the NASDAQ, or (ii) to receive upon
any exercise of his Option, in lieu of the number of shares as to which the
Option shall then be so exercised, the securities, property and other assets,
including cash, to which the Optionee would have been entitled pursuant to the
terms of the agreement of merger or consolidation or the agreement giving rise
to the other corporate transaction if at the time of such merger, consolidation
or other transaction such optionee had been the holder of the number of shares
of Common Stock equal to the number of shares as to which the Option shall then
be so exercised.
If a corporate transaction described in Section 424(a) of the Code which
involves the Company is to take place and there is to be no surviving
corporation while an Option remains in whole or in part unexercised, it shall
be cancelled by the Board of Directors as of the effective date of any such
corporate transaction but before the date each optionee shall be provided with
a notice of such cancellation and each optionee shall have the right to
exercise such Option in full (without regard to any limitations set forth in or
imposed pursuant to Paragraph 9 of the Plan) to the extent it is then still
unexercised during a 30-day period preceding the effective date of such
corporate transaction.
For purposes of this Paragraph J, "Current Market Price per share of Common
Stock" shall mean the closing price of a share of Common Stock on the principal
national securities exchange on which the Common Stock is listed or, if the
Common Stock is not so listed, the average bid and asked price of a share of
Common Stock as reported in the NASDAQ System, in each case on the trading day
immediately preceding the first trading day on which, as a result of the
establishment of a record date or otherwise, the trading price reflects that an
acquiror of Common Stock in the public market will not participate in or
receive the payment of any applicable dividend or distribution.
Except a hereinbefore expressly provided, the issue by the Company of
shares of Common Stock of any class, or securities convertible into shares of
stock of any class, for cash or property, or for labor or services either upon
direct sale or upon the exercise of rights or warrants to subscribe therefor,
or upon conversion of shares or obligations of the Company convertible into
such shares or other securities, shall not affect, and no adjustment by reason
thereof shall be made with respect to, the number or price of shares of Common
Stock then subject to outstanding Options.
K. SUBSTITUTION OPTIONS. Options may be granted under this Plan from time
to time in substitution for stock options held by employees of other
corporations who are about to become employees of the Company, or whose
employer is about to become a parent or subsidiary corporation, conditioned in
the case of an incentive stock option upon the employee becoming an employee as
the result of a merger or consolidation of the Company with another
corporation, or the acquisition by the Company of substantially all the assets
of another corporation, or the acquisition by the Company of at least 50% of
the issued and outstanding stock of another corporation as the result of which
it becomes a subsidiary of the Company. The terms and conditions of the
substitute Options granted may vary from the terms and conditions of this Plan
to the extent the Board at the time of grant may deem appropriate to conform,
in whole or in part, to the provisions of the stock options in substitution for
which they are granted. But with respect to stock options which are incentive
stock options, no variation shall be made which will affect the status of any
substitute option as an "incentive stock option" under Section 422 of the Code.
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<PAGE> 10
L. ACCELERATION AND CANCELLATION OF OPTION IN CONTEMPLATION OF CHANGE IN
CONTROL. Notwithstanding the provisions of this Section 7, the Committee shall
have the power, in the event of a disposition of all or substantially all of
the assets of the Company, or the dissolution of the Company, or any merger or
consolidation of the Company with or into any other Company, or the merger or
consolidation of any other entity into the Company, or the making of a tender
offer to purchase 30% or more of the outstanding shares of Common Stock, to
amend all outstanding Options (upon such conditions as it shall deem
appropriate) to (i) permit the exercise of Options prior to the effective date
of the transaction and to terminate all unexercised Options as of such date or
(ii) require the forfeiture of all Options, provided the Company pays to each
Optionee the excess of the Fair Market Value of the Stock subject to the Option
over the exercise price of the Option, or (iii) make any other provision with
respect to the Options that the Committee deems appropriate and equitable.
SECTION 8. REQUIREMENTS OF LAW
The Company shall not be required to sell, issue or deliver any shares of
Common Stock under any Award if such sale, issuance or delivery shall
constitute a violation by the Award recipient or the Company of any provisions
of any law or regulation of any governmental authority. Each Award granted
under this Plan shall be subject to the requirements that, if at any time the
Board or the Committee shall determine that the listing, registration or
qualification of the shares upon any securities exchange or under any state or
federal law of the United States or of any other country or governmental
subdivision, or the consent or approval of any governmental regulatory body, or
investment or other representations, are necessary or desirable in connection
with the issue, or purchase or delivery of shares subject to an Award, that
Award shall not be exercised in whole or in part and no shares shall be
delivered pursuant to an Award unless the listing, registration, qualification,
consent, approval or representations shall have been effected or obtained free
of any conditions not acceptable to the Committee. Any determination in this
connection by the Committee shall be final. In the event the shares issuable
or deliverable on exercise or vesting of an Award are not registered under the
Securities Act of 1933, the Company may imprint on the certificate for those
shares the following legend or any other legend which counsel for the Company
considers necessary or advisable to comply with the Securities Act of 1933:
"The shares of stock represented by this certificate have not been
registered under the Securities Act of 1933 or under the securities laws of
any state and may not be sold or transferred except upon registration or
upon receipt by the Corporation of an opinion of counsel satisfactory to
the Corporation, in form and substance satisfactory to the Corporation,
that registration is not required for a sale or transfer."
The Company may, but shall in no event be obligated to, register any securities
covered by this Plan under the Securities Act of 1933 (as now in effect or as
later amended) and, in the event any shares are registered, the Company may
remove any legend on certificates representing those shares. The Company shall
not be obligated to take any other affirmative action in order to cause the
exercise of an Award or the issuance or delivery of shares under the Award to
comply with any law or regulation or any governmental authority.
SECTION 9. EMPLOYMENT OBLIGATION
The granting of any Award shall not impose upon the Company any obligation
to employ or continue to employ any Award recipient. The right of the Company
to terminate the employment of any officer or other Employee shall not be
diminished or affected by reason of the fact that an Award has been granted to
him.
SECTION 10. FORFEITURE FOR CAUSE
Notwithstanding any other provision of this Plan, if the Committee finds by
a majority vote, that the Award recipient, before or after termination of his
employment with the Company (a) committed a fraud, embezzlement, theft, felony
or act of dishonesty in the course of his employment by the Company which
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<PAGE> 11
conduct damaged the Company or (b) disclosed trade secrets of the Company, then
any outstanding options which have not been exercised by the individual and any
Awards which have not yet vested will be forfeited. The decision of the
Committee as to the cause of an Award recipient's discharge, the damage done to
the Company and the extent of the individual's competitive activity will be
final. No decision of the Committee, however, will affect the finality of the
discharge of the individual by the Company.
SECTION 11. AMENDMENT OR TERMINATION OF PLAN
The Board may modify, revise or terminate this Plan at any time and from
time to time. However, without the further Company stockholder approval by a
majority of the votes cast at a duly held stockholders' meeting at which a
quorum representing a majority of all outstanding voting stock (or if the
provisions of the corporate charter, bylaws or applicable state law prescribe a
greater degree of stockholder approval for this action, without the degree of
stockholder approval thus required) is, either in person or by proxy, present
and voting on the issue, the Board may not (a) increase the aggregate number of
shares that may be subject to Awards pursuant to the provisions of this Plan;
(b) materially increase the benefits accruing to participants under this Plan
or (c) materially modify the requirements as to eligibility for participation
in this Plan unless, in each such case, the Board of Directors of the Company
shall have obtained an opinion of legal counsel to the effect that stockholder
approval of the amendment is not required (i) by law, (ii) by the applicable
rules and regulations of, or any agreement with, any national securities
exchange that the Common Stock is then listed on or if the Common Stock is not
so listed, the rules and regulations, or any agreement with, the National
Association of Securities Dealers, Inc., and (iii) in order to make available
to the optionee with respect to any option granted under the Plan, the benefits
of Rule 16b-3 of the Rules and Regulations under the Securities Exchange Act of
1934, or any similar or successor rule.
SECTION 12. WRITTEN AGREEMENT
Each Award granted under this Plan shall be embodied in a written
Agreement, which shall be subject to the terms and conditions prescribed above,
and shall be signed by the recipient and by the appropriate officer of the
Company for and in the name and on behalf of the Company. Each Agreement shall
contain any other provisions consistent with this Plan that the Committee in
its discretion shall deem advisable.
SECTION 13. INDEMNIFICATION OF THE COMMITTEE
The Company shall indemnify each present and future member of the Committee
against, and each member of the Committee shall be entitled without further act
on his part to indemnity from the Company for, all expenses (including the
amount of judgments and the amount of approved settlements made with a view to
the curtailment of costs of litigation, other than amounts paid to the Company
itself) reasonably incurred by him in connection with or arising out of any
action, suit or proceeding in which he may be involved by reason of his being
or having been a member of the Committee, whether or not he continues to be
such member of the Committee at the time of incurring such expenses; provided,
however, that such indemnity shall not include any expenses incurred by any
such member of the Committee (a) in respect of matters as to which he shall be
finally adjudged in any such action, suit or proceeding to have been guilty of
gross negligence or willful misconduct in the performance of his duty as such
member of the Committee, or (b) in respect of any matter in which any
settlement is effected, to an amount in excess of the amount approved by the
Company on the advice of its legal counsel; and provided further, that no right
of indemnification under the provisions set forth herein shall be available to
or enforceable by any such member of the Committee unless, within sixty (60)
days after institution of any such action, suit or proceeding, he shall have
offered the Company, in writing, the opportunity to handle and defend the same
at its own expense. The foregoing right of indemnification shall inure to the
benefit of the heirs, executors or administrators of each such member of the
Committee and shall be in addition to all other rights to which such member of
the Committee may be entitled to as a matter of law, contract or otherwise.
Nothing in this Section shall be construed to limit or otherwise affect any
right to indemnification or payment of expense, or any provisions limiting the
liability of any officer or director of the
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Company or any member of the Committee, provided by law, the Certificate of
Incorporation of the Company or otherwise.
SECTION 14. AWARD GRANT TERMINATION.
No Awards shall be granted pursuant to this Plan after December 18, 2005.
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<PAGE> 1
UTI ENERGY CORP.
NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
1. Purpose. This Non-Employee Director Stock Option Plan (the "Plan") of
UTI Energy Corp., a Delaware corporation (the "Company"), is adopted for the
benefit of the directors of the Company who at the time of their service are
not employees of the Company or any of its subsidiaries ("Non-Employee
Directors"), and is intended to advance the interests of the Company by
providing the Non-Employee Directors with additional incentive to serve the
Company by increasing their proprietary interest in the success of the Company.
2. Administration. The Plan shall be administered by a committee of the
Board of Directors of the Company (the "Committee"), the members of which shall
consist solely of directors who are employees of the Company. For the purposes
of the Plan, a majority of the members of the Committee shall constitute a
quorum for the transaction of business, and the vote of a majority of those
members present at any meeting shall decide any question brought before that
meeting. In addition, the Committee may take any action otherwise proper under
the Plan by the affirmative vote, taken without a meeting, of a majority of its
members. No member of the Committee shall be liable for any act or omission of
any other member of the Committee or for any act or omission on his own part,
including but not limited to the exercise of any power or discretion given to
him under the Plan, except those resulting from his own gross negligence or
willful misconduct. Except as otherwise expressly provided for herein, all
questions of interpretation and application of the Plan, or as to options
granted hereunder (the "Options"), shall be subject to the determination, which
shall be final and binding, of a majority of the whole Committee.
Notwithstanding the above, the selection of Non-Employee Directors to whom
Options are to be granted, the number of shares subject to any Option, the
exercise price of any Option and the term of any Option shall be as hereinafter
provided and the Committee shall have no discretion as to such matters.
3. Option Shares. The stock subject to the Options and other provisions
of the Plan shall be shares of the Company's Common Stock, $.001 par value (or
such other par value as may be designated by act of the Company's stockholders)
(the "Common Stock"). The total amount of the Common Stock with respect to
which Options may be granted shall not exceed in the aggregate 100,000 shares;
provided, that the class and aggregate number of shares which may be subject to
the Options granted hereunder shall be subject to adjustment in accordance with
the provisions of Paragraph 12 hereof. Such shares may be treasury shares or
authorized but unissued shares.
In the event that any outstanding Option for any reason shall expire or
terminate by reason of the death of the optionee or the fact that the optionee
ceases to be a director, the surrender of any such Option, or any other cause,
the shares of Common Stock allocable to the unexercised portion of such Option
may again be subject to an Option under the Plan.
4. Grant of Options. Subject to the provisions of Paragraph 16 and the
availability under the Plan of a sufficient number of shares of Common Stock
that may be issuable upon the exercise of outstanding Options, there shall be
granted the following Options:
(a) To each Non-Employee Director as of December 19, 1995, and each
future Non-Employee Director as the date he is first elected as a director of
the Company, an Option to purchase 2,500 shares of Common Stock at a purchase
price per share of Common Stock (the "Option Price") equal to the fair market
value of the Common Stock as defined in Paragraph 7 hereof as of the date of
grant; and
(b) Commencing on December 31, 1996, each Non-Employee Director who has
served as a non-employee director for a period of at least one year shall
receive on each December 31 on which such person is a
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Non-Employee Director], an Option to purchase 1,250 shares of Common Stock at
an Option Price equal to the fair market value of the Common Stock as defined
in Paragraph 7 hereof as of the date of grant.
No Option shall be granted pursuant to the Plan after December 18, 2005.
5. Duration of Options. Each Option granted under the Plan shall be
exercisable for a term of five years from the date of grant, subject to earlier
termination as provided in Paragraph 9 hereof.
6. Amount Exercisable. Each Option granted pursuant to the Plan shall not
be exercisable for a period of one year from the date of grant. After such
time, such Option shall be fully vested and exercisable throughout the term of
the Option. Notwithstanding the foregoing, no Option granted by virtue of the
amendments effected by this Plan shall be exercisable for a period of six
months following stockholder approval.
7. Exercise of Options. An optionee may exercise such optionee's Option
by delivering to the Company a written notice stating (i) that such optionee
wishes to exercise such Option on the date such notice is so delivered, (ii)
the number of shares of stock with respect to which such Option is to be
exercised, (iii) the address to which the certificate representing such shares
of stock should be mailed, and (iv) the social security number of such
optionee. In order to be effective, such written notice shall be accompanied
by (i) payment of the Option Price of such shares of stock and (ii) if
applicable, payment of an amount of money necessary to satisfy any withholding
tax liability that may result from the exercise of such Option. Each such
payment shall be made by check drawn on a national banking association and
payable to the order of the Company in United States dollars.
If, at the time of receipt by the Company of such written notice, (i) the
Company has unrestricted surplus in an amount not less than the Option Price of
such shares of stock, (ii) all accrued cumulative preferential dividends and
other current preferential dividends on all outstanding shares of preferred
stock of the Company have been fully paid, (iii) the acquisition by the Company
of its own shares of stock for the purpose of enabling such optionee to
exercise such Option is otherwise permitted by applicable law and without any
vote or consent of any stockholder of the Company, and (iv) there shall have
been adopted, and there shall be in full force and effect, a resolution of the
Board of Directors of the Company authorizing the acquisition by the Company of
its own shares of stock for such purpose, then such optionee may deliver to the
Company, in payment of the Option Price of the shares of stock with respect to
which such Option is exercised, (x) certificates registered in the name of such
optionee that represent a number of shares of stock legally and beneficially
owned by such optionee (free of all liens, claims and encumbrances of every
kind) and having a fair market value on the date of receipt by the Company of
such written notice that is not greater than the Option Price of the shares of
stock with respect to which such Option is to be exercised, such certificates
to be accompanied by stock powers duly endorsed in blank by the record holder
of the shares of stock represented by such certificates, with the signature of
such record holder guaranteed by a national banking association (or, in lieu of
such certificates, other arrangements for the transfer of such shares to the
Company which are satisfactory to the Company) and (y) if the Option Price of
the shares of stock with respect to which such Options are to be exercised
exceeds such fair market value, a check drawn on a national banking association
and payable to the order of the Company in an amount, in United States dollars,
equal to the amount of such excess plus the amount of money necessary to
satisfy any withholding tax liability that may result from the exercise of such
Option. Notwithstanding the provisions of the immediately preceding sentence,
the Committee, in its sole discretion, may refuse to accept shares of stock in
payment of the Option Price of the shares of stock with respect to which such
Option is to be exercised and, in that event, any certificates representing
shares of stock that were received by the Company with such written notice
shall be returned to such optionee, together with notice by the Company to such
optionee of the refusal of the Committee to accept such shares of stock. The
Company may, at its option and upon approval by the Board of Directors of the
Company, retain shares of Common Stock which would otherwise be issued upon
exercise of an Option to satisfy any withholding tax liability that may result
from the exercise of such Option, which shares shall be valued for such purpose
at their then fair market value. If, at the expiration of seven business days
after the delivery to such optionee of such written notice from the Company,
such optionee shall not have delivered to the Company a check drawn on a
national banking
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association and payable to the order of the Company in an amount, in United
States dollars, equal to the Option Price of the shares of stock with respect
to which such Option is to be exercised, such written notice from the optionee
to the Company shall be ineffective to exercise such Option.
As promptly as practicable after the receipt by the Company of (i) such
written notice from the optionee, (ii) payment, in the form required by the
foregoing provisions of this Paragraph 7, of the Option Price of the shares of
stock with respect to which such Option is to be exercised, and (iii) payment,
if required, in the form required by the foregoing provisions of this Paragraph
7, of an amount necessary to satisfy any withholding tax liability that may
result from the exercise of such Option, a certificate representing the number
of shares of stock with respect to which such Option has been so exercised,
reduced, to the extent applicable by the number of shares retained by the
Company to pay any required withholding tax, such certificate to be registered
in the name of such optionee, provided that such delivery shall be considered
to have been made when such certificate shall have been mailed, postage
prepaid, to such optionee at the address specified for such purpose in such
written notice from the optionee to the Company.
For purposes of this Paragraph 7, the "fair market value" of a share of
stock as of any particular date shall mean the closing sale price of a share of
Common Stock on that date as reported by the principal national securities
exchange on which the Common Stock is listed if the Common Stock is then listed
on a national securities exchange, or if the Common Stock is not so listed, the
average of the bid and asked price of a share of Common Stock on that date and
reported in the National Association of Securities Dealers Automated Quotation
system (the "NASDAQ System"); provided that if no such closing price or quotes
are so reported on that date or if in the discretion of the Committee another
means of determining the fair market value of a share of stock at such date
shall be necessary or advisable, the Committee may provide for another means
for determining such fair market value.
8. Transferability of Options. Options shall not be transferable by the
optionee otherwise than by will or under the laws of descent and distribution,
and shall be exercisable, during his lifetime, only by him.
9. Termination. Except as may be otherwise expressly provided herein,
each Option, to the extent it shall not previously have been exercised, shall
terminate on the earlier of the following:
(a) On the last day within the three month period commencing on the date on
which the optionee ceases to be a member of the Company's Board of
Directors, for any reason other than the death, disability or
retirement of the optionee, during which period the optionee shall be
entitled to exercise all Options fully vested as described in Paragraph
6 by the optionee on which the optionee ceased on the date on which the
optionee ceased be a member of the Company's Board of Directors;
(b) On the last day within the one year period commencing on the date on
which the optionee ceases to be a member of the Company's Board of
Directors because of permanent disability, during which period the
optionee shall be entitled to exercise all Options fully vested as
described in Paragraph 6 by the optionee on the date on which the
optionee ceased to be a member of the Company's Board of Directors
because of such disability;
(c) On the last day within the one year period commencing on the date of
the optionee's death while serving as a member of the Company's Board
of Directors, during which period the executor or administrator of the
optionee's estate or the person or persons to whom the optionee's
Option shall have been transferred by will or the laws of descent or
distribution, shall be entitled to exercise all Options in respect of
the number of shares that the optionee would have been entitled to
purchase had the optionee exercised such Options on the date of his
death;
(d) On the last day within the one year period commencing on the date an
optionee who has had at least five years of service on the Board of
Directors of the Company retires from the Board of Directors of the
Company, during which period the optionee, or the executor or
administrator of the optionee's
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estate or the person or persons to whom such Option shall have been
transferred by the will or the laws of descent or distribution in the event
of the optionee's death within such one year period, as the case may be,
shall be entitled to exercise all Options in respect of the number of
shares that the optionee would have been entitled to purchase had the
optionee exercised such Options on the date of such retirement; and
(e) Ten years after the date of grant of such Option.
10. Requirements of Law. The Company shall not be required to sell or
issue any shares under any Option if the issuance of such shares shall
constitute a violation by the optionee or the Company of any provisions of any
law or regulation of any governmental authority. Each Option granted under the
Plan shall be subject to the requirements that, if at any time the Board of
Directors of the Company or the Committee shall determine that the listing,
registration or qualification of the shares subject thereto upon any securities
exchange or under any state or federal law of the United States or of any other
country or governmental subdivision thereof, or the consent or approval of any
governmental regulatory body, or investment or other representations, are
necessary or desirable in connection with the issue or purchase of shares
subject thereto, no such Option may be exercised in whole or in part unless
such listing, registration, qualification, consent, approval or representation
shall have been effected or obtained free of any conditions not acceptable to
the Board of Directors. If required at any time by the Board of Directors or
the Committee, an Option may not be exercised until the optionee has delivered
an investment letter to the Company. In addition, specifically in connection
with the Securities Act of 1933 (as now in effect or hereafter amended), upon
exercise of any Option, the Company shall not be required to issue the
underlying shares unless the Committee has received evidence satisfactory to it
to the effect that the holder of such Option will not transfer such shares
except pursuant to a registration statement in effect under such Act or unless
an opinion of counsel satisfactory to the Company has been received by the
Committee to the effect that such registration is not required. Any
determination in this connection by the Committee shall be final, binding and
conclusive. In the event the shares issuable on exercise of an Option are not
registered under the Securities Act of 1933, the Company may imprint on the
certificate for such shares the following legend or any other legend which
counsel for the Company considers necessary or advisable to comply with the
Securities Act of 1933:
"The shares of stock represented by this certificate have not been
registered under the Securities Act of 1933 or under the securities laws of
any state and may not be sold or transferred except upon such registration
or upon receipt by the Corporation of an opinion of counsel satisfactory,
in form and substance to the Corporation, that registration is not required
for such sale or transfer."
The Company may, but shall in no event be obligated to, register any securities
covered hereby pursuant to the Securities Act of 1933 (as now in effect or as
hereafter amended) and, in the event any shares are so registered, the Company
may remove any legend on certificates representing such shares. The Company
shall not be obligated to take any other affirmative action in order to cause
the exercise of an Option or the issuance of shares pursuant thereto to comply
with any law or regulation of any governmental authority.
11. No Rights as Stockholder. No optionee shall have rights as a
stockholder with respect to shares covered by his Option until the date of
issuance of a stock certificate for such shares; and, except as otherwise
provided in Paragraph 12 hereof, no adjustment for dividends, or otherwise,
shall be made if the record date therefor is prior to the date of issuance of
such certificate.
12. Changes in the Company's Capital Structure. The existence of
outstanding Options shall not affect in any way the right or power of the
Company or its stockholders to make or authorize any or all adjustments,
recapitalizations, reorganizations or other changes in the Company's capital
structure or its business, or any merger or consolidation of the Company, or
any issue of bonds, debentures, preferred or prior preference stock ahead of or
affecting the Common Stock or the rights thereof, or the dissolution or
liquidation of the Company, or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding, whether of a
similar character or otherwise.
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If the Company shall effect a subdivision or consolidation of shares or
other capital adjustment of, or the payment of a dividend in capital stock or
other equity securities of the Company on, its Common Stock, or other increase
or reduction of the number of shares of the Common Stock without receiving
consideration therefor in money, services, or property, or the reclassification
of its Common Stock, in whole or in part, into other equity securities of the
Company, then (a) the number, class and per share price of shares of stock
subject to outstanding Options hereunder shall be appropriately adjusted (or in
the case of the issuance of equity securities as a dividend on, or in a
reclassification of, the Common Stock, the Options shall extend to such other
securities) in such a manner as to entitle an optionee to receive, upon
exercise of an Option, for the same aggregate cash compensation, the same total
number and class or classes of shares (or in the case of a dividend of, or
reclassification into, other equity securities, such other securities) he would
have held after such adjustment if he had exercised his Option in full
immediately prior to the event requiring the adjustment, or, if applicable, the
record date for determining stockholders to be affected by such adjustment; and
(b) the number and class of shares then reserved for issuance under the Plan
(or in the case of a dividend of, or reclassification into, other equity
securities, such other securities) shall be adjusted by substituting for the
total number and class of shares of stock then received, the number and class
or classes of shares of stock (or in the case of a dividend of, or
reclassification into, other equity securities, such other securities) that
would have been received by the owner of an equal number of outstanding shares
of Common Stock as the result of the event requiring the adjustment.
Comparable rights shall accrue to each optionee in the event of successive
subdivisions, consolidations, capital adjustment, dividends or
reclassifications of the character described above.
If the Company shall distribute to all holders of its shares of Common
Stock (including any such distribution made to non-dissenting stockholders in
connection with a consolidation or merger in which the Company is the surviving
corporation and in which holders of shares of Common Stock continue to hold
shares of Common Stock after such merger or consolidation) evidences of
indebtedness or cash or other assets (other than cash dividends payable out of
consolidated retained earnings not in excess of, in any one year period, the
greater of (a) $.10 per share of Common Stock and (b) two times the aggregate
amount of dividends per share paid during the preceding calendar year and
dividends or distributions payable in shares of Common Stock or other equity
securities of the Company described in the immediately preceding paragraph),
then in each case the Option Price shall be adjusted by reducing the Option
Price in effect immediately prior to the record date for the determination of
stockholders entitled to receive such distribution by the fair market value, as
determined in good faith by the Board of Directors of the Company (whose
determination shall be described in a statement filed in the Company's
corporate records and be available for inspection by any holder of an Option)
of the portion of the evidence of indebtedness or cash or other assets so to be
distributed applicable to one share of Common Stock; provided that in no event
shall the Option Price be less than the par value of a share of Common Stock.
Such adjustment shall be made whenever any such distribution is made, and shall
become effective on the date of the distribution retroactive to the record date
for the determination of the stockholders entitled to receive such
distribution. Comparable adjustments shall be made in the event of successive
distributions of the character described above.
After the Company shall make a tender offer for, or grant to all of its
holders of its shares of Common Stock the right to require the Company to
acquire from such stockholders shares of, Common Stock, at a price in excess of
the Current Market Price (a "Put Right") or the Company shall grant to all of
its holders of its shares of Common Stock the right to acquire shares of Common
Stock for less than the Current Market Price (a "Purchase Right") then, in the
case of a Put Right, the Option Price shall be adjusted by multiplying the
Option Price in effect immediately prior to the record date for the
determination of stockholders entitled to receive such Put Right by a fraction,
the numerator of which shall be the number of shares of Common Stock then
outstanding minus the number of shares of Common Stock which could be purchased
at the Current Market Price for the aggregate amount which would be paid if all
Put Rights are exercised and the denominator of which is the number of shares
of Common Stock which would be outstanding if all Put Rights are exercised;
and, in the case of a Purchase Right, the Option Price shall be adjusted by
multiplying the Option Price in effect immediately prior to the record date for
the determination of the stockholders entitled to receive such Purchase Right
by a fraction, the numerator of which shall be the number of shares of Common
Stock then outstanding plus the number of shares of Common Stock which could be
purchased at the Current Market Price for the
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<PAGE> 6
aggregate amount which would be paid if all Purchase Rights are exercised and
the denominator of which is the number of shares of Common Stock which would be
outstanding if all Purchase Rights are exercised. In addition, the number of
shares subject to the Option shall be increased by multiplying the number of
shares then subject to the Option by a fraction which is the inverse of the
fraction used to adjust the Option Price. Notwithstanding the foregoing if any
such Put Rights or Purchase Rights shall terminate without being exercised, the
Option Price and number of shares subject to Option shall be appropriately
readjusted to reflect the Option Price and number of shares subject to the
Option which would have been in effect if such unexercised Rights had never
existed. Comparable adjustments shall be made in the event of successive
transactions of the character described above.
After the merger of one or more corporations into the Company, after any
consolidation of the Company and one or more corporations, or after any other
corporate transaction described in Section 424(a) of the Internal Revenue Code
of 1986, as amended (the "Code") in which the Company shall be the surviving
corporation, each optionee, at no additional cost, shall be entitled to
receive, upon any exercise of his Option, in lieu of the number of shares as to
which the Option shall then be so exercised, the number and class of shares of
stock or other equity securities to which the optionee would have been entitled
pursuant to the terms of the agreement of merger or consolidation if at the
time of such merger or consolidation such optionee had been a holder of a
number of shares of Common Stock equal to the number of shares as to which the
Option shall then be so exercised and, if as a result of such merger,
consolidation or other transaction, the holders of Common Stock are not
entitled to receive any shares of Common Stock pursuant to the terms thereof,
each optionee, at no additional cost, shall be entitled to receive, upon
exercise of his Option, such other assets and property, including cash, to
which he would have been entitled if at the time of such merger, consolidation
or other transaction he had been the holder of the number of shares of Common
Stock equal to the number of shares as to which the Option shall then be so
exercised. Comparable rights shall accrue to each optionee in the event of
successive mergers or consolidations of the character described above.
After a merger of the Company into one or more corporations, after any
consolidation of the Company and any one or more corporations, or after any
other corporate transaction described in Section 424(a) of the Code in which
the Company is not the surviving corporation, each optionee shall, at no
additional cost, be entitled at the option of the surviving corporation, (i) to
have his then existing Option assumed or to have a new option substituted for
the existing Option by the surviving corporation to the transaction which is
then employing him, or a parent or subsidiary of such corporation, on a basis
where the excess of the aggregate fair market value of the shares subject to
the option immediately after the substitution or assumption over the aggregate
option price of such option is equal to the excess of the aggregate fair market
value of all shares subject to the option immediately before such substitution
or assumption over the aggregate option price of such shares, provided that the
shares subject to the new option must be traded on the New York Stock Exchange
or the American Stock Exchange or quoted on the NASDAQ, or (ii) to receive upon
any exercise of his Option, in lieu of the number of shares as to which the
Option shall then be so exercised, the securities, property and other assets,
including cash, to which the Optionee would have been entitled pursuant to the
terms of the agreement of merger or consolidation or the agreement giving rise
to the other corporate transaction if at the time of such merger, consolidation
or other transaction such optionee had been the holder of the number of shares
of Common Stock equal to the number of shares as to which the Option shall then
be so exercised.
If a corporate transaction described in Section 424(a) of the Code which
involves the Company is to take place and there is to be no surviving
corporation while an Option remains in whole or in part unexercised, it shall
be cancelled by the Board of Directors as of the effective date of any such
corporate transaction but before the date each optionee shall be provided with
a notice of such cancellation and each optionee shall have the right to
exercise such Option in full (without regard to any limitations set forth in or
imposed pursuant to Paragraph 9 of the Plan) to the extent it is then still
unexercised during a 30-day period preceding the effective date of such
corporate transaction.
For purposes of this Paragraph 12, "Current Market Price per share of
Common Stock" shall mean the closing price of a share of Common Stock on the
principal national securities exchange on which the Common
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<PAGE> 7
Stock is listed or, if the Common Stock is not so listed, the average bid and
asked price of a share of Common Stock as reported in the NASDAQ System, in
each case on the trading day immediately preceding the first trading day on
which, as a result of the establishment of a record date or otherwise, the
trading price reflects that an acquiror of Common Stock in the public market
will not participate in or receive the payment of any applicable dividend or
distribution.
Except a hereinbefore expressly provided, the issue by the Company of
shares of Common Stock of any class, or securities convertible into shares of
stock of any class, for cash or property, or for labor or services either upon
direct sale or upon the exercise of rights or warrants to subscribe therefor,
or upon conversion of shares or obligations of the Company convertible into
such shares or other securities, shall not affect, and no adjustment by reason
thereof shall be made with respect to, the number or price of shares of Common
Stock then subject to outstanding Options.
13. Amendment or Termination of Plan. The Board of Directors may modify,
revise or terminate the Plan at any time and from time to time; provided,
however, that without the further approval of the holders of a majority of the
shares of voting stock present in person or by proxy at a meeting of
stockholders, or if the provisions of the corporate charter, by-laws or
applicable state law prescribes a greater degree of stockholder approval for
this action, without the degree of stockholder approval thus required, the
Board of Directors may not (a) change the aggregate number of shares which may
be issued under Options pursuant to the provisions of the Plan; (b) reduce the
option price permitted for the Options; (c) extend the term during which an
option may be exercised or the termination date of the Plan; or (d) materially
increase any other benefits accruing to directors under the Plan or materially
modify the requirements as to eligibility for participation in the Plan unless,
in each such case, the Board of Directors of the Company shall have obtained an
opinion of legal counsel to the effect that stockholder approval of the
amendment is not required (i) by law, (ii) by the applicable rules and
regulations of, or any agreement with, any national securities exchange that
the Common Stock is then listed on or if the Common Stock is not so listed, the
rules and regulations, or any agreement with, the National Association of
Securities Dealers, Inc., and (iii) in order to make available to the optionee
with respect to any option granted under the Plan, the benefits of Rule 16b-3
of the Rules and Regulations under the Securities Exchange Act of 1934, or any
similar or successor rule. In addition, the terms of the Plan relating to the
number of shares that may be subject to an Option, the times at which Options
shall be granted, and the means by which the Option Price for Options granted
is to be determined shall not be amended more than once every six months, other
than to comport with changes in the Code, the Employee Retirement Income
Security Act or the rules thereunder.
14. Written Agreement. Each Option granted hereunder shall be embodied in
a written option agreement, which shall be subject to the terms and conditions
prescribed above, and shall be signed by the optionee and by the appropriate
officer of the Company for and in the name and on behalf of the Company. Such
an option agreement shall contain such other provisions as the Committee in its
discretion shall deem advisable.
15. Indemnification of Committee. The Company shall indemnify each present
and future member of the Committee against, and each member of the Committee
shall be entitled without further act on his part to indemnity from the Company
for, all expenses (including the amount of judgments and the amount of approved
settlements made with a view to the curtailment of costs of litigation, other
than amounts paid to the Company itself) reasonably incurred by him in
connection with or arising out of any action, suit or proceeding in which he
may be involved by reason of his being or having been a member of the
Committee, whether or not he continues to be such member of the Committee at
the time of incurring such expenses; provided, however, that such indemnity
shall not include any expenses incurred by any such member of the Committee (a)
in respect of matters as to which he shall be finally adjudged in any such
action, suit or proceeding to have been guilty of gross negligence or willful
misconduct in the performance of his duty as such member of the Committee, or
(b) in respect of any matter in which any settlement is effected, to an amount
in excess of the amount approved by the Company on the advice of its legal
counsel; and provided further, that no right of indemnification under the
provisions set forth herein shall be available to or enforceable by any such
member of the Committee unless, within sixty (60) days after institution of any
such action, suit or proceeding, he shall have offered the
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<PAGE> 8
Company, in writing, the opportunity to handle and defend same at its own
expense. The foregoing right of indemnification shall inure to the benefit of
the heirs, executors or administrators of each such member of the Committee and
shall be in addition to all other rights to which such member of the Committee
may be entitled to as a matter of law, contract, or otherwise. Nothing in this
Section 15 shall be construed to limit or otherwise affect any right to
indemnification, or payment of expense, or any provisions limiting the
liability of any officer or director of the Company or any member of the
Committee, provided by law, the Certificate of Incorporation of the Company or
otherwise.
16. Effective Date of Plan. The Plan shall be deemed to have been adopted
and effective on December 19, 1995, when and if approved by the holders of a
majority of the shares of voting stock of the Company represented in person or
by proxy at the Company's Annual Meeting of Stockholders to be held in 1996.
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EXHIBIT 5.1
[LETTERHEAD OF FULBRIGHT & JAWORSKI L.L.P.]
September 30, 1996
UTI Energy Corp.
Suite 112
485 Devon Park Drive
Wayne, Pennsylvania 19087
Gentlemen:
We have acted as counsel for UTI Energy Corp., a Delaware corporation
(the "Company"), in connection with the registration under the Securities Act
of 1933 of 901,600 shares of the Company's common stock, $.001 par value (the
"Shares"), 486,600 shares of which are to be offered upon the terms and subject
to the conditions set forth in the Company's 1993 Non-Qualified Stock Option
Plan (the "1993 Plan"), 15,000 shares of which are to be offered upon the terms
and subject to the conditions set forth in the First Amendment to Termination
Agreement and Release (the "Termination Agreement") dated August 23, 1996,
between the Company and Eddie L. Nowell, 300,000 of which are to be offered
upon the terms and subject to the conditions set forth in the Company's 1996
Employee Stock Option Plan (the "1996 Plan"), and 100,000 of which are to be
offered upon the terms and subject to the conditions set forth in the Company's
Non-Employee Director Stock Option Plan.
In connection therewith, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of the Restated
Certificate of Incorporation of the Company, as amended, the amended Bylaws of
the Company, the 1993 Plan, the Termination Agreement, the 1996 Plan, the
Director Plan, the records of relevant corporate proceedings with respect to
the offering of the Shares and such other documents and instruments as we have
deemed necessary or appropriate for the expression of the opinions contained
herein. We also have examined the Company's Registration Statement on Form S-8
(the "Registration Statement") to be filed with the Securities and Exchange
Commission with respect to the Shares.
We have assumed the authenticity and completeness of all records,
certificates and other instruments submitted to us as originals, the conformity
to original documents of all records, certificates and other instruments
submitted to us as copies, the authenticity and completeness of the originals
of those records, certificates and other instruments submitted to us as copies
and the correctness of all statements of fact contained in all records,
certificates and other instruments that we have examined.
Based on the foregoing, and having regard for such legal
considerations as we have deemed relevant, we are of the opinion that the
Shares have been duly and validly authorized for issuance and, when issued in
accordance with the terms of the 1993 Plan, the Termination Agreement, the 1996
Plan or the Director Plan, as the case may be, will be duly and validly issued,
fully paid and nonassessable.
The opinions expressed herein relate solely to, are based solely upon
and are limited exclusively to the laws of the State of Delaware and the
federal laws of the United States of America, to the extent applicable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name under the caption "Item 5.
Interests of Named Experts and Counsel" in the Registration Statement.
Very truly yours,
/s/ Fulbright & Jaworski L.L.P.
Fulbright & Jaworski L.L.P.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration
Statement (Form S-8) pertaining to the UTI Energy Corp. 1993 Non-qualified
Stock Option Plan, the First Amendment to Termination Agreement and Release,
the UTI Energy Corp. 1996 Employee Stock Option Plan and the UTI Energy Corp.
Non-Employee Director Stock Option Plan of our report dated February 22, 1996,
with respect to the consolidated financial statements and schedule of UTI
Energy Corp. included in its Annual Report (Form 10-K) for the year ended
December 31, 1995, filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
Philadelphia, Pennsylvania
September 30, 1996
