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EXHIBIT 10.9
UTI ENERGY CORP.
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (this "Agreement"), is made and entered
into effective as of the 19th day of December, 1995, by and between UTI Energy
Corp., a Delaware corporation (the "Company"), and Remy Investors and
Consultants Incorporated, a Delaware corporation ("Optionee").
W I T N E S S E T H:
WHEREAS, the Company's Board of Directors has determined that it is in
the interest of the Company, in consideration for past consulting services on
behalf of the Company, to grant to the Optionee the right to acquire certain
shares of the Company's common stock, $.001 par value per share (the "Common
Stock"), subject to the terms and provisions of this Agreement.
NOW, THEREFORE, in consideration of the mutual undertakings,
covenants, conditions and agreements contained herein, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and Optionee agree with each other as follows:
1. Grant of Stock Option. The Company hereby grants to Optionee,
subject to the provisions hereinafter set forth, the right (the "Option") to
purchase 120,000 shares of Common Stock of the Company (the "Option Shares").
The Option Shares shall be subject to adjustment as hereinafter set forth.
This Option shall be exercisable at any time after the date hereof and on or
before December 18, 2000 (the "Expiration Date").
2. Exercise Price. The exercise price per share for which all or
any of the Option Shares may be purchased shall be $511/16 (the "Exercise
Price"). The Exercise Price shall be subject to adjustment as hereinafter set
forth.
3. Exercise.
(a) The Option may be exercised by Optionee, in full or
in part, for the purchase of any of the Option Shares upon delivery by
Optionee of written notice to the Company at the address of the
Company set forth in Section 8, or such other address as the Company
shall designate in written notice to Optionee, setting forth the
number of Option Shares with respect to which the Option is being
exercised,
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together with the Option and payment (in the manner described in
Section 3(b) below) for the aggregate Exercise Price of the Option
Shares so purchased. Upon the exercise of the Option, the Company
shall as promptly as practicable execute and deliver to Optionee a
certificate or certificates for the total number of whole Option
Shares for which the Option is being exercised in such names and
denominations as are requested by Optionee. If the Option shall be
exercised with respect to less than all of the Option Shares, Optionee
shall be entitled to receive a new Option covering the number of
Option Shares in respect of which the Option shall not have been
exercised, which new Option shall in all other respects be identical
to the Option.
(b) Payment for the Option Shares to be purchased upon
the exercise of the Option may be made by the delivery of a check
payable to the Company in the amount of the aggregate Exercise Price
of the Option Shares to be purchased.
4. Covenants and Conditions. The above provisions are subject to
the following:
(a) Optionee acknowledges and agrees that neither the
Option nor the Option Shares have been registered under the Securities
Act of 1933, as amended (the "Act"), or any state securities laws
("Blue Sky Laws"). Optionee covenants and agrees that the Option and
the Option Shares have been acquired for investment purposes and not
with a view to distribution or resale and the Option Shares may not be
made subject to a security interest, pledged, hypothecated, sold or
otherwise transferred without an effective registration statement
therefor under the Act and such applicable Blue Sky Laws or an opinion
of counsel (which opinion and counsel rendering same shall be
reasonably acceptable to the Company) that registration is not
required under the Act and under any applicable Blue Sky Laws. The
certificates representing the Option Shares shall bear substantially
the following legend:
THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), OR QUALIFIED UNDER ANY APPLICABLE STATE
SECURITIES LAWS, BUT HAVE BEEN ACQUIRED FOR THE PRIVATE
INVESTMENT OF THE HOLDER HEREOF AND MAY NOT BE OFFERED, SOLD
OR TRANSFERRED UNTIL (I) A REGISTRATION STATEMENT UNDER THE
ACT OR SUCH APPLICABLE STATE SECURITIES LAWS SHALL HAVE BECOME
EFFECTIVE WITH REGARD THERETO, OR (II) IN THE OPINION OF
COUNSEL (WHICH OPINION AND COUNSEL SHALL BE REASONABLY
SATISFACTORY TO THE COMPANY) REGISTRATION UNDER THE ACT OR
SUCH APPLICABLE STATE SECURITIES LAWS SHALL HAVE BECOME
EFFECTIVE WITH REGARD THERETO, OR (III) IN THE OPINION OF
COUNSEL (WHICH OPINION AND COUNSEL SHALL BE REASONABLY
SATISFACTORY TO THE COMPANY) REGISTRATION UNDER THE LAW OR
SUCH APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED IN
CONNECTION WITH SUCH PROPOSED OFFER, SALE OR TRANSFER.
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Other legends as required by applicable federal and state laws may be
placed on such certificates. Optionee and the Company agree to
execute such documents and instruments as counsel for the Company
reasonably deems necessary to effect compliance of the issuance of the
Option and any Option Shares issued upon the exercise thereof with
applicable federal and state securities laws. Optionee agrees that
the Company may decline to permit a transfer of the Option if the
proposed transferee does not meet the applicable qualifications for
investors in securities offerings exempt from registration.
(b) The Company covenants and agrees that all Option
Shares which may be issued upon the exercise of the Option will, upon
issuance and payment therefor, be legally and validly issued and
outstanding, fully paid and nonassessable.
5. Rights as a Shareholder. The Option does not confer upon
Optionee any right whatsoever as a shareholder of the Company.
6. Changes in the Company's Capital Structure. The existence of
the Option 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 the number, class and per share price of shares
of stock subject to the Option 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 Option shall extend to such other securities) in such
a manner as to entitle the holder to receive, upon exercise of the 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) it would have held after such
adjustment if the holder had exercised the Option in full immediately prior to
the event requiring the adjustment. Comparable rights shall accrue in the
event of successive subdivisions, consolidations, capital adjustments,
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
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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
Exercise Price shall be adjusted by reducing the Exercise 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 the holder of the 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
Exercise 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 Exercise Price (the "Exercise Right") then, in the case
of a Put Right, the Exercise Price shall be adjusted by multiplying the
Exercise 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 Exercise Price shall be adjusted by
multiplying the Exercise 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 Exercise Price. Notwithstanding the foregoing if any such
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Put Rights or Purchase Rights shall terminate without being exercised, the
Exercise Price and number of shares subject to the Option shall be
appropriately readjusted to reflect the Exercise 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 with or 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 holder of the Option, at no additional
cost, shall be entitled to receive, upon any exercise of the Option, in lieu of
the number of shares as to which the Option may then be so exercised, the
number and class of shares of stock or other equity securities to which the
holder would have been entitled pursuant to the terms of the agreement of
merger or consolidation if at the time of such merger or consolidation the
holder had been a holder of a number of shares of Common Stock equal to the
number of shares as to which the Option may 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, the holder, at no additional cost, shall be entitled to
receive, upon exercise of the Option, such other assets and property, including
cash, to which the holder would have been entitled if at the time of such
merger, consolidation or other transaction the holder 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 in the
event of successive mergers or consolidations of the character described above.
For purposes of this Section 6, "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 as 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 the Option.
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7. Reservation of Common Stock. The Company will, at all times
during the term of this Agreement, reserve and keep available out of its
authorized but unissued shares of Common Stock, solely for the purpose of
effecting the exercise of the Option, such number of shares of Common Stock of
the Company as shall from time to time be sufficient to effect the exercise of
the Option. If, at any time, the number of authorized but unissued shares of
Common Stock shall not be sufficient to effect the exercise of the entire
Option, in addition to such other remedies as shall be available to the holder
of the Option, the Company will use its reasonable efforts to take such
corporate action as may, in the opinion of its counsel, be necessary to
increase its authorized but unissued shares of Common Stock to such number of
shares as shall be sufficient for such purposes.
8. Restrictions on Transfer.
The shares of Common Stock acquired upon the exercise of the
Option shall not be sold, pledged, hypothecated or otherwise transferred unless
such shares are exempt from registration under the Act and any applicable state
securities laws.
9. Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
given if delivered or mailed, first class, with postage prepaid, to:
If to the Company, addressed to:
UTI Energy Corp.
000 Xxxxx Xxxx Xxxxx, Xxxxx 000
Xxxxx, Xxxxxxxxxxxx 00000
Attention: President
If to the Optionee, addressed to:
Remy Investors and Consultants Incorporated
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxx
Delivery shall be made to such other address for notice as either
party shall hereafter notify the other party in writing, from time to time.
10. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas without giving any
effect to conflicts of law provisions.
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11. Entire Agreement. This Agreement contains the entire
understanding between the parties hereto concerning the subject matter
contained herein. There are no representations, agreements, arrangements, or
understandings, oral or written, between or among the parties hereto, relating
to the subject matter of this Agreement, which are not fully expressed herein.
12. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which shall
be deemed to be one and the same instrument, regardless of whether one or more
parties sign the same counterpart.
IN WITNESS WHEREO, the parties hereto have executed this Agreement to
be effective the date first set forth above.
UTI ENERGY CORP.
By: /s/ Xxxxxx X. Drum
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Name: Xxxxxx X. Drum
Title: President and Chief Executive Officer
REMY INVESTORS AND
CONSULTANTS INCORPORATED
By: /s/ Xxxx X. Xxxxxx
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Name: Xxxx X. Xxxxxx
Title: President
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