NON-STATUTORY STOCK OPTION AGREEMENT Optionee:
Exhibit 10.5
T-3 ENERGY SERVICES, INC.
Optionee:
1. Grant of Stock Option. As of the Grant Date (identified in Section 17 below), T-3 Energy
Services, Inc., a Delaware corporation (the “Company”), hereby grants a Non-statutory Stock Option
(the “Option”) to the Optionee (identified above), a non-employee director of the Company, to
purchase the number of shares of the Company’s common stock, $.001 par value per share (the” Common
Stock”) identified in Section 17 below (the “Shares”), subject to the terms and conditions of this
agreement (the “Agreement”) and the T-3 Energy Services 2002 Stock Incentive Plan (the “Plan”).
The Plan is hereby incorporated herein in its entirety by reference. The Shares, when issued to
Optionee upon the exercise of the Option, shall be fully paid and non-assessable. The Option is not
an “incentive stock option” as defined in Section 422 of the Internal Revenue Code.
2. Definitions. All capitalized terms used herein shall have the meanings set forth in the
Plan unless otherwise provided herein. Section 17 sets forth meanings for certain of the
capitalized terms used in this Agreement.
3. Option Term. The Option shall commence on the Grant Date (identified in Section 17) and
terminate on the tenth (10th) anniversary of the Grant Date as specified in Section 17. The period
during which the Option is in effect and may be exercised is referred to herein as the “Option
Period”.
4. Option Price. The Option Price per Share is identified in Section 17.
5. Vesting. The total number of Shares subject to this Option shall vest in accordance with
the Vesting Schedule (described in Section 17). The Shares may be purchased at any time after they
become vested, in whole or in part, during the Option Period; provided, however, the Option may
only be exercisable to acquire whole Shares. The right of exercise provided herein shall be
cumulative so that if the Option is not exercised to the maximum extent permissible after vesting,
the vested portion of the Option shall be exercisable, in whole or in part, at any time during the Option Period.
6. Method of Exercise. The Option is exercisable by delivery of a written notice to the
Secretary of the Company, signed by the Optionee, specifying the number of Shares to be acquired
on, and the effective date of, such exercise. The Optionee may withdraw notice of exercise of this
Option, in writing, at any time prior to the close of business on the business day preceding the
proposed exercise date.
7. Method of Payment. Subject to applicable provisions of the Plan, the Option Price upon
exercise of the Option shall be payable to the Company in full either: (i) in cash or its
equivalent; (ii) subject to prior approval by the Committee in its discretion, by tendering
previously acquired Shares having an aggregate Fair Market Value (as defined
in the Plan) at the time of exercise equal to the total Option Price (provided that the Shares
must have been held by the Optionee for at least six (6) months prior to their
tender to satisfy the Option Price); (iii) subject to prior approval by the Committee in its
discretion, by withholding Shares which otherwise would be acquired on exercise having an aggregate
Fair Market Value at the time of exercise equal to the total Option Price; or (iv) any other
permitted method pursuant to the applicable terms and conditions of the Plan. As soon as
practicable after receipt of a written notification of exercise and full payment, the Company shall
deliver to or on behalf of the Optionee, in the name of the Optionee or other appropriate
recipient, Share certificates or other evidence of ownership for the number of Shares purchased
under the Option.
8. Restrictions on Exercise. The Option may not be exercised if the issuance of such Shares or
the method of payment of the consideration for such Shares would constitute a violation of any
applicable federal or state securities or other laws or regulations, or any rules or regulations of
any stock exchange on which the Common Stock may be listed. In addition, Optionee understands and
agrees that the Option cannot be exercised if the Company determines that such exercise, at the
time of such exercise, will be in violation of the Company’s xxxxxxx xxxxxxx policy.
9. Termination of Directorship Service. Voluntary or involuntary termination of the Optionee
as a member of the Company’s Board of Directors shall affect Optionee’s rights under the Option as
follows:
(a) Termination for Cause. The entire Option, including any vested portion thereof, shall
expire at 12:01 a.m. (CST) on the date of termination of the Optionee’s directorship and shall not
be exercisable to any extent if Optionee’s directorship is terminated for Cause (as defined in the
Plan at the time of such termination of directorship).
(b) Other Involuntary Termination or Voluntary Termination. Subject to the Vesting Schedule in
Section 17, if Optionee’s directorship is terminated for any reason other than for Cause, then (i)
any non-vested portion of the Option shall immediately expire on the termination date and (ii) the
vested portion of the Option shall expire to the extent not exercised as of the earlier of (A) the
expiration of the Option Period or (B) two (2) years after the effective date of his termination of
directorship.
10. Independent Legal and Tax Advice. Optionee acknowledges that the Company has advised
Optionee to obtain independent legal and tax advice regarding the grant and exercise of the Option
and the disposition of any Shares acquired thereby.
11. Reorganization of Company. 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 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 Shares 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.
12. Adjustment of Shares. In the event of stock dividends, spin-offs of assets or other
extraordinary dividends, stock splits, combinations of shares, recapitalizations, mergers,
consolidations, reorganizations, liquidations, issuances of rights or warrants and similar
transactions or events involving Company, appropriate adjustments shall be made to the terms and
provisions of the Option as provided in the Plan.
13. No Rights in Shares. Optionee shall have no rights as a stockholder in respect of the
Shares until the Optionee becomes the record holder of such Shares.
14. Investment Representation. Optionee will enter into such written representations,
warranties and agreements as Company may reasonably request in order to comply with any federal or
state securities law. Moreover, any stock certificate for any Shares issued to Optionee hereunder
may contain a legend restricting their transferability as determined by the Company in its
discretion. Optionee agrees that Company shall not be obligated to take any affirmative action in
order to cause the issuance or transfer of Shares hereunder to comply with any law, rule or
regulation that applies to the Shares subject to the Option.
15. No Guarantee of Directorship. The Option shall not confer upon Optionee any right to
continued membership on the Company’s Board of Directors.
16. General.
(a) Notices. All notices under this Agreement shall be mailed or delivered by hand to the
parties at their respective addresses set forth beneath their signatures below or at such other
address as may be designated in writing by either of the parties to one another, or to their
permitted transferees if applicable. Notices shall be effective upon receipt.
(b) Shares Reserved. The Company shall at all times during the Option Period reserve and keep
available under the Plan such number of Shares as shall be sufficient to satisfy the requirements
of this Option.
(c) Transferability of Option. The Option is transferable only to the extent permitted under
the Plan at the time of transfer (i) by will or by the laws of descent and distribution, (ii) by a
qualified domestic relations order (as defined in Section 414(p) of the Internal Revenue Code), or
(iii) to Optionee’s Immediate Family. No right or benefit hereunder shall in any manner be liable
for or subject to any debts, contracts, liabilities, obligations or torts of Optionee or any
permitted transferee thereof.
(d) Amendment and Termination. No amendment, modification or termination of this Agreement
shall be made at any time without the written consent of Optionee and Company.
(e) No Guarantee of Tax Consequences. The Company makes no commitment or
guarantee that any tax treatment will apply or be available to Optionee or any other person. The
Optionee has been advised, and provided with the opportunity, to obtain independent legal and tax
advice regarding the grant and exercise of the Option and the disposition of any Shares acquired
thereby.
(f) Severability. In the event that any provision of this Agreement shall be held illegal,
invalid, or unenforceable for any reason, such provision shall be fully severable,
but shall not affect the remaining provisions of the Agreement, and the Agreement shall be
construed and enforced as if the illegal, invalid, or unenforceable provision had not been included
herein.
(g) Supersedes Prior Agreements. This Agreement shall supersede and replace all
prior agreements and understandings, oral or written, between the Company and the Optionee
regarding the grant of the Options covered hereby.
(h) Governing Law. The Option shall be construed in accordance with the laws of the State of
Delaware, without regard to its conflict of law provisions, to the extent federal law does not
supersede and preempt Delaware law.
17. Definitions and Other Terms. The following capitalized terms shall have those meanings set
forth opposite them:
| (a) | Optionee: | ||
| (b) | Grant Date: | ||
| (c) | Shares: | ||
| (d) | Option Price: | ||
| (e) | Option Period: | ||
| (f) | Vesting Schedule: |
In the event of a “Change in Control” of the Company (as defined in the Plan at the time of
such event), the non-vested portion of the Option shall become immediately 100% vested as of the
Change in Control date. In addition, in the event that Optionee (i) is not nominated for
re-election to the Board, (ii) is nominated for re-election to the Board but is not re-elected to
the Board, or (iii) is involuntarily forced to resign or is removed from his position as a director
on the Board for whatever reason except for Cause, then any non-vested portion of the Option at
such time shall become immediately 100% vested as of the date of such event. In the event that
Optionee voluntarily resigns his position as a director on the Board for whatever reason, or is
involuntarily removed from such position for Cause, then no accelerated vesting shall occur.
[Signature page follows.]
IN WITNESS WHEREOF, the Company, as of the Grant Date, has caused this Agreement to be
executed on its behalf by its duly authorized officer and Optionee has hereunto executed this
Agreement as of the same date.
| T-3 ENERGY SERVICES, INC. | ||||||||
| By: | ||||||||
| Name: | ||||||||
| Title: | ||||||||
| Address for Notices: | ||||||||
| T-3 Energy Services, Inc. | ||||||||
| 00000 Xxxxxxxxx Xxxxxxx, Xxxxx 000 | ||||||||
| Xxxxxxx, XX 00000 | ||||||||
| Attn: Corporate Secretary | ||||||||
| OPTIONEE | ||||||||
| Signature: | ||||||||
| Address for Notices: | ||||||||
