D. XXXX XXXX
STOCK OPTION AGREEMENT
This Stock Option Agreement dated as of October 5, 1995 is entered
into by and between Xxxxxxxxxxx Enterra, Inc., a Delaware
corporation ("Weatherford"), and D. Xxxx Xxxx (the "Optionee").
WITNESSETH:
WHEREAS, the Optionee is currently a consultant to Weatherford
in accordance with the terms of the Consulting Agreement of even date
herewith (the "Consulting Agreement"); and
WHEREAS, as part of the Optionee's compensation under the
Consulting Agreement, Weatherford has agreed to grant him an
option to purchase up to 84,500 shares of common stock, $.10 par
value, of Weatherford ("Common Stock");
NOW, THEREFORE, in consideration of the covenants and
agreements herein contained, the parties hereto hereby agree as
follows:
1. GRANT OF OPTION. Subject to the terms and conditions
hereinafter set forth, Weatherford hereby grants to the Optionee
the right and option (the "Option") to purchase up to 84,500
shares (after giving effect to the one-for-two reverse stock
split effected on even date herewith) of Common Stock (the
"Shares"). Such number of Shares shall be subject to adjustment
as hereinafter provided. The Option does not constitute an
"incentive stock option" within the meaning of the Internal
Revenue Code of 1986, as amended.
2. OPTION PRICE. The option price of the Shares shall be
$25.75 per Share. Such price shall be subject to adjustment as
hereinafter provided.
3. EXERCISE OF OPTION. The period during which the Option
is in effect shall be referred to as the "Option Period", which
shall begin on October 5, 1995 (the "Grant Date"). The Option
Period shall terminate at midnight on October 4, 2005 (the
"Expiration Date"). No exercise of the Option may be made prior
to one year after the Grant Date.
Subject to the provisions of the preceding paragraph
and Section 10 of this Agreement, the Option shall be exercisable
as follows:
On or after
October 5, 1996 20% of the Shares can be purchased
by the Optionee.
On or after
October 5, 1997 20% of the Shares can be purchased
by the Optionee, plus any Shares
that could have been purchased
previously but were not.
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On or after
October 5, 1998 20% of the Shares can be purchased
by the Optionee, plus any Shares
that could have been purchased
previously but were not.
On or after
October 5, 1999 20% of the Shares can be purchased
by the Optionee, plus any Shares
that could have been purchased
previously but were not.
On or after
October 5, 2000 All Shares not previously purchased
can be purchased by the Optionee.
If the Optionee wishes to exercise the Option, the
Optionee will deliver a written, signed notice to the Corporate
Secretary of Weatherford setting forth the number of Shares with
respect to which the Option is being exercised and the address to
which the certificates representing such Shares should be mailed.
To be effective, such written notice shall be accompanied, at the
time of its delivery to the Corporate Secretary, by payment of
the option price of such Shares, which payment shall be made by
check, payable to the order of Weatherford in an amount, in
United States dollars, equal to the option price of such Shares.
Alternatively, subject to the provisions of Rule 16b-3 of the
Securities Exchange Act of 1934, payment of the option price may
be made by the Optionee's delivering to the Corporate Secretary
such written, signed exercise notice together with irrevocable
instructions to a broker to promptly deliver to Weatherford an
amount equal to the option price of such Shares, such amount
being either from loan proceeds or from the sale of the Shares to
be issued to the Optionee.
If, in the opinion of counsel for Weatherford, any law
or regulation requires Weatherford to take such action with
respect to the Shares specified in such notice, then the date of
the delivery of such Shares and payment therefor shall be
extended for the period necessary to take such action.
4. LIMITATION OF RIGHTS OF THE OPTIONEE. The Optionee
shall have no rights with respect to any Shares not expressly
conferred by this Agreement.
5. NO ASSIGNMENT. This Agreement and the Option granted
hereunder are of a personal nature and the Optionee's rights with
respect thereto may not be sold, mortgaged, pledged, assigned,
hypothecated, transferred, conveyed or disposed of in any manner
by the Optionee, and shall not be exercisable by any person,
other than the Optionee, except as expressly permitted hereby.
Any such attempted sale, mortgage, pledge, assignment,
hypothecation, transfer, conveyance, disposition or exercise
shall be void and Weatherford shall not be bound thereby.
Notwithstanding the above and subject to the provisions
of Section 10 of this Agreement, the Option granted hereunder may
be transferred by will or the laws of descent and distribution.
In addition, the Optionee may transfer the Option granted
hereunder to his children,
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grandchildren or spouse or to one or more trusts for the
benefit of such family members or to partnerships in which
such family members are the only partners (a "Family Transfer"),
provided that the Optionee receives no consideration for a Family
Transfer and that the option documents relating to the Family Transfer
provide for the same terms and conditions that are applicable to the
Option.
6. SUCCESSORS. This Agreement shall be binding upon any
successors of Weatherford and the heirs, successors and legal
representatives of the Optionee.
7. RESTRICTIONS ON TRANSFER; COMPLIANCE WITH THE
SECURITIES ACT.
X. Xxxxxxxxxxx shall use reasonable efforts to
register for sale under the Securities Act of 1933 (the
"Securities Act") the Shares represented by this Option.
Weatherford shall not be obligated to issue any shares of Common
Stock pursuant to this Option at any time when the Shares have
not been registered under the Securities Act, notwithstanding
Xxxxxxxxxxx'x efforts to do so, and such other state and federal
laws, rules or regulations as Weatherford deems applicable and,
in the opinion of legal counsel for Weatherford, there is no
exemption from the registration requirements of such laws, rules
or regulations available for the issuance and sale of such
Shares. If the Shares are not registered for sale under the
Securities Act, Weatherford shall use reasonable efforts to cause
the issuance of any Shares pursuant to this Option to qualify for
an exemption from such laws, rules or regulations, if any
exemption is available. If such an exemption is available, the
Optionee (or the person permitted to exercise this Option under
Section 5 or 10 of this Agreement), if requested by Weatherford
to do so, will execute and deliver to Weatherford in writing an
agreement containing such provisions as Weatherford may require
to assure compliance with such exemption and such laws, rules or
regulations.
B. The Shares shall not be transferable except upon
the conditions specified in this Section 7, which conditions are
intended, among other things, to ensure compliance with the
provisions of the Securities Act in respect of the transfer of
the Shares.
C. If the Shares are not registered for sale under
the Securities Act, the Optionee by acceptance hereof agrees that
prior to the transfer or attempted transfer of the Shares, he, or
his successor in interest, will give written notice to
Weatherford of his intention to effect such transfer. Each such
notice shall (i) describe the manner and circumstances of the
proposed transfer in sufficient detail, (ii) contain an
undertaking by the person giving such notice to furnish such
other information as may be required to enable counsel to render
the opinions referred to below and (iii) designate the counsel
for the person giving such notice. The person giving such notice
shall submit a copy thereof to the counsel designated in such
notice and Weatherford shall submit a copy thereof to its
counsel.
(1) If in the opinion of each such counsel the
proposed transfer of the Shares may be effected without
registration under the Securities Act of the Shares, Weatherford
shall, as promptly as practicable, so notify the Optionee, and he
shall thereupon be entitled to transfer the Shares in accordance
with the terms of the notice delivered by such holder to
Weatherford.
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(2) If in the opinion of either of such counsel
the proposed transfer of the Shares may not be effected without
registration under the Securities Act of the Shares, Weatherford
shall, as promptly as practicable, so notify the Optionee, and
Weatherford shall not be obligated to effect such transfer of the
Shares.
D. If the Shares are not registered for sale under
the Securities Act, each certificate for Shares issued upon
exercise of this Option shall bear a legend to the effect that
the Shares may not be transferred except upon compliance with the
provisions of this Section 7, and each certificate for Shares
transferred pursuant to Subsection C(1) of this Section 7 shall
also bear such a legend unless, in the opinion of counsel for
Weatherford, a legend is not required. The legend shall read in
the form substantially as follows:
"The shares of stock represented by this certificate
shall 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
Xxxxxxxxxxx Enterra, Inc. of an opinion of counsel satisfactory
to Weatherford, in form and substance satisfactory to
Weatherford, that registration is not required for such sale or
transfer."
E. The Optionee hereby covenants and agrees with
Weatherford as follows:
(1) The Optionee acknowledges that the Shares
must be held by him indefinitely unless the Shares are registered
for sale by him under the Securities Act or an exemption from
such registration is available. He understands that any sale of
the Shares made in reliance upon Rule 144 under the Securities
Act may be made only in limited amounts after the expiration of
two years from the date of receipt of the Shares and otherwise in
accordance with the terms and conditions of such Rule.
(2) Weatherford may instruct its transfer agent
not to transfer any of the Shares unless such agent has been
advised by Weatherford or otherwise has been satisfied that the
Optionee has complied with the provisions described above.
8. CHANGES IN XXXXXXXXXXX'X CAPITAL STRUCTURE. This
Option shall not affect in any way the right or power of
Weatherford or its stockholders to make or authorize any or all
adjustments, recapitalizations, reorganizations or other changes
in Xxxxxxxxxxx'x capital structure or its business, or any merger
or consolidation of Weatherford, 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 Weatherford, or any sale, transfer,
lease, exchange or other disposition of all or any part of its
assets or business, or any corporate act or proceeding, whether
of a similar character or otherwise.
If Weatherford shall effect a subdivision or
consolidation of shares of Common Stock or the payment of a stock
dividend on the Common Stock outstanding, without receiving
compensation therefor in money, services or property, or if
Weatherford recapitalizes or otherwise changes its capital
structure, then
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(A) The number, class and per share price of the
Shares shall be appropriately adjusted in such a manner as to
entitle the Optionee to receive upon exercise of this Option, for
the same aggregate cash consideration, the same total number and
class of shares as he would have received had he exercised this
Option in full immediately prior to the event requiring the
adjustment; and
(B) The number and class of shares then reserved for
issuance pursuant to this Option shall be adjusted by
substituting for the total number and class of shares of Common
Stock then reserved that number and class of shares of stock that
would have been received by the owner of an equal number of
outstanding shares of Common Stock as a result of the event
requiring the adjustment.
9. OTHER ISSUANCES. Except as hereinbefore expressly
provided, the issue by Weatherford of shares of stock of any
class, or securities convertible into shares of stock of any
class, for cash, property, labor or services, upon direct sale,
upon the exercise of rights or warrants to subscribe therefor, or
upon conversion of shares or obligations of Weatherford
convertible into such shares or other securities, and in any case
whether or not for fair value, shall not affect, and no
adjustment by reason thereof shall be made with respect to, the
number or price of Shares subject to this Option.
10. LIMITATIONS ON EXERCISABILITY; DEATH OF OPTIONEE. In
the event of the termination of the Consulting Agreement pursuant
to subsection (i), (iii) or (iv) of Section 2(b) thereof before
October 5, 2000, this Option shall thereafter be exercisable only
with respect to such number of Shares that could be purchased by
the Optionee immediately prior to such termination. After the
death of the Optionee, his executors, administrators or any other
person or persons to whom this Option may be transferred by will
or by the laws of descent and distribution, shall have the right,
at any time prior to the Expiration Date, to exercise this
Option, in whole or in part, in accordance with the terms hereof.
11. NOTICES. Every notice or other communication relating
to this Option shall be in writing and shall be mailed to or
delivered to the party for whom it is intended at such address as
may from time to time be designated by it in a notice mailed or
delivered to the other party as herein provided; provided that,
unless and until some other address be so designated, all notices
or communication by the Optionee to Weatherford shall be
addressed to the Corporate Secretary of Weatherford and mailed or
delivered to Weatherford at its office at the following address:
Xxxxxxxxxxx Enterra, Inc.
0000 Xxxx Xxx Xxxxxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
All notices or communications by Weatherford to the Optionee may
be given to the Optionee personally or may be mailed to him at
the following address:
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D. Xxxx Xxxx
0000 Xxxxxxx Xxxxx Xx.
Xxxxxxx, Xxxxx 00000
12. AMENDMENT. This Agreement may be amended, modified,
superseded or canceled only by a written instrument executed by
both parties hereto.
13. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS
WITHOUT GIVING EFFECT TO CONFLICTS OF LAW PROVISIONS.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the day and year first above written.
XXXXXXXXXXX ENTERRA, INC.
By: /s/ Xxxxxx Xxxxxxxxxx
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Name: Xxxxxx Xxxxxxxxxx
Title: Chairman, President and
Chief Executive Officer
Optionee
/s/ D. Xxxx Xxxx
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D. XXXX XXXX
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