Exhibit 10.14
GREY WOLF, INC
AMENDMENT TO NON-QUALIFIED STOCK OPTION AGREEMENT
November 13, 2001
THIS AMENDMENT TO NON-QUALIFIED STOCK OPTION AGREEMENT (this
"Agreement" is by and among Grey Wolf, Inc. (f/k/a DI Industries, Inc.), a
Texas Corporation (the "Corporation"), Xxxxxx X. Xxxxxxxx (the "Optionee") and
Xxxxxxxx Brothers Interests, L.P., a Texas limited partnership ("RBI"), and is
an amendment to that certain Non-Qualified Stock Option Agreement entered into
by and between the Corporation and the Optionee as of September 3, 1996 (the
"NSO Agreement").
WHEREAS, the Corporation granted an option to purchase all or a part of
an aggregate number of two million (2,000,000) shares of common stock of the
Corporation to Optionee under the NSO Agreement;
WHEREAS, pursuant to that certain Option Purchase Agreement dated
September 3, 1996 between Optionee and RBI, RBI purchased from Optionee an
option to purchase all or part of an aggregate number of one million (1,000,000)
shares of common stock of the Corporation together with a corresponding
undivided interest in the rights and obligations of Optionee under the NSO
Agreement (the "RBI Options");
WHEREAS, the Options granted pursuant to the NSO Agreement,
subsequently exercised by the Optionee and RBI and currently held by Optionee
and RBI are reflected on Exhibit "A" hereto;
WHEREAS, the Board of Directors of the Corporation has approved certain
changes to the NSO Agreement in this Agreement pursuant to that certain
Unanimous Consent of Board of Directors dated November 13, 2001;
WHEREAS, the Corporation, the Optionee and RBI deem it desirable, for
and in the best interests of the parties to this Agreement, to modify the NSO
Agreement as provided herein; and
WHEREAS, for purposes of this Agreement references to Optionee shall
include RBI and references to Option or Options shall also include the RBI
Options.
NOW THEREFORE BE IT RESOLVED, that the Corporation, Optionee and RBI do
hereby agree to amend the NSO Agreement as follows:
1. Corporate Proceedings of the Corporation. Section 8(b) and 8(c) of
the NSO Agreement shall be deleted in their entirety and the following new
Sections 8(b) and 8(c) substituted therefor and new Section 8(f) shall be added:
"8. Corporate Proceedings of the Corporation.
(b) If the Corporation merges into or with or consolidates
with (such
events collectively referred herein as a "Merger") any
corporation or corporations and is not the surviving
corporation, then the Corporation shall cause the surviving
corporation to assume the Option or substitute a new option of
the surviving corporation for the Option (with an Exercise
Period at least equal to the period remaining until the
Expiration Date for the Option). In the event that the Option
is assumed or a new option of the surviving corporation is
substituted for the Option (i) if, on the effective date of
the Merger, the Option is "in the money" the excess of the
aggregate fair market value of the shares subject to the
Option immediately after such assumption, or the new option
immediately after such substitution, over the aggregate
Exercise Price of such shares must be, based upon a good faith
determination by the Board of Directors of the Corporation,
not less than the excess of the aggregate fair market value of
the Common Stock subject to the Option immediately before such
substitution or assumption over the aggregate Exercise Price
of such Common Stock and (ii) if, on the effective date of the
Merger, the Option is "out of the money" the excess of the
aggregate Exercise Price of the shares subject to the Option
immediately after such assumption, or the new option
immediately after such substitution over the fair market value
of such shares must be, based upon a good faith determination
by the Board of Directors of the Corporation, not more than
the excess of the aggregate Exercise Price of the Common Stock
subject to the Option immediately before such assumption or
substitution over the aggregate fair market value of such
Common Stock.
(c) In the event of a dissolution or liquidation of
the Corporation, the Corporation shall cause written notice of
such dissolution or liquidation (and the material terms and
conditions thereof) to be delivered to the Optionee at least
thirty (30) days prior to the proposed effective date (the
"Effective Date") of such event. The Optionee (and the
Optionee's transferees) shall be entitled to exercise the
Option (as to all Option Shares, whether or not the Option is
then otherwise exercisable under Section 2) until the earlier
of the Effective Date or the Expiration Date. Any Option which
has not been exercised on or before the Effective Date shall
terminate. Notwithstanding the foregoing, in the event that
Optionee (and/or Optionee's transferees) is precluded from
immediately selling the Option Shares received upon the
exercise of the Option by applicable state or federal
securities laws, the Corporation agrees to loan to Optionee
(and/or Optionee's transferees, if applicable) amounts
necessary to fund the Payments to the Corporation pursuant to
Section 3 hereof upon the exercise of the Option. The loans
contemplated by this Section shall bear interest (at the
average borrowing rate charged from time to time on the
Company's indebtedness to its principal lender or lenders),
shall be secured by the Option Shares issued upon the exercise
of the applicable Option and shall be repayable promptly after
the lapse of the securities laws restrictions which precluded
the sale of the Option Shares by Optionee (and Optionee's
transferees, if applicable) immediately after exercise of the
Option. To the extent that the dissolution or liquidation is
consummated after the Expiration Date, the Option shall
terminate and the Corporation shall have no
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further obligations of any type hereunder. The provisions of
this paragraph shall not apply to any merger or
reorganization, the principal purpose of which is to change
the jurisdiction of the domicile of the Corporation.
(f) In the event that neither the shares of stock of
the Corporation nor shares of stock of the surviving
corporation are listed on an established exchange as a result
of a "going private" transaction, the Fair Market Value of the
Option (as to all Option Shares, whether or not the Option is
then exercisable under Section 2) shall be determined as soon
as practicable after completion of the "going private"
transaction. Optionee shall be paid the Fair Market Value of
such Option by cashiers check or wire transfer of immediately
available funds within ten (10) days after the determination
of such Fair Market Value. The Option shall terminate upon
receipt of such payment by the Optionee. For purposes of this
Section 8(f), the "Fair Market Value" of the Option purchased
shall be determined as follows: (i) If the Optionee and the
Corporation can agree on the Fair Market Value of the Option
within fifteen (15) days following completion of the going
private transaction, the Fair Market Value will be the agreed
value of the Option; (ii) If the Optionee and Corporation
cannot agree on the Fair Market Value of the Option, the value
will be determined as follows: (1) Each party shall, within
thirty (30) days following completion of the going private
transaction, provide written notice of the appointment of an
appraiser to the other party. If the parties appoint the same
appraiser or if only one appraiser is timely appointed, then
the timely appointed appraiser shall be the only appraiser and
shall prepare and deliver the appraised value of the Option
taking into consideration the "Black-Scholes" method of
valuation of such Option within thirty (30) days following its
appointment; (2) If the parties each timely appoint different
appraisers, such appraisers shall agree upon a third appraiser
within fifteen (15) days following their appointment. If such
appraisers cannot agree upon a third appraiser within fifteen
(15) days following their appointment, either the Optionee or
the Corporation may petition any United States federal
district court in the Southern District of Texas to appoint
such appraiser; (3) Each appraiser shall complete his
appraisal of the Option taking into consideration the
"Black-Scholes" method of valuation of such Option and deliver
a copy of his written appraisal to the Optionee and the
Corporation within thirty (30) days of such appraiser's
appointment; (4) If there is more than one appraiser, the Fair
Market Value shall be the mathematical average of the two
closest appraisals; (5) Each appraiser appointed hereunder
shall have been actively involved in the business of valuing
and appraising companies in the oil and gas service industry
for the five year period immediately preceding the date of
appointment; and (6) The parties understand and agree that the
value of the Option is dependent upon a valuation of the
Corporation and that the appraisers shall have access to the
business records, assets and properties of the Corporation as
they may reasonably request for the purpose of appraising the
value of the Option."
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2. Termination. Section 9 of the NSO Agreement shall be deleted in
their entirety and the following new Section 9 substituted therefor:
"9. Termination. If the Optionee ceases to be
employed by the Corporation, or a parent or subsidiary
corporation of the Corporation for any reason whatsoever, and
prior to such cessation, the Optionee was employed at all
times from the date of the granting of the Option until the
date of such cessation, the Option shall be exercisable by the
Optionee at any time on or before the Expiration Date.
Notwithstanding the foregoing, if the Optionee is terminated
for Cause (as defined in the Employment Agreement), the Option
will terminate as to all of the unexercised Option Shares on
the thirtieth day following such termination, during which
thirty (30) days the Optionee may exercise the Option as to
the Option Shares exercisable on or prior to the date of such
termination for Cause.
Nothing in this Section 9 shall extend the time for
exercising the Option granted pursuant to this Agreement
beyond the Expiration Date."
3. In all other respect, the terms and provisions of the NSO Agreement
are hereby reaffirmed by the Corporation and the Optionee.
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IN WITNESS WHEREOF, the parties have executed this Amendment to NSO
Agreement as of the date first above written.
GREY WOLF, INC.
By:__________________________________________
Name: XXXXXX X. XXXXXXX
Title: CHAIRMAN, COMPENSATION COMMITTEE
BOARD OF DIRECTORS
XXXXXX X. XXXXXXXX
_____________________________________________
Title: PRESIDENT AND CHIEF EXECUTIVE OFFICER
XXXXXXXX BROTHERS INTERESTS, L.P.
By: XXXXXXXX BROTHERS COMPANY,
GENERAL PARTNER
By: _________________________________________
XXXXXX X. XXXXXXXX,
PRESIDENT
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EXHIBIT "A"
TO
GREY WOLF, INC.
AMENDMENT TO NON-QUALIFIED STOCK OPTION AGREEMENTS
NOVEMBER 13, 2001
NUMBER OF OPTIONS
OPTIONEE DATE OF ORIGINAL OPTION AGREEMENT GRANTED {EXERCISE)
-------- ----------------------- --------- ------------------
Xxxxxx X. Xxxxxxxx September 3, 1996 1,000,000 (350,000}
TOTAL OUTSTANDING 650,000
Xxxxxxxx Brothers Interests, L.P. September 3, 1996 1,000,000 {550,000}
TOTAL OUTSTANDING 450,000
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