EXHIBIT 4.2
FORM OF STOCK OPTION AWARD AGREEMENT
Xxxxxx Drilling Company
Third Amended and Restated 1997 Stock Plan
THIS STOCK OPTION AWARD AGREEMENT (this "Agreement") is made and
entered into as of ___________ by and between Xxxxxx Drilling Company, a
Delaware corporation ("Xxxxxx"), and the below named individual ("Participant").
RECITALS
WHEREAS, in consideration of the presently existing relationship
between the Company and the Participant, and as an additional inducement to
provide employees, directors or consultants who are in a position to contribute
to the growth, management and success of the business of the Company and its
subsidiaries, it is agreed between the Company and Participant as follows:
1. Defined Terms. As used herein, the following terms shall have the
following meanings:
(a) "Compensation Committee" shall mean the Compensation Committee
of the Board which shall be composed of at least two
non-employee directors as determined by the Board.
(b) "Plan" shall mean the Xxxxxx Drilling Company 1997 Stock Plan,
including any amendments thereto.
(c) "Participant" shall mean ___________.
(d) "Prospectus" shall mean the prospectus describing the terms
and conditions of the Plan, as amended.
(e) "Option Shares" shall mean ______ shares of the Common Stock
of the Company, par value 16-2/3 cents per share.
(f) "Expiration Date" shall mean ____________.
(g) "Board" shall mean the Board of Directors of Xxxxxx.
Any other capitalized terms used herein shall be defined in accordance
with the definitions in the Plan.
2. Option Grant. The Company hereby grants to Participant, subject to
the terms hereof and the terms of the Plan, the right and option to purchase all
or any part of
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the Option Shares on or before the Expiration Date (the "Option"); provided,
that the Option shall vest and become exercisable as non-qualified stock options
in _____l installments of _________ on ___________. No exercise as to a portion
of the Option Shares shall preclude a later exercise or exercises as to
additional portions. Further, the Option shall be exercisable upon vesting only
(a) as provided in paragraph 3(b) hereof, (b) during such time as Participant
remains an employee, director or consultant of the Company, (c) in the event of
disability (for purposes of this Agreement, Participant shall be considered
disabled if he/she is unable to engage in substantial gainful activity by reason
of any medically determinable physical or mental impairment 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) during employment, until the
earlier of the Expiration Date or one year after commencement of Participant's
disability, (d) in the event of death during employment, until the earlier of
the Expiration Date or one year after Participant's death, or (e) as otherwise
provided in the Plan.
3. Terms and Conditions of the Option. The Option shall be subject to
the following terms and conditions:
(a) Option Price. The price to be paid for each of the Option
Shares with respect to which the Option is exercised, shall be $ _____
(the "Option Price").
(b) Exercise of Option. The option to purchase the Option
Shares shall be exercisable as specified herein and in the Plan.
Payment of the Option Price for the number of shares as to which the
option is being exercised may be paid (i) in cash, (ii) in shares of
Common Stock held by the Participant having an aggregate Fair Market
Value, as determined as of the close of business on the day on which
such Option is exercised, equal to the Option Price, (iii) if permitted
by the Board or the Compensation Committee, by delivery of
Participant's promissory note in the amount of the Option Price, which
note shall provide for full personal liability and contain such terms
and provisions as the Board or Compensation Committee may determine,
including without limitation the right to repay the note partially or
wholly with Common Stock, (iv) by delivery of irrevocable instructions
to a broker to promptly deliver to the Company the amount of sale or
loan proceeds necessary to pay for all Common Stock acquired through
such exercise and any tax withholding obligations resulting from such
exercise, (v) if permitted by the Board or Compensation Committee, by
the withholding by the Company, pursuant to a written election
delivered by the Participant to the Administrator of the Plan on or
prior to the date of exercise, from the shares of Common Stock issuable
upon any exercise of the Option that number of shares having a Fair
Market Value as of the close of business on the day prior to the day on
which such Option is exercised equal to such Option Price, (vi) if
permitted by the Board or Compensation Committee, by constructive
delivery of shares of Common Stock held by the Participant having an
aggregate Fair Market Value, as determined as of the close of business
on the day of exercise, equal to the Option Price effected through
providing the Company with a notarized statement on or before the day
of exercise attesting to the number of shares owned by the Participant
that will serve as the Option Price payment shares, or (vii) by a
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combination of such methods. The option shall not be exercisable with
respect to fractions of a share.
(c) Notice of Exercise. Each exercise of the Option shall be
by written notice to the Company. Each such notice shall state the
number of Option Shares with respect to which the Option is being
exercised and shall specify a date, not less than five nor more than
ten days after the date of such notice, as the date on which the shares
will be delivered and payment made therefor at the principal offices of
the Company. If any law or regulation requires the Company to take any
action with respect to the shares specified in such notice, then the
date for delivery of such shares against payment therefor shall be
extended for the period necessary to take such action. In the event of
any failure to pay for the number of shares specified in such notice on
the date set forth therein, subject to such date being extended as
provided above, the Option shall terminate with respect to such number
of shares, but shall continue with respect to the remaining shares
covered by this Agreement and not yet acquired by exercise of the
Option or any portion thereof.
(d) Investment Representation. If shares of stock issued
pursuant to exercise of the Option have not been registered under the
Securities Act of 1933, as amended (the "Securities Act"), Participant
agrees to represent and warrant in writing at the time of any exercise
of the Option or any portion thereof that the Option Shares are being
purchased only for investment and without any present intention to sell
or distribute such shares, and further agrees that shares so acquired
may be appropriately legended and will be sold or transferred only in
accordance with the rules and regulations of the Securities and
Exchange Commission (the "SEC") or any applicable law, regulation, or
rule of any governmental agency.
(e) Taxes. Participant shall pay all original issue or
transfer taxes and all other fees and expenses incident to the issue,
transfer, or delivery of Option Shares.
(f) Nonassignability. Except as specifically authorized by the
Board, the Option shall be exercisable during Participant's lifetime
only by Participant, and shall not be assigned, transferred, pledged,
hypothecated, sold or otherwise disposed of, in whole or in part,
voluntarily or involuntarily, any such assignment, transfer, pledge,
hypothecation, sale or other disposition being void and of no effect;
provided, however, that the Option shall be transferable by will or the
laws of descent and distribution.
(g) No Rights Until Issue. No right to vote or receive
dividends or any other rights as a stockholder of the Company shall
exist with respect to the Option Shares, notwithstanding the exercise
of the Option, until the underlying shares have been duly listed on the
New York Stock Exchange and the issuance to the Participant of a stock
certificate or certificates representing such shares.
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(h) Anti-dilution. In the event of a merger, consolidation,
reorganization, recapitalization, stock dividend, stock split or other
change in the corporate structure or capitalization of the Company, the
number of Option Shares and the Option Price shall be subject to
appropriate adjustments as described in the Plan.
The Option is also subject to, and, by accepting and executing this Agreement,
Participant agrees to be bound by, all of the terms, provisions, limitations and
conditions of the Plan.
4. Cancellation or Reduction. The Board may elect to cancel the Option
or reduce the number of Option Shares at any time prior to the exercise of the
Option, as described in the Plan.
5. The Plan. Participant acknowledges receipt of a copy of the
Prospectus and the Plan and represents that he/she is familiar with the terms
and provisions thereof and hereby accepts the Option subject to all the terms
and provisions of the Plan.
6. Relationship. Nothing in the Plan or in this Agreement shall confer
upon Participant any right to continued relationship as an employee, director or
consultant of the Company or interfere in any way with the right of the Company
to terminate Participant's relationship at any time.
7. Binding Agreement. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective heirs,
executors, administrators, trustees, successors and assigns.
EXECUTED as of the day and year first above written.
Xxxxxx Drilling Company Participant
By:
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Name: Name:
Its:
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