TETRA Technologies, Inc. EMPLOYEE INCENTIVE STOCK OPTION AGREEMENT Pursuant to the terms of the TETRA Technologies, Inc. 2007 Long Term Incentive Compensation Plan
Exhibit
4.12
TETRA Technologies,
Inc.
EMPLOYEE
INCENTIVE STOCK OPTION AGREEMENT
Pursuant
to the terms of the
TETRA
Technologies, Inc. 2007 Long Term Incentive Compensation Plan
1.
Grant of Incentive
Option. TETRA Technologies, Inc., a Delaware corporation (“Company”),
hereby grants to [ ] (“Optionee”) the
right, privilege and option as herein set forth (the “Incentive Option”) to
purchase up to [x,xxx] shares (the “Shares”) of common stock, $0.01 par value
per share, of the Company (“Common Stock”), subject to and in accordance with
the terms and conditions of this document. This Employee Incentive Stock Option
Agreement (the “Agreement”) is dated as of [xx/xx/xx]. The Shares, when issued
to Optionee upon exercise of the Incentive Option, shall be fully paid and
nonassessable and the Optionee (or the person permitted to exercise the
Incentive Option in the event of Optionee’s death) shall be and have all the
rights and privileges of a stockholder of record of the Company with respect to
the Shares acquired upon exercise of the Incentive Option, effective upon such
exercise. The Incentive Option is granted pursuant to and to implement in part
the TETRA Technologies, Inc. 2007 Long Term Incentive Compensation Plan (as
amended and in effect from time to time, the “Plan”) and is subject to the
provisions of the Plan, which is hereby incorporated herein and is made a part
hereof, as well as the provisions of this Agreement. By execution of this
Agreement, Optionee agrees to be bound by all of the terms, provisions,
conditions and limitations of the Plan as implemented by the Incentive Option
and this Agreement, together with all rules and determinations from time to time
issued by the Management and Compensation Committee (“Committee”) pursuant to
the Plan. All capitalized terms have the meanings set forth in the Plan unless
otherwise specifically provided. All references to specified paragraphs pertain
to paragraphs of this Incentive Option unless otherwise provided. The Incentive
Option is intended to qualify as an “incentive stock option” within the meaning
of Section 422 of the Internal Revenue Code of 1986, as amended (the
“Code”).
2.
Option Terms.
Subject to earlier termination as provided herein, the Incentive Option shall
expire on the 10th
anniversary of the date of grant of Incentive Option, which anniversary shall be
[xx/xx/xx]. The period during which the Incentive Option is in effect is
referred to as the “Option Period”.
3.
Option Exercise
Price. The exercise price (the “Exercise Price”) of the Shares subject to
the Incentive Option shall be $[xx.xx] per Share which has been determined to be
no less than the Fair Market Value Per Share of the Common Stock on the date of
grant of the Incentive Option or if the Optionee, at the date if grant, owned
more than ten percent (10%) of the total combined voting power of the Company’s
voting securities, the Exercise Price has been determined to be no less than one
hundred ten percent (110%) of the Fair Market Value Per Share of the Common
Stock on that date of grant of the Incentive Option.
4.
Vesting. Subject
to the provisions of this Agreement including, without limitation, the following
provisions of this Paragraph 4, the total number of Shares subject to this
Incentive Option shall vest and be exercisable only in accordance with the
following schedule:
[schedule to be specified]
The vested Shares
that may be acquired under the Incentive Option may be purchased, in whole or in
part, at any time after they become vested during the Option Period. In
addition, the Committee may accelerate vesting and the time at which the
Incentive Option may be exercised, (i) upon the occurrence of a Change in
Control in accordance with Paragraph 8 below, or (ii) upon the death, Disability
or Retirement of Optionee in accordance with Paragraph 7 below.
5.
Method of
Exercise. To exercise the Incentive Option, Optionee shall deliver notice
to the Company at its principal executive office, directed to the Plan
Administrator, such exercise to be effective at the time of receipt of such
notice at the Company’s principal executive office during normal business hours,
stating the number of Shares with respect to which the Incentive Option is being
exercised together with payment for such Shares plus any required withholding
taxes, unless other arrangements for withholding tax liability have been made
with the Committee. The exercise notice shall be delivered in person, by
certified or regular mail, or by such other method (including electronic
transmission) as determined from time to time by the Committee or the Plan
Administrator. Any exercise of the Incentive Option must be for a minimum of 100
Shares or, if less, for all remaining Shares subject to the Incentive
Option.
6.
Payment of Exercise
Price and Required Withholding. In order to exercise the Incentive
Option, the Optionee or other person or persons entitled to exercise such
Incentive Option shall deliver to Company payment in full for (i) the Shares
being purchased and (ii) unless other arrangements have been made with the
Committee, any required withholding taxes. The payment of the Exercise Price for
the Incentive Option shall either be (i) in cash, or by check payable and
acceptable to the Company, (ii) with the consent of the Committee, by tendering
to Company shares of Common Stock owned by the person exercising the Incentive
Option for more than six months having an aggregate Fair Market Value as of the
date of exercise that is not greater than the full exercise price for the Shares
with respect to which the Incentive Option is being exercised and by paying any
remaining amount of the Exercise Price (and any required withholding taxes) as
provided in (i) above, or (iii) with the consent of the Committee and compliance
with such instructions as the Committee may specify, by delivering to the
Company and to a broker a properly executed exercise notice and irrevocable
instructions to such broker to deliver to the Company cash or a check payable
and acceptable to the Company to pay the exercise price and any applicable
withholding taxes. Upon receipt of the cash or check from the broker, the
Company will deliver to the broker the shares for which the Incentive Option is
exercised. In the event that the person elects to make payment as allowed under
clause (ii) above, the Committee may, upon confirming that the Optionee owns the
number of additional Shares being tendered, authorize the issuance of a new
certificate for the number of Shares being acquired pursuant to the exercise of
the Incentive Option less that number of Shares being tendered upon the exercise
and return to the person (or not require surrender of) the certificate for the
Shares being tendered upon the exercise. The date of sale of the shares by the
broker pursuant to a cashless exercise under (iii) above shall be the date of
exercise of the Incentive Option. If the Committee so requires, such person or
persons shall also deliver a written representation that all Shares being
purchased are being acquired for investment and not with a view to, or for
resale in connection with, any distribution of such Shares.
7.
Termination of
Employment. Termination of Employment, Retirement, death or Disability of
Optionee, shall affect Optionee’s rights under the Incentive Option as
follows:
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(a)
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Termination of
Employment. If Employment of Optionee is terminated for any reason
whatsoever other than death, Disability or Retirement, subject to the
provisions of this Section 7, any nonvested portion of the Incentive
Option outstanding at the time of such termination and all rights
thereunder shall wholly and completely terminate and no further vesting
shall occur, and Optionee shall be entitled to exercise his or her rights
with respect to the portion of the Incentive Option vested as of the date
of termination for a period that shall end on the earlier of (i) the
expiration date set forth in the Incentive Option with respect to the
vested portion of the Incentive Option or (ii) the date that occurs three
(3) months after such termination
date.
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(b)
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Retirement. Upon the
Retirement of Optionee:
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(i)
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any nonvested
portion of the Incentive Option shall immediately terminate and no further
vesting shall occur; and
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(ii)
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any vested
portion of the Incentive Option shall expire on the earlier of (A) the
expiration of the Option Period; or (B) the expiration of twelve (12)
months after the date of Retirement; provided, however, any exercise more
than three (3) months after the Optionee’s Retirement shall result in the
Incentive Option becoming a Nonqualified
Option.
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(c)
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Disability or Death.
Upon termination of Employment as a result of Disability or death of
Optionee or if Optionee retires and dies during the period described in
Section 7(b)(ii) above (hereinafter the “Applicable Retirement Period”),
or if the Optionee’s Employment was terminated as a result of Disability
and the Optionee dies during the period that expires on the earlier of the
expiration of the Option Period or the first anniversary of the Optionee’s
termination of Employment due to Disability (hereinafter the “Applicable
Disability Period”),
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(i)
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any nonvested
portion of the Incentive Option that has not already terminated shall
immediately terminate and no further vesting shall occur;
and
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(ii)
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any vested
portion of the Incentive Option shall expire upon the earlier of (A) the
expiration of the Option Period or (B) the later of (1) the first
anniversary of such termination of Employment as a result of Disability or
death, or (2) the first anniversary of Optionee’s death during the
Applicable Retirement Period or the Applicable Disability Period;
provided, however, if the Optionee’s death occurs in any Applicable
Retirement Period more than three (3) months after the Optionee’s
Retirement, the Incentive Option shall automatically become a Nonqualified
Option.
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(d)
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Notwithstanding
any other provision of the Incentive Option, the Committee, in its
discretion, may provide that,
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(i)
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upon
Retirement of Optionee or upon termination of Employment as a result of
Disability or death of Optionee, all or a part of any unvested portion of
the Incentive Option shall become vested, and together with the previously
vested portion of the Incentive Option, shall be exercisable for such
period and upon such terms and conditions as may be determined by the
Committee; or
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(ii)
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in the event
that the Optionee ceases to be an Employee, the vested portion of the
Incentive Option shall remain exercisable for such period and upon such
terms and conditions as may be determined by the
Committee;
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provided,
however, that no such acceleration of vesting or continuation of
exercisability shall be effective prior to the date of the Committee’s
written determination, no continuation may exceed the expiration of the
Option Period, and any continuation that extends exercisability more than
three (3) months beyond the date of Optionee’s Retirement, death or
Disability shall result in the Incentive Option becoming a Nonqualified
Option.
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8. Change
in Control.
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(a)
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Change in Control. In
the event of a Change in Control described in clauses (ii), (iii) and (iv)
of the definition of Change in Control under Section 1.2 of the Plan, the
Committee may accelerate vesting and the time at which the Incentive
Option may be exercised so that the Incentive Option may be
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exercised in
full for a limited period of time on or before a specified date fixed by
the Committee, after which the unexercised Incentive Option and all rights
of Optionee thereunder shall terminate, or the Committee may accelerate
vesting and the time at which the Incentive Option may be exercised so
that the Incentive Option may be exercised in full for its then remaining
term.
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Notwithstanding
the above, the Committee shall not be required to take any action
described in the preceding sentence and any decision made by the
Committee, in its sole discretion, not to take some or all of the actions
described in the preceding sentence shall be final, binding and conclusive
with respect to the Company and all other interested
persons.
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(b)
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Right of Cash-Out. If
approved by the Board prior to or within thirty (30) days after such time
as a Change in Control shall be deemed to have occurred, the Board shall
have the right for a forty-five (45) day period immediately following the
date that the Change in Control is deemed to have occurred to require
Optionee to transfer and deliver to Company the Incentive Option in
exchange for an amount equal to the “cash value” (defined below) of the
Incentive Option. Such right shall be exercised by written notice to
Optionee. The cash value of the Incentive Option shall equal the excess of
the “market value” (defined below) per Share over the Exercise Price, if
any, multiplied by the number of Shares subject to the Incentive Option.
For purposes of the preceding sentence, “market value” per Share shall
mean the higher of (i) the average of the Fair Market Value per Share of
Common Stock on each of the five trading days immediately following the
date a Change in Control is deemed to have occurred or (ii) the highest
price, if any, offered in connection with the Change in Control. The
amount payable to Optionee by Company pursuant to this Paragraph 8(b)
shall be in cash or by certified check and shall be reduced by any taxes
required to be withheld.
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9.
Reorganization of
Company and Subsidiaries. The existence of the Incentive Option shall not
affect in any way the right or power of 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 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 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.
10.
Adjustment of
Shares. In the event that at any time after the date of grant
the outstanding shares of Common Stock are changed into or exchanged
for a different number or kind of shares or other securities of the Company by
reason of a merger, consolidation, recapitalization, reclassification, stock
split, stock dividend, combination of shares or the like, the aggregate number
of Shares subject to the Incentive Option which have not vested under this
Agreement and the Exercise Price, subject to any required action by the
stockholders of the Company, shall automatically be proportionately
adjusted.
11.
No Rights in
Shares. Optionee shall have no rights as a stockholder in respect of
Shares until such Optionee becomes the holder of record of such
Shares.
12.
Certain
Restrictions. The certificate issued for the Shares subject to the
restrictions described in this Paragraph 12 may, in the Committee’s discretion,
be issued with an appropriate legend describing such restrictions, and the
Committee may establish an escrow or other custodial arrangement for holding of
the certificate by a person (other than Optionee) selected by the
Committee.
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By exercising the Incentive Option, Optionee
agrees that if at the time of such exercise the sale of Shares issued hereunder
is not covered by an effective registration statement filed under the Securities
Act of 1933 (Act), Optionee will acquire the Shares for Optionee’s own account
and without a view to resale or distribution in violation of the Act or any
other securities law, and upon any such acquisition Optionee will enter into
such written representations, warranties and agreements as Company may
reasonably request in order to comply with the Act or any other securities law
or with this Agreement. 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 Incentive Option.
13.
Shares Reserved.
Company shall at all times during the Option Period reserve and keep available
such number of Shares as will be sufficient to satisfy the requirements of this
Incentive Option.
14.
Nontransferability of
Option. The Incentive Option evidenced by this Agreement is not
transferable other than by will, and the laws of descent and distribution. The
Incentive Option will be exercisable during Optionee’s lifetime only by Optionee
or by Optionee’s guardian or legal representative. No right or benefit hereunder
shall in any manner be liable for or subject to any debts, contracts,
liabilities, or torts of Optionee.
15.
Amendment and
Termination. The Incentive Option may not be terminated by the Board or
the Committee at any time without the written consent of Optionee. This
Agreement may be amended in writing by the Company and Optionee, provided the
Company may amend this Agreement unilaterally (i) if the amendment does not
adversely affect the Optionee’s rights hereunder in any material respect, (ii)
if the Company determines that an amendment is necessary to comply with Rule
16b-3 under the Exchange Act, or (iii) if the Company determines that an
amendment is necessary to meet the requirements of the Code or to prevent
adverse tax consequences to the Optionee.
16.
No Guarantee of
Employment. The Incentive Option shall not confer upon Optionee any right
with respect to continuance of employment or other service with the Company or
any Affiliate, nor shall it interfere in any way with any right Company or any
Affiliate would otherwise have to terminate such Optionee’s employment or other
service at any time.
17.
Notice of Disqualifying
Disposition. If the Optionee sells or otherwise disposes of any of the
Shares acquired pursuant to the exercise of the Incentive Option on or before
the later of (i) the date that is two years after the date of grant of the
Incentive Option, and (ii) the date that is one (1) year after the transfer of
the Shares to the Optionee upon exercise of the Incentive Option, the Optionee
shall make the information regarding such disposition available to the Company
upon the Company’s request.
18.
Withholding of
Taxes. Any issuance of Common Stock pursuant to the exercise of the
Incentive Option shall not be made until appropriate arrangements satisfactory
to the Company have been made for the payment of any tax amounts (federal,
state, local or other) that may be required to be withheld or paid by the
Company with respect thereto at the minimum statutory rate. Company shall have
the right to take such action as may be necessary or appropriate to satisfy any
such tax withholding obligations.
19.
No Guarantee of Tax
Consequences. Neither Company nor any Affiliate nor the Board or
Committee makes any commitment or guarantee that any federal or state tax
treatment will apply or be available to any person eligible for the benefits
under the Incentive Option.
20. Consent
to Electronic Delivery; Electronic Signature. In lieu of receiving
documents in paper format, Optionee agrees, to the fullest extent permitted by
law, to accept
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electronic delivery
of any documents that the Company may be required to deliver (including, but not
limited to, prospectuses, prospectus supplements, grant or award notifications
and agreements, account statements, annual and quarterly reports, and all other
forms of communications) in connection with this and any other award made or
offered by the Company. Electronic delivery may be via a Company electronic mail
system or by reference to a location on a Company intranet to which Optionee has
access. Optionee hereby consents to any and all procedures the Company has
established or may establish for an electronic signature system for delivery and
acceptance of any such documents that the Company may be required to deliver,
and agrees that his or her electronic signature is the same as, and shall have
the same force and effect as, his or her manual signature.
21.
Severability. In
the event that any provision of the Incentive Option 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 Incentive
Option, and the Incentive Option shall be construed and enforced as if the
illegal, invalid, or unenforceable provision had never been included
herein.
22.
Governing Law.
The Incentive Option and this Agreement shall be construed in accordance with
the laws of the State of Delaware to the extent federal law does not supersede
and preempt Delaware law.
COMPANY
TETRA
Technologies, Inc.
By:
Xxxxxx X.
Xxxxxxxxx
President
& Chief Executive Officer
OPTIONEE
By:
Employee
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