Exhibit 10.3
Date of Grant: May 13, 1999
Number of Shares Subject to Option: 1.0101
UNION DRILLING, INC.
STOCK OPTION PLAN AND AGREEMENT
This Agreement, dated May 13, 1999 is made between Union Drilling, Inc.,
(the "Company") and Xxxxxxxxxxx Xxxxxx (the "Employee"), an employee of the
Company.
I. Stock Option
1. Grant of Incentive Stock Option. In compliance with the provisions of
Section 422 of the Internal Revenue Code of 1986, as may be amended from time to
time, the Company hereby grants to the Employee, subject to the terms and
conditions herein set forth, an option ("Option") to purchase 1.0101 shares of
the Company's common stock, par value $0.01 per share ("Stock"), at the purchase
price of $330,000 per share, such Option to be exercisable and exercised as
hereinafter provided.
2. Specific Terms and Conditions.
(a) Exercise of Option. Subject to the other terms of this Agreement
regarding the exercisability of this Option, this Option may be exercised in
accordance with the following:
On or After This Date: This Option Shall be
Exercisable With Respect to
The Following Cumulative
Number of Shares:
5/13/2000 .2525
5/13/2001 .505
5/13/2002 .7575
5/13/2003 1.01
This Option also shall become fully exercisable upon the Employee's termination
of employment due to his or her death or Total Disability. This Option may be
exercised, to
the extent exercisable by its terms, from time to time in whole or in part at
any time prior to the expiration thereof. Any exercise shall be accompanied by a
written notice to the Company specifying the number of shares as to which this
Option is being exercised. Notation of any partial exercise or installment
exercise shall be made by the Company on Schedule B hereto.
(b) Notification of Disqualifying Disposition. The Employee hereby agrees
to notify the Company in writing in the event shares acquired pursuant to the
exercise of this Option are transferred, other than by will or by the laws of
descent and distribution, within two years after the date indicated above or
within one year after the issuance of such shares pursuant to such exercise.
II. General Terms and Conditions
1. Payment of Purchase Price Upon Exercise. At the time of any exercise of
an Option, the purchase of the shares as to which any such Option shall be
exercised shall be paid in full to the Company in cash or in Stock already owned
by the Employee, or a combination of cash and Stock, or in such other
consideration acceptable to the Board of Directors of the Company (including, to
the extent permitted by applicable law, the relinquishment of a portion of the
Option) as the Board deems appropriate, having a total fair market value equal
to the purchase price.
2. Expiration Date. The Option granted pursuant to this Agreement shall
expire ten years from the date indicated above.
3. Issuance of Certificates. The Employee shall be issued a certificate for
any shares as to which an Option shall be exercised. Such shares shall be
subject to such stop-transfer orders and other restrictions as the Board may
deem advisable under the rules, regulations, and other requirements of the
Securities and Exchange Commission, any stock exchange upon which the Stock is
then listed and any applicable federal or state securities laws, and the Board
may cause a legend or legends to be placed on any such certificates to make
appropriate reference to such restrictions. The foregoing provision shall not be
effective if and to the extent that the shares of Stock delivered under the
Option are covered by an effective and current registration statement under the
Securities Act of 1933 ("1933 Act"), or if, and so long as, the Board determines
that application of such provisions is no longer required or desirable. In
making such determination, the Board may rely upon an opinion of counsel for the
Company. The Company shall not be required to issue or deliver any certificates
for shares of Stock prior to (i) the listing of such shares on any stock
exchange on which the Stock may then be listed, or (ii) the completion of any
registration or qualification of such shares under
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any federal or state law, or any ruling or regulation of any governmental body,
which the Board shall, in its sole discretion, determine to be necessary or
advisable.
4. Exercise in the Event of Death, Retirement, Total Disability, or
Termination of Employment. If the Employee's employment with the Company
terminates due to his or her death, retirement or Total Disability or his
discharge by the Company without Cause, then any vested Option granted pursuant
to this Agreement may be exercised by the Employee (or, in the event of the
Employee's death, the Employee's representative) within three months (twelve
months in the event of termination due to death or for Total Disability) after
the date of the Employee's termination of employment, or at such later date, and
subject to such terms and conditions, as the Board may specify, but not later
than the expiration dates specified in Section II.2. All determinations as to
whether an Employee's termination is without Cause shall be made by the Company,
in its sole discretion.
Upon the Employee's involuntary termination of employment by the Company
for cause or the resignation of the Employee, all Options granted pursuant to
this Agreement, whether vested or not, automatically shall expire as of the date
of such termination, or at such later date, and subject to such terms and
conditions, as the Board may specify, but not later than the expiration dates
specified in Section II.2. All determinations as to whether the Employee's
termination is voluntary shall be made by the Company, in its sole discretion.
5. Nontransferability. No Option shall be transferable other than by will
or by the laws of descent and distribution. During the lifetime of the Employee,
any Option shall be exercisable only by the Employee. If, by reason of any
attempted assignment, transfer, pledge, or encumbrance or any bankruptcy or
other event happening at any time, any shares issuable or amount payable under
an Option would be made subject to the debts or liabilities of the Employee,
then the Board may terminate such person's interest in any such shares or
payment and direct that the same be held and applied to or for the benefit of
the Employee, or any other persons deemed to be the natural objects of his or
her bounty, taking into account the expressed wishes of the Employee (or, in the
event of his or her death, those of his or her representative) in such manner as
the Board may deem proper.
6. Registration. Unless at the time of exercise there is a valid and
effective registration statement under the 1933 Act and appropriate
qualification and registration under applicable state securities laws relating
to the Stock being acquired pursuant to an Option, the Employee shall upon
exercise of the Option give a representation that he or she is acquiring such
shares for his or her own account for investment and not with a view to, or for
sale in connection with, the resale or distribution of any such shares. In the
absence of such registration statement, the Employee shall be required to
execute a
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written affirmation, in a form reasonably satisfactory to the Company, of such
investment intent and to further agree that he or she will not sell or transfer
any Stock acquired pursuant to the Option until he or she requests and receives
an opinion of the Company's counsel to the effect that (i) such proposed sale or
transfer will not result in a violation of the 1933 Act, or (ii) a registration
statement covering the sale or transfer of the shares has been declared
effective by the Securities and Exchange Commission, or (iii) he or she obtains
a no-action letter from the Securities and Exchange Commission with respect to
the proposed transfer.
7. Adjustments. In the event of any change in the outstanding Stock of the
Company by reason of any stock dividend or distribution, recapitalization,
merger, consolidation, split-up, combination, exchange of shares or other
similar events, the number and kind of shares subject to any Option and their
purchase price per share shall be appropriately adjusted consistent with such
change in such manner as the Board may deem equitable to prevent substantial
dilution or enlargement of the rights granted to the Employee hereunder. Any
adjustments so made shall be final and binding upon the Employee.
8. No Rights as Stockholder. The Employee shall have no rights as a
stockholder with respect to any shares of Stock subject to any Option prior to
the date of issuance to him or her of a certificate or certificates for such
shares.
9. No Right to Continued Employment. This Agreement shall not confer upon
the Employee any right with respect to continuance of employment by the Company
nor shall it interfere in any way with the right of the Company to terminate his
or her employment at any time.
10. Compliance With Law and Regulations. This Agreement and the obligation
of the Company to sell and deliver shares of Stock hereunder shall be subject to
all applicable federal and state laws, rules and regulations and to such
approvals by any government or regulatory agency as may be required. If at any
time the Board shall determine that (i) the listing, registration or
qualification of the shares of Stock subject or related thereto upon any
securities exchange or under state or federal law, or (ii) the consent or
approval of any government regulatory body, or (iii) an agreement by the
recipient of an award with respect to the disposition of shares of Stock is
necessary or desirable as a condition of or in connection with the issuance or
purchase of shares of Stock hereunder, such Option may not be exercised in whole
or in part unless such listing, registration, qualification, consent, approval
or agreement shall have been effected or obtained free of any conditions not
acceptable to the Board. Moreover, an Option may not be exercised if its
exercise or the receipt of shares of Stock pursuant thereto would be contrary to
applicable law.
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11. Tax Withholding Requirements. The Company shall have the right to
require the Employee to remit to the Company an amount sufficient to satisfy any
federal, state or local withholding tax requirements prior to the delivery of
any certificate or certificates for Stock.
IV. Miscellaneous
1. Notices. Any notice hereunder to the Company shall be addressed to it at
its office, South Pittsburgh Technology Park, 0000 Xxxxxxxxxx Xxxx, Xxxxxxxxxxx,
Xxxxxxxxxxxx 00000, Attention: Chairman of the Board, and any notice hereunder
to the Employee shall be addressed to the Employee at his or her address on the
records of the Company, subject to the right of either party to designate at any
time hereafter in writing some other address.
2. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall constitute one and the same instrument.
IN WITNESS WHEREOF, Union Drilling, Inc. has caused this Agreement to be
executed by a duly authorized officer and the Employee has executed this
Agreement both as of the day and year first above written.
UNION DRILLING, INC.
By: /s/ XXXXXX X. X'XXXXX, XX.
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Xxxxxx X. X'Xxxxx, Xx., Chairman and
Chief Executive Officer
/s/ XXXXXXXXXXX XXXXXX (L.S.)
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Xxxxxxxxxxx Xxxxxx
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SCHEDULE A
UNION DRILLING, INC.
NOTATIONS AS TO PARTIAL OR INSTALLMENT
EXERCISE OF STOCK OPTION
Number of Balance of
Date of Shares Shares on Authorized Notation
Exercise Purchased Option Signature Date
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