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EXHIBIT 11
STOCK OPTION AGREEMENT
XXXXXXXXX-UTI ENERGY, INC. AMENDED AND RESTATED
1997 LONG-TERM INCENTIVE PLAN
THIS STOCK OPTION AGREEMENT (this "Agreement") is effective as of July
20, 2001, between Xxxxxxxxx-UTI Energy, Inc., a Delaware corporation
("Xxxxxxxxx-UTI"), and Xxxx X. Xxxxxx (the "Employee").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, by virtue of the merger with UTI Energy Corp. Xxxxxxxxx-UTI
has assumed the Xxxxxxxxx-UTI Energy, Inc. Amended and Restated 1997 Long-Term
Incentive Plan (the "Plan"); and
WHEREAS, the Employee is currently an employee of Xxxxxxxxx-UTI, and
Xxxxxxxxx-UTI desires to encourage the Employee to remain in Xxxxxxxxx-UTI's
service and, as an inducement thereto, has determined to grant to the Employee
pursuant to the Plan the option provided for herein.
NOW, THEREFORE, in consideration of the premises and the covenants and
agreements herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Xxxxxxxxx-UTI and the
Employee hereby agree as follows:
1. Grant. Effective as of July 20, 2001 (the "Date of Grant"),
Xxxxxxxxx-UTI hereby grants to the Employee pursuant to the terms and conditions
of the Plan an option (the "Option") to purchase 250,000 shares of Common Stock
at a price of $15.85 per share (the "Option Price"). The Option shall be for a
term commencing on July 20, 2001 and ending on July 19, 2011 (unless such Option
terminates earlier as provided in this Agreement or as set forth under the terms
of the Plan). The Option is subject to the terms and provisions of the Plan,
which are hereby incorporated herein by reference and the terms and provisions
of this Agreement. The Option shall vest and be exercisable as follows:
(a) on July 20, 2002, the Option shall be vested and become
exercisable with respect to 50,000 shares subject to the Option; and
(b) on the 20th day of each month of the forty-seven (47)
months thereafter, 4,167 shares subject to the Option shall be vested
and become exercisable and on the 20th day of the forty-eighth month
4,151 shares subject to the Option shall be vested and become
exercisable; and
(c) to the extent not exercised, installments shall be
cumulative and may be exercised in whole or in part; and
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(d) notwithstanding any other provision of this Agreement,
this Option, when exercised, to the extent exercisable must be
exercised in full or in installments of not less than 100 shares of
stock (adjusted proportionately to any adjustments described in Section
2(b) of this Agreement).
2. Changes in Xxxxxxxxx-UTI's Capital Structure. (a) The existence of
the Option shall not affect in any way the right or power of Xxxxxxxxx-UTI or
its stockholders to make or authorize any or all adjustments, recapitalizations,
reorganizations or other changes in Xxxxxxxxx-UTI's capital structure or its
business, or any merger or consolidation of Xxxxxxxxx-UTI, or any issue of
bonds, debentures or preferred or prior preference stock ahead of or affecting
the Common Stock or the rights thereof, or the dissolution or liquidation of
Xxxxxxxxx-UTI, 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.
(b) The number of shares of Common Stock subject to the Option, the
Option Price and the securities issuable and other property payable upon
exercise of the Option shall be subject to adjustment as provided in the Plan.
3. Change of Control. Notwithstanding the vesting schedule set forth in
Section 1 of this Agreement, all unvested Options will immediately vest and
become immediately exercisable upon a Change of Control as defined in the Plan.
Furthermore, notwithstanding Section 7 (a)-(e) of this Agreement, such Options
will remain exercisable for three years following the Employee's termination of
employment following a Change of Control (but not beyond July 19, 2011) for any
reason other than a termination of employment for dishonesty (as determined by
the Committee hereinafter defined), conviction of a felony, willful unauthorized
disclosure of confidential information (as determined by the Committee), or
willful refusal to perform the duties of such Employee's position (as determined
by the Committee), in which event such Option shall terminate one day less than
three months following the Employee's termination of employment.
4. Exercise of Options. The Option may be exercised from time to time
as to the total number of shares that may then be issuable upon the exercise
thereof or any portion thereof by giving written notice of such exercise in
substantially the form attached hereto as Exhibit A.
5. Assignment. The Option may not be transferred or assigned in any
manner by the Employee except by will or the laws of descent and distribution,
and shall be exercisable during the Employee's lifetime only by him or her.
6. Requirements of Law. Xxxxxxxxx-UTI shall not be required to sell or
issue any shares on the exercise of the Option if the issuance of such shares
shall constitute a violation by the Employee or Xxxxxxxxx-UTI of any provisions
of any law or regulation of any governmental authority. The Option shall be
subject to the requirements that, if at any time the Board of Directors of
Xxxxxxxxx-UTI or the committee of the Board of Directors of Xxxxxxxxx-UTI
administering the Plan (the "Committee") shall determine that the listing,
registration or qualification of the shares subject
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thereto upon any securities exchange or under any state or federal law of the
United States or of any other country or governmental subdivision thereof, or
the consent or approval of any governmental regulatory body, or investment or
other representations, are necessary or desirable in connection with the issue
or purchase of shares subject thereto, the Option may not be exercised in whole
or in part unless such listing, registration, qualification, consent, approval
or representation shall have been effected or obtained free of any conditions
not acceptable to the Board of Directors. If required at any time by the Board
of Directors or the Committee, the Option may not be exercised until the
Employee has delivered an investment letter to Xxxxxxxxx-UTI. In addition,
specifically in connection with the Securities Act of 1933 (as now in effect or
hereafter amended), upon exercise of the Option, Xxxxxxxxx-UTI shall not be
required to issue the underlying shares unless the Committee has received
evidence satisfactory to it to the effect that the Employee will not transfer
such shares except pursuant to a registration statement in effect under such Act
or unless an opinion of counsel satisfactory to the Committee has been received
by Xxxxxxxxx-UTI to the effect that such registration is not required. Any
determination in this connection by the Committee shall be final, binding and
conclusive. In the event the shares issuable on exercise of the Option are not
registered under the Securities Act of 1933, Xxxxxxxxx-UTI may imprint on the
certificate for such shares the following legend or any other legend that
counsel for Xxxxxxxxx-UTI considers necessary or advisable to comply with
Securities Act of 1933:
The shares of stock represented by this certificate 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 the Corporation of an opinion
of counsel satisfactory to the Corporation, in form and substance
satisfactory to the Corporation, that registration is not required for
such sale or transfer.
Xxxxxxxxx-UTI may, but shall in no event be obligated to, register any
securities covered hereby pursuant to the Securities Act of 1933. Xxxxxxxxx-UTI
shall not be obligated to take any other affirmative action to cause the
exercise of the Option or the issuance of shares of Common Stock pursuant
thereto to comply with any law or regulation of any governmental authority.
7. Termination. The Option, to the extent it shall not previously have
been exercised, shall terminate on the earlier of the following unless the
Committee extends the term of this Option to a period not extending beyond July
19, 2011:
(a) One day less than three months after the date of the
severance, upon severance of the employment relationship between
Xxxxxxxxx-UTI and the Employee for cause, as defined in the Plan,
during which period the Employee or, if the Employee should die within
such three month period, the Employee's executor or administrator or
the person or persons to whom the Option shall be transferred by the
Employee's will or the laws of descent and distribution, shall be
entitled to exercise the Option in respect of the number of shares that
the Employee would have been entitled to purchase had the Employee
exercised the Option on the date of such severance of employment;
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(b) On the last day within the one year period commencing on
the date of severance of the employment relationship between
Xxxxxxxxx-UTI and the Employee, for any reason other than cause or the
death, disability or retirement of the Employee, during which period
the Employee or, if the Employee should die within such one year
period, the Employee's executor or administrator or the person or
persons to whom the Option shall have been transferred by the
Employee's will or the laws of descent and distribution shall be
entitled to exercise the Option in respect of the number of shares that
the Employee would have been entitled to purchase as of the date of
such retirement;
(c) On the last day within the one year period commencing on
the date on which the Employee ceases to be in the employment of
Xxxxxxxxx-UTI because of disability, during which period the Employee
or, if the Employee should die within such one year period, the
Employee's executor or administrator or the person or persons to whom
the Option shall be transferred by the Employee's will or the laws of
descent and distribution, shall be entitled to exercise the Option in
respect to the number of shares that the Employee would have been
entitled to purchase had the Employee exercised the Option on the date
of severance because of disability;
(d) On the last day within the one year period commencing on
the date of the Employee's death while in the employment of
Xxxxxxxxx-UTI, during which period the executor, administrator or any
person or persons to whom the Option shall have been transferred by the
Employee's will or the laws of descent and distribution shall be
entitled to exercise the Option in respect of the number of shares that
the Employee would have been entitled to purchase had the Employee been
alive on such date;
(e) On the last day within the one year period commencing on
the date on which the Employee retires in accordance with provisions of
Xxxxxxxxx-UTI's then existing policies regarding retirement as applied
by the Committee, during which period the Employee or, if the Employee
should die within such one year period, the Employee's executor or
administrator or the person or persons to whom the Option shall have
been transferred by the Employee's will or the laws of descent and
distribution shall be entitled to exercise the Option in respect of the
number of shares that the Employee would have been entitled to purchase
as of the date of such retirement; and
(f) On July 19, 2011.
8. Amendment. This Agreement may not be changed, amended or modified
except by an agreement in writing signed on behalf of each of the parties
hereto.
9. No Rights as a Stockholder. The Employee shall not have any rights
as a stockholder with respect to any shares of Common Stock issuable upon the
exercise of the Option until the date of issuance of the stock certificate or
certificates representing such shares following the Employee's exercise of the
Option pursuant to its terms and conditions and payment for such shares. Except
as otherwise provided in the Plan, no adjustment shall be made for dividends or
other distributions made with respect to the Common Stock the record date for
the payment of which is prior to the date
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of issuance of the stock certificate or certificates representing such shares
following the Employee's exercise of the Option.
10. Governing Law. The validity, construction and performance of this
Agreement shall be governed by the laws of the State of Texas. Any invalidity of
any provision of this Agreement shall not affect the validity of any other
provision.
11. Notices. All notices, demands, requests or other communications
hereunder shall be in writing and shall be deemed to have been duly made or
given if mailed by registered or certified mail, return receipt requested. Any
such notice mailed to Xxxxxxxxx-UTI shall be addressed to its principal
executive office. If to the physical location, 0000 Xxxxxx Xxxxxxx, Xxxxxx,
Xxxxx 00000; if to the mailing address, X.X. 0000, Xxxxxx, Xxxxx 00000
(attention: Vice President-Finance), and any notice mailed to the Employee shall
be addressed to the Employee's residence address as it appears on the books and
records of Xxxxxxxxx-UTI or to such other address as either party may hereafter
designate in writing to the other.
12. Employment Obligation. The granting of the Option by Xxxxxxxxx-UTI
to the Employee shall not impose upon Xxxxxxxxx-UTI any obligation to employ or
continue to employ the Employee; and the right of Xxxxxxxxx-UTI to terminate the
employment of the Employee with Xxxxxxxxx-UTI shall not be diminished or
affected by reason of the grant of the Option to the Employee pursuant to this
Agreement.
13. Binding Effect. This Agreement shall, except as otherwise provided
to the contrary in this Agreement or in the Plan, inure to the benefit of and
bind the successors and assigns of Xxxxxxxxx-UTI. This Agreement shall, except
as otherwise provided to the contrary in this Agreement or in the Plan, inure to
the benefit of and bind the heirs, executors, administrators and legal
representatives of the Employee.
14. Plan Controls. This Agreement is subject in all respects to the
terms and conditions of the Plan, which are deemed incorporated by reference
herein. In the event any terms of this Agreement contradict or are inconsistent
with the terms of the Plan, the terms of the Plan shall control.
[SIGNATURES BEGIN ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
as of the day and year first above mentioned.
XXXXXXXXX-UTI ENERGY, INC.:
By:
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Xxxxxx X. Xxxxxxx, Chief Executive Officer
EMPLOYEE:
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Xxxx X. Xxxxxx
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EXHIBIT A
XXXXXXXXX-UTI ENERGY, INC.
AMENDED AND RESTATED 1997 LONG-TERM INCENTIVE PLAN
EXERCISE OF STOCK OPTION
Xxxxxxxxx-UTI Energy, Inc.
0000 Xxxxxx Xxxxxxx
X.X. Xxx 0000
Xxxxxx, XX 00000
Attention: Vice President-Finance
Gentlemen:
The undersigned Optionee, Xxxx X. Xxxxxx, hereby exercises the Option
granted to him pursuant to the Xxxxxxxxx-UTI Energy, Inc. Amended and Restated
1997 Long-Term Incentive Plan dated as of July 20, 2001 between Xxxxxxxxx-UTI
Energy, Inc. and the Optionee with respect to _________ Common Shares covered by
said Option, and tenders herewith $__________ in payment of the purchase price
thereof by delivery of _________________.
The name and registered address on such certificate should be:
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The Optionee's social security number is: .
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Optionee
Dated:
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