EXHIBIT 4.2
NEWPARK RESOURCES, INC.
INCENTIVE STOCK OPTION AGREEMENT
This Incentive Stock Option Agreement (the "Agreement") is made and entered
into as of _____________, 199_ (hereinafter referred to as the "Date of Grant"),
by and between NEWPARK RESOURCES, INC., a Delaware corporation (the "Company"),
and ___________________ ("Optionee"), with reference to the following facts:
A. The Company has duly adopted a 1995 Incentive Stock Option Plan
(hereinafter referred to as the "Plan") which authorizes the Compensation
Committee of the Board of Directors of the Company (the "Committee") to grant
nonstatutory stock options or incentive stock options, within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), and
which is intended to encourage ownership of stock of the Company by officers and
other key management employees and to provide additional incentive for them to
promote the success of the Company.
B. The Committee has determined that Optionee is entitled to participate
in the Plan, and has taken appropriate action to authorize the granting of an
incentive stock option to Optionee for the number of shares, at the price per
share and on the terms set forth in this Agreement.
C. Optionee desires to participate in the Plan and to receive an incentive
stock option on the terms and conditions set forth in this Agreement.
NOW, THEREFORE, the parties agree as follows:
1. GRANT OF OPTION.
---------------
The Company hereby grants to Optionee the right and option (hereinafter
referred to as the "Option") to purchase all or any part of an aggregate of
_________ shares (the "Option Shares") of common stock, $.01 par value, of the
Company (the "Common Stock") on the terms and conditions set forth in this
Agreement.
2. PURCHASE PRICE.
--------------
The purchase price (the "Exercise Price") of each Option Share shall be
$__.__.
3. OPTION PERIOD.
-------------
The Option shall commence on the Date of Grant and shall expire, and
all rights to purchase the Option Shares shall terminate, at the close of
business on the day immediately preceding the seventh anniversary of the Date of
Grant, unless terminated earlier as provided in this Agreement. The Option shall
not be exercisable until the time at which all legal requirements in connection
with the Plan have been fully complied with. Subject to the foregoing, the
Option shall be exercisable during its term as to one-third of the Option Shares
during the twelve months beginning on the first anniversary of the Date of
Grant; one-third of the Option Shares during the twelve months beginning on the
second anniversary of the Date of Grant; and one-third of the Option Shares
during the twelve months beginning on the third anniversary of the Date of
Grant; provided, however, if Optionee shall not in any one exercise
period purchase all of the Option Shares which Optionee is entitled to
purchase in such period, Optionee may purchase all or any part of such Option
Shares at any time after the end of such period and prior to the expiration of
the Option. Notwithstanding the foregoing, (a) if Optionee is subject to the
reporting requirements of Section 16(a) of the Securities Exchange Act of 1934
(the "Exchange Act"), the Option shall not be exercisable until at least six
months and one day from the Date of Grant and (b) the sum of
the fair market value of (i) the Option Shares which are subject to incentive
stock options and (ii) all shares of Common Stock which are subject to incentive
stock options that have been granted to Optionee under the Plan or any other
option plan of the Company, which are first exercisable in any one calendar year
may not exceed $100,000.00 (determined on the Date of Grant).
4. EXERCISE OF OPTION.
------------------
4.1 The Option shall be exercised by delivering this Agreement for
endorsement to the Company, at its principal office, attention of the Corporate
Secretary, together with a Notice and Agreement of Exercise (in the form
attached hereto or specified from time to time by the Committee) indicating the
number of Option Shares Optionee wishes to purchase and full payment of the
Exercise Price of such shares. In no event shall the Company be required to
issue or transfer fractional shares.
4.2 Payment for Option Shares may be made in cash, by cashier's or
certified check or (if the Committee authorizes payment in stock) by delivery to
the Company of shares of Common Stock, duly assigned to the Company by a stock
power with signatures guaranteed as provided on the back of the stock
certificate. The value of each share delivered in payment of the Exercise Price
of Option Shares shall be the fair market value ("Fair Market Value") of the
Common Stock on the date such shares are delivered. The Fair Market Value of a
share of the Common Stock on any date shall be equal to the closing price of the
Common Stock for the last preceding day on which the Company's shares were
traded, and the method for determining the closing price shall be determined by
the Committee.
5. EMPLOYMENT OF OPTIONEE.
----------------------
5.1 Except as otherwise provided in paragraph 6 of this Agreement,
Optionee may not exercise the Option unless, at the time of exercise, Optionee
is an employee of the Company or a parent or a subsidiary thereof and has been
in the employ of the Company or a parent or a subsidiary thereof continuously
since the Date of Grant. For purposes of this paragraph, the period of
continuous employment with the Company shall be deemed to include (without
extending the term of the Option) any period during which Optionee is on leave
of absence with the consent of the Company, provided that such leave of absence
shall not exceed three months and Optionee returns to the employ of the Company
at the expiration of such leave of absence. If Optionee fails to return to the
employ of the Company at the expiration of such leave of absence, Optionee's
employment with the Company shall be deemed terminated as of the date such leave
of absence commenced. The continuous employment of Optionee with the Company
shall also be deemed to include any period during which Optionee is a member of
the Armed Forces of the United States, provided that Optionee returns to the
employ of the Company within 90 days (or such longer period as may be prescribed
by law) from the date Optionee first becomes entitled to discharge. If Optionee
does not return to the employ of the Company within 90 days from the date
Optionee first becomes entitled to discharge (or such longer period as may be
prescribed by law), Optionee's employment with the Company shall be deemed to
have terminated as of the date Optionee's military service ended.
5.2 Nothing contained herein shall be construed to impose upon the
Company or upon any parent or subsidiary thereof any obligation to employ
Optionee for any period or to supersede or in any way alter, increase or
diminish the respective rights and obligations of the Company or any parent or
subsidiary thereof and Optionee under any employment contract now or hereafter
existing between them.
2
6. TERMINATION OF EMPLOYMENT.
-------------------------
6.1 If the employment of Optionee with the Company shall terminate
because of Retirement, Disability (as such terms are defined in the Plan) or
death, unless otherwise provided by the Committee, (a) the Option, to the extent
then presently exercisable, shall remain in full force and effect and may be
exercised pursuant to the provisions hereof, including expiration at the end of
the fixed term hereof, and (b) the Option, to the extent not then presently
exercisable, shall terminate as of the date of such termination of employment
and shall not be exercisable thereafter.
6.2 If the employment of Optionee with the Company shall terminate for
any reason other than the reasons set forth in paragraph 6.1 hereof, unless
otherwise provided by the Committee, (a) the Option, to the extent then
presently exercisable or to the extent the Option becomes exercisable pursuant
to Paragraph 9.3 hereof, shall remain exercisable only for a period of 90 days
after the date of such termination of employment (except that the 90 day period
shall be extended to 12 months if Optionee shall die during such 90 day period)
and may be exercised during such period pursuant to the provisions hereof,
including expiration at the end of the fixed term hereof, and (b) the Option, to
the extent not then presently exercisable, shall terminate as of the date of
such termination of employment and shall not be exercisable thereafter.
7. SECURITIES LAWS REQUIREMENTS.
----------------------------
7.1 The Option shall not be exercisable unless and until any applicable
registration or qualification requirements of federal and state securities laws,
and all other requirements of law or any regulatory bodies having jurisdiction
over such exercise or issuance and delivery, have been fully complied with. The
Company will use reasonable efforts to maintain the effectiveness of a
Registration Statement under the Securities Act of 1933 (the "Securities Act")
for the issuance of the Option and the Option Shares but there may be times when
no such Registration Statement will be currently effective. Exercise of the
Option may be temporarily suspended without liability to the Company during
times when no such Registration Statement is currently effective, or during
times when, in the reasonable opinion of the Committee, such suspension is
necessary to preclude violation of any requirements of applicable law or
regulatory bodies having jurisdiction over the Company. If the Option would
expire for any reason except the end of its term during such a suspension, then
if exercise of the Option is duly tendered before its expiration, the Option
shall be exercisable and exercised (unless the attempted exercise is withdrawn)
as of the first day after the end of such suspension. The Company shall have no
obligation to file any Registration Statement covering resales of the Option
Shares.
7.2 Upon each exercise of the Option, Optionee shall represent, warrant
and agree, by the Notice and Agreement of Exercise delivered to the Company,
that (a) no Option Shares will be sold or otherwise distributed in violation of
the Securities Act or any other applicable federal or state securities laws, (b)
if Optionee is subject to the reporting requirements under Section 16(a) of the
Exchange Act, Optionee will furnish to the Company a copy of each Form 4 or Form
5 filed by Optionee and will timely file all reports required under federal
securities laws, and (c) Optionee will report all sales of Option Shares to the
Company in writing on the form prescribed from time to time by the Company. All
Option Share certificates may be imprinted with legend conditions reflecting
federal and state securities law restrictions and conditions and the Company may
comply therewith and issue "stop transfer" instructions to its transfer agents
and registrars without liability.
3
8. NON-TRANSFERABILITY OF OPTION.
-----------------------------
The Option shall be transferable only pursuant to Optionee's will or the
laws of descent and distribution, and may be exercised, during the lifetime of
Optionee, only by Optionee. Without limiting the generality of the foregoing,
the Option may not be assigned, transferred (except as provided above), pledged
or hypothecated in any way, shall not be assignable by operation of law and
shall not be subject to attachment, execution, garnishment, sequestration, the
law of bankruptcy or any other legal or equitable process. Any attempted
assignment, transfer, pledge, hypothecation or other disposition contrary to the
provisions of this Agreement, and the levy of any execution, attachment or
similar process thereupon, shall be null and void and without effect.
9. CHANGES IN CAPITALIZATION.
-------------------------
9.1 The number and class of shares subject to the Option, the Exercise
Price (but not the total price), and the minimum number of shares as to which
the Option may be exercised at any one time, shall be proportionately adjusted
in the event of any increase or decrease in the number of the issued shares of
Common Stock which results from a split-up or consolidation of shares, payment
of a stock dividend or stock dividends exceeding a total of two and one-half
percent (2.5%) for which the record dates occur in any one fiscal year, a
recapitalization (other than the conversion of convertible securities according
to their terms), a combination of shares or other like capital adjustment, so
that upon exercise of the Option, Optionee shall receive the number and class of
shares Optionee would have received had Optionee been the holder of the number
of shares of Common Stock for which the Option is being exercised upon the date
of such change or increase or decrease in the number of issued shares of the
Company.
9.2 Upon a reorganization, merger or consolidation of the Company with
one or more corporations as a result of which the Company is not the surviving
corporation, or in which the Company survives as a wholly-owned subsidiary of
another corporation, or upon a sale of all or substantially all of the property
of the Company to another corporation, or any dividend or distribution to
stockholders of more than 10% of the Company's assets, adequate adjustment or
other provisions shall be made by the Company or other party to such transaction
so that there shall remain and/or be substituted for the Option Shares provided
for herein, the shares, securities or assets which would have been issuable or
payable in respect of or in exchange for the Option Shares then remaining under
the Option, as if Optionee had been the owner of such shares as of the
applicable date. Any securities so substituted shall be subject to similar
successive adjustments.
9.3 The Option shall become fully exercisable upon the occurrence of a
change in control of the Company as defined herein (a "Change in Control"). A
Change in Control of the Company shall be deemed to have occurred (a) on the
date the Company first has actual knowledge that any person (as such term is
used in Sections 13(d) and 14(d)(2) of the Exchange Act) who is not such
beneficial owner on the Date of Grant has become the beneficial owner (as
defined in Rule 13(d)-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 40% or more of the combined voting power
of the Company's then outstanding securities or (b) on the date the stockholders
of the Company approve (i) a merger of the Company with or into any other
corporation in which the Company is not the surviving corporation or in which
the Company survives as a subsidiary of another corporation, (ii) a
consolidation of the Company with any other corporation or (iii) the sale or
disposition of all or substantially all of the Company's assets or a plan of
complete liquidation.
4
10. RELATIONSHIP TO OTHER EMPLOYEE BENEFIT PLANS.
--------------------------------------------
The Option shall not be deemed to be salary or other compensation to
Optionee for purposes of any pension, thrift, profit sharing, stock purchase or
other employee benefit plan now maintained or hereafter adopted by the Company.
11. MISCONDUCT OF OPTIONEE.
----------------------
Notwithstanding any other provision of this Agreement or the Plan, if
Optionee shall commit fraud or dishonesty toward the Company, wrongfully use or
disclose any trade secret, confidential data or other information proprietary to
the Company or intentionally take any other action materially inimical to the
best interests of the Company, as determined by the Committee in its sole and
absolute discretion, Optionee shall forfeit all rights and benefits under this
Agreement.
12. SUBSIDIARY.
----------
The term "subsidiary" as used herein, shall mean each corporation which
is a "subsidiary corporation" of the Company, within the definition contained in
Section 424(f) of the Code. Unless the context indicates otherwise, references
to the Company shall include all subsidiaries of the Company and any parent it
may have in the future.
13. PRIVILEGES OF OWNERSHIP.
-----------------------
Optionee shall not have any of the rights of a stockholder with respect
to the shares covered by the Option except to the extent that share certificates
have actually been issued and registered in Optionee's name on the books of the
Company or its registrar upon the due exercise of the Option. The Company shall
be allowed a reasonable time following notice of exercise in which to accomplish
the issuance and registration.
14. REFERENCE TO PLAN AND INTERNAL REVENUE CODE.
-------------------------------------------
This Agreement and the Option are subject to all of the terms and
conditions of the Plan, which are hereby incorporated by reference. In the
event of any conflict between this Agreement and the Plan, the provisions of the
Plan shall prevail. Inasmuch as the Option is intended to constitute an
"incentive stock option" within the meaning of Section 422 of the Code, and the
Regulations issued thereunder, as said Section or Regulations may be amended
from time to time, all interpretations and provisions of this Agreement, the
Option and the Plan shall be resolved to the extent possible, in accordance with
the requirements of said Section and Regulations and in a way which preserves
the Option as an incentive stock option. To the extent that any portion of the
Option does not qualify as an incentive stock option, that portion shall
constitute a non-statutory stock option provided that the status of the
remaining portion of the Option as an incentive stock option is not effected
thereby.
15. NOTICES.
-------
Any notice to be given under the terms of this Agreement shall be
addressed to the Company in care of its Corporate Secretary at 3850 Causeway
Boulevard, Suite 1770, Metairie, Louisiana 70002, and any notice to be given to
Optionee shall be addressed to Optionee at the address appearing on the
employment records of the Company, or at such other address or addresses as
either party may hereafter designate in writing to the other. Any such notice
shall be deemed duly given when enclosed
5
in a properly sealed envelope, addressed as herein required and deposited,
postage prepaid, in a post office or branch post office regularly maintained by
the United States Government.
16. WITHHOLDING TAXES.
-----------------
The Company shall have the right at the time of exercise of the Option
to make adequate provision for any federal, state, local or foreign taxes which
it believes are or may be required by law to be withheld with respect to such
exercise ("Tax Liability"), to ensure the payment (through withholding from
Optionee's salary or the Option Shares or otherwise as the Company shall deem in
its sole and conclusive discretion to be in its best interests) of any such Tax
Liability.
17. NUMBER AND GENDER.
-----------------
Terms used herein in any number or gender include other numbers or
genders, as the context may require.
18. COUNTERPARTS.
------------
This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
19. GOVERNING LAW.
-------------
This Agreement and performance under it, shall be construed in
accordance with and under the laws of the State of Delaware. Should a court or
other body of competent jurisdiction determine that any term or provision of
this Agreement is excessive in scope, such term or provision shall be adjusted
rather than voided and interpreted so as to be enforceable to the fullest extent
possible, and all other terms and provisions of this Agreement shall be deemed
valid and enforceable to the fullest extent possible.
IN WITNESS WHEREOF, the Company and Optionee have executed this
Agreement as of the Date of Grant.
"OPTIONEE" "COMPANY"
NEWPARK RESOURCES, INC.
- -------------------------
(Signature)
_________________________ By__________________________
(Print Name) James D. Cole, President
6
NEWPARK RESOURCES, INC.
NOTICE AND AGREEMENT OF EXERCISE
OF INCENTIVE STOCK OPTION
_______________, 199_
I hereby exercise my Newpark Resources, Inc. Incentive Stock Option dated
________________, 199_, as to __________ shares of Newpark Resources, Inc.
common stock, $.01 par value (the "Option Shares").
Enclosed are the documents and payment specified in Paragraph 4 of my
Option Agreement. I understand that no Option Shares shall be issued and
delivered unless and until any applicable registration requirements of the
Securities Act of 1933, as amended, any listing requirements of any securities
exchange on which stock of the same class is then listed, and any other
requirements of law or any regulatory bodies having jurisdiction over such
issuance and delivery, shall have been fully complied with. I hereby represent,
warrant and agree, to and with Newpark Resources, Inc. (the "Company"), that:
a. The Option Shares I am purchasing are being acquired for my account,
and no other person (except, if I am married, my spouse) will own any interest
therein.
b. I will not sell or dispose of my Option Shares in violation of the
Securities Act of 1933 or any other applicable Federal or state securities laws.
I will obtain the Company's advice prior to any disposition of my Option Shares.
c. I agree that the Company may, without liability, place legend
conditions upon my Option Shares and issue "stop transfer" restrictions
requiring compliance with applicable securities laws and the terms of my Option.
d. If and so long as I am subject to reporting requirements under Section
16(a) of the Securities Exchange Act of 1934, I will furnish to the Company a
copy of each Form 4 or Form 5 filed by me and will timely file all reports
required under the Federal securities laws.
e. I will report to the Company all sales of Option Shares on the form
prescribed from time to time by the Company.
The number of Option Shares specified above are to be issued in the
following registration (husband and wife will be shown to be joint tenants
unless I state that the Option Shares will be held as community property or as
tenants in common):
- ---------------------------------- ------------------------------
(Print your name) (Signature)
- ---------------------------------- ------------------------------
(Option - Print name of spouse
if you wish joint registration ------------------------------
Address
7