EXHIBIT 10(a)
1981 INCENTIVE STOCK OPTION PLAN
FOR
BONRAY DRILLING CORPORATION AND ITS SUBSIDIARIES
ARTICLE I
Purpose
The purpose of the 1981 Incentive Stock Option Plan for
Bonray Drilling Corporation and Its Subsidiaries ("Plan") shall
be to attract, retain and motivate key management employees of
Bonray Drilling Corporation ("Company") and its subsidiaries by
providing additional compensation to such employees for future
services by way of granting incentive stock options ("Stock
Options") to such employees to enable them to purchase common
stock of the Company. The Stock Options to be granted under the
Plan are intended to qualify as "incentive stock options" as
defined in Section 422A of the Internal Revenue Code of 1954, as
amended (the "Code"). Under the Plan, subsidiaries are
corporations of which 80% or more of the outstanding voting stock
is owned by the Company, and which are herein referred to as
"Subsidiary" or "Subsidiaries."
ARTICLE II
Administration of the Plan
The Plan shall be administered by the Executive
Compensation Committee (the "Committee") appointed by the Board
of Directors (the "Board") of the Company and consisting of not
less than three members from the Board none of whom shall be
employees of the Company or a Subsidiary while serving on the
Committee. The members of the Committee shall serve at the
pleasure of the Board and shall be ineligible to participate
under the Plan. Any member may serve concurrently as a member of
any other administrative committee of any other plan of the
Company or any of its affiliates entitling participants therein
to acquire stock, stock options or deferred compensation rights
(including stock appreciation rights). No member of the Board may
serve on the Committee if such member has been eligible, during
the year preceding his appointment, to participate under the Plan
or any other plan of the Company entitling participants therein
to acquire stock, stock options or deferred compensation rights
(including stock appreciation rights). The Committee shall have
the power where consistent with the general purpose and intent of
the Plan (a) to establish policies and to adopt rules and
regulations for carrying out the purposes and provisions of the
Plan; (b) to interpret and construe the Plan and determine all
questions arising under the Plan and any agreement made pursuant
to the Plan, and any such interpretation, construction or
determination made by the Committee shall be final, binding and
conclusive; (c) to determine the number of shares of common stock
of the Company covered by each Stock Option; (d) to determine the
time or times when Stock Options will be granted and exercisable;
(e) to determine the conditions and restrictions under which
Stock Options may be granted and exercised; and (f) to prescribe
the form of the instruments relating to the grant, exercise and
other terms of Stock Options. A majority of the Committee shall
constitute a quorum, and an act of the majority of the members
present at any meeting at which a quorum is present shall be the
act of the Committee.
ARTICLE III
Participation in the Plan
Stock Options may be granted only to key management
employees. The Committee shall determine from time to time those
key management employees ("Participants") of the Company or a
Subsidiary who are to be granted Stock Options. No Stock Options
shall be granted to any person who is not eligible to receive
"incentive stock options" as provided in Section 422A of the
Code. No Stock Options shall be granted to any Participant if,
immediately before the grant of a Stock Option, such Participant
owns more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company or of a Subsidiary.
Provided, the preceding sentence shall not apply if, at the time
the Stock Option is granted, the Option Price is at least 110% of
the fair market value of the Stock subject to the Stock Option,
and such Stock Option by its terms is not exercisable after the
expiration of five (5) years from the date such Stock Option is
granted.
ARTICLE IV
Shares Subject to the Plan
Subject to adjustment under Article VII hereof, shares
of common stock of the Company covered by Stock Options shall not
exceed in the aggregate 50,000 shares of the common stock of the
Company (such 50,000 shares hereinafter referred to as "Stock").
Either authorized and unissued shares or treasury shares may be
delivered pursuant to the Plan. If any Stock Option for shares
of Stock granted to a Participant lapses, or is otherwise
terminated, the Committee may grant Stock Options for such shares
of Stock to other Participants.
ARTICLE V
Terms of Stock Options and Exercise
Each Stock Option granted hereunder shall be in writing
and shall contain such terms, restrictions and conditions as the
Committee may determine, which terms, restrictions and conditions
may or may not be the same in each case, subject to the
following:
The option price ("Option Price") for shares of Stock
shall be determined by the Committee, but in no event shall such
Option Price be less than the greater of (a) the fair market
value of the common stock of the Company on the date of grant or
(b) the par value of the Stock. "Fair market value" shall mean
the average of the bid and asked prices of the common stock of
the Company as reported by the National Association of Securities
Dealers Automated Quotations Systems or, if such common stock
should be listed on any securities exchange, the average of the
high and low, or closing sales prices as of the granting date,
exercise date or other relevant date.
The aggregate fair market value (determined as of the
time the Stock Option is granted) of the Stock for which any
Participant may be granted Stock Options in any calendar year
(under all incentive stock option plans qualified under Section
422A of the Code of the Company or a Subsidiary) shall not exceed
$100,000 plus the amount of any unused limit carryover applicable
to such year as provided in Section 422A(c)(4) of the Code.
No Stock Options may be granted under the Plan after
September 11, 1991. The maximum period for exercise of a Stock
Option shall be established by the Committee at the date of
grant, but shall not be more than ten (10) years from the date of
grant ("Option Period"). Stock Options may be exercisable in
installments (which may be cumulative or noncumulative or subject
to acceleration) during an Option Period as may be determined by
the Committee at the date of grant. Any shares not purchased on
any applicable installment date may, if so provided, be purchased
at any time prior to the expiration of the Option Period.
A Stock Option shall not be transferrable otherwise
than by will or the laws of descent and distribution, and the
Stock Option may be exercised, during the lifetime of the
Participant, only by him. More particularly (but without
limiting the generality of the foregoing), the Stock 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 execution, attachment, or
similar process. Any attempted assignment, transfer, pledge,
hypothecation, or other disposition of the Stock Option contrary
to the provisions hereof shall be null and void and without
effect.
At all times during the period commencing with the date
a Stock Option is granted to a Participant and ending on the
earlier of the expiration of the Option Period applicable to such
Stock Option or the date which is three (3) months prior to the
date the Stock Option is exercised by such Participant, such
Participant must be an employee of either (i) the Company, (ii) a
parent or a subsidiary of the Company, or (iii) a corporation or
a parent or a subsidiary corporation of such corporation issuing
or assuming a Stock Option in a transaction to which Section
425(a) of the Code applies. Provided, in the case of a
Participant who is "disabled" (within the meaning of Section
105(d)(4) of the Code) the aforesaid three (3) month period shall
mean a one (1) year period. Provided further, in the event a
Participant's employment is terminated by reason of his death,
his personal representative may exercise any unexercised Stock
Option granted to the Participant under the Plan at any time
after the Participant's death but in any event not after the
expiration of the Option Period applicable to such Stock Option.
So long as the Participant shall continue to be an
employee of the Company or one or more of its Subsidiaries, any
Stock Option granted to him shall not be affected by any change
of duties or position. Leaves of absence of a Participant, duly
authorized, shall not be deemed termination or interruptions of
employment. Nothing in the Plan or in any option agreement shall
confer upon any Participant any right to continue in the employ
of the Company or of any of its Subsidiaries, or interfere in any
way with the right of the Company or of any such Subsidiary to
terminate his employment at any time.
Any Stock Option granted hereunder to a Participant
shall not, by its terms, be exercisable while there is
outstanding (within the meaning of Section 422A(c)(7) of the
Code) any "incentive stock option" theretofore granted to such
Participant to purchase common stock of the Company or in a
corporation (which at the time of the granting of such Stock
Option hereunder) is a parent or subsidiary of the Company, or is
a predecessor corporation of any such corporations.
Participants may be granted more than one Stock Option.
The granting of a Stock Option shall not affect any outstanding
Stock Option previously granted to a Participant under the Plan.
To exercise his Stock Option, a Participant shall give
written notice to the Secretary of the Company, or other officer
designated by the Committee, at the Company's main office in
Oklahoma City, Oklahoma at least two (2) days prior to the
exercise of the Stock Option. No Stock shall be issued to any
Participant until the Company receives full payment for the Stock
purchased.
Payment for shares of Stock purchased under this Plan
shall be made in full, in cash, common stock of the Company or a
combination of cash and common stock of the Company, at the time
of the exercise of the Stock Option as a condition thereof, and
no loan or advance shall be made by the Company for the purpose
of financing, in whole or in part, the purchase of Stock. Any
cash proceeds of sale of Stock subject to the Stock Option are to
be added to the general funds of the Company to be used for its
general corporate purposes. In the event that common stock of
the Company is utilized as consideration for the purchase of
Stock upon the exercise of a Stock Option, such common stock
shall be valued at the "fair market value" as defined in this
Article V.
The Company shall have no liability to issue any Stock
hereunder unless such shares and issuance thereof comply with any
applicable federal or state securities laws or any other
applicable laws.
ARTICLE VI
Assumption of Outstanding Options
To the extent permitted by the then applicable
provisions of the Code, another employer succeeding to, or
assigned the business of, the Company as the result of or in
connection with a corporate merger or consolidation, purchase or
acquisition of property or stock, a separation, reorganization or
liquidation transaction may assume Stock Options existing under
the plan or issue new options in place of existing Stock Options
under the Plan.
ARTICLE VII
Adjustments
In the event of a merger, consolidation,
reorganization, recapitalization, stock dividend, stock split,
reverse stock split, or other change in the corporate structure
or capitalization affecting the Company common stock, a fair and
equitable adjustment shall be made by the Committee in the
number, kind, Option Price, etc., of shares of Stock subject to
outstanding Stock Options, including any adjustment in the Option
Price, shall be made in such a manner as not to constitute a
"modification" as defined in Section 425 of the Code.
ARTICLE VIII
Amendment and Termination of the Plan
The Plan shall terminate after September 11, 1991,
provided, the Plan shall continue with respect to Stock Options
which are in effect as of such date. Prior to any such
termination the Plan may be terminated, altered, changed,
modified or amended by the Board for any reason including, but
not limited to, the necessity of modifying requirements of the
Plan to conform with the law or to meet special circumstances not
anticipated or covered by the Plan. Provided, no action of the
Board may, without the approval of the shareholders of the
Company, increase the aggregate number of shares of Stock which
may be purchased under Stock Options granted under the Plan;
withdraw the administration of the Plan from the Committee;
permit a member of the Board to serve on the Committee, if he has
been eligible for the year preceding his appointment, to
participate under the Plan or any other plan of the Company
entitling Participants therein to acquire stock, stock options or
deferred compensation rights (including stock appreciation
rights); permit any person while a member of the Committee to be
eligible to receive or hold a Stock Option under the Plan;
decrease the minimum Option Price; or extend the maximum Option
Period or extend the term of the Plan. No amendment,
modification or termination of the Plan shall in any manner
adversely affect any Stock Option theretofore granted under the
Plan without the consent of the affected Participant.
ARTICLE IX
Effective Date
The Plan shall become effective only if approved by a
majority of the holders of the Company's common stock at the
stockholder meeting to be held within twelve (12) months from
September 11, 1981, and if so approved, shall be effective as of
said September 11, 1981.
STOCK OPTION AGREEMENT
FOR
1981 INCENTIVE STOCK OPTION PLAN
FOR
BONRAY DRILLING CORPORATION AND ITS SUBSIDIARIES
THIS STOCK OPTION AGREEMENT (the "Option Agreement"),
made as of this ______ day of _____________, 1982, at Oklahoma
City, Oklahoma, by and between ________________ (hereinafter
referred to as the "Participant"), and Bonray Drilling
Corporation and Its Subsidiaries (hereinafter referred to as the
"Company"):
W I T N E S S E T H:
WHEREAS, the Participant is a key management employee
of the Company or one of its subsidiaries, and it is important to
the Company that the Participant be encouraged to remain in the
employ of the Company or one of its subsidiaries; and
WHEREAS, in recognition of such facts, the Company
desires, by affording the Participant an opportunity to purchase
shares of the common stock of the Company, as hereinafter
provided, pursuant to the "1981 Incentive Stock Option Plan for
Bonray Drilling Corporation and Its Subsidiaries" (the "Plan").
NOW, THEREFORE, in consideration of the mutual
covenants hereinafter set forth and for good and valuable
consideration, the Participant and the Company hereby agree as
follows:
1. GRANT OF STOCK OPTION. The Company hereby grants
to the Participant an option (the "Stock Option") to purchase all
or any part of an aggregate of ____________________ (__,000)
shares of its common stock (the "Stock") of the Company as set
forth below, under and subject to the terms and conditions of
this Option Agreement and the Plan which is incorporated herein
by reference and made a part hereof for all purposes. The
purchase price per share shall be ____________________ ($_______
per share (but in no event shall such price be less than the
"fair market value" as defined in Article V of the Plan as of the
date hereof). A copy of the Plan has been furnished to the
Participant, and the Participant hereby acknowledges the receipt
thereof.
2. TIMES OF EXERCISE OF STOCK OPTION. After, and only
after, the conditions of paragraph 10 hereof have been satisfied,
a Participant shall be eligible to exercise that portion of his
Stock Option pursuant to the schedule set forth hereafter. If
the Participant's employment with the Company (or its parent or
of any one or more of its subsidiaries) remains full-time and
continuous at all times to any of the "Exercise Dates" specified
hereafter, then the Participant shall be entitled, subject to the
applicable provisions of the Plan and this Option Agreement
having been satisfied, to exercise on or after the applicable
Exercise Date, on a cumulative basis, that number of shares of
Stock determined by multiplying the aggregate number of shares
set forth in the foregoing paragraph 1 by the designated
percentage set forth hereafter.
Percent of Stock
Exercise Dates Option Exercisable
After __________, 1982 20%
After _________, 1982 and
before __________ , 1983 40%
After __________, 1983 and
before ___________, 1984 60%
After ____________, 1984 and
before ____________, 1985 50%
After ___________, 1985 and
before ____________, 1986 100%
3. TERM OF STOCK OPTION. The term of the Stock Option
("Option Period") shall be for a period of 10 years from the date
hereof, subject to earlier termination as provided in paragraph 6
below and pursuant to the terms of the Plan. Except as provided
in paragraph 6 hereof, the Stock Option may not be exercised at
any time unless the Participant shall have been in the full-time
continuous employ of the Company, the parent or of one or more of
its subsidiaries, from the date hereof to the date of the
exercise of the Stock Option. The holder of the Stock Option
shall not have any of the rights of a stockholder with respect to
the shares of Stock covered by the Stock Option except and only
to the extent that one or more certificates for such shares of
Stock shall be delivered to him upon the due exercise of the
Stock Option. No Stock Option may be exercised by the
Participant (or such Participant's personal representative in the
event of his death) after the expiration of the Option Period
applicable to such Stock Option.
4. NON-TRANSFERABILITY. A Stock Option shall not be
transferable otherwise than by will or the laws of descent and
distribution, and the Stock Option may be exercised, during the
lifetime of the Participant, only by the Participant. More
particularly (but without limiting the generality of the
foregoing), the Stock 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 execution, attachment, or similar process. Any
attempted assignment, transfer, pledge, hypothecation, or other
disposition of the Stock Option contrary to the provisions hereof
shall be null and void and without effect.
5. EMPLOYMENT. So long as the Participant shall
continue to be a full-time and continuous employee of the Company
or its parent or one or more of its subsidiaries, any Stock
Option granted to him shall not be affected by any change of
duties or position. Leaves of absence of a Participant, duly
authorized by the Company, shall not be deemed termination or
interruptions of employment. Nothing in the Plan or in this
Option Agreement shall confer upon the Participant any right to
continue in the employ of the Company or its parent or of any of
its subsidiaries, or interfere in any way with the right of the
Company or its parent or of any of its subsidiaries to terminate
such Participant's employment at any time.
6. EXPIRATION OF OPTION PERIOD UPON TERMINATION OF
EMPLOYMENT.
(a) At all times during the period commencing
with the date a Stock Option is granted to the Participant and
ending on the earlier of the expiration of the Option Period
applicable to the Stock Option or the date which is three months
prior to the date the Stock Option is exercised by the
Participant, the Participant must be an employee of either (i)
the Company, (ii) a parent or a subsidiary corporation of the
Company, or (iii) a corporation or a parent or a subsidiary
corporation of such corporation issuing or assuming a Stock
Option in a transaction to which Section 425(a) of the Code
applies. Provided, if the Participant is "disabled" (within the
meaning of Section 105(d)(4) of the Code) the aforesaid three
month period shall mean a one year period. Provided further, in
the event the Participant's employment is terminated by reason of
his death, his personal representative may exercise any
unexercised Stock Option granted to the Participant under the
Plan at any time within one year after the Participant's death,
but in any event not after the expiration of the Option Period
applicable to such Stock Option.
(b) Notwithstanding anything herein to the
contrary, in the event the employment of the Participant is
terminated for any of the reasons as set forth in subparagraph
6(a) hereof, unless otherwise determined by the Committee, the
Participant (or the Participant's personal representative in the
case of death) shall be permitted to exercise any Stock Option or
part thereof to the extent, and only to the extent, that such
Stock Option becomes exercisable (as provided in paragraph 2,
hereof) as of the date the Participant's employment is
terminated.
7. SUCCESSIVE OPTIONS. Any Stock Option granted
hereunder shall not be exercisable while there is outstanding
(within the meaning of Section 422A(c)(7) of the Code) any
"incentive stock option" theretofore granted to the Participant
to purchase common stock of the Company or in a corporation
(which at the time of the granting of such Stock Option
hereunder) is a parent or subsidiary corporation of the Company,
or in a predecessor corporation of any such corporations.
8. METHOD OF EXERCISING OPTION.
(a) The manner of exercising the Stock Option
herein granted shall be by written notice to the Company at least
two days before the date the Stock Option, or part thereof, is to
be exercised, and in any event prior to the expiration of the
Option Period. Such notice shall state the election to exercise
the Stock Option and the number of shares of Stock with respect
to that portion of the Stock Option being exercised, and shall be
signed by the person or persons so exercising the Stock Option.
The notice shall be accompanied by payment of the full purchase
price of such shares, in which event the Company shall deliver a
certificate or certificates representing such shares to the
person or persons entitled thereto as soon as practicable after
the notice shall be received.
(b) Payment for shares of Stock purchased under
this Option Agreement shall be made in full, in cash, common
stock of the Company or a combination of cash and common stock of
the Company, at the time of the exercise of the Stock Option as a
condition thereof, and no loan or advance shall be made by the
Company for the purpose of financing, in whole or in part, the
purchase of Stock. Any cash proceeds of sale of Stock subject to
the Stock Option are to be added to the general funds of the
Company to be used for its general corporate purposes. In the
event that common stock of the Company is utilized as
consideration for the purchase of Stock upon the exercise of a
Stock Option, such common stock shall be valued at the "fair
market value" as defined in Article V of the Plan.
(c) In the event the Option is exercised,
pursuant to the foregoing provisions of this paragraph 8, by any
person or persons other than the Participant in the event of the
death of the Participant, such notice shall also be accompanied
by appropriate proof of the right of such person or persons to
exercise the Stock Option. The notice so required shall be given
by personal delivery to the Secretary of the Company or by
registered or certified mail, addressed to the Company at 4201 N.
Tulsa, Perimeter Center, Suite 200, P. O. Box 12279, Oklahoma
City, Oklahoma 73157 and it shall be deemed to have been given
when it is so personally delivered or when it is deposited in the
United States mail in an envelope addressed to the Company, as
aforesaid, properly stamped for delivery as a registered or
certified letter.
9. ADJUSTMENTS. In the event of a merger,
consolidation, reorganization, recapitalization, stock dividend,
stock split, reverse stock split, or other change in the
corporate structure or capitalization affecting the Company's
common stock, a fair and equitable adjustment shall be made in
the number, kind, option price, etc., of shares of Stock subject
to Stock Option granted hereunder; provided, however, that each
such adjustment and the number and kind of shares of Stock
subject to outstanding Stock Options, including any adjustment in
the option price, shall be made in such a manner as not to
constitute a "modification" as defined in Section 425 of the
Internal Revenue Code of 1954, as amended.
10. SECURITIES LAW RESTRICTIONS. Stock Options shall
be exercised and Stock issued only upon compliance with the
Securities Act of 1933, as amended (the "Act"), and any other
applicable securities law, or pursuant to an exemption therefrom.
11. GENERAL. The Company shall at all times during
the term of this Option Agreement reserve and keep available such
number of shares of its common stock as will be sufficient to
satisfy the requirements of this Option Agreement.
IN WITNESS WHEREOF, the Company has caused this Option
Agreement to be duly executed by its officers thereunto duly
authorized, and the Participant has hereunto set his hand and
seal, all on the day and year first above written.
BONRAY DRILLING CORPORATION
By_______________________________
ATTEST: President
______________________ "COMPANY"
Secretary
WITNESSED BY: _________________________________
, an individual
_____________________
"PARTICIPANT"