Exhibit 10(k)
INCENTIVE STOCK OPTION AGREEMENT
THIS INCENTIVE STOCK OPTION AGREEMENT (the "Option
Agreement"), made as of this 18th day of May, 1998, by and
between Philip R. Jamison (the "Participant"), and Beard
Technologies, Inc. (the "Company")
W I T N E S S E T H:
WHEREAS, the Participant is a key management employee of the
Company, its parent or any subsidiary of the Company, and it is
important to the Company that the Participant be encouraged to
remain in the employ of the Company, its parent or any subsidiary
of the Company; and
WHEREAS, in recognition of such facts, the Company desires
to provide to the Participant an opportunity to purchase shares
of the common stock of the Company, as hereinafter provided.
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 ISO OPTION. The Company hereby grants to the
Participant an incentive stock option (the "ISO Option") intended
to qualify under Section 422 of the Internal Revenue Code of
1986, as amended (the "Code") to purchase all or any part of an
aggregate of twenty-five (25) shares of its Common Stock, par
value $10.00, (the "Stock") as set forth below, under and subject
to the terms and conditions of this Option Agreement. The
purchase price for each share to be purchased hereunder shall be
ten dollars and no/100ths($10.00)(the "Option Price").
2. TIMES OF EXERCISE OF ISO OPTION. After and only after the
conditions of Section 8 hereof have been satisfied, the
Participant shall be eligible to exercise that portion of his ISO
Option pursuant to the schedule set forth hereinafter. If the
Participant's employment with the Company (or its parent or of
any one or more of the subsidiaries of the Company) remains full-
time and continuous at all times prior to any of the "Exercise
Dates" specified hereafter, then the Participant shall be
entitled, subject to the applicable provisions of this Option
Agreement having been satisfied, to exercise on or after the
applicable Exercise Date, on a cumulative basis, the number of
shares of Stock determined by multiplying the aggregate number of
shares set forth in the foregoing Section 1 by the designated
percentage set forth hereafter.
Percent of ISO
Exercise Dates Option Exercisable
- -------------- ------------------
On or after, May 18, 1999 20%
On or after, May 18, 2000 20%
On or after, May 18, 2001 20%
On or after, May 18, 2002 20%
On or after, May 18, 2003 20%
3. TERM OF ISO OPTION. ISO Options shall be granted on the
following terms and conditions: ISO Options shall only be granted
to key management employees, directors or key professional
employees of the Company, its parent or any subsidiary of the
Company. No ISO Option shall be exercisable more than ten (10)
years from the date of grant. Subject to such limitations, the
Committee shall have the discretion to fix the period (the "ISO
Period") during which any ISO Option may be exercised. Provided,
notwithstanding anything in this Option Agreement to the
contrary, if the employment of the Participant is terminated for
"Cause" prior to the expiration of the Option Period, to the
extent any ISO Options under this Option Agreement have not been
previously exercised, such ISO Options shall automatically and
immediately expire as of the date of such termination of
employment, regardless of the extent to which it would have been
otherwise exercisable at such time. For purposes of this Option
Agreement, termination of the Participant's employment by the
Company for Cause shall mean termination for one of the following
reasons: (i) the conviction of the Participant of a felony by a
federal or state court of competent jurisdiction; (ii) an act or
acts of dishonesty taken by the Participant and intended to
result in substantial personal enrichment of the Participant at
the expense of the Company; or (iii) the Participant's willful
breach or habitual neglect of the duties which he is expected to
perform as a key employee of the Company.
At all times during the period commencing with the date an
ISO Option is granted to a Participant and ending on the earlier
of the expiration of the ISO Period applicable to such ISO Option
or the date which is three (3) months prior to the date the ISO
Option is exercised by such Participant, such 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 an ISO Option in a transaction to which Section
424(a) of the Code applies. Provided, in the case of a
Participant who incurs a disability, 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 ISO Option granted to the Participant at any time
within one (1) year after the Participant's death but in any
event not after the expiration of the ISO Period applicable to
such ISO Option.
4. NONTRANSFERABILITY OF STOCK OPTIONS. Except as otherwise
herein provided, any ISO Option granted shall not be transferable
otherwise than by will or the laws of descent and distribution,
and the ISO Option may be exercised, during the lifetime of the
Participant, only by him. More particularly (but without limiting
the generality of the foregoing), the ISO 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 ISO 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, its parent
or one or more of the subsidiaries of the Company, any ISO Option
granted to him shall not be affected by any change of duties or
position. Nothing in this Option Agreement shall confer upon the
Participant any right to continue in the employ of the Company,
its parent or any of the subsidiaries of the Company, or
interfere in any way with the right of the Company, its parent or
any of the subsidiaries of the Company to terminate such
Participant's employment at any time.
6. SPECIAL RULES WITH RESPECT TO ISO OPTIONS. With
respect to ISO Options granted hereunder, the following special
rules shall apply:
(a) Annual Limitation on Exercise of ISO Options.
Except as provided in Section 8 herein, with respect to ISO
Options granted, in no event during any calendar year will the
aggregate "fair market value" (determined as of the time the ISO
Option is granted) of the Stock for which the Participant may
first have the right to exercise under an ISO Option granted
under all "incentive stock option" plans qualified under Section
422 of the Code which are sponsored by the Company, its parent
and its subsidiary corporations exceed $100,000. For purposes of
this Section 6(a), "incentive stock options," as defined under
Section 422 (and its predecessor Section 422A) of the Code,
granted prior to January 1, 1987, shall be disregarded when
calculating the foregoing $100,000 limitation.
(b) Acceleration of Otherwise Unexercisable ISO
Options on Retirement. Death, Disability or Other Special Circum-
stances. The Committee, in its sole discretion, may permit (i) a
Participant who terminates employment due to retirement, (ii) a
Participant who terminates employment due to a disability, (iii)
the personal representative of a deceased Participant, or (iv)
any other Participant who terminates employment upon the
occurrence of special circumstances (as determined by the
Committee) to purchase all or any part of the shares subject to
any ISO Option on the date of the Participant's retirement,
disability, death, or as the Committee otherwise so determines,
notwithstanding that all installments, if any, had not accrued on
such date.
(c) Number of ISO Options Granted. Participants may be
granted more than one ISO Option. In making any such deter-
mination, the Committee shall obtain the advice and
recommendation of the officers of the Company, its parent, or a
subsidiary of the Company which have supervisory authority over
such Participants. Further, the granting of an ISO Option under
this Option Agreement shall not affect any outstanding ISO Option
previously granted to a Participant.
(c) Assumption of Outstanding ISO Options. To the
extent permitted by the applicable provisions of the Code, any
successor to the Company succeeding to, or assigned the business
of, the Company as the result of or in connection with a
corporate merger, consolidation, combination, reorganization or
liquidation transaction shall assume ISO Options outstanding
under this Option Agreement or issue new ISO Options in place of
such outstanding ISO Options. Provided, such assumption of
outstanding ISO Options is to be made on a fair and equivalent
basis in accordance with the applicable provisions of Section
424(a) of the Code; provided, further, in no event will such
assumption result in a modification of any ISO Option as defined
in Section 424(h) of the Code.
(d) Adjustments Under Changes in Capitalization. The
aggregate number of shares of Stock under ISO Options granted
under this Option Agreement, the Option Price and the total
number of shares of Stock which may be purchased by a Participant
on exercise of the ISO Option shall be appropriately adjusted or
modified by the Committee to reflect any recapitalization, stock
split, merger, consolidation, reorganization, combination,
liquidation, stock dividend or similar transaction involving the
Company. Provided, any such adjustment shall be made in such a
manner as to not constitute a modification as defined in Section
424(h) of the Code.
7. METHOD OF EXERCISING STOCK OPTIONS.
(a) Procedures for Exercise. The manner of exercising
the ISO Option herein granted shall be by written notice to the
Secretary or Personnel Manager of the Company prior to the date
the ISO 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 ISO 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 ISO Option.
(b) Form of Payment. Payment for shares of Stock
purchased under this Option Agreement shall be made in full and
in cash or by check, Stock of the Company or a combination
thereof, at the time of exercise of the ISO Options 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. In the event that common stock of the Company
is utilized as consideration for the purchase of Stock upon the
exercise of any ISO Option, then, such common stock shall be
valued at "fair market value". For all purposes of effecting the
exercise of an ISO Option, the date on which the Participant
gives the notice of exercise to the Company will be the date he
becomes bound contractually to take and pay for the shares of
Stock underlying the ISO Option. The Committee may also adopt
such other procedures which it desires for the payment of the
purchase price upon the exercise of an ISO Option which are not
inconsistent with the applicable provisions of the Code which
relate to Stock Options.
(c) Further Information. In the event the ISO Option
is exercised, pursuant to the foregoing provisions of this
Section 7, 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 ISO Option. The notice so required
shall be given by personal delivery to the Secretary or the
Personnel Manager of the Company or by registered or certified
mail, addressed to the Company at 5600 N. May Avenue, Suite 320,
Oklahoma City, Oklahoma 73112, 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.
8. SECURITIES LAW RESTRICTIONS. ISO 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.
9. SHAREHOLDER RIGHTS. The Participant shall have no rights
as a shareholder with respect to any shares of Stock subject to a
ISO Option prior to the purchase of such shares of Stock by
exercise of the ISO Option.
10. NOTICES. All notices or other communications
relating to the Plan and this Option Agreement as it relates to
the Participant shall be in writing and shall be mailed (U.S.
Mail) by the Company to the Participant at the then current
address as maintained by the Company or such other address as the
Participant may advise the Company in writing.
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.
BEARD TECHNOLOGIES, INC.,
an Oklahoma corporation
By HERB MEE, JR.
Herb Mee, Jr., Vice President
"COMPANY"
PHILIP R. JAMISON
Philip R. Jamison, an individual
"PARTICIPANT"