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EXHIBIT 10.30
STOCK OPTION AGREEMENT AND CONSENT TO AMENDMENT
THIS STOCK OPTION AGREEMENT AND CONSENT TO AMENDMENT, executed this
____ day of May, 2000, but effective as of April 20, 2000, by and between
UNIVERSAL COMPRESSION HOLDINGS, INC., a Delaware corporation ("Holdings") and
__________________ (the "Employee"), who is an Employee of Universal
Compression, Inc. ("Universal"), a wholly-owned subsidiary of Holdings.
WHEREAS, Holdings previously granted to the Employee, effective
____________, 1998, an option (the "Prior Option") to purchase ______ shares of
Holdings Common Stock, $.01 par value per share, (the "Common Stock") at $50 per
share pursuant to the Universal Compression Holdings, Inc. Incentive Stock
Option Plan (the "Plan");
WHEREAS, the terms and conditions of the Prior Option are set forth in
a stock option agreement dated ____________, 1998, (the "Prior Option
Agreement");
WHEREAS, pursuant to the terms of the Plan and in connection with the
proposed initial public offering of Common Stock, and a related change in
capitalization of Holdings if such offering is consummated, the Board of
Directors of Holdings (the "Board") may equitably adjust outstanding stock
options;
WHEREAS, the parties desire to amend the provisions of the Prior Option
Agreement regarding termination of employment, mode of exercise and
anti-dilution;
WHEREAS, effective April 20, 2000, Holdings amended Section 10 of the
Plan to modify the anti-dilution provision;
WHEREAS, Holdings proposes to amend, effective May 15, 2000, Section 10
of the Plan to modify the option price payment provision of such Section;
WHEREAS, Holdings has granted to the Employee an option to purchase
_______ shares of Common Stock at $________ per share (the "Exercise Price"),
pursuant to the terms and conditions of this Agreement and Consent in
consideration for services to Universal and the Employee's agreement and consent
to the amendment of the Prior Option Agreement and the Plan; and
WHEREAS, pursuant to Employee's execution of this Agreement and
Consent, the Employee agrees and consents to the amendment of the Prior Option
Agreement and Section 10 of the Plan;
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NOW, THEREFORE, in consideration of the mutual covenants hereinafter
set forth and for other good and valuable consideration, the sufficiency of
which is hereby acknowledged, the parties agree as follows:
I.
PRIOR OPTION AGREEMENT AMENDMENT
1. Sections 2(b)(ii) and (iii) of the Prior Option Agreement are
amended to provide as follows:
(ii) Termination of Employment Without Cause. In the
event Universal terminates Employee's employment without Cause (as
defined in the Plan), the Option shall terminate as of the date of
Employee's termination of employment except for the portion of the
Option which is exercisable as of the date of termination of
employment, which shall terminate 30 days following the date of such
termination of employment.
(iii) Termination of Employment for Cause or
Voluntary Resignation. In the event the Employee's employment with
Universal shall terminate for Cause (as defined in the Plan), or the
Employee voluntarily resigns his or her employment with Universal, the
Option, whether or not exercisable as of the date of termination of
employment, shall terminate in its entirety on the date of termination.
2. Section 4 of the Prior Option Agreement is amended to provide as
follows:
4. MODE OF EXERCISE. The Option shall be exercised by giving
to Holdings written notice stating (a) the number of shares with
respect to which the Option is being exercised, (b) the aggregate
Exercise Price for such shares, and (c) the method of payment. At the
option of the Employee, such aggregate Exercise Price may be paid: (i)
in cash; (ii) with the consent of the Board of Directors of Holdings
(the "Board"), which consent may be given or withheld in its sole
discretion, by delivery of a promissory note to Holdings payable over a
three (3) year period and bearing interest at the prime rate; (iii)
with the consent of the Administrator of the Plan, which consent may be
given or withheld in its sole discretion, by delivery of shares of
Common Stock owned by the Employee having a Fair Market Value (as
determined by Section 7 hereof) equal in amount to the aggregate
Exercise Price of the Option being exercised; (iv) by any combination
of (i), (ii) and (iii); or (v) with the consent of the Administrator of
the Plan, which consent may be given or withheld in its sole
discretion, by cancellation of a portion of the Option as determined by
the Administrator of the Plan.
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3. Section 8 of the Prior Option Agreement is amended to provide as
follows:
8. ADJUSTMENT. The number, class of and/or Exercise Price of
shares subject to the Option shall be adjusted by the Administrator of
the Plan to reflect a change in the capitalization of Holdings
resulting from a stock dividend or split, and may be adjusted by the
Administrator of the Plan to reflect a change in the capitalization of
Holdings resulting from a merger, consolidation, acquisition,
separation (including a spin-off or spin-out), reorganization or
liquidation; provided that the number of shares subject to the Option
shall always be a whole number. Notwithstanding the foregoing, the
issuance by Holdings of shares of any class or securities convertible
into shares of any class, for cash or property, or for labor or
services, either upon direct sale or upon exercise of rights or
warrants to subscribe therefor, or upon conversion of shares or
obligations of Holdings convertible into such shares or other
securities, shall not affect, and no adjustment by reason thereof shall
be made with respect to the shares subject to the Option.
II.
EMPLOYEE CONSENT TO PLAN AMENDMENT
1. The Employee hereby agrees and consents to the April 20, 2000
amendment to Section 10(h) of the Plan and the May 15, 2000 amendment to Section
10(d) of the Plan and the application of such Plan Sections, as amended, to the
Prior Option, the Option and any other options granted to the Employee under the
Plan.
2. As amended, Section 10(d) of the Plan will provide as follows:
(d) Payment of Option Price Upon Exercise. The purchase price
of the shares of Common Stock as to which an Option shall be exercised
shall be paid to the Corporation at the time of exercise: (i) in cash;
(ii) with the consent of the Board, by delivery of a promissory note to
the Corporation payable over a three (3) year period and bearing
interest at the prime rate; (iii) with the consent of the
Administrator, by delivery of shares of Common Stock owned by the
Participant having a Fair Market Value (as defined and determined by
Section 2 hereof) equal in amount to the aggregate exercise price of
the Option being exercised; (iv) by any combination of (i), (ii) and
(iii); or (v) with the consent of the Administrator, by cancellation of
a portion of the Option as determined by the Administrator.
3. As amended, Section 10(h) of the Plan provides as follows:
(h) Adjustments. The aggregate number and/or class of shares
which may be available for the grant of Options and the number, class
of and/or option price of shares subject to outstanding Options shall
be adjusted by the Administrator to reflect a change in the
capitalization of the Corporation resulting from a stock dividend or
split, and may be adjusted by the Administrator to reflect
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a change in the capitalization of the Corporation resulting from a
merger, consolidation, acquisition, separation (including a spin-off or
spin-out), reorganization or liquidation; provided that the number of
shares subject to any Option shall always be a whole number.
Notwithstanding the foregoing, the issuance by the Corporation of
shares of any class or securities convertible into shares of any class,
for cash or property, or for labor or services, either upon direct sale
or upon exercise of rights or warrants to subscribe therefor, or upon
conversion of shares or obligations of the Corporation convertible into
such shares or other securities, shall not affect, and no adjustment by
reason thereof shall be made with respect to, the shares authorized for
issuance under Section 4 or the shares subject to outstanding Options.
III.
NEW OPTION GRANT
1. GRANT OF NEW OPTION. Holdings grants to the Employee an option (the
"Option") to purchase _______ shares of Common Stock at $______ per share
effective as of April 20, 2000. The Option shall expire on December 31, 2000
unless on or before such date (a) the Employee executes this Agreement and
Consent and (b) there is an initial public offering of Common Stock. If both (a)
and (b) occur on or before December 31, 2000, the Option shall expire at 12:00
midnight on April 19, 2010, unless sooner terminated under the provisions
hereof. This Option is granted under the Plan, as amended April 20, 2000, a copy
of which is attached hereto as Exhibit "A" and is incorporated herein by
reference, and shall constitute an Incentive Stock Option under Section 422 of
the Internal Revenue Code of 1986, as amended, (the "Code") to the extent
permissible under Section 422(d) of the Code, and otherwise shall be a
Non-qualified Stock Option. All capitalized terms not otherwise defined in this
Agreement and Consent shall have the respective meaning of such terms as defined
in the Plan.
2. OPTION TERMS AND CONDITIONS.
(a) Exercise of Option. The Option shall become exercisable based on
the same vesting schedule and dates as set forth in Section 2(a) of the Prior
Option Agreement; provided, however, the Option shall become immediately
exercisable (except as provided in this sentence below) upon (i) a public
offering of Common Stock of Holdings, (ii) the acquisition by any Person, other
than an Affiliate of ▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners III, L.P. (as defined in the Plan)
of fifty-one percent (51%) or more of the Common Stock of Holdings, or (iii) a
sale of all or substantially all of the assets of Holdings; provided further
that, notwithstanding the foregoing, in no event may the Option be exercisable
prior to the later of: (x) the Employee's execution of this Agreement and
Consent and (y) an initial public offering of Common Stock, and if neither of
such events occurs on or before December 31, 2000, this Option shall terminate
as provided in Section 1 above.
(b) Termination of Employment.
(i) Termination due to Death, Disability or Retirement. In the
event the Employee's employment with Universal terminates on account of death,
Disability (as defined in
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the Plan) or retirement after age 65, the Option shall terminate as of the date
of Employee's termination of employment, except for the portion of the Option
which is exercisable as of the date of termination of employment, which shall
terminate three months following the date of Employee's death, disability or
retirement after age 65.
(ii) Termination of Employment Without Cause. In the event
Universal terminates Employee's employment without Cause (as defined in the
Plan), the Option shall terminate as of the date of Employee's termination of
employment except for the portion of the Option which is exercisable as of the
date of termination of employment, which shall terminate 30 days following the
date of such termination of employment.
(iii) Termination of Employment for Cause or Voluntary
Resignation. In the event the Employee's employment with Universal shall
terminate for Cause (as defined in the Plan), or the Employee voluntarily
resigns his or her employment with Universal, the Option, whether or not
exercisable as of the date of termination of employment, shall terminate in its
entirety on the date of termination.
3. NON-TRANSFERABILITY. No Option granted hereby and no right arising
thereunder shall be transferable other than by will or by the laws of descent
and distribution. During the lifetime of the Employee, the Option shall be
exercisable only by the Employee. If the Option is exercisable at the date of
the Employee's death and is transferred by will or by the laws of descent and
distribution, the Option shall be exercisable in accordance with the terms of
such Option by the executor or administrator, as the case may be, of the
Employee's estate for a period of three (3) months after the date of the
Employee's death and shall then terminate.
4. MODE OF EXERCISE. The Option shall be exercised by giving to
Holdings written notice stating (a) the number of shares with respect to which
the Option is being exercised, (b) the aggregate Exercise Price for such shares,
and (c) the method of payment. At the option of the Employee, such aggregate
Exercise Price may be paid: (i) in cash; (ii) with the consent of the Board,
which consent may be given or withheld in its sole discretion, by delivery of a
promissory note to Holdings payable over a three (3) year period and bearing
interest at the prime rate; (iii) with the consent of the Administrator of the
Plan, which consent may be given or withheld in its sole discretion, by delivery
of shares of Common Stock owned by the Employee having a Fair Market Value (as
determined by Section 5 below) equal in amount to the aggregate Exercise Price
of the Option being exercised; (iv) by any combination of (i), (ii) and (iii);
or (v) with the consent of the Administrator of the Plan, which consent may be
given or withheld in its sole discretion, by cancellation of a portion of the
Option as determined by the Administrator of the Plan.
5. FAIR MARKET VALUE OF COMMON STOCK. The "Fair Market Value" of the
Common Stock on any day shall be determined by the Board as follows: (i) if the
Common Stock is listed on a national securities exchange or quoted through the
NASDAQ National Market System, the Fair Market Value on any day shall be the
average of the high and low reported Consolidated Trading sales prices, or if no
such sale is made on such day, the average of the closing bid and asked prices
reported on the Consolidated Trading listing for such day; (ii) if the Common
Stock is quoted on the NASDAQ inter-dealer quotation system, the Fair Market
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Value on any day shall be the average of the representative bid and asked prices
at the close of business for such day; (iii) if the Common Stock is not listed
on a national stock exchange or quoted on NASDAQ, the Fair Market Value on any
day shall be the average of the high bid and low asked prices reported by the
National Quotation Bureau, Inc. for such day; or (iv) if none of clauses (i) -
(iii) are applicable, the Fair Market Value as may be determined by the Board or
the Administrator of the Plan, there being no obligation to make such
determination.
6. STOCK CERTIFICATES. All stock certificates representing shares of
Common Stock acquired pursuant to the exercise of an Option that are issued by
Holdings shall contain a legend substantially in the following form:
"SHARES OF UNIVERSAL COMPRESSION HOLDINGS, INC. ("HOLDINGS")
REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A STOCKHOLDERS AGREEMENT,
DATED AS OF February 20, 1998, AS MAY BE AMENDED, WHICH CONTAINS
PROVISIONS REGARDING THE RESTRICTIONS ON THE TRANSFER OF SUCH SHARES AND
OTHER MATTERS. A COPY OF SUCH AGREEMENT IS AVAILABLE FOR INSPECTION AT
THE PRINCIPAL OFFICE OF HOLDINGS. THE SHARES REPRESENTED BY THIS
CERTIFICATE WERE NOT REGISTERED UNDER, AND ARE SUBJECT TO, THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE SOLD,
TRANSFERRED OR ASSIGNED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
UNDER THE SECURITIES ACT OR IN A TRANSACTION EXEMPT FROM REGISTRATION
UNDER THE SECURITIES ACT."
In the event that the shares of Common Stock issued pursuant to the
Option are (i) registered under the Securities Act of 1933, as amended (the
"Securities Act"), pursuant to an effective registration statement which
complies with the then applicable regulations, rules and procedures and
practices of the Securities and Exchange Commission, and are registered and/or
qualified in accordance with any applicable state laws, regulations, rules and
administrative procedures practices, or (ii) transferred pursuant to an
exemption from registration under the Securities Act and, at the request of
Holdings, Holdings has received an executed legal opinion, satisfactory to its
counsel, as to the availability of and compliance with such exemption and that
such shares need not bear the restrictive legend stating that such shares have
not been registered under the Securities Act, Holdings may issue new
certificates representing such shares omitting that portion of such restrictive
legend.
The shares of Common Stock acquired pursuant to the Option shall be
subject to the provisions regarding transfers of shares in the Stockholders
Agreement dated as of February 20, 1998, among Holdings and the partners named
on the signature pages thereto, as amended from time to time (the "Stockholders
Agreement"). At the request of Holdings, the Employee shall become a party to
the Stockholders Agreement prior to the issuance of any shares under this
Agreement and Consent.
In the event the Stockholders Agreement terminates, certificates
representing the shares of Common Stock issued pursuant to the Option may be
issued omitting that portion of the
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restrictive legend stating that such shares are subject to the Stockholders
Agreement and the availability of a copy of such agreement.
7. OPTION SUBJECT TO SECURITIES AND OTHER REGULATIONS. The Option
granted hereunder and the obligation of Holdings to sell and deliver shares
under such Option 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. Holdings, in its discretion, may postpone the
issuance or delivery of shares upon any exercise of the Option until completion
of any stock exchange listing, or other qualification of such shares under any
state or federal law, rule or regulation as Holdings may consider appropriate,
and may require the Employee, his beneficiary or his legal representative to
make such representations and furnish such information as it may consider
appropriate in connection with the issuance or delivery of the shares in
compliance with applicable laws, rules and regulations.
Upon demand by the Board, the Employee (or any person acting under
Section 3 above) shall deliver to the Board at the time of exercise of the
Option a written representation that the shares to be acquired upon the exercise
of the Option are being acquired for his own account and not with a view to, or
for resale in connection with, any distribution in violation of federal or state
securities laws. Upon such demand, delivery of such representation prior to the
delivery of any shares issued upon exercise of the Option shall be a condition
precedent to the right of the Employee or such other person to purchase any
shares.
8. BUYBACK RIGHT. Upon any termination of the employment of the
Employee prior to a public offering of Common Stock, Holdings or its designee
may at its option purchase all Common Stock acquired upon any exercise of the
Option then held by the Employee for a purchase price equal to the determined
value of such stock at the time of purchase. For purposes of this Section 8,
"determined value" shall mean the determined value of the shares of Common Stock
being purchased by Holdings pursuant to this Section 8, such value to be
determined annually as of March 31 of each year by a nationally recognized
investment banking or appraisal firm selected by Holdings. This valuation will
serve as the determined value for the shares until the next valuation unless the
Board determines that a significant change in Holdings performance or prospects
requires a revaluation of the shares.
The purchase by Holdings pursuant to this Section 8 shall be paid for
in cash, to the extent permitted under the loan agreements and debt instruments
relating to Holdings or any of its subsidiaries, or, to the extent cash payments
are not permitted thereunder, by means of a subordinated payment-in-kind
promissory note issued by Holdings bearing interest, payable annually, at the
lowest interest rate required to avoid imputed interest, which note shall be
repaid as soon as permitted.
9. NO RIGHTS AS STOCKHOLDER PRIOR TO EXERCISE OF OPTION. The
Participant shall not have any rights as a stockholder with respect to any
shares subject to the Option prior to the date on which the Employee is recorded
as the holder of such shares on the records of Holdings.
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10. NO RIGHTS WITH RESPECT TO CONTINUANCE OF EMPLOYMENT. Neither the
grant of the Option nor any action taken with respect thereto shall be construed
as giving the Employee the right to be retained in the employ of Universal or
any subsidiary or affiliate, nor shall it interfere in any way with the right of
Universal or any such subsidiary or affiliate to terminate any Employee's
employment at any time for any reason, or for no reason at all.
11. TAXES. Holdings may make such provisions and take such steps as it
may deem necessary or appropriate for the withholding of all Federal, state,
local and other taxes required by law to be withheld with respect to the Option
including, but not limited to: (i) reducing the number of shares of Common Stock
otherwise deliverable, based upon their Fair Market Value on the date of
exercise, to permit deduction of the amount of any such withholding taxes from
the amount otherwise payable under this Agreement and Consent; (ii) deducting
the amount of any such withholding taxes from any other amount then or
thereafter payable to the Employee; or (iii) requiring the Employee, his
beneficiary or his legal representative to pay to Holdings the amount required
to be withheld or to execute such documents as Holdings deems necessary or
desirable to enable it to satisfy its withholding obligations as a condition of
releasing the Common Stock.
12. GOVERNING LAW. This Agreement and Consent shall be governed and
construed in accordance with the laws of the State of Delaware applicable to
contract made and to be performed entirely within such state.
13. COUNTERPARTS. This Agreement and Consent may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
shall constitute one and the same instrument, and it shall not be necessary in
making proof of this Agreement and Consent to produce or account for more than
one such counterpart.
14. NOTICES. Any notice or other communication required or which may be
given hereunder shall be in writing and shall be delivered personally,
telecopied with confirmed receipt, sent by certified, registered, or express
mail, postage prepaid, or sent by a national next-day delivery service to the
parties at the following addresses or at such other addresses as shall be
specified by the parties by like notice, and shall be deemed given when so
delivered personally or telecopied, or if mailed, 2 days after the date of
mailing, or, if by national next-day delivery service, on the day after delivery
to such service as follows:
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(i) if to Holdings, at:
Universal Compression Holdings, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, C.F.O.
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Universal Compression, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. Banner, General Counsel
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
(ii) if to Employee, to him or her at:
Universal Compression, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
15. HEADINGS. The headings in this Agreement and Consent are for
convenience of reference only and shall not in any manner define or limit the
scope or intent of any provisions of this Agreement and Consent.
16. SEVERABILITY. If any term, provision, covenant or restriction of
this Agreement and Consent, or any part thereof, is held by a court of competent
jurisdiction or any foreign federal, state, county or local government or any
other governmental, regulatory or administrative agency or authority to be
invalid, void, unenforceable or against public policy for any reason, the
remainder of the terms, provisions, covenants and restrictions of this Agreement
and Consent shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.
17. SPECIFIC PERFORMANCE. Each of the parties hereto acknowledges and
agrees that in the event of any breach of this Agreement and Consent, the
non-breaching party would be irreparably harmed and could not be made whole by
monetary damages. It is accordingly agreed that the parties hereto shall and do
hereby waive the defense in any action for specific performance that a remedy at
law would be adequate and that the parties hereto, in addition to any other
remedy to which they may be entitled at law or in equity, shall be entitled to
compel specific performance of this Agreement and Consent in any action
instituted in the Supreme Court of the State of New York or the United States
District Court for the Southern District of New York, or, in the event such
courts shall not have jurisdiction of such action, in any court of the United
States or any state thereof having subject matter jurisdiction of such action.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound
hereby, have executed this Agreement and Consent effective as of the day and
year first above mentioned.
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EMPLOYEE
By:
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[NAME OF EMPLOYEE]
UNIVERSAL COMPRESSION HOLDINGS, INC.
By:
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
President and Chief Executive Officer
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