Exhibit 10.5
T-3 ENERGY SERVICES, INC.
NON-STATUTORY STOCK OPTION AGREEMENT
Optionee:
     1. Grant of Stock Option. As of the Grant Date (identified in Section 17
below), T-3 Energy Services, Inc., a Delaware corporation (the “Company”),
hereby grants a Non-statutory Stock Option (the “Option”) to the Optionee
(identified above), a non-employee director of the Company, to purchase the
number of shares of the Company’s common stock, $.001 par value per share (the”
Common Stock”) identified in Section 17 below (the “Shares”), subject to the
terms and conditions of this agreement (the “Agreement”) and the T-3 Energy
Services 2002 Stock Incentive Plan (the “Plan”). The Plan is hereby incorporated
herein in its entirety by reference. The Shares, when issued to Optionee upon
the exercise of the Option, shall be fully paid and non-assessable. The Option
is not an “incentive stock option” as defined in Section 422 of the Internal
Revenue Code.
     2. Definitions. All capitalized terms used herein shall have the meanings
set forth in the Plan unless otherwise provided herein. Section 17 sets forth
meanings for certain of the capitalized terms used in this Agreement.
     3. Option Term. The Option shall commence on the Grant Date (identified in
Section 17) and terminate on the tenth (10th) anniversary of the Grant Date as
specified in Section 17. The period during which the Option is in effect and may
be exercised is referred to herein as the “Option Period”.
     4. Option Price. The Option Price per Share is identified in Section 17.
     5. Vesting. The total number of Shares subject to this Option shall vest in
accordance with the Vesting Schedule (described in Section 17). The Shares may
be purchased at any time after they become vested, in whole or in part, during
the Option Period; provided, however, the Option may only be exercisable to
acquire whole Shares. The right of exercise provided herein shall be cumulative
so that if the Option is not exercised to the maximum extent permissible after
vesting, the vested portion of the Option shall be exercisable, in whole or in
part, at any time during the Option Period.
     6. Method of Exercise. The Option is exercisable by delivery of a written
notice to the Secretary of the Company, signed by the Optionee, specifying the
number of Shares to be acquired on, and the effective date of, such exercise.
The Optionee may withdraw notice of exercise of this Option, in writing, at any
time prior to the close of business on the business day preceding the proposed
exercise date.
     7. Method of Payment. Subject to applicable provisions of the Plan, the
Option Price upon exercise of the Option shall be payable to the Company in full
either: (i) in cash or its equivalent; (ii) subject to prior approval by the
Committee in its discretion, by tendering previously acquired Shares having an
aggregate Fair Market Value (as defined

 

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in the Plan) at the time of exercise equal to the total Option Price (provided
that the Shares must have been held by the Optionee for at least six (6) months
prior to their tender to satisfy the Option Price); (iii) subject to prior
approval by the Committee in its discretion, by withholding Shares which
otherwise would be acquired on exercise having an aggregate Fair Market Value at
the time of exercise equal to the total Option Price; or (iv) any other
permitted method pursuant to the applicable terms and conditions of the Plan. As
soon as practicable after receipt of a written notification of exercise and full
payment, the Company shall deliver to or on behalf of the Optionee, in the name
of the Optionee or other appropriate recipient, Share certificates or other
evidence of ownership for the number of Shares purchased under the Option.
     8. Restrictions on Exercise. The Option may not be exercised if the
issuance of such Shares or the method of payment of the consideration for such
Shares would constitute a violation of any applicable federal or state
securities or other laws or regulations, or any rules or regulations of any
stock exchange on which the Common Stock may be listed. In addition, Optionee
understands and agrees that the Option cannot be exercised if the Company
determines that such exercise, at the time of such exercise, will be in
violation of the Company’s insider trading policy.
     9. Termination of Directorship Service. Voluntary or involuntary
termination of the Optionee as a member of the Company’s Board of Directors
shall affect Optionee’s rights under the Option as follows:
     (a) Termination for Cause. The entire Option, including any vested portion
thereof, shall expire at 12:01 a.m. (CST) on the date of termination of the
Optionee’s directorship and shall not be exercisable to any extent if Optionee’s
directorship is terminated for Cause (as defined in the Plan at the time of such
termination of directorship).
     (b) Other Involuntary Termination or Voluntary Termination. Subject to the
Vesting Schedule in Section 17, if Optionee’s directorship is terminated for any
reason other than for Cause, then (i) any non-vested portion of the Option shall
immediately expire on the termination date and (ii) the vested portion of the
Option shall expire to the extent not exercised as of the earlier of (A) the
expiration of the Option Period or (B) two (2) years after the effective date of
his termination of directorship.
     10. Independent Legal and Tax Advice. Optionee acknowledges that the
Company has advised Optionee to obtain independent legal and tax advice
regarding the grant and exercise of the Option and the disposition of any Shares
acquired thereby.
     11. Reorganization of Company. The existence of the Option shall not affect
in any way the right or power of the Company or its stockholders to make or
authorize any or all adjustments, recapitalizations, reorganizations or other
changes in Company’s capital structure or its business, or any merger or
consolidation of the Company, or any issue of bonds, debentures, preferred or
prior preference stock ahead of or affecting the Shares or the rights thereof,
or the dissolution or liquidation of the Company, 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.

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     12. Adjustment of Shares. In the event of stock dividends, spin-offs of
assets or other extraordinary dividends, stock splits, combinations of shares,
recapitalizations, mergers, consolidations, reorganizations, liquidations,
issuances of rights or warrants and similar transactions or events involving
Company, appropriate adjustments shall be made to the terms and provisions of
the Option as provided in the Plan.
     13. No Rights in Shares. Optionee shall have no rights as a stockholder in
respect of the Shares until the Optionee becomes the record holder of such
Shares.
     14. Investment Representation. Optionee will enter into such written
representations, warranties and agreements as Company may reasonably request in
order to comply with any federal or state securities law. Moreover, any stock
certificate for any Shares issued to Optionee hereunder may contain a legend
restricting their transferability as determined by the Company in its
discretion. Optionee agrees that Company shall not be obligated to take any
affirmative action in order to cause the issuance or transfer of Shares
hereunder to comply with any law, rule or regulation that applies to the Shares
subject to the Option.
     15. No Guarantee of Directorship. The Option shall not confer upon Optionee
any right to continued membership on the Company’s Board of Directors.
     16. General.
     (a) Notices. All notices under this Agreement shall be mailed or delivered
by hand to the parties at their respective addresses set forth beneath their
signatures below or at such other address as may be designated in writing by
either of the parties to one another, or to their permitted transferees if
applicable. Notices shall be effective upon receipt.
     (b) Shares Reserved. The Company shall at all times during the Option
Period reserve and keep available under the Plan such number of Shares as shall
be sufficient to satisfy the requirements of this Option.
     (c) Transferability of Option. The Option is transferable only to the
extent permitted under the Plan at the time of transfer (i) by will or by the
laws of descent and distribution, (ii) by a qualified domestic relations order
(as defined in Section 414(p) of the Internal Revenue Code), or (iii) to
Optionee’s Immediate Family. No right or benefit hereunder shall in any manner
be liable for or subject to any debts, contracts, liabilities, obligations or
torts of Optionee or any permitted transferee thereof.
     (d) Amendment and Termination. No amendment, modification or termination of
this Agreement shall be made at any time without the written consent of Optionee
and Company.
     (e) No Guarantee of Tax Consequences. The Company makes no commitment or
guarantee that any tax treatment will apply or be available to Optionee or any
other person. The Optionee has been advised, and provided with the opportunity,
to obtain independent legal and tax advice regarding the grant and exercise of
the Option and the disposition of any Shares acquired thereby.
     (f) Severability. In the event that any provision of this Agreement shall
be held illegal, invalid, or unenforceable for any reason, such provision shall
be fully severable,

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but shall not affect the remaining provisions of the Agreement, and the
Agreement shall be construed and enforced as if the illegal, invalid, or
unenforceable provision had not been included herein.
     (g) Supersedes Prior Agreements. This Agreement shall supersede and replace
all prior agreements and understandings, oral or written, between the Company
and the Optionee regarding the grant of the Options covered hereby.
     (h) Governing Law. The Option shall be construed in accordance with the
laws of the State of Delaware, without regard to its conflict of law provisions,
to the extent federal law does not supersede and preempt Delaware law.
     17. Definitions and Other Terms. The following capitalized terms shall have
those meanings set forth opposite them:

  (a)   Optionee:     (b)   Grant Date:     (c)   Shares:     (d)   Option
Price:     (e)   Option Period:     (f)   Vesting Schedule:

     In the event of a “Change in Control” of the Company (as defined in the
Plan at the time of such event), the non-vested portion of the Option shall
become immediately 100% vested as of the Change in Control date. In addition, in
the event that Optionee (i) is not nominated for re-election to the Board,
(ii) is nominated for re-election to the Board but is not re-elected to the
Board, or (iii) is involuntarily forced to resign or is removed from his
position as a director on the Board for whatever reason except for Cause, then
any non-vested portion of the Option at such time shall become immediately 100%
vested as of the date of such event. In the event that Optionee voluntarily
resigns his position as a director on the Board for whatever reason, or is
involuntarily removed from such position for Cause, then no accelerated vesting
shall occur.
[Signature page follows.]

 

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     IN WITNESS WHEREOF, the Company, as of the Grant Date, has caused this
Agreement to be executed on its behalf by its duly authorized officer and
Optionee has hereunto executed this Agreement as of the same date.

                      T-3 ENERGY SERVICES, INC.    
 
               
 
  By:                              Name:         Title:    
 
                    Address for Notices:    
 
                    T-3 Energy Services, Inc.         13111 Northwest Freeway,
Suite 500         Houston, TX 77040         Attn: Corporate Secretary    
 
                    OPTIONEE    
 
                    Signature:    
 
               
 
                    Address for Notices: