Document:

exv10w1

 

EXHIBIT 10.1

NATIONAL OILWELL VARCO, INC.

LONG-TERM INCENTIVE PLAN

Nonqualified Stock Option Agreement

	 	 	 
	Grantee:

	 	                    
	 
	 	 
	Date of Grant:

	 	                    
	 
	 	 
	Exercise Price per Share:

	 	$                    
	 
	 	 
	Number of Option Shares Granted:

	 	                    

     1. Notice of Grant. National Oilwell Varco, Inc. (the “Company”) is pleased to notify
you that you have been granted an option (“Option”) to purchase the number of shares of Common
Stock of the Company set forth above pursuant to the National Oilwell Varco, Inc. Long-Term
Incentive Plan (the “Plan”), subject to the terms and conditions of the Plan and this Agreement.
This Option is not intended to be an incentive stock option within the meaning of Section 422 of
the Code.

     2. Vesting and Exercise of Option. Subject to the further provisions of this
Agreement, the Option shall become vested and may be exercised in accordance with the following
schedule, by written notice to the Company at its principal executive office addressed to the
attention of its Secretary (or such other officer or employee of the Company as the Company may
designate from time to time):

	 	 	 
	NUMBER OF FULL YEARS	 	PERCENTAGE OF SHARES THAT MAY BE PURCHASED
	Less than 1 year
	 	0%
	 
	 	 
	1 year
	 	33 1/3%
	 
	 	 
	2 years
	 	66 2/3%
	 
	 	 
	3 years or more
	 	100%

Notwithstanding the above schedule, but subject to the further provisions hereof, upon the
occurrence of the following events the Option shall vest and become exercisable as provided below:

          (a) Disability. If your employment with the Company terminates by reason of a
disability that entitles you to benefits under the Company’s long-term disability plan, the
Option may be exercised at any time during the one-year period following such termination by
you or by your guardian or legal

 

 

 representative (or, if you die during such one-year period, by your estate or the person
who acquires the Option by will or the laws of descent and distribution), but only as to the
vested number of Option shares, if any, that you were entitled to exercise hereunder as of
the date your employment so terminates.

          (b) Death. If you die while in the employ of the Company, your estate (or the
person who acquires the Option by will or the laws of descent and distribution) may exercise
the Option at any time during the one-year period following the date of your death), but only
as to the vested number of Option shares, if any, that you were entitled to exercise
hereunder as of the date of your death.

          (c) Termination for Cause. If your employment is terminated by the Company for
cause, the Option automatically shall be cancelled and may not be exercised following your
termination. The term “cause” means (i) your gross negligence or willful misconduct in the
performance of your duties with respect to the Company or (ii) your final conviction of a
felony or a misdemeanor involving moral turpitude.

          (d) Other Terminations. If your employment with the Company is terminated for
any reason other than as provided above, including an Involuntary Termination (as defined
below), the Option, to the extent vested on the date of your termination, may be exercised,
at any time during the three-month period following such termination, by you or by your
guardian or legal representative (or by your estate or the person who acquires the Option by
will or the laws of descent and distribution or otherwise by reason of the death of you if
you die during such three-month period), but in each case only as to the vested number of
Option shares, if any, that you were entitled to purchase hereunder as of the date your
employment so terminates.

          (e) Change of Control. The Option shall become fully vested upon your
Involuntary Termination. As used in this paragraph, “Involuntary Termination” means your
termination from employment with the Company on or within twelve months following a Change of
Control that is either (i) initiated by the Company for reasons other than cause, or (ii)
initiated by you after (a) a reduction by the Company of your authority, duties or
responsibilities immediately prior to the Change of Control (excluding for this purpose (A)
an insubstantial reduction of such authorities, duties or responsibilities or an
insubstantial reduction of your offices, titles and reporting requirements, or (B) an
isolated, insubstantial and inadvertent action not taken in bad faith and that is remedied by
the Company promptly after receipt of notice thereof given by you), (b) a reduction of your
base salary or total compensation as in effect immediately prior to the Change of Control
(total compensation means for this purpose: base salary, participation in an annual bonus
plan, and participation in a long-term incentive plan), or (c) your transfer, without your
express written consent, to a location which is outside the general metropolitan area in
which your principal place of business immediately prior to the Change of Control may be
located or the Company’s requiring you to travel on Company business to a substantially
greater extent than required immediately prior to the Change of Control. The term “Change of
Control” shall mean: (i) the Company completes the sale of assets having a gross sales price
which exceeds 50% of the consolidated total capitalization of the Company (consolidated total
stockholders’ equity plus consolidated total long-term debt as determined in accordance with
generally accepted accounting principles) as at the end of the last full fiscal quarter prior
to the date such determination is made; or (ii) any corporation, person or group within the
meaning of Section 13(d)(3) and 14(d)(2) of the Securities Exchange Act of 1934, as amended
(the “Act”), becomes the beneficial owner (within the meaning of Rule 13d-3 under the Act) of
voting securities of the Company representing more than 30% of the total votes eligible to be
cast at any election of directors of the Company.

 

 

     For purposes of this Agreement, “employment with the Company” shall include being an employee
or a director of, or a consultant to, the Company or a Subsidiary.

     The provisions of any written employment or severance agreement between you and the Company
concerning the vesting, exercise and/or period for exercise of Company stock options are
incorporated hereby and made a part of this Agreement.

     There is no minimum or maximum number of Option shares that must be purchased upon exercise of
the Option. Instead, the Option may be exercised, at any time and from time to time, to purchase
any number of Option shares that are then vested according to the provisions of this Agreement.

     Notwithstanding any of the foregoing, the Option shall not be exercisable in any event after
the expiration of 10 years from the above Date of Grant.

     All Option shares that are not vested on your termination of employment as provided above
shall be automatically cancelled and forfeited without payment upon your termination.

     3. Method of Payment. Payment of the aggregate Exercise Price for the Shares being
purchased may be by any of the following, or a combination thereof: (a) cash; (b) check acceptable
to the Company; (c) consideration received by the Company under a “cashless broker” exercise
program approved by the Company; (d) the constructive surrender of Shares already owned by you; or
(e) with the consent of the Company (or the Committee if you are subject to Section 16(b) of the
Exchange Act), withholding Shares to be acquired upon exercise of the Option.

     4. Nontransferability of Option. This Option may not be transferred in any manner
otherwise than by will or by the laws of descent or distribution and may be exercised during your
lifetime only by you. The terms of the Plan and this Agreement shall be binding upon your
executors, administrators, heirs, successors and assigns.

     5. Entire Agreement; Governing Law. This Option is granted under and governed by the
terms and conditions of the Plan and this Agreement. In the event of any conflict between the Plan
and this Agreement, the terms of the Plan shall control. Unless otherwise defined herein, the
terms defined in the Plan shall have the same defined meanings in this Agreement. The Plan is
incorporated herein by reference. The Plan and this Agreement constitute the entire agreement of
the parties with respect to the subject matter hereof and supersede in their entirety all prior
undertakings and agreements of the Company and you with respect to the subject matter hereof, and
may not be modified adversely to your interest except by means of a writing signed by the Company
and you. This Agreement is governed by the internal substantive laws, but not the choice of law
rules, of the state of Texas.

     6. Withholding of Tax. To the extent that the exercise of the Option results in the
receipt of compensation by you with respect to which the Company or a Subsidiary has a tax
withholding obligation pursuant to applicable law, unless other arrangements have been made by you
that are acceptable to the Company or such Subsidiary, which, with the consent of the Company (or
the Committee if you are subject to Section 16(b) of the Exchange Act), may include withholding a
number of Shares that would otherwise be delivered on exercise that have an aggregate Fair Market
Value that does not exceed the amount of taxes to be withheld, you shall deliver to the Company or
the Subsidiary such amount of money as the Company or the Subsidiary may require to meet its
withholding obligations under such applicable law. No delivery of Shares shall be made pursuant to
the exercise of the Option under this Agreement until you have paid or made arrangements approved
by the Company or the Subsidiary to satisfy in full the applicable tax withholding requirements of
the Company or Subsidiary.exv10w2

 

EXHIBIT 10.2

NATIONAL OILWELL VARCO, INC.

Nonqualified Stock Option Agreement

     AGREEMENT made as of                      between NATIONAL OILWELL VARCO, INC., a Delaware
corporation (the “Company”) and                     (“Optionee”), a non-employee director of the
Company.

     To carry out the purposes of the National Oilwell Varco, Inc. Long-Term Incentive Plan, as
amended and restated (the “Plan”), by affording Optionee the opportunity to purchase shares of the
Common Stock of the Company (“Stock”), and in consideration of the mutual agreements and other
matters set forth herein and in the Plan, the Company and Optionee hereby agree as follows:

     1. Grant of Option. The Company hereby grants to Optionee the right and option
(“Option”) to purchase all or any part of an aggregate of                                 shares of Stock, on the terms
and conditions set forth herein and in the Plan, which Plan is incorporated herein by reference as
a part of this Agreement. This Option shall not be treated as an incentive stock option within the
meaning of section 422(b) of the Internal Revenue Code of 1986, as amended (the “Code”).

     2. Purchase Price. The purchase price of Stock purchased pursuant to the exercise of
this Option shall be $                      per share, which has been determined to be not less than 100% of the
fair market value of the Stock at the date of grant of this Option. For all purposes of this
Agreement, fair market value of Stock shall be determined in accordance with the provisions of the
Plan.

     3. Exercise of Option. Subject to the earlier expiration of this Option as herein
provided, this Option may be exercised, by written notice to the Company at its principal executive
office addressed to the attention of its Secretary, at any time and from time to time after the
date of grant hereof, but, except as otherwise provided below, this Option shall not be exercisable
for more than a percentage of the aggregate number of shares offered by this Option determined by
the number of full years from the date of grant hereof to the date of such exercise, in accordance
with the following schedule:

	 	 	 
	NUMBER OF FULL YEARS	 	PERCENTAGE OF SHARES THAT MAY BE PURCHASED
	Less than 1 year
	 	0%
	1 year
	 	33 1/3%
	2 years
	 	66 2/3%
	3 years or more
	 	100%

 

 

     The termination of Optionee’s director relationship with the Company and a Change of Control
(as such term is defined below) shall affect Optionee’s rights under this Option as follows:

          (a) This Option shall terminate and cease to be exercisable upon the termination of Optionee’s
director relationship with the Company for cause. For purposes of this Paragraph 2, the term
“cause” shall mean (i) Optionee has engaged in gross negligence or willful misconduct in the
performance of Optionee’s duties with respect to the Company or (ii) Optionee’s final conviction of
a felony or of a misdemeanor involving moral turpitude.

          (b) If Optionee’s director relationship with the Company terminates for any reason other than
for cause, this Option may be exercised by Optionee (or Optionee’s estate or the person who
acquires this Option by will or the laws of descent and distribution or otherwise by reason of the
death of Optionee) at any time prior to the expiration of ten years from the date of grant hereof,
but, except as provided in (c) below, only as to the number of shares Optionee was entitled to
purchase hereunder as of the date Optionee’s director relationship with the Company so terminates.

          (c) Notwithstanding the exercise schedule set forth above, if (i) a Change of Control shall
occur prior to the date upon which this Option is exercisable in full as provided in such schedule,
(ii) Optionee’s director relationship with the Company is terminated at any time on or after such
Change of Control for any reason other than for cause, and (iii) Optionee has served as a director
of the Company continuously from the date of grant of this Option to the date Optionee’s director
relationship with the Company so terminates, then this Option may be exercised in full by Optionee
(or Optionee’s estate or the person who acquires this Option by will or the laws of descent and
distribution or otherwise by reason of the death of Optionee) at any time prior to the expiration
of ten years from the date of grant hereof. For purposes of this Paragraph 2, the term “Change of
Control” shall mean: (y) the Company completes the sale of assets having a gross sales price which
exceeds 50% of the consolidated total capitalization of the Company (consolidated total
stockholders’ equity plus consolidated total long-term debt as determined in accordance with
generally accepted accounting principles) as at the end of the last full fiscal quarter prior to
the date such determination is made; or (z) any corporation, person or group within the meaning of
Section 13(d)(3) and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Act”),
becomes the beneficial owner (within the meaning of Rule 13d-3 under the Act) of voting securities
of the Company representing more than 30% of the total votes eligible to be cast at any election of
directors of the Company.

     This Option shall not be exercisable in any event after the expiration of ten years from the
date of grant hereof. The purchase price of shares as to which this Option is exercised shall be
paid in full at the time of exercise (a) in cash (including check, bank draft or money order
payable to the order of the Company), (b) by delivering to the Company shares of Stock having a
fair market value equal to the purchase price (provided such shares have been owned by Optionee for
more than six months, unless this requirement is waived by the Committee), (c) through a
“cashless-broker” exercise (through procedures approved by the Committee), (d) by authorizing the
Company to withhold shares of Stock issuable upon exercise of this Option having a fair market
value equal to the purchase price (through procedures approved by the Committee) or (e) any
combination of the foregoing. No fraction of a share of Stock shall be issued by the Company upon
exercise of an Option or accepted by the Company in payment of the purchase price thereof; rather,
Optionee shall provide a cash payment for such amount as is necessary to effect the issuance and
acceptance of only whole shares of Stock. Unless and until a certificate or certificates
representing such shares shall have been issued by the Company to Optionee, Optionee (or the person
permitted to exercise this Option in the event of Optionee’s death) shall not be or have any of the

 

 

rights or privileges of a shareholder of the Company with respect to shares acquirable upon an
exercise of this Option.

     4. Withholding of Tax. If necessary, as a condition of delivery of shares of stock to
be delivered upon exercise of this Option, the Company shall be entitled to require that Optionee
remits or, in appropriate cases agrees to remit when due, the amount necessary to satisfy all
federal, state and local withholding tax requirements relating thereto.

     5. Status of Stock. Optionee agrees that the shares of Stock which Optionee may
acquire by exercising this Option will not be sold or otherwise disposed of in any manner which
would constitute a violation of any applicable securities laws, whether federal or state. Optionee
also agrees (i) that the certificates representing the shares of Stock purchased under this Option
may bear such legend or legends as the Committee deems appropriate in order to assure compliance
with applicable securities laws, (ii) that the Company may refuse to register the transfer of the
shares of Stock purchased under this Option on the stock transfer records of the Company, if such
proposed transfer would, in the opinion of counsel satisfactory to the Company, constitute a
violation of any applicable securities law and (iii) that the Company may give related instructions
to its transfer agent, if any, to stop registration of the transfer of the shares of Stock
purchased under this Option.

     6. Director Relationship. Any question as to whether and when there has been a
termination of Optionee’s director relationship with the Company, and the cause of such
termination, shall be determined by the Committee and its determination shall be final.

     7. Binding Effect. This Agreement shall be binding upon and inure to the benefit of
any successors to the Company and all persons lawfully claiming under Optionee.

     8. Entire Agreement; Amendment. This Agreement constitutes the entire agreement of
the parties with regard to the subject matter hereof, and contains all the covenants, promises,
representations, warranties and agreements between the parties with respect to the Option granted
hereby. Without limiting the scope of the preceding sentence, all prior understandings and
agreements, if any, among the parties hereto relating to the subject matter hereof are hereby null
and void and of no further force and effect. Any modification of this Agreement shall be effective
only if it is in writing and signed by both Optionee and an authorized officer of the Company.

     9. Definitions. Defined terms not specifically defined herein shall have the
definitions given them in the Plan.

     10. Governing Law. This Agreement shall be governed by, and construed in accordance
with, the laws of the State of Texas and applicable federal law.

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