Document:

exv10w1

Exhibit 10.1

C&J ENERGY SERVICES, INC.

2006 Stock Option Plan 

	1.	 	Purpose and Eligibility

     The purpose of this 2006 Stock Option Plan (the “Plan”) of C&J ENERGY
SERVICES, INC., a Texas corporation (the “Company”) is to provide stock options and other
equity interests in the Company (each an “Award”) to employees, officers, directors,
consultants and advisors of the Company and its Subsidiaries, all of whom are eligible to
receive Awards under the Plan. Any person to whom an Award has been granted under the Plan
is called a “Participant.” Additional definitions are contained in Section 8.

	2.	 	Administration

     a. Administration by Board of Directors. The Plan will be administered by the
Board of Directors of the Company (the “Board”). The Board, in its sole discretion, shall
have the authority to grant and amend Awards, to adopt, amend and repeal rules relating to
the Plan and to interpret and correct the provisions of the Plan and any Award. All decisions
by the Board shall be final and binding on all interested persons. Neither the Company nor
any member of the Board shall be liable for any action or determination relating to the Plan.

     b. Appointment of Committees. To the extent permitted by applicable law, the
Board may delegate any or all of its powers under the Plan to one or more committees or
subcommittees of the Board (a “Committee”). All references in the Plan to the “Board” shall
mean such Committee or the Board. The provisions of this paragraph shall not amend or limit
the applicability of any agreement to which the Company may be subject pursuant to which it
has agreed to limit the grant of Awards, or subject the grant of Awards to the approval of
persons other than the Board.

     c. Delegation to Executive Officers. To the extent permitted by applicable law,
the Board may delegate to one or more executive officers of the Company the power to grant
Awards and exercise such other powers under the Plan as the Board may determine; provided
that the Board shall fix the maximum number of Awards to be granted and the maximum number of
shares issuable to any one Participant pursuant to Awards granted by such executive officers.

     d. Section 409A. The Plan will be maintained and administered in compliance with
the requirements of Section 409A(a)(2), (3) and (4) of the Code.

	3.	 	Stock Available for Awards

     a. Number of Shares. Subject to adjustment under Section 3(c), the aggregate
number of shares of Common Stock of the Company (the “Common Stock”) that may be issued
pursuant to the Plan is 289,474 shares. If any Award expires, or is terminated, surrendered
or forfeited, in whole or in part, the unissued Common Stock covered by such Award shall
again be available for the grant of Awards under the Plan. If shares of Common Stock issued
pursuant to the Plan are repurchased by, or are surrendered or forfeited to, the Company at
no more than cost, such shares of Common Stock shall again be available for the grant of
Awards under the

 

 

Plan; provided that the cumulative number of such shares that may be so reissued under the
Plan will not exceed 289,474 shares. Shares issued under the Plan shall consist in whole or in
part of authorized but unissued shares or treasury shares.

     b. Per-Participant Limit. Subject to adjustment under Section 3(c), no Participant may
be granted Awards during any one fiscal year to purchase more than 200,000 shares of Common Stock.

     c. Adjustment to Common Stock. In the event of any stock split, stock dividend,
extraordinary cash dividend, recapitalization, reorganization, merger, consolidation, combination,
exchange of shares, liquidation, spin-off, split-up, or other similar change in capitalization or
event, (i) the number and class of securities available for Awards under the Plan and the
per-Participant share limit, (ii) the number and class of securities, vesting schedule and exercise
price per share subject to each outstanding Option (defined below in Section 4(a)), (iii) the
repurchase price per security subject to repurchase, and (iv) the terms of each other outstanding
stock-based Award shall be adjusted by the Company (or substituted Awards may be made) to the
extent the Board shall determine, in good faith, that such an adjustment (or substitution) is
appropriate. If Section 7(e)(i) applies for any event, this Section 3(c) shall not be applicable.

	4.	 	Stock Options

     a. General. The Board may grant options to purchase Common Stock (each, an “Option”)
and determine the number of shares of Common Stock to be covered by each Option, the exercise price
of each Option and the conditions and limitations applicable to the exercise of each Option and the
Common Stock issued upon the exercise of each Option, including vesting provisions, repurchase
provisions and restrictions relating to applicable federal or state securities laws, as it
considers advisable. Without limiting the generality of the foregoing, the Board may make the
exercise of any Option subject to an agreement by the holder thereof to be a party to any other
agreement, including an agreement not to engage in competition with the Company following
termination of employment.

     b. Incentive Stock Options. An Option that the Board intends to be an “incentive stock
option” as defined in Section 422 of the Code (an “Incentive Stock Option”) shall be granted only
to employees of the Company and shall be subject to and shall be construed consistently with the
requirements of Section 422 of the Code. The Board and the Company shall have no liability if an
Option or any part thereof that is intended to be an Incentive Stock Option does not qualify as
such. An Option or any part thereof that does not qualify as an Incentive Stock Option is referred
to herein as a “Nonstatutory Stock Option.”

     c. Exercise Price. The Board shall establish the exercise price (or determine the
method by which the exercise price shall be determined) at the time each Option is granted and
specify it in the applicable option agreement.

     d. Duration of Options. Each Option shall be exercisable at such times and subject to
such terms and conditions as the Board may specify in the applicable option agreement.

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     e. Exercise of Option. Options may be exercised only by delivery to the Company of a
written notice of exercise signed by the proper person together with payment in full as specified
in Section 4(f) for the number of shares for which the Option is exercised.

     f. Payment Upon Exercise. Common Stock purchased upon the exercise of an Option shall
be paid for by one or any combination of the following forms of payment:

          (i) by check payable to the order of the Company;

          (ii) by any method set forth in an Option agreement;

          (iii) except as otherwise explicitly provided in the applicable option agreement, and only
if the Common Stock is then publicly traded, delivery of an irrevocable and unconditional
undertaking, satisfactory in form and substance to the Company, by a creditworthy broker to
deliver promptly to the Company sufficient funds to pay the exercise price, or delivery by the
Participant to the Company of a copy of irrevocable and unconditional instructions, satisfactory
in form and substance to the Company, to a creditworthy broker to deliver promptly to the Company
cash or a check sufficient to pay the exercise price; or

          (iv) to the extent explicitly provided in the applicable option agreement, by (x) delivery
of shares of Common Stock owned by the Participant valued at Fair Market Value, (y) delivery of a
promissory note of the Participant to the Company (and delivery to the Company by the Participant
of a check in an amount equal to the par value of the shares purchased), or (z) payment of such
other lawful consideration as the Board may determine.

	5.	 	Restricted Stock

     a. Grants. The Board may grant Awards entitling recipients to acquire shares of Common
Stock (each, a “Restricted Stock Award”), subject to (i) delivery to the Company by the Participant
of cash or other lawful consideration in an amount at least equal to the par value of the shares
purchased, and (ii) the right of the Company to repurchase all or part of such shares at their
issue price or other stated or formula price from the Participant in the event that conditions
specified by the Board in the applicable Award are not satisfied prior to the end of the applicable
restriction period or periods established by the Board for such Award.

     b. Terms and Conditions. The Board shall determine the terms and conditions of any
Restricted Stock Award. Any stock certificates issued in respect of a Restricted Stock Award shall
be registered in the name of the Participant and, unless otherwise determined by the Board,
deposited by the Participant, together with a stock power endorsed in blank, with the Company (or
its designee). After the expiration of the applicable restriction periods, the Company (or such
designee) shall deliver the certificates no longer subject to such restrictions to the Participant
or, if the Participant has died, to the beneficiary designated by a Participant (the
“Designated Beneficiary”), in a manner determined by the Board, to receive amounts due or
exercise rights of the Participant in the event of the Participant’s death. In the absence of an
effective designation by a Participant, Designated Beneficiary shall mean the Participant’s estate.

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	6.	 	Other Stock-Based Awards

     The Board shall have the right to grant other Awards based upon the Common Stock having such
terms and conditions as the Board may determine, including, without limitation, the grant of
shares based upon certain conditions, the grant of securities convertible into Common Stock and
the grant of stock appreciation rights, phantom stock awards or stock units.

	7.	 	General Provisions Applicable to Awards

     a. Transferability of Awards. Except as the Board may otherwise determine or provide
in an Award, Awards shall not be sold, assigned, transferred, pledged or otherwise encumbered by
the person to whom they are granted, either voluntarily or by operation of law, except by will or
the laws of descent and distribution, and, during the life of the Participant, shall be exercisable
only by the Participant. References to a Participant, to the extent relevant in the context, shall
include references to authorized transferees.

     b. Documentation. Each Award under the Plan shall be evidenced by a written instrument
in such form as the Board shall determine or as executed by an officer of the Company pursuant to
authority delegated by the Board. Each Award may contain terms and conditions in addition to those
set forth in the Plan provided that such terms and conditions do not contravene the provisions of
the Plan.

     c. Board Discretion. The terms of each type of Award need not be identical, and the
Board need not treat Participants uniformly.

     d. Termination of Status. The Board shall determine the effect on an Award of the
disability, death, retirement, authorized leave of absence or other change in the employment or
other status of a Participant and the extent to which, and the period during which, the
Participant, or the Participant’s legal representative, conservator, guardian or Designated
Beneficiary, may exercise rights under the Award.

     e. Acquisition of the Company

          (i) Consequences of an Acquisition. Upon the consummation of an Acquisition, the Board
or the board of directors of the surviving or acquiring entity (as used in this Section 7(e)(i),
also the “Board”), shall, as to outstanding Awards (on the same basis or on different bases as the
Board shall specify), make appropriate provision for the continuation of such Awards by the Company
or the assumption of such Awards by the surviving or acquiring entity and by substituting on an
equitable basis for the shares then subject to such Awards either (a) the consideration payable
with respect to the outstanding shares of Common Stock in connection with the Acquisition, (b)
shares of stock of the surviving or acquiring corporation or (c) such other securities or other
consideration as the Board deems appropriate, the fair market value of which (as determined by the
Board in its sole discretion) shall not materially differ from the Fair Market Value of the shares
of Common Stock subject to such Awards immediately preceding the Acquisition. In addition to or in
lieu of the foregoing, with respect to outstanding Options, the Board may, on the same basis or on
different bases as the Board shall specify, upon written notice to the affected optionees, provide
that one or more Options then outstanding must be exercised, in whole or in part, within a
specified number of days of the date of such notice, at

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the end of which period such Options shall terminate, or provide that one or more Options then
outstanding, in whole or in part, shall be terminated, in exchange for a cash payment equal to the
excess of the Fair Market Value for the shares subject to such Options over the exercise price
thereof; provided that before terminating any portion of an Option that is not vested or
exercisable (other than in exchange for a cash payment), the Board must first accelerate in full
the exercisability of the portion that is to be terminated. Unless otherwise determined by the
Board (on the same basis or on different bases as the Board shall specify), any repurchase rights
or other rights of the Company that relate to an Option or other Award shall continue to apply to
consideration, including cash, that has been substituted, assumed or amended for an Option or
other Award pursuant to this paragraph. The Company may hold in escrow all or any portion of any
such consideration in order to effectuate any continuing restrictions.

          (ii) Acquisition Defined. An “Acquisition” shall mean: (x) the sale of the Company by
merger, consolidation or reorganization in which the shareholders of the Company immediately prior
to such transaction, in their capacity as such, no longer own [at least 50% of the] equity
securities of the Company (or its successor) entitling them to vote with respect to the election
of directors; or (y) any sale of all or substantially all of the assets or capital stock of the
Company (other than in a spin-off or similar transaction) in a transaction requiring shareholder
approval or (z) any other acquisition of a material portion of the business of the Company
determined by the Board to constitute an Acquisition.

          (iii) Assumption of Options Upon Certain Events. In connection with a merger or
consolidation of an entity with the Company or the acquisition by the Company of property or stock
of an entity, the Board may grant Awards under the Plan in substitution for stock and stock-based
Awards issued by such entity or an affiliate thereof. The substitute Awards shall be granted on
such terms and conditions as the Board considers appropriate in the circumstances.

     f. Withholding. Each Participant shall pay to the Company, or make provisions
satisfactory to the Company for payment of, any taxes required by law to be withheld in connection
with Awards to such Participant no later than the date of the event creating the tax liability. The
Board may allow Participants to satisfy such tax obligations in whole or in part by transferring
shares of Common Stock, including shares retained from the Award creating the tax obligation,
valued at their Fair Market Value. The Company may, to the extent permitted by law, deduct any such
tax obligations from any payment of any kind otherwise due to a Participant.

     g. Amendment of Awards. The Board may not amend, modify or terminate any outstanding
Award including, but not limited to, substituting therefor another Award of the same or a different
type, changing the date of exercise or realization, and converting an Incentive Stock Option to a
Nonstatutory Stock Option without the Participant’s prior written consent.

     h. Conditions on Delivery of Stock. The Company will not be obligated to deliver any
shares of Common Stock pursuant to the Plan or to remove restrictions from shares previously
delivered under the Plan until (i) all conditions of the Award have been met or removed to the
satisfaction of the Company, (ii) in the opinion of the Company’s counsel, all other legal matters
in connection with the issuance and delivery of such shares have been satisfied, including any
applicable securities laws and any applicable stock exchange or stock

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market rules and regulations, (iii) the Participant has executed and delivered to the Company
such representations or agreements as the Company may consider appropriate to satisfy the
requirements of any applicable laws, rules or regulations, and (iv) if required by an agreement
binding upon the Company, the execution and delivery by the Participant of an agreement to be
bound by any shareholders’, voting or other agreement relating to the Common Stock.

     i. Acceleration. The Board may at any time provide that any Options shall become
immediately exercisable in full or in part, that any Restricted Stock Awards shall be free of some
or all restrictions, or that any other stock-based Awards may become exercisable in full or in
part or free of some or all restrictions or conditions, or otherwise realizable in full or in
part, as the case may be, despite the fact that the foregoing actions may (i) cause the
application of Sections 280G and 4999 of the Code if a change in control of the Company occurs, or
(ii) disqualify all or part of the Option as an Incentive Stock Option. In the event of the
acceleration of the exercisability of one or more outstanding Options, including pursuant to
paragraph (e)(i), the Board may provide, as a condition of full exercisability of any or all such
Options, that the Common Stock or other substituted consideration, including cash, as to which
exercisability has been accelerated shall be restricted and subject to forfeiture back to the
Company at the option of the Company at the cost thereof upon termination of employment or other
relationship, with the timing and other terms of the vesting of such restricted stock or other
consideration being equivalent to the timing and other terms of the superseded exercise schedule
of the related Option.

	8.	 	Miscellaneous

     a. Definitions.

          (i) “Company,” for purposes of eligibility under the Plan, shall include any present or
future subsidiary corporations of the Company, as defined in Section 424(f) of the Code (a
“Subsidiary”), and any present or future parent corporation of the Company, as defined in Section
424(e) of the Code. For purposes of Awards other than Incentive Stock Options, the term “Company”
shall include any other business venture in which the Company has a direct or indirect significant
interest, as determined by the Board in its sole discretion.

          (ii) “Code” means the Internal Revenue Code of 1986, as amended, and any regulations
promulgated thereunder.

          (iii) “Disability” means the sickness or disability that renders a Person incapable of
performing his duties under any employment or consulting agreement between such Person and the
Company or any Subsidiary of the Company for a period in excess of six (6) months during any
consecutive twelve (12) month period.

          (iv) “employee” for purposes of eligibility under the Plan (but not for purposes of Section
4(b)) shall include a person to whom an offer of employment has been extended by the Company.

          (v) “Fair Market Value” means the fair market value of the Common Stock as determined
on an annual basis in good faith by a majority of the Board (the “Original Board Value”) or, at the
request of any Participant, the value determined by an independent appraiser

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(the “Independent Appraiser”) mutually agreed upon between the Board and such Participant,
who shall appraise the Fair Market Value of the Common Stock, without taking into account any
discount that would otherwise be applied in valuing such shares of Common Stock for a minority
interest and the restrictions and lack of marketability or liquidity of the Common Stock held by
the Participant. If the Independent Appraiser’s determination of the Fair Market Value of the
Common Stock (the “Independent Appraiser Value”) is within ten percent (10%) of the Original Board
Value, the Fair Market Value of the Common Stock shall be the average of the Independent Appraiser
Value and the Original Board Value, and the Participant shall pay for the cost of the appraisal by
the Independent Appraiser. If the Independent Appraiser Value is greater than the Original Board
Value (the “Greater Independent Appraiser Value”) and the Greater Independent Appraiser Value
differs from the Original Board Value by more than ten percent (10%), then the Fair Market Value
of the Common Stock shall be the Greater Independent Appraiser Value and the Company shall pay for
the cost of the appraisal by the Independent Appraiser. If the Independent Appraiser Value is
lower than the Original Board Value (the “Lower Independent Appraiser Value”) and the Lower
Independent Appraiser Value differs from the Original Board Value by more than ten percent (10%),
then the Fair Market Value of the Common Stock shall be the Lower Independent Appraiser Value and
the Participant shall pay for the cost of the appraisal by the Independent Appraiser..

          (vi) “Good Cause” means a Person’s (i) failure to perform, without proper legal justification
or due to reasons beyond such Person’s control, the duties required under any employment agreement
between such Person and the Company or any Subsidiary of the Company or as otherwise required by
the Board if such failure continues for 15 or more days after the Company gives written notice
thereof to such Person; (ii) conviction, admission or plea of guilty or nolo contendre to a charge
of felony, or any dishonest conduct materially adverse to the Company, including any theft,
embezzlement, misappropriation or misuse of funds or property, fraud or falsification of records,
correspondence or other documents; (iii) any material breach of any of the terms of, or failure to
perform any of his covenants contained in any employment agreement between such Person and the
Company or any Subsidiary of the Company; and (iv) material violation or failure to abide by the
lawful instructions, policies, or work place rules established by the Company or any Subsidiary of
the Company if such violation or failure continues for 15 or more days after the Company gives
written notice thereof to such Person.

     b. No Right To Employment or Other Status. No person shall have any claim or right to
be granted an Award, and the grant of an Award shall not be construed as giving a Participant the
right to continued employment or any other relationship with the Company. The Company expressly
reserves the right at any time to dismiss or otherwise terminate its relationship with a
Participant free from any liability or claim under the Plan.

     c. No Rights As Shareholder. Subject to the provisions of the applicable Award, no
Participant or Designated Beneficiary shall have any rights as a shareholder with respect to any
shares of Common Stock to be distributed with respect to an Award until becoming the record holder
thereof.

     d. Effective Date and Term of Plan. The Plan shall become effective on the date on which it is
adopted by the Board. No Awards shall be granted under the Plan after the

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completion of ten (10) years from the date on which the Plan was adopted by the Board, but Awards
previously granted may extend beyond that date.

     e. Amendment of Plan. The Board may amend, suspend or terminate the Plan or any
portion thereof at any time.

     f. Governing Law. The provisions of the Plan and all Awards made hereunder shall be
governed by and interpreted in accordance with the laws of Texas, without regard to any applicable
conflicts of law.

Adopted by the Board of Directors on

October 16, 2006

Approved by the shareholders on

October 16, 2006

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Exhibit 10.2

Execution Version

AMENDMENT TO THE

C&J ENERGY SERVICES, INC.

2006 STOCK OPTION PLAN

          WHEREAS, C&J Energy Services, Inc. (the “Company”) has heretofore adopted the C&J Energy
Services, Inc. 2006 Stock Option Plan (the “2006 Plan”) under which stock options have been granted
to employees, directors, and consultants of the Company;

          WHEREAS, the Company intends to adopt the C&J Energy Services, Inc. 2010 Stock Option Plan
(the “2010 Plan”) under which stock options may be granted to employees, directors, and consultants
of the Company;

          WHEREAS, in connection with the Company’s adoption of the 2010 Plan, the Company desires to
permanently suspend the granting of new Awards under the 2006 Plan effective as of the date of the
closing of that certain private placement described in the preliminary offering memorandum dated
November 22, 2010, pursuant to which shares of Company common stock will be purchased and/or placed
by FBR Capital Markets & Co. (the “Effective Date”); and

          WHEREAS, in connection with the Company’s private placement of additional common stock of the
Company, the Company desires to fully vest all outstanding Options granted under the Plan;

          NOW, THEREFORE, the Plan is hereby amended as follows, effective as provided below:

	 	1.	 	Capitalized terms used but not defined herein shall have the meanings attributed to
such terms in the Plan.
	 
	 	2.	 	Notwithstanding any provision of the Plan to the contrary:

	 	(a)	 	No Awards shall be granted under the 2006 Plan on or after the Effective Date.
	 
	 	(b)	 	Any Award outstanding under the 2006 Plan as of the Effective Date shall
continue to be subject to the terms of the 2006 Plan and the applicable Award document.
	 
	 	(c)	 	All outstanding Options granted under the 2006 Plan that have not previously
vested are hereby made fully vested and immediately exercisable effective as of the
Effective Date and, with respect to any such outstanding Options held by Josh Comstock,
Randy McMullen, or Brett Barrier (the “Executives”), immediately following the
effectiveness of that certain employment agreement between such Executive and the
Company dated as of the Effective Date.

 

 

	 	3.	 	In the event that the Effective Date does not occur, this amendment shall be null and
void and of no force and effect and the terms of the 2006 Plan shall continue in full force
and effect without regard to this amendment.
	 
	 	4.	 	As amended hereby, the 2006 Plan is specifically ratified and reaffirmed.

[Signatures on next page.]

2

 

          IN WITNESS WHEREOF, the undersigned have caused these presents to be executed this 23rd day of
December, 2010, effective for all purposes as provided above.

	 	 	 	 	 	 	 

	 	 	C&J ENERGY SERVICES, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Randy McMullen	 	 
	 

	 	Name:
	 	 

Randy McMullen
	 	 
	 

	 	Title:
	 	Executive Vice President, Chief Financial
Officer, Secretary and Treasurer	 	 

3

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