Document:

exv10w6

 

Exhibit 10.6

Allis-Chalmers Energy Inc.

NON-EMPLOYEE DIRECTOR NONQUALIFIED STOCK OPTION AGREEMENT

Pursuant to the terms of the Allis-Chalmers Energy Inc. 2006 Incentive Plan

     1. Grant of Nonqualified Option. Allis-Chalmers Energy Inc., a Delaware corporation
(“Company”), hereby grants to                                          (“Optionee”) the right, privilege
and option as herein set forth (the “Nonqualified Option”) to purchase up to                                 shares
(the “Shares”) of common stock, $0.01 par value per share, of the Company (“Common Stock”), subject
to and in accordance with the terms and conditions of this document. This Non-Employee Director
Nonqualified Stock Option Agreement (the “Agreement”) is dated as of                     . The Shares, when
issued to Optionee upon exercise of the Nonqualified Option, shall be fully paid and nonassessable
and the Optionee (or the person permitted to exercise the Nonqualified Option in the event of
Optionee’s death) shall be and have all the rights and privileges of a stockholder of record of the
Company with respect to the Shares acquired upon exercise of the Nonqualified Option, effective
upon such exercise. The Nonqualified Option is granted pursuant to and to implement in part the
Allis-Chalmers Energy Inc. 2006 Incentive Plan (as amended and in effect from time to time, the
“Plan”) and is subject to the provisions of the Plan, which is hereby incorporated herein and is
made a part hereof, as well as the provisions of this Agreement. By execution of this Agreement,
Optionee agrees to be bound by all of the terms, provisions, conditions and limitations of the Plan
as implemented by the Nonqualified Option and this Agreement, together with all rules and
determinations from time to time issued by the Committee pursuant to the Plan. All capitalized
terms have the meanings set forth in the Plan unless otherwise specifically provided. All
references to specified paragraphs pertain to paragraphs of this Nonqualified Option unless
otherwise provided. The Nonqualified Option is not intended to qualify as an “incentive stock
option” within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
“Code”).

     2. Option Terms. Subject to earlier termination as provided herein, the Nonqualified Option
shall expire on the 10th anniversary of the date of grant of Nonqualified Option, which
anniversary shall be                     . The period during which the Nonqualified Option is in effect is
referred to as the “Option Period”.

     3. Option Exercise Price. The exercise price (the “Exercise Price”) of the Shares subject to
the Nonqualified Option shall be $                     per Share which has been determined to be no less
than the Fair Market Value Per Share of the Common Stock on the date of grant of the Nonqualified
Option.

     4. Vesting. Subject to the provisions of this Agreement, including, without limitation, the
following provisions of this Paragraph 4, the total number of Shares subject to this Nonqualified
Option shall vest and be exercisable only in accordance with the following schedule:

[schedule to be specified]

The vested Shares that may be acquired under the Nonqualified Option may be purchased, in whole or
in part, at any time after they become vested during the Option Period. In addition, upon the
occurrence of a Change in Control, to the extent provided in Paragraph 8 below, the Nonqualified
Option shall become immediately vested and fully exercisable.

     5. Method of Exercise. To exercise the Nonqualified Option, Optionee shall deliver notice to
the Company at its principal executive office, directed to the Plan Administrator, such exercise to
be effective at the time of receipt of such notice at the Company’s principal executive office
during normal business hours, stating the number of Shares with respect to which

 

 

the Nonqualified Option is being exercised together with payment for such Shares plus any
required withholding taxes, unless other arrangements for withholding tax liability have been made
with the Committee. The exercise notice shall be delivered in person, by certified or regular
mail, or by such other method (including electronic transmission) as determined from time to time
by the Committee or the Plan Administrator. Any exercise of the Nonqualified Option must be for a
minimum of one hundred (100) Shares or, if less, for all remaining Shares subject to the
Nonqualified Option.

     6. Payment of Exercise Price and Required Withholding. In order to exercise the Nonqualified
Option, the Optionee or other person or persons entitled to exercise such Nonqualified Option shall
deliver to Company payment in full for (i) the Shares being purchased and (ii) unless other
arrangements have been made with the Committee, any required withholding taxes.

     The payment of the Exercise Price for the Nonqualified Option shall either be:

     (i) in cash, or by check payable and acceptable to the Company;

     (ii) with the consent of the Committee, by tendering to Company Shares of Common Stock
owned by the person exercising the Nonqualified Option for more than six (6) months having an aggregate Fair Market Value as of the date of exercise that is
not greater than the full exercise price for the Shares with respect to which the
Nonqualified Option is being exercised and by paying any remaining amount of the Exercise
Price (and any required withholding taxes) as provided in (i) above; or

     (iii) with the consent of the Committee and compliance with such instructions as the
Committee may specify, by delivering to the Company and to a broker a properly executed
exercise notice and irrevocable instructions to such broker to deliver to the Company cash
or a check payable and acceptable to the Company to pay the exercise price and any
applicable withholding taxes.

     Upon receipt of the cash or check from the broker, the Company will deliver to the
broker the Shares for which the Nonqualified Option is exercised. In the event that the
person elects to make payment as allowed under clause (ii) of the immediately preceding
sentence, the Committee may, upon confirming that the Optionee owns the number of additional
Shares being tendered, authorize the issuance of a new certificate for the number of Shares
being acquired pursuant to the exercise of the Nonqualified Option less that number of
Shares being tendered upon the exercise and return to the person (or not require surrender
of) the certificate for the Shares being tendered upon the exercise. The date of sale of
the Shares by the broker pursuant to a cashless exercise under (iii) above shall be the date
of exercise of the Nonqualified Option. If the Committee so requires, such person or
persons shall also deliver a written representation that all Shares being purchased are
being acquired for investment and not with a view to, or for resale in connection with, any
distribution of such Shares.

     7. Termination of Service of Non-Employee Director. The following provisions will apply in
the event the Optionee’s service as a Non-Employee Director on the Board terminates before the
expiration of the Option Period:

     (a) Termination of Board Service. If the Optionee’s service as a Non-Employee Director
on the Board is terminated for any reason whatsoever other than one of the reasons described
in paragraphs (b) through (d) below, any nonvested portion of the Nonqualified Option
outstanding at the time of such termination and all rights

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thereunder shall wholly and completely terminate and no further vesting shall occur,
and Optionee shall be entitled to exercise his or her rights with respect to the portion of
the Nonqualified Option vested as of the date of termination for a period that shall end on
the earlier of (i) the expiration date set forth in the Nonqualified Option with respect to
the vested portion of the Nonqualified Option or (ii) the date that occurs three (3) months
after such termination date.

     (b) Retirement. If Optionee’s service as a Non-Employee Director on the Board
terminates before the expiration of the Option Period and before the expiration of the term
for which the Optionee was elected to the Board (the “Term”) as a result of the Optionee’s
Retirement:

     (i) any nonvested portion of the Nonqualified Option shall immediately
terminate upon such Retirement and no further vesting shall occur; and

     (ii) any vested portion of the Nonqualified Option shall expire on the earlier
of (A) the expiration of the Option Period; or (B) the expiration of twelve (12)
months after the date of Retirement (the “Applicable Retirement Period”).

For purposes of this Agreement, “Retirement” means the Optionee’s voluntary termination of
service as a Non-Employee Director on or after the date the Participant completes                      (___) years of service as a member of the Board.

     (c) Completion of Term. If prior to the expiration of the Option Period the Optionee
completes the Term and as a result thereof the Optionee’s service as a Non-Employee Director
on the Board terminates:

     (i) effective as of the last day of the Term the nonvested portion of the
Nonqualified Option shall fully vest and become exercisable in full; and

     (ii) the Nonqualified Option shall expire on the earlier of (A) the expiration
of the Option Period; or (B) the expiration of twelve (12) months after the last day
of the Term (the “Applicable Term Completion Period”).

     (d) Disability or Death. Upon termination of Optionee’s service as a Non-Employee
Director on the Board as a result of Disability or death of Optionee or if (x) Optionee retires and dies during the Applicable Retirement Period, (y) Optionee
completes service on the Board for the Term for which Optionee is elected and dies during
the Applicable Term Completion Period, or (z) if the Optionee’s service as a Non-Employee
Director on the Board was terminated as a result of Disability and the Optionee dies during
the period that expires on the earlier of the expiration of the Option Period or the first
anniversary of the Optionee’s termination of service due to Disability (hereinafter the
“Applicable Disability Period”),

     (i) any nonvested portion of the Nonqualified Option that has not already
terminated shall immediately terminate and no further vesting shall occur; and

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     (ii) any vested portion of the Nonqualified Option shall expire upon the
earlier of (A) the expiration of the Option Period or (B) the later of (1) the first
anniversary of such termination of service as a result of Disability or death, or
(2) the first anniversary of Optionee’s death during the Applicable Retirement
Period, Applicable Term Completion Period, or the Applicable Disability Period.

     (d) Notwithstanding any other provision of the Nonqualified Option, the Committee, in
its discretion, may provide for the continuation of the Nonqualified Option for such period
and upon such terms and conditions as are determined by the Committee in the event that the
Optionee ceases to serve as a Non-Employee Director on the Board.

     8. Change in Control.

     (a) Change in Control. In the event of a Change in Control described in clauses (a),
(b) or (c) of the definition of Change in Control under Section 2 of the Plan, if the
Company does not survive as an independent corporation (excluding as a subsidiary) and if
any surviving or successor corporation and its affiliates refuse to assume or continue the
Nonqualified Option, then, effective immediately prior to such Change in Control the
Nonqualified Option shall be immediately vested and exercisable in full for its then
remaining term.

     (b) Right of Cash-Out. If approved by the Board prior to or within thirty (30) days
after such time as a Change in Control shall be deemed to have occurred, the Board shall
have the right for a forty-five (45) day period immediately following the date that the
Change in Control is deemed to have occurred to require Optionee to transfer and deliver to
Company the Nonqualified Option in exchange for an amount equal to the “cash value” (defined
below) of the Nonqualified Option. Such right shall be exercised by written notice to
Optionee. The cash value of the Nonqualified Option shall equal the excess of the “market
value” (defined below) per Share over the Exercise Price, if any, multiplied by the number
of Shares subject to the Nonqualified Option. For purposes of the preceding sentence,
“market value” per Share shall mean the higher of (i) the average of the Fair Market Value
per Share of Common Stock on each of the five (5) trading days immediately following the
date a Change in Control is deemed to have occurred or (ii) the highest price, if any,
offered in connection with the Change in Control. The amount payable to Optionee by Company
pursuant to this Paragraph 8(b) shall be in cash or by certified check and shall be reduced
by any taxes required to be withheld.

     9. Reorganization of Company and Subsidiaries. The existence of the Nonqualified Option shall
not affect in any way the right or power of Company or its stockholders to make or authorize any or
all adjustments, recapitalizations, reorganizations or other changes in the Company’s capital
structure or its business, or any merger or consolidation of 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 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.

     10. 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, the Committee shall, in such manner as it may deem
equitable, make adjustments to the terms and provisions of this Nonqualified Option.

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     11. No Rights in Shares. Optionee shall have no rights as a stockholder in respect of Shares
until such Optionee becomes the holder of record of such Shares.

     12. Certain Restrictions. The certificate issued for the Shares subject to the restrictions
described in this Paragraph 12 may, in the Committee’s discretion, be issued with an appropriate
legend describing such restrictions, and the Committee may establish an escrow or other custodial
arrangement for holding of the certificate by a person (other than Optionee) selected by the
Committee.

     By exercising the Nonqualified Option, Optionee agrees that if at the time of such exercise
the sale of Shares issued hereunder is not covered by an effective registration statement filed
under the Securities Act of 1933 (“Act”), Optionee will acquire the Shares for Optionee’s own
account and without a view to resale or distribution in violation of the Act or any other
securities law, and upon any such acquisition Optionee will enter into such written
representations, warranties and agreements as Company may reasonably request in order to comply
with the Act or any other securities law or with this Agreement. 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 Nonqualified Option.

     13. Shares Reserved. Company shall at all times during the Option Period reserve and keep
available such number of Shares as will be sufficient to satisfy the requirements of this
Nonqualified Option.

     14. Nontransferability of Option. The Nonqualified Option evidenced by this Agreement is not
transferable other than by will, the laws of descent and distribution, or pursuant to a qualified
domestic relations order. The Nonqualified Option will be exercisable during Optionee’s lifetime
only by Optionee or by Optionee’s guardian or legal representative. No right or benefit hereunder
shall in any manner be liable for or subject to any debts, contracts, liabilities, or torts of
Optionee. The Optionee (or his guardian) may, in accordance with rules and procedures established
by the Committee from time to time, transfer, for estate planning purposes, all or part of the
Nonqualified Option to one or more immediate family members or related family trusts or
partnerships or similar entities as determined by the Committee. To the extent the Nonqualified
Option is transferred in accordance with the provisions of this Paragraph 14, the Nonqualified
Option may only be exercised by the person or persons who acquire a proprietary interest in the
Nonqualified Options pursuant to the transfer.

     15. Amendment and Termination. The Nonqualified Option may not be terminated by the Board or
the Committee at any time without the written consent of Optionee. This Agreement may be amended in
writing by the Company and Optionee, provided the Company may amend this Agreement unilaterally (i)
if the amendment does not adversely affect the Optionee’s rights hereunder in any material respect,
(ii) if the Company determines that an amendment is necessary to comply with Rule 16b-3 under the
Exchange Act or other applicable law, or (iii) if the Company determines that an amendment is
necessary to meet the requirements of the Code or to prevent adverse tax consequences to the
Optionee.

     16. No Guarantee of Board Membership. The Nonqualified Option shall not confer upon Optionee
any right with respect to continuance of Board service or other service with the Company or any
Affiliate, nor shall it interfere in any way with any right the Company or any Affiliate would
otherwise have to terminate such Optionee’s Board membership or other service at any time.

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     17. Withholding of Taxes. Any issuance of Common Stock pursuant to the exercise of the
Nonqualified Option shall not be made until appropriate arrangements satisfactory to the Company
have been made for the payment of any tax amounts (federal, state, local or other) that may be
required to be withheld or paid by the Company with respect thereto at the minimum statutory rate.
Company shall have the right to take such action as may be necessary or appropriate to satisfy any
such tax withholding obligations.

     18. No Guarantee of Tax Consequences. Neither Company nor any Affiliate nor the Board or
Committee makes any commitment or guarantee that any federal or state tax treatment will apply or
be available to any person eligible for the benefits under the Nonqualified Option.

     19. Severability. In the event that any provision of the Nonqualified Option shall be held
illegal, invalid, or unenforceable for any reason, such provision shall be fully severable, but
shall not affect the remaining provisions of the Nonqualified Option, and the Nonqualified Option
shall be construed and enforced as if the illegal, invalid, or unenforceable provision had never
been included herein.

     20. Consent to Electronic Delivery; Electronic Signature. In lieu of receiving documents in
paper format, Optionee agrees, to the fullest extent permitted by law, to accept electronic
delivery of any documents that the Company may be required to deliver (including, but not limited
to, prospectuses, prospectus supplements, grant or award notifications and agreements, account
statements, annual and quarterly reports, and all other forms of communications) in connection with
this and any other award made or offered by the Company. Electronic delivery may be via a Company
electronic mail system or by reference to a location on a Company intranet to which Optionee has
access. Optionee hereby consents to any and all procedures the Company has established or may
establish for an electronic signature system for delivery and acceptance of any such documents that
the Company may be required to deliver, and agrees that his or her electronic signature is the same
as, and shall have the same force and effect as, his or her manual signature.

     21. Governing Law. The Nonqualified Option and this Agreement shall be construed in accordance
with the laws of the State of Delaware to the extent federal law does not supersede and preempt
Delaware law.

	 	 	 	 	 
	 	 	COMPANY:
	 
	 	 	 	 
	 	 	Allis-Chalmers Energy Inc.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 	 	Printed Name:
	 

	 	 	 	 

	 	 	Title:
	 

	 	 	 	 

	 
	 	 	 	 
	 	 	OPTIONEE:
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	(Signature)

Page 6exv4w7

 

Exhibit 4.7

FORM OF PROMISSORY NOTE

[Note No. X-XXX]

			
	 	 	 
	$                                         
	 	                                        ,200___
	 
	 	San Jose, California

     The undersigned (“Borrower”) promises to pay to the order of VENTURE LENDING & LEASING III,
INC., a Maryland corporation (“Lender”), at its office at 2010 North First Street, Suite 310, San
Jose, California 95131, or at such other place as Lender may designate in writing, in lawful money
of the United States of America, the principal sum of                                                              Dollars
($                    ), with Basic Interest thereon (except as otherwise provided herein) from the date
hereof until maturity, whether scheduled or accelerated, at a fixed rate per annum equal to [ the
Prime Rate on the Business Day Lender prepares the Note plus 5.797%, but in no event less than
9.797%; (the “Designated Rate”) [, and a Terminal Payment in the sum of 
          [5.00% of face amount]        Dollars ($                    ) payable on the Maturity Date.]

          This Note is one of the Notes referred to in, and is entitled to all the benefits of, a Loan
and Security Agreement dated as of March___, 2004, between Borrower and Lender (the “Loan
Agreement”). Each capitalized term not otherwise defined herein shall have the meaning set forth
in the Loan Agreement. The Loan Agreement contains provisions for the acceleration of the maturity
of this Note upon the happening of certain stated events.

     Principal of and interest on this Note shall be payable as follows:

     On the Borrowing Date, Borrower shall pay (i) interest at the Designated Rate on the
outstanding principal balance of this Note for the period from the Borrowing Date through 
[the last day of the same month]___; and (ii) a first (1st) amortization installment
of principal and Basic Interest at the Designated Rate in the amount of                                         , in
advance for the month of [first full month after Borrowing Date] and (iii) a thirty-third
(33rd) amortization installment of principal and Basic Interest at the Designated Rate in the
amount of $                     , in advance for the month of      [date of last regular amortization
payment]     .

     Commencing on the first day of the second full month after the Borrowing Date, and continuing
on the first day of each consecutive month thereafter, principal and Basic Interest at the
Designated Rate shall be payable, in advance, in thirty(30) equal consecutive installments of
                                                             Dollars ($                 
   ) each, with a thirty-first (31st)
installment equal to the entire unpaid principal balance and accrued Basic Interest at the
Designated Rate on                     , 200___. The Terminal Payment and unpaid expenses, fees,
interest and principal amount shall be due and payable on      [one month later]     ,
200___.]

     This Note may be voluntarily prepaid only as permitted under Section 2 of Part 2 of the
Supplement to the Loan Agreement.

     Any unpaid payments of principal or interest on this Note shall bear interest from their
respective maturities, whether scheduled or accelerated, at a rate per annum equal to the Default
Rate. Borrower shall pay such interest on demand.

     Interest, charges and fees shall be calculated for actual days elapsed on the basis of a
360-day year, which results in higher interest, charge or fee payments than if a 365-day year were
used. In no event shall Borrower be obligated to pay interest, charges or fees at a rate in excess
of the highest rate permitted by applicable law from time to time in effect.

 

 

     If Borrower is late in making any payment under this Note by more than five (5) days, Borrower
agrees to pay a “late charge” of five percent (5%) of the installment due, but not less than fifty
dollars ($50.00) for any one such delinquent payment. This late charge may be charged by Lender
for the purpose of defraying the expenses incidental to the handling of such delinquent amounts.
Borrower acknowledges that such late charge represents a reasonable sum considering all of the
circumstances existing on the date of this Note and represents a fair and reasonable estimate of
the costs that will be sustained by Lender due to the failure of Borrower to make timely payments.
Borrower further agrees that proof of actual damages would be costly and inconvenient. Such late
charge shall be paid without prejudice to the right of Lender to collect any other amounts provided
to be paid or to declare a default under this Note or any of the other Loan Documents or from
exercising any other rights and remedies of Lender.

     This Note shall be governed by, and construed in accordance with, the laws of the State of
California.

	 	 	 	 	 	 	 
	 	 	OCULUS INNOVATIVE SCIENCES, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Its:	 	 	 	 
	 

	 	 	 	 

	 	 

 

 

Schedule to Exhibit 4.7 — Form of Promissory Note

	 	 	 	 	 	 	 	 	 	 	 
	Name of Holder
	 	Date	 	Amount	 	 	Interest Rate	 
	Venture Lending & Leasing III
	 	August 2, 2004	 	$	20,175.15	 	 	 	10.047	%
	Venture Lending & Leasing III
	 	August 2, 2004	 	$	96,882.50	 	 	 	10.047	%
	Venture Lending & Leasing III
	 	July 29, 2004	 	$	180,645.30	 	 	 	10.047	%
	Venture Lending & Leasing III
	 	April 30, 2004	 	$	202,875.45	 	 	 	9.797	%
	Venture Lending & Leasing III
	 	April 1, 2004	 	$	493,761.54	 	 	 	9.797	%

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