Document:

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OIL STATES INTERNATIONAL, INC.

2001 EQUITY PARTICIPATION PLAN,

AS AMENDED AND RESTATED

Effective February 16, 2005

THE 2001 EQUITY PARTICIPATION PLAN

OF

OIL STATES INTERNATIONAL, INC.

     
OIL STATES INTERNATIONAL, INC., a Delaware corporation, adopted
The 2001 Equity Participation Plan of Oil States International,
Inc. (the “Plan”), effective February 19, 2001
(the “Effective Date”), for the benefit of its
eligible employees, consultants and directors. This Plan was an
amendment and restatement of the 1996 Equity Participation Plan
of CE Holdings, Inc. (“ConEmsco Plan”).

     
The Plan was amended and restated, effective February 19,
2002, to increase the number of shares of Common Stock (as
defined below) subject to Options (as defined below) and all
other Awards (as defined below) under the Plan. The Plan is
hereby being amended and restated, effective February 16,
2005 (the “Restatement Date”), to again increase the
number of shares of Common Stock subject to Options and all
other Awards under the plan, to be effective as provided in
Section 10.4, to condition upon stockholder approval
post-Restatement Date re-grants of expired or cancelled Awards
or shares surrendered or withheld for payment from the original
3,700,000 shares of Common Stock under the Plan, to be
effective as provided in Section 10.4, and to allow for
Awards to Directors (as defined below) on the same basis as
currently permitted to Employees (as defined below).

     
The purposes of this Plan are as follows:

		
	 	     
    (1) To provide an additional incentive for Directors,
    Employees and consultants to further the growth, development and
    financial success of the Company by personally benefiting
    through the ownership of Company stock and/or rights which
    recognize such growth, development and financial success.
	 
	 	     
    (2) To enable the Company to obtain and retain the services
    of Directors, Employees and consultants considered essential to
    the long range success of the Company by offering them an
    opportunity to own stock in the Company and/or rights which will
    reflect the growth, development and financial success of the
    Company.

ARTICLE I

DEFINITIONS

     
1.1 General. All references to share numbers and
dollar amounts in this Plan shall be deemed to give effect to
the concurrent reverse three-for-one split of the Common Stock
to be effected on or before the Effective Date. Wherever the
following terms are used in this Plan they shall have the
meaning specified below, unless the context clearly indicates
otherwise.

     
1.2 Affiliate. “Affiliate” shall mean any
entity that, directly or through one or more intermediaries, is
controlled by the Company or controls the Company as determined
by the Committee.

     
1.3 Award Limit. “Award Limit” shall mean
400,000 shares of Common Stock.

     
1.4 Board. “Board” shall mean the Board of
Directors of the Company.

 

     
1.5 Change of Control. “Change of Control”
shall mean any of the following:

		
	 	     
    (a) any “person” (as such term is used in
    Section 13(d) and 14(d) of the Securities Exchange Act of
    1934, as amended (the “Exchange Act”)), (other than a
    trustee or other fiduciary holding securities under an employee
    benefit plan of the Company or any affiliate, SCF III,
    L.P., SCF IV, L.P., or any affiliate of SCF-III, L.P. or
    SCF-IV, L.P. or any corporation owned, directly or indirectly,
    by the stockholders of the Company in substantially the same
    proportions as their ownership of stock of the Company),
    acquires “beneficial ownership” (within the meaning of
    Rule 13d-3 under the Exchange Act) of securities of the
    Company representing 35% or more of the combined voting power of
    the Company’s then outstanding securities; provided,
    however, that if the Company engages in a merger or
    consolidation in which the Company or surviving entity in such
    merger or consolidation becomes a subsidiary of another entity,
    then references to the Company’s then outstanding
    securities shall be deemed to refer to the outstanding
    securities of such parent entity;
	 
	 	     
    (b) a change in the composition of the Board, as a result
    of which fewer than a majority of the directors are Incumbent
    Directors. “Incumbent Directors” shall mean directors
    who either (i) are directors of the Company as of the
    Effective Date, or (ii) are elected, or nominated for
    election, to the Board with the affirmative votes of at least
    two-thirds of the Incumbent Directors at the time of such
    election or nomination, but Incumbent Director shall not include
    an individual whose election or nomination occurs as a result of
    either (1) an actual or threatened election contest (as
    such terms are used in Rule 14a-11 of Regulation 14A
    promulgated under the Exchange Act) or (2) an actual or
    threatened solicitation of proxies or consents by or on behalf
    of a person other than the Board;
	 
	 	     
    (c) the consummation of a merger or consolidation of the
    Company with any other corporation, other than a merger or
    consolidation which would result in the voting securities of the
    Company outstanding immediately prior thereto continuing to
    represent (either by remaining outstanding or by being converted
    into voting securities of the surviving entity (or if the
    surviving entity is or shall become a subsidiary of another
    entity, then such parent entity)) more than 50% of the combined
    voting power of the voting securities of the Company (or such
    surviving entity or parent entity, as the case may be)
    outstanding immediately after such merger or consolidation;
	 
	 	     
    (d) the stockholders of the Company approve a plan of
    complete liquidation of the Company; or
	 
	 	     
    (e) the sale or disposition (other than a pledge or similar
    encumbrance) by the Company of all or substantially all of the
    assets of the Company other than to a subsidiary or subsidiaries
    of the Company.

     
1.6 Code. “Code” shall mean the Internal
Revenue Code of 1986, as amended.

     
1.7 Committee. “Committee” shall mean the
Board or a subcommittee of the Board appointed as provided in
Section 9.1.

     
1.8 Common Stock. “Common Stock” shall
mean the common stock of the Company, par value $0.01 per
share.

     
1.9 Company. “Company” shall mean Oil
States International, Inc., a Delaware corporation.

     
1.10 Deferred Stock. “Deferred Stock”
shall mean Common Stock awarded under Article VII of this
Plan.

     
1.11 Director. “Director” shall mean a
member of the Board who is not an Employee.

     
1.12 Dividend Equivalent. “Dividend
Equivalent” shall mean a right to receive the equivalent
value (in cash or Common Stock) of dividends paid on Common
Stock, awarded under Article VII of this Plan.

     
1.13 Employee. “Employee” shall mean any
officer or other employee (as defined in accordance with
Section 3401(c) of the Code) of the Company or of any
Affiliate or Subsidiary.

     
1.14 Exchange Act. “Exchange Act” shall
mean the Securities Exchange Act of 1934, as amended.

 

     
1.15 Fair Market Value. “Fair Market
Value” of a share of Common Stock as of a given date shall
be (i) the closing price of a share of Common Stock on the
principal exchange on which shares of Common Stock are then
trading, if any (as reported in any reporting service approved
by the Committee), on the trading day previous to such date, or
if shares were not traded on the trading day previous to such
date, then on the next preceding date on which a trade occurred,
or (ii) if Common Stock is not traded on an exchange but is
quoted on Nasdaq or a successor quotation system, the mean
between the closing representative bid and asked prices for the
Common Stock on the trading day previous to such date as
reported by Nasdaq or such successor quotation system; or
(iii) if Common Stock is not publicly traded on an exchange
and not quoted on Nasdaq or a successor quotation system, the
Fair Market Value of a share of Common Stock as established by
the Committee acting in good faith. Notwithstanding the
foregoing, the Fair Market Value of a share of Common Stock on
the date of an initial public offering of Common Stock shall be
the offering price under such initial public offering.

     
1.16 Grantee. “Grantee” shall mean an
Employee or consultant granted a Performance Award, Dividend
Equivalent, or Stock Payment, or an award of Deferred Stock,
under this Plan.

     
1.17 Non-Qualified Stock Option. “Non-Qualified
Stock Option” shall mean an Option which is not designated
as an Incentive Stock Option by the Committee.

     
1.18 Option. “Option” shall mean a stock
option granted under Article III of this Plan). An Option
granted under this Plan shall, as determined by the Committee,
be either a Non-Qualified Stock Option or an Incentive Stock
Option; provided, however, that Options granted to
Directors, consultants and Employees employed by an Affiliate
that is not a Subsidiary shall be Non-Qualified Stock Options.

     
1.19 Optionee. “Optionee” shall mean an
Employee, consultant or Director granted an Option under this
Plan.

     
1.20 Performance Award. “Performance
Award” shall mean a performance or incentive award, other
than an Option, Restricted Stock, Deferred Stock or Stock
Payments, that is paid in cash, Common Stock or a combination of
both, awarded under Article VII of this Plan.

     
1.21 Performance Objectives. “Performance
Objectives” means the objectives, if any, established by
the Committee that are to be achieved with respect to an Award
granted under this Plan, which may be described in terms of
Company-wide objectives, in terms of objectives that are related
to performance of a division, subsidiary, department or function
within the Company or an Affiliate in which the Participant
receiving the Award is employed or in individual or other terms,
and which will relate to the period of time determined by the
Committee. The Performance Objectives intended to qualify under
Section 162(m) of the Code shall be with respect to one or
more of the following: (i) net income; (ii) pre-tax
income; (iii) operating income; (iv) cash flow;
(v) earnings per share; (vi) earnings before any one
or more of the following items: interest, taxes, depreciation or
amortization; (vii) return on equity; (viii) return on
invested capital or assets; (ix) cost reductions or
savings; (x) funds from operations and
(xi) appreciation in the fair market value of the
Company’s common stock. Which objectives to use with
respect to an Award, the weighting of the objectives if more
than one is used, and whether the objective is to be measured
against a Company-established budget or target, an index or a
peer group of companies, shall be determined by the Committee in
its discretion at the time of grant of the Award. A Performance
Objective need not be based on an increase or a positive result
and may include, for example, maintaining the status quo or
limiting economic losses.

     
1.22 Plan. “Plan” shall mean The 2001
Equity Participation Plan of Oil States International, Inc.

     
1.23 QDRO. “QDRO” shall mean a qualified
domestic relations order as defined by the Code or Title I
of the Employee Retirement Income Security Act of 1974, as
amended, or the rules thereunder.

     
1.24 Restricted Stock. “Restricted Stock”
shall mean Common Stock awarded under Article VI of this
Plan.

     
1.25 Restricted Stockholder. “Restricted
Stockholder” shall mean an Employee or consultant granted
an award of Restricted Stock under Article VI of this Plan.

 

     
1.26 Rule 16b-3. “Rule 16b-3”
shall mean that certain Rule 16b-3 under the Exchange Act,
as such Rule may be amended from time to time.

     
1.27 Stock Payment. “Stock Payment” shall
mean (i) a payment in the form of shares of Common Stock,
or (ii) an option or other right to purchase shares of
Common Stock, as part of a deferred compensation arrangement,
made in lieu of all or any portion of the compensation,
including without limitation, salary, bonuses and commissions,
that would otherwise become payable to an Employee or consultant
in cash, awarded under Article VII of this Plan.

     
1.28 Subsidiary. “Subsidiary” shall mean
any corporation in an unbroken chain of corporations beginning
with the Company if each of the corporations other than the last
corporation in the unbroken chain then owns stock possessing
50 percent or more of the total combined voting power of
all classes of stock in one of the other corporations in such
chain.

ARTICLE II

SHARES SUBJECT TO PLAN

     
2.1 Shares Subject to Plan.

     
(a) The shares of stock subject to Options, awards of
Restricted Stock, Performance Awards, Dividend Equivalents,
awards of Deferred Stock, or Stock Payments shall be Common
Stock. The aggregate number of such shares which may be issued
upon exercise of such options or rights or upon any such awards
under the Plan shall not exceed seven million seven hundred
thousand (7,700,000), subject to the requirements of
Section 10.4. The shares of Common Stock issuable upon
exercise of such options or rights or upon any such awards may
be either previously authorized but unissued shares or treasury
shares.

     
(b) The maximum number of shares which may be subject to
Options, Restricted Stock or Deferred Stock granted under the
Plan to any individual in any calendar year shall not exceed the
Award Limit. The maximum value of Performance Awards granted
under the Plan to any individual in any calendar year shall not
exceed $2.5 million.

     
2.2 Add-back Options and Other Rights. If any
Option, or other right to acquire shares of Common Stock under
any other award under this Plan, expires or is canceled without
having been fully exercised, if shares of Common Stock are
surrendered for payment of the exercise price or purchase price
of an Award of if shares of Common Stock are withheld for
payment of applicable employment and/or withholding taxes
respecting an Award, the number of shares subject to such Option
or other right but as to which such Option or other right was
not exercised prior to its expiration or cancellation or the
number of shares so surrendered or withheld for payment may
again be optioned, granted or awarded hereunder, subject to the
limitations of Section 2.1. If any share of Restricted
Stock is forfeited by the Grantee, such share may again be
optioned, granted or awarded hereunder, subject to the
limitations of Section 2.1. Any post-Restatement Date
re-grant of expired or cancelled awards or shares surrendered or
withheld for payment from the original 3,700,000 shares of
Common Stock under the Plan shall be subject to the requirements
of Section 10.4.

ARTICLE III

GRANTING OF OPTIONS

     
3.1 Eligibility. Any Employee, Director or
consultant selected by the Committee pursuant to
Section 3.4(a)(i) shall be eligible to be granted an Option.

     
3.2 Disqualification for Stock Ownership. No person
may be granted an Incentive Stock Option under this Plan if such
person, at the time the Incentive Stock Option is granted, owns
stock possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or
any then existing Subsidiary unless such Incentive Stock Option
conforms to the applicable provisions of Section 422 of the
Code,

 

     
3.3 Qualification of Incentive Stock Options. No
Incentive Stock Option shall be granted unless such Option, when
granted, qualifies as an “incentive stock option”
under Section 422 of the Code. No Incentive Stock Option
shall be granted to any person who is not an employee of the
Company or a Subsidiary.

     
3.4 Granting of Options

     
(a) The Committee shall from time to time, in its absolute
discretion, and subject to applicable limitations of this Plan:

		
	 	     
    (i) Select from among the Employees, Directors or
    consultants (including Employees, Directors or consultants who
    have previously received Options or other awards under this
    Plan) such of them as in its opinion should be granted Options;
	 
	 	     
    (ii) Subject to the Award Limit, determine the number of
    shares to be subject to such Options granted to the selected
    Employees, Directors or consultants;
	 
	 	     
    (iii) Determine whether such Options are to be Incentive
    Stock Options or Non-Qualified Stock Options; and
	 
	 	     
    (iv) Determine the terms and conditions of such Options,
    consistent with this Plan.

     
(b) Upon the selection of an Employee, Director or
consultant to be granted an Option, the Committee shall instruct
the Secretary of the Company to issue the Option and may impose
such conditions on the grant of the Option as it deems
appropriate.

     
(c) Any Incentive Stock Option granted under this Plan may
be modified by the Committee to disqualify such option from
treatment as an “incentive stock option” under
Section 422 of the Code.

ARTICLE IV

TERMS OF OPTIONS

     
4.1 Option Agreement. Each Option shall be evidenced
by a Stock Option Agreement, which shall be executed by the
Optionee and an authorized officer of the Company and which
shall contain such terms and conditions as the Committee shall
determine, consistent with this Plan.

     
4.2 Option Price. The price per share of the shares
subject to each Option shall be set by the Committee; provided,
however, that, except as provided in Section 8.1 with
respect to assumed options, such price shall not be less than
100% of the Fair Market Value of a share of Common Stock on the
date the Option is granted.

     
4.3 Option Term. The term of an Option shall be set
by the Committee in its discretion; provided, however, that in
the case of Incentive Stock Options, the term shall not be more
than ten (10) years from the date the Incentive Stock
Option is granted, or five (5) years from such date if the
Incentive Stock Option is granted to an individual then owning
(within the meaning of Section 424(d) of the Code) more
than 10% of the total combined voting power of all classes of
stock of the Company or any Subsidiary).

     
4.4 Option Vesting

     
(a) The period during which the right to exercise an Option
in whole or in part vests in the Optionee shall be set by the
Committee and the Committee may determine that an Option may not
be exercised in whole or in part for a specified period after it
is granted. At any time after grant of an Option, the Committee
may, in its sole and absolute discretion and subject to whatever
terms and conditions it selects, accelerate the period during
which an Option vests.

     
(b) To the extent that the aggregate Fair Market Value of
stock with respect to which “incentive stock options”
(within the meaning of Section 422 of the Code, but without
regard to Section 422(d) of the Code) are exercisable for
the first time by an Optionee during any calendar year (under
the Plan and all other incentive stock option plans of the
Company and any parent or Subsidiary) exceeds $100,000, such
Options shall be treated as Non-Qualified Options to the extent
required by Section 422 of the Code. The rule set forth

 

in the preceding sentence shall be applied by taking Options
into account in the order in which they were granted. For
purposes of this Section 4.4(b), the Fair Market Value of
stock shall be determined as of the time the Option with respect
to such stock is granted.

ARTICLE V

EXERCISE OF OPTIONS

     
5.1 Partial Exercise. An exercisable Option may be
exercised in whole or in part; however, an Option shall not be
exercisable with respect to fractional shares and the Committee
may require that, by the terms of the Option, a partial exercise
be with respect to a minimum number of shares.

     
5.2 Manner of Exercise. All or a portion of an
exercisable Option shall be deemed exercised upon delivery of
all of the following to the Secretary of the Company or his
office:

		
	 	     
    (a) A written notice complying with the applicable rules
    established by the Committee stating that the Option, or a
    portion thereof, is exercised. The notice shall be signed by the
    Optionee or other person then entitled to exercise the Option or
    such portion;
	 
	 	     
    (b) Such representations and documents as the Committee, in
    its absolute discretion, deems necessary or advisable to effect
    compliance with all applicable provisions of the Securities Act
    of 1933, as amended, and any other federal or state securities
    laws or regulations. The Committee or Board may, in its absolute
    discretion, also take whatever additional actions it deems
    appropriate to effect such compliance including, without
    limitation, placing legends on share certificates and issuing
    stop-transfer notices to agents and registrars;
	 
	 	     
    (c) In the event that the Option shall be exercised
    pursuant to Section 10.1 by any person or persons other
    than the Optionee, appropriate proof of the right of such person
    or persons to exercise the Option; and
	 
	 	     
    (d) Full cash payment to the Secretary of the Company for
    the shares with respect to which the Option, or portion thereof,
    is exercised. However, the Committee may in its discretion or
    provide in the grant agreement (i) that payment may be
    made, in whole or in part, through the delivery of shares of
    Common Stock owned by the Optionee, duly endorsed for transfer
    to the Company, with a Fair Market Value on the date of delivery
    not in excess of the aggregate exercise price of the Option or
    exercised portion thereof and subject to such other limitations
    as the Committee may impose thereon, (ii) allow payment, in
    whole or in part, through the surrender of shares of Common
    Stock then issuable upon exercise of the Option having a Fair
    Market Value on the date of Option exercise equal to the
    aggregate exercise price of the Option or exercised portion
    thereof, (iii) allow payment, in whole or in part, through
    the delivery of property of any kind which constitutes good and
    valuable consideration; (iv) allow payment, in whole or in
    part, through the delivery of a full recourse promissory note
    bearing interest (at no less than such rate as shall then
    preclude the imputation of interest under the Code) and payable
    upon such terms as may be prescribed by the Committee,
    (v) allow payment through a cashless-broker procedure
    approved by the Company, or (vi) allow payment through any
    combination of the consideration provided above. In the case of
    a promissory note, the Committee may also prescribe the form of
    such note and the security to be given for such note. The Option
    may not be exercised, however, by delivery of a promissory note
    or by a loan from the Company when or where such loan or other
    extension of credit is prohibited by law.

     
5.3 Conditions to Issuance of Stock Certificates.
The Company shall not be required to issue or deliver any
certificate or certificates for shares of stock purchased upon
the exercise of any Option or portion thereof prior to
fulfillment of all of the following conditions:

		
	 	     
    (a) The admission of such shares to listing on all stock
    exchanges on which such class of stock is then listed;

 

		
	 	     
    (b) The completion of any registration or other
    qualification of such shares under any state or federal law, or
    under the rulings or regulations of the Securities and Exchange
    Commission or any other governmental regulatory body which the
    Committee shall, in its absolute discretion, deem necessary or
    advisable;
	 
	 	     
    (c) The obtaining of any approval or other clearance from
    any state or federal governmental agency which the Committee
    shall, in its absolute discretion, determine to be necessary or
    advisable;
	 
	 	     
    (d) The lapse of such reasonable period of time following
    the exercise of the Option as the Committee may establish from
    time to time for reasons of administrative convenience; and
	 
	 	     
    (e) The receipt by the Company of full payment for such
    shares, including payment of any applicable withholding tax.

     
5.4 Rights as Stockholders. The holders of Options
shall not be, nor have any of the rights or privileges of,
stockholders of the Company in respect of any shares purchasable
upon the exercise of any part of an Option unless and until
certificates representing such shares have been issued by the
Company to such holders.

     
5.5 Ownership and Transfer Restrictions. The
Committee, in its absolute discretion, may impose such
restrictions on the ownership and transferability of the shares
purchasable upon the exercise of an Option as it deems
appropriate. Any such restriction shall be set forth in the
respective Stock Option Agreement and may be referred to on the
certificates evidencing such shares. The Committee may require
the Optionee to give the Company prompt notice of any
disposition of shares of Common Stock acquired by exercise of an
Incentive Stock Option within (i) two years from the date
of granting such Option to such Optionee or (ii) one year
after the transfer of such shares to such Optionee. The
Committee may direct that the certificates evidencing shares
acquired by exercise of an Option refer to such requirement to
give prompt notice of disposition.

ARTICLE VI

AWARD OF RESTRICTED STOCK

     
6.1 Award of Restricted Stock

     
(a) The Committee shall from time to time, in its absolute
discretion:

		
	 	     
    (i) Select from among the Employees or consultants
    (including Employees or consultants who have previously received
    other awards under this Plan) such of them as in its opinion
    should be awarded Restricted Stock; and
	 
	 	     
    (ii) Determine the terms and conditions applicable to such
    Restricted Stock, consistent with this Plan, which may include
    the achievement of Performance Objectives.

     
(b) Upon the selection of an Employee or consultant to be
awarded Restricted Stock, the Committee shall instruct the
Secretary of the Company to issue such Restricted Stock and may
impose such conditions on the issuance of such Restricted Stock
as it deems appropriate.

     
6.2 Restricted Stock Agreement. Restricted Stock
shall be issued only pursuant to a Restricted Stock Agreement,
which shall be executed by the selected Employee or consultant
and an authorized officer of the Company and which shall contain
such terms and conditions as the Committee shall determine,
consistent with this Plan.

     
6.3 Rights as Stockholders. Upon delivery of the
shares of Restricted Stock to the escrow holder, the Restricted
Stockholder shall have, unless otherwise provided by the
Committee, all the rights of a stockholder with respect to said
shares, subject to the restrictions in his Restricted Stock
Agreement, including the right to receive all dividends and
other distributions paid or made with respect to the shares;
provided, however, that in the discretion of the Committee, any
extraordinary distributions with respect to the Common Stock
shall be subject to the restrictions set forth in
Section 6.4.

 

     
6.4 Restriction. All shares of Restricted Stock
issued under this Plan (including any shares received by holders
thereof with respect to shares of Restricted Stock as a result
of stock dividends, stock splits or any other form of
recapitalization) shall, in the terms of each individual
Restricted Stock Agreement, be subject to such restrictions as
the Committee shall provide, which restrictions may include,
without limitation, restrictions concerning voting rights and
transferability and restrictions based on duration of employment
with the Company, Company performance and individual
performance; provided, however, that, by action taken after the
Restricted Stock is issued, the Committee may, on such terms and
conditions as it may determine to be appropriate, remove any or
all of the restrictions imposed by the terms of the Restricted
Stock Agreement. Restricted Stock may not be sold or encumbered
until all restrictions are terminated or expire.

     
6.5 Escrow. The Secretary of the Company or such
other escrow holder as the Committee may appoint shall retain
physical custody of each certificate representing Restricted
Stock until all of the restrictions imposed under the Restricted
Stock Agreement with respect to the shares evidenced by such
certificate expire or shall have been removed.

     
6.6 Legend. In order to enforce the restrictions
imposed upon shares of Restricted Stock hereunder, the Committee
shall cause a legend or legends to be placed on certificates
representing all shares of Restricted Stock that are still
subject to restrictions under Restricted Stock Agreements, which
legend or legends shall make appropriate reference to the
conditions imposed thereby.

ARTICLE VII

PERFORMANCE AWARDS, DIVIDEND EQUIVALENTS,

DEFERRED STOCK, STOCK PAYMENTS

     
7.1 Performance Awards. Any Employee or consultant
selected by the Committee may be granted one or more Performance
Awards. The value of such Performance Awards may be linked to
the achievement of such specific Performance Objectives
determined appropriate by the Committee over any period or
periods determined by the Committee. In making such
determinations, the Committee shall consider (among such other
factors as it deems relevant in light of the specific type of
award) the contributions, responsibilities and other
compensation of the particular Employee or consultant.

     
7.2 Dividend Equivalents. Any Employee or consultant
selected by the Committee may be granted Dividend Equivalents
based on the dividends declared on Common Stock, to be credited
as of dividend payment dates, during the period between the date
an Option, Deferred Stock or Performance Award is granted, and
the date such Option, Deferred Stock or Performance Award is
exercised, vests or expires, as determined by the Committee.
Such Dividend Equivalents shall be converted to cash or
additional shares of Common Stock by such formula and at such
time and subject to such limitations as may be determined by the
Committee.

     
7.3 Stock Payments. Any Employee or consultant
selected by the Committee may receive Stock Payments in the
manner determined from time to time by the Committee. The number
of shares shall be determined by the Committee and may be based
upon the Fair Market Value, book value, net profits or other
measure of the value of Common Stock or other specific
performance criteria determined appropriate by the Committee,
determined on the date such Stock Payment is made or on any date
thereafter.

     
7.4 Deferred Stock. Any Employee or consultant
selected by the Committee may be granted an award of Deferred
Stock in the manner determined from time to time by the
Committee. The number of shares of Deferred Stock shall be
determined by the Committee and may be linked to the achievement
of such specific Performance Objectives determined to be
appropriate by the Committee over any period or periods
determined by the Committee. Common Stock underlying a Deferred
Stock award will not be issued until the Deferred Stock award
has vested, pursuant to a vesting schedule or Performance
Objectives set by the Committee, as the case may be. Unless
otherwise provided by the Committee, a Grantee of Deferred Stock
shall have no rights as a Company stockholder with respect to
such Deferred Stock until such time as the award has vested and
the Common Stock underlying the award has been issued.

 

     
7.5 Performance Award Agreement, Dividend Equivalent
Agreement, Deferred Stock Agreement, Stock Payment
Agreement. Each Performance Award, Dividend Equivalent,
award of Deferred Stock and/or Stock Payment shall be evidenced
by an agreement, which shall be executed by the Grantee and an
authorized Officer of the Company and which shall contain such
terms and conditions as the Committee shall determine,
consistent with this Plan.

     
7.6 Term. The term of a Performance Award, Dividend
Equivalent, award of Deferred Stock and/or Stock Payment shall
be set by the Committee in its discretion.

     
7.7 Exercise Upon Termination of Employment. A
Performance Award, Dividend Equivalent, award of Deferred Stock
and/or Stock Payment is exercisable or payable only while the
Grantee is an Employee or consultant; provided that the
Committee may determine that the Performance Award, Dividend
Equivalent, award of Deferred Stock and/or Stock Payment may be
exercised or paid subsequent to termination of employment or
termination of consultancy without cause, or following a change
in control of the Company, or because of the Grantee’s
retirement, death or disability, or otherwise.

     
7.8 Payment. Payment of the amount determined under
Section 7.1 or 7.2 above shall be in cash, in Common Stock
or a combination of both, as determined by the Committee. To the
extent any payment under this Article VII is effected in
Common Stock, it shall be made subject to satisfaction of all
provisions of Section 5.3.

ARTICLE VIII

MERGED PLANS/ REPLACEMENT AWARDS

     
8.1 The following plans have been merged into this Plan:
the Sooner, Inc. 1998 Stock Option Plan and the HWC Energy
Services, Inc. 1997 Stock Option Plan, and all stock options and
other stock-based awards granted under such plans are converted
into options and awards under this Plan with respect to Common
Stock. In addition, the individual stock option grants made
outside of a plan by Sooner, Inc. and PTI Group, Inc. to their
respective employees and outstanding on the date of their
respective mergers with the Company or a Company Subsidiary also
are hereby assumed and converted into Company options. The
number of shares and the exercise price of each assumed award
shall be made pursuant to the applicable merger agreement
between the Company and the stockholders of such entities.

ARTICLE IX

ADMINISTRATION

     
9.1 Committee. The Committee members shall be
appointed by and hold office at the pleasure of the Board.
Appointment of Committee members shall be effective upon
acceptance of appointment. Committee members may resign at any
time by delivering written notice to the Board. Vacancies in the
Committee may be filled by the Board.

     
9.2 Duties and Powers of Committee. It shall be the
duty of the Committee to conduct the general administration of
this Plan in accordance with its provisions. The Committee shall
have the power to interpret this Plan and the agreements
pursuant to which Options, awards of Restricted Stock or
Deferred Stock, Performance Awards, Dividend Equivalents or
Stock Payments are granted or awarded, and to adopt such rules
for the administration, interpretation, and application of this
Plan as are consistent therewith and to interpret, amend or
revoke any such rules. Any such grant or award under this Plan
need not be the same with respect to each Optionee, Grantee or
Restricted Stockholder. Any such interpretations and rules with
respect to Incentive Stock Options shall be consistent with the
provisions of Section 422 of the Code. In its absolute
discretion, the Board may at any time and from time to time
exercise any and all rights and duties of the Committee under
this Plan except with respect to matters which under
Rule 16b-3 or Section 162(m) of the Code, or any
regulations or rules issued thereunder, are required to be
determined in the sole discretion of the Committee.

 

     
9.3 Majority Rule; Unanimous Written Consent. The
Committee shall act by a majority of its members in attendance
at a meeting at which a quorum is present or by a memorandum or
other written instrument signed by all members of the Committee.

     
9.4 Compensation; Professional Assistance, Good Faith
Actions. Members of the Committee shall receive such
compensation for their services as members as may be determined
by the Board. All expenses and liabilities which members of the
Committee incur in connection with the administration of this
Plan shall be borne by the Company. The Committee may employ
attorneys, consultants, accountants, appraisers, brokers, or
other persons. The Committee, the Company and the Company’s
officers and Directors shall be entitled to rely upon the
advice, opinions or valuations of any such persons. All actions
taken and all interpretations and determinations made by the
Committee or the Board in good faith shall be final and binding
upon all Optionees, Grantees, Restricted Stockholders, the
Company and all other interested persons. No members of the
Committee or Board shall be personally liable for any action,
determination or interpretation made in good faith with respect
to this Plan, Options, awards of Restricted Stock or Deferred
Stock, Performance Awards, Dividend Equivalents or Stock
Payments, and all members of the Committee and the Board shall
be fully protected by the Company in respect of any such action,
determination or interpretation.

ARTICLE X

MISCELLANEOUS PROVISIONS

     
10.1 Not Transferable. Except as provided below,
Options, Restricted Stock awards, Deferred Stock awards,
Performance Awards, Dividend Equivalents or Stock Payments under
this Plan may not be sold, pledged, assigned, or transferred in
any manner other than by will or the laws of descent and
distribution or pursuant to a QDRO, unless and until such rights
or awards have been exercised, or the shares underlying such
rights or awards have been issued, and all restrictions
applicable to such shares have lapsed. No Option, Restricted
Stock award, Deferred Stock award, Performance Award, Dividend
Equivalent or Stock Payment or interest or right therein shall
be liable for the debts, contracts or engagements of the
Optionee, Grantee or Restricted Stockholder or his successors in
interest or shall be subject to disposition by transfer,
alienation, anticipation, pledge, encumbrance, assignment or any
other means whether such disposition be voluntary or involuntary
or by operation of law by judgment, levy, attachment,
garnishment or any other legal or equitable proceedings
(including bankruptcy), and any attempted disposition thereof
shall be null and void and of no effect, except to the extent
that such disposition is permitted by the preceding sentence. An
Optionee may, with the consent of the Committee, transfer a
Nonqualified Stock Option to such family members and persons as
may be permitted by this Committee, subject to such restrictions
and limitations, if any, that the Committee, in its discretion,
may impose on such transfer.

     
During the lifetime of the Optionee or Grantee, only he may
exercise an Option or other right or award (or any portion
thereof) granted to him under the Plan unless it has been
disposed of pursuant to a QDRO. After the death of the Optionee
or Grantee, any exercisable portion of an Option or other right
or award may, prior to the time when such portion becomes
unexercisable under the Plan or the applicable Stock Option
Agreement or other agreement, be exercised by his personal
representative or by any person empowered to do so under the
deceased Optionee’s or Grantee’s will or under the
then applicable laws of descent and distribution.

     
10.2 Amendment, Suspension or Termination of this
Plan. This Plan may be wholly or partially amended or
otherwise modified, suspended or terminated at any time or from
time to time by the Board or the Committee. However, without
approval of the Company’s stockholders given within twelve
months before or after the action by the Committee, no action of
the Committee may, except as provided in Section 10.3,
increase the limits imposed in Section 2.1 on the maximum
number of shares which may be issued under this Plan or reduce
the exercise price of an Option, and no action of the Committee
may be taken that would otherwise require stockholder approval
as a matter of applicable law, regulation or rule. No amendment,
suspension or termination of this Plan shall, without the
consent of the holder of Options, Restricted Stock awards,
Deferred Stock awards, Performance Awards, Dividend Equivalents
or Stock Payments, materially

 

alter or impair any rights or obligations under any Options,
Restricted Stock awards, Deferred Stock awards, Performance
Awards, Dividend Equivalents or Stock Payments theretofore
granted or awarded, unless the award itself otherwise expressly
so provides. No Options, Restricted Stock, Deferred Stock,
Performance Awards, Dividend Equivalents or Stock Payments may
be granted or awarded during any period of suspension or after
termination of this Plan, and in no event may any Incentive
Stock Option be granted under this Plan after the first to occur
of the following events:

		
	 	     
    (a) The expiration of ten years from the date the Plan is
    adopted by the Board; or
	 
	 	     
    (b) The expiration of ten years from the date the Plan is
    approved by the Company’s stockholders under
    Section 10.4.

     
10.3 Changes in Common Stock or Assets of the Company;
Acquisition or Liquidation of the Company and Other Corporate
Events.

     
(a) Subject to Section 10.3(e), in the event that the
Committee determines that any dividend or other distribution
(whether in the form of cash, Common Stock, other securities, or
other property), recapitalization, reclassification, stock
split, reverse stock split, reorganization, merger,
consolidation, split-up, spin-off, combination, repurchase,
liquidation, dissolution, or sale, transfer, exchange or other
disposition of all or substantially all of the assets of the
Company, or exchange of Common Stock or other securities of the
Company, issuance of warrants or other rights to purchase Common
Stock or other securities of the Company, or other similar
corporate transaction or event, in the Committee’s sole
discretion, affects the Common Stock such that an adjustment is
determined by the, Committee to be appropriate in order to
prevent dilution or enlargement of the benefits or potential
benefits intended to be made available under the Plan or with
respect to an Option, Restricted Stock award, Performance Award,
Dividend Equivalent, Deferred Stock award or Stock Payment, then
the Committee shall, in such manner as it may deem equitable,
adjust any or all of

		
	 	     
    (i) the number and kind of shares of Common Stock (or other
    securities or property) with respect to which Options,
    Performance Awards, Dividend Equivalents or Stock Payments may
    be granted under the Plan, or which may be granted as Restricted
    Stock or Deferred Stock (including, but not limited to,
    adjustments of the limitations in Section 2.1 on the
    maximum number and kind of shares which may be issued and
    adjustments of the Award Limit),
	 
	 	     
    (ii) the number and kind of shares of Common Stock (or
    other securities or property) subject to outstanding Options,
    Performance Awards, Dividend Equivalents, or Stock Payments, and
    in the number and kind of shares of outstanding Restricted Stock
    or Deferred Stock, and
	 
	 	     
    (iii) the grant or exercise price with respect to any
    Option, Performance Award, Dividend Equivalent or Stock Payment.

     
(b) Subject to Section 10.3(e), in the event of any
corporate transaction or other event described in
Section 10.3(a) which results in shares of Common Stock
being exchanged for or converted into cash, securities
(including securities of another corporation) or other property,
the Committee will have the right to terminate this Plan as of
the date of the event or transaction, in which case all options,
rights and other awards granted under this Plan shall become the
right to receive such cash, securities or other property, net of
any applicable exercise price.

     
(c) Subject to Section 10.3(e), in the event of any
corporate transaction or other event described in
Section 10.3(a) or any unusual or nonrecurring transactions
or events affecting the Company, any affiliate of the Company,
or the financial statements of the Company or any affiliate, or
of changes in applicable laws, regulations, or accounting
principles, the Committee in its discretion is hereby authorized
to take any one or more of the following actions whenever the
Committee determines that such action is appropriate in order to
prevent dilution or enlargement of the benefits or potential
benefits intended to be made available under the Plan or with
respect to any option, right or other award under this Plan, to
facilitate such transactions or events or to give effect to such
changes in laws, regulations or principles:

		
	 	     
    (i) In its discretion, and on such terms and conditions as
    it deems appropriate, the Committee may provide, either
    automatically or upon the Optionee’s request, for either
    the purchase of any such Option,

 

		
	 	
    Performance Award, Dividend Equivalent, or Stock Payment, or any
    Restricted Stock or Deferred Stock for an amount of cash equal
    to the amount that could have been attained upon the exercise of
    such option, right or award or realization of the
    Optionee’s rights had such option, right or award been
    currently exercisable or payable or the replacement of such
    option, right or award with other rights or property selected by
    the Committee in its sole discretion;
	 
	 	     
    (ii) In its sole and absolute discretion, the Committee may
    provide, either by the terms of such Option, Performance Award,
    Dividend Equivalent, or Stock Payment, or Restricted Stock or
    Deferred Stock or by action taken prior to the occurrence of
    such transaction or event that it cannot be exercised after such
    event;
	 
	 	     
    (iii) In its sole and absolute discretion, and on such
    terms and conditions as it deems appropriate, the Committee may
    provide, either by the terms of such Option, Performance Award,
    Dividend Equivalent, or Stock Payment, or Restricted Stock or
    Deferred Stock or by action taken prior to the occurrence of
    such transaction or event, that, for a specified period of time
    prior to such transaction or event, such option, right or award
    shall be exercisable as to all shares covered thereby,
    notwithstanding anything to the contrary in
    (1) Section 4.4 or (2) the provisions of such
    Option, Performance Award, Dividend Equivalent, or Stock
    Payment, or Restricted Stock or Deferred Stock;
	 
	 	     
    (iv) In its discretion, and on such terms and conditions as
    it deems appropriate, the Committee may provide, either by the
    terms of such Option, Performance Award, Dividend Equivalent, or
    Stock Payment, or Restricted Stock or Deferred Stock or by
    action taken prior to the occurrence of such transaction or
    event, that upon such event, such option, right or award be
    assumed by the successor corporation, or a parent or subsidiary
    thereof, or shall be substituted for by similar options, rights
    or awards covering the stock of the successor corporation, or a
    parent or subsidiary thereof, with appropriate adjustments as to
    the number and kind of shares and prices;
	 
	 	     
    (v) In its discretion, and on such terms and conditions as
    it deems appropriate, the Committee may make adjustments in the
    number and type of shares of Common Stock (or other securities
    or property) subject to outstanding Options, Performance Awards,
    Dividend Equivalents, or Stock Payments, and in the number and
    kind of outstanding Restricted Stock or Deferred Stock and/or in
    the terms and conditions of (including the grant or exercise
    price), and the criteria included in, outstanding options,
    rights and awards and options, rights and awards which may be
    granted in the future;
	 
	 	     
    (vi) In its discretion, and on such terms and conditions as
    it deems appropriate, the Committee may provide either by the
    terms of a Restricted Stock award or Deferred Stock award or by
    action taken prior to the occurrence of such event that, for a
    specified period of time prior to such event, the restrictions
    imposed under a Restricted Stock Agreement or a Deferred Stock
    Agreement upon some or all shares of Restricted Stock or
    Deferred Stock may be terminated; and
	 
	 	     
    (vii) In its discretion, and on such terms and conditions
    as it deems appropriate, the Committee may make adjustments to
    the Performance Objectives of any outstanding award.

     
(d) Notwithstanding anything in Sections 10.3(a),
10.3(c) or 10.3(e) to the contrary, except to the extent an
award agreement expressly provides to the contrary, in the event
of a Change of Control of the Company all outstanding awards
automatically shall become fully vested immediately prior to
such Change in Control (or such earlier time as set by the
Committee), all restrictions, if any, with respect to such
awards shall lapse, all performance criteria, if any, with
respect to such awards shall be deemed to have been met at their
target level.

     
(e) With respect to an award intended to qualify as
performance-based compensation under Section 162(m), no
adjustment or action described in this Section 10.3, other
than as provided in Section 10.3(d), shall be taken by the
Committee to the extent that such adjustment or action would
cause such award to fail to so qualify under Section 162(m)
or any successor provisions thereto.

     
10.4     Approval of Amended and
Restated Plan by Stockholders. The amendment and restatement
of this Plan will be submitted for the approval of the
Company’s stockholders within twelve months after the

 

Restatement Date. Options, Performance Awards, Dividend
Equivalents or Stock Payments may be granted and Restricted
Stock or Deferred Stock may be awarded prior to such stockholder
approval with respect to the additional two million shares of
Common Stock authorized for awards under Section 2.1 of
this amendment and restatement (the “Additional
Shares”), and with respect to post-Restatement Date
re-grants of expired or cancelled Awards or shares of Common
Stock surrendered or withheld for payment from the original
3,700,000 shares of Common Stock under the Plan pursuant to
Section 2.2 (the “Re-Granted Shares”), provided
that such Options, Performance Awards, Dividend Equivalents or
Stock Payments shall not be exercisable and such Restricted
Stock or Deferred Stock shall not vest prior to the time when
this amendment and restatement of the Plan is approved by the
stockholders, and provided further that if such approval has not
been obtained at the end of said twelve-month period, all such
Options, Performance Awards, Dividend Equivalents or Stock
Payments previously granted and all Restricted Stock or Deferred
Stock previously awarded under this Plan, to the extent made
with respect to the Additional Shares or Re-Granted Shares,
shall thereupon be canceled and become null and void.

     
10.5 Tax Withholding. The Company shall be entitled
to require payment in cash or deduction from other compensation
payable to each Optionee, Grantee or Restricted Stockholder of
any sums required by applicable tax law to be withheld with
respect to the issuance, vesting or exercise of any Option,
Restricted Stock, Deferred Stock, Performance Award, Dividend
Equivalent or Stock Payment. Subject to the timing requirements
of Section 5.3, the Committee may, in its discretion and in
satisfaction of the foregoing requirement, allow such Optionee,
Grantee or Restricted Stockholder to elect to have the Company
withhold shares of Common Stock otherwise issuable under such
Option or afterward (or allow the return of shares of Common
Stock) having a Fair Market Value equal to the minimum tax sums
required to be withheld by the Company. Notwithstanding the
foregoing, any such person who is subject to Section 16b
with respect to Company Stock may direct that the Company’s
tax withholding obligation be satisfied by withholding the
appropriate number of shares from such award and/or the
“constructive” tender already-owned shares of Common
Stock.

     
10.6 Loans. The Committee may, in its discretion,
extend one or more loans to Employees in connection with the
exercise or receipt of an Option, Performance Award, Dividend
Equivalent or Stock Payment granted under this Plan, or the
issuance of Restricted Stock or Deferred Stock awarded under
this Plan, The terms and conditions of any such loan shall be
set by the Committee.

     
10.7 Limitations Applicable to Section 16 Persons
and Performance-Based Compensation. Notwithstanding any
other provision of this Plan, this Plan, and any Option,
Performance Award, Dividend Equivalent or Stock Payment granted,
or Restricted Stock or Deferred Stock awarded, to any individual
who is then subject to Section 16 of the Exchange Act,
shall be subject to any limitations set forth in any applicable
exemptive rule under Section 16 of the Exchange Act
(including any amendment to Rule 16b-3 of the Exchange Act)
that are requirements for the application of such exemptive
rule. To the extent permitted by applicable law, the Plan,
Options, Performance Awards, Dividend Equivalents, Stock
Payments, Restricted Stock and Deferred Stock granted or awarded
hereunder shall be deemed amended to the extent necessary to
conform to such applicable exemptive rule. Furthermore,
notwithstanding any other provision of this Plan, any award
intended to qualify as performance-based compensation as
described in Section 162(m)(4)(C) of the Code shall be
subject to any additional limitations set forth in
Section 162(m) of the Code (including any amendment to
Section 162(m) of the Code) or any regulations or rulings
issued thereunder that are requirements for qualification as
performance-based compensation as described in
Section 162(m)(4)(C) of the Code.

     
10.8 Effect of Plan Upon Options and Compensation
Plans. Except as provided in Section 8.1, this Plan
amendment and restatement shall not affect any other
compensation or incentive plans in effect for the Company or any
Subsidiary. Nothing in this Plan shall be construed to limit the
right of the Company (i) to establish any other forms of
incentives or compensation for Employees, Directors or
consultants of the Company or any Subsidiary or (ii) to
grant or assume options or other rights otherwise than under
this Plan in connection with any proper corporate purpose
including but not by way of limitation, the grant or assumption
of options in connection with the acquisition by purchase,
lease, merger, consolidation or otherwise, of the business,
stock or assets of any corporation, partnership, entity or
association.

 

     
10.9 Compliance with Laws. This Plan, the granting
and vesting of Options, Restricted Stock awards, Deferred Stock
awards, Performance Awards, Dividend Equivalents or Stock
Payments under this Plan and the issuance and delivery of shares
of Common Stock and the payment of money under this Plan or
under Options, Performance Awards, Dividend Equivalents or Stock
Payments granted or Restricted Stock or Deferred Stock awarded
hereunder are subject to compliance with all applicable federal
and state laws, rules and regulations (including but not limited
to state and federal securities law and federal margin
requirements) and to such approvals by any listing, regulatory
or governmental authority as may, in the opinion of counsel for
the Company, be necessary or advisable in connection therewith.
Any securities delivered under this Plan shall be subject to
such restrictions, and the person acquiring such securities
shall, if requested by the Company, provide such assurances and
representations to the Company as the Company may deem necessary
or desirable to assure compliance with all applicable legal
requirements. To the extent permitted by applicable law, the
Plan, Options, Restricted Stock awards, Deferred Stock awards,
Performance Awards, Dividend Equivalents or Stock Payments
granted or awarded hereunder shall be deemed amended to the
extent necessary to conform to such laws, rules and regulations.

     
10.10 Titles. Titles are provided herein for
convenience only and are not to serve as a basis for
interpretation or construction of this Plan.

     
10.11 Governing Law. This Plan and any agreements
hereunder shall be administered, interpreted and enforced under
the internal laws of the State of Texas without regard to
conflicts of laws thereof.exv10w22

 

Exhibit 10.22

EXECUTIVE AGREEMENT

     This Executive Agreement (“Agreement”) between Oil States International, Inc., a Delaware
corporation (the “Company”), and Christopher E. Cragg (the “Executive”) is made and entered into
effective March 1, 2004 (the “Effective Date”).

     WHEREAS, Executive is a key executive of the Company or a subsidiary; and

     WHEREAS, the Company believes it to be in the best interests of its stockholders to attract,
retain and motivate key executives and ensure continuity of management; and

     WHEREAS, it is in the best interest of the Company and its stockholders if the key executives
can approach material business development decisions objectively and without concern for their
personal situation; and

     WHEREAS, the Company recognizes that the possibility of a Change of Control (as defined below)
of the Company may result in the departure of key executives to the detriment of the Company and
its stockholders; and

     WHEREAS, the Board of Directors of the Company has authorized this Agreement and certain
similar agreements in order to retain and motivate key management and to ensure continuity of key
management;

     THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Company and Executive agree as follows:

	1.  	Term of Agreement

	 	A.  	This Agreement shall commence on the Effective Date and, subject to the
provisions for earlier termination in this Agreement, shall continue in effect through
the third anniversary of the Effective Date; provided, however, commencing on the
Effective Date and on each day thereafter, the term of this Agreement shall
automatically be extended for one additional day unless the Board of Directors of the
Company shall give written notice to Executive that the term shall cease to be so
extended in which event the Agreement shall terminate on the third anniversary of the
date such notice is given.
	 
	 	B.  	Notwithstanding anything in this Agreement to the contrary, this Agreement, if
in effect on the date of a Change of Control, shall automatically be extended for the
24-month period following the Change of Control.
	 
	 	C.  	Termination of this Agreement shall not alter or impair any rights of Executive
arising hereunder on or before such termination.

	2.  	Certain Definitions

	 	A.  	“Cause” shall mean:

 

 

	 	(i)  	Executive’s conviction of (or plea of nolo contendere to) a
felony, dishonesty or a breach of trust as regards the Company or any
subsidiary;
	 
	 	(ii)  	Executive’s commission of any act of theft, fraud, embezzlement
or misappropriation against the Company or any subsidiary that is materially
injurious to the Company or such subsidiary regardless of whether a criminal
conviction is obtained;
	 
	 	(iii)  	Executive’s willful and continued failure to devote
substantially all of his business time to the Company’s business affairs
(excluding failures due to illness, incapacity, vacations, incidental civic
activities and incidental personal time) which failure is not remedied within a
reasonable time after written demand is delivered by the Company, which demand
specifically identifies the manner in which the Company believes that Executive
has failed to devote substantially all of his business time to the Company’s
business affairs; or
	 
	 	(iv)  	Executive’s unauthorized disclosure of confidential information
of the Company that is materially injurious to the Company.

	 	   	        For purposes of this definition, no act, or failure to act, on Executive’s part
shall be deemed “willful” unless done, or omitted to be done, by Executive not in
good faith and without reasonable belief that Executive’s action or omission was in
the best interest of the Company.
	 
	 	B.  	“Change of Control” shall mean any of the following:

	 	(i)  	any “person” (as such term is used in Section 13(d) and 14(d)
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (other
than a trustee or other fiduciary holding securities under an employee benefit
plan of the Company or any affiliate, other than any corporation owned,
directly or indirectly, by the stockholders of the Company in substantially the
same proportions as their ownership of stock of the Company or other than SCF
III, L.P., SCF IV, L.P., or any affiliate of SCF III, L.P. or SCF IV, L.P.)
acquires “beneficial ownership” (within the meaning of Rule 13d-3 under the
Exchange Act) of securities of the Company representing 35% or more of the
combined voting power of the Company’s then outstanding securities; provided,
however, that if the Company engages in a merger or consolidation in which the
Company or surviving entity in such merger or consolidation becomes a
subsidiary of another entity, then references to the Company’s then outstanding
securities shall be deemed to refer to the outstanding securities of such
parent entity;
	 
	 	(ii)  	a change in the composition of the Board, as a result of which
fewer than a majority of the directors are Incumbent Directors. “Incumbent
Directors” shall mean directors who either (i) are directors of the Company as
of the

2

 

	 	   	Effective Date, or (ii) are elected, or nominated for election, to the Board
with the affirmative votes of at least two-thirds of the Incumbent Directors
at the time of such election or nomination, but Incumbent Director shall not
include an individual whose election or nomination occurs as a result of
either (1) an actual or threatened election contest (as such terms are used
in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or (2)
an actual or threatened solicitation of proxies or consents by or on behalf
of a person other than the Board of Directors of the Company;
	 
	 	(iii)  	the consummation of a merger or consolidation of the Company
with any other corporation, other than a merger or consolidation which would
result in the voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity (or if the surviving
entity is or shall become a subsidiary of another entity, then such parent
entity)) more than 50% of the combined voting power of the voting securities of
the Company (or such surviving entity or parent entity, as the case may be)
outstanding immediately after such merger or consolidation;
	 
	 	(iv)  	the stockholders of the Company approve a plan of complete
liquidation of the Company; or
	 
	 	(v)  	the sale or disposition (other than a pledge or similar
encumbrance) by the Company of all or substantially all of the assets of the
Company other than to a subsidiary or subsidiaries of the Company.

	 	C.  	“Date of Termination” shall mean the date the Notice of Termination is
given unless such termination is by Executive in which event the Date of Termination
shall not be less than 30 days following the date the Notice of Termination is given.
Further, a Notice of Termination given by Executive due to a Good Reason event that is
corrected by the Company before the Date of Termination shall be void.
	 
	 	D.  	“Good Reason” shall mean:

	 	(i)  	a material reduction in Executive’s authority, duties or
responsibilities from those in effect immediately prior to the Change of
Control or the assignment to Executive duties or responsibilities inconsistent
in any material respect from those of Executive in effect immediately prior to
the Change of Control;
	 
	 	(ii)  	a material reduction of Executive’s compensation and benefits,
including, without limitation, annual base salary, annual bonus, and equity
incentive opportunities, from those in effect immediately prior to the Change
of Control;

3

 

	 	(iii)  	the Company fails to obtain a written agreement from any
successor or assigns of the Company to assume and perform this Agreement as
provided in Section 9 hereof; or
	 
	 	(iv)  	the Company requires Executive, without Executive’s consent, to
be based at any office located more than 50 miles from the Company’s offices to
which Executive was based immediately prior to the Change of Control, except
for travel reasonably required in the performance of Executive’s duties.

	 	   	Notwithstanding the above however, Good Reason shall not exist with respect to a
matter unless Executive gives the Company written notice of such matter within 30
days of the date Executive knows or should reasonably have known of its occurrence.
If Executive fails to give such notice timely, Executive shall be deemed to have
waived all rights Executive may have under this Agreement with respect to such
matter.
	 
	 	E.  	“Notice of Termination” shall mean a written notice delivered to the
other party indicating the specific termination provision in this Agreement relied
upon for termination of Executive’s employment and shall set forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination of Executive’s
employment under the provision so indicated.
	 
	 	F.  	“Protected Period” shall mean the 24-month period beginning on the
effective date of a Change of Control.
	 
	 	G.  	“Target AICP” shall mean the targeted value of Executive’s annual
incentive compensation plan bonus for the year in which the Date of Termination occurs
or the fiscal year immediately preceding the Change of Control, whichever is a greater
amount.
	 
	 	H.  	“Termination Base Salary” shall mean Executive’s base salary at the
rate in effect at the time the Notice of Termination is given or, if a greater amount,
Executive’s base salary at the rate in effect immediately prior to the Change of
Control.

	3.  	No Employment Agreement.
	 
	   	This Agreement shall be considered solely as a “severance agreement” obligating the Company
to pay Executive certain amounts of compensation and to provide certain benefits in the
event and only in the event of Executive’s termination of employment for the specified
reasons and at the times specified herein. The parties agree that this Agreement shall not
be considered an employment agreement and that Executive is an “at will” employee of the
Company.

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	4.  	Regular Severance Benefits.
	 
	   	Subject to the conditions precedent set out in Section 13, if the Company terminates
Executive’s employment (i) other than for Cause and (ii) not during the Protected Period,
Executive shall receive the following compensation and benefits from the Company:

	 	A.  	Within 15 days of Executive’s satisfaction of the requirements of Section 13,
the Company shall pay to Executive in a lump sum, in cash, an amount equal to one times
the sum of Executive’s (i) Termination Base Salary and (ii) Target AICP.
	 
	 	B.  	Notwithstanding anything in any Company stock plan or grant agreement to the
contrary, all restricted shares and restricted stock units of Executive shall become
100% vested and all restrictions thereon shall lapse as of the Date of Termination and
the Company shall promptly deliver such shares to Executive.
	 
	 	C.  	For the 24-month period following the Date of Termination (the “Regular
Severance Period”), the Company shall continue to provide Executive and Executive’s
eligible family members, based on the cost sharing arrangement between the Company and
similarly situated active employees, with medical and dental health benefits and
disability coverage and benefits at least equal to those which would have been provided
to Executive if Executive’s employment had not been terminated or, if more favorable to
Executive, as in effect generally at any time during such period. Notwithstanding the
foregoing, if Executive becomes eligible to receive medical, dental and disability
benefits under another employer’s plans during this Regular Severance Period, the
Company’s obligations under this Section 4C shall be reduced to the extent comparable
benefits are actually received by Executive during such period, and any such benefits
actually received by Executive shall be promptly reported by Executive to the Company.
In the event Executive is ineligible under the terms of the Company’s health and other
welfare benefit plans or programs to continue to be so covered, the Company shall
provide Executive with substantially equivalent coverage through other sources or will

provide Executive with a lump sum payment in such amount that, after all taxes on that
amount, shall be equal to the cost to Executive of providing Executive such benefit
coverage. The lump sum shall be determined on a present value basis using the interest
rate provided in Section 1274(b)(2)(B) of the Internal Revenue Code of 1986, as amended
(the “Code”) on the Date of Termination.

Change of Control Severance Benefits

	5.  	Severance Benefits. Subject to the conditions precedent set out in Section 13, if either (a)
Executive terminates his employment during the Protected Period for a Good Reason event or (b)
the Company terminates Executive’s employment during the Protected Period other than for
Cause, Executive shall receive the following compensation and benefits from the Company:

5

 

	 	A.  	Within 15 days of Executive’s satisfaction of the requirements of Section 13,
the Company shall pay to Executive in a lump sum, in cash, an amount equal to two times
the sum of Executive’s (i) Termination Base Salary and (ii) Target AICP.
	 
	 	B.  	Notwithstanding anything in any Company stock plan or grant agreement to the
contrary, (i) all restricted shares and restricted stock units of Executive shall
become 100% vested and all restrictions thereon shall lapse as of the Date of
Termination and the Company shall promptly deliver such shares to Executive and (ii)
each then outstanding stock option of Executive shall become 100% exercisable and,
excluding any incentive stock option granted prior to the Effective Date, shall remain
exercisable for the remainder of such option’s term.
	 
	 	C.  	Executive shall be fully vested in Executive’s accrued benefits under all
qualified pension, nonqualified pension, profit sharing, 401(k), deferred compensation
and supplemental plans maintained by the Company for Executive’s benefit, except to
that the extent the acceleration of vesting of such benefits would violate any
applicable law or require the Company to accelerate the vesting of the accrued benefits
of all participants in such plan or plans, in which event the Company shall pay
Executive a lump sum amount, in cash, within 15 days following the Date of Termination,
equal to the present value of such unvested accrued benefits that cannot become vested
under the plan for the reasons provided above.
	 
	 	D.  	For the 36-month period following the Date of Termination (the “COC Severance
Period”), the Company shall continue to provide Executive and Executive’s eligible
family members, based on the cost sharing arrangement between Executive and the Company
on the Date of Termination, with medical and dental health benefits and disability
coverage and benefits at least equal to those which would have been provided to
Executive if Executive’s employment had not been terminated or, if more favorable to
Executive, as in effect generally at any time during such period. Notwithstanding the
foregoing, if Executive becomes eligible to receive medical, dental and disability
benefits under another employer’s plans during this COC Severance Period, the Company’s
obligations under this Section 5D shall be reduced to the extent comparable benefits
are actually received by Executive during such period, and any such benefits actually
received by Executive shall be promptly reported by Executive to the Company. In the
event Executive is ineligible under the terms of the Company’s health and other welfare
benefit plans or programs to continue to be so covered, the Company shall provide
Executive with substantially equivalent coverage through other sources or will provide
Executive with a lump sum payment in such amount that, after all taxes on that amount,
shall be equal to the cost to Executive of providing Executive such benefit coverage.
The lump sum shall be determined on a present value basis using the interest rate
provided in Section 1274(b)(2)(B) of the Code on the Date of Termination.
	 
	 	E.  	Throughout the term of the COC Severance Period or until Executive accepts
other employment, including as an independent contractor, with a new employer,
whichever occurs first, Executive shall be entitled to receive outplacement

6

 

	 	   	services, payable by the Company, with an aggregate cost not to exceed 15% of
Executive’s Termination Base Salary, with an executive outplacement service firm
reasonably acceptable to the Company and Executive.

	6.  	Parachute Tax Gross Up.
	 
	   	If any payment (including without limitation any imputed income) made, or benefit provided,
to or on behalf of Executive pursuant to this Agreement, including any accelerated vesting
or any deferred compensation or other award, in connection with a “change in control” of the
Company (within the meaning of Section 280G of the Code) results in Executive being subject
to the excise tax imposed by Section 4999 of the Code (or any successor or similar
provision) the Company shall promptly pay Executive an additional amount in cash (the
“Additional Amount”) such that the net amount of all such payments and benefits received by
Executive after paying all applicable taxes (including penalties and interest) on such
payments and benefits, including on such Additional Amount, shall be equal to the net
after-tax amount of the payments and benefits (excluding the Additional Amount) that
Executive would have received if Section 4999 were not applicable to such payments and
benefits. Such determinations shall be made by the Company’s independent certified public
accountants.
	 
	7.  	Accelerated Vesting of Options Upon a Change of Control.
	 
	   	Notwithstanding any provisions of any Company stock option plan or option agreement to the
contrary, upon a Change of Control all outstanding unvested stock options, if any, granted
to Executive under any Company stock option plan (or options substituted therefor covering
the stock of a successor corporation) shall be fully vested and exercisable as to all shares
of stock covered thereby effective as of the date of the Change of Control.
	 
	8.  	Mitigation.
	 
	   	Executive shall not be required to mitigate the amount of any payment provided for in this
Agreement by seeking other employment or otherwise nor, except as provided in Section 4C and
Section 5D, shall the amount of any payment or benefit provided for in this Agreement be
reduced by any compensation earned or benefit received by Executive as the result of
employment by another employer or self-employment, by retirement benefits, by offset against
any amount claimed to be owed by Executive to the Company or otherwise, except that any
severance payments or benefits that Executive is entitled to receive pursuant to a Company
severance plan or program for employees in general shall reduce the amount of payments and
benefits otherwise payable or to be provided under this Agreement.
	 
	9.  	Successor Agreement.
	 
	   	The Company will require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or assets of the
Company to assume expressly and agree to perform this Agreement in the same manner and to
the same extent that the Company would be required to perform if no succession

7

 

	   	had taken place. Failure of the successor to so assume shall constitute a breach of this
Agreement and entitle Executive to the benefits hereunder as if triggered by a termination
by the Company other than for Cause.
	 
	10.  	Indemnity.
	 
	   	In any situation where under applicable law the Company has the power to indemnify, advance
expenses to and defend Executive in respect of any judgments, fines, settlements, loss, cost
or expense (including attorneys fees) of any nature related to or arising out of Executive’s
activities as an agent, employee, officer or director of the Company or in any other
capacity on behalf of or at the request of the Company, then the Company shall promptly on
written request, indemnify Executive, advance expenses (including attorney’s fees) to
Executive and defend Executive to the fullest extent permitted by applicable law, including
but not limited to making such findings and determinations and taking any and all such
actions as the Company may, under applicable law, be permitted to have the discretion to
take so as to effectuate such indemnification, advancement or defense. Such agreement by
the Company shall not be deemed to impair any other obligation of the Company respecting
Executive’s indemnification or defense otherwise arising out of this or any other agreement
or promise of the Company under any statute.
	 
	11.  	Notice.
	 
	   	For the purpose of this Agreement, notices and all other communications provided for in this
Agreement shall be in writing and delivered by United States certified or registered mail
(return receipt requested, postage prepaid) or by courier guaranteeing overnight delivery or
by hand delivery (with signed receipt required), addressed to the respective addresses set
forth below, and such notice or communication shall be deemed to have been duly given two
days after deposit in the mail, one day after deposit with such overnight carrier or upon
delivery with hand delivery. The addresses set forth below may be changed by a writing in
accordance herewith.
	 
	   	Company:                          Executive:
	 
	   	Oil States International, Inc.

333 Clay Street, Suite 3460

Houston, Texas 77002

Attn: Chairman of the Board
	 
	12.  	Arbitration.
	 
	   	The parties agree to resolve any claim or controversy arising out of or relating to this
Agreement, including but not limited to issues relating to Executive’s termination of
employment, by binding arbitration under the Federal Arbitration Act before one arbitrator
in Houston, Texas, administered by the American Arbitration Association under its Commercial
Arbitration Rules, and judgment on the award rendered by the arbitrator may be entered in
any court having jurisdiction thereof. The fees and expenses of the arbitrator shall be
borne solely by the non-prevailing party or, in the event there is

8

 

	   	no clear prevailing party, as the arbitrator deems appropriate. Except as provided above,
each party shall pay its own costs and expenses (including, without limitation, attorneys’
fees) relating to any mediation/arbitration proceeding conducted under this Section 12.
	 
	13.  	Waiver and Release.
	 
	   	As a condition to the receipt of any payment or benefit under this Agreement, Executive must
first execute and deliver to the Company a binding general release, as prepared by the
Company, that releases the Company, its officers, directors, employees, agents, subsidiaries
and affiliates from any and all claims and from any and all causes of action of any kind or
character that Executive may have arising out of Executive’s employment with the Company or
the termination of such employment, but excluding (i) any claims and causes of action that
Executive may have arising under or based upon this Agreement, and (ii) any vested rights
Executive may have under any employee benefit plan or deferred compensation plan or program
of the Company. If Executive is age 40 or above at the time of execution of the general
release, pursuant to the terms of the Older Worker Benefits Protection Act, the release does
not become a ‘binding general release’ until the 8th day after execution and so long as it
is not revoked during the 7-day revocation period following execution.
	 
	14.  	Employment with Affiliates.
	 
	   	Employment with the Company for purposes of this Agreement includes employment with any
entity in which the Company has a direct or indirect ownership interest of 50% or more of
the total combined voting power of all outstanding equity interests, and employment with any
entity which has a direct or indirect interest of 50% or more of the total combined voting
power of all outstanding equity interests of the Company. For purposes of this Agreement,
“Good Reason” shall be construed to refer to Executive’s positions, duties, and
responsibilities in the position or positions in which Executive serves immediately before
the Change of Control, but shall not include titles or positions with subsidiaries and
affiliates of the Company that are held primarily for administrative convenience.
	 
	15.  	Governing Law.

	 	(a)  	THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF TEXAS WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES.
	 
	 	(b)  	EACH PARTY HERETO HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF
THE STATE AND FEDERAL COURTS IN HARRIS COUNTY, TEXAS, FOR THE PURPOSES OF ANY
PROCEEDING ARISING OUT OF THIS AGREEMENT.

	16.  	Entire Agreement.
	 
	   	This Agreement is an integration of the parties’ agreement and no agreement or
representatives, oral or otherwise, express or implied, with respect to the subject matter

9

 

	   	hereof have been made by either party which are not set forth expressly in this Agreement.
This Agreement hereby expressly terminates, rescinds and replaces in full any prior
agreement (written or oral) between the parties relating to the subject matter hereof,
including, without limitation, the                                          previously executed by you on
                     but does not in any manner affect any confidentiality or non-disclosure
agreements with the Company Executive may have entered into..
	 
	17.  	Withholding of Taxes.
	 
	   	The Company shall withhold from all payments and benefits provided under this Agreement all
taxes required to be withheld by applicable law.
	 
	18.  	Beneficiary.
	 
	   	In the event Executive dies before receiving the lump sum severance payment to which
Executive was entitled hereunder, Executive’s spouse or, if there is no spouse, the
beneficiary designated by Executive under the Company-sponsored group term life insurance
plan, shall receive such payment.

     IN WITNESS WHEREOF, the Company and Executive have executed this Agreement
effective for all purposes as of
the Effective Date.

	 	 	 	 	 
	 	OIL STATES INTERNATIONAL, INC.

 	 
	 	By:  	 	 
	 	Name: 	Cindy Taylor 	 
	 	Title: 	Senior VP, Chief Financial Officer and Treasurer 	 

	 	 	 	 	 
	 	EXECUTIVE

 	 
	 	 
 	 
	 	 	 
	 	 
 	 
	 

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