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As filed with the Securities and Exchange Commission on October 24, 1997
Registration No. 333-32191
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
--------------------
POST-EFFECTIVE AMENDMENT NO. 2
TO
FORM S-4 REGISTRATION STATEMENT
ON
FORM S-8
UNDER
THE SECURITIES ACT OF 1933
--------------------
NATIONAL-OILWELL, INC.
(Exact name of registrant as specified in its charter)
Delaware 76-0475815
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
5555 San Felipe
Houston, Texas 77056
(Address of principal executive offices) (Zip Code)
DRECO ENERGY SERVICES LTD. AMENDED AND RESTATED 1989 EMPLOYEE INCENTIVE STOCK
OPTION PLAN, AS AMENDED
EMPLOYMENT AND COMPENSATION ARRANGEMENTS PURSUANT TO
PRIVATE STOCK OPTION AGREEMENTS
(Full title of the plans)
PAUL M. NATION
VICE PRESIDENT AND GENERAL COUNSEL
NATIONAL-OILWELL, INC.
5555 SAN FELIPE
HOUSTON, TEXAS 77056
(Name and address of agent for service)
713-960-5100
(Telephone number, including area code, of agent for service)
--------------------
Copy of all communications to:
DAVID R. KING
MORGAN, LEWIS & BOCKIUS LLP
2000 ONE LOGAN SQUARE
PHILADELPHIA, PA 19103-6993
(215) 963-5000
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EXPLANATORY NOTES
This Post-Effective Amendment No. 2 to Registration Statement on Form
S-4 on Form S-8 (the "Registration Statement") filed by National-Oilwell, Inc.
(the "Company") relates to 893,002 shares (the "Shares") of the Company's
Common Stock, par value $.01 per share (the "Common Stock"). Of the Shares,
751,040 shares are issuable pursuant to the Dreco Energy Services Ltd. Amended
and Restated 1989 Employee Incentive Stock Option Plan, as amended, and 141,962
shares are issuable pursuant to employment and compensation arrangements under
separate private stock option agreements. All such shares were previously
registered on the Company's Registration Statement on Form S-4, as amended
(File No. 333-32191), and are being transferred to this Registration
Statement.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed by the Company with the Securities and
Exchange Commission (the "Commission") pursuant to the Securities Exchange Act
of 1934 (the "Exchange Act") are incorporated by reference in this Registration
Statement:
1. National-Oilwell's Annual Report on Form 10-K for the fiscal
year ended December 31, 1996, as amended by Form 10-K/A filed on August 18,
1997.
2. National-Oilwell's Quarterly Report on Form 10-Q for the
period ended March 31, 1997.
3. National-Oilwell's Quarterly Report on Form 10-Q for the
period ended June 30, 1997.
4. National-Oilwell's Current Report on Form 8-K filed on May 25,
1997.
5. National-Oilwell's Current Report on Form 8-K filed on October
8, 1997.
6. The description of National-Oilwell's shares of Common Stock
contained in the Registration Statement on Form 8-A filed by National-Oilwell
with the Commission on October 15, 1996 to register such securities under the
Exchange Act.
All reports and other documents subsequently filed by the Company with
the Commission pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange
Act after the date of this Registration Statement, and prior to the filing of a
post-effective amendment to this Registration Statement that indicates that all
securities offered by this Registration Statement have been sold or which
deregisters all such securities then remaining unsold, shall be deemed to be
incorporated by reference into this Registration Statement and to be part
hereof from the date of filing of such documents. Each document incorporated
by reference into this Registration Statement shall be deemed to be a part of
this Registration Statement from the date of the filing of such document with
the Commission until the information contained therein is superseded or updated
by any subsequently filed document which is incorporated by reference into this
Registration Statement.
Any statement contained in a document incorporated by reference herein
shall be deemed to be modified or superseded for purposes hereof to the extent
that a statement contained herein (or in any other subsequently filed document
that is also incorporated by reference herein) modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part hereof.
Experts. The consolidated financial statements of the Company at
December 31, 1996 and 1995, and for each of the three years in the period ended
December 31, 1996 have been incorporated by reference herein in reliance upon
the report of Ernst & Young LLP, independent auditors, incorporated by
reference herein, given upon the authority of said firm as experts in
accounting and auditing. To the extent that Ernst & Young LLP audits and
reports on financial statements of the Company issued at future dates, and
consents to the use of their report thereon, such financial statements also
will be incorporated by reference in this Registration Statement in reliance
upon their reports given upon said authority.
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ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the DGCL authorizes, inter alia, a corporation to
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action by or in
the right of the corporation), by reason of the fact that such person is or was
an officer or director of such corporation, or is or was serving at the request
of such corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise. The
indemnity may include expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by such person
in connection with such action, suit or proceeding, provided that he acted in
good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful. A
Delaware corporation may indemnify past or present officers and directors of
such corporation or of another corporation or other enterprise at the former
corporation's request, in an action by or in the right of the corporation to
procure a judgment in its favor under the same conditions, except that no
indemnification is permitted without judicial approval if such person is
adjudged to be liable to the corporation. Where an officer or director is
successful on the merits or otherwise in defense of any action referred to
above, or in defense of any claim, issue or matter therein, the corporation
must indemnify him against the expenses (including attorney's fees) which he
actually and reasonably incurred in connection therewith. Section 145 further
provides that any indemnification shall be made by the corporation only as
authorized in each specific case upon a determination by the (i) stockholders,
(ii) board of directors by a majority vote of a quorum consisting of directors
who were not parties to such action, suit or proceeding or (iii) independent
counsel if a quorum of disinterested directors so directs. Section 145 provides
that indemnification pursuant to its provisions is not exclusive of other
rights of indemnification to which a person may be entitled under any bylaw,
agreement, vote of stockholders or disinterested directors or otherwise.
Section 145 of the DGCL also empowers a corporation to purchase and
maintain insurance on behalf of any person who is or was an officer or director
of the corporation against liability asserted against or incurred by him in any
such capacity, whether or not the corporation would have the power to indemnify
such officer or director against such liability under the provisions of Section
145. National-Oilwell maintains a directors' and officers' liability policy for
such purposes.
Article Sixth, Part II, Section 1 of National-Oilwell's Amended and
Restated Certificate of Incorporation and Article VI of National-Oilwell's
Bylaws each provide that directors, officers, employees and agents shall be
indemnified to the fullest extent permitted by Section 145 of the DGCL.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
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ITEM 8. EXHIBITS.
The following exhibits are filed herewith or incorporated by reference
as part of this Registration Statement:
Exhibit
Number Exhibit
- ------ -------
4.1 Dreco Energy Services Ltd. Amended and Restated 1989 Employee
Incentive Stock Option Plan.
4.2 Amendment 1997-1 to the Dreco Energy Services Ltd. Amended and
Restated 1989 Employee Incentive Stock Option Plan (incorporated by
reference to Exhibit 10.2 of the Registrant's Registration Statement
on Form S-1 (File No. 333-2428)).
4.3 Form of Private Stock Option Agreement.
4.4 Form of Notice of Conversion of (Private) Stock Options and Revised
Terms and Conditions.
5.1 Opinion of Morgan, Lewis & Bockius LLP as to the legality of the
shares being registered.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Morgan, Lewis & Bockius LLP (included in Exhibit 5.1).
ITEM 9. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933.
(ii) To reflect in the prospectus any facts or events
arising after the effective date of this Registration Statement (or
the most recent post-effective amendment to the Registration
Statement) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the Registration
Statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the registrant
pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post- effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
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(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in this Registration Statement
shall be deemed to be a new registration statement relating to the securities
offered herein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling persons in connection with the securities
being registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in Houston, Texas, on this 24th day of October, 1997.
NATIONAL-OILWELL, INC.
By: /s/ Steven W. Krablin
------------------------------------------
Steven W. Krablin
Vice President and Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 2 to Registration Statement has been signed below
by the following persons in the capacities and on the date indicated.
Signature Title Date
- --------- ----- ----
/s/ Joel V. Staff* Chairman of the Board of Directors
- ---------------------------------- (Principal Executive Officer)
Joel V. Staff
/s/ Steven W. Krablin Principal Financial and Accounting October 24, 1997
- ---------------------------------- Officer
Steven W. Krablin
/s/ Howard I. Bull* Director
- ----------------------------------
Howard I. Bull
/s/ James C. Comis III* Director
- ----------------------------------
James C. Comis III
/s/ James T. Dresher* Director
- ----------------------------------
James T. Dresher
/s/ W. McComb Dunwoody* Director
- ----------------------------------
W. McComb Dunwoody
/s/ William E. Macaulay* Director
- ----------------------------------
William E. Macaulay
Director
- ----------------------------------
Frederick W. Pheasey
Director
- ----------------------------------
Robert L. Phillips
/s/ Bruce M. Rothstein* Director
- ----------------------------------
Bruce M. Rothstein
*By: /s/ Steven W. Krablin October 24, 1997
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Steven W. Krablin
Attorney-in-Fact
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EXHIBIT INDEX
Exhibit
No. Description
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4.1 Dreco Energy Services Ltd. Amended and Restated
1989 Employee Incentive Stock Option Plan.
4.2 Amendment 1997-1 to the Dreco Energy Services
Ltd. Amended and Restated 1989 Employee
Incentive Stock Option Plan.
4.3 Form of Private Stock Option Agreement.
4.4 Form of Notice of Conversion of (Private) Stock
Options and Revised Terms and Conditions.
5.1 Opinion of Morgan, Lewis & Bockius LLP as to
the legality of the shares being registered.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Morgan, Lewis & Bockius LLP
(included in Exhibit 5.1).
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Exhibit 4.1
DRECO ENERGY SERVICES LTD.
AMENDED AND RESTATED
1989 EMPLOYEE INCENTIVE STOCK OPTION PLAN
JANUARY 14, 1997
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DRECO ENERGY SERVICES LTD.
AMENDED AND RESTATED
1989 EMPLOYEE INCENTIVE STOCK OPTION PLAN
1. PURPOSE
This Plan is intended to advance the best interest of the Corporation by
providing those persons who have a substantial responsibility for its
management, operations and growth with additional incentive by increasing their
proprietary interest in the success of the Corporation. The General Part of
the Plan contains provisions applicable to all Options granted under the Plan.
Part A of the Plan contains provisions specifically applicable to Options which
are not intended to qualify as "incentive stock options" under Section 422A of
the United States Internal Revenue Code of 1986, as amended. Part B of the
Plan contains provisions applicable to Options which are intended to qualify as
"incentive stock options" under Section 422A of the United States Internal
Revenue Code of 1986, as amended.
GENERAL
2. INTERPRETATION
In this Plan (including this clause), unless there is something in the
subject or context inconsistent therewith, words importing the singular number
shall include the plural and vice versa, words importing the masculine gender
shall include all genders and the expressions following shall have the
following meanings, respectively:
(a) "BOARD" shall mean Board of Directors of the Corporation;
(b) "COMMON SHARE" shall mean a Class "A" common share in the capital
stock of the Corporation as constituted on November 14, 1988 or as
subsequently consolidated or subdivided, and any other share resulting
from the redemption, exchange or change of such share or from an
amalgamation, consolidation or merger;
(c) "COMMITTEE" shall mean the committee of directors appointed by
the Board in accordance with section 3 hereof;
(d) "CORPORATION" shall mean Dreco Energy Services Ltd. and any
successor or continuing corporation resulting from any form of corporate
reorganization;
(e) "EMPLOYEE" shall mean a key employee of the Corporation or of any
of its Subsidiaries and shall include officers and directors who are
full time employees of the Corporation or of a Subsidiary;
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(f) "EXPIRY DATE" shall mean the Normal Expiration Date or the date
on which an Option terminates pursuant to the Plan or an Option
Agreement, whichever occurs first;
(g) "MARKET PRICE" shall mean (i) the last reported sale price at
which Common Shares traded on The Toronto Stock Exchange on the Option
Date, or (ii) if there is no reported sale price at which Common Shares
traded on such Exchange on the Option Date, then "Market Price" shall
mean the last reported sale price at which Common Shares traded on such
Exchange prior to the Option Date; in the event the Common Shares are
not listed on The Toronto Stock Exchange but are listed on another stock
exchange or on an automated quotation system, the foregoing references
to The Toronto Stock Exchange shall be deemed to be references to such
other stock exchange or automated quotation system, or, if more than
one, to such one as shall be designated by the Committee;
(h) "NORMAL EXPIRATION DATE" shall mean, in respect of any Option,
the date determined by the Committee on which the Option would normally
terminate, which date shall in no event be later than 10 years after the
Option Date (except as otherwise provided in clauses (i) and (ii) of
paragraph 6.1(g) of the Plan or in section 2 of Part B of the Plan);
(i) "OPTION" shall mean an option to purchase Common Shares pursuant
to the Plan;
(j) "OPTION AGREEMENT" shall mean an agreement entered into between
the Corporation and an Employee, pursuant to which an Option is granted
to an Employee, which agreement shall contain such provisions not
inconsistent with the Plan as the Committee may approve;
(k) "OPTION DATE" shall mean the date on which the Board approves the
grant of an Option to an Employee;
(l) "OPTION SHARES" shall mean the Common Shares which an Employee is
entitled to purchase under an Option;
(m) "OPTIONEE" shall mean an Employee who has entered into an Option
Agreement with the Corporation;
(n) "PLAN" shall mean the Corporation's "Amended and Restated 1989
Employee Incentive Stock Option Plan" as embodied herein and as from
time to time amended;
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(o) "PURCHASE PRICE" means the purchase price of Common Shares under
an Option Agreement determined as provided in Part A or Part B hereof,
as the case may be; and
(p) "SUBSIDIARY" means any corporation (other than the Corporation)
in an unbroken chain of corporations ending the with Corporation, if at
the time an Option is granted, each of the corporations other than the
last corporation in the unbroken chain owns shares possessing 50% or
more of the total combined voting power of all classes of shares in one
of the other corporations in such chain, as the Committee shall
determine from time to time.
3. ADMINISTRATION
3.1 The Plan shall be administered by the Committee, and all questions of
interpretation and application of the Plan or of Options granted under the Plan
shall be subject to the determination of the Committee, which shall be final
and binding. The Committee shall be composed of three or more members of the
Board, each of whom:
(a) is not an officer or an employee of the Corporation; and
(b) is not eligible to participate and has not been eligible to
participate for a one year period prior to his appointment to the
Committee, in the Plan.
3.2 A majority of the members of the Committee shall constitute a quorum.
All determinations of the Committee shall be made by a majority of its members.
Any decision or determination in writing and signed by a majority of the
members will be as effective as if it had been made by a majority vote at a
meeting properly called and held.
3.3 The Committee shall determine from time to time those Employees to whom
Options should be granted and the terms and conditions of each Option and
Option Agreement (subject only to the provisions of this Plan) including,
without limitation, the number of Common Shares which should be optioned from
time to time to any Employee, terms relating to the number or percentage of
Common Shares that may be purchased in any specified period, the applicable
Expiry Date, and the Purchase Price. The Board shall receive the
recommendation of the Committee and may in its discretion accept or reject (but
not vary) the Committee's recommendations. The Committee shall review the Plan
from time to time with a view to making appropriate recommendations to the
Board.
3.4 Nothing contained in the Plan or in any resolution adopted or to be
adopted by the Board or by the Committee shall constitute an Option hereunder.
An Option granted to an Employee pursuant to the Plan is subject to and shall
be of no force and effect until the execution and delivery of an Option
Agreement by both the Corporation and such Employee. Until such time as the
Plan is approved by the shareholders of the Corporation, all Option Agreements
entered into between the Corporation and its Employees shall be conditional
upon such approval being obtained.
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4. COMMON SHARES RESERVED
The total number of Common Shares which, at any one time, may be subject
to issuance or which may be issued pursuant to the Plan, or pursuant to other
options or employee stock purchase plans, shall not exceed 975,000 Common
Shares, subject only to adjustment in accordance with the provisions of section
18. In the event that any outstanding Option for any reason shall expire or
terminate or be surrendered, in whole or in part, the Common Shares allocated
to the unexercised Option or portion thereof shall again be available for
Options under this Plan, provided that in no event may the number of Common
Shares issued under this Plan exceed the maximum described in the first
sentence of this Section. So long as any Options are outstanding under the
Plan, the Board shall at all times reserve a sufficient number of unissued
Common Shares to enable all of such Options to be exercised in accordance with
their terms.
5. LIMITATIONS
Notwithstanding any other provisions of the Plan to the contrary:
(a) the maximum number of Common Shares which may be subject to
issuance or which may be issued to any one Employee pursuant to the Plan
or pursuant to other options or employee stock purchase plans shall not
exceed five percent (5%) of the Common Shares outstanding from time to
time; and
(b) to the extent that the aggregate fair market value (determined as
of the time the Option is granted) of Common Shares for which any
Employee has been granted Options which are exercisable by the Employee
for the first time in any calendar year (under this Plan and any other
plans of the Corporation and any Subsidiary which entitle the Employee
to acquire shares, options or stock appreciation rights of the
Corporation or any Subsidiary) exceeds $100,000, such Options shall not
be treated as "incentive stock options" under Part B of the Plan. For
the purpose of this Section 5, Options shall be taken into account in
the order in which they were granted.
6. CERTAIN TERMS OF OPTION AGREEMENTS
6.1 The following provisions of sections 6.1 and 6.2 shall be contained in
or addressed (as appropriate) in each Option Agreement:
(a) each Option shall terminate on its Normal Expiration Date but
subject always to the provisions of paragraph (g) of this section 6.1;
(b) any Option may specify a number or percentage of Common Shares
that the Employee may purchase in any specified period, year or number
of years, and may provide that it may be exercised in whole upon the
occurrence of specified events;
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(c) an Option under the Plan is not exercisable as to less than 100
Common Shares at any one time and can be exercised only in blocks of 100
Common Shares or a multiple thereof;
(d) the Purchase Price shall be the price per Common Share
recommended by the Committee and approved by the Board on the Option
Date in accordance with Part A or Part B hereof, whichever is
applicable;
(e) Options shall not be transferable by the Optionee otherwise than
by will or under the laws of descent and distribution, and shall be
exercisable during his lifetime only by him;
(f) subject to section 6.2, Options shall be exercised by the
delivery of written notice to the Corporation setting forth the number
of Option Shares with respect to which the Option is to be exercised,
together with (i) payment of the total Purchase Price therefor by
certified cheque or bank draft payable to the order of the Corporation;
and (ii) such other documents and agreements as the Option Agreement or
the Committee may require, including if required by the Committee, an
executed copy of a share purchase agreement which would bind the
Optionee and his spouse, if any, and a written notice of the address to
which the certificates for such Option Shares are to be mailed upon
their release from the share purchase agreement, if any. Such notice
shall be delivered in person to the secretary of the Corporation, or
shall be sent by registered mail, return receipt requested, to the
secretary of the Corporation, in which case delivery shall be deemed
made on the date such notice is deposited in the mail. As promptly as
practicable after receipt of such written notification and payment, the
Corporation shall deliver to the Optionee or (if required under the
share purchase agreement) the escrow agent, certificates for the number
of Option Shares with respect to which such Option has been so
exercised, issued in the Optionee's name, provided that such delivery
shall be deemed effected for all purposes when a stock transfer agent of
the Corporation shall have deposited such certificates in the mail,
addressed to the Optionee, at the address specified pursuant to this
paragraph (f) or to the escrow agent if the Committee requires the
execution of the share purchase agreement as a condition of exercise;
(g) if subsequent to the Option Date and before the Normal Expiration
Date, the Optionee ceases for any reason to be an Employee and his
employment terminates:
(i) by reason of death or permanent disability, the
Option may be exercised during a period of 12 months after such
date of death or date of termination (but only as to such Option
Shares in respect of which the Option would have been exercisable
on such date of death or date of termination if such employment
had not terminated as aforesaid), notwithstanding that such
period of twelve months may extend beyond the Normal Expiration
Date;
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(ii) by reason of retirement of the Optionee (other than
by reason of permanent disability) under the then established
policies of the Corporation, the Option may be exercised during a
period of three months after the date of such retirement or up to
the Normal Expiration Date, whichever date shall first occur (but
only as to such Option Shares in respect of which the Option
would have been exercisable on such date if such employment had
not terminated as aforesaid);
(iii) for any cause other than death, permanent
disability or retirement under the then established policies of
the Corporation, the Option may be exercised (but only as to such
Option Shares in respect of which the Option would have been
exercisable on such date of termination of employment if such
employment had not terminated as aforesaid) up to a date three
months after termination of employment or up to the Normal
Expiration Date, whichever date shall first occur.
With respect to clause (g)(i) of this section 6.1,
the rights under the Option exercisable after the death of the
Optionee may be exercised by the person or persons to whom the
Optionee's right under the Option Agreement shall pass by will or
applicable law or, if no such person has such right, by the
deceased Optionee's executors or administrators. Also with
respect to clause (g)(i) of this section 6.1, an Optionee shall
be deemed to be permanently disabled if he is unable to engage in
any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected
to result in death or which has lasted or can be expected to last
for a continuous period of not less than 12 months;
(h) an Optionee who takes an authorized leave of absence with the
approval of the Board shall not be deemed thereby (but only for the
purposes of the Option Agreement) to have ceased to be an Employee,
provided that if he shall fail to return to full time service as an
Employee within 90 days after the conclusion of such leave of absence,
his Option shall terminate (if not theretofore terminated or expired in
accordance with the terms hereof) at the earlier of the Normal
Expiration Date or the expiration of the said 90 day period;
(i) each Option granted hereunder shall be embodied in an Option
Agreement, which shall be subject to the terms and conditions prescribed
above and such other terms and conditions as are contemplated by the
Plan or as the Committee may prescribe, and shall be signed by the
Optionee and by the Corporation by the officer or officers set forth in
section 22.2 for and in the name and on behalf of the Corporation.
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6.2 Notwithstanding paragraph 6.1(f), if at the time of actual receipt by
the Committee of a written notice pursuant to paragraph 6.1(f), (i) the
Corporation has unrestricted earned or contributed surplus in an amount not
less than the Purchase Price of those Option Shares with respect to which the
Option is to be exercised, (ii) all accrued cumulative preferential dividends
and other current preferential dividends on all outstanding preferred shares of
the Corporation have been fully paid, (iii) the reacquisition by the
Corporation of its own shares for the purpose of enabling the Optionee to
exercise such Option is otherwise permitted by applicable law and without any
vote or consent of any shareholder of the Corporation, and (iv) there shall
have been adopted, and there is in full force and effect, a resolution of the
Board authorizing the reacquisition by the Corporation of its own shares for
such purpose, then such Optionee may deliver to the Committee, in payment of
the Purchase Price of the Option Shares with respect to which such Option is to
be exercised, (a) certificates registered in the name of such Optionee
representing a number of Common Shares legally and beneficially owned by such
Optionee, free of all liens, claims and encumbrances of every kind, and having
a fair market value on the date of actual receipt by the Committee of such
written notice that is not greater than the Purchase Price of the Option Shares
with respect to which such Option is to be exercised, such certificates to be
accompanied by stock powers duly endorsed in blank by the record holder of
shares guaranteed by an institution acceptable to the Committee, and (b) if the
Purchase Price of the Option Shares with respect to which such Option is to be
exercised exceeds such fair market value, a cheque payable to the order of the
Corporation in an amount equal to the amount of such excess. Notwithstanding
the foregoing provisions of this section 6.2, the Committee, in its sole
discretion, may refuse to accept Common Shares in payment of the Purchase Price
of the Option Shares with respect to which such Option is to be exercised and,
in that event, any certificates representing Common Shares which were delivered
to the Committee with such written notice shall be returned to such Optionee
together with notice to such Optionee of the refusal of the Committee to accept
such shares. If, within fourteen business days after the receipt by such
Optionee of such written notice, such Optionee shall not have delivered to the
Committee a cheque in an amount equal to the Purchase Price of the Option
Shares with respect to which such Option is to be exercised, such written
notice from the Optionee to the Committee shall be ineffective to exercise such
Option.
7. CONDITIONS OF GRANT
7.1 Each Employee to whom an Option is granted under the Plan shall, if
requested by the Committee at the time of grant, agree in writing as a
condition to the granting or exercise of the Option that he will remain
associated with the Corporation or one or more of its Subsidiaries in a
specified capacity and for a specified period following the date of the grant
or exercise of the Option. Such agreement may also specify that the transfer
of the Common Shares issued upon exercise of the Option will be prohibited
until fulfillment of such condition, and may specify the penalties for
violation of such condition, which shall be fixed in the discretion of the
Committee and may include forfeiture of the applicable Common Shares.
7.2 In addition, the Committee may, as a condition to the grant of an Option
under the Plan, require an Optionee to give the Corporation the right to
repurchase Common Shares issued upon
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exercise of such Option either (i) at the Purchase Price thereof for a
specified period of time following such exercise, not to exceed six months or
(ii) at the fair market value thereof for a specified period of time
thereafter, or both. The Committee may determine the amount of such shares
subject to such repurchase right or obligation and the conditions under which
such right or obligation to repurchase shall come into existence. A grant of
an Option under the Plan may also be subject to other conditions, including the
termination of other options previously granted to the Optionee. The foregoing
enumeration of conditions of grant is not intended in any way to limit the
discretion of the Committee in imposing other or different conditions of grant.
8. EMPLOYMENT OBLIGATION
The granting of any Option shall not impose upon the Corporation any
obligation to employ or continue to employ any Optionee, and the right of the
Corporation to terminate the employment of any person shall not be diminished
or affected by reason of the fact that an Option has been granted to him.
9. NO RIGHTS AS SHAREHOLDER
No Optionee shall have rights as a shareholder with respect to his
Option Shares until the date of issuance of a certificate for such shares and,
except as otherwise provided in section 18 hereof, no adjustment for dividends,
or otherwise, shall be made if the record date therefor is prior to the date of
issuance of such certificate.
10. SPECIAL CIRCUMSTANCES
Notwithstanding anything contained herein:
(a) if a person provides services to the Corporation, but is not
actually an employee of the Corporation, then with the approval of the
Committee and of the stock exchanges or automated quotation systems upon
which the Common Shares are listed and such other regulatory approvals
as may be necessary, an Option may be granted under the Plan to such
person, subject to such terms and conditions as may be determined by the
Corporation and accepted by such stock exchanges, automated quotation
systems and other regulatory authorities but, subject as aforesaid, the
terms and conditions of the Plan shall apply mutatis mutandis to such
Option; and
(b) if an Optionee is a resident of Canada or the United States and
is transferred out of his country of residence after his Option was
granted, then the Committee may in its discretion permit such Optionee
to exercise the Option to purchase all of the Common Shares as to which
the Option was granted to such Optionee under his Option Agreement (and
not theretofore purchased by such Optionee under such Option Agreement)
notwithstanding the terms of his Option Agreement.
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11. FORFEITURE FOR COMPETITION
Notwithstanding any other provision of the Plan, if at any time during
the term of an Option granted hereunder, the Committee, after full
consideration of the facts presented on behalf of the Corporation and the
Optionee, finds by majority vote that such Optionee, without the written
consent of the Corporation, directly or indirectly owns, operates, manages,
controls or participates in the ownership, management, operation or control of,
or is employed by or is paid as a consultant or as an independent contractor by
a business which competes with the Corporation in the trade area served by the
Corporation at any time during the term of the Option but prior to its exercise
in full and in which area the Optionee had performed services for the
Corporation while employed by it, the Committee shall forfeit all unexercised
Options and all exercised Options for which the Corporation has not yet
delivered share certificates. The decision of the Committee shall be final.
The preceding provisions of this section 11 shall not apply to investments in
independently managed mutual funds or similar securities, and shall not be
deemed to have been violated solely by reason of the Optionee's ownership of
stock or securities of any publicly owned corporation, provided that such
ownership does not result in effective control of such corporation, and
provided further that written notice of such ownership is given to the
Committee within 60 days after the later of (i) the date on which the Optionee
is notified of the award of an Option, or (ii) the date on which such ownership
is acquired.
12. FORFEITURE FOR DISHONESTY
Notwithstanding anything to the contrary in the Plan, if the Committee,
after full consideration of the facts presented on behalf of the Corporation
and the Optionee, finds by majority vote that the Optionee has been engaged in
fraud, embezzlement, theft, commission of a felony, or proven dishonesty in the
course of his employment by the Corporation which damaged the Corporation, or
that the Optionee has, without authority, disclosed trade secrets of the
Corporation or has breached obligations of confidence imposed on him or the
Corporation and has thereby damaged the Corporation, the Committee shall
forfeit all unexercised Options and all exercised Options for which the
Corporation has not yet delivered share certificates. The decision of the
Committee shall be final.
13. STOCK APPRECIATION RIGHTS
13.1 In this section 13, the following expressions shall have the following
meanings:
(a) "EXERCISABLE SHARES" shall mean the number of Common Shares with
respect to which the Employee is entitled to exercise his Option at the
Surrender Date;
(b) "OPTION PREMIUM" shall mean the amount, if any, by which the
Surrender Date Market Price exceeds the Purchase Price for Surrendered
Option Shares;
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(c) "PURCHASE PRICE" shall mean the exercise price per Common Share
specified in the Option;
(d) "SETTLEMENT SHARES" shall mean Common Shares issued to an
Employee in exchange for Exercisable Shares in accordance with a
determination of the Board pursuant to section 13.3;
(e) "SURRENDER DATE" shall mean the date on which the Employee
surrenders his right to acquire any Exercisable Shares;
(f) "SURRENDER DATE MARKET PRICE" shall mean the last reported sale
price at which the Common Shares of the Corporation traded on The
Toronto Stock Exchange on the Surrender Date, or if there is no reported
sale price on such Surrender Date, then Surrender Date Market Price
shall mean the last reported sale price at which Common Shares traded on
The Toronto Stock Exchange prior to the Surrender Date, and if the
Common Shares are not listed on The Toronto Stock Exchange but are
listed on another stock exchange or on an automated quotation system,
the foregoing references to The Toronto Stock Exchange shall be deemed
to be references to such other stock exchange or automated quotation
system, or, if more than one, to such one as shall be designated by the
Committee; and
(g) "SURRENDERED OPTION SHARES" shall mean that number of Exercisable
Shares with respect to which the Employee elects to give up his option
to acquire under the Option.
13.2 The Committee may, in its discretion and subject to such terms and
conditions as it in its sole discretion may prescribe, make recommendations to
the Board to grant an Employee the right to surrender all or part of his right
to acquire Exercisable Shares and in exchange therefor to receive Settlement
Shares. The Board may, in its discretion, accept or reject (but not vary) a
recommendation from the Committee.
13.3 If the Board accepts the Committee's recommendation, then the
Corporation shall grant to the Employee the right to surrender Surrendered
Option Shares and acquire such number of Settlement Shares as is determined by
multiplying the number of Surrendered Option Shares by a fraction of which the
numerator is the Option Premium and the denominator is the Surrender Date
Market Price.
13.4 Any such right shall be granted in writing and shall specify the maximum
number of Surrendered Option Shares and the latest permitted Surrender Date.
Any such right must be exercised by the Employee giving written notice to the
Corporation in the manner contemplated by the Option Agreement.
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13.5 Such rights shall only be extended to Employees (i) in cases where the
normal exercise provisions contained in an Option Agreement would defeat the
purposes of the Plan, or (ii) for other reasons, if the Committee is satisfied
that such action would be in accordance with applicable laws and regulatory
requirements.
14. CONDITIONS OF ISSUANCE OF COMMON SHARES
14.1 The Corporation shall not be required to issue any Common Shares on the
exercise of any Option of the issuance of such Common Shares would constitute a
violation by the Optionee or the Corporation of any provision of any applicable
law or the policies or regulations of any stock or automated quotation system
on which the Common Shares are listed or the policies or regulations of any
regulatory authority having jurisdiction. If at any time the Committee shall
determine, in its discretion, that any one or more of the following is
necessary or desirable as a condition of the issuance of any Option Shares,
namely:
(a) The registration or qualification of the Option Shares for
distribution under any laws of Canada or any Province thereof or
of the United States or any state thereof, or the consent or
approval of any regulatory authority thereof;
(b) the consent or approval of any stock exchange or automated
quotation system on which the Common Shares are listed;
(c) evidence (in form and content satisfactory to the
Committee) of the investment intent of the Optionee; or
(d) an undertaking of the Optionee not to sell or dispose of
the Option Shares for a specified period of time;
then the issuance of any Option Shares shall not be made unless and until such
registration, qualification, consent, approval, evidence or undertaking shall
have been effected or obtained in form and substance acceptable to the
Committee.
14.2 Notwithstanding any other provision of this Plan, if, at the time of
actual receipt by the Committee of a notice of exercise of an Option pursuant
to paragraph 6.1(f), the Corporation is in a position to deliver or cause to be
delivered to the Optionee, issued, fully paid and non-assessable Common Shares
which are free of all liens, claims and encumbrances of every kind in full or
partial satisfaction of the number of Option Shares with respect to which the
Option is being exercised, and provided the delivery of such shares to the
Optionee (i) is permitted by applicable law and without the vote or consent of
any shareholder of the Corporation, (ii) has received all required approvals of
any stock exchange or automated quotation system on which the Common Shares are
listed and of any regulatory agencies having jurisdiction, and (iii) has been
authorized by the Board, then the Corporation may satisfy its obligations in
respect of the number of Option Shares with respect to which the Option is
being exercised in full or in part by delivering or causing to be delivered to
the
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Optionee such issued Common Shares evidenced by a share certificate therefor
registered in his name; provided that the terms of this Plan and any Option
Agreement shall in all other respects apply, mutatis mutandis.
14.3 Any trade by the Optionee in any Common Shares issued to the Optionee
pursuant to the Plan and including any sale or disposition for valuable
consideration, and any transfer, pledge or encumbrance of any Common Shares
issued to an Optionee pursuant to the Plan shall be subject to such regulatory
approvals as may be required at the time of such trade. Accordingly, the
Corporation makes no representation as to the ability of any Optionee to trade
in such Common Shares.
14.4 The Corporation cannot assure a profit or protect the Optionee against a
loss on the Common Shares purchased under the Plan. The Corporation assumes no
responsibility relating to any tax liability of the Optionee by reason of the
exercise of any Option or any subsequent trade in such Common Shares.
14.5 The Corporation shall, if so directed by the Committee, calculate,
withhold and remit any United States or Canadian taxes (whether federal,
provincial, state or local taxes) payable by an Employee in connection with the
grant of an Option, or by an Optionee in connection with the exercise of an
Option.
15. COMMON SHARES FULLY PAID AND NON-ASSESSABLE
All Common Shares issued upon the exercise of any Option shall be issued
as fully paid and non-assessable Common Shares.
16. LOANS TO EMPLOYEES
Subject to applicable law and receipt of any required regulatory
approvals, the Committee may, with the approval of the Board, at any time
authorize the Corporation to loan money to an Optionee on such terms and
conditions as the Committee may determine (which terms may include limiting
recourse under such loan to the value of the Option Shares) to assist such
Employee to exercise his Option.
17. SUBSTITUTION OPTIONS
Options may be granted under this Plan from time to time in substitution
for similar stock options held by employees of other corporations who are about
to become employees of the Corporation as a result of a merger or consolidation
of the Corporation, or the acquisition by the Corporation of the assets of the
employing corporation, or the acquisition by the Corporation of stock of the
employing corporation as the result of which the employing corporation becomes
a Subsidiary. The terms and conditions of the substitute Options so granted
may vary from the terms and conditions set forth in this Plan to such extent as
the Committee at the time of grant may deem
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appropriate to conform, in whole or in part, to the provisions of the similar
stock options in substitution for which they are granted.
18. CHANGES IN THE CORPORATION'S CAPITAL STRUCTURE
18.1 The existence of outstanding Options shall not affect in any way the
right or power of the Corporation or its shareholders to make or authorize any
or all adjustments, recapitalizations, reorganizations or other changes in the
Corporation's capital structure or its business, or any merger or consolidation
of the Corporation, or any issue of bonds, debentures, preferred shares or
other shares having rights ranking in priority to the Common Shares or the
rights thereof, or the dissolution or liquidation of the Corporation, 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.
18.2 If the Corporation shall effect a subdivision or consolidation of Common
Shares or other capital readjustment, the payment of a stock dividend, or other
increase or reduction of the number of Common Shares outstanding, without
receiving compensation therefor in money, services or property, then:
(a) the number and Purchase Price of Option Shares subject to
outstanding Options hereunder shall be appropriately adjusted in
such a manner as to entitle an Optionee to receive upon exercise
of an Option, for the same aggregate cash consideration, the
number and class of shares (as nearly as may be reasonably
possible) that he would have received had he exercised his Option
in full immediately prior to the event requiring the adjustment;
and
(b) the number of Common Shares then reserved for issuance
under the Plan shall be adjusted by substituting for the total
number of Common Shares then reserved, that number and class of
shares (as nearly as may be reasonably possible) that would have
been received by the owner of an equal number of outstanding
Common Shares as the result of the event requiring the
adjustment.
18.3 After a merger or amalgamation of one or more corporations into the
Corporation or after a merger or amalgamation of the Corporation and one or
more corporations in which the Corporation shall be the surviving corporation,
each Optionee shall, at no additional cost, be entitled upon exercise of such
Option to receive in lieu of the number of Option Shares as to which such
Option shall then be so exercisable, the number and class of shares or other
securities (as nearly as may be reasonably possible) to which such Optionee
would have been entitled pursuant to the terms of the agreement of merger or
amalgamation if, immediately prior to such merger or amalgamation, such
Optionee had been the holder of record of the number of Common Shares equal to
the number of Option Shares.
18.4 If the Corporation is merged into or amalgamated with another
corporation under circumstances where the Corporation is not the surviving
corporation, or if the Corporation is
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liquidated, or sells or otherwise disposes of substantially all its assets to
another corporation while unexercised Options remain outstanding under the
Plan, then:
(a) subject to the provisions of clause (c) below, after the
effective date of such merger, consolidation or sale, as the case
may be, each Optionee shall be entitled, upon exercise of such
Option, to receive, in lieu of Common Shares, such shares or
other securities (as nearly as may be reasonably possible) as the
holders of the Common Shares received pursuant to the terms of
the merger, consolidation or sale;
(b) the Committee may waive any limitations set forth in or
imposed pursuant to Option Agreements so that all Options, from
and after a date prior to the effective date of such merger,
consolidation, liquidation or sale, as the case may be, specified
by the Board, shall be exercisable in full; and
(c) all outstanding Options may be cancelled by the Committee
as of the effective date of any such merger, consolidation,
liquidation or sale provided that (i) notice of such cancellation
shall be given to each Optionee, and (ii) each Optionee shall
have the right to exercise such Option in full (without regard to
any limitations set forth in or imposed pursuant to an Option
Agreement) during a 30-day period preceding the effective date of
such merger, consolidation, liquidation, sale or acquisition.
18.5 Except as hereinbefore expressly provided, the issue by the Corporation
of shares of any class, or securities convertible into shares of any class, for
cash or property or for labour or services, either upon direct sale or upon the
exercise of rights or warrants to subscribe therefor, or upon conversion of
shares or obligations of the Corporation convertible into such shares or other
securities, shall not affect, and no adjustment by reason thereof shall be made
with respect to, the number, class or price of Option Shares then subject to
outstanding Options.
19. INTERPRETATION, AMENDMENT AND DISCONTINUANCE
The Committee may interpret the Plan, prescribe, amend and rescind rules
and regulations relating to it, and make all other determinations necessary or
advisable for its administration. With the approval of the Board, the
Committee may from time to time alter, suspend or discontinue the Plan provided
that:
(a) such alteration, suspension or discontinuance shall not
divest any Optionee of any rights such Optionee may have under
any Option Agreement theretofore executed and delivered by the
Corporation and such Optionee;
(b) the Committee may not materially increase the benefits
accruing to participants under the Plan or change the aggregate
number of shares which may be
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issued under the Options pursuant to the Plan or change the class
of Employees eligible to receive Options without the further
approval of the shareholders; and
(c) any amendments required by applicable law or regulatory
authorities having jurisdiction to be approved by shareholders
shall not become effective until so approved.
Subject to the foregoing provisions of this section 19, the Committee shall,
with the approval of the Board, have the power to make such changes in the Plan
and in the regulations and administrative provisions hereunder or in any
outstanding Option or Option Agreement as, in the opinion of counsel for the
Corporation, may be necessary or appropriate from time to time to ensure that
the purpose and intent of the Plan is carried out. Notwithstanding the
foregoing provisions of this section 19, the Board may terminate the Plan at
any time.
20. INDEMNIFICATION OF THE COMMITTEE AND THE BOARD
With respect to administration of the Plan, the Corporation shall
indemnify each present and future member of the Committee and the Board to the
extent provided in the Corporation's by-laws and such persons shall have the
benefit of all arrangements now or hereafter established by the Corporation in
connection with its obligations to indemnify its directors.
21. NOTICES
The manner of giving notices to the Corporation or to an Optionee shall
be specified in the Option Agreement with such Optionee.
22. GENERAL
22.1 This Plan and each Option granted under the Plan shall be governed by
and construed in accordance with the laws of the Province of Alberta and any
Option Agreement entered into pursuant to the Plan shall be treated in all
respects as an Alberta contract, unless the Committee determines otherwise.
22.2 The following officers of the Corporation are hereby authorized to
execute and deliver, under corporate seal or otherwise, all instruments and
documents (including, without limitation, Option Agreements) and do all things
necessary or desirable for carrying out the provisions of the Plan:
(a) any two of the President, any Vice-President, Treasurer or
Secretary; or
(b) such other officer or officers as the Board may from time
to time designate.
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22.3 Nothing contained herein shall restrict or limit or be deemed to
restrict or limit the rights or powers of the Board in connection with any
allotment and issuance of shares in the capital stock of the Corporation which
are not reserved for issuance hereunder.
22.4 The Plan and any Option Agreement entered into pursuant hereto shall
enure to the benefit of and be binding upon the Corporation, its successors and
assigns. The interest of any Optionee hereunder or under any Option Agreement
shall not be transferable or alienable by the Optionee either by assignment or
in any other manner whatsoever and, during his lifetime, shall be vested only
in him, but shall, subject to the terms hereof and of the Option Agreement,
enure to the benefit of and be binding upon the legal personal representatives
of the Optionee.
23. EFFECTIVE DATE OF PLAN AND RESTATEMENT THEREOF
The Plan shall become effective and shall be deemed to have been adopted
on November 16, 1989, subject only to approval by the shareholders of the
Corporation within 12 months after such date. The Plan is restated herein as
at January 14, 1997 to reflect all amendments thereto as at such date.
PART A
The provisions contained in this Part A of the Plan shall govern all Options
other than those granted under Part B of the Plan.
1. PURCHASE PRICE
The Purchase Price at which Option Shares may be purchased pursuant to
Options shall not be greater than the Market Price and shall not be less than
the applicable discount from the Market Price permitted by The Toronto Stock
Exchange or other stock exchanges or automated quotation systems upon which the
Common Shares are listed and by such other regulatory authorities having
jurisdiction.
PART B
The provisions contained in this Part B of the Plan shall govern all Options
which are intended to qualify as "incentive stock options" as described in
Section 422A of the Internal Revenue Code of 1986, as amended (the "Code").
1. PURCHASE PRICE
The Purchase Price at which Option Shares may be purchased pursuant to
Options shall be not less than the fair market value of the Common Shares on
the date the Option is granted, and the Committee in its discretion may provide
that the Purchase Price at which such shares may be so purchased shall be more
than such fair market value. In the case of any Employee of the Corporation
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who owns shares possessing more than 10 percent of the total combined voting
power of all classes of shares of the corporation employing the Employee, or of
its parent or subsidiary corporation, the price at which Option Shares may be
so purchased shall be not less than 110 percent of the fair market value of the
Common Shares on the date the Option is granted. For the purposes of this Part
B of the Plan, any reference to a parent or subsidiary of the Corporation shall
mean a parent corporation within the meaning of Section 425(e) of the Code or a
subsidiary corporation within the meaning of Section 425(f) of the Code.
2. DURATION OF OPTIONS
Notwithstanding the definition of "Normal Expiration Date" in the Plan,
in the case of any Employee who owns shares possessing more than 10 percent of
the total combined voting power of all classes of shares of the corporation
employing the Employee or of its parent or subsidiary corporation (as defined
in the Code), no Option shall be exercisable after the expiration of five years
from the date such Option is granted.
3. AMENDMENTS
The Committee shall have the power to make such additions or changes to
this Part B of the Plan and in the regulations and administrative provisions
hereunder or in any outstanding Option or Option Agreement as in the opinion of
counsel for the Corporation may be necessary or appropriate from time to time
to enable any Option granted pursuant to this Part B of the Plan to qualify as
an incentive stock option or such other stock option as may be defined under
the Code so as to receive preferential United States Federal income tax
treatment.
4. EXPIRY
No Option shall be granted pursuant to this Part B of the Plan after the
tenth anniversary of the effective date of the Plan.
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Exhibit 4.2
NATIONAL-OILWELL, INC.
AMENDMENT 1997-1 TO THE
DRECO ENERGY SERVICES LTD.
AMENDED AND RESTATED
1989 EMPLOYEE INCENTIVE STOCK OPTION PLAN
WHEREAS, pursuant to the Combination Agreement dated as of May 14,
1997, as amended, (the "Combination Agreement") by and between
National-Oilwell, Inc. (the "Company") and Dreco Energy Services Ltd.
("Dreco"), and the Plan of Arrangement under Section 186 of the Business
Corporations Act (Alberta) (the "Plan of Arrangement"), as approved by the
Court of Queen's Bench of Alberta, the Company will acquire shares of the
capital stock of Dreco;
WHEREAS, Dreco maintains the Dreco Energy Services Ltd. Amended and
Restated 1989 Employee Incentive Stock Option Plan (the "Dreco Stock Option
Plan") for the benefit of its eligible employees;
WHEREAS, pursuant to the Combination Agreement and the Plan of
Arrangement, effective as of the Effective Time on the Effective Date (as those
terms are defined in the Plan of Arrangement), each of the then outstanding
stock options granted under the Dreco Stock Option Plan will be converted into
an option to purchase shares of common stock of the Company in accordance with
Section 2.1(j) of the Plan of Arrangement (collectively, the "Converted Dreco
Stock Options");
WHEREAS, pursuant to the Combination Agreement and the Plan of
Arrangement, effective as of the Effective Time on the Effective Date, the
Company has agreed to assume the obligations of Dreco under the Converted Dreco
Stock Options, and to substitute itself for Dreco as the sponsor of the Dreco
Stock Option Plan;
WHEREAS, the Company desires to amend the Dreco Stock Option Plan to
reflect the Company's assumption of Dreco's obligations under the Converted
Dreco Stock Options, and the substitution of the Company as the sponsor of the
Dreco Stock Option Plan.
NOW, THEREFORE, the Dreco Stock Option Plan is hereby amended as
follows:
1. Section 2(b) of the Dreco Stock Option Plan is amended by
adding the following sentence to the end thereof:
2
"From and after the Effective Time on the Effective Date (as
those terms are defined in the Combination Agreement dated as of May
14, 1997, as amended, (the 'Combination Agreement') by and between
National-Oilwell, Inc. and Dreco Energy Services Ltd., and the Plan of
Arrangement under Section 186 of the Business Corporations Act
(Alberta) (the 'Plan of Arrangement'), as approved by the Court of
Queen's Bench of Alberta), the term 'Common Share' shall refer to a
share of common stock, par value $.01, of National-Oilwell, Inc.;"
2. Section 2(d) of the Dreco Stock Option Plan is amended by
adding the following sentence to the end thereof:
"From and after the Effective Time on the Effective Date (as
those terms are defined in the Plan of Arrangement and Combination
Agreement), the term 'Corporation' shall refer to National-Oilwell,
Inc.;"
3. Section 2(g) of the Dreco Stock Option Plan is amended by
adding the following sentence to the end thereof:
"From and after the Effective Time on the Effective Date (as
those terms are defined in the Plan of Arrangement and Combination
Agreement), all references herein to The Toronto Stock Exchange shall
refer instead to the The New York Stock Exchange."
4. Section 4 of the Dreco Stock Option Plan is amended by
deleting the first sentence thereof, in its entirety, and substituting the
following therefor:
"The total number of Common Shares which, at any one time,
may be subject to issuance or which may be issued pursuant to the Plan
(or pursuant to other options issued, or employee stock purchase plans
maintained, by Dreco Energy Services Ltd. prior to the Effective Time
on the Effective Date, as those terms are defined in the Plan of
Arrangement and Combination Agreement), shall not exceed 975,000
Common Shares (893,002 Common Shares from and after the Effective Time
on the Effective Date), subject only to adjustment in accordance with
the provisions of section 18."
5. Section 5(a) of the Dreco Stock Option Plan is amended, in its
entirety, to read as follows:
"the maximum number of Common Shares which may be subject to
issuance or which may be issued to any one Employee pursuant to the
Plan (or pursuant to other options issued, or employee stock purchase
plans maintained by Dreco Energy Services Ltd. prior to the Effective
Time on the Effective Date as those terms are defined in the Plan of
Arrangement and Combination Agreement) shall not exceed five percent
(5%) of the Common Shares outstanding from time to time; and"
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6. Section 13.1(f) of the Dreco Stock Option Plan is amended by
adding the following parenthetical phrase at the end thereof:
"(from and after the Effective Time on the Effective Date, as
those terms are defined in the Plan of Arrangement and Combination
Agreement, all references herein to The Toronto Stock Exchange shall
refer instead to The New York Stock Exchange)."
7. A new Section 18.6 is added to the Dreco Stock Option Plan to
read, in its entirety, as follows:
"18.6 Notwithstanding anything herein to the contrary, at
the Effective Time on the Effective Date (as those terms are defined
in the Plan of Arrangement and Combination Agreement), in accordance
with Section 2.1(j) of the Plan of Arrangement, each then outstanding
Option shall be converted into an Option to purchase shares of common
stock, par value $.01, of National-Oilwell, Inc. as follows: (a) the
number of Option Shares subject to each such Option immediately prior
to the Effective Time on the Effective Date shall be multiplied by an
exchange ratio of .9159, and (b) the Purchase Price of each such
Option immediately prior to the Effective Time on the Effective Date
shall be divided by the exchange ratio of .9159."
8. Section 1 of Part A of the Plan shall be amended by adding the
following sentence at the end thereof:
"From and after the Effective Time on the Effective Date (as
those terms are defined in the Plan of Arrangement and Combination
Agreement), the reference to The Toronto Stock Exchange shall refer
instead to The New York Stock Exchange."
9. This Amendment 1997-1 shall be effective as of the Effective
Time on the Effective Date as those terms are defined in the Plan of
Arrangement and Combination Agreement.
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Exhibit 4.3
NATIONAL-OILWELL, INC.
NOTICE OF CONVERSION OF STOCK OPTIONS
AND REVISED TERMS AND CONDITIONS
[Date]
PERSONAL & CONFIDENTIAL
TO: [Name of optionee]
From: National-Oilwell, Inc.
RE: DRECO ENERGY SERVICES LTD. STOCK OPTIONS -- NATIONAL-OILWELL, INC.
COMBINATION
In connection with the combination of Dreco Energy Services Ltd. and
National-Oilwell, Inc., your outstanding Dreco stock options have been
converted into National-Oilwell stock options to purchase shares of common
stock of National- Oilwell, Inc. as follows:
Option Date [Insert original date of grant]
Stock Option Plan Dreco Energy Services Ltd. Amended
and Restated 1989 Employee Incentive
Stock Option Plan ("Dreco Stock
Option Plan")
Number of Option Shares [Insert number as adjusted by the
Exchange Ratio]
Purchase Price [Insert purchase price as adjusted
by the Exchange Ratio]
Your outstanding Dreco stock options have been converted using the formula
provided in the Combination Agreement and Plan of Arrangement that governed the
combination. The number of Dreco shares subject to your outstanding Dreco stock
options has been converted to shares of National-Oilwell common stock by
multiplying the number of Dreco shares covered by the option by an exchange
ratio of .9159. The purchase price of your Dreco stock options has been
adjusted by dividing the purchase price by the same exchange ratio.
The normal expiration date of your Dreco stock options remains the same;
however, your options may lapse prior to that date under certain conditions, as
specified in the Dreco Stock Option Plan.
2
All other terms and conditions of your original Dreco stock option grant also
remain the same, except to the extent modified by Amendment 1997-1 to the Dreco
Stock Option Plan to reflect National-Oilwell's assumption of the Plan. A copy
of Amendment 1997-1 to the Dreco Stock Option Plan is attached to this notice.
This notice also constitutes an amendment of your Dreco stock options referred
to herein.
Please acknowledge your receipt of this notice of converted stock option on the
terms and conditions as set forth herein where indicated and return a copy of
this notice to Paul M. Nation, Vice President, Secretary and General Counsel,
5555 San Felipe, Houston, Texas 77056. If you have any questions about your
converted stock options, please call Mr. Nation at (713) 960-5100.
- ----------------------------- -------------------------------------
National-Oilwell, Inc. Date
- ----------------------------- -------------------------------------
Optionee Date
2
1
Exhibit 4.4
NATIONAL-OILWELL, INC.
NOTICE OF CONVERSION OF STOCK OPTIONS
AND REVISED TERMS AND CONDITIONS
[Date]
PERSONAL & CONFIDENTIAL
TO: [Name of optionee]
From: National-Oilwell, Inc.
RE: DRECO ENERGY SERVICES LTD. STOCK OPTIONS -- NATIONAL-OILWELL, INC.
COMBINATION
In connection with the combination of Dreco Energy Services Ltd. and National-
Oilwell, Inc., your outstanding Dreco stock options have been converted into
National-Oilwell stock options to purchase shares of common stock of National-
Oilwell, Inc. as follows:
Option Date [Insert original date of grant]
Stock Option Plan No. Private Agreement
Number of Option Shares [Insert number as adjusted by the Exchange
Ratio]
Purchase Price [Insert purchase price as adjusted by the
Exchange Ratio]
Your outstanding Dreco stock options have been converted using the formula
provided in the Combination Agreement and Plan of Arrangement that governed the
combination. The number of Dreco shares subject to your outstanding Dreco
stock options has been converted to shares of National-Oilwell common stock by
multiplying the number of Dreco shares covered by the option by an exchange
ratio of .9159. The purchase price of your Dreco stock options has been
adjusted by dividing the purchase price by the same exchange ratio.
The normal expiration date of your Dreco stock options remains the same;
however, your options may lapse prior to that date under certain conditions, as
specified in your original Dreco stock option. The other terms and conditions
of your original Dreco stock option grant, also remain the same. This notice
constitutes an amendment of your Dreco stock options referred to herein.
2
Please acknowledge your receipt of this notice of converted stock option on the
terms and conditions as set forth herein where indicated and return a copy of
this notice to Paul M. Nation, Vice President, Secretary and General Counsel,
5555 San Felipe, Houston, Texas 77056. If you have any questions about your
converted stock options, please call Mr. Nation at (713) 960-5100.
- ------------------------------------------- -----------------------------
National-Oilwell, Inc. Date
- -------------------------------------------- -----------------------------
Optionee Date
2
1
Exhibit 5.1
October 23, 1997
National-Oilwell, Inc.
5555 San Felipe
Houston, Texas 77056
Re: National-Oilwell, Inc. - Form S-8 Registration Statement Relating to
Dreco Energy Services Ltd. Amended and Restated 1989 Employee
Incentive Stock Option Plan, as amended, and Employment and
Compensation Arrangements Pursuant to Private Stock Option Agreements
Ladies and Gentlemen:
As your counsel, we have assisted in the preparation of the above-referenced
registration statement (the "Registration Statement") for filing with the
Securities and Exchange Commission pursuant to the Securities Act of 1933, as
amended (the "Act"), and the rules and regulations promulgated thereunder.
The Registration Statement relates to 893,002 shares of Common Stock, par value
$.01 per share (the "Common Stock"), of National-Oilwell, Inc. (the
"Registrant") which may be issued pursuant to the Dreco Energy Services Ltd.
Amended and Restated 1989 Employee Incentive Stock Option Plan, as amended, and
certain employment and compensation arrangements under individual private stock
option agreements of the Registrant (collectively, the "Benefit Arrangements").
We have examined the Registrant's Amended and Restated Certificate of
Incorporation, Bylaws, minutes and such other documents, and have made such
inquiries of the Registrant's officers, as we have deemed appropriate. In our
examination, we have assumed the genuineness of all signatures, the
authenticity of all items submitted to us as originals, and the conformity with
originals of all items submitted to us as copies.
Based upon the foregoing, it is our opinion that the Registrant's Common Stock
originally issued by the Registrant to eligible participants through the
Benefit Arrangements, when issued and delivered as contemplated by the Benefit
Arrangements, will be legally issued, fully paid and non-assessable.
We hereby consent to the use of this opinion as Exhibit 5.1 to the Registration
Statement. In giving such consent, we do not thereby admit that we are acting
within the category of persons whose consent is required under Section 7 of the
Act or the rules or regulations of the Securities and Exchange Commission
thereunder.
Very truly yours,
Morgan, Lewis & Bockius LLP
1
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in
Post-Effective Amendment No. 2 to the S- 4 Registration Statement filed on Form
S-8 (No. 333-32191) and to the use of our report dated July 25, 1997, with
respect to the consolidated financial statements of National-Oilwell, Inc.
included in its Annual Report (Form 10-K/A) for the year ended December 31,
1996 filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
Houston, Texas
October 21, 1997
