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Cameron International Corporation Incentive Stock Option Agreement

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CAMERON INTERNATIONAL CORP | CAMERON INTERNATIONAL CORPORATION

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Title: CAMERON INTERNATIONAL CORPORATION INCENTIVE STOCK OPTION AGREEMENT
Governing Law: Texas     Date: 1/29/2016
Industry: Oil Well Services and Equipment     Sector: Energy

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CAMERON INTERNATIONAL CORPORATION

INCENTIVE STOCK OPTION AGREEMENT

(Including Non-Compete, Non-Solicitation, and Confidentiality Agreements)

 

Effective Date: October 14, 2015

 

1.      Purpose.   As an additional incentive and inducement to you to remain in the employment of Cameron International Corporation (the “Company”) and to acquire an ownership position in the Company, thereby aligning your interests with those of the Company and its stockholders, the Company hereby grants to you, the “Optionee”, the option to purchase common stock of the Company from the Company (the “Options”) at the times and upon the terms and conditions set forth on the attached Notice of Grant of Stock Options and this Option Agreement (the “Agreement”), subject to your acceptance of this Agreement in writing or electronically in the manner prescribed by the Company or its third party administrator. The Options are intended to be incentive stock options granted in accordance with Code Section 422. For purposes of this Agreement, “Employer” means the Company or any successor of the Company or any affiliate of either that employs the Optionee on the applicable date. All capitalized terms not defined in this Agreement shall have the same meaning as set forth in the Plan.

 

2.      Terms Subject to the Plan.   The Agreement is expressly subject to the terms and provisions of the Company’s Equity Incentive Plan (the “Plan”), as indicated in your Notice of Grant of Stock Options. A copy of the Plan is available from the Corporate Secretary upon request. In the event there is a conflict between the terms of the Plan and this Agreement, the terms of the Plan shall control.

 

3.      Purchase Price .   The purchase price of the Shares of the Company’s common stock subject to the Agreement shall be $65.97 per Share.

 

4.      Vesting and Exercisability.

 

(a)The Options granted pursuant to this Agreement shall vest on the earliest of (i) the “normal vesting schedule”, (ii) termination without “Cause” (as defined below) by the Company or Employer, (iii)(x) termination by the Optionee within six months following the closing of the proposed Cameron/Schlumberger merger pursuant to the Merger Agreement between Cameron and Schlumberger Holdings Corporation, et. al. dated as of August 25, 2015 (the “Closing”) for “Modified Good Reason” (as defined below) , and (y) termination by the Optionee more than six months following the Closing for “Standard Good Reason” (as defined below) , (iv) the Optionee’s death or termination due to “Long-Term Disability” (as defined below) or (v) the Optionee’s termination of employment from the Company or Employer for reasons other than “Cause” at age 60 or older with at least 10 years of continuous service. The “normal vesting schedule” is three installments as follows: one-third on October 14, 2016 , one-third on October 14, 2017 , and one-third on October 14, 2018 , provided the Optionee remains employed as of such date (each a “Scheduled Vesting Date”).

 

(b)If the Optionee terminates his or her employment within six months of Closing for “Modified Good Reason”, then the Optionee agrees that he or she is bound by the terms of the Covenant Not to Compete, Solicit or Disclose Confidential Information set out in Section 7 hereof.

 

(c)The Options granted pursuant to this Agreement may be exercised, in whole or in part, but only as to the number of Options as to which the right to exercise has vested at the time of exercise, during the period beginning October 14, 2016 (one year from the date on which the Option was granted), and, provided the Optionee remains employed until such date or is terminated pursuant to Section 4(a)(ii). (iii), (iv) or (v) above, ending October 14, 2025 (ten years from the date on which the Option was granted). If the Optionee terminates employment under circumstances not described in Section 4(a)(ii), (iii), (iv) or (v), the Options will be exercisable within a three month period after such termination or the term of the Options, whichever is less, but only to the extent exercisable immediately prior to the date of termination, unless the Optionee is terminated for Cause, in which case the Options will immediately cease to be exercisable.

 

(d) “Cause”, for the purposes hereof, shall mean the Optionee has (i) engaged in gross negligence or willful misconduct in the performance of his or her duties and responsibilities respecting his or her position with the Company or Employer; (i) willfully refused, without proper legal reason, to perform the duties and responsibilities respecting his or her position with the Company or Employer; (iii) breached any material policy or code of conduct established by the Company or Employer and affecting the Optionee; (iv) engaged in conduct that Optionee knows or should know is materially injurious to the Company or Employer; (v) been convicted of a felony or a misdemeanor involving moral turpitude; or (vi) engaged in an act of dishonest or impropriety which materially impairs the Optionee’s effectiveness in his or her position with the Company or Employer.

 

(e)“Modified Good Reason”, for the purposes hereof, shall mean (i) a major demotion or major reduction in job responsibilities, which for the avoidance of doubt, shall not include changes in duties or reporting responsibilities resulting from the Company ceasing to be a separate publicly-traded company or becoming an indirect subsidiary of Schlumberger, (ii) a major decrease in aggregate compensation opportunities for a fiscal year or (iii) the relocation of an employee’s principal place of employment to a location 50 miles further from the employee’s principal residence. To qualify as Modified Good Reason, the Optionee must (i) give written notice of an event constituting Modified Good Reason within 90 days of its initial occurrence, (ii) give the Company 30 days in which to cure such condition, and (iii) actually terminate employment within two years following the initial occurrence of the Modified Good Reason condition and prior to the Scheduled Vesting Date.

 

(f)“Standard Good Reason”, for the purposes hereof, shall mean, except as provided otherwise below, the occurrence of any of the following without the Optionee’s express written consent: (i) a material change in the Optionee’s status, title(s) or positions(s) with the Company, including as an officer of the Company, which in the Optionee’s reasonable judgment, does not represent a promotion, with commensurate adjustment of compensation, from the Optionee’s current status, title(s) and positions(s) or the assignment to the Optionee of any duties or responsibilities which, in the Optionee’s reasonable judgment, are materially inconsistent with such status, title(s) or positions(s); or any removal of the Optionee from or any failure to reappoint or reelect the Optionee to such position(s); provided that the circumstances described in this item (i) do not apply following receipt by the Optionee of written notice from the Company of the termination of the Optionee’s employment for Cause; (ii) a reduction by the Company in the Optionee’s then current base salary; (iii) the failure by the Company to continue to effect any material Plan in which the Optionee was participating, other than as a result of the normal expiration or amendment of any such Plan in accordance with its terms; or the taking of any action, or the failure to act, by the Company which would materially adversely affect the Optionee’s continued participation in any such Plan on at least as favorable a basis to the Optionee’s participation or which would materially reduce the Optionee’s benefits under any such Plan or deprive the Optionee of any material benefit enjoyed by Optionee; or (iv) the relocation of the principal place of Optionee’s employment to a location 25 miles further from the Optionee’s principal residence. To qualify as Standard Good Reason, the Optionee must (i) give written notice of an event constituting Standard Good Reason within the latter of 90 days of its initial occurrence or the date on which this definition becomes operative, (ii) give the Company 30 days in which to cure such condition, and (iii) actually terminate employment within two years following the latter of the initial occurrence of the Standard Good Reason condition or the date on which this definition becomes operative and prior to the Scheduled Vesting Date.

 

Notwithstanding the foregoing, in the case of any Optionee who is party to a Change in Control Agreement with the Company, the definition of Good Reason in such agreement shall apply to this Award following the date that is six months after the Closing.

 

(g)“Long-Term Disability”, for the purposes hereof, shall mean that the Optionee is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve months.

 

5 .     Exercise of Option.   The Options granted herein may be exercised as to vested Options, in whole or in part, from time to time by the Optionee by giving written notice to the Secretary of the Company on or prior to the date on which the Option terminates. Such notice shall identify the Option and specify the number of whole Shares that the Optionee desires to purchase. Any notice of exercise shall be in an electronic or written form as prescribed by the Company or its designated third party administrator. Payment of the purchase price of the Shares that the Optionee desires to purchase shall be tendered in full at the time of giving notice by (i) cash, check in U.S. Dollars, or bank draft payable and acceptable to the Company (or the equivalent thereof acceptable to the Company), (ii) Shares theretofore owned and held by the Optionee, (iii) a combination of cash and Shares theretofore owned and held by the Optionee, or (iv) the Optionee delivering to the Company a properly executed exercise notice together with irrevocable instructions to a broker to promptly deliver to the Company cash or a check payable and acceptable to the Company to pay the exercise price. The notice shall not be considered to be properly given unless accompanied by all documentation deemed appropriate by the Company to reflect exercise of the Option and compliance with all applicable laws, rules and regulations.

 

6.      Changes in the Company’s Capital Structure.   The number of Shares subject to the Option and the price per Share payable upon exercise of the Option shall be subject to the provisions of Section 12.2 of the Plan relating to adjustments to corporate capitalization.

 

7.     Covenant Not To Compete, Solicit or Disclose Confidential Information.

 

(a)      The Optionee acknowledges that the Optionee is in possession of and has access to confidential information, including material relating to the business, products and/or services of the Company and that he or she will continue to have such possession and access during employment by the Company or Employer. The Optionee also acknowledges that the Company’s (or Employer’s) business, products and services are highly specialized and that it is essential that they be protected, and, accordingly, the Optionee agrees that as partial consideration for the Option granted herein that should the Optionee engage in any “Detrimental Activity,” as defined below, at any time during his or her employment or during a period of one year following his or her termination the Company or Employer shall be entitled to: (i) cancel any unexercised portion of the Option grant; (ii) recover from the Optionee the value of any portion of the Option grant that has been exercised; (iii) seek injunctive relief against the Optionee pursuant to the provision of subsection (c) below; (iv) recover all damages, court costs, and attorneys’ fees incurred by the Company or Employer in enforcing the provisions of this Option grant, and (v) set-off any such sums to which the Company or Employer is entitled hereunder against any sum which may be owed the Optionee by the Company or Employer.

 

(b)    “Detrimental Activity” for the purposes hereof, other than with respect to involuntary termination by the Company or Employer without Cause or termination by the Optionee for Standard Good Reason more than six months following the Closing, shall include: (i) rendering of services for any person or organization, or engaging directly or indirectly in any business, which is or becomes competitive with the Company or Employer; (ii) disclosing to anyone outside the Company or Employer, or using in other than the Company’s or Employer’s business, without prior written authorization from the Company or Employer, any confidential information including material relating to the business, products or services of the Company or Employer acquired by the Optionee during employment with the Company or Employer; (iii) soliciting, interfering, inducing, or attempting to cause any employee of the Company or Employer to leave his or her employment, whether done on Optionee’s own account or on account of any person, organization or business which is or becomes competitive with the Company or Employer, or (iv) directly or indirectly soliciting the trade or business of any customer of the Company or Employer. “Detrimental Activity” for the purposes hereof with respect to involuntary termination by the Company or Employer without Cause, or termination by the Optionee for Standard Good Reason more than six months following the Closing, shall include only part (ii) of the preceding sentence.

 

(c)    Because of the difficulty of measuring economic losses to the Company or Employer as a result of a breach of the foregoing covenants, and because of the immediate and irreparable damage that could be caused to the Company or Employer for which it would have no other adequate remedy, the Optionee agrees that the foregoing covenants may be enforced by the Company or Employer in the event of breach by him/her by injunction relief and restraining order, without the necessity of posting a bond, and that such enforcement shall not be the Company's or Employer’s exclusive remedy for a breach but instead shall be in addition to all other rights and remedies available to the Company or Employer.

 

(d)    The covenants and the provisions of this Section 7 are severable and separate, and the unenforceability of any specific covenant or provision shall not affect the enforceability of any other covenant or provision. Moreover, in the event any arbitrator or court of competent jurisdiction shall determine that the scope or time set forth are unreasonable, then it is the intention of the parties that such restrictions be enforced to the fullest extent which the panel or court deems reasonable, and this Agreement shall thereby be reformed.

 

(e)    Each of the covenants in this Section 7 shall be construed as an agreement independent of any other provision in this Agreement, and the existence of any claim or cause of action of the Optionee against the Company or Employer, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by the Company or Employer of such covenants or provisions.

 

8.      Employment.   This Agreement is not an employment agreement. Nothing contained herein shall be construed as creating any employment relationship.

 

9.      Notices.   All notices required or permitted under this Agreement shall be in writing and shall be delivered personally or by mailing the same by registered or certified mail postage prepaid, to the other party. Notice given by mail as below set out shall be deemed delivered at the time and on the date the same is postmarked.

Notices to the Company should be addressed to:

Cameron International Corporation

1333 West Loop South, Suite 1700

Houston, Texas 77027

Attention: Corporate Secretary

Telephone:


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