Exhibit 10.4
DAWSON GEOPHYSICAL COMPANY
2006 STOCK AND PERFORMANCE INCENTIVE PLAN
STOCK OPTION AGREEMENT
This
option agreement (“Option Agreement” or
“Agreement”) executed between DAWSON GEOPHYSICAL
COMPANY (the “Company”), and
(the “Participant”), an employee of the Company or one
of its Subsidiaries, regarding a right (the “Option”)
awarded to the Participant on
(the “Grant Date”) to purchase from the Company up to
but not exceeding in the aggregate
shares of Common Stock (as defined in the Dawson Geophysical
Company 2006 Stock and Performance Incentive Plan (the
“Plan”)) at $___.___ per share (the “Exercise
Price”), such number of shares and such price per share being
subject to adjustment as provided in the Plan, and further subject
to the terms and conditions set forth herein.
1. Relationship to
Plan.
This
Option is subject to all of the terms, conditions and provisions of
the Plan and administrative interpretations thereunder, if any,
which have been adopted by the Company’s Compensation
Committee (“Committee”) and are in effect on the date
hereof. Except as defined herein, capitalized terms shall have the
same meanings ascribed to them under the Plan. This Option is
intended to qualify as an “Incentive Stock Option” as
defined in the Plan. To the extent the relevant limits are exceeded
or the requisite holding period requirements are not satisfied,
this Option shall be deemed a Nonqualified Stock Option (as defined
in the Plan). For purposes of this Option Agreement:
(a) “Cause”
means:
(i) unacceptable or inadequate
performance as determined by the Company, including but not limited
to failure to perform the Participant’s job at a level or in
a manner acceptable to the Company;
(ii) misconduct, dishonesty, acts
detrimental or destructive to the Company or any Subsidiary or to
any employees or property of the Company or any Subsidiary;
or
(iii) violation of any policies of
the Company.
(b) “Change of
Control” means
(i) any “person” (as such
term is used in Sections 13(d) and 14(d)(2) of the Securities
Exchange Act of 1934) is or becomes a beneficial owner, directly or
indirectly, of securities of the Company representing twenty
percent (20%) or more of the total voting power of the
Company’s then outstanding securities;
(ii) the individuals who were members
of the Board of Directors of the Company (the “Board”)
immediately prior to a meeting of the shareholders of the Company
involving a contest for the election of directors shall not
constitute a
majority of the
Board following such election unless a majority of the new members
of the Board were recommended or approved by majority vote of
members of the Board immediately prior to such shareholder
meeting;
(iii) the Company shall have merged
into or consolidated with another corporation, or merged another
corporation into the Company, on a basis whereby less than fifty
percent (50%) of the total voting power of the surviving
corporation is represented by shares held by former shareholders of
the Company prior to such merger or consolidation; or
(iv) the Company shall have sold,
transferred or exchanged all, or substantially all, of its assets
to another corporation or other entity or person.
(c) “ Disability ”
means illness or other incapacity which prevents the Participant
from continuing to perform the duties of his job for a period of
more than three months.
(d) “Employment”
means employment with the Company or any of its Subsidiaries.
(e) “Exchange Act”
means the Securities Exchange Act of 1934, as amended.
(f) “Option
Shares” means the shares of Common Stock covered by this
Option Agreement.
2. Exercise
Schedule.
(a) This Option may be exercised in
accordance with the following schedule:
[
]
The
Participant must be in continuous Employment from the Grant Date
through the date of exercisability in order for the Option to
become exercisable with respect to additional shares of Common
Stock on such date.
(b) This Option shall become fully
exercisable, irrespective of the limitations set forth in
subparagraph (a) above, provided that the Participant has been
in continuous Employment since the Grant Date, upon the occurrence
of
(i) a Change of Control;
2
(ii) the Participant’s
termination of Employment due to death or Disability; or
(iii) the Participant’s
termination of Employment by the Company or a Subsidiary for
reasons other than Cause.
(c) To the extent the Option becomes
exercisable, such Option may be exercised in whole or in part (at
any time or from time to time, except as otherwise provided herein)
until expiration of the Option pursuant to the terms of this
Agreement or the Plan.
3. Termination of
Option
The
Option hereby granted shall terminate and be of no force and effect
with respect to any shares of Common Stock not previously purchased
by the Participant at the earliest time specified below:
(a) the tenth anniversary of the
Grant Date;
(b) if Participant’s Employment
is terminated by the Company or a Subsidiary for Cause at any time
after the Grant Date, then the Option shall terminate immediately
upon such termination of Participant’s Employment;
(c) if Participant’s Employment
is terminated by the Company or a Subsidiary for any reason other
than death, Disability or Cause, then the Option shall terminate on
the first business day following the expiration of the 90-day
period which began on the date of termination of
Participant’s Employment;
(d) if Participant’s Empl
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