X0201 4 2004-03-22 0000003982 ALLIS CHALMERS CORP ACLM 0001169449 MORTENSEN JENS H 7660 WOODWAY, SUITE 200 HOUSTON TX 77063 1 1 0 0 President Common Stock 1337957 D Option to Purchase Common Stock .55 2004-03-22 4 A 0 500000 0 A 2013-12-16 Common Stock, par value $0.15 per share 500000 500000 D Non-Employee Option to Purchase Common Stock Common Stock 6145512 6145512 D The option is exercisable, (a) immediately with respect to 166,667 shares, (b) on December 16, 2004 with respect to an additional 166,667 shares, and (c) on December 16, 2005 with respect to the remaining 166,666 shares. Not applicable. Currently, the Issuer and Mr. Mortensen own 81% and 19%, respectively, of Jens Oilfield Services, Inc. ("JOS"). Pursuant to the terms of a Shareholders Agreement dated February 1, 2002, Mr. Mortensen has the option to exchange his interest in JOS for a number of shares of Common Stock of the Issuer equal to a fraction, the numerator of which is 4.6 multiplied by the trailing 12 month EBITDA (as defined below) of JOS, less any net intercompany loans to and third party investments in JOS, multiplied by 0.19, and the denominator of which is the average closing bid price for the Issuer's Common Stock during the thirty days prior to the date of the exercise of the option. For purposes of the foregoing calculation, EBITDA means JOS' earnings before interest, taxes, depreciation and amortization and any payments made to the Issuer in respect of the Issuer's overhead. At March 2, 2004, the number of shares of the Issuer's Common Stock into which Mr. Mortensen had the right to convert his JOS shares was 5,645,912. Jens H. Mortensen Jr. 2004-03-24