There are a number of benefits in offering a Cashless Exercise...

There are a number of benefits in offering a Cashless Exercise Facility alternative including, for example:

1. it limits dilution to existing Shareholders as fewer Shares are issued under the Cashless Exercise Facility;
2. it makes exercising the Director Options a more attractive prospect for the Director, who may otherwise not have the necessary funds available to fund the exercise in a traditional manner; and
3. it makes retention of the Shares issued on exercise more attractive as the Director would not need to sell all or part of the Shares to recoup the money paid to exercise the Director Options.

All three of the above are benefits to NOV.

the cashless exercise facility is a way of extracting some value out of the options for Directors (but with the benefits as explained above at 1,2,3)

A cashless exercise facility enables the directors to set-off the exercise cost of their options against the number of shares which they are entitled to receive upon the exercise of their director options (these may be otherwise still exercised in the traditional manner if the director has the upfront money and willing to deploy it).

If a Director elects to use the Cashless Exercise Facility, the Director will only be entitled to that number of shares (rounded down to the nearest whole number) as are equal in value to the difference between the exercise price otherwise payable for the Director Options and the market value of the Shares at the time of exercise. The market value would be stipulated by NOV in a prior agreement but is typically based on 'X Day' VWAP of the Company’s Shares prior to the notice of exercise being given by the Director, unless otherwise determined by the Board

Expressed as formula, the number of Shares that a Director is entitled to when using the Cashless Exercise Facility will be determined in the following manner:

its an alternative to expiry of in the money shares because Director doesn't have or cant get funds to exercise and it also prevents from buying and dumping on market for a marginal gain to the determent of everyone else. They can still extract the small amount of value as they likely dont necessary want millions of extra shares for the long term etc