Exhibit 10.20

 

MIDSTATES PETROLEUM COMPANY, INC.

 

PERFORMANCE STOCK UNIT AGREEMENT

 

PURSUANT TO THE

 

2016 LONG TERM INCENTIVE PLAN

 

(PERFORMANCE VESTING)

 

*  *  *  *  *

 

Participant:  [·]

 

Grant Date:  [·]

 

Target Number of Performance Stock Units Granted:  [·]

 

*  *  *  *  *

 

THIS PERFORMANCE STOCK UNIT AWARD AGREEMENT (this “Agreement”), dated as of the
Grant Date specified above, is entered into by and between MIDSTATES PETROLEUM
COMPANY, INC., a corporation organized in the State of Delaware (the “Company”),
and the Participant specified above, pursuant to the Midstates Petroleum
Company, Inc. 2016 Long Term Incentive Plan, as in effect and as amended from
time to time (the “Plan”), which is administered by the Committee (as defined in
the Plan); and

 

WHEREAS, it has been determined under the Plan that it would be in the best
interests of the Company to grant the Performance Stock Units (“PSUs”) provided
herein to the Participant.

 

NOW, THEREFORE, in consideration of the mutual covenants and promises
hereinafter set forth and for other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties hereto hereby
mutually covenant and agree as follows:

 

1.             Incorporation By Reference; Plan Document Receipt.  This
Agreement is subject in all respects to the terms and provisions of the Plan
(including, without limitation, any amendments thereto adopted at any time and
from time to time unless such amendments are expressly intended not to apply to
the Award provided hereunder), all of which terms and provisions are made a part
of and incorporated in this Agreement as if they were each expressly set forth
herein.  Except as provided otherwise herein, any capitalized term not defined
in this Agreement shall have the same meaning as is ascribed thereto in the
Plan.  The Participant hereby acknowledges receipt of a true copy of the Plan
and that the Participant has read the Plan carefully and fully understands its
content.  In the event of any conflict between the terms of this Agreement and
the terms of the Plan, the terms of the Plan shall control.

 

2.             Grant of Performance Stock Unit Award.  The Company hereby grants
to the Participant, as of the Grant Date specified above, the number of PSUs
specified above.  Except as

 

--------------------------------------------------------------------------------

 

otherwise provided by the Plan, the Participant agrees and understands that
nothing contained in this Agreement provides, or is intended to provide, the
Participant with any protection against potential future dilution of the
Participant’s interest in the Company for any reason, and no adjustments shall
be made for dividends in cash or other property, distributions or other rights
in respect of the shares of Stock underlying the PSUs, except as otherwise
specifically provided for in the Plan or this Agreement.

 

3.             Vesting.

 

(a)           Subject to the provisions of Sections 3(b) - 3(g) hereof, the PSUs
subject to this Award shall vest, or be forfeited, at the conclusion of the
Performance Period if, and to the extent, the Performance Conditions (each, as
defined below) are satisfied; provided the Participant remains employed by the
Company through the conclusion of the Performance Period.

 

(i)            For purposes of this Agreement, “Performance Period” shall mean
the period commencing on [·] and ending on [·].

 

(ii)           For purposes of this Agreement, “Performance Conditions” shall
mean, the Company’s “Relative TSR” (as defined below) as follows:

 

 

Relative TSR for the
Performance Period

 

Vesting Level as %
of Target Number
of PSUs

 

Maximum

[·]

 

[·]

%

Target

[·]

 

[·]

%

Threshold

[·]

 

[·]

%

Below Threshold

[·]

 

[·]

%

 

(b)           To the extent that Relative TSR for the Performance Period is
between specified vesting levels, the portion of the PSUs that shall become
vested based on Relative TSR performance shall be determined on a pro rata basis
using straight line interpolation; provided that the maximum portion of the PSUs
that may become vested based on Relative TSR for the Performance Period shall
not exceed [·]% of the Target Number of PSUs.  Furthermore, in the event that
Relative TSR for the Performance Period is not positive, the maximum portion of
the PSUs that may become vested shall be no greater than the Target.

 

(c)           Certain Definitions.

 

(i)            For purposes of this Agreement, “Relative TSR” shall mean the
percentile rank of the Company’s TSR compared to the TSR of the Peer Group over
the performance period.  If any of the companies in the peer group are no longer

 

2

--------------------------------------------------------------------------------

 

publicly traded at the end of the Performance Period due to bankruptcy, they
will continue to be included in the Relative TSR calculation by force ranking
them at the bottom of the array.  If any companies are no longer publicly traded
due to acquisition, they will be excluded from the calculation.

 

(ii)           For purposes of this Agreement, “Peer Group” shall mean the
following: [·].

 

(d)           Termination Without Cause, due to death or Disability; Resignation
for Good Reason.  In the event of the Participant’s Termination by the Company
without Cause, due to the Participant’s death or Disability or by the
Participant for Good Reason (each, a “Qualifying Termination”), Participant
shall be eligible to receive, subject to the satisfaction of all applicable
performance-based vesting conditions at the conclusion of the Performance
Period, a pro-rata portion of the PSUs, based on actual performance throughout
the Performance Period and prorated based on the number of days during the
Performance Period during which the Participant was an employee of the Company.

 

(e)           Change in Control.

 

(i)            Committee Discretion to Adjust Awards.  Upon a Change in Control
the Committee, acting in its sole discretion without the consent or approval of
the Participant, may affect one or more of the following alternatives:
(A) accelerate the vesting of all or a portion of the PSUs, (B) cancel all PSUs
and pay to the Participant an amount of cash, shares of stock, or a combination
thereof equal to the Change in Control Price for each share subject to the
Target Number of PSUs, (C) provide for the assumption or substitution or
continuation of PSUs by the successor company or a parent or subsidiary of the
successor company, (D) certify the extent to which the Performance Conditions
have been achieved prior to the conclusion of the Performance Period based on
all information reasonably available to the Committee prior to the Change in
Control, or (E) make such adjustments to PSUs then outstanding as the Committee
deems appropriate to reflect such Change in Control; provided, however, that the
Committee may determine in its sole discretion that no adjustment is necessary
to PSUs then outstanding.

 

(ii)           Termination of Employment.  All unvested PSUs shall become
immediately and fully vested at the Target Number of PSUs set forth above upon
the occurrence of a Qualifying Termination on or within twelve (12) months
following a Change in Control.

 

(f)            Committee Discretion.  In addition to the foregoing, the
Committee may, in its sole discretion, (i) accelerate vesting of the PSUs at any
time and for any reason and (ii) reduce the number of shares of Stock otherwise
deliverable in respect of PSUs following the conclusion of the Performance
Period based on the Committee’s assessment of overall Company performance or
other factors the Committee deems appropriate to take into consideration.

 

3

--------------------------------------------------------------------------------

 

(g)           Forfeiture.  Subject to the terms of this Section 3, all unvested
PSUs (taking into account any vesting that may occur upon the Participant’s
Termination in accordance with Section 3(d) and Section 3(e) hereof) shall be
immediately forfeited upon the Participant’s Termination for any reason.

 

4.             Delivery of Shares.

 

(a)           General.  Following the conclusion of the Performance Period the
Committee shall certify the extent to which the Performance Conditions have been
achieved and the extent to which the PSUs shall vest hereunder.  Subject to the
provisions of Section 4(b) and Section 4(c) hereof, following the Committee’s
certification and within sixty (60) days following the conclusion of the
Performance Period the Participant shall receive the number of shares of Stock
that correspond to the number of PSUs that have become vested, less any shares
of Stock withheld by the Company pursuant to Section 7 hereof. Notwithstanding
the foregoing, in the event of a Qualifying Termination in accordance with
Section 3(e) hereof and subject to the provisions of Section 4(b) and
Section 4(c) hereof, the Participant shall receive the number of shares of Stock
that correspond to the number of PSUs that have become vested, less any shares
of Stock withheld by the Company pursuant to Section 7 hereof, within ten
(10) days following the Participant’s Qualifying Termination.  For the avoidance
of doubt, any portion of the PSUs that do not become vested in accordance with
this Section 4(a) will be forfeited following the conclusion of the Performance
Period.

 

(b)           Administrative Provisions.  Any portion of the PSUs that does not
become vested in accordance with the provisions of this Agreement shall be
automatically forfeited and cancelled for no value without any consideration
being paid therefor and otherwise without any further action of the Company
whatsoever.  The Committee shall in good faith make all determinations necessary
or appropriate to determine whether the performance vesting conditions hereunder
have been satisfied.  The Committee’s determinations shall be final, binding and
conclusive upon all parties, absent manifest error or bad faith.

 

(c)           Blackout Periods. If the Participant is subject to any Company
“blackout” policy or other trading restriction imposed by the Company on the
date such distribution would otherwise be made pursuant to Section 4(a) hereof,
such distribution shall be instead made on the earlier of (i) the date that the
Participant is not subject to any such policy or restriction and (ii) the later
of (A) the end of the calendar year in which such distribution would otherwise
have been made and (B) a date that is immediately prior to the expiration of two
and one-half months following the date such distribution would otherwise have
been made hereunder.

 

(d)           Dividends; Rights as Stockholder.  Cash dividends on the number of
shares of Stock issuable hereunder shall be credited to a dividend book entry
account on behalf of the Participant with respect to each PSU granted to the
Participant; provided that such cash dividends shall not be deemed to be
reinvested in shares of Stock and shall be held uninvested and without interest
and paid in cash at the same time (and to the same extent) that the shares of
Stock underlying the PSUs are delivered to the Participant in accordance with
the provisions hereof.  Stock dividends on shares of Stock shall be credited to
a

 

4

--------------------------------------------------------------------------------

 

dividend book entry account on behalf of the Participant with respect to each
PSU granted to the Participant; provided that such stock dividends shall be paid
in shares of Stock at the same time (and to the same extent) that the shares of
Stock underlying the PSUs are delivered to the Participant in accordance with
the provisions hereof.  Except as otherwise provided herein, the Participant
shall have no rights as a stockholder with respect to any shares of Stock
covered by any PSU unless and until the Participant has become the holder of
record of such shares.

 

5.             Non-Transferability.  The PSUs, and any rights and interests with
respect thereto, issued under this Agreement and the Plan shall not be sold,
exchanged, transferred, assigned, pledged, encumbered or otherwise disposed of
or hypothecated in any way by the Participant (or any beneficiary of the
Participant who holds the PSUs as a result of a Transfer by will or by the laws
of descent and distribution), other than in accordance with the provisions of
Section 10(a) of the Plan.

 

6.             Governing Law; Jurisdiction and Venue.  All questions arising
with respect to the provisions of this Agreement shall be determined by
application of the laws of Delaware, without giving any effect to any conflict
of law provisions thereof, except to the extent Delaware state law is preempted
by federal law. The obligation of the Company to sell and deliver Stock
hereunder is subject to applicable laws and to the approval of any governmental
authority required in connection with the authorization, issuance, sale, or
delivery of such Stock. The Company and the Participant shall irrevocably and
unconditionally (a) submit in any proceeding relating to the Plan or this
Agreement, or for the recognition and enforcement of any judgment in respect
thereof (a “Proceeding”), to the exclusive jurisdiction of the courts located in
Tulsa County, Oklahoma, the court of the United States of America for the
Northern District of Oklahoma, and appellate courts having jurisdiction of
appeals from any of the foregoing, and agree that all claims in respect of any
such Proceeding shall be heard and determined in such Oklahoma State court or,
to the extent permitted by law, in such federal court, (b) consent that any such
Proceeding may and shall be brought in such courts and waives any objection that
the Company and the Participant may now or thereafter have to the venue or
jurisdiction of any such Proceeding in any such court or that such Proceeding
was brought in an inconvenient court and agree not to plead or claim the same,
(c) waive all right to trial by jury in any Proceeding (whether based on
contract, tort or otherwise) arising out of or relating to the Plan or this
Agreement, (d) agree that service of process in any such Proceeding may be
effected by mailing a copy of such process by registered or certified mail (or
any substantially similar form of mail), postage prepaid, to such party, in the
case of a Participant, at the Participant’s address shown in the books and
records of the Company or, in the case of the Company, at the Company’s
principal offices, attention General Counsel, and (e) agree that nothing in the
Plan shall affect the right to effect service of process in any other manner
permitted by the laws of the State of Delaware.

 

7.             Withholding of Tax.  The Company may require the Participant to
pay to the Company (or the Company’s Subsidiary if the Participant is an
employee of a Subsidiary of the Company), an amount the Company deems necessary
to satisfy its (or its Subsidiary’s) current or future obligation to withhold
federal, state or local income or other taxes that the Participant incurs as a
result of the Award. With respect to any required tax withholding, the
Participant may (a) direct the Company to withhold from the shares of Stock to
be issued to the Participant under this Agreement, an amount sufficient to
satisfy any federal, state, local and foreign taxes of any kind

 

5

--------------------------------------------------------------------------------

 

(including, but not limited to, the Participant’s FICA and SDI obligations)
which the Company, in its sole discretion, deems necessary to be withheld or
remitted to comply with the Code and/or any other applicable law, rule or
regulation with respect to the PSUs (such amount, in the aggregate, the
“Withholding Obligation”), which determination will be based on the shares’ Fair
Market Value at the time such determination is made; (b) deliver to the Company
shares of Stock sufficient to satisfy the Withholding Obligation, based on the
shares’ Fair Market Value at the time such determination is made; or (c) deliver
cash to the Company sufficient to satisfy the Withholding Obligation. Without
limiting the foregoing, the Company shall withhold shares of Stock otherwise
deliverable to the Participant hereunder in order to pay the Participant’s
income and employment taxes due upon vesting of the PSUs, but only to the extent
permitted by applicable accounting rules so as not to affect accounting
treatment.

 

8.             Legend.  The Company may at any time place legends referencing
any applicable federal, state or foreign securities law restrictions on all
certificates, if any, representing shares of Stock issued pursuant to this
Agreement.  The Participant shall, at the request of the Company, promptly
present to the Company any and all certificates, if any, representing shares of
Stock acquired pursuant to this Agreement in the possession of the Participant
in order to carry out the provisions of this Section 8.

 

9.             Securities Representations.  This Agreement is being entered into
by the Company in reliance upon the following express representations and
warranties of the Participant.  The Participant hereby acknowledges, represents
and warrants that:

 

(a)           The Participant has been advised that the Participant may be an
“affiliate” within the meaning of Rule 144 under the Securities Act and in this
connection the Company is relying in part on the Participant’s representations
set forth in this Section 9.

 

(b)           If the Participant is deemed an affiliate within the meaning of
Rule 144 of the Securities Act, the shares of Stock issuable hereunder must be
held indefinitely unless an exemption from any applicable resale restrictions is
available or the Company files an additional registration statement (or a
“re-offer prospectus”) with regard to such shares of Stock and the Company is
under no obligation to register such shares of Stock (or to file a “re-offer
prospectus”).

 

(c)           If the Participant is deemed an affiliate within the meaning of
Rule 144 of the Securities Act, the Participant understands that (i) the
exemption from registration under Rule 144 will not be available unless (A) a
public trading market then exists for the Stock of the Company, (B) adequate
information concerning the Company is then available to the public, and
(C) other terms and conditions of Rule 144 or any exemption therefrom are
complied with, and (ii) any sale of the shares of Stock issuable hereunder may
be made only in limited amounts in accordance with the terms and conditions of
Rule 144 or any exemption therefrom.

 

10.          Entire Agreement; Amendment.  This Agreement, together with the
Plan, contains the entire agreement between the parties hereto with respect to
the subject matter contained herein, and supersedes all prior agreements or
prior understandings, whether written or oral, between the parties relating to
such subject matter.  This Agreement may be amended the

 

6

--------------------------------------------------------------------------------

 

Board or by the Committee at any time (a) if the Board or the Committee
determines, in its sole discretion, that amendment is necessary or advisable in
light of any addition to or change in any federal or state, tax or securities
law or other law or regulation, which change occurs after the Grant Date and by
its terms applies to the Award; or (b) other than in the circumstances described
in clause (a) or provided in the Plan, with the Participant’s consent.

 

11.          Notices.  All notices required or permitted under this Agreement
must be in writing and personally delivered or sent by certified mail, return
receipt requested, and shall be deemed to be delivered on the date on which it
is actually received by the person to whom it is properly addressed, in the case
of a Participant, at the Participant’s address shown in the books and records of
the Company or, in the case of the Company, at the Company’s principal offices,
attention General Counsel. Any person entitled to notice hereunder may waive
such notice in writing.

 

12.          No Right to Employment.  Any questions as to whether and when there
has been a Termination and the cause of such Termination shall be determined in
the sole discretion of the Committee.  Nothing in this Agreement confers upon
you the right to continue in the employ of or performing services for the
Company or any Subsidiary, or interfere in any way with the rights of the
Company or any Subsidiary to terminate your employment or service relationship
at any time, subject to any employment agreement or other service agreement in
effect between the Company and the Participant.

 

13.          Transfer of Personal Data.  The Participant authorizes, agrees and
unambiguously consents to the transmission by the Company (or any Subsidiary) of
any personal data information related to the PSUs awarded under this Agreement
for legitimate business purposes (including, without limitation, the
administration of the Plan).  This authorization and consent is freely given by
the Participant.

 

14.          Compliance with Laws.  Notwithstanding any provision of this
Agreement to the contrary, the issuance of the PSUs (and the shares of Stock
upon settlement of the PSUs) pursuant to this Agreement will be subject to
compliance with all applicable requirements of federal, state, or foreign law
with respect to such securities and with the requirements of any stock exchange
or market system upon which the Stock may then be listed. No Stock will be
issued hereunder if such issuance would constitute a violation of any applicable
federal, state, or foreign securities laws or other law or regulations or the
requirements of any stock exchange or market system upon which the Stock may
then be listed. In addition, Stock will not be issued hereunder unless (a) a
registration statement under the Securities Act of 1933, as amended (the “Act”),
is at the time of issuance in effect with respect to the shares issued or (b) in
the opinion of legal counsel to the Company, the shares issued may be issued in
accordance with the terms of an applicable exemption from the registration
requirements of the Act. The inability of the Company to obtain from any
regulatory body having jurisdiction the authority, if any, deemed by the
Company’s legal counsel to be necessary to the lawful issuance and sale of any
shares subject to the Award will relieve the Company of any liability in respect
of the failure to issue such shares of Stock as to which such requisite
authority has not been obtained. As a condition to any issuance hereunder, the
Company may require the Participant to satisfy any qualifications that may be
necessary or appropriate to evidence compliance with any applicable law or
regulation and to make any representation or warranty with respect to such
compliance as may be requested by the Company. From time to time, the Board and
appropriate officers of the Company are authorized to take the actions

 

7

--------------------------------------------------------------------------------

 

necessary and appropriate to file required documents with governmental
authorities, stock exchanges, and other appropriate Persons to make shares of
Stock available for issuance.

 

15.          Section 409A. Notwithstanding anything herein or in the Plan to the
contrary, the PSUs are intended to be exempt from the applicable requirements of
Section 409A of the Code and shall be limited, construed and interpreted in
accordance with such intent.

 

16.          Binding Agreement; Assignment.  This Agreement shall inure to the
benefit of, be binding upon, and be enforceable by the Company and its
successors and assigns.  The Participant shall not assign any part of this
Agreement without the prior express written consent of the Company, which
consent may not be unreasonably withheld, conditioned or delayed.

 

17.          Headings.  The titles and headings of the various sections of this
Agreement have been inserted for convenience of reference only and shall not be
deemed to be a part of this Agreement.

 

18.          Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same instrument.

 

19.          Further Assurances.  Each party hereto shall do and perform (or
shall cause to be done and performed) all such further acts and shall execute
and deliver all such other agreements, certificates, instruments and documents
as either party hereto reasonably may request in order to carry out the intent
and accomplish the purposes of this Agreement and the Plan and the consummation
of the transactions contemplated thereunder.

 

20.          Severability.  If any provision of this Agreement is held to be
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining provisions hereof, but such provision shall be fully severable and
this Agreement shall be construed and enforced as if the illegal or invalid
provision had never been included herein.

 

[Remainder of Page Intentionally Left Blank]

 

8

--------------------------------------------------------------------------------

 

By signing below, the Participant hereby acknowledges receipt of the PSUs issued
on the Grant Date indicated above, which have been issued under the terms and
conditions of the Plan and this Agreement.

 

MIDSTATES PETROLEUM COMPANY, INC.

 

 

 

 

 

By:

 

 

Name: Kim Harding

 

Title: Vice President — Human Resources and Administration

 

 

Accepted by:

 

 

 

 

 

[·]

 

 

 

Date:

 

 

 

 

 

 

Confirmation of Receipt by Company:

 

 

 

By:

 

 

 

 

Date:

 

 

 

9

--------------------------------------------------------------------------------