Exhibit 10.4

U.S. WELL SERVICES, INC.
GRANT NOTICE FOR 2018 STOCK INCENTIVE PLAN
DEFERRED STOCK UNIT AWARD

FOR GOOD AND VALUABLE CONSIDERATION, U.S. Well Services, Inc. (the “Company”),
hereby grants to the Participant named below the number of deferred stock units
(the “Deferred Stock Units” or “DSUs”) whereby each Deferred Stock Unit
represents the right to receive one share of the Company’s Class A common stock,
par value $0.0001 per share (the “Common Stock”), as specified below (the
“Award”), upon the terms and subject to the conditions set forth in this Grant
Notice, the U.S. Well Services, Inc. Amended and Restated 2018 Stock Incentive
Plan (as amended, the “Plan”) and the Terms and Conditions for Deferred Stock
Unit attached hereto (the “Terms and Conditions”) promulgated under such Plan,
each as amended from time to time. This Award is granted pursuant to the Plan
and is subject to and qualified in its entirety by the Terms and Conditions.  

Name of Participant:

 

Grant Date:

November [___], 2020

Vesting Effective Date

January 1, 2020

Number of Deferred Stock Units:

[_________], subject to adjustment as set forth in the Plan.

Restricted Periods:

One (1) year from the Vesting Effective Date with respect to one-third (1/3) of
the Award (“First Restricted Period” or a “Restricted Period”);

Two (2) years from the Vesting Effective Date with respect to one-third (1/3) of
the Award (“Second Restricted Period” or a “Restricted Period”); and

Three (3) years from the Vesting Effective Date with respect to one-third (1/3)
of the Award (“Third Restricted Period” or a “Restricted Period” and, together
with the First Restricted Period and the Second Restricted Period, the “Full
Restricted Period”).

Subject to the Participant’s Continuous Service, the First Restricted Period,
Second Restricted Period and Third Restricted Period shall lapse on each of the
first (1st), second (2nd) and third (3rd) anniversary of the Vesting Effective
Date, respectively.

Subject to the Participant’s Continuous Service through a Change in Control, the
Full Restricted Period shall fully lapse immediately prior to the consummation
of such Change in Control.

Upon a termination of the Participant’s Continuous Service due to the
Participant’s death or Disability during any of the First Restricted Period,
Second Restricted Period or Third Restricted Period, such Restricted Period
shall fully lapse.

 

 

 

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Upon a termination of the Participant’s Continuous Service due to the
Participant’s Retirement during either the Second Restricted Period or Third
Restricted Period, such Restricted Period shall fully lapse. “Retirement” shall
refer to a termination of Continuous Service by the Participant on or after the
date on which the Participant has become entitled to receive full retirement
benefits pursuant to the U.S. Social Security Act.

Upon a termination of the Participant’s Continuous Service by the Company for
Cause, the entire Award, whether or not then vested, shall be immediately
forfeited and canceled as of the date of such termination of Continuous Service.

Upon a termination of the Participant’s Continuous Service for any other reason
(other than due to the Participant’s death, Disability or Retirement or by the
Company for Cause) prior to the lapse of the applicable Restricted Period, the
portion of the Award that has not vested as of the date of termination shall be
forfeited and canceled as of such date.

Deferred Settlement Payment Date:

No shares of Common Stock shall be issued to the Participant in respect of the
DSUs granted pursuant to any portion of the Award prior to the date on which
such portion of the Award becomes vested and the applicable Restricted Period
with respect to such portion of the Award lapses, in accordance with the terms
hereof.

The shares of Common Stock issuable with respect to vested DSUs shall be issued
in a lump sum on the earlier of the following dates and otherwise only as
follows:

(a)The 60th day after a termination of the Participant’s Continuous Service;

(b)The consummation of a Change in Control (with such issuance deemed to occur
as of immediately prior to such Change in Control to the extent permitted under
Code Section 409A, but with the timing of such issuance otherwise determined by
the Company); and

(c)Upon the fifth (5th) anniversary of the Grant Date.

Notwithstanding the above, the Company shall not be obligated to deliver any
shares of Common Stock during any period when the Company determines that the
delivery of shares of Common Stock hereunder would violate any federal, state or
other applicable laws.

 

 

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Forfeiture:

Notwithstanding anything to the contrary herein, the right of the Participant to
receive shares of Common Stock in settlement of the Award is conditioned upon
the Company receiving stockholder approval of certain amendments to the Plan as
may be required in order to permit the transactions contemplated by the Award
and similar awards granted to other Company personnel, and in the event such
stockholder approval is not received and the Company lacks sufficient shares of
Common Stock in the Total Share Reserve under the Plan to satisfy the Award in
full, then the unsatisfied portion of the Awards shall be forfeited and void.

 

[Signature page to follow]

 

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By accepting this Grant Notice, the Participant acknowledges that he or she has
received and read, and agrees that this Award shall be subject to, the terms of
this Grant Notice, the Plan and the Terms and Conditions.

U.S. WELL SERVICES, INC.

 

 

By:

Name:

Title:

 

 

 

PARTICIPANT:

 

 

 

 

Address (please print):

 

 

 

 

 

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U.S. WELL SERVICES, INC.
TERMS AND CONDITIONS FOR
DEFERRED STOCK UNITS

These Terms and Conditions apply to the award of deferred stock units (the
“Award” or the “Deferred Stock Units”) whereby each Deferred Stock Unit
represents the right to receive one share of the Company’s Class A common stock,
par value $0.0001 (the “Common Stock”), as set forth in the Grant Notice
provided herewith (the “Grant Notice”) and granted pursuant to the U.S. Well
Services, Inc. 2018 Stock Incentive Plan (the “Plan”). In addition to these
Terms and Conditions, the Deferred Stock Units shall be subject to the terms of
the Plan, which are incorporated into these Terms and Conditions by this
reference. Capitalized terms not otherwise defined herein shall have the meaning
set forth in the Plan.

1.TERMS OF DEFERRED STOCK UNITS

U.S. Well Services, Inc. (the “Company”), has granted the Award to the
Participant named in the Grant Notice. The Award is subject to the conditions
set forth in the Grant Notice, these Terms and Conditions, and the Plan, each as
amended from time to time. For purposes of these Terms and Conditions and the
Grant Notice, any reference to the Company shall include a reference to its
subsidiaries.

2.VESTING OF DEFERRED STOCK UNITS

The Award shall not be vested as of the Grant Date set forth in the Grant Notice
and shall be forfeitable unless and until the applicable Restricted Period
lapses pursuant to the terms of the Grant Notice and these Terms and Conditions.
After the Grant Date, subject to termination or acceleration as provided in the
Grant Notice, these Terms and Conditions (as amended from time to time) and the
Plan, the applicable Restricted Period shall lapse as described in the Grant
Notice with respect to that number of Deferred Stock Units as set forth in the
Grant Notice.

3.NO RIGHTS AS STOCKHOLDER

The Deferred Stock Units granted pursuant to the Award do not and shall not
entitle the Participant to any rights of a holder of Common Stock prior to the
date that shares of Common Stock are issued to the Participant in settlement of
the Award. The Participant’s rights with respect to the Deferred Stock Units
shall remain forfeitable at all times prior to the date on which rights become
vested and the restrictions with respect to the Deferred Stock Units lapse in
accordance with the Grant Notice.

4.CHANGE IN CONTROL

For the purposes of the Award, “Change in Control” shall not have the meaning
provided in the Plan, but rather, “Change in Control” shall mean:

(a)  the direct or indirect sale, transfer, conveyance or other disposition
(other than by way of merger or consolidation), in one or a series of related
transactions, of all or substantially all of the properties or assets of the
Company and its subsidiaries, taken as a whole, other than a transaction in
which the Company’s voting securities outstanding immediately before the
transaction continuing to represent (either by remaining outstanding or by being
converted into voting securities of the Company or the person that, as a result
of the transaction, controls, directly or indirectly, the Company or owns,
directly or indirectly, all or substantially all of the Company’s assets or
otherwise succeeds to the business of the Company (the Company or such person,
the “Successor Entity”)) directly or indirectly, at least a majority of the
combined voting power of the Successor Entity’s outstanding voting securities
immediately after the transaction;

(b)  the Incumbent Directors cease for any reason to constitute at least a
majority of the Board;

 

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(c)  the consummation of a complete liquidation or dissolution of the Company;

(d)  the acquisition by any Person (excluding any Existing Major Holder (as
defined below)) of Beneficial Ownership of more than 50% (on a fully diluted
basis) of either (i) the then outstanding shares of Common Stock of the Company,
taking into account as outstanding for this purpose such Common Stock issuable
upon the exercise of options or warrants, the conversion of convertible stock or
debt, and the exercise of any similar right to acquire such Common Stock (the
“Outstanding Company Common Stock”) or (ii) the combined voting power of the
then outstanding voting securities of the Company entitled to vote generally in
the election of directors (the “Outstanding Company Voting Securities”);
provided, however, that for purposes of this Plan, the following acquisitions
shall not constitute a Change in Control: (A) any acquisition by the Company or
any Affiliate, (B) any acquisition by any employee benefit plan sponsored or
maintained by the Company or any subsidiary, (C) any acquisition which complies
with clauses, (i), (ii) and (iii) of subsection (e) of this definition or (D) in
respect of an Award held by a particular Participant, any acquisition by the
Participant or any group of persons including the Participant (or any entity
controlled by the Participant or any group of persons including the
Participant);

(e)   the consummation of a reorganization, merger, consolidation, statutory
share exchange or similar form of corporate transaction involving the Company
that requires the approval of the Company’s shareholders, whether for such
transaction or the issuance of securities in the transaction (a “Business
Combination”), unless immediately following such Business Combination: (i) more
than 50% of the total voting power of  (A) the entity resulting from such
Business Combination (the “Surviving Company”), or (B) if applicable, the
ultimate parent entity that directly or indirectly has beneficial ownership of
sufficient voting securities eligible to elect a majority of the members of the
board of directors (or the analogous governing body) of the Surviving Company
(the “Parent Company”), is represented by the Outstanding Company Voting
Securities that were outstanding immediately prior to such Business Combination
(or, if applicable, is represented by shares into which the Outstanding Company
Voting Securities were converted pursuant to such Business Combination), and
such voting power among the holders thereof is in substantially the same
proportion as the voting power of the Outstanding Company Voting Securities
among the holders thereof immediately prior to the Business Combination; (ii) no
Person (other than any Existing Major Holder or any employee benefit plan
sponsored or maintained by the Surviving Company or the Parent Company) is or
becomes the Beneficial Owner, directly or indirectly, of 50% or more of the
total voting power of the outstanding voting securities eligible to elect
members of the board of directors of the Parent Company (or the analogous
governing body) (or, if there is no Parent Company, the Surviving Company); and
(iii) at least a majority of the members of the board of directors (or the
analogous governing body) of the Parent Company (or, if there is no Parent
Company, the Surviving Company) following the consummation of the Business
Combination were Board members at the time of the Board’s approval of the
execution of the initial agreement providing for such Business Combination; or

(f) the consummation of any sale of shares of Common Stock of the Company or any
options, warrants, stock or debt convertible or exchangeable into shares of
Common Stock of the Company by any Person which as of the Grant Date has
Beneficial Ownership of more than thirty-five percent (35%) (on a fully diluted
basis) of the Outstanding Company Common Stock which results in such Person
having both (a) Beneficial Ownership of less than twelve and one-half percent
(12.5%) (on a fully diluted basis) of the Outstanding Company Common Stock held
by such Person as of the Grant Date and (b) Beneficial Ownership of less than
five (5%) (on a fully diluted basis) of the Outstanding Company Common Stock at
the time of such sale.

Notwithstanding anything herein to the contrary, in no event shall the Company’s
initial business combination or the transactions occurring in connection
therewith constitute a Change in Control and, with respect to any Award (or
portion of any Award) that provides for the deferral of compensation that is
subject to Section 409A of the Code, an event shall not be considered to be a
Change in Control under the Plan for purposes of payment of such Award (or
portion thereof)

 

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unless such event is also a “change in ownership,” a “change in effective
control” or a “change in the ownership of a substantial portion of the assets”
of the Company within the meaning of Section 409A of the Code.

For the purposes hereof, an “Existing Major Holder” shall mean any Person which
as of the Grant Date has Beneficial Ownership of more than 10% (on a fully
diluted basis) of the Outstanding Company Common Stock.

5.NO FRACTIONAL SHARES

Fractional shares of Common Stock shall not be delivered upon the settlement of
DSUs.

6.TAXES

The Company shall not deliver shares of Common Stock in respect of the
settlement of any DSUs unless and until the Participant has made arrangements
satisfactory to the Company to satisfy applicable withholding tax obligations.
Subject to the discretion of the Committee, the Participant may satisfy any
federal, state or local tax withholding obligation relating to the acquisition
of Common Stock under any DSUs by any of the following means (in addition to the
Company’s right to withhold from any compensation paid to the Participant by the
Company) or by a combination of such means: (a) tendering a cash payment; (b)
authorizing the Company to withhold shares of Common Stock from the shares of
Common Stock otherwise issuable to the Participant as a result of the exercise
or acquisition of Common Stock under the DSUs, provided, however, that no shares
of Common Stock are withheld with a value exceeding the maximum amount of tax
required to be withheld by law; or (c) delivering to the Company previously
owned and unencumbered shares of Common Stock of the Company.

Subject to the Participant’s election, if any, as permitted herein, the Company
may require the Participant to pay to the Company an amount the Company
reasonably deems necessary to satisfy its 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 obligations,
the Participant may shall deliver cash to the Company sufficient to satisfy its
tax withholding obligations with respect to the Participant’s receipt of shares.

The Participant has been advised and Participant hereby acknowledges that he has
been advised to obtain independent legal and tax advice regarding this Award,
grant of the Deferred Stock Units, the vesting and payment, including, without
limitation, under Section 409A of the Internal Revenue Code of 1986, as amended
and the applicable notices, rules, and regulation thereunder (the “Code”).  The
Participant acknowledges that none of the Company, its Affiliates, the Committee
or any of their officers, directors, employees or agents guarantees or are
otherwise responsible for any tax consequences to the Participant in connection
with this Award, the Deferred Stock Units, the Plan or the vesting or
disposition of shares under any federal, state, local domestic or foreign law,
including, without limitation, any income or excise taxes or interest or
penalties under Code Section 409A.

The intent of the parties is that this Award comply with Internal Revenue Code
Section 409A and the regulations and guidance promulgated thereunder to the
extent it is applicable and, accordingly, this Award shall be interpreted to be
in compliance therewith, and to the extent required the defined terms herein
shall have the meaning required of such term under Code Section 409A, and any
provision that would violate Code Section 409A shall be null and
void.  Notwithstanding any provision to the contrary in this Award, payments
under this Award that are subject to Code Section 409A and are to be made
hereunder upon a termination of employment shall only be made upon a "separation
from service" (as defined in Treasury Regulation § 1.409A 1(h)) and, if the
Participant is deemed on the date of termination to be a "specified employee"
within the meaning of that term under Code Section 409A(a)(2)(B), then with
regard to any payment that constitutes "nonqualified deferred compensation"
subject to Code Section 409A, such payment or benefit

 

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shall be made or provided at the date which is the earlier of (A) the expiration
of the six (6)-month period measured from the date after the date of such
"separation from service" of the Participant, and (B) the date of the
Participant’s death (the “Delay Period”).  Upon the expiration of the Delay
Period, all payments and benefits delayed pursuant to this provision (whether
they would have otherwise been payable in a single sum or in installments in the
absence of such delay) shall be paid or reimbursed to the Participant in a lump
sum, and any remaining payments and benefits due under this Award shall be paid
or provided in accordance with the normal payment dates specified for them
herein.  Whenever a payment under this Award may be paid within a specified
period, the actual date of payment within the specified period shall be within
the sole discretion of the Company.  In no event may the Participant, directly
or indirectly, designate the calendar year of any payment to be made under this
Award.

This grant of Award is subject to all applicable federal, state and local taxes
and withholding requirements.

7.OTHER AGREEMENTS SUPERSEDED

The Grant Notice, these Terms and Conditions and the Plan constitute the entire
understanding between the Participant and the Company regarding the Deferred
Stock Units. Except as may otherwise be specifically set forth in any employment
or severance agreement between the Participant and the Company, any prior
agreements, commitments or negotiations concerning the Deferred Stock Units are
superseded.

8.LIMITATION OF INTEREST IN SHARES SUBJECT TO DEFERRED STOCK UNITS

Neither the Participant (individually or as a member of a group) nor any
beneficiary or other person claiming under or through the Participant shall have
any right, title, interest, or privilege in or to any shares of Common Stock
allocated or reserved for the purpose of the Plan or subject to the Grant Notice
or these Terms and Conditions except as to such shares of Common Stock, if any,
as shall have been issued to such person in connection with the Award.

Nothing in the Plan, in the Grant Notice, these Terms and Conditions or any
other instrument executed pursuant to the Plan shall confer upon the Participant
any right to continue to serve the Company or an Affiliate in the capacity in
effect at the time the Award was granted or shall affect the right of the
Company or an Affiliate to terminate the employment of the Participant with or
without notice and with or without Cause.

9.

SECURITIES LAW COMPLIANCE

 

No shares of Common Stock shall be purchased or sold thereunder unless and until
(a) any then applicable requirements of state or federal laws and regulatory
agencies have been fully complied with to the satisfaction of the Company and
its counsel and (b) if required to do so by the Company, the Participant has
executed and delivered to the Company a letter of investment intent in such form
and containing such provisions as the Committee may require.

10.GENERAL

(a)In the event that any provision of these Terms and Conditions is declared to
be illegal, invalid or otherwise unenforceable by a court of competent
jurisdiction, such provision shall be reformed, if possible, to the extent
necessary to render it legal, valid and enforceable, or otherwise deleted, and
the remainder of these Terms and Conditions shall not be affected except to the
extent necessary to reform or delete such illegal, invalid or unenforceable
provision.

(b)The headings preceding the text of the sections hereof are inserted solely
for convenience of reference, and shall not constitute a part of these Terms and
Conditions, nor shall they affect its meaning, construction or effect.

 

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(c)These Terms and Conditions shall inure to the benefit of and be binding upon
the parties hereto and their respective permitted heirs, beneficiaries,
successors and assigns.

(d)These Terms and Conditions shall be construed in accordance with and governed
by the laws of the State of Delaware, without regard to principles of conflicts
of law.

(e)In the event of any conflict between the Grant Notice, these Terms and
Conditions and the Plan, the Grant Notice and these Terms and Conditions shall
control. In the event of any conflict between the Grant Notice and these Terms
and Conditions, the Grant Notice shall control.

(f)All questions arising under the Plan, the Grant Notice or under these Terms
and Conditions shall be decided by the Committee in its total and absolute
discretion.

11.ELECTRONIC DELIVERY

By executing the Grant Notice, the Participant hereby consents to the delivery
of information (including, without limitation, information required to be
delivered to the Participant pursuant to applicable securities laws) regarding
the Company and its subsidiaries, the Plan, and the Deferred Stock Units via
Company web site or other electronic delivery.