Exhibit 10.2

 

FORM OF

KLX INC. LONG-TERM INCENTIVE PLAN
RESTRICTED STOCK UNIT AWARD AGREEMENT

 

THIS AWARD AGREEMENT (the “Award Agreement”) is made effective as of
                   (the “Date of Grant”) between KLX Inc., a Delaware
corporation (the “Company”), and                          (the “Participant”). 
Capitalized terms not otherwise defined herein shall have the same meanings as
in the KLX Inc. Long-Term Incentive Plan (the “Plan”).

 

WHEREAS, the Company desires to grant the Restricted Stock Units provided for
herein to the Participant pursuant to the Plan and the terms and conditions set
forth herein;

 

NOW THEREFORE, in consideration of the mutual covenants hereinafter set forth,
the parties agree as follows:

 

1.                                      Grant of the Award.  Subject to the
provisions of this Award Agreement and the Plan, the Company hereby grants to
the Participant, an aggregate of                                  restricted
stock units (the “RSUs”) each entitling the Participant to receive one share of
Company common stock (the “Shares”), subject to adjustment as set forth in the
Plan.  * (*%) of the RSUs shall be subject to time-based vesting (the
“Time-Based RSUs”) and * (*%) of the RSUs shall be subject to performance-based
vesting (the “Performance-Based RSUs”).

 

2.                                      Incorporation of Plan.  The Participant
acknowledges receipt of the Plan and represents that the Participant is familiar
with its terms and provisions.  This Award Agreement and the RSUs shall be
subject to the Plan, the terms of which are incorporated herein by reference,
and in the event of any conflict or inconsistency between the Plan and this
Award Agreement, the Plan shall govern.

 

3.                                      Vesting Schedule.  Subject to the terms
and conditions hereof, the Participant shall vest in the RSUs as set forth
below, subject to the Participant’s continued employment with the Company or its
Subsidiaries on each applicable vesting date except to the extent provided
herein, unless previously vested or canceled in accordance with the provisions
of the Plan or this Award Agreement.  There shall be no proportionate or partial
vesting in the periods prior to each vesting date.  RSUs shall be exercisable
only with respect to a whole number of Shares.  The Company shall not be
required to issue any fractional Shares and may settle any fractional Shares in
cash.

 

(a)                                 Time-Based RSUs.  *

 

(b)                                 Performance-Based RSUs.  *

 

The applicable annual performance targets shall be established by the Committee
in writing no later than 90 days after the commencement of each applicable year
during the Performance Period for purposes of Section 162(m) of the Internal
Revenue Code of 1986, as amended and the regulations and guidance promulgated
thereunder (the “Code”).

 

4.                                      Termination of Employment.  Except as
otherwise provided in this Award Agreement, all unvested RSUs shall be cancelled
immediately without consideration as of the date of the Participant’s
termination of employment with the Company for any reason.

 

5.                                      Change in Control.  [Change in Control
vesting provisions to be determined on a case-by-case basis by the Compensation
Committee.]

 

6.                                      Nontransferability of RSUs.  Unless
otherwise determined by the Committee in accordance with the terms and
conditions of Section 12(a) of the Plan, the RSUs may not be pledged, alienated,
assigned or otherwise transferred other than by last will and testament or by
the laws of descent and distribution or pursuant to a domestic relations order,
as the case may be; provided, however, that the Committee may, subject to such
terms and conditions as it shall specify, permit the transfer of the RSUs,
including, without limitation, for no consideration to a charitable institution
or a Permitted Transferee.  Any RSUs transferred to a charitable institution may
not be further transferable without the Committee’s approval and, to the extent
that any of the RSUs are

 

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transferred to a Permitted Transferee, such RSUs shall be further transferable
only by last will and testament or the laws of descent and distribution or, for
no consideration, to another Permitted Transferee of the Participant to the
extent approved by the Committee in accordance with the terms and conditions of
Section 12(a) of the Plan.

 

7.                                      No Rights as a Stockholder.  The RSUs do
not entitle the Participant to any of the rights of a stockholder of the
Company, including, the right to vote Shares until the Participant or his
nominee becomes the holder of record of Shares.

 

8.                                      Dividends Equivalent Rights.  The
Participant shall accumulate dividend equivalent rights on all RSUs in an amount
equal to the cash dividends paid with respect to the Shares on each date prior
to settlement of the Participant’s RSUs that a cash dividend is paid on Shares. 
The dividend equivalent rights shall be held by the Company as a bookkeeping
account and shall be subject to the same terms and conditions (including vesting
terms) as the corresponding RSUs and shall accumulate and be paid if and when
the corresponding RSUs are settled.

 

9.                                      Settlement of RSUs.  Unless the
Participant has executed and not revoked a valid deferral election under the KLX
Inc. Deferred Compensation Plan, as amended (the “DC Plan”) (or has elected an
alternative investment allocation with respect to RSUs deferred under the DC
Plan), settlement of vested RSUs shall be made within thirty (30) days following
the applicable vesting date (or such earlier date on which the RSUs vest and
settle pursuant to the terms of this Award Agreement; but, except as provided by
Section 5 of the Award Agreement with respect to RSUs that constitute deferred
compensation subject to Section 409A (if any), in no event later than March 15th
of the calendar year immediately following the calendar year in which the
applicable vesting date occurs.  Settlement will be made by delivery of Shares. 
Notwithstanding the foregoing, the Company shall not be obligated to deliver any
Shares if counsel to the Company determines that such sale or delivery would
violate any applicable law or any rule or regulation of any governmental
authority or any rule or regulation, or agreement of the Company with, any
securities exchange or association upon which the Shares are listed or quoted. 
If the Participant has executed and not revoked a valid deferral election,
settlement shall be made in accordance with the DC Plan.

 

10.                               No Entitlements.

 

(a)                                 No Right to Continued Employment.  This
award is not an employment agreement, and nothing in this Award Agreement or the
Plan shall (i)  alter the Participant’s status as an “at-will” employee of the
Company, subject to the requirements of any applicable employment agreement,
(ii) be construed as guaranteeing the Participant’s employment by the Company or
as giving the Participant any right to continue in the employ of the Company
during any period (including without limitation the period between the Date of
Grant and the applicable vesting date in accordance with  Section 3 hereof) or
(iii)  be construed as giving the Participant any right to be reemployed by the
Company following any termination of employment.

 

(b)                                 No Right to Future Awards.  This award of
RSUs and all other equity-based awards under the Plan are discretionary.  This
award does not confer on the Participant any right or entitlement to receive
another award of RSUs or any other equity-based award at any time in the future
or in respect of any future period.

 

(c)                                  No Effect on Future Employment
Compensation.  The Company has made this award of RSUs to the Participant in its
sole discretion.  This award does not confer on the Participant any right or
entitlement to receive compensation in any specific amount for any future fiscal
year, and does not diminish in any way the Company’s discretion to determine the
amount, if any, of the Participant’s compensation.  In addition, this award of
RSUs is not part of the Participant’s base salary or wages and will not be taken
into account in determining any other employment-related rights the Participant
may have, such as rights to pension or severance pay.

 

11.                               Taxes and Withholding.

 

(a) No later than the date as of which an amount with respect to the RSUs first
becomes includable in the gross income of the Participant for applicable income
tax purposes, the Participant shall pay to the Company or make arrangements
satisfactory to the Committee regarding payment of any federal, state or local
taxes of any kind required by law to be withheld with respect to such amount. 
Unless otherwise determined by the Committee, in accordance with rules and
procedures established by the Committee, the minimum required withholding
obligations may be settled in Shares, including Shares that are issued in
settlement of the award that gives rise to the

 

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withholding requirement.  The obligations of the Company to settle the RSUs
under this Award Agreement shall be conditional upon such payment or
arrangements and the Company shall, to the extent permitted by law, have the
right to deduct any such taxes from any payment of any kind otherwise due to the
Participant, including, without limitation, by withholding Shares to be
delivered upon settlement.

 

(b) Notwithstanding Section 11(a) and in furtherance thereof, in the event that
the Participant becomes subject to federal employment taxes on this award before
the date that this RSU first becomes includable in the gross income of the
Participant for income tax purposes, the Participant shall pay to the Company or
make arrangements satisfactory to the Committee regarding payment of such
federal employment taxes required by law to be withheld with respect to such
amount at such earlier time.

 

12.                               Securities Laws.  In connection with the
grant, vesting or settlement of the RSUs the Participant will make or enter into
such written representations, warranties and agreements as the Committee may
reasonably request in order to comply with applicable securities laws or with
this Award Agreement.

 

13.                               Miscellaneous Provisions.

 

(a)                                 Notices.  Any notice necessary under this
Award Agreement shall be addressed to the Company in care of its Secretary at
the principal executive office of the Company and to the Participant at the
address appearing in the records of the Company for the Participant or to either
party at such other address as either party hereto may hereafter designate in
writing to the other.  Notwithstanding the foregoing, the Company may deliver
notices to the Participant by means of email or other electronic means that are
generally used for employee communications.  Any such notice shall be deemed
effective upon receipt thereof by the addressee.

 

(b)                                 Headings.  The headings of sections and
subsections are included solely for convenience of reference and shall not
affect the meaning of the provisions of this Award Agreement.

 

(c)                                  Counterparts.  This Award Agreement may be
executed in two or more counterparts, each of which shall be deemed to be an
original but all of which together will constitute one and the same instrument.

 

(d)                                 Entire Agreement.  This Award Agreement and
the Plan constitute the entire agreement between the parties hereto with regard
to the subject matter hereof.  They supersede all other agreements,
representations or understandings (whether oral or written and whether express
or implied) that relate to the subject matter hereof.

 

(e)                                  Amendments.  The Board or the Committee
shall have the power to alter, amend, modify or terminate the Plan or this Award
Agreement at any time; provided, however, that no such termination, amendment or
modification may adversely affect, in any material respect, the Participant’s
rights under this Award Agreement without the Participant’s consent. 
Notwithstanding the foregoing, the Company shall have broad authority to amend
this Award Agreement without the consent of the Participant to the extent it
deems necessary or desirable (i) to comply with or take into account changes in
or interpretations of, applicable tax laws, securities laws, employment laws,
accounting rules and other applicable laws, rules and regulations, (ii) to
ensure that the RSUs are not subject to taxes, interest and penalties under
Section 409A of the Code, (iii) to take into account unusual or nonrecurring
events or market conditions, or (iv) to take into account significant
acquisitions or dispositions of assets or other property by the Company.  Any
amendment, modification or termination shall, upon adoption, become and be
binding on all persons affected thereby without the requirement for consent or
other action with respect thereto by any such person.  The Committee shall give
written notice to the Participant in accordance with Section 13(a) hereof of any
such amendment, modification or termination as promptly as practicable after the
adoption thereof.  The foregoing shall not restrict the ability of the
Participant and the Company by mutual consent to alter or amend the terms of the
RSUs in any manner that is consistent with the Plan and approved by the
Committee.

 

(f)                                   Section 409A.  (i)  The RSUs are intended
to comply with or be exempt from the requirements of Section 409A, and the Plan
with respect to this RSU and this Award Agreement shall be administered and
interpreted consistent with such intent.  If any provision of the Plan or this
Award Agreement would, in the reasonable good faith judgment of the Committee,
result or likely result in the imposition on the

 

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Participant of a penalty tax under Section 409A, the Committee may modify the
terms of the Plan or this Award Agreement, without the consent of the
Participant, in the manner that the Committee may reasonably and in good faith
determine to be necessary or advisable to avoid the imposition of such penalty
tax.  This Section 13(f) does not create an obligation on the part of the
Company to modify the Plan or this Award Agreement and does not guarantee that
the RSUs will not be subject to taxes, interest and penalties under
Section 409A.

 

(ii)                                  Notwithstanding anything to the contrary
in the Plan or this Award Agreement, to the extent that the RSUs constitute
deferred compensation for purposes of Section 409A and the Participant is a
“Specified Employee” (within the meaning of the Committee’s established
methodology for determining “Specified Employees” for purposes of Section 409A),
no payment or distribution of any amounts with respect to the RSUs that are
subject to Section 409A may be made before the first business day following the
six (6) month anniversary from the Participant’s “Separation from Service” from
the Company (as defined in Section 409A) or, if earlier, the date of the
Participant’s death.

 

(iii)                               The actual date of settlement of the RSUs
shall be within the sole discretion of the Company.  In no event may the
Participant be permitted to control the year in which settlement occurs.

 

(g)                                  Successor.  Except as otherwise provided
herein, this Award Agreement shall be binding upon and shall inure to the
benefit of any successor or successors of the Company, and to any Permitted
Transferee pursuant to Section 6 hereof.

 

(h)                                 Choice of Law.  Except as to matters of
federal law, this Award Agreement and all actions taken thereunder shall be
governed by and construed in accordance with the laws of the State of Florida
(other than its conflict of law rules).

 

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IN WITNESS WHEREOF, the parties have executed this Award Agreement as of the
date first written above.

 

 

KLX INC.

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

 

 

 

[Signature Page – Restricted Stock Unit Award Agreement]

 

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