Exhibit 10.14

 

SELECT ENERGY SERVICES, INC.

2016 EQUITY INCENTIVE PLAN

PERFORMANCE SHARE UNIT GRANT NOTICE

Pursuant to the terms and conditions of the Select Energy Services, Inc. 2016
Equity Incentive Plan, as amended from time to time (the “Plan”), Select Energy
Services, Inc. (the “Company”) hereby grants to the individual listed below
(“you” or the “Participant”) the number of performance share units (the “PSUs”)
set forth below.  This award of PSUs (this “Award”) is subject to the terms and
conditions set forth herein and in the Performance Share Unit Agreement attached
hereto as Exhibit A (the “Agreement”) and the Plan, each of which is
incorporated herein by reference.  Capitalized terms used but not defined herein
shall have the meanings set forth in the Plan.

Participant:

 

 

 

Date of Grant:

January 19, 2018

Award Type and Description:

Other Stock-Based Award granted pursuant to Section 6(h) of the Plan that has
been designated as a Performance Award under Section 6(k) of the Plan. This
Award represents the right to receive shares of Stock in an amount up to 175% of
the Target PSUs (defined below), subject to the terms and conditions set forth
herein and in the Agreement.

Your right to receive settlement of this Award in an amount ranging from 0% to
175% of the Target PSUs shall vest and become earned and nonforfeitable upon (i)
your satisfaction of the continued employment or service requirements described
below under “Service Requirement” and (ii) the Committee’s certification of the
level of achievement of the Performance Goal (defined below). The portion of the
Target PSUs actually earned upon satisfaction of the foregoing requirements is
referred to herein as the “Earned PSUs.”

Target Number of PSUs:

 

(the “Target PSUs”).

 

Performance Period:

January 1, 2018 (the “Performance Period Commencement Date”) through December
31, 2020 (the “Performance Period End Date”).

Service Requirement:

Except as expressly provided in Sections  4 and 5 of the Agreement, you must
remain continuously employed by, or continuously provide services to, the
Company or an Affiliate, as applicable, from the Date of Grant through the
Performance Period End Date to be eligible to receive payment of this Award,
which is based on the level of achievement with respect to the Performance Goal
(as defined below).

 

1

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

 

 

 

 

Performance Goal:

Subject to the terms and conditions set forth in the Plan, the Agreement and
herein, the number of Target PSUs, if any, that become Earned PSUs during the
Performance Period will be determined in accordance with the following table:

 

Return on Assets at Performance Period End Date

 

Percentage of Target
PSUs Earned*

 

 

Less than 9.6%

 

0%

 

 

9.6%

 

50%

 

 

12%

 

100%

 

 

14.4%

 

175%

 

 

 

 

 

 

 

*The percentage of Target PSUs earned for other Return on Assets values between
the values set forth in the table shall be linearly interpolated between the
values in the table.

The “Performance Goal” for the Performance Period is based on the Company’s
achievement with respect to Return on Assets (defined below) as described
herein. For purposes of this Award:

(i) “Return on Assets” means the percentage obtained by dividing (A) Adjusted
Net Income by (B) Net Assets;

(ii) “Adjusted Net Income” means the product obtained by multiplying:

(A) income/(loss) before tax benefit/(expense) determined in accordance with
generally accepted accounting principles, as adjusted for clauses (b) through
(j) in the definition of “EBITDA” in that certain Credit Agreement dated as of
November 1, 2017, among the Company, SES Holdings, LLC, Wells Fargo Bank,
National Association, JPMorgan Chase Bank, N.A., and the lenders party thereto;
provided, however, that such adjustments shall exclude certain extraordinary
items, including (x) any net non-cash gain or loss during such period arising
from the sale, exchange, retirement or other disposition of capital assets (such
term to include all fixed assets and all securities) other than in the ordinary
course of business, and (y) any write-up or write-down of assets, by

(B) 0.79; and

(iii) “Net Assets” shall be the Company’s average property and equipment, net,
for the Performance Period, plus average total current assets (other than cash
and cash equivalents and current tax assets) for the Performance Period, less
average total current liabilities (other than current tax liabilities) for the
Performance Period, each as determined in accordance with generally accepted
accounting principles or on a non-GAAP basis consistent with the Company’s
practices.

 

The Committee may adjust the Performance Goal as permitted by the Plan.

 

An example calculation of Return on Assets is attached hereto as Exhibit B.

Settlement:

Settlement of the Earned PSUs shall be made solely in shares of Stock, which
shall be delivered to you in accordance with Section 6 of the Agreement.

2

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

 

By your signature below, you agree to be bound by the terms and conditions of
the Plan, the Agreement and this Performance Share Unit Grant Notice (this
“Grant Notice”).  You acknowledge that you have reviewed the Agreement, the Plan
and this Grant Notice in their entirety and fully understand all provisions of
the Agreement, the Plan and this Grant Notice.  You hereby agree to accept as
binding, conclusive and final all decisions or interpretations of the Committee
regarding any questions or determinations that arise under the Agreement, the
Plan or this Grant Notice.  This Grant Notice may be executed in one or more
counterparts (including portable document format (.pdf) and facsimile
counterparts), each of which shall be deemed to be an original, but all of which
together shall constitute one and the same agreement.

[Signature Page Follows]

 

 

3

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

 

IN WITNESS WHEREOF, the Company has caused this Grant Notice to be executed by
an officer thereunto duly authorized, and the Participant has executed this
Grant Notice, effective for all purposes as provided above.

 

 

 

 

COMPANY

 

 

 

Select Energy Services, Inc.

 

 

 

 

 

By:

                              

                     

 

Name:  Holli C. Ladhani

 

Its:  President and Chief Executive Officer

 

 

 

 

 

 

 

PARTICIPANT

 

 

 

 

                     

 

Name:

 

 

 

Signature Page to

Performance Share Unit Grant Notice

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

 

EXHIBIT A

PERFORMANCE SHARE UNIT AGREEMENT

This Performance Share Unit Agreement (together with the Grant Notice to which
this Agreement is attached, this “Agreement”) is made as of the Date of Grant
set forth in the Grant Notice to which this Agreement is attached by and between
Select Energy Services, Inc., a Delaware corporation (the “Company”), and
_________ (the “Participant”). Capitalized terms used but not specifically
defined herein shall have the meanings specified in the Plan or the Grant
Notice.

1.         Definitions.  For purposes of this Agreement, the following terms
shall have the meanings specified below.

(a)        “Cause” means “cause” (or a term of like import) as defined under the
Participant’s employment, consulting and/or severance agreement with the Company
or an Affiliate or, in the absence of such an agreement or definition, shall
mean a determination by the Company in its sole discretion that the Participant
has: (i) engaged in gross negligence or willful misconduct in the performance of
the Participant’s duties with respect to the Company or an Affiliate, (ii)
materially breached any material provision of any written agreement between the
Participant and the Company or an Affiliate or corporate policy or code of
conduct established by the Company or an Affiliate and applicable to the
Participant; (iii) willfully engaged in conduct that is materially injurious to
the Company or an Affiliate;  or (iv) been convicted of, pleaded no contest to
or received adjudicated probation or deferred adjudication in connection with, a
felony involving fraud, dishonestly or moral turpitude (or a crime of similar
import in a foreign jurisdiction).

(b)        “Disability” means “disability” (or a term of like import) as defined
under the Participant’s employment, consulting and/or severance agreement with
the Company or an Affiliate or, in the absence of such an agreement or
definition, shall mean the Participant’s inability to perform the Participant’s
duties, with reasonable accommodation, due to a mental or physical impairment
that continues (or can reasonably be expected to continue) for (i) 90
consecutive days or (ii) 180 days out of any 365-day period, which, in either
case, shall only be deemed to occur following the written determination by the
Company of any such occurrence of Disability.

(c)        “Good Reason” means “good reason” (or a term of like import) as
defined under the Participant’s employment, consulting and/or severance
agreement with the Company or an Affiliate or, in the absence of such an
agreement or definition, shall mean (i) a material diminution in the
Participant’s base salary or (ii) the relocation of the geographic location of
the Participant’s principal place of employment by more than 50 miles from the
location of the Participant’s principal place of employment as of the Grant
Date; provided that, in the case of the Participant’s assertion of Good Reason,
(A) the condition described in the foregoing clauses must have arisen without
the Participant’s consent; (B) the Participant must provide written notice to
the Company of such condition in accordance with this Agreement within 45 days
of the initial existence of the condition; (C) the condition specified in such
notice must remain uncorrected for 30 days after receipt of such notice by the
Company; and (D) the date of termination of the

 

 

Exhibit A-1

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

 

Participant’s employment or other service relationship with the Company or an
Affiliate must occur within 90 days after such notice is received by the
Company.

(d)        “Retirement” means the termination of the Participant’s employment or
other service relationship with the Company or an Affiliate due to the
Participant’s voluntary resignation on or after attaining age 55 and completing
10 or more full years of service with the Company or an Affiliate.

2.         Award.  In consideration of the Participant’s past and/or continued
employment with, or service to, the Company or its Affiliates and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, effective as of the Date of Grant set forth in the Grant Notice
(the “Date of Grant”), the Company hereby grants to the Participant the target
number of PSUs set forth in the Grant Notice on the terms and conditions set
forth in the Grant Notice, this Agreement and the Plan, which is incorporated
herein by reference as a part of this Agreement. In the event of any
inconsistency between the Plan and this Agreement (including, for the avoidance
of doubt, with respect of the subject matter covered in Section 5), the terms of
the Plan shall control.  To the extent vested, each PSU represents the right to
receive one share of Stock, subject to the terms and conditions set forth in the
Grant Notice, this Agreement and the Plan; provided, however, that, depending on
the level of performance determined to be attained with respect to the
Performance Goal, the number of shares of Stock that may be earned hereunder in
respect of this Award may range from 0% to 175% of the Target PSUs.  Unless and
until the PSUs have become vested in the manner set forth in the Grant Notice,
the Participant will have no right to receive any Stock or other payments in
respect of the PSUs.  Prior to settlement of this Award, the PSUs and this Award
represent an unsecured obligation of the Company, payable only from the general
assets of the Company.

3.         Vesting of PSUs.  Except as otherwise set forth in Sections 4 and 5,
 the PSUs shall vest and become Earned PSUs in accordance with the Participant’s
satisfaction of the vesting schedule set forth in the Grant Notice (the “Service
Requirement”) based on the extent to which the Company has satisfied the
Performance Goal set forth in the Grant Notice, which shall be determined by the
Committee in its sole discretion following the end of the Performance Period
(and any PSUs that do not become Earned PSUs shall be automatically forfeited). 
Unless and until the PSUs have vested and become Earned PSUs as described in the
preceding sentence,  the Participant will have no right to receive any dividends
or other distribution with respect to the PSUs.

4.         Effect of Termination of Employment or Service.

(a)        Termination of Employment or Service without Cause [or for Good
Reason].  Notwithstanding anything in the Grant Notice, this Agreement or the
Plan to the contrary, upon the termination of the Participant’s employment or
other service relationship with the Company or an Affiliate without Cause by the
Company or an Affiliate [or by the Participant for Good Reason] that occurs
prior to the Performance Period End Date, then the Participant shall be deemed
to have satisfied the Service Requirement with respect to the PSUs and such PSUs
shall remain outstanding and, subject to the satisfaction of the Performance
Goal, become Earned PSUs, which shall be eligible for settlement in accordance
with Section 6.

 

 

A-2

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

 

(b)        Termination of Employment or Service due to Disability or Death.
Notwithstanding anything in the Grant Notice, this Agreement or the Plan to the
contrary, upon the termination of the Participant’s employment or other service
relationship with the Company or an Affiliate due to the Participant’s
Disability or death that occurs prior to the Performance Period End Date, then
the Participant shall be deemed to have satisfied the Service Requirement with
respect to the PSUs and such PSUs shall remain outstanding and, subject to the
satisfaction of the Performance Goal, become Earned PSUs, which shall be
eligible for settlement in accordance with Section 6.

(c)        Termination of Employment or Service due to
Retirement.  Notwithstanding anything in the Grant Notice, this Agreement or the
Plan to the contrary, upon the termination of the Participant’s employment or
other service relationship with the Company or an Affiliate due to the
Participant’s Retirement that occurs prior to the Performance Period End Date,
then the Participant shall be deemed to have satisfied the Service Requirement
with respect to a number of PSUs equal to (i) the Target PSUs, multiplied by
(ii) a fraction, the numerator of which is the number of days which have elapsed
between the Performance Period  Commencement Date and the date of such
termination of employment or other service relationship, and the denominator of
which is the total number of days in the Performance Period, and such PSUs shall
remain outstanding and, subject to the satisfaction of the Performance Goal,
become Earned PSUs, which shall be eligible for settlement in accordance with
Section 6. With respect to the remaining portion of the Target PSUs for which
the Service Requirement is not deemed to have been satisfied in accordance with
the preceding sentence, such Target PSUs (and all rights arising from such PSUs
and from being a holder thereof) will terminate automatically without any
further action by the Company and will be forfeited without further notice and
at no cost to the Company.

(d)        Other Termination of Employment or Service. Except as otherwise
provided in Section 4(a),  (b) or (c),  if the Participant has not satisfied the
Service Requirement, then upon the termination of the Participant’s employment
or other service relationship with the Company or an Affiliate for any reason,
 any unearned PSUs (and all rights arising from such PSUs and from being a
holder thereof) will terminate automatically without any further action by the
Company and will be forfeited without further notice and at no cost to the
Company.

5.         Change in Control.  In the event a Change in Control (so long as such
Change in Control also constitutes a “change in control event” as defined in the
Nonqualified Deferred Compensation Rules) occurs prior to the Performance Period
End Date (the date of such occurrence, the “Change in Control Date”), so long as
the Participant has remained continuously employed by, or has continuously
provided services to, the Company or an Affiliate, as applicable, from the Date
of Grant through the Change in Control Date, then:

(a)        A portion of the PSUs determined by multiplying (i) the Target PSUs
by (ii) a fraction, the numerator of which is the number of days which elapsed
between the Performance Period  Commencement Date and the Change in Control
Date, and the denominator of which is the total number of days in the
Performance Period, will be deemed to be Earned PSUs to the extent that the
Performance Goal has been achieved as of the Change in Control Date assuming
that the Performance Period ended on the Change in Control Date, and which shall
be eligible for settlement in accordance with Section 6 except that settlement
shall occur within 60 days following the Change in Control Date; and

A-3

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

 

(b)        With respect to the remaining portion of the Target PSUs that are not
subject to Section 5(a), (i) if the Company continues following the Change in
Control in substantially the same form as it existed immediately prior to the
Change in Control, such Target PSUs shall remain outstanding and be eligible to
be earned in accordance with the terms hereof, or (ii) if the Company does not
continue following the Change in Control in substantially the same form as it
existed immediately prior to the Change in Control,  the successor, surviving,
continuing or purchasing entity or parent thereof, as applicable, to the Company
shall provide for a replacement or substitute grant on substantially similar
terms to this Award, subject to the terms and conditions of the applicable plans
of such successor, surviving, continuing or purchasing entity or parent thereof,
as applicable, as in effect following the Change in Control.

6.         Settlement of PSUs.  As soon as administratively practicable
following the Committee’s certification of the level of attainment of the
Performance Goal (which is expected to occur within two weeks following the date
the Company files its annual report on Form 10-K for the Company’s fiscal year
that includes the Performance Period End Date), but in no event later than June
30 of the calendar year following the Performance Period End Date, the Company
shall deliver to the Participant (or the Participant’s permitted transferee, if
applicable),  a number of shares of Stock equal to the number of Earned PSUs;
provided, however, that any fractional PSU that becomes earned hereunder shall
be rounded down at the time shares of Stock are issued in settlement of such
PSU.  No fractional shares of Stock, nor the cash value of any fractional shares
of Stock, shall be issuable or payable to the Participant pursuant to this
Agreement. All shares of Stock, if any, issued hereunder shall be delivered
either by delivering one or more certificates for such shares to the Participant
or by entering such shares in book-entry form, as determined by the Committee in
its sole discretion.  The value of shares of Stock shall not bear any interest
owing to the passage of time.  Neither this Section 6 nor any action taken
pursuant to or in accordance with this Agreement shall be construed to create a
trust or a funded or secured obligation of any kind.

7.         Tax Withholding.  To the extent that the receipt, vesting or
settlement of this Award results in compensation income or wages to the
Participant for federal, state, local and/or foreign tax purposes, the
Participant shall make arrangements satisfactory to the Company for the
satisfaction of obligations for the payment of withholding taxes and other tax
obligations relating to this Award, which arrangements include the delivery of
cash or cash equivalents, Stock (including previously owned Stock, net
settlement, a broker-assisted sale, or other cashless withholding or reduction
of the amount of shares otherwise issuable or delivered pursuant to this Award),
other property, or any other legal consideration the Committee deems
appropriate. If such tax obligations are satisfied through net settlement or the
surrender of previously owned Stock, the maximum number of shares of Stock that
may be so withheld (or surrendered) shall be the number of shares of Stock that
have an aggregate Fair Market Value on the date of withholding or surrender
equal to the aggregate amount of such tax liabilities determined based on the
greatest withholding rates for federal, state, local and/or foreign tax
purposes, including payroll taxes, that may be utilized without creating adverse
accounting treatment for the Company with respect to this Award, as determined
by the Committee. The Participant acknowledges that there may be adverse tax
consequences upon the receipt, vesting or settlement of this Award or
disposition of the underlying shares and that the Participant has been advised,
and hereby is advised, to consult a tax advisor. The Participant represents that
the Participant is in no manner relying on the Board, the Committee, the Company
or an Affiliate or any of their respective managers, directors, officers,

A-4

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

 

employees or authorized representatives (including, without limitation,
attorneys, accountants, consultants, bankers, lenders, prospective lenders and
financial representatives) for tax advice or an assessment of such tax
consequences.

8.         Non-Transferability.  During the lifetime of the Participant, the
PSUs may not be sold, pledged, assigned or transferred in any manner other than
by will or the laws of descent and distribution, unless and until the shares of
Stock underlying the PSUs have been issued, and all restrictions applicable to
such shares have lapsed.  Neither the PSUs nor any interest or right therein
shall be liable for the debts, contracts or engagements of the Participant or
his or her successors in interest or shall be subject to disposition by
transfer, alienation, anticipation, pledge, encumbrance, assignment or any other
means, whether such disposition be voluntary or involuntary or by operation of
law by judgment, levy, attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy), and any attempted disposition thereof shall
be null and void and of no effect, except to the extent that such disposition is
permitted by the preceding sentence.

9.         Compliance with Applicable Law.  Notwithstanding any provision of
this Agreement to the contrary, the issuance of shares of Stock hereunder will
be subject to compliance with all applicable requirements of applicable 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 shares of Stock will
be issued hereunder if such issuance would constitute a violation of any
applicable law or regulation or the requirements of any stock exchange or market
system upon which the Stock may then be listed.  In addition, shares of Stock
will not be issued hereunder unless (a) a registration statement under the
Securities Act is in effect at the time of such issuance with respect to the
shares to be issued or (b) in the opinion of legal counsel to the Company, the
shares to be issued are permitted to be issued in accordance with the terms of
an applicable exemption from the registration requirements of the Securities
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 for the lawful issuance and sale of any shares of Stock hereunder will
relieve the Company of any liability in respect of the failure to issue such
shares as to which such requisite authority has not been obtained.  As a
condition to any issuance of Stock hereunder, the Company may require the
Participant to satisfy any requirements 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.

10.       Legends.  If a stock certificate is issued with respect to shares of
Stock issued hereunder, such certificate shall bear such legend or legends as
the Committee deems appropriate in order to reflect the restrictions set forth
in this Agreement and to ensure compliance with the terms and provisions of this
Agreement, the rules, regulations and other requirements of the Securities and
Exchange Commission, any applicable laws or the requirements of any stock
exchange on which the Stock is then listed.  If the shares of Stock issued
hereunder are held in book-entry form, then such entry will reflect that the
shares are subject to the restrictions set forth in this Agreement.

11.       Rights as a Stockholder. The Participant shall have no rights as a
stockholder of the Company with respect to any shares of Stock that may become
deliverable hereunder unless

A-5

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

 

and until the Participant has become the holder of record of such shares of
Stock, and no adjustments shall be made for dividends in cash or other property,
distributions or other rights in respect of any such shares of Stock, except as
otherwise specifically provided for in the Plan or this Agreement.

12.       Execution of Receipts and Releases.  Any issuance or transfer of
shares of Stock or other property to the Participant or the Participant’s legal
representative, heir, legatee or distributee, in accordance with this Agreement
shall be in full satisfaction of all claims of such person hereunder.  As a
condition precedent to such payment or issuance, the Company may require the
Participant or the Participant’s legal representative, heir, legatee or
distributee to execute (and not revoke within any time provided to do so) a
release and receipt therefor in such form as it shall determine appropriate;
provided, however, that any review period under such release will not modify the
date of settlement with respect to Earned PSUs.

13.       No Right to Continued Employment, Service or Awards. Nothing in the
adoption of the Plan, nor the award of the PSUs thereunder pursuant to the Grant
Notice and this Agreement, shall confer upon the Participant the right to
continued employment by, or a continued service relationship with, the Company
or any Affiliate, or any other entity, or affect in any way the right of the
Company or any such Affiliate, or any other entity to terminate such employment
or other service relationship at any time. The grant of the PSUs is a one-time
benefit and does not create any contractual or other right to receive a grant of
Awards or benefits in lieu of Awards in the future. Any future Awards will be
granted at the sole discretion of the Company.

14.       Lock-Up Period. If so requested by the Company or any representative
of the underwriters in connection with an underwritten public offering of the
Company’s securities (a “Public Offering”), the Participant (or other holder)
shall not sell or otherwise transfer or distribute any Stock or other securities
of the Company (or any securities convertible or exchangeable or exercisable for
Stock or engage in any hedging transactions relating to Stock) during the period
beginning 14 days prior to the expected date of the “pricing” of such Public
Offering and continuing for the 180-day period (or such other period as may be
requested in writing by such underwriters and agreed to in writing by the
Company) following the effective date of such Public Offering. The Company may
impose stop-transfer instructions with respect to securities subject to the
foregoing restrictions until the end of such period.

15.       Legal and Equitable Remedies.  The Participant acknowledges that a
violation or attempted breach of any of the Participant's covenants and
agreements in this Agreement will cause such damage as will be irreparable, the
exact amount of which would be difficult to ascertain and for which there will
be no adequate remedy at law, and accordingly, the parties hereto agree that the
Company and its Affiliates shall be entitled as a matter of right to an
injunction issued by any court of competent jurisdiction, restraining the
Participant or the affiliates, partners or agents of the Participant from such
breach or attempted violation of such covenants and agreements, as well as to
recover from the Participant any and all costs and expenses sustained or
incurred by the Company or any Affiliate in obtaining such an injunction,
including, without limitation, reasonable attorneys' fees. The parties to this
Agreement agree that no bond or other security shall be required in connection
with such injunction. Any exercise by either of the parties to this Agreement of
its rights pursuant to this Section 15 shall be cumulative and in addition to
any other remedies to which such party may be entitled.

 

A-6

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

 

16.       Notices.  All notices and other communications under this Agreement
shall be in writing and shall be delivered to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):

If to the Company, unless otherwise designated by the Company in a written
notice to the Participant (or other holder):

Select Energy Services, Inc.
Attn: Senior Vice President, General Counsel and Secretary

515 Post Oak Blvd., Suite 200

Houston, Texas 77027

If to the Participant, at the Participant’s last known address on file with the
Company.

Any notice that is delivered personally or by overnight courier or telecopier in
the manner provided herein shall be deemed to have been duly given to the
Participant when it is mailed by the Company or, if such notice is not mailed to
the Participant, upon receipt by the Participant. Any notice that is addressed
and mailed in the manner herein provided shall be conclusively presumed to have
been given to the party to whom it is addressed at the close of business, local
time of the recipient, on the fourth day after the day it is so placed in the
mail.

17.       Consent to Electronic Delivery; Electronic Signature.  In lieu of
receiving documents in paper format, the Participant agrees, to the fullest
extent permitted by law, to accept electronic delivery of any documents that the
Company may be required to deliver (including, but not limited to, prospectuses,
prospectus supplements, grant or award notifications and agreements, account
statements, annual and quarterly reports and all other forms of communications)
in connection with this and any other Award made or offered by the Company.
Electronic delivery may be via a Company electronic mail system or by reference
to a location on a Company intranet to which the Participant has access. The
Participant hereby consents to any and all procedures the Company has
established or may establish for an electronic signature system for delivery and
acceptance of any such documents that the Company may be required to deliver,
and agrees that his or her electronic signature is the same as, and shall have
the same force and effect as, his or her manual signature.

18.       Agreement to Furnish Information.  The Participant agrees to furnish
to the Company all information requested by the Company to enable it to comply
with any reporting or other requirement imposed upon the Company by or under any
applicable statute or regulation.

19.       Entire Agreement; Amendment.  This Agreement constitutes the entire
agreement of the parties with regard to the subject matter hereof, and contains
all the covenants, promises, representations, warranties and agreements between
the parties with respect to the PSUs granted hereby; provided¸ however, that the
terms of this Agreement shall not modify and shall be subject to the terms and
conditions of any employment, consulting and/or severance agreement between the
Company (or an Affiliate or other entity) and the Participant in effect as of
the date a determination is to be made under this Agreement.  Without limiting
the scope of the preceding sentence, except as provided therein, all prior
understandings and agreements, if any, among the

 

A-7

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

 

parties hereto relating to the subject matter hereof are hereby null and void
and of no further force and effect.  The Committee may, in its sole discretion,
amend this Agreement from time to time in any manner that is not inconsistent
with the Plan; provided, however, that except as otherwise provided in the Plan
or this Agreement, any such amendment that materially reduces the rights of the
Participant shall be effective only if it is in writing and signed by both the
Participant and an authorized officer of the Company.

20.       Severability and Waiver.  If a court of competent jurisdiction
determines that any provision of this Agreement is invalid or unenforceable,
then the invalidity or unenforceability of such provision shall not affect the
validity or enforceability of any other provision of this Agreement, and all
other provisions shall remain in full force and effect. Waiver by any party of
any breach of this Agreement or failure to exercise any right hereunder shall
not be deemed to be a waiver of any other breach or right. The failure of any
party to take action by reason of such breach or to exercise any such right
shall not deprive the party of the right to take action at any time while or
after such breach or condition giving rise to such rights continues.

21.       Clawback.  Notwithstanding any provision in the Grant Notice, this
Agreement or the Plan to the contrary, to the extent required by (a) applicable
law, including, without limitation, the requirements of the Dodd-Frank Wall
Street Reform and Consumer Protection Act of 2010, any Securities and Exchange
Commission rule or any applicable securities exchange listing standards and/or
(b) any policy that may be adopted or amended by the Board from time to time,
all shares of Stock issued hereunder shall be subject to forfeiture, repurchase,
recoupment and/or cancellation to the extent necessary to comply with such
law(s) and/or policy.

22.       Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO CONTRACTS MADE
AND TO BE PERFORMED THEREIN, EXCLUSIVE OF THE CONFLICT OF LAWS PROVISIONS OF
DELAWARE LAW.

23.       Successors and Assigns.  The Company may assign any of its rights
under this Agreement without the Participant’s consent.  This Agreement will be
binding upon and inure to the benefit of the successors and assigns of the
Company.  Subject to the restrictions on transfer set forth herein and in the
Plan, this Agreement will be binding upon the Participant and the Participant's
beneficiaries, executors, administrators and the person(s) to whom the PSUs may
be transferred by will or the laws of descent or distribution.

24.       Headings. Headings are for convenience only and are not deemed to be
part of this Agreement.

25.       Counterparts.  The Grant Notice may be executed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.  Delivery of an executed counterpart
of the Grant Notice by facsimile or portable document format (.pdf) attachment
to electronic mail shall be effective as delivery of a manually executed
counterpart of the Grant Notice.

26.       Section 409A. Notwithstanding anything herein or in the Plan to the
contrary, the PSUs granted pursuant to this Agreement are intended to comply
with the applicable requirements

A-8

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

 

of the Nonqualified Deferred Compensation Rules and shall be construed and
interpreted in accordance with such intent. If  the Participant is deemed to be
a “specified employee” within the meaning of the Nonqualified Deferred
Compensation Rules, as determined by the Committee, at a time when the
Participant becomes eligible for settlement of the PSUs upon his “separation
from service” within the meaning of the Nonqualified Deferred Compensation
Rules, then to the extent necessary to prevent any accelerated or additional tax
under the Nonqualified Deferred Compensation Rules, such settlement will be
delayed until the earlier of: (a) the date that is six months following the
Participant’s separation from service and (b) the Participant’s
death.  Notwithstanding the foregoing, the Company and its Affiliates make no
representations that the PSUs provided under this Agreement are compliant with
the Nonqualified Deferred Compensation Rules and in no event shall the Company
or any Affiliate be liable for all or any portion of any taxes, penalties,
interest or other expenses that may be incurred by the Participant on account of
non-compliance with the Nonqualified Deferred Compensation Rules.

 

 

A-9

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

 

EXHIBIT B

EXAMPLE RETURN ON ASSETS CALCULATION

Example of how we would calculate the ROA in a given year using 2018 figures as
an example:

($ in thousands)

 

 

 

 

 

 

 

 

 

 

    

Projected1
2017YE

    

Plan2
2018YE

 

Net PP&E

 

$

474,667 

 

$

483,687 

 

Net Working Capital

 

 

268,644 

 

 

304,979 

 

Total PP&E + NWC

 

$

743,311 

 

$

788,667 

 

 

 

 

 

 

 

 

 

Full Year Average

 

 

 

 

$

765,989 

 

 

 

 

 

 

 

 

 

Adj. Pre-Tax Income

 

 

 

 

$

126,539 

 

Less: Taxes @ 21%

 

 

 

 

 

26,573 

 

Net Income

 

 

 

 

$

99,966 

 

Return on Assets

 

 

 

 

 

13.1 

%

 

Notes:

1         Based on preliminary estimates for purchase price allocation which is
still under review and subject to change

2         Based on 2018 board approved plan of $310mm of Adjusted EBITDA

3 Year Target ROA = 12%

 

Exhibit B-1

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