Document:

Exhibit 10.10

 

SELECT ENERGY SERVICES, INC.

2016 EQUITY INCENTIVE PLAN

STOCK OPTION AGREEMENT

 

	
Grant Date:
    	
 
    	
                  (the “Grant Date”)

 
    
	
Name of Participant:
    	
 
    	
                  (the “Participant”)

 
    
	
Number of Shares of   Stock subject to Option:
    	
 
    	
                  (the “Shares”)

 
    
	
Per Share Exercise   Price:
    	
 
    	
                  (the “Exercise Price Per Share”)

 
    

 

This STOCK OPTION AGREEMENT (this “Agreement”), dated as of the Grant Date specified above, is entered into by and between Select Energy Services, Inc., a Delaware corporation (the “Company”) and the Participant, pursuant to which the Company grants the Participant an option (the “Option”) to purchase from the Company, for the Exercise Price Per Share, up to the number of Shares set forth above pursuant to the Select Energy Services, Inc. 2016 Equity Incentive Plan (the “Plan”). Capitalized terms not otherwise defined in this Agreement shall have the meaning given to them in the Plan. The Option is not intended to be subject to Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”).

 

1.                                      Terms. The terms and conditions of the Option granted hereby, to the extent not superseded by the terms and conditions contained in the Plan, are as follows:

 

(a)                                 Price. The price at which each Share may be purchased shall be the Exercise Price Per Share set forth above, subject to any adjustments that may be made pursuant to the terms of the Plan.

 

(b)                                 Vesting. Except as otherwise provided herein, the Option shall vest and become exercisable according to the following schedule:                                      , so long as the Participant has been continuously employed by, or has continuously provided services to, the Company or an Affiliate of the Company, as applicable, through such vesting date(s).

 

(c)                                  Exercise Limitation.  The Option may be exercised only to the extent that it is vested and may, to the extent vested, be exercised in whole or in part, subject to the limitation set forth in Section 2. Except as set forth in Section 5, (i) the Participant may not exercise the Option unless at the time of exercise the Participant has been employed by, or has otherwise provided services to, the Company or an Affiliate continuously since the Grant Date, and (ii) the unvested portion of the Option shall terminate and be forfeited immediately on the date the Participant ceases to be an employee of, or ceases providing services to, the Company or an Affiliate. The Option shall be exercisable during the lifetime of the Participant only by the Participant or the person to whom the Participant’s rights shall pass by will or the laws of descent and distribution.

 

(d)                                 Expiration. The Option shall expire on the                 anniversary of the Grant Date (the “Expiration Date”) and, notwithstanding anything contained to the contrary herein, no portion of the Option shall be exercisable after such date.

 

 

2.                                      Exercise and Payment.

 

(a)                                 Manner of Exercise. The Participant (or his or her representative, guardian, devisee or heir, as applicable) may exercise any portion of the Option that has become vested in accordance with the terms of this Agreement as to all or any of the Shares by giving written notice of exercise to the Company, in the form attached hereto as Exhibit A, specifying the number of Shares to be purchased and accompanying such notice with payment of the Exercise Price Per Share for each Share purchased. The election shall state the address to which distributions, notices, reports, or similar information are to be sent, and shall contain the Participant’s social security number or employee identification number. If the Company has elected to issue certificates for Shares, only one certificate evidencing the Shares will be issued unless the Participant otherwise requests in writing. Shares purchased upon exercise of the Option will be issued in the name of the Participant. The Participant shall not be entitled to any rights and privileges as a stockholder of the Company in respect of any of the Shares covered by the Option until such Shares shall have been purchased pursuant to the exercise of the Option by the Participant in accordance with the foregoing.

 

(b)                                 Payment. Payment of the Exercise Price Per Share shall be in cash or cash equivalents, Stock (including previously owned shares or through a cashless exercise, i.e., “net settlement”, a broker-assisted exercise, or other reduction of the amount of Shares otherwise issuable pursuant to the Option) or any other legal consideration the Committee deems appropriate.

 

(c)                                  Limitation on Exercise. Notwithstanding anything contained to the contrary herein, the Option may not be exercised with respect to any Shares prior to the earliest to occur of: (i) to the extent applicable, the date of termination of the Participant’s employment or other service relationship with the Company and its Affiliates that occurs on or after the Grant Date, (ii) a Change in Control and (iii) the date that the Company completes an underwritten public offering (“Public Offering”) or otherwise becomes a publicly-traded company pursuant to an effective registration statement under the Securities Act.

 

3.                                      The Plan. It is understood that the Plan is incorporated into this Agreement by reference and made a part of this Agreement as if fully set forth in this Agreement. In the event there shall be any conflict between the Plan and this Agreement, the terms of the Plan shall control. The Committee shall have authority to interpret this Agreement, and to correct any defect or supply any omission or reconcile any inconsistency in this Agreement, and to prescribe rules and regulations relating to the administration of the Option and other options granted under the Plan.

 

4.                                      Withholding Tax. Prior to the exercise of the Option, and as a condition to the Company’s obligation to deliver Shares upon such exercise, or in connection with any disposition of Shares acquired pursuant to such exercise, the Participant (or any person permitted to exercise the Option in the event of the Participant’s death) shall make arrangements satisfactory to the Company

 

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for the satisfaction of obligations for the payment of withholding taxes and other tax obligations relating to the Option, 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 the Option), other property, or any other legal consideration the Committee deems appropriate. If such tax obligations are satisfied through net settlement or the surrender of 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 such Award, as determined by the Committee. The Participant acknowledges that there may be adverse tax consequences upon the vesting, exercise or settlement of the Award or disposition of the underlying Shares and that the Participant has been advised, and hereby is advised, to consult a tax advisor prior to such vesting, exercise or settlement. The Participant represents that he is in no manner relying on the Board, the Committee, the Company or any of its Affiliates or any of their respective managers, directors, officers, 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.

 

5.                                      Termination of Employment or Other Relationship.

 

(a)                     Termination. Subject to Section 5(b), if the Participant’s employment or other service relationship with the Company or an Affiliate shall be terminated by the Company or an Affiliate or by the Participant for any reason, then the Participant shall be entitled to exercise the Option (only to the extent vested) during the 30 days following the date of the termination of such employment or service relationship.

 

(b)                     Death or Disability. Notwithstanding anything contained herein to the contrary, if the Participant’s employment or other service relationship with the Company or an Affiliate is terminated due to the Participant’s “Disability” (as defined below) or death, the Option shall immediately become fully vested upon such termination and be fully exercisable on the date of the termination of such employment or service relationship and remain exercisable until earlier to occur of (a) the expiration date of the Option and (b) the first anniversary of the date of such termination. For purposes of this Agreement, “Disability” means “disability” (or a word of like import) as defined under Participant’s employment agreement with the Company 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, 

 

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shall only be deemed to occur following the written determination by the Committee of any such occurrence of Disability.

 

6.                                      Non-Transferability. During the lifetime of the Participant, the Option 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 underlying the Option have been exercised and issued, and all restrictions applicable to such Shares have lapsed.  Neither the Option 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.

 

7.                                      Compliance with Applicable Law. Notwithstanding any provision of this Agreement to the contrary, the issuance of Shares hereunder following each exercise of the Option 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 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 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 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 Shares 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.

 

8.                                      Rights as a Stockholder. The Participant shall have no rights as a stockholder of the Company with respect to any shares of Stock covered by the Option unless 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.

 

9.                                      Execution of Receipts and Releases.  Any issuance or transfer of shares of Stock or other property to Participant or Participant’s legal representative, heir, legatee or distributee, in accordance with this Agreement shall be in full satisfaction of all claims of such person 

 

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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 exercise with respect to purchased Shares.

 

10.                               No Right to Continued Employment, Service or Awards. Nothing in the adoption of the Plan, nor the award of the Option thereunder pursuant to 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 Option 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.

 

11.                               Lock-Up Period. If so requested by the Company or any representative of the underwriters in connection with 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.

 

12.                               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 12 shall be cumulative and in addition to any other remedies to which such party may be entitled.

 

13.                               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):

 

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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: Gary Gillette

1820 North I-35, P.O. Box 1715

Gainesville, Texas 76241

 

If to the Participant, to the address for the Participant indicated on the signature page to this Agreement (as such address may be updated by the Participant providing written notice to such effect to 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.

 

14.                               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.

 

15.                               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.

 

16.                               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 Option 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 parties hereto relating to the subject matter hereof are hereby null and void and 

 

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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.

 

17.                               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.

 

18.                               Clawback.  Notwithstanding any provision in 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 Common 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.

 

19.                               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.

 

20.                               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 Option may be transferred by will or the laws of descent or distribution.

 

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

 

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

 

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23.                               Section 409A.  Notwithstanding anything herein or in the Plan to the contrary, the Option is intended to be exempt from the applicable requirements of the Nonqualified Deferred Compensation Rules and shall be limited, construed and interpreted in accordance with such intent. Notwithstanding the foregoing, the Company and its Affiliates make no representations that the Option provided under this Agreement is exempt from or 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.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed in its name by its duly authorized officer on the date first above written, and the Participant has hereunto set his hand on such date.

 

	
 
    	
COMPANY:
    
	
 
    	
 
    
	
 
    	
Select Energy Services,   Inc.
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name: John Schmitz
    
	
 
    	
Its: Chief Executive   Officer
    
	
 
    	
 
    
	
 
    	
PARTICIPANT:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Address:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
SSN:
    	
 
    
					

 

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EXHIBIT A

 

STOCK OPTION EXERCISE NOTICE

 

Select Energy Services, Inc.
 Attn: Gary Gillette

1820 North I-35, P.O. Box 1715

Gainesville, TX 76241

 

I hereby elect to exercise the Option granted in the Stock Option Agreement described below (the “Agreement”) pursuant to the Select Energy Services, Inc. 2016 Equity Incentive Plan (the “Plan”) of Select Energy Services, Inc., a Delaware corporation (the “Company”) with respect to the number of Shares (terms capitalized but not defined in this notice are used as defined in the Agreement or the Plan, as applicable):

 

	
 
    	
Grant Date:
    
	
 
    	
 
    
	
 
    	
Participant:
    
	
 
    	
 
    
	
 
    	
Number of Shares for which   the Option will be exercised:
    
	
 
    	
 
    
	
 
    	
Exercise Price:
    
	
 
    	
 
    
	
 
    	
 
    	
Per Share:$
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Total: $
    

 

In connection with this exercise, and in order to fulfill the requirements of the Agreement and the Plan, I represent and warrant to and agree with the Company as follows:

 

1.                                      SECURITIES LAW MATTERS. I understand that the Company and its officers are relying upon the accuracy and completeness of the information set forth herein in complying with their obligations under applicable securities laws in connection with the sale to me of the Shares for which the Option is being exercised and that the Company is not required to sell such Shares to me unless it can do so in compliance with all applicable securities laws.

 

2.                                      SURVIVAL OF COVENANTS. I understand and agree that the provisions of the Plan and the Agreement will survive the issuance of Shares to me and that I will continue to be bound thereby.

 

[Signature Page Follows]

 

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THIS STOCK OPTION EXERCISE NOTICE is executed as of                                             , 20      .

 

	
 
    	
PARTICIPANT
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Signature:
    	
 
    
	
 
    	
Print name:
    	
 
    
	
 
    	
Date:
    	
 
    
	
 
    	
Address:
    	
 
    
	
 
    	
SSN:
    	
 
    

 

11EX-10.1

 Exhibit 10.1 

SEVERANCE AGREEMENT AND GENERAL RELEASE 

THIS RELEASE (“Release”) is effective as of the 24th day of February, 2017, by
John J. Ellsworth (“Executive”) in favor of ScanSource, Inc. (“ScanSource” or the “Company”). This is the Release referred to in that certain Employment Agreement dated effective as of July 1, 2014 by and
between the Company and Executive (the “Employment Agreement”). Executive gives this Release in consideration of the Company’s promises and covenants as recited herein and in the Employment Agreement, with respect to which this
Release is an integral part. 
  

	 	1.	Last Day of Employment and Resignation. 

 (a)     Last Day of
Employment. The Parties agree that Executive’s last day of employment with the Company will be February 24, 2017 (“Separation Date”). Assuming that Executive does not revoke and complies with all of the terms of this Release,
Executive will be paid his base salary through his Separation Date, his separation shall be characterized as a resignation, and he will submit a written resignation as a Director and Officer of the company and any parent or affiliate entities.
Executive acknowledges that he shall not be entitled to receive any incentive, bonus, or other compensation or benefits whatsoever under the Employment Agreement other than as set forth in this Release. 

(b)     Withdrawal of Legal Representation and Company Representation. Executive shall, as of the Separation Date, or as
required by court rule or practice, or formally withdraw as legal counsel and legal representative of ScanSource in any matters in which he is listed as counsel of record or in which he otherwise has made any appearances or maintained any formal
authority. 
 (c)     Other Obligations. To be eligible for the consideration provided in paragraph 2 of this Release,
Executive has additional obligations as set forth in Schedule A (“Other Obligations”). 
  

	 	2.	Consideration. 

 (a)     Severance Pay. As consideration for each and
every covenant and promise of Executive contained in this Release, the Company agrees to pay Executive an amount equal to $92,500, subject to W-2 reporting and less applicable state and federal taxes and
withholdings. This payment shall be made in a lump sum payment within 2 weeks of the execution of this Release. 
 (b)
    Medical/Dental Insurance Benefits. Regardless of whether Executive signs this Release, the Company and/or its applicable carriers will notify Executive of his rights to elect continuation of medical and dental benefits for
him and his eligible dependents under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”) following his Separation Date. In addition, following his Separation Date, and provided all conditions of this Release are and continue to
be met by Executive, the 

 
Company agrees that Executive’s monthly COBRA premium will be at the same level of his current shared coverage expense until the earlier of six months following his Separation Date, or the
date that Executive becomes eligible for coverage under another group plan. The Company shall reimburse Executive for the difference between the monthly premium amount actually paid by him for coverage under COBRA and the monthly premium amount paid
by active employees for the same level of coverage. Such reimbursement shall be paid by the 20th day of the month immediately following the month in which Executive timely remits the required
premium payment. The Company makes no representation to Executive regarding the tax consequences of any benefits that may be received pursuant to this paragraph. If Executive wishes to continue his COBRA coverage beyond the end of such period, he
will then be responsible for paying the full premiums for such coverage during the remainder of his potential COBRA coverage eligibility or benefits. Executive will be notified by the Company’s insurance carrier or plan administrator regarding
his rights under COBRA and the costs and conditions of that option. All other insurance coverage provided to Executive by the Company, including but not limited to group life insurance and short and long-term disability benefits, will terminate and
cease to be in effect as of the Separation Date. In addition, failure by Executive to timely elect COBRA coverage, to timely pay any required premiums or to make any required payments, or to remain eligible for COBRA coverage continuation will
terminate the Company’s obligations with respect to such COBRA payments. 
 (c)     Other Benefits. The Company will
reimburse Executive for the cost of complying with the Other Obligations indicated in Schedule A, up to a total of $44,000. This amount will be paid in a lump sum within 30 days of receiving satisfactory confirmation of completion of the obligations
indicated in Schedule A. 
 (d)     Outplacement Services. The Company will pay for up to six (6) months of
outplacement services with Major, Lindsay & Africa or another outplacement services provider mutually agreed to by the parties. 

(e)     Reference Letter. The Company will provide Executive with a reference letter. 

(f)     Effect of Separation on Other Existing Benefits. Except as otherwise set forth herein and any vested benefits, as
of the Separation Date, Executive shall cease to be an active participant in the Company’s bonus, incentive, and benefit programs. Following Executive’s Separation Date, Executive’s rights to continue any benefits under the
Company’s benefit plans, to convert any such benefits to personal policies, or to receive any vested or accrued benefits under those plans will be governed by the terms of the applicable plan documents and law. 

  
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 3.    General Release. 

Executive, for himself, his successors, assigns, executors, administrators, insureds, attorneys, and all those entitled to assert his rights,
now and forever hereby releases and discharges the Company and its respective past and present officers, directors, shareholders, stockholders, trustees, partners, joint ventures, board members, employees, agents, parent corporations, divisions,
wholly or partially owned subsidiaries, affiliates, estates, predecessors, successors, heirs, executors, administrators, assigns, representatives, insurers, benefit plans, and attorneys (the “Released Parties”), from any and all legal,
administrative, and/or equitable claims, actions, causes of action, sums of money due, suits, debts, liens, covenants, contracts, obligations, costs, expenses, damages, judgments, agreements, promises, demands, claims for attorneys’ fees and
costs, or liabilities of any nature whatsoever, in law or in equity, which Executive ever had or now has against the Released Parties, including any claims arising by reason of or in any way connected with any employment relationship which existed
between the Company or any of its parents, subsidiaries, affiliates, or predecessors, and Executive. It is understood and agreed that this Release is intended to cover all actions, causes of action, claims or demands for any damage, loss or
injury, which may be traced either directly or indirectly to the aforesaid employment relationship, or the termination of that relationship, that Executive has, had or purports to have, from the beginning of time to the date of this Release, whether
known or unknown, that now exists, no matter how remotely they may be related to the aforesaid employment relationship including but not limited to claims for employment discrimination under federal, state or local statutes. Without limiting the
broadness of the foregoing language, Executive agrees to release the Released Parties from any and all claims under: 
  

	 	a.	Title VII of the Civil Rights Act of 1964, as amended by the Civil Rights Act of 1991; 

  

	 	b.	Section 1981 of the Civil Rights Act of 1866, as amended; 

  

	 	c.	Executive Orders 11246, 13496, and 11141; 

  

	 	d.	the Equal Pay Act of 1963; 

  

	 	e.	the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA); 

  

	 	f.	the Americans with Disabilities Act of 1990 and any amendments thereto, including the ADA Amendments Act of 2008; 

  

	 	g.	the Rehabilitation Act of 1973; 

  

	 	h.	the Employee Retirement and Income Security Act of 1974; 

  

	 	i.	the Sarbanes-Oxley Corporate Reform Act of 2002 and the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”); 

 

	 	j.	Whistle-blower and/or retaliation claims or suits under the Sarbanes-Oxley Act of 2002 and/or the Dodd-Frank Act; 

  

	 	k.	the Family and Medical Leave Act of 1993, as amended; 

  

	 	l.	the Health Insurance Portability and Accountability Act of 1996 (HIPAA); 

  

	 	m.	the Fair Labor Standards Act of 1938, as amended; 

  

	 	n.	the Occupational Safety and Health Act; 

  

	 	o.	the Uniformed Services Employment and Re-employment Act of 1994; 

  

	 	p.	the Worker Adjustment and Retraining Notification Act; 

  

	 	q.	the Lilly Ledbetter Fair Pay Act of 2009; 

  

	 	r.	the Fair Credit Reporting Act; 

  
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	 	s.	the Consumer Credit Protection Act; 

  

	 	t.	the Immigration Reform and Control Act of 1986; 

  

	 	u.	the National Labor Relations Act; 

  

	 	v.	the Genetic Information Nondiscrimination Act of 2008; 

  

	 	w.	the Age Discrimination in Employment Act; 

  

	 	x.	the South Carolina Payment of Wages Act; 

  

	 	y.	the South Carolina Human Affairs Law; 

  

	 	z.	claims arising under the United States and/or South Carolina Constitutions; 

  

	 	aa.	claims for wages and overtime pay and commissions, bonuses, vacation pay, or any express or implied contracts; 

  

	 	bb.	any common law claims or claims founded in tort (including negligence) for wrongful discharge, negligence, negligent hiring, negligent training or negligent supervision, assault or battery, invasion of privacy, false
imprisonment, intentional infliction of emotional distress, defamation, libel, slander, promissory estoppel, detrimental reliance, quantum meruit, unjust enrichment, breach of contract (oral, written or implied), or any other equitable basis or
action; 

  

	 	cc.	claims that the Company treated or dealt with Executive unfairly or not in good faith; 

  

	 	dd.	any claims arising under any other federal, state or local law, statute, regulation, ordinance, treaty or law of any other type, or any other cause of action or theory of recovery arising by virtue of Executive’s
employment relationship and/or affiliation with ScanSource; and 

  

	 	ee.	any public policy, tort or common law. 

 Without waiving any prospective or retrospective rights
under the Fair Labor Standards Act, Executive admits that Executive has received from ScanSource all rights and benefits, if any, due or potentially due to him pursuant to the Fair Labor Standards Act. Executive understands and acknowledges that it
is the Parties’ intent that Executive releases all claims that can be legally released but no more than that. 
 Executive affirms that
while Executive was employed with the Company, Executive had no known and unreported workplace injuries or occupational diseases and was not denied leave under the Family and Medical Leave Act of 1993. 

Executive represents and agrees that Executive has been paid and has received all paid or unpaid leave, compensation, wages, overtime, vacation
or sick pay, bonuses and/or benefits to which Executive may be entitled and no other amounts, except as may be provided in this Release, are due to Executive. 

To the maximum extent permitted by law, Executive waives any right or ability to be a class or collective action representative or to otherwise
participate in any putative or certified class, collective, or multi-party action or proceeding in which any of the Released Parties is a party. Executive specifically agrees not to attempt to institute any proceedings or pursue any action pursuant
to any laws (state, local, or federal) in 

  
 4 

 
any jurisdiction (state, local, or federal) based on employment with or termination from the Company except as required or protected by law. Nothing in this Release prohibits or prevents
Executive from filing a charge with or participating, testifying, or assisting in any investigation, hearing, whistleblower proceeding or other proceeding before any federal, state, or local government agency (e.g. EEOC, NLRB, SEC., etc.). However,
to the maximum extent permitted by law, Executive agrees that if such an administrative claim is made, Executive shall not be entitled to recover any individual monetary relief or other individual remedies. 

 

	 	4.	Special Notification Under the Age Discrimination in Employment Act. 

 Executive
acknowledges: (a) that he was advised to consult with an attorney prior to executing this Release; (b) that he was allowed up to a period of twenty-one (21) calendar days to consider the Release
but has voluntarily signed the Agreement prior to the expiration of that time period; (c) that he is not eligible for the consideration he will receive in Paragraph 2 of this Release except for his agreement to be bound by the terms of this
Release; and (d) that he was advised that he may revoke this Release within seven (7) days after he executes it. For this revocation to be effective, written notice must be postmarked or received by Michael Baur, Chief Executive Officer,
no later than the close of business on the seventh day after Executive has executed this Release. If Executive revokes this Release, it will not be effective or enforceable, and Executive will not receive any of the payments or benefits described in
this Release. 
  

	 	5.	Acknowledgement of No Known Wrongdoing. 

 Executive acknowledges and represents that as
an employee of the Company, he has been obligated to, and has been given the full and unfettered opportunity to, report timely to the Company any conduct that would give rise to an allegation that the Company or any affiliate of the Company has
violated any laws applicable to its businesses or has engaged in conduct which could otherwise be construed as inappropriate or unethical in any way, even if such conduct is not, or does not appear to be, a violation of any law. Executive
acknowledges that a condition of the payment of any consideration provided by the Company to the Executive hereunder is his truthful and complete representation to the Company regarding any such conduct, including but not limited to conduct
regarding compliance with the Company’s Code of Ethics, policies, and procedures, and with all laws and standards governing the Company’s business. 

Executive’s truthful and complete representation, based on his thorough search of his knowledge and memory, is as follows: Executive has
not been directly or indirectly involved in any such conduct; no one has asked or directed him to participate in any such conduct; and Executive has no specific knowledge of any conduct by any other person(s) that would give rise to an allegation
that the Company or any affiliate of the Company has violated any laws applicable to its businesses or has engaged in conduct which could otherwise be construed as inappropriate or unethical in any way. 

  
 5 

	 	6.	Continued Cooperation. 

 Executive agrees that he shall, to the extent reasonably
requested by the Company, cooperate with the Company in any pending or future charge, complaint, litigation (including alternative dispute resolution) or investigation and regarding which Executive was involved during the course of his work with the
Company and is reasonably expected to have knowledge or information, or in which Executive did or is alleged to have participated during his employment with the Company. Executive further agrees that in any such litigation (including alternative
dispute resolution) or investigation, he will, without the necessity of a subpoena, provide truthful testimony relevant to the litigation (including alternative dispute resolution) or investigation in any jurisdiction in which the Company requests.
the Company will reimburse Executive for reasonable expenses incurred by Executive in complying with this Section to the extent such expenses are authorized by the Company in advance. the Company and Executive acknowledge and agree that nothing in
this Section of this Release nor any other provision of this Release affects Executive’s obligations to cooperate with any government investigation or to respond truthfully to any lawful governmental inquiry or to give truthful testimony in
court. 
  

	 	7.	Waiver of Section 11(c)(i) of the Employment Agreement. 

 The Company agrees to waive the
Non-Compete obligations set forth in Section 11(c)(i) of the Employment Agreement. All other restrictions contained in Section 11 survive the execution of this Release. 

 

	 	8.	Governing Law. 

 This Release shall be construed in accordance with the laws of the state
of South Carolina and any applicable federal laws. 
  

	 	9.	Survival/Modification/Waiver. 

 The confidentiality,
non-disparagement, non-solicitation, non-disclosure and use, and non-recruiting
obligations contained in Sections 11 of the Employment Agreement survive execution of this Release. Other than those obligations, this Release constitutes the entire understanding of the parties, and no representation, promise, or inducement not
included herein shall be binding upon the parties. Executive and the Company affirm that the only consideration for the signing of this Release are the terms set forth above and that no other promises or assurances of any kind have been made to him
by the Company or any other entity or person as an inducement for either to sign this Release. This Release may not be changed orally but only by an agreement in writing signed by the parties or their respective heirs, legal representatives,
successors, and assigns. No waiver by any party hereto at any time of any breach by any other party hereto of, or in compliance with, any condition 

  
 6 

 
or provision of this Release to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No
waiver of any provision of this Release shall be implied from any course of dealing between or among the parties hereto or from any failure by any party hereto to assert its rights hereunder on any occasion or series of occasions. 

 

	 	10.	Validity/Severability. 

 The provisions of this Release shall be deemed severable and the
invalidity or unenforceability of any portion or any provision shall not affect the validity or enforceability of the other portions or provisions. Such provisions shall be appropriately limited and given effect to the extent they may be
enforceable. 
  

	 	11.	Arbitration. 

 Executive agrees to have any and all disputes or controversies arising
under or in connection with this Release settled by final and binding arbitration administered by the American Arbitration Association (“AAA”) under its National Rules for the Resolution of Employment Disputes and the Federal Arbitration
Act, 9 U.S.C. §1, et seq. subject to the following: (a) such arbitration shall take place in Greenville, South Carolina; (b) such arbitration shall be arbitrated by one (1) neutral arbitrator with at least ten (10) years of
employment arbitration experience and chosen by both parties from the AAA Roster of Neutral Arbitrators; (c) either party may seek from any court having jurisdiction any interim or provisional relief that is necessary to protect the rights or
property of that party, pending the establishment of the arbitral tribunal; (d) discovery shall consist of the exchange of non-confidential and non-privileged
documents that are strictly relevant to the claims before the arbitrator, shall be concluded within forty-five (45) days following the appointment of the arbitrator, and, in case of depositions, shall consist of no more than three
(3) depositions per party with a maximum duration of three (3) hours each, and all depositions shall be held within thirty (30) days of the making of a request; (e) the arbitration will be based on the submission of documents and
there shall be no in-person or oral hearing; (f) the award shall be issued within six (6) months of the filing of the notice of intention to arbitrate and the arbitrator shall agree to comply with
this schedule before accepting appointment; (g) except as may be required by law, neither a party nor an arbitrator may disclose the existence, content, or results of any arbitration hereunder without the prior written consent of both parties;
(h) the arbitrator shall not have authority the authority to award punitive damages; (i) each party shall bear its own attorney’s fees with the Company bearing the arbitrator’s and administrative fees related to arbitration; and
(j) judgment upon the award rendered by the arbitrator may be entered by any court having jurisdiction thereof. 

  
 7 

	 	12.	No Admission Of Wrongdoing. 

 The Parties agree that neither this Release nor the
furnishing of the consideration for this Release shall be deemed or construed at any time for any purpose as an admission by the Company of wrongdoing or evidence of any liability or unlawful conduct of any kind. The Company denies any wrongdoing in
all respects. 
 Executive agrees that he has carefully read this Release and is signing it voluntarily. 

[Signature page to Ellsworth Severance Agreement and General Release] 

 

			
	 /s/ John Ellsworth

	Executive	 	
	Date:	 	2-28-17
	
	For ScanSource, Inc.:
		
	By:	 	 /s/ John Harvey

	Its:	 	 VP of Worldwide Human Resources

	Date:	 	2-28-17

  
 8

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