Document:

Exhibit 10.1

SECURED PROMISSORY NOTE

	$33,000,000 	
March 31, 2017

 

FOR VALUE RECEIVED, Energy 11 Operating Company, LLC, a Delaware limited liability company (“Borrower”), with a mailing address of 5815 N. Western Avenue,  Oklahoma City, Oklahoma 73118, hereby promises to pay to the order of Kaiser-Francis Management Company, L.L.C., as agent on behalf of all Secured Persons under the Mortgage (as those terms are defined herein), with a mailing address of 6733 South Yale Avenue, Tulsa, OK 74136 (together with its successors and assigns, collectively, the “Agent”), the principal sum of Thirty Three Million and No/100 Dollars ($33,000,000), or such lesser amount as is provided for herein, in legal and lawful money of the United States of America. Unless sooner paid and satisfied as provided herein, the outstanding principal balance of this Note and all accrued and unpaid interest thereon shall be due and payable on August 1, 2017, or such earlier date on which the amounts evidenced by this Secured Promissory Note (this “Note”) are accelerated as provided herein or in the Collateral Documents, as defined herein (the “Maturity Date”).

The Agent shall maintain and, upon Borrower’s request or at the option of Agent send, a register which sets forth the amounts outstanding under this Note and such register shall be conclusive and binding on Borrower absent manifest error, provided, any failure of the Agent to maintain such register shall not affect, modify, reduce or waive any of the Borrower’s obligations under this Note or any other Collateral Document.

The entire outstanding principal amount of this Note (as the same may be increased as expressly provided herein) shall bear interest at the fixed rate of five percent per annum (5.0%); provided, however that in no event shall the rate of interest to be paid on the unpaid principal balance of this Note be more than the maximum legal rate allowed by applicable law. After the occurrence of an Event of Default (as defined herein), principal shall bear interest from and including the date of such default until paid in full at a rate per annum equal to the Default Rate, such interest to be payable on demand.

Borrower shall make payments of interest beginning April 30, 2017, and continuing on the last day of each calendar month thereafter until the Maturity Date. In addition to interest payments on the outstanding principal balance of this Note, Borrower shall make mandatory principal payments to the Agent (for the benefit of the Secured Persons) in the amount of the Net Equity Proceeds Amount (as hereinafter defined) on each of (i) April 28, 2017, (ii) May 26, 2017, (iii) June 30, 2017, and (iv) July 28, 2017 (each such date a “Mandatory Repayment Date”).  Concurrently with the payment of each Net Equity Proceeds Amount, Borrower shall deliver to Agent a certificate of the chief financial officer or other financial officer of Borrower in substantially the form of Exhibit A attached hereto (i) certifying as to whether an Event of Default has occurred and, if an Event of Default has occurred, specifying the details thereof and any action taken or proposed to be taken with respect thereto, and (ii) setting forth the gross amount of the Net Equity Proceeds received by Borrower during such measurement period in reasonable detail as well as a reasonably detailed calculation of the Net Equity Proceeds Amount for such period.

For purposes of this Note, the following terms shall have the meanings set forth below:

1

“Asset Sale” means any sale, transfer, assignment, conveyance or other disposition by Borrower to any Person (as defined in the Mortgage), including by way of redemption by such Person, of any oil and gas leases, wells, properties and interests owned by Borrower (including, without limitation, the Mortgaged Property) including, without limitation, any capital stock or other securities of, or equity interests in, another Person.

“Net Equity Proceeds Amount” shall mean 100% of all Net Equity Proceeds received by or on behalf of Borrower during the period from the first day of each such calendar month until the day immediately preceding such Mandatory Repayment Date.  For purposes of illustration only, with respect to the mandatory principal payment due on April 28, 2017, all Net Equity Proceeds received from April 1, 2017 through April 27, 2017 shall be included in the calculation of Net Equity Proceeds Amount for the month of April, 2017.

“Net Equity Proceeds” means for any issuance of equity interests of or capital or other equity contribution or commitment to Borrower, the gross cash proceeds from such issuance of equity interests or capital or equity contribution or commitment, net of customary brokerage fees actually paid by Borrower in connection therewith but in no event shall such brokerage fees exceed the commissions paid to such brokers as of the date of this Note.  For purposes of clarification, if such gross cash proceeds are $0.00, Net Equity Proceeds shall be $0.00.

“Net Sale Proceeds” means for any sale or other disposition of any oil and gas leases, wells, properties and interests owned by Borrower (including, without limitation, the Mortgaged Property) (as defined in the Mortgage) pursuant to an Asset Sale, the gross cash proceeds (including any cash received by way of deferred payment pursuant to a promissory note, receivable or otherwise, but only as and when received) received from such Asset Sale, net of (a) reasonable transaction costs (including, without limitation, customary selling commissions, reasonable legal, advisory and other fees and expenses (including title and recording expenses), and transfer taxes arising therefrom), and (b) the amount of all reserves required to be maintained by Borrower in accordance with GAAP and all purchase price hold-backs for any potential indemnity obligations that may be required to be made by Borrower of as a result of such Asset Sale; provided, however, (i) that such gross proceeds shall not include any portion of such gross cash proceeds which Borrower determines in good faith should be reserved for post-closing adjustments (which shall be certified by Borrower to the Agent upon its request), it being understood and agreed that on the day that all such post-closing adjustments have been determined, the amount (if any) by which the reserved amount in respect of such Asset Sale exceeds the actual post-closing adjustments payable by Borrower shall constitute Net Sale Proceeds on such date received by Borrower from such Asset Sale, and (ii) at such time as the Borrower is no longer required to maintain any indemnity reserves in accordance with GAAP or any purchase price hold-back as a result of any Asset Sale, the amount (if any) by which such reserved amount in respect of such Asset Sale exceeds the actual amount of indemnity payments made by Borrower for which such reserves were required to be maintained in respect of such Asset Sale shall constitute Net Sale Proceeds at such time.

If the Borrower receives any cash proceeds from any Asset Sale, no later than three (3) business days following receipt an amount equal to 100% of the Net Sale Proceeds therefrom shall be paid by Borrower to the Agent (for the benefit of the Secured Persons) and applied on such date (as and when received), but with respect to Net Sale Proceeds finally determined to be an excess reserved amount with respect to post-closing adjustments payable by Borrower no later than three (3) business days following such determination, as a mandatory repayment against the outstanding principal balance of this Note.

2

On the Maturity Date, Borrower shall pay to Agent for the benefit of all Secured Persons: (a) all accrued and unpaid interest and accrued and unpaid fees and (b) a lump sum principal payment in the amount of (y) $33,000,000, less (z) any prepayments of principal prior to the Maturity Date actually made by Borrower in good funds. All payments hereunder shall be made in lawful money of the United States and in immediately available funds.

The payment of this Note is secured by a Mortgage, Fixture Filing, Assignment of As-Extracted Collateral, Security Agreement and Financing Statement dated the date hereof between Borrower and Agent (the “Mortgage”) and a UCC Financing Statement against the Mortgaged Property, as defined in the Mortgage (the “UCC Financing Statement”). “Collateral Documents” means, collectively, (a) the Mortgage, (b) the UCC Financing Statement and (c) the Loan Documents, as defined in the Mortgage. “Secured Persons” has the meaning set forth in the Mortgage.  Each capitalized term used in this Note and not defined in this Note shall have the meaning assigned such term in the Mortgage.

All payments shall be made to Agent, for the benefit of the Secured Persons, by wire transfer of readily available funds to the following account:

	
ACCOUNT NAME:

	
Kaiser-Francis Management Company

	
F/B/O:

	
Kaiser-Francis Management Company

	
ACCOUNT NUMBER:

	
xxxxxxxxx

	
ABA NUMBER:

	
xxxxxxxxxxxx

	
BANK NAME:

	
xxxxxxxxxxxxxxxxxxx

Upon written notice by Agent to Borrower, Borrower shall thereafter make all payments due under this Note to such alternate (singular) account as specified by Agent in such written notice.

Borrower may prepay the principal of this Note in whole or in part at any time, without premium or penalty.

Interest under this Note is compounded annually and calculated on a 365-day factor applied on a 365-day year or a 366-day year, in the event that the year is a leap year, on the unpaid principal to the date of the payment; provided, however, that in the event the interest rate reaches the maximum rate allowed by applicable law, said maximum legal rate shall be computed on a full calendar year 365/365 days basis or on a 366/366 days basis, in the event that the year is a leap year. The interest charged and herein contracted for will not exceed the maximum rate allowed by law.

Matured unpaid amounts shall bear interest computed on a full calendar year 365/365 days basis, or on a 366/366 days basis in the event that the year is a leap year, at a rate of interest equal to the lesser of ten percent per annum (10.0%) or the highest legal rate of interest allowed by Oklahoma law (the “Default Rate”).

Any notice required or delivered to the parties shall be deemed delivered when personally delivered, or if mailed, three (3) business days after deposit in the United States mail, certified or registered mail, return receipt requested, or if sent by national overnight courier, on the next business day after deposit with such courier, and addressed to the applicable party at the address set forth opposite such party’s name in the first paragraph of this Note, which address such Party may at any time change by delivering written notice to the other party in the manner set forth above. For purposes of this Note, “business days” means any day that is not a Saturday, Sunday or other day on which commercial banks in Tulsa, Oklahoma are authorized or required by law to remain closed.  With

3

respect to any notice sent to Borrower, such notice shall be sent to the attention of Anthony F. Keating, III, Co-Chief Operating Officer, and shall be copied to Zachary M. Garsek, Barlow Garsek & Simon, LLP, 920 Foch Street, Fort Worth, Texas 76107.

Borrower shall pay all outstanding unpaid principal and all accrued and unpaid interest that remain due and owing, on the Maturity Date.

If all or a part of the indebtedness represented by this Note is collected at law or in equity or in bankruptcy, receivership or other court proceedings or if this Note is placed in the hands of attorneys for collection after default, the Borrower and any endorser or guarantor hereof shall pay to the holder hereof, in addition to the principal and interest due and payable hereon, all attorneys’ fees, court costs and other collection fees and expenses reasonably incurred by the Agent.

Borrower and any endorser or guarantor hereof hereby waive presentment for payment, demand, notice of nonpayment, protest and notice of protest with respect to any payment hereunder.  No delay on the part of the holder hereof in exercising any rights hereunder shall operate as a waiver of such rights.

This Note and the indebtedness evidenced hereby shall be construed and enforced in accordance with and governed by the laws of the State of Oklahoma. To the maximum extent not prohibited by applicable law, each of Agent (on behalf of itself and the Secured Persons, and by acceptance of this Note) and Borrower hereby irrevocably: (i) submits to the jurisdiction of any Oklahoma state or United States federal court sitting in or serving Tulsa, Oklahoma over any action or proceeding arising out of this Note; (ii) agrees that all claims in respect of such action or proceeding may be held and determined in such Oklahoma state or federal court; (iii) agrees that any action or proceeding brought against the Agent or Borrower may be brought only in an Oklahoma state or United States federal court sitting in or serving Tulsa, Oklahoma; (iv) consents to the service of process in any such action or proceeding in either of said courts by mailing thereof by Agent or Borrower by registered or certified mail, postage prepaid, to the Borrower or Agent, respectively, at its address specified for notices to be given under this Note; and (v) waives any defense on the basis of an inconvenient forum. Agent (on behalf of itself and the Secured Persons, and by acceptance of this Note) and Borrower agree that a final judgment in any such action or proceeding shall be conclusive and may be enforced in any other jurisdiction by suit or proceeding in such state and hereby waive any defense on the basis of an inconvenient forum.  BORROWER AND AGENT EACH WAIVE THE RIGHT TO A JURY TRIAL.

This Note is non-assumable by any successor to or assignee of Borrower without the prior approval in writing of the Agent.  In the event Agent shall so approve such assumption, the terms of this Note shall be binding upon Borrower’s successors and assigns.  The terms of this Note shall inure to the benefit of Agent and its successors and assigns.

Borrower represents and warrants to the Agent, as of the date hereof, that:

(a)  this Note and the Collateral Documents constitute the legal, valid and binding obligations of the Borrower, enforceable against the Borrower in accordance with their terms, except as the enforcement hereof and thereof may be limited by bankruptcy, insolvency, or other similar laws affecting the enforcement of creditors' rights generally and subject to the applicability of general principles of equity;

4

(b)          the execution, delivery and performance by the Borrower of this Note and the Collateral Documents and all other documents contemplated hereby or thereby do not and will not (i) conflict with or constitute a breach of, or default under, or require any consent under, or result in the creation of any lien, charge or encumbrance upon the property or assets of the Borrower pursuant to any other agreement or instrument to which the Borrower is a party or is bound or by which its properties may be bound or affected; or (ii) violate any provision of any law, rule, regulation (including, without limitation, Regulation U of the Federal Reserve Board), order, writ, judgment, injunction, decree, determination or award presently in effect having applicability to the Borrower;

(c)          no consent, approval or authorization of, or registration, declaration or filing with, any governmental authority or other person or entity is required as a condition to or in connection with the due and valid execution, delivery and performance by the Borrower of this Note and the Collateral Documents;

(d)          there are no actions, suits, investigations or proceedings pending or, to the best of the Borrower’s knowledge, threatened (in writing) against Borrower at law, in equity, in arbitration or by or before any other authority involving or affecting: (i) the Borrower that, if adversely determined, are likely to have a material adverse effect on the financial condition of the Borrower; (ii) any material part of the assets or properties of the Borrower except as may be pending or threatened, as of the closing date under the Purchase Agreement (as defined below), with respect to the Properties and/or the Target (as those terms are defined in the Purchase Agreement); or (iii) any of the transactions contemplated in this Note and the Collateral Documents.  There are currently no material judgments entered against the Borrower and the Borrower is not in default with respect to any judgment, writ, injunction, order, decree or consent of any court or other judicial authority (other than any judgment, writ, injunction, order, decree or consent existing as of the closing under the Purchase Agreement with respect to any of the Properties and/or the Target), which default is likely to have or has had a material adverse effect on the financial condition of the Borrower;

(e)          in the event that the Borrower is a partnership, limited liability partnership, corporation or limited liability company, the Borrower also represents and warrants that it is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, and has all requisite power and authority to execute, deliver and perform its obligations under this Note and the Collateral Documents;

(f)          Borrower has no outstanding funded indebtedness and none of the Borrower’s assets or properties (including, without limitation, the Mortgaged Property) have been encumbered or pledged and no mortgage, Lien, encumbrance, charge, security interest or hypothecation has been granted by Borrower or is outstanding against any of the Borrower’s assets or properties other than the Mortgage granted in favor of the Agent.

Until such time as the Secured Obligations have been paid in full in cash to Agent (for the ratable benefit of the Secured Persons), Borrower shall not, and shall not permit any other Person, directly or indirectly, to (i) create or permit any mortgage, Lien, encumbrance, charge, or security interest of any kind (other than a Permitted Lien) to exist on any of Borrower’s assets or properties owned now or in the future including, without limitation, any oil and gas leases, wells, properties and interests owned by Borrower (including, without limitation, the Mortgaged Property), (ii) incur any indebtedness for funded debt (other than trade payables incurred in the ordinary course which are not more than sixty (60) days outstanding),  (iii) enter into, incur or permit to exist any agreement or other arrangement that prohibits, restricts, or imposes any condition upon the ability of the Borrower to

5

create, incur or permit to exist any mortgage, Lien or security interest upon the Mortgaged property, or (iv) transfer, sell, assign or in any manner dispose of all or any part of any oil and gas leases, wells, properties and interests owned by Borrower (including, without limitation, the Mortgaged Property) (collectively, the “Negative Covenant”).  The Negative Covenant shall terminate, without further action on the part of Agent or any other Person, at such time that the outstanding principal balance owing hereunder is equal to or less than $30,000,000 (the “Negative Covenant Termination”).  As of the Negative Covenant Termination, this Note shall be read as though the Negative Covenant were not set forth herein and, at the request of Borrower, Agent shall provide a written and signed affirmation that the Negative Covenant no longer applies.

If any one or more of the following events shall occur (each an "Event of Default"):

(a)          the Borrower shall fail to pay the principal of, or interest on, this Note, or any other amount payable under this Note or any other Collateral Document, as and when due and payable and such failure shall continue unremedied for a period of three (3) business days after the date due, provided, no such cure period shall be applicable to any principal and/or interest due on this Note on the Maturity Date;

(b)          any representation or warranty made or deemed made by the Borrower in this Note or in any other Collateral Document, shall prove to have been incorrect in any material respect when made, and/or Borrower shall breach or fail to be in compliance with the Negative Covenant;

(c)          other than with respect to an event under clauses (a) and (b) above, the Borrower shall fail to perform or observe in any material respect any term, covenant or agreement on its part to be performed or observed contained in any other Collateral Document and such failure shall continue unremedied for a period of thirty (30) days after written notice to the Borrower;

(d)          the Borrower shall fail to pay when due any of its indebtedness for borrowed money or any interest or premium thereon when due (whether by scheduled maturity, acceleration, demand or otherwise) and the effect of such default is to accelerate the maturity of any such indebtedness or to permit the holder or holders thereof, or any trustee or agent for such holders, to cause such indebtedness to become due and payable prior to its expressed maturity;

(e)          the Borrower : (i) shall generally not, or be unable to, or shall admit in writing its inability to, pay its debts as its debts become due; (ii) shall make an assignment for the benefit of creditors, or petition or apply to any tribunal for the appointment of a custodian, receiver or trustee for its or a substantial part of its assets; (iii) shall commence any proceeding under any law relating to bankruptcy, reorganization, arrangement, readjustment of debt, dissolution or liquidation; (iv) shall have had any such petition filed, or any such proceeding shall have been commenced against it, in which an adjudication is made or order for relief is entered or which remains undismissed for a period of 60 days; (v) shall have had a receiver, custodian or trustee appointed for all or a substantial part of its property which appointment remains undismissed for a period of 60 days; or (vi) takes any action effectuating, approving or consenting to any of the events described in clauses (i) through (v);

(f)          the Borrower shall dissolve or for any reason cease to be in existence or if a Change of Control occurs.  For purposes hereof, a “Change of Control” shall mean (i) the acquisition of ownership, directly or indirectly, beneficially or of record, by any individual, entity or group (within the meaning of the Securities Exchange Act of 1934 and the rules of the Securities and Exchange Commission thereunder as in effect on the date hereof), of any equity interest in Borrower representing

6

more than 50% of the aggregate ordinary voting power; or (b) occupation of a majority of the seats (other than vacant seats) on the board of directors of Borrower by persons who were neither (i) nominated by the board of directors of Borrower nor (ii) appointed by directors so nominated.  For purposes hereof, “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of an entity, whether through the ability to exercise voting power, by contract or otherwise.  "Controlling" and "Controlled" have meanings correlative thereto;

(g)          any judgment, settlement, decree or order, or series of judgments, settlements, decrees or orders rendered against or entered into by the Borrower requiring the Borrower, to pay money in an amount in excess of $1,000,000, to the extent such judgment(s), settlement(s), decree(s) or order(s) shall continue unsatisfied and in effect for a period of ninety (90) consecutive days without being vacated, discharged, satisfied, or stayed or bonded pending appeal;

(h)          there shall occur any material adverse change in, or material adverse effect on, or material impairment of (i) the validity or enforceability of this Note or any Collateral Document or (ii) the rights and remedies or benefits available to Lender under this Note or any Collateral Document; or

(i)          the Borrower (x) creates, incurs or permits to exist any debt secured by a Lien, security interest, or charge upon the Mortgaged Property or any other Collateral (other than a Permitted Lien), other than debt hereunder, or (y) enters into or assumes any contract or agreement (other than this Note and the other Collateral Documents, the Purchase Agreement and other Transaction Documents, and the Leases and the Basic Documents as those two terms are defined in the Purchase Agreement) (1) which imposes, creates or results in any Lien, security interest, charge, restriction or negative pledge upon or with respect to the Mortgaged Property or any other the Collateral (other than a Permitted Lien), or (2) which in any way prohibits or restricts (a) the granting, conveying, creation, imposition, foreclosure or enforcement of any Lien on the Mortgaged Property or any other Collateral in favor of the Agent and the Secured Persons (including, without limitation, the appointment by the Agent of a receiver with respect to the Mortgaged Property or the Collateral) as provided in the Mortgage or prohibits or restricts Agent’s ability to realize or pursue any remedy or right available to Agent; or (b) Borrower (directly or indirectly) from transferring, selling or disposing of any Mortgaged Property or any Collateral, whether in connection with any foreclosure, deed-in-lieu, enforcement action or otherwise, or which requires the consent of other Persons (excluding any “soft” consent not to be unreasonably withheld) in connection therewith or in connection with any other conveyance or transfer of the Mortgaged Property or the Collateral (or any portion thereof), or (z) breaches the Negative Covenant (subject to the Negative Covenant Termination);

THEN, the Agent may, by written notice to the Borrower, declare the unpaid principal amount of this Note, accrued interest thereon and all other amounts payable under this Note due and payable whereupon the same shall become and be forthwith due and payable without presentment, demand, protest, notice of acceleration or intention to accelerate or further notice of any kind, all of which are hereby expressly waived by the Borrower, provided that in the case of an Event of Default described in clause (e) above, the unpaid principal amount of this Note, accrued interest and other amounts payable under this Note shall be immediately due and payable. Failure of Agent to exercise any such right or remedy shall not constitute a waiver of Agent’s right to exercise any right or remedy Agent may have under this Note, the other Collateral Document, at law or in equity.

If any payment of principal or interest on this Note becomes due on a day that is not a business day (other than with respect to the Maturity Date), such payment will be made on the next succeeding

7

business day and such extension of time will in such case be included in computing interest in connection with such payment.

RIGHT OF SET OFF / RIGHT OF OFFSET. Notwithstanding any provision in this Note to the contrary, Borrower may, at any time and from time to time at its sole discretion with notice to Agent, to the fullest extent permitted by law, set off and apply any amounts for indemnity or other payments from the Sellers, subject to the terms, provisions and restrictions set forth in Section 2.10 of the Purchase Agreement, to or for the credit of the account of Borrower or any Buyer Indemnitee (as defined in that certain Interest Purchase Agreement dated March 8, 2017 by and among Borrower, Kaiser Acquisition and Development, LLC and the other named selling party thereto (such agreement as has been and may from time to time be amended, modified or supplemented, the “Purchase Agreement”)), against any principal, interest or other amounts then outstanding under this Note or any other amount that may become due and payable hereunder.  The terms of Section 2.10 of the Purchase Agreement are hereby incorporated by reference into this Note.

The rights of the Agent and Secured Persons under this Note shall be freely assignable by Agent (on behalf of itself and the Secured Persons) whether for collateral or security purposes or otherwise.

BORROWER ACKNOWLEDGES EXECUTION OF THIS NOTE AND HAVING READ ALL OF ITS PROVISIONS AND BORROWER AGREES TO ITS TERMS.

THIS NOTE REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

[Signature Page Attached]

 

 

8

THIS SECURED PROMISSORY NOTE is dated and executed as of the date indicated on the first page.

BORROWER:

ENERGY 11 OPERATING COMPANY, LLC

By:            /s/ Anthony F. Keating, III                   

Name:     Anthony F. Keating, III

Title:       Co-Chief Operating Officer

 

  

Signature Page

Secured Promissory Note

EXHIBIT A

COMPLIANCE CERTIFICATE

The undersigned certifies that he/she is a financial officer of the Borrower named below (the Borrower is referred to herein as the “Company”), and DOES HEREBY FURTHER CERTIFY on behalf of the Company that:

1.          He/she has reviewed the terms of that certain Secured Promissory Note dated as of March 31, 2017, by and between the Company and Kaiser-Francis Management Company, L.L.C., as agent on behalf of all Secured Persons under the Mortgage (the “Agent”) (as amended, supplemented or modified from time to time, the “Note”), including but without limitation the provisions regarding the Company’s obligation to pay to the Agent (for the benefit of the Secured Persons) Net Equity Proceeds Amounts as and when due, and has made, or has caused to be made by employees or agents under his/her supervision, a detailed review of the transactions and conditions of the Company. Capitalized terms not defined herein are defined in the Note;

2.          The examinations described in paragraph 1 did not disclose, and he/she has no knowledge of, the existence of any condition or event which constitutes an Event of Default during or at the end of the applicable Mandatory Repayment Date or as of the date of this Compliance Certificate, except as set forth below; and

3.          Schedule I attached hereto sets forth financial data and computations evidencing the gross amount of the Net Equity Proceeds received by the Company during the applicable measurement period to which this Compliance Certificate applies in reasonable detail together with the Company’s reasonably detailed calculation of the Net Equity Proceeds Amount for such period, all of which data and computations are true, complete and correct.

Described below are the exceptions, if any, to paragraph 2 by listing, in detail, the nature of the condition or event, the period during which it has existed and the action which the Company has taken, is taking, or proposes to take with respect to each such condition or event:

 

          

 

 

The foregoing certifications, together with the computations set forth in Schedule I attached hereto, are made and delivered this ___ day of __________, 20__.

BORROWER:

ENERGY 11 OPERATING COMPANY, LLC

By: ____________________________________

Name: _________________________________

 Title:   ________________________________EX-4.3

 Exhibit 4.3 

DXC TECHNOLOGY COMPANY 

2017 OMNIBUS INCENTIVE PLAN 

Effective March 30, 2017 

Section 1 

Purpose and Objectives 

This DXC Technology Company 2017 Omnibus Incentive Plan (this “Plan”) was adopted by Everett SpinCo, Inc. (“Everett”), the
predecessor of DXC Technology Company, prior to the spinoff of Everett from Hewlett Packard Enterprise Company (“HPE”) effective as of March 31, 2017 (the “Spinoff”). 

The primary purpose of the Plan is to reward selected corporate officers and key employees of the Company and its Subsidiaries by enabling
them to acquire shares of common stock of the Company and/or through the provision of cash payments. The Plan is designed to attract and retain employees of the Company and its Subsidiaries and to encourage the sense of proprietorship in the Company
and its Subsidiaries. 
 The Plan also governs the terms of certain Spinoff Awards and CSC Rollover Awards assumed by the Company in
connection with the Spinoff and the merger with Computer Sciences Corporation (“CSC”) following the Spinoff (the “CSC Merger”). 

Section 2 

Definitions 
 As
used herein, the terms set forth below shall have the following respective meanings: 
 (a) “Authorized Officer” means the
Chairman of the Board, the Chief Executive Officer of the Company or the Chief Human Resources Officer of the Company (or any other senior officers of the Company to whom any of such individuals shall delegate the authority to execute any Award
Agreement). 
 (b) “Award” means the grant of any Option, Stock Appreciation Right, Stock Award, or Cash Award, any of
which may be structured as a Performance Award, whether granted singly, in combination or in tandem, to a Participant pursuant to such applicable terms, conditions, and limitations as the Committee may establish in accordance with the objectives of
this Plan, including any Spinoff Awards and any CSC Rollover Awards. 
 (c) “Award Agreement” means the document (in
written or electronic form) communicating the terms, conditions and limitations applicable to an Award. The Committee may, in its discretion, require that the Participant execute such Award Agreement, or may provide for procedures through which
Award Agreements are made available but not executed. Any Participant who is granted an Award and who does not affirmatively reject the applicable Award Agreement shall be deemed to have accepted the terms of Award as embodied in the Award
Agreement. 
 (d) “Board” means the Board of Directors of the Company. 

(e) “Cash Award” means an Award denominated in cash. 

(f) “Change in Control” means the consummation of a “change in ownership” of the Company, a “change in
effective control” of the Company or a “change in the ownership of a substantial portion of the assets” of the Company, and in each case, as defined under Code Section 409A. 

 (g) “Code” means the Internal Revenue Code of 1986, as amended from time to
time. 
 (h) “Committee” means the Compensation Committee of the Board, and any successor committee thereto or such other
committee of the Board as may be designated by the Board to administer this Plan in whole or in part including any subcommittee of the Board as designated by the Board. 

(i) “Common Stock” means the Common Stock, par value $0.01 per share, of the Company. 

(j) “Company” means DXC Technology Company, a Nevada corporation, or any successor thereto. 

(k) “CSC” has the meaning set forth in Section 1. 

(l) “CSC Merger” has the meaning set forth in Section 1. 

(m) “CSC Rollover Awards” means employee equity awards granted under one or more CSC equity incentive plans which were
converted and assumed by the Company in connection with the CSC Merger in accordance with the terms of the Employee Matters Agreement. 

(n) “Disability” means, unless otherwise provided in an Award Agreement, a disability that entitles the Employee to benefits
under the Company’s long-term disability plan, as may be in effect from time to time, as determined by the plan administrator of the long-term disability plan, or if the Employee is not a participant under the Company’s long-term
disability plan, as determined if the Employee were a participant in a long-term disability plan that covers similarly situated employees. Notwithstanding the foregoing, if an Award is subject to Code Section 409A and Disability is a payment
event, the definition of Disability shall conform to the requirements of Treasury Regulation § 1.409A-3(i)(4)(i). 
 (o)
“Dividend Equivalents” means, in the case of Restricted Stock Units or Performance Units, an amount equal to all dividends and other distributions (or the economic equivalent thereof) that are payable to shareholders of record
during the Restriction Period or performance period, as applicable, on a like number of shares of Common Stock that are subject to the Award. 

(p) “Effective Date” means March 30, 2017, the date prior to the Spinoff on which this Plan was approved by HPE as sole
shareholder of Everett SpinCo, Inc., the predecessor to the Company. 
 (q) “Employee” means an employee of the Company or
any of its Subsidiaries. 
 (r) “Employee Matters Agreement” means the amended and restated employee matters agreement
between Everett SpinCo, Inc., HPE and CSC dated March 31, 2017, as amended. 
 (s) “Exchange Act” means the Securities
Exchange Act of 1934, as amended from time to time. 
 (t) “Exercise Price” means the price at which a Participant may
exercise his right to receive cash or Common Stock, as applicable, under the terms of an Award. 
 (u) “Fair Market Value”
of a share of Common Stock means, as of a particular date, (1) if shares of Common Stock are listed on a national securities exchange, the closing sales price per share of Common Stock on the consolidated transaction reporting system for the
principal national securities exchange on which shares of Common Stock are listed on that date, or, if there shall have been no such sale so reported on that date, on the last preceding date on which such a sale was so reported, (2) if the
Common Stock is not so listed, the average of the closing bid and asked price on that date, or, if there are no quotations available for such date, on the last preceding date on which such quotations shall be

 
available, as reported by an inter-dealer quotation system, (3) if shares of Common Stock are not publicly traded, the most recent value determined by an independent appraiser appointed by
the Committee for such purpose, or (4) if none of the above are applicable, the fair market value of a share of Common Stock as determined in good faith by the Committee. 

(v) “Fiscal Year” means a fiscal year of the Company. 

(w) “Grant Date” means the date an Award is granted to a Participant and, with respect to any Spinoff Award or CSC Rollover
Award, shall mean the date the award was originally granted. 
 (x) “HPE” has the meaning set forth in Section 1. 

(y) “Incentive Stock Option” means an Option that is intended to comply with the requirements set forth in Code
Section 422. 
 (z) “Nonqualified Stock Option” means an Option that is not intended to comply with the requirements
set forth in Code Section 422. 
 (aa) “Option” means a right to purchase a specified number of shares of Common Stock
at a specified Exercise Price, which is either an Incentive Stock Option or a Nonqualified Stock Option, including any such right that is Spinoff Award or CSC Rollover Award. 

(bb) “Participant” means an Employee to whom an Award has been made under this Plan. Participant also includes any holder of
a Spinoff Award or a CSC Rollover Award. 
 (cc) “Performance Award” means an Award made pursuant to this Plan to a
Participant which is subject to the attainment of one or more Performance Goals. A Performance Award may be in the form of Performance Unit Awards, Restricted Stock Awards, Options, SARs or Cash Awards. 

(dd) “Performance Goal” means one or more standards established by the Committee to determine in whole or in part whether a
Performance Award shall be earned. 
 (ee) “Performance Unit” means a unit evidencing the right to receive in specified
circumstances cash or shares of Common Stock or equivalent value of Common Stock in cash, the value of which at the time it is settled is determined as a function of the extent to which established performance criteria have been satisfied.
Performance Units may take the form of performance-based Restricted Stock Units or Cash Awards. 
 (ff) “Performance Unit
Award” means an Award in the form of Performance Units. 
 (gg) “Qualified Performance Awards” has the meaning set
forth in Section 13.2. 
 (hh) “Restricted Stock” means a share of Common Stock that is restricted or subject to
forfeiture provisions. 
 (ii) “Restricted Stock Award” means an Award in the form of Restricted Stock. 

(jj) “Restricted Stock Unit” means a unit evidencing the right to receive in specified circumstances one share of Common
Stock or equivalent value in cash that is restricted or subject to forfeiture provisions. 

 (kk) “Restricted Stock Unit Award” means an Award in the form of Restricted
Stock Units. 
 (ll) “Restriction Period” means a period of time beginning as of the date upon which a Restricted Stock
Award or Restricted Stock Unit Award is made pursuant to this Plan and ending as of the date upon which such Award is no longer restricted or subject to forfeiture provisions. 

(mm) “Spinoff Awards” means employee equity awards granted under one or more HPE equity incentive plans which were converted
and assumed by the Company in connection with the Spinoff in accordance with the terms of the Employee Matters Agreement. 
 (nn)
“Stock Appreciation Right” or “SAR” means a right to receive a payment, in cash or Common Stock, equal to the excess of the Fair Market Value of a specified number of shares of Common Stock on the date the right is
exercised over a specified Exercise Price, including any such right that is a Spinoff Award or CSC Rollover Award. 
 (oo) “Stock
Award” means an Award in the form of shares of Common Stock, including a Restricted Stock Award, and a Restricted Stock Unit Award or Performance Unit Award that may be settled in shares of Common Stock, and excluding Options and SARs,
including any such Award that is a Spinoff Award or CSC Rollover Award. 
 (pp) “Stock-Based Award Limitations” has the
meaning set forth in Section 4.3. 
 (qq) “Subsidiary” means any corporation, partnership, association, joint stock
company, business trust, unincorporated organization or other entity that the Company controls directly, or indirectly through one or more intermediaries. 

Section 3 

Eligibility 
 All
Employees are eligible for Awards under this Plan. The Committee shall determine the type or types of Awards to be made under this Plan and shall designate from time to time the Employees who are to be granted Awards under this Plan. In addition,
holders of Spinoff Awards and CSC Rollover Awards shall be eligible to participate in the Plan. 
 Section 4 

Shares Subject to Awards 

4.1 Common Stock Available for Awards. Subject to the provisions of Section 18 hereof, there shall be available for
Awards under this Plan granted wholly or partly in Common Stock (including rights or Options that may be exercised for or settled in Common Stock) an aggregate of 34,200,000 shares of Common Stock (the “Maximum Share Limit”). Each Award
(including a Spinoff Award or CSC Rollover Award) granted under the Plan, regardless of type, shall reduce the Maximum Share Limit by one share for each share associated with the Award. 

Such shares shall be reserved from authorized but unissued shares, treasury shares and from shares which have been reacquired by the Company.
The Board and the appropriate officers of the Company shall from time to time take whatever actions are necessary to file any required documents with governmental authorities, stock exchanges and transaction reporting systems to ensure that shares
of Common Stock are available for issuance pursuant to Awards. 

 4.2 Share Counting. If an Award (including a Spinoff Award or CSC Rollover
Award) expires or is terminated, cancelled or forfeited, the shares of Common Stock associated with the expired, terminated, cancelled or forfeited Award shall again be available for Awards under this Plan. The Maximum Share Limit shall be increased
by one share of Common Stock for each share associated with such terminated, cancelled or forfeited Award. 
 In addition, the following
principles shall apply in determining the number of shares under any applicable limit within the Maximum Share Limit: 
 (a) Shares of Common
Stock that are tendered by a Participant or withheld as full or partial payment to satisfy minimum withholding taxes shall not become available again for issuance under this Plan; 

(b) Shares of Common Stock that are tendered by a Participant or withheld as full or partial payment for the Exercise Price of an Award shall
not become available again for issuance under this Plan; 
 (c) Shares of Common Stock reserved for issuance upon grant of an SAR, to the
extent the number of reserved shares of Common Stock exceeds the number of shares of Common Stock actually issued upon exercise or settlement of such SAR, shall not become available again for issuance under this Plan; 

(d) Awards that by their terms may only be settled in cash shall not reduce the Maximum Share Limit under this Plan; and 

(e) If cash is issued in lieu of shares of Common Stock pursuant to an Award, such shares not become available again for issuance under this
Plan. 
 4.3 Fiscal Year Limitations on Grants of Awards. The following limitations shall apply to any Awards made
hereunder, other than to Spinoff Awards and CSC Rollover Awards which shall be disregarded for purposes of applying the following limits: 

(a) No Employee may be granted during any Fiscal Year Awards consisting of Options or SARs that are exercisable for more than 1,000,000 shares
of Common Stock; 
 (b) No Employee may be granted during any Fiscal Year Stock Awards covering or relating to more than 1,000,000 shares of
Common Stock (the limitation set forth in this subsection (b), together with the limitation set forth in subsection (a), being hereinafter collectively referred to as the “Stock-Based Award Limitations”); and 

(c) No Employee may be granted during any Fiscal Year (1) Cash Awards or (2) Restricted Stock Unit Awards or Performance Unit Awards
that may be settled solely in cash having a value determined on the Grant Date in excess of $10,000,000. 
 Section 5 

Administration 

5.1 Authority of the Committee; Qualifications. Except as otherwise provided in this Plan with respect to actions or
determinations by the Board, this Plan shall be administered by the Committee, subject to the following: 
 (a) The members of the Committee
shall satisfy any independence requirements prescribed by any stock exchange on which the Company lists its Common Stock; 

 (b) Awards may be granted to individuals who are subject to Section 16(b) of the Exchange
Act only if the Committee is comprised solely of two or more “Non-Employee Directors” as defined in Securities and Exchange Commission Rule 16b-3 (as amended from time to time, and any successor rule, regulation or statute fulfilling the
same or similar function); and 
 (c) any Award intended to qualify for the “performance-based compensation” exception under Code
Section 162(m) shall be granted only if the Committee is comprised solely of two or more “outside directors” within the meaning of Code Section 162(m) and regulations pursuant thereto. 

5.2 Powers. Subject to the provisions hereof, the Committee shall have full and exclusive power and authority to
administer this Plan and to take all actions that are specifically contemplated hereby or are necessary or appropriate in connection with the administration hereof. The Committee shall also have full and exclusive power to interpret this Plan and to
adopt such rules, regulations and guidelines for carrying out this Plan as it may deem necessary or proper, all of which powers shall be exercised in the best interests of the Company and in keeping with the objectives of this Plan. 

Subject to Sections 5.4, 6.2 and 6.3 hereof, the Committee may, in its discretion, 

(a) Provide for the extension of the exercisability of an Award; 

(b) In the event of death, Disability, Change in Control, retirement, involuntary termination without cause or voluntary termination for good
reason, accelerate the vesting or exercisability of an Award, eliminate or make less restrictive any restrictions contained in an Award, waive any restriction or other provision of this Plan or an Award or otherwise amend or modify an Award in any
manner that is, in either case, (1) not adverse to the Participant to whom such Award was granted, (2) consented to by such Participant or (3) authorized by Section 18.3 hereof; provided, however, that no such action shall
permit the term of any Option or SAR to be greater than 10 years from its Grant Date; or 
 (c) Accelerate the vesting or exercisability of
an Award to the extent provided for in an Employee’s employment agreement with the Company or any Subsidiary that was effective prior the Effective Date. 

5.3 Final and Binding. The Committee may correct any defect or supply any omission or reconcile any inconsistency in this
Plan or in any Award Agreement in the manner and to the extent the Committee deems necessary or desirable to further this Plan’s purposes. Any decision of the Committee in the interpretation and administration of this Plan shall lie within its
sole and absolute discretion and shall be final, conclusive and binding on all parties concerned. 
 5.4 Prohibition on
Repricing of Awards. Subject to the provisions of Section 18 hereof, the Committee may not, without the approval of the Company’s stockholders, 
  

	 	(a)	reduce the Exercise Price of any outstanding Options or SARs; 

  

	 	(b)	take any action which would be treated as a “repricing” under generally accepted accounting principles; or 

  

	 	(c)	cancel any outstanding Option or SAR at a time when its Exercise Price exceeds the Fair Market Value of the stock underlying such Option or SAR in exchange for (i) another Option or SAR with an Exercise Price below
the Exercise Price of the then outstanding Option or SAR, (ii) any other type of Award, (iii) any other equity in the Company or (iv) cash. 

Nothing in this Section 5.4 shall be construed to apply to the issuance of Spinoff Awards and CSC Rollover Awards that are Options or
SARs. 

 5.5 Delegation of Authority. Subject to Nevada law, the Committee may
delegate any of its authority to the Board, to any other committee of the Board or to an Authorized Officer to grant Awards to Employees who are not subject to Section 16(b) of the Exchange Act; provided that the requirements of
Section 5.1 are met. Such delegation shall be made in writing specifically setting forth such delegated authority. As permitted by Nevada law, the Committee may also delegate to an Authorized Officer authority to execute on behalf of the
Company any Award Agreement. The Committee and the Board, as applicable, may engage or authorize the engagement of a third party administrator to carry out administrative functions under this Plan. 

Section 6 
 Awards

 6.1 Grants. The Committee, in its absolute discretion, may grant all Awards under this Plan from time to
time. 
 6.2 Award Agreements. Each Award shall be embodied in an Award Agreement, which shall contain such terms,
conditions and limitations as shall be determined by the Committee, in its sole discretion, and, if required by the Committee, shall be signed by the Participant to whom the Award is granted and by an Authorized Officer for and on behalf of the
Company. Awards may consist of those listed in Sections 7 - 13 and may be granted singly, in combination or in tandem. Awards may also be made in combination or in tandem with, in replacement of, or as alternatives to, grants or rights under this
Plan or any other plan of the Company or any of its Subsidiaries, including the plan of any acquired entity. Upon the termination of employment by a Participant who is an Employee, any unexercised, unvested or unpaid Awards shall be treated as set
forth in the applicable Award Agreement or in any other written agreement the Company has entered into with the Participant. 
 6.3
Vesting Limitations. Except as otherwise provided below, any Stock Award, Option or Stock Appreciation Right (other than any Spinoff Award or CSC Rollover Award which shall not be subject to the following limits) that 

(a) is not a Performance Award shall have a minimum Restriction Period of one year from the date of grant; or 

(b) is a Performance Award shall have a minimum performance period of one year from the date of grant; 

provided, however, that (1) the Committee may provide for earlier vesting (x) to the extent provided for in an Employee’s employment
agreement with the Company or any Subsidiary that was effective prior the Effective Date and (y) upon an Employee’s termination of employment by reason of death, Disability, Change in Control, retirement, involuntary termination without
cause or voluntary termination for good reason and (2) vesting of a Stock Award, Option or Stock Appreciation Right may occur incrementally over the one-year Restriction Period or one-year minimum performance period, as applicable. The
foregoing notwithstanding, 1,710,000 of the total number of shares of Common Stock available for issuance under this Plan may be granted without regard to any minimum Restriction Period or performance period, as applicable, described in this
Section 6.3. 
 6.4 Payment of Awards. Payment of Awards may be made in the form of cash or Common Stock, or a
combination thereof, and may include such restrictions as the Committee shall determine, including, but not limited to, in the case of Common Stock, restrictions on transfer and forfeiture provisions. For a Restricted Stock Award, the certificates
evidencing the shares of such Restricted Stock (to the extent that such shares are so evidenced) shall contain appropriate legends and restrictions that describe the terms and conditions of the restrictions applicable thereto. For a Restricted Stock
Unit Award that may be settled in shares of Common Stock, the shares of Common Stock that may be issued at the end of the Restriction Period shall be evidenced by book entry registration or in such other manner as the Committee may determine. 

 6.5 Dividends and Dividend Equivalents. Rights to dividends will be extended
to and made part of any Restricted Stock Award and Dividend Equivalents may, in the Committee’s discretion, be extended to and made part of any Restricted Stock Unit Award and Performance Unit Award, subject in each case to such terms,
conditions and restrictions as the Committee may establish; provided, however, that no such dividends or Dividend Equivalents shall be paid with respect to unvested Stock Awards, including Stock Awards subject to Performance Goals.
Dividends and/or Dividend Equivalents shall not be extended to any Options or SARs. 
 6.6 Spinoff and CSC Rollover Awards.
Notwithstanding anything in the Plan to the contrary, (i) Spinoff Awards shall be governed by the terms of the Spinoff Awards as in effect immediately prior to the Spinoff, and (ii) CSC Rollover Awards shall be governed by the terms of the
CSC Rollover Awards as in effect immediately prior to the CSC Merger, in each case except for any adjustment pursuant to the terms of the Employee Matters Agreement. 

Section 7 
 Options

 7.1 General. An Award may be in the form of an Option. An Option awarded pursuant to this Plan may consist of
either an Incentive Stock Option or a Nonqualified Stock Option. Subject to Section 18 hereof, the price at which shares of Common Stock may be purchased upon the exercise of an Option shall be not less than the Fair Market Value of the Common
Stock on the Grant Date. For avoidance of doubt, Spinoff Awards and CSC Rollover Awards that are Options may have an Exercise Price that is less than the Fair Market Value of the Common Stock on the date such Awards are converted and assumed by the
Company. The term of an Option shall not exceed 10 years from the Grant Date. Options may not include provisions that “reload” the Option upon exercise. Subject to the foregoing provisions, the terms, conditions and limitations applicable
to any Option, including, but not limited to, the term of any Option and the date or dates upon which the Option becomes vested and exercisable, shall be determined by the Committee and subject to the minimum Restriction Period and performance
period requirements and any other applicable requirements described in Section 6 hereof. 
 7.2 Option Exercise.
The Exercise Price shall be paid in full at the time of exercise in cash or, if permitted by the Committee and elected by the Participant, the Participant may pay the exercise price by means of the Company withholding shares of Common Stock
otherwise deliverable on exercise of the Award or tendering Common Stock valued at Fair Market Value on the date of exercise, or any combination thereof. The Committee, in its sole discretion, shall determine acceptable methods for Participants to
tender Common Stock. The Committee may provide for procedures to permit the exercise or purchase of such Awards by use of the proceeds to be received from the sale of Common Stock issuable pursuant to an Award (including cashless exercise procedures
approved by the Committee involving a broker or dealer approved by the Committee). The Committee may adopt additional rules and procedures regarding the exercise of Options from time to time, provided that such rules and procedures are not
inconsistent with the provisions of this Section. 
 Section 8 

Stock Appreciation Rights 

An Award may be in the form of an SAR. The Exercise Price for an SAR shall not be less than the Fair Market Value of the Common Stock on the
Grant Date. For avoidance of doubt, Spinoff Awards and CSC Rollover Awards that are SARs may have an Exercise Price that is less than the Fair Market Value of the Common Stock on the date such Awards are converted and assumed by the Company. The
holder of a tandem SAR may elect to exercise either the Option or the SAR, but not both. The exercise period for an SAR shall extend no more than 10 years after the Grant Date. SARs may not include provisions that

 
“reload” the SAR upon exercise. Subject to the foregoing provisions, the terms, conditions, and limitations applicable to any SAR, including, but not limited to, the term of any SAR and
the date or dates upon which the SAR becomes vested and exercisable, shall be determined by the Committee; provided, however, that a SAR that may be settled all or in part in shares of Common Stock shall be subject to the minimum Restriction
Period and performance period requirements and any other applicable requirements described in Section 6 hereof. 
 Section 9

 Restricted Stock Awards 

An Award may be in the form of a Restricted Stock Award. The terms, conditions and limitations applicable to any Restricted Stock Award,
including, but not limited to, vesting or other restrictions, shall be determined by the Committee and subject to the minimum Restriction Period and performance period requirements and any other applicable requirements described in Section 6
hereof. 
 Section 10 

Restricted Stock Unit Awards 

An Award may be in the form of a Restricted Stock Unit Award. The terms, conditions and limitations applicable to a Restricted Stock Unit
Award, including, but not limited to, the Restriction Period and the right to Dividend Equivalents, if any, shall be determined by the Committee. Subject to the terms of this Plan, the Committee, in its sole discretion, may settle Restricted Stock
Units in the form of cash or in shares of Common Stock (or in a combination thereof) equal to the value of the vested Restricted Stock Units; provided, however, that a Restricted Stock Unit Award that may be settled all or in part in shares
of Common Stock shall be subject to the minimum Restriction Period and performance period requirements and any other applicable requirements described in Section 6 hereof. 

Section 11 

Performance Unit Awards 

An Award may be in the form of a Performance Unit Award. Each Performance Unit shall have an initial value that is established by the
Committee on the Grant Date. Subject to the terms of this Plan, after the applicable performance period has ended, the Participant shall be entitled to receive settlement of the value and number of Performance Units earned by the Participant over
the performance period, to be determined as a function of the extent to which the corresponding performance goals have been achieved. The timing and the terms of settlement of earned Performance Units shall be as determined by the Committee and as
evidenced in an Award Agreement. Subject to the terms of this Plan, the Committee, in its sole discretion, may settle earned Performance Units in the form of cash or in shares of Common Stock (or in a combination thereof) equal to the value of the
earned Performance Units as soon as practicable after the end of the performance period and following the Committee’s determination of actual performance against the performance measures and related goals established by the Committee;
provided, however, that a Performance Unit Award that may be settled all or in part in shares of Common Stock shall be subject to the minimum Restriction Period and performance period requirements and any other applicable requirements described
in Section 6 hereof. 
 Section 12 

Cash Awards 
 An Award may
be in the form of a Cash Award. The terms, conditions and limitations applicable to a Cash Award, including, but not limited to, vesting or other restrictions, shall be determined by the Committee. 

 Section 13 

Performance Awards 

Without limiting the type or number of Awards that may be made under the other provisions of this Plan, an Award may be in the form of a
Performance Award. The terms, conditions and limitations applicable to an Award that is a Performance Award shall be determined by the Committee. 

13.1 Nonqualified Performance Awards. Performance Awards granted to Employees that are not intended to qualify as
qualified performance-based compensation under Code Section 162(m) shall be based on achievement of such Performance Goals and be subject to such terms, conditions and restrictions as the Committee or its delegate shall determine. 

13.2 Qualified Performance Awards. Performance Awards granted to Employees under this Plan that are intended to qualify
as qualified performance-based compensation under Code Section 162(m) shall be paid, vested or otherwise deliverable solely on account of the attainment of one or more pre-established, objective Performance Goals established by the Committee
prior to the earlier to occur of (i) 90 days after the commencement of the period of service to which the Performance Goal relates; and (ii) the lapse of 25% of the period of service (as scheduled in good faith at the time the goal is
established), and in any event while the outcome is substantially uncertain. 
 A Performance Goal is objective if a third party having
knowledge of the relevant facts could determine whether the goal is met. One or more of such goals may apply to the Employee, one or more business units, divisions or sectors of the Company, or the Company as a whole, and if so desired by the
Committee, by comparison with a peer group of companies including by direct reference to peers, by reference to an index, or by a similar mechanism. 

(a) Performance Goals. A Performance Goal shall include one or more of the following: 

 

	 	(i)	contract awards; 

  

	 	(ii)	backlog; 

  

	 	(iii)	market share; 

  

	 	(iv)	revenue; 

  

	 	(v)	sales; 

  

	 	(vi)	days’ sales outstanding; 

  

	 	(vii)	overhead; 

  

	 	(viii)	other expense management; 

  

	 	(ix)	operating income; 

  

	 	(x)	operating income margin; 

  

	 	(xi)	earnings (including net earnings, EBT, EBIT and EBITDA); 

  

	 	(xii)	earnings margin; 

	 	(xiii)	earnings per share; 

  

	 	(xiv)	cash flow; 

  

	 	(xv)	working capital; 

  

	 	(xvi)	book value per share; 

  

	 	(xvii)	improvement in capital structure; 

  

	 	(xviii)	credit rating; 

  

	 	(xix)	return on stockholders’ equity; 

  

	 	(xx)	return on investment; 

  

	 	(xxi)	cash flow return on investment; 

  

	 	(xxii)	return on assets; 

  

	 	(xxiii)	total stockholder return; 

  

	 	(xxiv)	economic profit; 

  

	 	(xxv)	stock price; 

  

	 	(xxvi)	total contract value; 

  

	 	(xxvii)	annual contract value; or 

  

	 	(xxviii)	client satisfaction. 

 Unless otherwise stated, a Performance Goal applicable to a Qualified
Performance Award need not be based upon an increase or positive result under a particular business criterion and could include, for example, maintaining the status quo or limiting economic losses (measured, in each case, by reference to specific
business criteria). 
 (b) Interpretation; Code Requirements. In interpreting Plan provisions applicable to Qualified
Performance Awards, it is the intent of this Plan to conform with the standards of Code Section 162(m) and Treasury Regulation § 1.162-27(e)(2)(i), and the Committee in establishing such goals and interpreting this Plan shall be guided by such
provisions. Prior to the payment of any compensation based on the achievement of Performance Goals applicable to Qualified Performance Awards, the Committee must certify in writing that applicable Performance Goals and any of the material terms
thereof were, in fact, satisfied. For this purpose, approved minutes of the Committee meeting in which the certification is made shall be treated as such written certification. Subject to the foregoing provisions, the terms, conditions and
limitations applicable to any Qualified Performance Awards made pursuant to this Plan shall be determined by the Committee. 

 13.3 Adjustment of Performance Awards. The Committee may provide in any such
Performance Award in writing in advance that the results may be adjusted to include or exclude particular factors, including but not limited to any of the following events that occur during a Performance Period: 

(a) asset write-downs; 
 (b)
litigation or claim judgments or settlements; 
 (c) the effect of changes in tax laws, accounting principles, or other laws or provisions
affecting reported results; 
 (d) any reorganization and restructuring programs; 

(e) extraordinary nonrecurring items as described in Accounting Principles Board Opinion No. 30 and/or in management’s discussion
and analysis of financial condition and results of operations appearing in the Company’s annual report to shareholders for the applicable Fiscal Year; 

(f) acquisitions or divestitures; 

(g) foreign exchange gains and losses; and 

(h) settlement of hedging activities. 

Only Awards that are not intended to qualify as Qualified Performance Awards may be adjusted upward in the discretion of the Committee. The
Committee may retain the discretion to adjust any Performance Awards downward, either on a formula or discretionary basis or any combination, as the Committee determines. 

Section 14 
 Change
of Control 
 Notwithstanding any other provision of this Plan to the contrary, unless (1) an Award Agreement shall specify
otherwise or (2) the agreement effectuating the Change in Control fails to provide for the assumption or substitution of Awards (in which case, the Committee may make any of the adjustments to outstanding Awards authorized by
Section 18.3), upon a Participant’s qualifying termination of employment within two (2) years after the date of the Change in Control: 

(a) all outstanding Options that have not vested in full on or prior thereto shall be fully vested and exercisable; 

(b) all restrictions applicable to outstanding Restricted Stock shall lapse in full; 

(c) all outstanding Restricted Stock Units that have not vested in full on or prior thereto shall be fully vested; 

(d) if the qualifying termination of employment occurs during the Performance Period, all Performance Awards shall be considered earned and
payable at their target value, prorated for the portion of the Performance Period that has elapsed and shall be immediately paid or settled; and 

 (e) if the qualifying termination of employment occurs after the Performance Period, all
Performance Awards shall, as soon as administratively practicable, be paid or settled based on the actual achievement of the applicable performance goals. 

For this purpose, a qualifying termination of employment shall be as determined by the Committee and set forth in the applicable Award
Agreement and may include, without limitation, involuntary termination without cause, death, disability or retirement. 
 Section 15

 Taxes 
 The
Company shall have the right to deduct applicable taxes from any Award payment and withhold, at the time of delivery or vesting of cash or shares of Common Stock under this Plan, an appropriate amount of cash or number of shares of Common Stock or a
combination thereof for payment of required withholding taxes or to take such other action as may be necessary in the opinion of the Company to satisfy all obligations for withholding of such taxes; provided, however, that the number of
shares of Common Stock withheld for payment of required withholding taxes must equal no more than the maximum individual statutory rate in the applicable jurisdiction. The Committee may also permit withholding to be satisfied by the transfer to the
Company of shares of Common Stock theretofore owned by the holder of the Award with respect to which withholding is required. If shares of Common Stock are used to satisfy tax withholding, such shares shall be valued based on the Fair Market Value
when the tax withholding is required to be made. 
 Section 16 

Amendment, Modification, Suspension or Termination 

The Board may amend, modify, suspend or terminate this Plan (and the Committee may amend an Award Agreement) for the purpose of meeting or
addressing any changes in legal requirements or for any other purpose permitted by law, except that no amendment or alteration that would adversely affect the rights of any Participant under any Award previously granted to such Participant shall be
made without the consent of such Participant. 
 No amendment or alteration shall be effective prior to its approval by the stockholders of
the Company to the extent stockholder approval is otherwise required by applicable legal requirements or the requirements of the securities exchange on which the Company’s stock is listed, including any amendment that: 

(a) expands the types of Awards available under this Plan; 

(b) materially increases the number of shares of Common Stock available for Awards under this Plan; 

(c) materially expands the classes of persons eligible for Awards under this Plan; 

(d) materially extends the term of this Plan; 

(e) materially changes the method of determining the Exercise Price of Options; 

(f) deletes or limits any provisions of this Plan that prohibit the repricing of Options or SARs; or 

(g) decreases any minimum vesting requirements for any Stock Award. 

 Section 17 

Assignability 
 Unless
otherwise determined by the Committee and expressly provided for in an Award Agreement, no Award or any other benefit under this Plan shall be assignable or otherwise transferable except (1) by will or the laws of descent and distribution or
(2) pursuant to a domestic relations order issued by a court of competent jurisdiction that is not contrary to the terms and conditions of this Plan or applicable Award and in a form acceptable to the Committee. The Committee may prescribe and
include in applicable Award Agreements other restrictions on transfer. Any attempted assignment of an Award or any other benefit under this Plan in violation of this Section 17 shall be null and void. Notwithstanding the foregoing, no Award may
be transferred for value or consideration. 
 Section 18 

Adjustments 
 18.1
Outstanding Awards. The existence of outstanding Awards shall not affect in any manner the right or power of the Company or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other
changes in the capital stock of the Company or its business or any merger or consolidation of the Company, or any issue of bonds, debentures, preferred or prior preference stock (whether or not such issue is prior to, on a parity with or junior to
the Common Stock) or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding of any kind, whether or not of a character similar to that of the acts
or proceedings enumerated above. 
 18.2 Plan Adjustments 

(a) Subdivision or Consolidation. In the event of any subdivision or consolidation of outstanding shares of Common Stock,
declaration of a dividend payable in shares of Common Stock or other stock split, then: 
 (i) the number of shares of Common Stock
reserved under this Plan and the number of shares of Common Stock available for issuance pursuant to specific types of Awards as described in Section 4; 

(ii) the number of shares of Common Stock covered by outstanding Awards; 

(iii) the exercise price or other price in respect of such Awards; 

(iv) the appropriate Fair Market Value and other price determinations for such Awards; and 

(v) any other limitations contained within this Plan shall each be proportionately adjusted by the Committee as appropriate to reflect
such transaction. 
 (b) Recapitalizations, Reorganizations, etc. In the event of any other recapitalization or capital
reorganization of the Company, any consolidation or merger of the Company with another corporation or entity, the adoption by the Company of any plan of exchange affecting the Common Stock or any distribution to holders of Common Stock of securities
or property (other than normal cash dividends or dividends payable in Common Stock), the Committee shall make appropriate adjustments to: 

(i) the number of shares of Common Stock reserved under this Plan and the number of shares of Common Stock available for issuance pursuant
to specific types of Awards as described in Section 4; 

 (ii) the number of shares of Common Stock covered by outstanding Awards; 

(iii) the exercise price or other price in respect of such Awards; 

(iv) the appropriate Fair Market Value and other price determinations for such Awards; 

(v) the Stock-Based Award Limitations; and 

(vi) any other limitations contained within this Plan; 

provided that such adjustments shall only be such as are necessary to maintain the proportionate interest of the holders of the Awards and preserve, without
exceeding, the value of such Awards. 
 18.3 Award Adjustments. In the event of a corporate merger, consolidation,
acquisition of property or stock, separation, split-up, spin-off, split-off, initial public offering of the common equity of a Subsidiary, reorganization or liquidation, or other Change in Control in which the Company is not the surviving publicly
traded entity, the Committee may make such adjustments to Awards or other provisions for the disposition of Awards as it deems equitable, and shall be authorized, in its discretion, to: 

(a) provide for the substitution of a new Award or other arrangement (which, if applicable, may be exercisable for such property or stock
as the Committee determines, including stock of another company) for an Award or the assumption of the Award (and for awards not granted under this Plan), regardless of whether in a transaction to which Code Section 424(a) applies; 

(b) provide, prior to the transaction, for the acceleration of the vesting and exercisability of, or lapse of restrictions with respect
to, the Award and, if the transaction is a cash merger, provide for the termination of any portion of the Award that remains unexercised at the time of such transaction; 

(c) provide for the acceleration of the vesting and exercisability of an Award and the cancellation thereof in exchange for such payment
as the Committee, in its sole discretion, determines is a reasonable approximation of the value thereof; 
 (d) cancel any Awards and
direct the Company to deliver to the Participants who are the holders of such Awards cash in an amount that the Committee shall determine in its sole discretion is equal to the Fair Market Value of such Awards as of the date of such event, which, in
the case of any Option, shall be the amount equal to the excess of the Fair Market Value of a share of Common Stock as of such date over the per-share exercise price for such Option (for the avoidance of doubt, if such exercise price is less than
such Fair Market Value, the Option may be canceled for no consideration or for such consideration that the Committee shall determine or as provided by the agreement effectuating an event described in this Section 18.3); or 

(e) cancel Awards that are Options and give the Participants who are the holders of such Awards notice and opportunity to exercise prior
to such cancellation; 
 provided, however, that the vesting of any time-based awards shall be accelerated upon a Change in Control only if the awards are
not assumed by or substituted for awards of the acquiring entity, and the acceleration of vesting of any performance-based awards upon a Change in Control shall be adjusted for actual performance and/or the fractional performance period through the
date of the Change of Control. 

 18.4 Compliance with Code Section 409A. No adjustment or substitution
pursuant to this Section 18 shall be made in a manner that results in noncompliance with the requirements of Code Section 409A, to the extent applicable. 

Section 19 

Restrictions 
 No Common
Stock or other form of payment shall be issued with respect to any Award unless the Company shall be satisfied based on the advice of its counsel that such issuance will be in compliance with applicable federal and state securities laws.
Certificates evidencing shares of Common Stock delivered under this Plan (to the extent that such shares are so evidenced) may be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the rules,
regulations and other requirements of the Securities and Exchange Commission, any securities exchange or transaction reporting system upon which the Common Stock is then listed or to which it is admitted for quotation and any applicable federal or
state securities law. The Committee may cause a legend or legends to be placed upon such certificates (if any) to make appropriate reference to such restrictions. 

Section 20 

Unfunded Plan 
 This Plan
is unfunded. Although bookkeeping accounts may be established with respect to Participants who are entitled to cash, Common Stock or rights thereto under this Plan, any such accounts shall be used merely as a bookkeeping convenience. The Company
shall not be required to segregate any assets that may at any time be represented by cash, Common Stock or rights thereto, nor shall this Plan be construed as providing for such segregation, nor shall the Company, the Board or the Committee be
deemed to be a trustee of any cash, Common Stock or rights thereto to be granted under this Plan. Any liability or obligation of the Company to any Participant with respect to an Award of cash, Common Stock or rights thereto under this Plan shall be
based solely upon any contractual obligations that may be created by this Plan and any Award Agreement, and no such liability or obligation of the Company shall be deemed to be secured by any pledge or other encumbrance on any property of the
Company. None of the Company, the Board or the Committee shall be required to give any security or bond for the performance of any obligation that may be created by this Plan. With respect to this Plan and any Awards granted hereunder, Participants
are general and unsecured creditors of the Company and have no rights or claims except as otherwise provided in this Plan or any applicable Award Agreement. 

Section 21 
 Code
Section 409A 
 21.1 Awards. Awards made under this Plan are intended to comply with or be exempt from Code
Section 409A, and ambiguous provisions hereof, if any, shall be construed and interpreted in a manner consistent with such intent. No payment, benefit or consideration shall be substituted for an Award if such action would result in the
imposition of taxes under Code Section 409A. Notwithstanding anything in this Plan to the contrary, if any Plan provision or Award under this Plan would result in the imposition of an additional tax under Code Section 409A, that Plan
provision or Award shall be reformed, to the extent permissible under Code Section 409A, to avoid imposition of the additional tax, and no such action shall be deemed to adversely affect the Participant’s rights to an Award. 

21.2 Settlement Period. Unless the Committee provides otherwise in an Award Agreement, each Restricted Stock Unit Award,
Performance Unit Award or Cash Award (or portion thereof if the Award is subject to a vesting schedule) shall be settled no later than the 15th day of the third month after the end of the first calendar year in which the Award (or such portion
thereof) is no longer subject to a “substantial risk of forfeiture” within the meaning of Code Section 409A. If the Committee determines that a Restricted Stock Unit Award, Performance Unit Award or Cash Award is intended to be
subject to Code Section 409A, the applicable Award Agreement shall include terms that are designed to satisfy the requirements of Code Section 409A. 

 21.3 Specified Employees. If the Participant is identified by the Company as
a “specified employee” within the meaning of Code Section 409A(a)(2)(B)(i) on the date on which the Participant has a “separation from service” (other than due to death) within the meaning of Treasury Regulation §
1.409A-1(h), any Award payable or settled on account of a separation from service that is deferred compensation subject to Code Section 409A shall be paid or settled on the earliest of (i) the first business day following the expiration of
six months from the Participant’s separation from service, (ii) the date of the Participant’s death, or (iii) such earlier date as complies with the requirements of Code Section 409A. 

Section 22 
 Award
Termination, Forfeiture and Disgorgement 
 The Committee shall have full power and authority to determine whether, to what extent and
under what circumstances any Award shall be terminated or forfeited, or the Participant should be required to disgorge to the Company any gains attributable to the Award. Such circumstances may include, without limitation, the following actions by a
Participant: 
 (a) competing with the Company or participating in any enterprise that competes with the Company; 

(b) using or disclosing, other than as expressly authorized by the Company or a Subsidiary, any confidential business information or trade
secrets that the Participant obtains during the course of his or her employment with the Company or any Subsidiary; and 
 (c) after the
Participant is no longer employed by the Company or any Subsidiary: 
 (i) soliciting, with respect to any of the services or products that
the Company or any Subsidiary then provides to customers, any person or entity whom the Participant knows to be a customer of the Company or any Subsidiary, or whose business the Participant solicited on behalf of the Company or any Subsidiary while
employed by it, 
 (ii) soliciting or hiring any person who is then an Employee, or 

(iii) taking any action that, in the judgment of the Committee, is not in the best interests of the Company. 

Additionally, any Awards granted pursuant to this Plan shall be subject to any recoupment or clawback policy that is adopted by, or applicable
to, the Company. 
 Section 23 

Awards to Non-U.S. Employees 

Awards may be granted to Employees who are foreign nationals or employed outside the United States, or both, on such terms and conditions
different from those applicable to Awards to Employees employed in the United States as may, in the judgment of the Committee, be necessary or desirable in order to recognize differences in local law or tax policy. The Committee also may impose
conditions on the exercise or vesting of Awards in order to minimize the Company’s obligation with respect to tax equalization for Employees on assignments outside their home country. 

 Section 24 

Governing Law 
 This Plan
and all determinations made and actions taken pursuant hereto, to the extent not otherwise governed by mandatory provisions of the Code or the securities laws of the United States, shall be governed by and construed in accordance with the laws of
the State of Nevada. 
 Section 25 

Right to Continued Service or Employment 

Nothing in this Plan or an Award Agreement shall interfere with or limit in any way the right of the Company or any of its Subsidiaries to
terminate any Participant’s employment or other service relationship with the Company or its Subsidiaries at any time, nor confer upon any Participant any right to continue in the capacity in which he is employed or otherwise serves the Company
or its Subsidiaries. 
 Section 26 

Term 
 This Plan shall be
effective as of the Effective Date. This Plan shall continue in effect for a term of 10 years commencing on the Effective Date, unless earlier terminated by action of the Board. 

Section 27 
 Usage

 Words used in this Plan in the singular shall include the plural and in the plural the singular, and the gender of words used shall
be construed to include whichever may be appropriate under any particular circumstances of the masculine, feminine or neuter genders. 

Section 28 

Headings 
 The headings in
this Plan are inserted for convenience of reference only and shall not affect the meaning or interpretation of this Plan.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00269-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00269-of-00352.parquet"}]]