Document:

ex10-12.htm

Exhibit 10.12

 

EXECUTIVE AGREEMENT

 

This Executive Agreement (“Agreement”) between Civeo Corporation, a Delaware corporation (the “Company”), and Allan D. Schoening (the “Executive”) is made and entered into effective as of the date of December 15, 2014 (the “Effective Date”).

 

WHEREAS, Executive is a key executive of the Company or a subsidiary; and

 

WHEREAS, the Company believes it to be in the best interests of its stockholders to attract, retain and motivate key executives and ensure continuity of management; and

 

WHEREAS, it is in the best interest of the Company and its stockholders if the key executives can approach material business development decisions objectively and without concern for their personal situation; and

 

WHEREAS, the Company recognizes that the possibility of a Change of Control (as defined below) of the Company may result in the departure of key executives to the detriment of the Company and its stockholders; and

 

WHEREAS, the Board of Directors of the Company (the “Board”) has authorized this Agreement and certain similar agreements in order to retain and motivate key management and to ensure continuity of key management;

 

THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and Executive agree as follows:

 

	
1.
	
Term of Agreement

 

	 	
(A)
	
This Agreement shall commence on the Effective Date and, subject to the provisions for earlier termination in this Agreement, shall continue in effect through the third anniversary of the Effective Date; provided, however, commencing on the Effective Date and on each day thereafter, the term of this Agreement shall automatically be extended for one additional day unless the Board shall give written notice to Executive that the term shall cease to be so extended in which event the Agreement shall terminate on the third anniversary of the date such notice is given.

 

	 	
(B)
	
Notwithstanding anything in this Agreement to the contrary, this Agreement, if in effect on the date of a Change of Control, shall automatically be extended for the 24-month period following the Change of Control.

 

	 	
(C)
	
Termination of this Agreement shall not alter or impair any rights of Executive arising hereunder on or before such termination.

 

 

 

1

 

 

	
2.
	
Certain Definitions 

 

	 	
(A)
	
“Cause” shall mean:

 

(i)     Executive’s conviction of (or plea of nolo contendere to) a felony, dishonesty or a breach of trust;

 

(ii)     Executive’s commission of any act of theft, fraud, embezzlement or misappropriation regardless of whether a criminal conviction is obtained;

 

(iii)     Executive’s continued failure to devote substantially all of his business time to the Company’s business affairs (excluding failures due to illness, incapacity, vacations, incidental civic activities and incidental personal time) which failure is not remedied within a reasonable time after written demand is delivered by the Company, which demand identifies the manner in which the Company believes that Executive has failed to devote substantially all of his business time to the Company’s business affairs; or

 

(iv)     Executive’s unauthorized disclosure of confidential information of the Company.

 

	 	
(B)
	
“Change of Control” shall mean any of the following:

 

(i)     any “person” (as such term is used in Section 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), (other than a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any affiliate, or any corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company), acquires “beneficial ownership” (within the meaning of Rule 13d-3 under the Exchange Act) of securities of the Company representing 35% or more of the combined voting power of the Company’s then outstanding securities; provided, however, that if the Company engages in a merger or consolidation in which the Company or surviving entity in such merger or consolidation becomes a subsidiary of another entity, then references to the Company’s then outstanding securities shall be deemed to refer to the outstanding securities of such parent entity;

 

(ii)     a change in the composition of the Board, as a result of which fewer than a majority of the directors are Incumbent Directors. “Incumbent Directors” shall mean directors who either (i) are directors of the Company as of the Effective Date, or (ii) are elected, or nominated for election, to the Board with the affirmative votes of at least two-thirds of the Incumbent Directors at the time of such election or nomination, but Incumbent Director shall not include an individual whose election or nomination occurs as a result of either (1) an actual or threatened election contest (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or (2) an actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Board;

 

 

 

2

 

 

(iii)     the consummation of a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity (or if the surviving entity is or shall become a subsidiary of another entity, then such parent entity)) more than 50% of the combined voting power of the voting securities of the Company (or such surviving entity or parent entity, as the case may be) outstanding immediately after such merger or consolidation;

 

(iv)     the stockholders of the Company approve a plan of complete liquidation of the Company; or

 

(v)     the sale or disposition (other than a pledge or similar encumbrance) by the Company of all or substantially all of the assets of the Company other than to a subsidiary or subsidiaries of the Company.

 

For the avoidance of doubt, in no event will a redomicile transaction or redomestication of the Company’s place of incorporation to Canada be deemed to constitute a “Change of Control” for purposes of this Agreement.

 

	 	
(C)
	
“Date of Termination” shall mean the date the Notice of Termination is given unless such Notice of Termination is by Executive in which event the Date of Termination shall not be less than 30 days following the date the Notice of Termination is given. Further, a Notice of Termination given by Executive due to a Good Reason event that is corrected by the Company before the Date of Termination shall be void.

 

	 	
(D)
	
“Good Reason” shall mean:

 

(i)     a material reduction in Executive’s authority, duties or responsibilities from those in effect immediately prior to the Change of Control or the assignment to Executive duties or responsibilities materially inconsistent with those of Executive in effect immediately prior to the Change of Control;

 

(ii)     a material reduction of Executive’s compensation and benefits, including, without limitation, annual base salary, annual bonus, and equity incentive opportunities from those in effect immediately prior to the Change of Control;

 

(iii)     the Company fails to obtain a written agreement from any successor or assigns of the Company to assume and perform this Agreement as provided in Section 8 hereof; or

 

(iv)     the Company requires Executive, without Executive’s consent, to be based at any office located more than 50 miles from the Company’s offices to which Executive was based immediately prior to the Change of Control, except for travel reasonably required in the performance of Executive’s duties.

 

 

 

3

 

 

Notwithstanding the above however, Good Reason shall not exist with respect to a matter unless all of the following conditions are satisfied: (i) the condition giving rise to Executive’s termination of employment must have arisen without Executive’s consent; and (ii) (1) Executive must provide written notice to the Company of such condition in accordance with Section 10 within 30 days of the initial existence of the condition, (2) the condition specified in such notice must remain uncorrected for 30 days after receipt of such notice by the Company and (3) the date of Executive’s termination of employment must occur within 30 days after the expiration of the cure period set forth in (2) above.

 

For purposes of this Agreement, “Good Reason” shall be construed to refer to Executive’s positions, duties, and responsibilities in the position or positions in which Executive serves immediately before the Change of Control, but shall not include titles or positions with subsidiaries and affiliates of the Company that are held primarily for administrative convenience.

 

For the avoidance of doubt, in no event will a redomicile transaction or redomestication of the Company’s place of incorporation to Canada be deemed to constitute “Good Reason” for purposes of this Agreement.

 

	 	
(E)
	
“Notice of Termination” shall mean a written notice delivered to the other party indicating the specific termination provision in this Agreement relied upon for termination of Executive’s employment and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive’s employment under the provision so indicated. For this purpose, termination of Executive’s employment shall be interpreted consistent with the meaning of the term “Separation from Service” in Section 409A(a)(2)(A)(i) of the Internal Revenue Code of 1986, as amended (the “Code”) and applicable regulation authority.

 

	 	
(F)
	
“Protected Period” shall mean the 18-month period beginning on the effective date of a Change of Control.

 

	 	
(G)
	
“Target AICP” shall mean the targeted value of Executive’s annual incentive compensation plan bonus for the year in which the Date of Termination occurs or the fiscal year immediately preceding the Change of Control, whichever is a greater amount.

 

	 	
(H)
	
“Termination Base Salary” shall mean Executive’s base salary at the rate in effect at the time the Notice of Termination is given or, if a greater amount, Executive’s base salary at the rate in effect immediately prior to the Change of Control.

 

	
3.
	
No Employment Agreement.

 

	 	
(A)
	
This Agreement shall be considered solely as a “severance agreement” obligating the Company to pay Executive certain amounts of compensation and to provide certain benefits in the event and only in the event of Executive’s termination of employment for the specified reasons and at the times specified herein. The parties agree that this Agreement shall not be considered an employment agreement and that Executive is an “at will” employee of the Company.

 

 

 

4

 

 

	 	
(B)
	
Unless otherwise agreed to in writing by the Company and Executive prior to the termination of Executive’s employment, any termination of Executive’s employment shall constitute an automatic resignation of Executive as an officer of the Company and each affiliate of the Company, and an automatic resignation of Executive from the Board and the board of directors of the Company (if applicable) and from the board of directors or similar governing body of any affiliate of the Company and from the board of directors or similar governing body of any corporation, limited liability entity or other entity in which the Company or any affiliate holds an equity interest and with respect to which board or similar governing body Executive serves as the Company’s or such affiliate’s designee or other representative.

 

	
4.
	
Regular Severance Benefits.

 

Subject to Section 13, if the Company terminates Executive’s employment other than for Cause and not during the Protected Period, Executive shall receive the following compensation and benefits from the Company:

 

	 	
(A)
	
Within 15 days of the expiration of the Release Period (as defined in Section 13), the Company shall pay to Executive in a lump sum, in cash, an amount equal to one times the sum of Executive’s (i) Termination Base Salary and (ii) Target AICP. 

 

	 	
(B)
	
Notwithstanding anything in any Company stock plan or grant agreement to the contrary, all restricted shares, restricted stock units, phantom stock units or any other equity based award of Executive shall, to the extent such awards would have vested in accordance with their terms had Executive remained employed for the 12-month period following the Date of Termination, become vested and restrictions thereon shall lapse as of the expiration of the Release Period, and the Company shall promptly deliver such shares to Executive.

 

	 	
(C)
	
For the 12-month period following the date of termination of Executive’s employment with the Company, the Company shall continue to provide Executive and Executive’s eligible family members with medical and dental health benefits at least equal to those which would have been provided to Executive if Executive’s employment had not been terminated. The medical and dental health benefits coverage shall be provided at full cost to the Executive during the applicable period. The Company shall also provide Executive with a lump sum payment within 15 days following the expiration of each of the four, sixth-month periods following termination of Executive’s employment with the Company in such amount that, after all taxes on that amount, shall be equal to the full cost, reduced by the cost sharing applicable to active employees, of providing Executive and Executive’s eligible family members with medical and dental health benefits coverage during each such preceding six-month period. Notwithstanding the foregoing, such benefits coverage shall not continue beyond the first sixty days following termination of Executive’s employment with the Company, and the lump sum payments shall not be paid, unless Executive complies with the requirements of Section 13 hereof by executing a general release. Notwithstanding the foregoing, if Executive becomes eligible to receive medical and dental benefits under another employer’s plans during the 12-month period following the date of termination of Executive’s employment with the Company, the Company’s obligations under this Section 4C shall be reduced to the extent comparable benefits are actually received by Executive during such period, and any such benefits actually received by Executive shall be promptly reported by Executive to the Company. In the event Executive is ineligible under the terms of the Company’s health and other welfare benefit plans or programs to continue to be so covered during the 12-month period following the date of termination of Executive’s employment with the Company, the Company shall provide Executive with substantially equivalent coverage through other sources or will provide Executive with a lump sum payment within 15 days following the expiration of each of the four, six-month periods following termination of Executive’s employment with the Company in such amount that, after all taxes on that amount, shall be equal to the cost of providing Executive and Executive’s eligible family members with the medical and dental health benefits coverage during each such preceding six-month period. Any lump sum shall be determined on a present value basis using the interest rate provided in Section 1274(b)(2)(B) of the Code on the Date of Termination.

 

 

 

5

 

 

	
5.
	
Change of Control Severance Benefits

 

Subject to Section 13, if either (a) Executive terminates his employment during the Protected Period for a Good Reason event or (b) the Company terminates Executive’s employment during the Protected Period other than for Cause, Executive shall receive, the following compensation and benefits from the Company:

 

	 	
(A)
	
Within 15 days of the expiration of the Release Period, the Company shall pay to Executive in a lump sum, in cash, an amount equal to two times the sum of Executive’s (i) Termination Base Salary and (ii) Target AICP.

 

	 	
(B)
	
Notwithstanding anything in any Company stock plan or grant agreement to the contrary, (i) all restricted shares, restricted stock units, phantom stock units and any other equity based award of Executive shall become 100% vested and all restrictions thereon shall lapse as of the expiration of the Release Period, and the Company shall promptly deliver such shares (or cash in lieu of shares in the case of phantom stock unit awards) to Executive and (ii) each then outstanding stock option of Executive shall become 100% exercisable as of the expiration of the Release Period and shall remain exercisable for 30 days following the lapse of the Release Period.

 

	 	
(C)
	
Executive shall be fully vested in Executive’s accrued benefits under all qualified pension, nonqualified pension, profit sharing, 401(k), deferred compensation and supplemental plans maintained by the Company for Executive’s benefit as of the lapse of such sixty-day period except to that the extent the acceleration of vesting of such benefits would violate any applicable law or require the Company to accelerate the vesting of the accrued benefits of all participants in such plan or plans, in which event the Company shall pay Executive a lump sum amount, in cash, within 15 days of the lapse of such sixty-day period, equal to the present value of such unvested accrued benefits that cannot become vested under the plan for the reasons provided above.

 

 

 

6

 

 

	 	
(D)
	
For the 24-month period following the date of termination of Executive’s employment with the Company, the Company shall continue to provide Executive and Executive’s eligible family members with medical and dental health benefits at least equal to those which would have been provided to Executive if Executive’s employment had not been terminated. The medical and dental health benefits coverage shall be provided at full cost to the Executive during the applicable period. The Company shall also provide Executive with a lump sum payment within 15 days following the expiration of each of the six, sixth-month periods following termination of Executive’s employment with the Company in such amount that, after all taxes on that amount, shall be equal to the full cost, reduced by the cost sharing applicable to active employees, of providing Executive and Executive’s eligible family members with medical and dental health benefits coverage during each such preceding six-month period. Notwithstanding the foregoing, such benefits coverage shall not continue beyond the first sixty days following termination of Executive’s employment with the Company, and the lump sum payments shall not be paid, unless Executive complies with the requirements of Section 13 hereof by executing a general release. Notwithstanding the foregoing, if Executive becomes eligible to receive medical, dental and disability benefits under another employer’s plans during the 24-month period following the date of termination of Executive’s employment with the Company, the Company’s obligations under this Section 5D shall be reduced to the extent comparable benefits are actually received by Executive during such period, and any such benefits actually received by Executive shall be promptly reported by Executive to the Company. In the event Executive is ineligible under the terms of the Company’s health and other welfare benefit plans or programs to continue to be so covered during the 24-month period following the date of termination of Executive’s employment with the Company, the Company shall provide Executive with substantially equivalent coverage through other sources or will provide Executive with a lump sum payment within 15 days following the expiration of each of the six, six-month periods following termination of Executive’s employment with the Company in such amount that, after all taxes on that amount, shall be equal to the cost of providing Executive and Executive’s eligible family members with medical and dental health benefits coverage during each such preceding six-month period. Any lump sum shall be determined on a present value basis using the interest rate provided in Section 1274(b)(2)(B) of the Code on the Date of Termination.

 

 

 

7

 

 

	 	
(E)
	
For the period beginning on the date of termination of Executive’s employment with the Company and ending on December 31 of the second calendar year following the calendar year which includes the date of termination, or until Executive accepts other employment, including as an independent contractor, with a new employer, Executive shall be entitled to receive outplacement services, payable by the Company, with an aggregate cost not to exceed 15% of Executive’s Termination Base Salary, with an executive outplacement service firm reasonably acceptable to the Company and Executive.

 

	
6.
	
Parachute Taxes.

 

Notwithstanding anything to the contrary in this Agreement, if Executive is a “disqualified individual” (as defined in Section 280G(c) of the Code), and the payments and benefits provided for under this Agreement, together with any other payments and benefits which Executive has the right to receive from the Company or any of its affiliates, would constitute a “parachute payment” (as defined in Section 280G(b)(2) of the Code), then the payments and benefits provided for under this Agreement shall be either (a) reduced (but not below zero) so that the present value of such total amounts and benefits received by Executive from the Company and its affiliates will be one dollar ($1.00) less than three times Executive’s “base amount”(as defined in Section 280G(b)(3) of the Code) and so that no portion of such amounts and benefits received by Executive shall be subject to the excise tax imposed by Section 4999 of the Code or (b) paid in full, whichever produces the better net after-tax position to Executive (taking into account any applicable excise tax under Section 4999 of the Code and any other applicable taxes). The reduction of payments and benefits hereunder, if applicable, shall be made by reducing, first, payments or benefits to be paid in cash hereunder in the order in which such payment or benefit would be paid or provided (beginning with such payment or benefit that would be made last in time and continuing, to the extent necessary, through to such payment or benefit that would be made first in time) and, then, reducing any benefit to be provided in kind hereunder in a similar order. The determination as to whether any such reduction in the amount of the payments and benefits provided hereunder is necessary shall be made by the Company. If a reduced payment or benefit is made or provided and through error or otherwise that payment or benefit, when aggregated with other payments and benefits from the Company (or its affiliates) used in determining if a parachute payment exists, exceeds one dollar ($1.00) less than three times Executive’s base amount, then Executive shall immediately repay such excess to the Company upon notification that an overpayment has been made.

 

	
7.
	
Mitigation.

 

Executive shall not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment or otherwise nor, except as provided in Section 4C and Section 5D shall the amount of any payment or benefit provided for in this Agreement be reduced by any compensation earned or benefit received by Executive as the result of employment by another employer or self-employment, by retirement benefits, by offset against any amount claimed to be owed by Executive to the Company or otherwise. Executive shall not be entitled to receive any severance payments or benefits pursuant to any Company severance plan or program for employees in general.

 

 

 

8

 

 

	
8.
	
Successor Agreement.

 

The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no succession had taken place. Failure of the successor to so assume shall constitute a breach of this Agreement and entitle Executive to the benefits hereunder as if triggered by a termination by the Company other than for Cause.

 

	
9.
	
Indemnity.

 

In any situation where under applicable law the Company has the power to indemnify, advance expenses to and defend Executive in respect of any judgments, fines, settlements, loss, cost or expense (including attorneys fees) of any nature related to or arising out of Executive’s activities as an agent, employee, officer or director of the Company or in any other capacity on behalf of or at the request of the Company, then the Company shall promptly on written request, indemnify Executive, advance expenses (including attorney’s fees) to Executive and defend Executive to the fullest extent permitted by applicable law, including but not limited to making such findings and determinations and taking any and all such actions as the Company may, under applicable law, be permitted to have the discretion to take so as to effectuate such indemnification, advancement or defense. Such agreement by the Company shall not be deemed to impair any other obligation of the Company respecting Executive’s indemnification or defense otherwise arising out of this or any other agreement or promise of the Company under any statute.

 

	
10.
	
Code Section 409A Restrictions. 

 

	 	
(A)
	
Each payment under this Agreement, including each payment in a series of installment payments, is intended to be a separate payment for purposes of Treas. Reg. § 1.409A-2(b), and is intended to be: (i) exempt from Section 409A of the Code, the regulations and other binding guidance promulgated thereunder (“Section 409A”), including, but not limited to, by compliance with the short-term deferral exemption as specified in Treas. Reg. § 1.409A-1(b)(4) and the involuntary separation pay exception within the meaning of Treas. Reg. § 1.409A-1(b)(9)(iii), or (ii) in compliance with Section 409A, including, but not limited to, being paid pursuant to a fixed schedule or specified date pursuant to Treas. Reg. § 1.409A-3(a) and the provisions of this Agreement will be administered, interpreted and construed accordingly.

 

	 	
(B)
	
Notwithstanding anything in this Agreement to the contrary, if payment of any amounts under this Agreement would be subject to additional taxes and interest under Section 409A because the timing of such payments is not delayed as provided in Section 409A(a)(2)(B)(i) of the Code and the regulations thereunder, then any such payments that Executive would otherwise be entitled to during the first six months following the date of the Executive’s termination of employment with the Company shall be accumulated and paid on the first business day that is six months after the date of the Executive’s termination of employment with the Company, or such earlier date upon which such payments can be paid under Section 409A without being subject to such additional taxes and interest. If this Section becomes applicable such that any payments are delayed, any payments that are so delayed shall accrue interest on a non-compounded basis, from the date they would otherwise have been made absent such delay to the actual date of payment, at the prime or base rate of interest announced by Wells Fargo Bank (or any successor thereto) at its principal office in Houston, Texas on the date of such termination, which shall be paid in a lump sum on the actual date of payment of the delayed payments.

 

 

 

9

 

 

	 	
(C)
	
Notwithstanding anything in this Agreement to the contrary, if benefits to be made available under this Agreement would be subject to additional taxes and interest under Section 409A because the provision of such benefits is not delayed for the first six months following the date of the Executive’s termination of employment with the Company as provided in Section 409A(a)(2)(B)(i) of the Code and the regulations thereunder, such benefits shall not be delayed; however, the Executive shall pay to the Company, at the time or times such benefits are provided, the fair market value of such benefits, and the Company shall reimburse the Executive for any such payments on the fifth business day following the expiration of such six-month period.

 

	 	
(D)
	
Executive hereby agrees to be bound by the Company’s determination of its “specified employees” (as such term is defined in Section 409A) in accordance with any of the methods permitted under the regulations issued under Section 409A.

 

	
11.
	
Notice.

 

For the purpose of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and delivered by United States certified or registered mail (return receipt requested, postage prepaid) or by courier guaranteeing overnight delivery or by hand delivery (with signed receipt required), addressed to the respective addresses set forth below, and such notice or communication shall be deemed to have been duly given two days after deposit in the mail, one day after deposit with such overnight carrier or upon delivery with hand delivery. The addresses set forth below may be changed by a writing in accordance herewith.

 

	
Company:
Civeo Corporation
333 Clay Street, Suite 4980
Houston, Texas 77002
Attn: Chairman of the Board
	
Executive:
Allan Schoening
_____________________
_____________________

	
12.
	
Arbitration.

 

The parties agree to resolve any claim or controversy arising out of or relating to this Agreement, including but not limited to the consequences of any termination of employment of Executive, by binding arbitration under the Federal Arbitration Act before one arbitrator in Houston, Texas, administered by the American Arbitration Association under its Commercial Arbitration Rules, and judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. The fees and expenses of the arbitrator shall be borne solely by the non-prevailing party or, in the event there is no clear prevailing party, as the arbitrator deems appropriate. Except as provided above, each party shall pay its own costs and expenses (including, without limitation, attorneys’ fees) relating to any mediation/arbitration proceeding conducted under this Section 12.

 

 

 

10

 

 

	
13.
	
Waiver and Release.

 

As a condition to the receipt of any payment or benefit as a severance payment under Section 4 or 5 of this Agreement, Executive must first execute and deliver to the Company a binding general release, as prepared by the Company, that releases the Company, its officers, directors, employees, agents, subsidiaries and affiliates from any and all claims and from any and all causes of action of any kind or character that Executive may have arising out of Executive’s employment with the Company or the termination of such employment, but excluding (i) any claims and causes of action that Executive may have arising under or based upon this Agreement, and (ii) any vested rights Executive may have under any employee benefit plan or deferred compensation plan or program of the Company. The general release described above must be effective and irrevocable within 55 days after the date of Executive’s termination of employment with the Company (the “Release Period”).

 

	
14.
	
Employment with Affiliates.

 

Employment with the Company for purposes of this Agreement includes employment with any entity in which the Company has a direct or indirect ownership interest of 50% or more of the total combined voting power of all outstanding equity interests, and employment with any entity which has a direct or indirect interest of 50% or more of the total combined voting power of all outstanding equity interests of the Company.

 

	
15.
	
Governing Law.

 

	 	
(A)
	
THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES.

 

	 	
(B)
	
EACH PARTY HERETO HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS IN HARRIS COUNTY, TEXAS, FOR THE PURPOSES OF ANY PROCEEDING ARISING OUT OF THIS AGREEMENT.

 

	
16.
	
Entire Agreement.

 

This Agreement is an integration of the parties’ agreement and no agreement or representatives, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Agreement. This Agreement hereby expressly terminates, rescinds and replaces in full any prior agreement (written or oral) between the parties relating to the subject matter hereof.

 

 

 

11

 

 

	
17.
	
Withholding of Taxes.

 

The Company shall withhold from all payments and benefits provided under this Agreement all taxes required to be withheld by applicable law.

 

	
18.
	
Beneficiary.

 

In the event Executive dies before receiving the lump sum severance payment to which Executive was entitled hereunder, Executive’s spouse or, if there is no spouse, the beneficiary designated by Executive under the Company-sponsored group term life insurance plan, shall receive such payment.

 

[End of Page]

 

 

 

 

 

12

 

 

IN WITNESS WHEREOF, the Company and Executive have executed this Agreement effective for all purposes as of the Effective Date.

 

CIVEO CORPORATION

 

 

 

By: /s/ Bradley J. Dodson 

Name: Bradley J. Dodson          

Title: President and Chief Executive Officer

 

 

EXECUTIVE

 

 

/s/ Allan Schoening________________________

Allan D. Schoening

 

 

13Exhibit 4.1

 

THIRD
AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT

 

THIS
THIRD AMENDMENT (this "Amendment"), dated as of October 29, 2015, amends and modifies that certain Third Amended and
Restated Credit Agreement, dated as of October 29, 2012 (as amended by the First Amendment thereto dated October 29, 2013 and the
Second Amendment thereto dated November 3, 2014, the "Credit Agreement"), among Otter
Tail Corporation (the "Borrower"), U.S. BANK NATIONAL ASSOCIATION, as Administrative Agent (in such capacity,
the "Agent"), and the Lenders, as defined therein. Terms not otherwise expressly defined herein shall have the meanings
set forth in the Credit Agreement.

 

FOR
VALUE RECEIVED, the Borrower, the Lenders and the Agent agree that the Credit Agreement is amended as follows.

 

ARTICLE
I - AMENDMENTS

 

1.1           The
definition of “Termination Date” appearing in Section 1.1 of the Credit Agreement is hereby amended to replace the
date “October 29, 2019” with the date “October 29, 2020”.

 

1.2           The
definition of “Federal Funds Effective Rate” appearing in Section 1.1 of the Credit Agreement is hereby amended to
insert immediately prior to the phrase “the weighted average of the rates” now appearing therein, the following: “the
greater of (a) zero percent (0.0%) and (b)”.

 

1.3           The
definition of “LIBOR Interbank Rate” appearing in Section 1.1 of the Credit Agreement is hereby amended to insert immediately
prior to the phrase “the offered rate for deposits” now appearing therein, the following: “the greater of (a)
zero percent (0.0%) and (b)”.

 

1.4           The
definition of “LIBOR Interbank Daily Rate” appearing in Section 1.1 of the Credit Agreement is hereby amended to insert
immediately prior to the phrase “the offered rate for deposits” now appearing therein, the following: “the greater
of (a) zero percent (0.0%) and (b)”.

 

1.5           Section
1.1 of the Credit Agreement is hereby amended to insert the following definitions alphabetically therein:

 

“Anti-Corruption
Laws” means all laws, rules, and regulations of any jurisdiction applicable to the Borrower or its Subsidiaries from
time to time concerning or relating to bribery or corruption.

 

“FATCA”
means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively
comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof
and any agreement entered into pursuant to Section 1471(b)(1) of the Code.

 

     

     

    

  

“OFAC”
means the U.S. Department of the Treasury’s Office of Foreign Assets Control, and any successor thereto.

 

“PATRIOT
Act” means the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)), as amended from time
to time, and any successor statute. 

 

“Sanctioned
Country” means, at any time, any country or territory which is itself the subject or target of any comprehensive Sanctions.

 

“Sanctioned
Person” means, at any time, (a) any Person or group listed in any Sanctions related list of designated Persons maintained
by OFAC or the U.S. Department of State, the United Nations Security Council, the European Union or any EU member state, (b) any
Person or group operating, organized or resident in a Sanctioned Country, (c) any agency, political subdivision or instrumentality
of the government of a Sanctioned Country, or (d) any Person 50% or more owned, directly or indirectly, by any of the above.

 

“Sanctions”
means economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) the U.S. government,
including those administered by OFAC or the U.S. Department of State or (b) the United Nations Security Council, the European Union
or Her Majesty’s Treasury of the United Kingdom.

 

1.6           Section
2.15 of the Credit Agreement is hereby amended and restated in its entirety as follows:

 

Section
2.15         Tax Matters      (a) No Person can become
a Bank unless it is either a United States Person or an “exempt recipient” within the meaning of Treasury Regulations
Section 1.6049-4(c) based on the indicators set forth therein, unless such Person represents and warrants to the Agent and the
Borrower that it is entitled to receive interest payments without withholding or deduction of any taxes and executes and delivers
to the Agent and the Borrower a United States Internal Revenue Service Form W-8BEN, W-8BEN-E, W-8ECI, W-8IMY and/or W-9 or any
successor to any of such forms, as appropriate, properly completed and claiming complete exemption from withholding and deduction
of all Federal Income Taxes. A “United States Person” means any citizen, national or resident of the United States,
any corporation or other entity created or organized in or under the laws of the United States or any political subdivision hereof
or any estate or trust, in each case that is not subject to withholding of United States Federal income taxes or other taxes on
payment of interest, principal of fees hereunder, (b) if a payment made to a Bank under any Loan Document would be subject
to U.S. federal withholding tax imposed by FATCA if such Bank were to fail to comply with the applicable reporting requirements
of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Bank shall deliver to the Borrower
and the Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or the Agent
such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional
documentation reasonably requested by the Borrower or the Agent as may be necessary for the Borrower and the Agent to comply with
their obligations under FATCA and to determine that such Bank has complied with such Bank’s obligations under FATCA or to
determine the amount to deduct and withhold from such payment. Solely for purposes of this Section 2.15(b) and Section
12.3(e), “FATCA” shall include any amendments made to FATCA after the date of this Agreement and (c) for purposes
of determining withholding taxes imposed under FATCA, from and after October 29, 2015, the Borrower and the Agent shall treat (and
the Banks hereby authorize the Agent to treat) the Agreement as not qualifying as a “grandfathered obligation” within
the meaning of Treasury Regulation Section 1.1471-2(b)(2)(i).

 

    	 	2	 

     

    

  

1.7           Section
5.1(a) of the Credit Agreement is hereby amended to delete the parenthetical appearing therein and to substitute the following
therefor:

 

(other than
(i) taxes imposed on the overall net income of such Bank by the jurisdiction in which such Bank has its principal office and (ii)
any U.S. federal withholding taxes imposed under FATCA)

 

1.8          Article
VII of the Credit Agreement is hereby amended to insert the following new Section 7.18 at the end thereof:

 

Section
7.18.         Anti-Corruption Laws; Sanctions; Anti-Terrorism Laws. 

 

(a)
The Borrower, its Subsidiaries and their respective officers and employees and to the knowledge of the Borrower its directors and
agents, are in compliance with Anti- Corruption Laws and applicable Sanctions in all material respects. None of the Borrower, any
Subsidiary or to the knowledge of the Borrower or such Subsidiary any of their respective directors, officers or employees is a
Sanctioned Person. No Loan or Letter of Credit, use of the proceeds of any Loan or Letter of Credit or other transactions contemplated
hereby will violate Anti-Corruption Laws or applicable Sanctions.

 

(b)
Neither the making of the Loans nor the issuance of any Letter of Credit hereunder nor the use of the proceeds thereof will violate
the PATRIOT Act, the Trading with the Enemy Act, as amended, or any of the foreign assets control regulations of the United States
Treasury Department (31 C.F.R., Subtitle B, Chapter V, as amended) or any enabling legislation or executive order relating thereto
or successor statute thereto. The Borrower and its Subsidiaries are in compliance in all material respects with the PATRIOT Act.

 

1.9           Section
8.1(a) of the Credit Agreement is hereby amended and restated in its entirety as follows:

 

    	 	3	 

     

    

  

(a)
As soon as available and in any event within 120 days after the end of each fiscal year of the Borrower, (i) the annual audited
financial statements of the Borrower and its Subsidiaries prepared on a consolidated basis and in conformity with GAAP, consisting
of at least statements of income, cash flow, and a consolidated balance sheet as at the end of such year, setting forth in each
case in comparative form corresponding figures from the previous fiscal year, certified without a “going concern” or
like qualification, or a qualification arising out of the scope of the audit, by independent certified public accountants of recognized
standing selected by the Borrower (it being agreed that the furnishing of the Borrower’s annual report on Form 10-K for such
year, as filed with the Securities and Exchange Commission, will satisfy the Borrower’s obligation under this Section 8.1(a)(i)
with respect to such year except with respect to the requirement that such financial statements be reported on without a “going
concern” or like qualification, or a qualification arising out of the scope of the audit), together with any related management
letters, and (ii) schedules providing consolidating detailed balance sheet, income statement results and statement of cash flows
for Varistar Corporation and its Subsidiaries, and a statement from an Authorized Representative that the financial statements
are fairly stated in all material respects when considered in relation to the basic consolidated statements taken as a whole.

 

1.10         Section
8.1(b) of the Credit Agreement is amended to delete the phrase “supplemental schedules detailing balance sheet and income
statement results” now appearing in clause (ii) thereof, and to substitute the following therefor: “schedules providing
consolidating detailed balance sheet, income statement results and statement of cash flows”.

 

1.11         Section
8.1 of the Credit Agreement is hereby amended to insert the following new clause (I) at the end thereof: 

 

(I)         Promptly
following request thereof, provide such information and take such actions as are reasonably requested by the Administrative Agent
or any Lender in order to assist the Administrative Agent and the Lenders in maintaining compliance with the PATRIOT Act. 

 

1.12         Section
8.8 of the Credit Agreement is amended to insert immediately following the phrase “to which it may be subject” now
appearing therein, the following: “, including, without limitation, all Anti-Corruption Laws and applicable Sanctions,”.

 

1.13         Section
9.11 of the Credit Agreement is hereby amended to insert immediately prior to the period (“.”) now appearing at the
end thereof, the following:

 

    	 	4	 

     

    

  

;
or request any Loan or Letter of Credit, nor shall the Borrower use, and the Borrower shall ensure that its Subsidiaries and its
or their respective directors, officers, employees and agents shall not use, the proceeds of any Loan or Letter of Credit (i) in
furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value,
to any Person in violation of any Anti-Corruption Laws or (ii) in any manner that would result in the violation of any applicable
Sanctions. 

 

1.14         Section
12.3(e) of the Credit Agreement is hereby amended and restated in its entirety as follows:

 

(e)
Tax Matters. No Bank shall be permitted to enter into any Assignment or Participation with any Assignee or Participant
who (i) is not a United States Person or (ii) is a United States Person that the Borrower may not treat as an “exempt
recipient” within the meaning of Treasury Regulations Section 1.6049-4(c) based on the indicators set forth therein,
unless such Assignee or Participant represents and warrants to such Bank, the Agent and the Borrower that, as at the date of such
Assignment or Participation, it is entitled to receive interest payments without withholding or deduction of any taxes and such
Assignee or Participant executes and delivers to such Bank on or before the date of execution and delivery of documentation of
such Participation or Assignment, a United States Internal Revenue Service Form W-8BEN, W-8BEN-E W-8ECI, W-8IMY and/or W-9 or any
successor to any of such forms, as appropriate, properly completed and claiming complete exemption from withholding and deduction
of all Federal Income Taxes. A “United States Person” means any citizen, national or resident of the United States,
any corporation or other entity created or organized in or under the laws of the United States or any political subdivision hereof
or any estate or trust, in each case that is not subject to withholding of United States Federal income taxes or other taxes on
payment of interest, principal of fees hereunder. In addition, if a payment made to an Assignee or Participant under any Loan Document
would be subject to U.S. federal withholding tax imposed by FATCA if such Assignee or Participant were to fail to comply with the
applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable),
such Assignee or Participant shall deliver to the Borrower and the Agent at the time or times prescribed by law and at such time
or times reasonably requested by the Borrower or the Agent such documentation prescribed by applicable law (including as prescribed
by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower or the Agent as
may be necessary for the Borrower and the Agent to comply with their obligations under FATCA and to determine that such Assignee
or Participant has complied with such Assignee’s or Participant’s obligations under FATCA or to determine the amount
to deduct and withhold from such payment.

 

1.15        Section
12.16 of the Credit Agreement is hereby amended and restated in its entirety as follows: 

 

Section
12.16         [RESERVED]. 

 

    	 	5	 

     

    

  

1.16         Section
13 of Exhibit E the Credit Agreement is hereby amended to amend and restate clause (b) therein in its entirety as follows:

 

(b)
agrees to furnish (if it is organized under the laws of any jurisdiction other than the United States or any State thereof)
to the Assignor, the Agent and the Borrower prior to the time that the Agent or Borrower is required to make any payment of principal,
interest or fees hereunder either U.S. Internal Revenue Service Form W-8ECI, W-8BEN or W-8BEN-E and agrees to provide new Forms
upon the expiration of any previously delivered form or comparable statements in accordance with applicable U.S. law and regulations
and amendments thereto, duly executed and completed by the Assignee, and

 

ARTICLE
II - REPRESENTATIONS AND WARRANTIES

 

To
induce the Agent and the Lenders to enter into this Amendment and to make and maintain the Loans under the Credit Agreement as
amended hereby, the Borrower hereby warrants and represents to the Agent and the Lenders that it is duly authorized to execute
and deliver this Amendment, and to perform its obligations under the Credit Agreement as amended hereby, and that this Amendment
constitutes the legal, valid and binding agreement of the Borrower, enforceable in accordance with its terms, subject to limitations
as to enforceability which might result from bankruptcy, insolvency, moratorium and other similar laws affecting creditors’
rights generally and subject to limitations on the availability of equitable remedies.

 

ARTICLE
III - CONDITIONS PRECEDENT

 

This
Amendment shall become effective on the date first set forth above, provided, however, that the effectiveness of this Amendment
is subject to the satisfaction of each of the following conditions precedent:

 

3.1           Warranties. Before and after giving effect to this Amendment, the representations and warranties in the Credit Agreement
shall be true and correct as though made on the date hereof with respect to representations and warranties containing qualifications
as to materiality, and true and correct as though made on the date hereof in all material respects with respect to representations
and warranties without qualifications as to materiality, except for changes that are permitted by the terms of the Credit Agreement.
The execution by the Borrower of this Amendment shall be deemed a representation that the Borrower has complied with the foregoing
condition.

 

3.2           Defaults.
Before and after giving effect to this Amendment, no Default and no Event of Default shall have occurred and be continuing under
the Credit Agreement. The execution by the Borrower of this Amendment shall be deemed a representation that the Borrower has complied
with the foregoing condition.

 

3.3           Documents.
The Borrower, the Agent and the Lenders shall have executed and delivered this Amendment.

 

    	 	6	 

     

    

  

3.4           Fees.
The Agent shall have received all fees and other amounts due and payable on or prior to the date hereof, including, without limitation,
(i) all fees set forth in that certain Fee Letter by and between the Borrower and the Agent dated as of October 29, 2015 and (ii)
to the extent invoiced reasonably in advance, reimbursement or payment of all out-of-pocket expenses required to be reimbursed
or paid by the Borrower under the Credit Agreement.

 

ARTICLE
IV - GENERAL

 

4.1           Expenses.
The Borrower agrees to reimburse the Agent upon demand for all reasonable expenses (including reasonable attorneys' fees and legal
expenses) incurred by the Agent in the preparation, negotiation and execution of this Amendment and any other document required
to be furnished herewith.

 

4.2           Counterparts.
This Amendment may be executed in as many counterparts as may be deemed necessary or convenient, and by the different parties hereto
on separate counterparts, each of which, when so executed, shall be deemed an original but all such counterparts shall constitute
but one and the same instrument.

 

4.3           Severability.
Any provision of this Amendment which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the remaining portions hereof or affecting the validity
or enforceability of such provisions in any other jurisdiction.

 

4.4           Governing
Law. This Amendment shall be a contract made under the laws of the State of Minnesota, which laws shall govern all the rights
and duties hereunder. 

 

4.5           Successors;
Enforceability. This Amendment shall be binding upon the Borrower, the Agent and the Lenders and their respective successors
and assigns, and shall inure to the benefit of the Borrower, the Agent and the Lenders and the successors and assigns of the Agent
and the Lenders. Except as hereby amended, the Credit Agreement shall remain in full force and effect and is hereby ratified and
confirmed in all respects.

 

    	 	7	 

     

    

 

IN WITNESS WHEREOF, the parties
hereto have caused this Amendment to be executed by their respective officers thereunto duly authorized as of the date first written
above.

 

	 	OTTER TAIL CORPORATION
	 	 	 
	 	By:	/s/ Kevin Moug
	 	 	 
	 	Title:	Chief Financial Officer

 

	 	4334 18th Avenue South
	 	Suite 200
	 	Fargo, North Dakota 58103
	 	Attention:	Mr. Kevin G. Moug,
	 	 	Chief Financial Officer
	 	Telephone:  (701) 451-3562
	 	Fax:  (701) 232-4108

 

(Signature Page to Third Amendment to Otter
Tail Corporation Credit Agreement)

 

     

     

    

 

 

	 	U.S. BANK NATIONAL ASSOCIATION,
	 	as Agent and a Bank
	 	 	 
	 	By:	/s/ Jacquelyn Ness
	 	 	 
	 	Title:	Vice President

 

	 	505 Second Avenue North
	 	Mail Code EP-ND-0630
	 	Fargo, ND 58102
	 	Attention:    Jacquelyn Ness, Vice President
	 	Telephone:   (701) 280-3655
	 	Fax:  (701) 280-3580

 

(Signature Page to Third Amendment to Otter
Tail Corporation Credit Agreement)

 

     

     

    

  

	 	BANK OF AMERICA, N.A., as Co-Syndication 

Agent and as a Bank
	 	 	 
	 	By:	/s/ A. Quinn Richardson
	 	 	 
	 	Title:	Senior Vice President

 

	 	IL-4135-07-65
	 	135 S. LaSalle Street
	 	Chicago, IL  60603
	 	Attention:	A. Quinn Richardson
	 	 	Senior Vice President
	 	Telephone:  (312) 992-2160
	 	Fax:  (312) 904-6546

 

(Signature Page to Third Amendment to Otter
Tail Corporation Credit Agreement)

 

     

     

    

 

 

	 	JPMORGAN CHASE BANK, N.A., as Co-

Syndication Agent and as a Bank
	 	 
	 	By:	/s/ Justin Martin
	 	 	 
	 	Title:	Authorized Officer
	 	 	 
	 	10 South Dearborn, 9th Floor, IL1-0090
	 	Chicago, IL  60603
	 	Attention:    Justin Martin
	 	Telephone:    (312) 732-4441
	 	Fax:  (312) 732-1762

 

(Signature Page to Third Amendment to Otter
Tail Corporation Credit Agreement)

 

     

     

    

  

	 	KEYBANK NATIONAL ASSOCIATION, as 

Documentation Agent and as a Bank
	 	 
	 	By:	/s/ Keven D. Smith
	 	 	 
	 	Title:	Senior Vice President

 

	 	1301 5th Avenue
	 	Mail Code:  WA-31-13-2514
	 	Seattle, WA  98101
	 	Attention:	Keven D. Smith
	 	Telephone:  	(206) 343-6966
	 	Fax:  (206) 684-6570

 

(Signature Page to Third Amendment to Otter
Tail Corporation Credit Agreement)

 

     

     

    

  

	 	BANK OF THE WEST, a California Banking 

Corporation, as a Bank
	 	 	 
	 	By:	/s/ David Wang
	 	 	 
	 	Title:	Director

 

	 	250 Marquette Ave., Suite 575
	 	Minneapolis, MN  55401
	 	Attention:   David Wang
	 	Telephone:   (612) 339-1403
	 	Fax:  (612) 339-6362

 

(Signature Page to Third Amendment to Otter
Tail Corporation Credit Agreement)

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00250-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00250-of-00352.parquet"}]]