Document:

Exhibit 10.1

 

SECOND AMENDMENT TO 
 SECOND AMENDED AND RESTATED STOCKHOLDERS AGREEMENT

 

THIS SECOND AMENDMENT (this “Amendment”) to the Second Amended and Restated Stockholders Agreement, dated as of September 21, 2007, as amended by the Amendment, dated as of July 2, 2013 (together, the “Agreement”), among HD Supply Holdings, Inc. (formerly known as HDS Investment Holding, Inc.) (the “Company”) and the stockholders from time to time party thereto, is made and entered into as of this 13th day of November, 2013, by the Company, the Bain Investors, the Carlyle Investors, the CD&R Investors, JFI-HDS, LLC (“JFI”) and JFI-HDS Affiliates, LLC (“JFI Affiliates” and, together with JFI, the “MJ Investors”).  All capitalized terms used herein but not defined herein shall have the meaning assigned to them in the Agreement, and, except as otherwise provided below, references herein to a specific Section or Schedule will refer, respectively, to the corresponding Section or Schedule of the Agreement.

 

WHEREAS, the Company, the Bain Investors, the Carlyle Investors, the CD&R Investors and the MJ Investors desire to amend the Agreement on the terms and subject to the conditions set forth herein, with such amendments to become effective as of December 31, 2013.

 

WHEREAS, pursuant to Section 5.3 of the Agreement, this Amendment has been approved by Stockholders holding in excess of 50% of the outstanding Voting Securities of the Stockholders and has been unanimously approved by the Principal Investors.

 

NOW, THEREFORE, in consideration of the premises and the mutual agreements and covenants in the Agreement and hereinafter set forth, and intending to be legally bound hereby, the parties hereto hereby agree as follows:

 

1.                                      Removal of the MJ Investors as Parties to the Stockholders Agreement.

 

The MJ Investors desire to be removed, and the Company, the Bain Investors, the Carlyle Investors and the CD&R Investors desire to have the MJ Investors removed, as parties to the Agreement. The MJ Investors hereby consent to be, and hereby are, removed as parties to the Agreement as of December 31, 2013 (the “Effective Date”). As such, as of the Effective Date, the definition of “Stockholder” and “Stockholders” in the Agreement shall not include the MJ Investors, notwithstanding that the MJ Investors executed the Agreement and are parties to this Amendment.

 

2.                                      Deletion of the Definition of “JFI”.  As of the Effective Date, the definition of “JFI” in Section 1.1 is hereby deleted in its entirety.

 

3.                                      Deletion of the Definition of “MJ Investors”.  As of the Effective Date, the definition of “MJ Investors” in Section 1.1 is hereby deleted in its entirety.

 

4.                                      Amendment to Definition of “Permitted Transferee”.  As of the Effective Date, the definition of “Permitted Transferee” in Section 1.1 is hereby deleted in its entirety and replaced as follows:

 

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““Permitted Transferee” means (i) with respect to any Principal Investor or its Affiliates, (x) the owners of such Stockholder or its Affiliates in connection with a Mandatory Distribution, (y) a Charitable Organization to which such Stockholder wishes to make or has made a bona fide charitable contribution of Equity Securities and (z) any member, partner or other employee of such Principal Investor or its Affiliates in connection with a bona fide gift to any Charitable Organization made on the date of, but prior to, the execution of the underwriting agreement entered into in connection with any public offering conducted as an underwritten public offering approved by the Coordination Committee in accordance with Section 3.7, and any such recipient Charitable Organization and (ii) with respect to any Stockholder, an Affiliate (other than any “portfolio company” described below) of such Stockholder; provided, however, that any such Transferee, other than any Charitable Organization receiving Common Stock or other securities of the Company pursuant to clause (i)(z) above, shall agree in a writing in the form attached as Exhibit B hereto to be bound by and to comply with all applicable provisions of this Agreement; provided, further, however, that in no event shall (A) the Company or any of its Subsidiaries or (B) any “portfolio company” (as such term is customarily used among institutional investors) of any Stockholder or any entity controlled by any portfolio company of any Stockholder constitute a “Permitted Transferee”.”

 

5.                                      Amendment to Section 2.4(c).  As of the Effective Date, Section 2.4(c) is hereby deleted in its entirety and replaced as follows:

 

“(c)                            In connection with any vote or action by written consent of the stockholders of the Company relating to any matter requiring consent as specified in Section 2.4(a) or Section 2.4(b), each Stockholder (other than THD Holdings and its Permitted Transferees with respect to any matter to which they have approval rights pursuant to Section 2.4(d)) agrees, with respect to any Voting Securities beneficially owned by such Stockholder with respect to which it has the power to vote, (i) to vote against (and not act by written consent to approve) such matter if such matter has not been consented to by the Requisite Investors to the extent required by Section 2.4(a) or by all of the Principal Investors to the extent required by Section 2.4(b), as applicable, and (ii) to take or cause to be taken, upon the written request of Bain (if such matter has not been consented to by Bain), Carlyle (if such matter has not been consented to by Carlyle), or CD&R (if such matter has not been consented to by CD&R), all other reasonable actions, at the expense of the Company, required, to the extent permitted by law, to prevent the taking of any action by the Company with respect to a matter unless such matter has been consented to by the Requisite Investors if required by Section 2.4(a) or by all of the Investors if required by Section 2.4(b), as applicable.

 

6.                                      Deletion of Section 2.4(e).  As of the Effective Date, Section 2.4(e) is hereby deleted in its entirety.

 

7.                                      Deletion of Section 2.8(e).  As of the Effective Date, Section 2.8(e) is hereby deleted in its entirety.

 

8.                                      Amendment to Section 3.7.  As of the Effective Date, the third sentence of Section 3.7 is hereby deleted in its entirety and replaced as follows:

 

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“Following an IPO, the Coordination Committee shall coordinate all Transfers, other than Transfers to Permitted Transferees, including, without limitation, Rule 144 sales, distributions to limited partners, shelf takedowns and block trades in order to give each Investor and THD Holdings and its Permitted Transferees an opportunity to participate on a pro rata basis (based on ownership at the time of such Transfer and provided that each Investor’s pro rata share of any such transfer shall be reduced by the amount of Shares transferred to Charitable Organizations by such Investor pursuant to clause (i)(z) of the definition of Permitted Transferee); provided, however, that the Coordination Committee may not exercise its approval rights or make any binding determination in a manner that would, by its terms, adversely affect THD Holdings or its Permitted Transferees in a material manner relative to the Principal Investors and their Affiliates.”

 

9.                                      Amendment to Section 5.3.  As of the Effective Date, the first sentence of Section 5.3 is hereby deleted in its entirety and replaced as follows:

 

“This Agreement may be amended, and the Company may take any action herein otherwise prohibited, or omit to perform any act herein otherwise required to be performed by it, only if any such amendment, action or omission to act, has been approved by Stockholders holding in excess of 50% of the then-outstanding Voting Securities of the Stockholders and, subject to Section 2.8(c), such amendment has been unanimously approved by the Principal Investors, provided that this Agreement may not be amended in a manner adversely affecting the rights or obligations of any Stockholder which does not, by its terms, adversely affect the rights or obligations of all similarly situated Stockholders in the same manner without the consent of such Stockholder and provided further that this Agreement, subject to Section 2.8(d), may not be amended in a manner that would, by its terms, adversely affect the rights or obligations of THD Holdings or its Permitted Transferees relative to the Principal Investors and their Affiliates without the consent of THD Holdings.”

 

10.                               No Modification.  On and after the date of this Amendment each reference in the Agreement to “this Agreement,” “hereunder,” “hereof,” or words of like import referring to the Agreement shall mean and be a reference to the Agreement as amended by this Amendment.  The Agreement, as amended by this Amendment, is and shall continue to be in full force and effect in accordance with its terms, and except as expressly set forth in this Amendment no other amendment or modification to the Agreement is agreed to or implied.

 

11.                               Governing Law; Jurisdiction and Forum; Waiver of Jury Trial. (a) This Amendment shall be governed by and construed in accordance with the laws of the State of Delaware applicable to contracts executed and to be performed wholly within such State and without reference to the choice-of-law principles that would result in the application of the laws of a different jurisdiction.

 

(b)                                 Each party to this Amendment irrevocably submits to the jurisdiction of the United States District Court for the Southern District of New York or any court of the State of New York located in such district any suit, action or other proceeding arising out of or relating

 

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to this Amendment, and hereby irrevocably agrees that all claims in respect of such suit, action or proceeding may be heard and determined in such court. Each party to this Amendment hereby irrevocably waives, to the fullest extent that it may effectively do so, the defense of an inconvenient forum to the maintenance of such suit, action or other proceeding. The parties further agree, to the extent permitted by law, that final and unappealable judgment against any of them in any suit, action or other proceeding contemplated above shall be conclusive and may be enforced in any other jurisdiction within or outside the United States by suit on the judgment, a certified copy of which shall be conclusive evidence of the fact and amount of such judgment.

 

(c)                                  EACH PARTY TO THIS AMENDMENT WAIVES TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY OF THEM AGAINST THE OTHER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS AMENDMENT, OR ANY OTHER AMENDMENTS EXECUTED IN CONNECTION HEREWITH OR THE ADMINISTRATION THEREOF OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN OR THEREIN. NO PARTY TO THIS AMENDMENT SHALL SEEK A JURY TRIAL IN ANY LAWSUIT, PROCEEDING, COUNTERCLAIM OR ANY OTHER LITIGATION PROCEDURE BASED UPON, OR ARISING OUT OF, THIS AMENDMENT OR ANY RELATED INSTRUMENTS OR THE RELATIONSHIP BETWEEN THE PARTIES. NO PARTY WILL SEEK TO CONSOLIDATE ANY SUCH ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. EACH PARTY TO THIS AMENDMENT CERTIFIES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AMENDMENT OR INSTRUMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS SET FORTH ABOVE IN THIS SECTION 11. NO PARTY HAS IN ANY WAY AGREED WITH OR REPRESENTED TO ANY OTHER PARTY THAT THE PROVISIONS OF THIS SECTION WILL NOT BE FULLY ENFORCED IN ALL INSTANCES.

 

12.                               Counterparts.  This Amendment may be executed and delivered (including by facsimile or pdf transmission) in one or more counterparts, and by each party hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.

 

[Rest of page intentionally left blank]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date set forth in the first paragraph hereof.

 

 

	
 
    	
HD SUPPLY HOLDINGS, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ William P. Stengel, II
    
	
 
    	
 
    	
Name:
    	
William   P. Stengel, II
    
	
 
    	
 
    	
Title:
    	
Senior   Vice President, SBD & IR
    

 

[Signature Page to Stockholders Agreement Second Amendment]

 

 

 

	
 
    	
CLAYTON,   DUBILIER & RICE FUND VII, L.P.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
CD&R   Associates VII, Ltd.,
    
	
 
    	
 
    	
its   general partner
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Theresa A. Gore
    
	
 
    	
 
    	
Name:
    	
Theresa   A. Gore
    
	
 
    	
 
    	
Title:
    	
Vice   President, Treasurer and
   Assistant Secretary
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
CD&R   PARALLEL FUND VII, L.P.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
CD&R   Parallel Fund Associates VII, Ltd.,
    
	
 
    	
 
    	
its   general partner
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Theresa A. Gore
    
	
 
    	
 
    	
Name:
    	
Theresa   A. Gore
    
	
 
    	
 
    	
Title:
    	
Vice   President, Treasurer and
   Assistant Secretary
    

 

[Signature Page to Stockholders Agreement Second Amendment]

 

 

	
 
    	
CLAYTON,   DUBILIER & RICE FUND VII
    
	
 
    	
(CO-INVESTMENT),   L.P.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
CD&R   Associates VII (Co-Investment), Ltd.,
    
	
 
    	
 
    	
its   general partner
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Theresa A. Gore
    
	
 
    	
 
    	
Name:
    	
Theresa   A. Gore
    
	
 
    	
 
    	
Title:
    	
Vice   President, Treasurer and
    
	
 
    	
 
    	
 
    	
Assistant   Secretary
    

 

[Signature Page to Stockholders Agreement Second Amendment]

 

 

	
 
    	
Carlyle   Partners V, L.P.
    
	
 
    	
 
    
	
 
    	
By:   TC Group V, L.P., its general partner
    
	
 
    	
By:   TC Group V, L.L.C., its general partner
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Brian Bernasek
    
	
 
    	
 
    	
Name:
    	
Brian   Bernasek
    
	
 
    	
 
    	
Title:
    	
Managing   Director
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Carlyle   Partners V-A, L.P.
    
	
 
    	
 
    
	
 
    	
By:   TC Group V, L.P., its general partner
    
	
 
    	
By:   TC Group V, L.L.C., its general partner
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Brian Bernasek
    
	
 
    	
 
    	
Name:
    	
Brian   Bernasek
    
	
 
    	
 
    	
Title:
    	
Managing   Director
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
CP   V Coinvestment A, L.P.
    
	
 
    	
 
    
	
 
    	
By:   TC Group V, L.P., its general partner
    
	
 
    	
By:   TC Group V, L.L.C., its general partner
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Brian Bernasek
    
	
 
    	
 
    	
Name:
    	
Brian   Bernasek
    
	
 
    	
 
    	
Title:
    	
Managing   Director
    

 

[Signature Page to Stockholders Agreement Second Amendment]

 

 

	
 
    	
CP   V Coinvestment B, L.P.
    
	
 
    	
 
    
	
 
    	
By:   TC Group V, L.P., its general partner
    
	
 
    	
By:   TC Group V, L.L.C., its general partner
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Brian Bernasek
    
	
 
    	
 
    	
Name:
    	
Brian   Bernasek
    
	
 
    	
 
    	
Title:
    	
Managing   Director
    

 

[Signature Page to Stockholders Agreement Second Amendment]

 

 

	
 
    	
BAIN   CAPITAL INTEGRAL INVESTORS
    
	
 
    	
2006,   LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:   Bain Capital Investors, LLC, its administrative member
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Stephen M. Zide
    
	
 
    	
 
    	
Name:
    	
Stephen   M. Zide
    
	
 
    	
 
    	
Title:
    	
Managing   Director
    

 

[Signature Page to Stockholders Agreement Second Amendment]

 

 

	
 
    	
JFI-HDS,   LLC
    
	
 
    	
 
    
	
 
    	
By:
    	
JFI-HDS   Partner, LLC,
    
	
 
    	
 
    	
its   managing member
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Mitchell Jacobson
    
	
 
    	
 
    	
Name:
    	
Mitchell   Jacobson
    
	
 
    	
 
    	
Title:
    	
Managing   Member
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
JFI-HDS   AFFILIATES, LLC
    
	
 
    	
 
    
	
 
    	
By:
    	
JFI-HDS   Partner, LLC,
    
	
 
    	
 
    	
its   managing member
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Mitchell Jacobson
    
	
 
    	
 
    	
Name:
    	
Mitchell   Jacobson
    
	
 
    	
 
    	
Title:
    	
Managing   Member
    

 

[Signature Page to Stockholders Agreement Second Amendment]Exhibit 10.6

 

ATHLON ENERGY INC.
 2013 INCENTIVE AWARD PLAN

 

RESTRICTED STOCK UNIT GRANT NOTICE

 

Athlon Energy Inc., a Delaware corporation (the “Company”), pursuant to its 2013 Incentive Award Plan, as amended from time to time (the “Plan”), hereby grants to the holder listed below (“Participant”) the number of Restricted Stock Units (the “RSUs”) set forth below.  The RSUs are subject to the terms and conditions set forth in this Restricted Stock Unit Grant Notice (the “Grant Notice”) and the Restricted Stock Unit Agreement attached hereto as Exhibit A (the “Agreement”) and the Plan, which are incorporated herein by reference.  Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in the Grant Notice and the Agreement.

 

	
Participant:
    	
[                ]
    
	
Grant Date:
    	
[                ],   2013
    
	
Target   Number of Performance-Based RSUs:
    	
[                ]   
    
	
Number   of
    Time-Based RSUs:
    	
[                ]   
    
	
Type of Shares Issuable:
    	
Common Stock
    
	
Vesting Schedule:
    	
This award will vest and become exercisable in   accordance with the vesting schedule set forth in Exhibit A. 
    

 

By Participant’s signature below, Participant agrees to be bound by the terms and conditions of the Plan, the Agreement and the Grant Notice.  Participant has reviewed the Agreement, the Plan and the Grant Notice in their entirety, has had an opportunity to obtain the advice of counsel prior to executing the Grant Notice and fully understands all provisions of the Grant Notice, the Agreement and the Plan.  Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising under the Plan, the Grant Notice or the Agreement.

 

 

	
ATHLON ENERGY INC.
    	
 
    	
PARTICIPANT
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
By:
    	
 
    
	
Print Name:
    	
 
    	
 
    	
Print Name:
    	
 
    
	
Title:
    	
 
    	
 
    	
 
    	
 
    

 

 

EXHIBIT A

TO RESTRICTED STOCK UNIT GRANT NOTICE

 

RESTRICTED STOCK UNIT AGREEMENT

 

Pursuant to the Grant Notice to which this Agreement is attached, the Company has granted to Participant RSUs  (including “Performance-Based RSUs” and “Time-Based RSUs”) as set forth in the Grant Notice.

 

ARTICLE I.

 

GENERAL

 

1.1                               Defined Terms.  Capitalized terms not specifically defined herein shall have the meanings specified in the Plan or the Grant Notice.

 

1.2                               Incorporation of Terms of Plan.  The RSUs and the shares of Common Stock (“Stock”) issued to Participant hereunder (“Shares”) are subject to the terms and conditions set forth in this Agreement and the Plan, which is incorporated herein by reference.  In the event of any inconsistency between the Plan and this Agreement, the terms of the Plan shall control.

 

ARTICLE II.

 

AWARD OF RESTRICTED STOCK UNITS AND DIVIDEND EQUIVALENTS

 

2.1                               Award of RSUs and Dividend Equivalents.

 

(a)                                 In consideration of Participant’s past and/or continued employment with or service to the Company or a Subsidiary and for other good and valuable consideration, effective as of the grant date set forth in the Grant Notice (the “Grant Date”), the Company has granted to Participant RSUs as set forth in the Grant Notice, upon the terms and conditions set forth in the Grant Notice, the Plan and this Agreement, subject to adjustment as provided in Section 12.2 of the Plan.  Each RSU represents the right to receive one Share or, at the option of the Company, an amount of cash as set forth in Section 2.3(b), in either case, at the times and subject to the conditions set forth herein.  However, unless and until the RSUs have vested, Participant will have no right to the payment of any Shares subject thereto.  Prior to the actual delivery of any Shares, the RSUs will represent an unsecured obligation of the Company, payable only from the general assets of the Company.

 

(b)                                 The Company hereby grants to Participant an Award of Dividend Equivalents with respect to each RSU granted pursuant to the Grant Notice for all ordinary cash dividends which are paid to all or substantially all holders of the outstanding shares of Stock between the Grant Date and the date when the applicable RSU is distributed or paid to Participant or is forfeited or expires.  The Dividend Equivalents for each RSU shall be equal to the amount of cash which is paid as a dividend on one share of Stock.  The Company shall establish, with respect to each RSU, a separate Dividend Equivalent bookkeeping account for such RSU (a “Dividend Equivalent Account”), which shall be credited (without interest) on the

 

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applicable dividend payment dates with an amount equal to any ordinary cash dividends paid during the period that such RSU remains outstanding with respect to the Share underlying the RSU to which such Dividend Equivalent relates.  Upon the vesting of an RSU, the Dividend Equivalent (and the Dividend Equivalent Account) with respect to such vested RSU shall also become vested.  Similarly, upon the forfeiture of an RSU, the Dividend Equivalent (and the Dividend Equivalent Account) with respect to such forfeited RSU shall also be forfeited.

 

2.2                               Vesting of RSUs and Dividend Equivalents.

 

(a)                                 Vesting of Performance-Based RSUs.  The Performance-Based RSUs shall be divided into three equal tranches (each a “Performance Tranche”), which shall vest, if at all, in amounts up to 200% of the applicable installment of the Target Number of Performance-Based RSUs on August 1, 2014, 2015 and 2016, respectively, as follows, subject to Section 2.2(c) below:

 

(i)                                     If, with respect to a Performance Tranche, the Company achieves a TSR over the Performance Period that is below the 25th percentile of the TSRs of the component members of the Company’s Peer Group over the Performance Period, none of the Performance-Based RSUs in such Performance Tranche shall vest;

 

(ii)                                  If, with respect to a Performance Tranche, the Company achieves a TSR over the Performance Period that is at the 25th percentile or between the 25th percentile and the 75th percentile of the TSRs of the component members of the Company’s Peer Group over the Performance Period, a number of RSUs equal to 100% (but not more than 100%) of the applicable installment of the Target Number of Performance-Based RSUs (as indicated in the Grant Notice above) shall vest; or

 

(iii)                               If, with respect to a Performance Tranche, the Company achieves a TSR over the Performance Period that is at or above the 75th percentile of the TSRs of the component members of the Company’s Peer Group over the Performance Period, a number of RSUs equal to 200% of the applicable installment of the Target Number of Performance-Based RSUs (as indicated in the Grant Notice above) shall vest.

 

(b)                                 Vesting of Time-Based RSUs.  Subject to Section 2.2(c) below, the Time-Based RSUs shall vest in three equal annual installments on August 1, 2014, 2015 and 2016, respectively.

 

(c)                                  In the event Participant incurs a Termination of Service, except as may be otherwise provided by the Administrator or as set forth in a written agreement between Participant and the Company, Participant shall immediately forfeit any and all RSUs and Dividend Equivalents granted under this Agreement which have not vested or do not vest on or prior to the date on which such Termination of Service occurs, and Participant’s rights in any such RSUs and Dividend Equivalents which are not so vested shall lapse and expire. In the event of a Change in Control, all RSUs granted under this agreement that were not previously eligible to vest will vest in full, with the Performance-Based RSUs vesting at the maximum level (200%).

 

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(d)                                 Definitions.

 

(i)                                     Performance Period.  For purposes of this Agreement, “Performance Period” means (A) for Performance-Based RSUs that are eligible to vest on August 1, 2014, the period beginning on August 2, 2013 and ending on August 1, 2014, (B) for Performance-Based RSUs that are eligible to vest on August 1, 2015, the period beginning on August 2, 2014 and ending on August 1, 2015, and (C) for Performance-Based RSUs that are eligible to vest on August 1, 2016, the period beginning on August 2, 2015 and ending on August 1, 2016.

 

(ii)                                  TSR.  For purposes of this Agreement, “TSR” means, as applicable, the Company’s or a member of the Peer Group’s total stockholder return for the applicable Performance Period calculated based on the change in the trading price of the applicable shares over the Performance Period (where the trading price for any date is calculated as the average of the closing price of the applicable shares of Stock on the applicable securities exchange, where reasonably available, on such date and on the nine (9) preceding trading days) and assuming the reinvestment of all dividends or distributions paid on shares during such period, all as determined by the Committee in its discretion; provided, however, that the trading price of the Company’s shares of Stock as of August 2, 2013 shall be deemed for all purposes under this Agreement to be $20.00 per share.

 

(iii)                               Peer Group.  For purposes of this Agreement, the “Peer Group” shall consist of the companies listed on Schedule A hereto, provided, however, that the Committee may make such changes and adjustments to the Peer Group from time to time that it deems equitable or appropriate in its discretion as a result of or to account for a Change in Control or any similar or other extraordinary transaction that may occur with respect a member of the Peer Group or a member of the Peer Group ceasing to be a publicly traded company, which change(s) or adjustment(s) may include, but are not limited to removing, replacing or adding additional members to the Peer Group for all or any purposes under this Agreement.

 

2.3                               Distribution or Payment of RSUs and Dividend Equivalents.

 

(a)                                 Participant’s vested RSUs shall be distributed in Shares (either in book-entry form or otherwise) or, at the option of the Company, paid in an amount of cash as set forth in Section 2.3(b), in either case, as soon as administratively practicable following the vesting of the applicable RSU pursuant to Section 2.2, and, in any event, within sixty (60) days following such vesting.  Notwithstanding the foregoing, the Company may delay a distribution or payment in settlement of RSUs if it reasonably determines that such payment or distribution will violate Federal securities laws or any other Applicable Law, provided that such distribution or payment shall be made at the earliest date at which the Company reasonably determines that the making of such distribution or payment will not cause such violation, as required by Treasury Regulation Section 1.409A-2(b)(7)(ii), and provided further that no payment or distribution shall be delayed under this Section 2.3(a) if such delay will result in a violation of Section 409A of the Code.

 

(b)                                 In the event that the Company elects to make payment of Participant’s RSUs in cash, the amount of cash payable with respect to each RSU shall be equal to the Fair Market Value of a Share on the day immediately preceding the applicable distribution or payment date set forth in Section 2.3(a).  All distributions made in Shares shall be made by the Company in the form of whole Shares, and any fractional share shall be distributed in cash in an

 

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amount equal to the value of such fractional share determined based on the Fair Market Value as of the date immediately preceding the date of such distribution.

 

(c)                                  Unpaid, vested Dividend Equivalents shall be paid to the Participant as follows: as soon as administratively practicable following the vesting of the applicable RSU and related Dividend Equivalent, and, in any event, within sixty (60) days following such vesting, the Participant shall be paid an amount in cash equal to the amount then credited to the Dividend Equivalent Account maintained with respect to such RSU.  For the avoidance of doubt, Dividend Equivalents relating to Performance-Based RSUs may be paid up to 200% based on the level at which the corresponding Performance Tranche of the Performance-Based RSUs vests.

 

2.4                               Conditions to Issuance of Certificates.  The Company shall not be required to issue or deliver any certificate or certificates for any Shares prior to the fulfillment of all of the following conditions:  (A) the admission of the Shares to listing on all stock exchanges on which such Shares are then listed, (B) the completion of any registration or other qualification of the Shares under any state or federal law or under rulings or regulations of the Securities and Exchange Commission or other governmental regulatory body, which the Administrator shall, in its absolute discretion, deem necessary or advisable, and (C) the obtaining of any approval or other clearance from any state or federal governmental agency that the Administrator shall, in its absolute discretion, determine to be necessary or advisable.

 

2.5                               Tax Withholding.  Notwithstanding any other provision of this Agreement:

 

(a)                                 The Company and its Subsidiaries have the authority to deduct or withhold, or require Participant to remit to the Company or the applicable Subsidiary, an amount sufficient to satisfy applicable federal, state, local and foreign taxes (including the employee portion of any FICA obligation) required by law to be withheld with respect to any taxable event arising pursuant to this Agreement.  The Company and its Subsidiaries may withhold or Participant may make such payment in one or more of the forms specified below:

 

(i)                                     by cash or check made payable to the Company or the Subsidiary with respect to which the withholding obligation arises;

 

(ii)                                  by the deduction of such amount from other compensation payable to Participant;

 

(iii)                               with respect to any withholding taxes arising in connection with the distribution of the RSUs, with the consent of the Administrator, by requesting that the Company and its Subsidiaries withhold a net number of vested Shares otherwise issuable pursuant to the RSUs having a then current Fair Market Value not exceeding the amount necessary to satisfy the withholding obligation of the Company and its Subsidiaries based on the minimum applicable statutory withholding rates for federal, state, local and foreign income tax and payroll tax purposes;

 

(iv)                              with respect to any withholding taxes arising in connection with the distribution of the RSUs, with the consent of the Administrator, by tendering to the Company vested Shares having a then current Fair Market Value not exceeding the amount necessary to satisfy the withholding obligation of the Company and its Subsidiaries based on the minimum

 

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applicable statutory withholding rates for federal, state, local and foreign income tax and payroll tax purposes;

 

(v)                                 with respect to any withholding taxes arising in connection with the distribution of the RSUs, through the delivery of a notice that Participant has placed a market sell order with a broker acceptable to the Company with respect to Shares then issuable to Participant pursuant to the RSUs, and that the broker has been directed to pay a sufficient portion of the net proceeds of the sale to the Company or the Subsidiary with respect to which the withholding obligation arises in satisfaction of such withholding taxes; provided that payment of such proceeds is then made to the Company or the applicable Subsidiary at such time as may be required by the Administrator, but in any event not later than the settlement of such sale; or

 

(vi)                              in any combination of the foregoing.

 

(b)                                 With respect to any withholding taxes arising in connection with the RSUs, in the event Participant fails to provide timely payment of all sums required pursuant to Section 2.5(a), the Company shall have the right and option, but not the obligation, to treat such failure as an election by Participant to satisfy all or any portion of Participant’s required payment obligation pursuant to Section 2.5(a)(ii) or (iii) above, or any combination of the foregoing as the Company may determine to be appropriate. The Company shall not be obligated to deliver any certificate representing Shares issuable with respect to the RSUs to Participant or his or her legal representative unless and until Participant or his or her legal representative shall have paid or otherwise satisfied in full the amount of all federal, state, local and foreign taxes applicable with respect to the taxable income of Participant resulting from the vesting or settlement of the RSUs or any other taxable event related to the RSUs.

 

(c)                                  In the event any tax withholding obligation arising in connection with the RSUs will be satisfied under Section 2.5(a)(iii), then the Company may elect to instruct any brokerage firm determined acceptable to the Company for such purpose to sell on Participant’s behalf a whole number of shares from those Shares then issuable to Participant pursuant to the RSUs as the Company determines to be appropriate to generate cash proceeds sufficient to satisfy the tax withholding obligation and to remit the proceeds of such sale to the Company or the Subsidiary with respect to which the withholding obligation arises.  Participant’s acceptance of this Award constitutes Participant’s instruction and authorization to the Company and such brokerage firm to complete the transactions described in this Section 2.5(c), including the transactions described in the previous sentence, as applicable.  The Company may refuse to issue any Shares in settlement of the RSUs to Participant until the foregoing tax withholding obligations are satisfied, provided that no payment shall be delayed under this Section 2.5(c) if such delay will result in a violation of Section 409A of the Code.

 

(d)                                 Participant is ultimately liable and responsible for all taxes owed in connection with the RSUs, regardless of any action the Company or any Subsidiary takes with respect to any tax withholding obligations that arise in connection with the RSUs.  Neither the Company nor any Subsidiary makes any representation or undertaking regarding the treatment of any tax withholding in connection with the awarding, vesting or payment of the RSUs or the subsequent sale of Shares.  The Company and the Subsidiaries do not commit and are under no obligation to structure the RSUs to reduce or eliminate Participant’s tax liability.

 

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2.6                               Rights as Stockholder.  Neither Participant nor any person claiming under or through Participant will have any of the rights or privileges of a stockholder of the Company in respect of any Shares deliverable hereunder unless and until certificates representing such Shares (which may be in book-entry form) will have been issued and recorded on the records of the Company or its transfer agents or registrars, and delivered to Participant (including through electronic delivery to a brokerage account).  Except as otherwise provided herein, after such issuance, recordation and delivery, Participant will have all the rights of a stockholder of the Company with respect to such Shares, including, without limitation, the right to receipt of dividends and distributions on such Shares.

 

ARTICLE III.

 

OTHER PROVISIONS

 

3.1                               Administration.  The Administrator shall have the power to interpret the Plan, the Grant Notice and this Agreement and to adopt such rules for the administration, interpretation and application of the Plan, the Grant Notice and this Agreement as are consistent therewith and to interpret, amend or revoke any such rules.  All actions taken and all interpretations and determinations made by the Administrator will be final and binding upon Participant, the Company and all other interested persons.  To the extent allowable pursuant to Applicable Law, no member of the Committee or the Board will be personally liable for any action, determination or interpretation made with respect to the Plan, the Grant Notice or this Agreement.

 

3.2                               RSUs Not Transferable.  The RSUs may not be sold, pledged, assigned or transferred in any manner other than by will or the laws of descent and distribution, unless and until the Shares underlying the RSUs have been issued, and all restrictions applicable to such Shares have lapsed.  No RSUs or any interest or right therein or part thereof shall be liable for the debts, contracts or engagements of Participant or his or her successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted disposition thereof shall be null and void and of no effect, except to the extent that such disposition is permitted by the preceding sentence.

 

3.3                               Adjustments.  The Administrator may accelerate the vesting of all or a portion of the RSUs in such circumstances as it, in its sole discretion, may determine.  Participant acknowledges that the RSUs and the Shares subject to the RSUs are subject to adjustment, modification and termination in certain events as provided in this Agreement and the Plan, including Section 12.2 of the Plan.

 

3.4                               Notices.  Any notice to be given under the terms of this Agreement to the Company shall be addressed to the Company in care of the Secretary of the Company at the Company’s principal office, and any notice to be given to Participant shall be addressed to Participant at Participant’s last address reflected on the Company’s records.  By a notice given pursuant to this Section 3.4, either party may hereafter designate a different address for notices to be given to that party.  Any notice shall be deemed duly given when sent via email or when sent

 

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by certified mail (return receipt requested) and deposited (with postage prepaid) in a post office or branch post office regularly maintained by the United States Postal Service.

 

3.5                               Titles.  Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.

 

3.6                               Governing Law.  The laws of the State of Delaware shall govern the interpretation, validity, administration, enforcement and performance of the terms of this Agreement regardless of the law that might be applied under principles of conflicts of laws.

 

3.7                               Conformity to Securities Laws.  Participant acknowledges that the Plan, the Grant Notice and this Agreement are intended to conform to the extent necessary with all Applicable Laws, including, without limitation, the provisions of the Securities Act and the Exchange Act, and any and all regulations and rules promulgated thereunder by the Securities and Exchange Commission, and state securities laws and regulations.  Notwithstanding anything herein to the contrary, the Plan shall be administered, and the RSUs are granted, only in such a manner as to conform to Applicable Law.  To the extent permitted by Applicable Law, the Plan and this Agreement shall be deemed amended to the extent necessary to conform to Applicable Law.

 

3.8                               Amendment, Suspension and Termination.  To the extent permitted by the Plan, this Agreement may be wholly or partially amended or otherwise modified, suspended or terminated at any time or from time to time by the Administrator or the Board, provided that, except as may otherwise be provided by the Plan, no amendment, modification, suspension or termination of this Agreement shall adversely affect the RSUs in any material way without the prior written consent of Participant.

 

3.9                               Successors and Assigns.  The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement shall inure to the benefit of the successors and assigns of the Company.  Subject to the restrictions on transfer set forth in Section 3.2 and the Plan, this Agreement shall be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto.

 

3.10                        Limitations Applicable to Section 16 Persons.  Notwithstanding any other provision of the Plan or this Agreement, if Participant is subject to Section 16 of the Exchange Act, the Plan, the RSUs (including RSUs which result from the deemed reinvestment of Dividend Equivalents), the Dividend Equivalents, the Grant Notice and this Agreement shall be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3 of the Exchange Act) that are requirements for the application of such exemptive rule.  To the extent permitted by Applicable Law, this Agreement shall be deemed amended to the extent necessary to conform to such applicable exemptive rule.

 

3.11                        Not a Contract of Employment.  Nothing in this Agreement or in the Plan shall confer upon Participant any right to continue to serve as an employee or other service provider of the Company or any Subsidiary or shall interfere with or restrict in any way the rights of the Company and its Subsidiaries, which rights are hereby expressly reserved, to discharge or terminate the services of Participant at any time for any reason whatsoever, with or without

 

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cause, except to the extent expressly provided otherwise in a written agreement between the Company or a Subsidiary and Participant.

 

3.12                        Entire Agreement.  The Plan, the Grant Notice and this Agreement (including any exhibit hereto) constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and Participant with respect to the subject matter hereof.

 

3.13                        Section 409A.  This Award is not intended to constitute “nonqualified deferred compensation” within the meaning of Section 409A of the Code (together with any Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the date hereof, “Section 409A”).  However, notwithstanding any other provision of the Plan, the Grant Notice or this Agreement, if at any time the Administrator determines that this Award (or any portion thereof) may be subject to Section 409A, the Administrator shall have the right in its sole discretion (without any obligation to do so or to indemnify Participant or any other person for failure to do so) to adopt such amendments to the Plan, the Grant Notice or this Agreement, or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, as the Administrator determines are necessary or appropriate for this Award either to be exempt from the application of Section 409A or to comply with the requirements of Section 409A.

 

3.14                        Agreement Severable.  In the event that any provision of the Grant Notice or this Agreement is held invalid or unenforceable, such provision will be severable from, and such invalidity or unenforceability will not be construed to have any effect on, the remaining provisions of the Grant Notice or this Agreement.

 

3.15                        Limitation on Participant’s Rights.  Participation in the Plan confers no rights or interests other than as herein provided.  This Agreement creates only a contractual obligation on the part of the Company as to amounts payable and shall not be construed as creating a trust.  Neither the Plan nor any underlying program, in and of itself, has any assets.  Participant shall have only the rights of a general unsecured creditor of the Company with respect to amounts credited and benefits payable, if any, with respect to the RSUs and Dividend Equivalents.

 

3.16                        Counterparts.  The Grant Notice may be executed in one or more counterparts, including by way of any electronic signature, subject to Applicable Law, each of which shall be deemed an original and all of which together shall constitute one instrument.

 

3.17                        Broker-Assisted Sales.  In the event of any broker-assisted sale of Shares in connection with the payment of withholding taxes as provided in Section 2.5(a)(iii) or (v): (A) any Shares to be sold through a broker-assisted sale will be sold on the day the tax withholding obligation arises or as soon thereafter as practicable; (B) such Shares may be sold as part of a block trade with other participants in the Plan in which all participants receive an average price; (C) Participant will be responsible for all broker’s fees and other costs of sale, and Participant agrees to indemnify and hold the Company harmless from any losses, costs, damages, or expenses relating to any such sale; (D) to the extent the proceeds of such sale exceed the applicable tax withholding obligation, the Company agrees to pay such excess in cash to

 

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Participant as soon as reasonably practicable; (E) Participant acknowledges that the Company or its designee is under no obligation to arrange for such sale at any particular price, and that the proceeds of any such sale may not be sufficient to satisfy the applicable tax withholding obligation; and (F) in the event the proceeds of such sale are insufficient to satisfy the applicable tax withholding obligation, Participant agrees to pay immediately upon demand to the Company or its Subsidiary with respect to which the withholding obligation arises an amount in cash sufficient to satisfy any remaining portion of the Company’s or the applicable Subsidiary’s withholding obligation.

 

*                                         *                                         *

 

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SCHEDULE A

TO RESTRICTED STOCK UNIT AGREEMENT

 

PEER GROUP

 

Approach Resources, Inc.

Berry Petroleum Co.

Bill Barrett Corp.

Bonanza Creek Energy, Inc.

Carrizo Oil & Gas Inc.

Comstock Resources Inc.

Diamondback Energy, Inc.

EXCO Resources Inc.

Forest Oil Corporation

Kodiak Oil & Gas Corp.

Laredo Petroleum Holdings, Inc.

PDC Energy, Inc.

Quicksilver Resources Inc.

Resolute Energy Corporation

Rosetta Resources, Inc.

Swift Energy Co.

 

A-1

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