Document:

Exhibit 4.4

 

KLX ENERGY SERVICES HOLDINGS, INC.
 Employee Stock Purchase Plan
 (Effective as of September 13, 2018)

 

SECTION 1.  PURPOSE OF PLAN

 

This document sets forth the KLX Energy Services Holdings, Inc. Employee Stock Purchase Plan (the Plan), effective as of September 13, 2018. The Plan is intended to provide a method by which eligible employees of KLX Energy Services Holdings, Inc. (KLX) and of such of KLX’s parents and subsidiaries as KLX’s Board of Directors (the Board of Directors) may from time to time designate (such parents, subsidiaries, together with KLX, being hereinafter referred to as the Company) may use voluntary, systematic payroll deductions to purchase shares of the common stock of KLX, par value $.01 per share (the Stock) and thereby acquire an interest in the future of KLX. The Plan is intended to comply with the provisions of Section 423 of the Internal Revenue Code of 1986, as amended, and the regulations and guidance promulgated thereunder (the Code) and shall be administered, interpreted and construed in accordance with such provisions. For purposes of the Plan, (i) a subsidiary is any corporation which constitutes a “subsidiary” of KLX within the meaning of Section 424 of the Code and (ii) a parent constitutes a “parent” of KLX within the meaning of Section 424 of the Code.

 

SECTION 2.  OPTIONS TO PURCHASE STOCK

 

Under the Plan, there is available an aggregate of not more than 200,000 shares of Stock (subject to adjustment as provided in Section 14) for sale pursuant to the exercise of options (Options) granted under the Plan. The Stock to be delivered upon exercise of Options under the Plan may be either shares of authorized but unissued Stock or shares of reacquired Stock, as the Board of Directors may determine.

 

SECTION 3.  ELIGIBLE EMPLOYEES

 

Except as otherwise provided in the Plan, each individual: (i) who is an active Employee of the Company (Employee); (ii) who has a customary working schedule of at least 20 hours per week; (iii) who has been an Employee for at least 90 days: and (iv) whose customary employment is for five months or more in any calendar year will be eligible to participate in the Plan (each such individual, an Eligible Employee). From time to time, the Compensation Committee of the Board of Directors (the Compensation Committee) may amend the requirements of an Eligible Employee, subject to the provisions of Sections 423 and 424 of the Code.

 

Any Employee who immediately after the grant of an Option would, in accordance with the provisions of Sections 423 and 424 of the Code, own stock possessing 5% or more of the total combined voting power or value of all classes of stock of KLX or any of its parents or subsidiaries, will not be an Eligible Employee.

 

No Employee will be granted an Option under the Plan which would permit his or her rights to purchase shares of Stock under all employee stock purchase plans of the Company (as defined by Section 423(b) of the Code) to accrue at a rate which exceeds $25,000 in fair market value of such Stock (determined at the time the Option is granted)

 

 

for each calendar year during which any such Option granted to such Employee is outstanding at any time, as provided in Sections 423 and 424(d) of the Code. For purposes of this limitation, the date of grant of an Option shall be the date on which the Option is exercised pursuant to Section 8. Fair market value on any given day will mean the Closing Price of the Stock on such day (or, if there was no Closing Price on such day, the latest day prior thereto on which there was a Closing Price). The Closing Price of the Stock on any business day will be the last sale price as reported on the principal market on which the Stock is traded or, if no last sale is reported, then the mean between the highest bid and lowest asked prices on that day. A good faith determination by the Compensation Committee as to fair market value shall be final and binding.

 

SECTION 4.  METHOD OF PARTICIPATION

 

(a)                                 Each of the periods during which this Plan remains in effect is hereinafter referred to as an Option Period. Option Periods shall be of six-month duration. Each Plan Year (January 1st through December 31st) shall contain two Option Periods, one shall commence January 1 and terminate June 30 and the other shall commence July 1 and terminate December 31.

 

(b)                                 Each person who is an Eligible Employee on the first day of an Option Period may elect to participate in the Plan by executing and delivering a payroll deduction authorization in accordance with Section 5. Such Employee will thereby become a participant (Participant) for such Option Period. Unless otherwise specified prior to the beginning of the year pursuant to Section 5, a Participant shall be deemed to have elected to participate in each subsequent Plan Year for which the Participant is an Eligible Employee to the same extent and in the same manner as at the end of the prior Plan Year.

 

SECTION 5.  PAYROLL DEDUCTIONS

 

(a)                                 The payroll deduction authorization will be in a form determined by the Compensation Committee from time to time. The payroll deduction authorization must be delivered to the Company at least five days prior to the first date of the Option Period (or such earlier or later date specified by the Compensation Committee from time to time). When executing and delivering the payroll deduction authorization, the Participant shall request withholding at a rate (in whole percentages) of not less than 2% or more than 15% of the Participant’s Compensation by means of equal payroll deductions over the Option Period. All amounts withheld in accordance with a Participant’s payroll deduction authorization will be credited to a withholding account for such Participant. All such amounts shall be assets of the Company and may be used by the Company for any corporate purpose. The payroll deduction authorization will remain in effect for each consecutive subsequent Option Period unless changed or revoked by the Participant pursuant to Section 5(b). For purposes of the Plan, Compensation will mean the sum of the types and amounts of compensation determined from time to time by the Compensation Committee to be eligible to be taken into account under the Plan; provided, however, that no such determination shall include or exclude any type or amount of compensation contrary to the requirements of Section 423 of the Code.

 

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(b)                                 At any time on or prior to the fifteenth day of the last month of an Option Period, a Participant may (i) cancel an Option and cease participation in the Plan with respect to all (but not less than all) of the Stock subject to such Option or (ii) reduce the withholding rate of his or her payroll deduction authorization for the Option Period by one or more whole percentage points (but not to below 2%) by delivering electronic notice to the Company in the form specified by the Compensation Committee, such cancellation or reduction to take effect prospectively as soon as practicable following receipt of such notice by the Company. A Participant may increase or reduce the withholding rate of his or her payroll deduction authorization for a future Option Period, or cease participation entirely for a future Option Period, by electronic notice delivered to the Company at least five days prior to the first day of the Option Period as to which the change is to be effective (or such earlier or later date specified by the Compensation Committee from time to time). To the extent then an Eligible Employee, any Participant who ceased to participate may elect to participate in a future Option Period by completing the process specified in Section 4 and Section 5. Upon cancellation, the balance in the Participant’s withholding account will be returned to the Participant.

 

SECTION 6.  GRANT OF OPTIONS

 

Each person who is a Participant on the first day of an Option Period will, as of such day, be granted an Option for such Period. Such Option will be for the number of whole shares (not in excess of the share maximum as hereinafter defined) of Stock to be determined by dividing (i) the balance in the Participant’s withholding account on the last day of the Option Period, by (ii) the purchase price per share of the Stock determined under Section 7. For purposes of the preceding sentence, the share maximum with respect to any Option for any Option Period shall be the largest whole number of shares of Stock which, when multiplied by the fair market value of a share of Stock on the last day of the Option Period, produces a dollar amount of $12,500 or less. The number of shares of Stock receivable by each Participant upon exercise of his or her Option for an Option Period will be reduced, on a substantially proportionate basis, in the event that the number of shares then available under the Plan is otherwise insufficient.

 

SECTION 7.  PURCHASE PRICE

 

The purchase price of Stock issued pursuant to the exercise of an Option will be 85% of the fair market value of the Stock at the time at which the Option is exercised pursuant to Section 8.

 

SECTION 8.  EXERCISE OF OPTIONS

 

(a)                                 Each Employee who is a Participant in the Plan on the last day of an Option Period will be deemed to have exercised, on the last day of the Option Period, the Option granted to him or her for that Option Period. Upon such exercise, the balance of the Participant’s withholding account will be applied to the purchase of the number of whole shares of Stock determined under Section 6 and as soon as practicable thereafter the shares will be issued to the Participant either in certificates or electronically in “book entry” form with the transfer agent or Compensation Committee. In the event that the balance of the Participant’s withholding account following an Option Period is in excess of the total purchase price of the shares issued, the balance of the account shall be

 

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returned to the Participant; provided, however, that if the balance left in the account consists solely of an amount equal to the value of a fractional share it will be retained in the withholding account and carried over to the next Option Period. The entire balance of the Participant’s withholding account following the final Option Period shall be returned to the Participant. No fractional shares will be issued hereunder.

 

(b)                                 As a condition to receiving shares or cash amounts hereunder, (i) the Company may require a Participant to make a cash payment to the Company of, or (ii) the Company may withhold from any shares and cash amounts distributable under the Plan, an amount necessary to satisfy all federal, state, city or other taxes required to be withheld in respect of such payments pursuant to any law or governmental regulation or ruling.

 

(c)                                  An Option may not be exercised and shares of Stock may not be issued in connection with an Option, unless the issuance of the shares of Stock (i) has been registered under the Securities Act of 1933, as amended, (ii) has qualified under applicable state “blue sky” laws (or the Company has determined that an exemption from registration and from qualification under state “blue sky” laws is available); and (iii) complies with foreign securities laws and other applicable laws rules and regulations (including any required consents and approvals). The Compensation Committee may require each Participant exercising an Option to represent to and agree with the Company in writing that the Participant is acquiring the Stock for investment purposes and not with a view to the distribution of the Stock. All certificates for Stock delivered under the Plan shall be subject to such stock transfer orders and other restrictions as the Compensation Committee may deem advisable under the rules, regulations, and other requirements of the Securities and Exchange Commission, any exchange upon which the Stock is then listed, and any applicable securities law, and the Compensation Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions. The Company may affix a legend to the stock certificate issued upon the exercise of an Option as it deems necessary in its sole discretion. The Company is under no obligation to register the Stock transferred to a Participant upon exercise. If the Stock is not registered, a Participant may not resell, offer to resell or otherwise transfer such Stock unless the resale or transfer takes place in accordance with applicable law and as otherwise determined by the Compensation Committee.

 

SECTION 9.  INTEREST

 

No interest will be payable on withholding accounts.

 

SECTION 10.  TERMINATION OF EMPLOYMENT; LEAVE OF ABSENCE; SALE TRANSACTION

 

(a)                                 Subject to Section 11, upon the termination of a Participant’s service with the Company for any reason, (i) he or she will cease to be a Participant, (ii) any Option held by the Participant under the Plan will be deemed cancelled, (iii) the balance of the Participant’s withholding account will be returned to the Participant, and (iv) the Participant will have no further rights under the Plan.

 

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(b)                                 Unless the Compensation Committee otherwise determines, a Participant on a paid leave of absence shall continue to be a Participant in the Plan so long as such Participant is on such paid leave of absence. Unless otherwise determined by the Compensation Committee, a Participant on an unpaid leave of absence will no longer be eligible to make any additional contributions as of the date such unpaid leave has begun; provided, however, that, unless the Participant cancels the Option pursuant to Section 5, the balance of the Participant’s withholding account shall be applied to the purchase of Stock, in accordance with Section 8 hereof, on the last day of the Option Period immediately following the commencement of the Participant’s leave of absence.

 

(c)                                  In the event of the proposed dissolution or liquidation of KLX, the Option Period then in progress shall be shortened by the Compensation Committee setting a new exercise date and shall terminate immediately prior to the consummation of such proposed dissolution or liquidation, unless provided otherwise by the Compensation Committee. The new exercise date selected by the Compensation Committee shall be before the date of the proposed dissolution or liquidation of KLX. Each Participant will be notified in writing, at least 10 business days prior to the new exercise date (or such longer or shorter period as the Compensation Committee may determine) that the exercise date for the Participant’s Options has been changed to the new exercise date and that the balance of the Participant’s withholding account shall be applied to the purchase of shares, in accordance with Section 8 hereof, on the new exercise date, unless prior to such date the Participant has ceased to participate in the Plan as provided in Section 5 hereof

 

(d)                                 In the event of a proposed sale of all or substantially all of the assets of KLX, or the merger or consolidation of KLX with or into another entity, unless provided otherwise by the Compensation Committee each outstanding Option shall be assumed, or an equivalent right to purchase shares substituted, by the successor or resulting entity or a parent or subsidiary of the such entity. In lieu of such substitution or assumption, the Compensation Committee may elect to shorten any Option Period then in progress by setting a new exercise date and any Option Period then in progress shall end on the new exercise date. The new exercise date selected by the Compensation Committee shall be before the effective date of such proposed sale, merger or consolidation. Each Participant will be notified in writing, at least 10 business days prior to the new exercise date (or such longer or shorter period as the Compensation Committee may determine) that the exercise date for the Participant’s Options has been changed to the new exercise date and that the balance of the Participant’s withholding account shall be applied to the purchase of shares, in accordance with Section 8 hereof, on the new exercise date, unless prior to such date the Participant has ceased to participate in the Plan as provided in Section 5 hereof.

 

SECTION 11.  DEATH OF PARTICIPANT

 

A Participant may file a written designation of beneficiary specifying who is to receive any Stock and/or cash credited to the Participant under the Plan in the event of the Participant’s death, which designation will also provide for the election by the Participant of either (i) cancellation of the Participant’s Option upon his or her death, resulting in the delivery of the cash balance in the Participant’s withholding account to the designated

 

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beneficiary or (ii) application as of the last day of the Option Period of the balance of the deceased Participant’s withholding account at the time of death to the exercise of his or her Option, pursuant to Section 8 of the Plan. In the absence of a valid election otherwise, the death of a Participant will be deemed to effect a cancellation of his or her Option. A designation of beneficiary and election may be changed by the Participant at any time, by written or electronic notice in a manner specified by the Compensation Committee. In the event of the death of a Participant and receipt by KLX of proof of the identity and existence at the Participant’s death of a beneficiary validly designated by him or her under the Plan, KLX will deliver to such beneficiary such Stock and/or cash to which the beneficiary is entitled under the Plan. Where the Participant has elected option (ii) above but there is no surviving designated beneficiary, KLX will deliver such Stock and/or cash to the executor or administrator of the estate of the Participant. No beneficiary will, prior to the death of the Participant by whom he or she has been designated, acquire any interest in any Stock or cash credited to the Participant under the Plan.

 

SECTION 12.  PARTICIPANT’S RIGHTS NOT TRANSFERABLE

 

All Participants will have the same rights and privileges under the Plan. Each Participant’s rights and privileges under any Option may be exercisable during his or her lifetime only by him or her, and may not be assigned, sold, pledged, or otherwise transferred in any manner (other than by will or the laws of descent and distribution). Any attempt at such transfer shall be without effect. In the event any Participant violates the terms of this Section 12, any Option held by him or her may be terminated by the Company in its sole discretion and upon return to the Participant of the balance of his or her withholding account, all his or her rights under the Plan will terminate.

 

SECTION 13.  EMPLOYMENT RIGHTS

 

Nothing contained in the provisions of the Plan will be construed to give to any Employee the right to be retained in the employ of the Company or to interfere with the right of the Company to discharge any Employee at any time. The loss of existing or potential profit in Options will not constitute an element of damages in the event of termination of employment for any reason, even if the termination is in violation of an obligation to the Participant.

 

SECTION 14.  CHANGE IN CAPITALIZATION

 

In the event of any change in the outstanding Stock by reason of a stock split, reverse stock split, stock dividend, recapitalization, reorganization, partial or complete liquidation, reclassification, merger, consolidation, separation, extraordinary cash dividend, split-up, spin-off, combination, exchange of Stock, warrants or rights offering to purchase Stock at a price substantially below fair market value, or any other corporate event or distribution of stock or property of KLX affecting the Stock, after the effective date of this Plan, the aggregate number of shares available under the Plan, the number of shares under Options granted but not exercised, and the purchase price will be appropriately adjusted. Such adjustment shall be made equitably by the Compensation Committee subject to the limitations of Section 424 of the Code.

 

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SECTION 15.  ADMINISTRATION OF PLAN

 

(a)                                 The Plan will be administered by the Compensation Committee, which will have the full power and authority (i) to determine any questions which may arise regarding the interpretation and application of the provisions of the Plan (ii) to proscribe, amend and rescind rules and regulations and (iii) to make, administer, construe and interpret such rules and regulations as it deems necessary or advisable in its sole discretion. Any determinations hereunder shall be made in the Compensation Committee’s sole discretion and shall be final and binding. Anything in the Plan to the contrary notwithstanding, subject to applicable law, any authority or responsibility that, under the terms of the Plan, may be exercised by the Compensation Committee may alternatively be exercised by the Board of Directors.

 

(b)                                 To the extent not prohibited by applicable law, the Compensation Committee may, from time to time, delegate some or all of its authority under the Plan to a subcommittee or subcommittees of the Compensation Committee or other persons or groups of persons as it deems necessary, appropriate or advisable under conditions or limitations that it may set at or after the time of the delegation. For purposes of the Plan, reference to the Compensation Committee shall be deemed to refer to any subcommittee, subcommittees, or other persons or groups of persons to whom the Compensation Committee delegates authority pursuant to this Section 15.

 

(c)                                  Subject to applicable law: (i) no member of the Board of Directors or Compensation Committee (or its delegates) shall be liable for any good faith action or determination made in connection with the operation, administration or interpretation of the Plan; and (ii) the members of the Board of Directors or the Compensation Committee (and its delegates) shall be entitled to indemnification and reimbursement in the manner provided in the Certificate of Incorporation and Bylaws of KLX, as they may be amended from time to time. In the performance of its responsibilities with respect to the Plan, the Compensation Committee shall be entitled to rely upon, and no member of the Compensation Committee shall be liable for any action taken or not taken in reliance upon, information and/or advice furnished by the Company’s officers or employees, the Company’s accountants, the Company’s counsel and any other party that the Compensation Committee deems necessary.

 

SECTION 16.  AMENDMENT AND TERMINATION OF PLAN

 

(a)                                 The Company reserves the right at any time or times to amend the Plan to any extent and in any manner it may deem advisable by vote of the Committee; provided, however, that any amendment relating to the aggregate number of shares which may be issued under the Plan (other than an adjustment provided for in Section 14) will have no force or effect unless it is approved by the shareholders within twelve months before or after its adoption. Shareholder approval is also required to the extent necessary to comply with applicable laws, rules and regulations including, without limitation, Sections 423 and 424 of the Code.

 

(b)                                 The Plan will become effective beginning on September 13, 2018. The Plan will automatically terminate on December 31, 2028 (at the end of the second Option Period beginning in Plan Year 2028). The Plan may be earlier suspended or terminated by the

 

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Board of Directors, but no such suspension or termination will adversely affect the rights and privileges of holders of outstanding Options. The Plan will terminate in any case when all or substantially all the Stock reserved for the purposes of the Plan has been purchased.

 

SECTION 17.  CAPTIONS, ETC.

 

The captions of the sections and paragraphs of this Plan have been inserted solely as a matter of convenience and in no way define or limit the scope or intent of any provision of the Plan. References to sections herein are to the specified sections of this Plan unless another reference is specifically stated. Wherever used herein, a singular number shall be deemed to include the plural unless a different meaning is required by the context.

 

SECTION 18.  EFFECT OF PLAN

 

The provisions of the Plan shall be binding upon, and inure to the benefit of, all successors of the Company and each Participant, including, without limitation, such Participant’s estate and the executors, administrators or trustees thereof, heirs and legatees, and any receiver, trustee in bankruptcy or representative of creditors of such Participant.

 

SECTION 19.  GOVERNING LAW

 

Except as to matters of federal law, the Plan and all actions taken under the Plan shall be governed by and construed in accordance with the laws of the State of Florida.

 

IN WITNESS WHEREOF, KLX has caused this Plan to be executed on its behalf the 13th day of September 2018.

 

	
 
    	
KLX Energy Services Holdings, Inc.
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Thomas P. McCaffrey
    
	
 
    	
Name:
    	
Thomas P. McCaffrey
    
	
 
    	
Title:
    	
Senior Vice President and Chief Financial   Officer
    

 

8Exhibit 4.5

 

KLX ENERGY SERVICES HOLDINGS, INC.

 

NON-EMPLOYEE DIRECTORS STOCK

 

AND

 

DEFERRED COMPENSATION PLAN

 

 

TABLE OF CONTENTS

 

	
CLAUSE
    	
 
    	
PAGE
    
	
 
    	
 
    	
 
    
	
SECTION 1 PURPOSES   AND AUTHORIZED SHARES
    	
 
    	
1
    
	
 
    	
 
    	
 
    
	
SECTION 2   DEFINITIONS
    	
 
    	
1
    
	
 
    	
 
    	
 
    
	
SECTION 3   PARTICIPATION
    	
 
    	
3
    
	
 
    	
 
    	
 
    
	
SECTION 4 SHARE OR   DEFERRAL ELECTIONS
    	
 
    	
3
    
	
 
    	
 
    	
 
    
	
SECTION 5 DEFERRAL   ACCOUNTS
    	
 
    	
4
    
	
 
    	
 
    	
 
    
	
SECTION 6   ADMINISTRATION
    	
 
    	
7
    
	
 
    	
 
    	
 
    
	
SECTION 7 PLAN   CHANGES AND TERMINATION
    	
 
    	
8
    
	
 
    	
 
    	
 
    
	
SECTION 8   MISCELLANEOUS
    	
 
    	
8
    

 

i

 

KLX ENERGY SERVICES HOLDINGS, INC.
 NON-EMPLOYEE DIRECTORS STOCK
 AND
 DEFERRED COMPENSATION PLAN

 

SECTION 1  PURPOSES AND AUTHORIZED SHARES

 

The purposes of the KLX Energy Services Holdings, Inc. Non-Employee Directors Stock and Deferred Compensation Plan (the Plan) are to attract, motivate and retain eligible non-employee directors of KLX Energy Services Holdings, Inc. (the Company) who elect to participate in this Plan by offering them opportunities to defer compensation and to encourage directors to increase their stock ownership in the Company. An aggregate number not to exceed 300,000 shares of Common Stock (subject to adjustments contemplated by Section 5.6 hereof) may be delivered pursuant to this Plan.

 

SECTION 2  DEFINITIONS

 

Whenever the following terms are used in this Plan, they shall have the meaning specified below unless the context clearly indicates to the contrary:

 

ACCOUNT or ACCOUNTS means one or more of the Participant’s Cash Account(s) or Stock Unit Account(s), as the context requires.

 

APPLICABLE PERCENTAGE means the percentage of Eligible Compensation subject to deferral or payment in Shares.

 

AVERAGE FAIR MARKET VALUE means the average of the Fair Market Values of a share of Common Stock during the last ten (10) trading days preceding the applicable Award Date.

 

AWARD DATE means, in the case of Cash Account deferrals, each date on which cash would otherwise have been paid; in the case of Unit Account deferrals, the last day of each calendar quarter.

 

BOARD means the Board of Directors of the Company, as constituted from time to time.

 

CASH ACCOUNT means the bookkeeping account maintained by the Company on behalf of a Participant who elects to defer his or her Compensation in cash pursuant to Section 4.

 

CHANGE IN CONTROL means any of the following events: (i) a change in the ownership of the Company, (ii) a change in the effective control of the Company, or (iii) a change in the ownership of a substantial portion of the assets of the Company.  For purposes of this Plan, a “change in the ownership” of the Company occurs on the date on which any one person, or more than one person acting as a group, acquires ownership of

 

 

stock of the Company that, together with stock held by such person or group constitutes more than 50% of the total fair market value or total voting power of the stock of the Company.  A “change in the effective control” of the Company occurs on the date on which either: (i) a person, or more than one person acting as a group, acquires ownership of stock of the Company possessing 30% or more of the total voting power of the stock of the Company, taking into account all such stock acquired during the 12-month period ending on the date of the most recent acquisition, or (ii) a majority of the members of the Board is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of such Board prior to the date of the appointment or election, but only if no other corporation is a majority shareholder of the Company.  A “change in the ownership of a substantial portion of assets” occurs on the date on which any one person, or more than one person acting as a group, other than a person or group of persons that is related to the Company, acquires assets from the Company that have a total gross fair market value equal to or more than 40% of the total gross fair market value of all of the assets of the Company immediately prior to such acquisition or acquisitions, taking into account all such assets acquired during the 12-month period ending on the date of the most recent acquisition.  An event constitutes a Change in Control with respect to the Company only if the Participant performs services for the Company that has experienced the Change in Control, or the Participant’s relationship to the affected Company otherwise satisfies the requirements of Treasury Regulation Section 1.409A- 3(i)(5)(ii).  The determination as to the occurrence of a Change in Control shall be based on objective facts and in accordance with the requirements of Code Section 409A.

 

CODE means the Internal Revenue Code of 1986, as amended from time to time, and the applicable guidance, rulings, and regulations promulgated thereunder.

 

COMMON STOCK means the Common Stock of the Company, par value $0.01 per share, subject to adjustment pursuant to Section 5.6 hereof.

 

COMMITTEE means the Board or a Committee of the Board acting under delegated authority from the Board.

 

COMPANY means KLX Energy Services Holdings, Inc., a Delaware corporation, and its successors and assigns.

 

DIVIDEND EQUIVALENT means the amount of cash dividends or other cash distributions paid by the Company on that number of shares of Common Stock which is equal to the number of Stock Units then credited to a Participant’s Stock Unit Account on the applicable measurement date, which amount shall be allocated as additional Stock Units to the Participant’s Stock Unit Account, as provided in Section 5.3 hereof.

 

EARNINGS mean those earnings that are allocable to the Participant’s Cash Accounts in such manner as the Committee shall reasonably determine.

 

EFFECTIVE DATE means September 13, 2018.

 

 

ELIGIBLE COMPENSATION means retainer and/or meeting fees for services as a director, as established by the Board from time to time, which may be payable in cash or Shares.

 

ELIGIBLE DIRECTOR means a member of the Board who is not an officer or employee of the Company or a subsidiary and who is compensated in the capacity as a director.

 

EXCHANGE ACT means the Securities Exchange Act of 1934, as amended from time to time, and the rules and regulations promulgated thereunder.

 

FAIR MARKET VALUE means on any date the average of the high and low prices of the Common Stock, as published in The Wall Street Journal or otherwise reliably reported, of the principal securities exchange or market on which the Common Stock is so listed, admitted to trade, or quoted, or, if there is no trading of the Common Stock on such date, then the average of the high and low prices of the Common Stock as quoted on the next preceding date on which there was trading in such shares. If the Common Stock is not so listed, admitted or quoted, the Committee may designate such other exchange, market or source of data as it deems appropriate for determining such value of purposes of this Plan.

 

PARTICIPANT means an Eligible Director who elects to participate in this Plan or otherwise has an Account balance under this Plan.

 

PLAN means the KLX Energy Services Holdings, Inc. Non-Employee Directors Stock and Deferred Compensation Plan, as amended from time to time.

 

SHARES means shares of Common Stock.

 

STOCK UNIT OR UNIT means a non-voting unit of measurement which is deemed for bookkeeping and payment purposes to represent the right to receive one share of Common Stock of the Company pursuant to the terms of this Plan.

 

STOCK UNIT ACCOUNT means the bookkeeping account maintained by the Company on behalf of each Participant which is credited with Stock Units in accordance with Section 5.2.

 

YEAR means each calendar year during the term of this Plan.

 

SECTION 3  PARTICIPATION

 

Each Eligible Director may elect to defer under and subject to Section 4 of this Plan his or her Eligible Compensation for any Year.

 

SECTION 4  SHARE OR DEFERRAL ELECTIONS

 

4.1                               TIME AND TYPES OF ELECTIONS. On or before December 31 immediately preceding each succeeding Year (or, in the case of a person who first

 

 

becomes an Eligible Director during the Year, within 30 days after becoming an Eligible Director), each Eligible Director may make the following two irrevocable elections, subject to Section 4.2 hereof:

 

(1)                                 To the extent that Participant’s Eligible Compensation is designated as payable to the Participant in the form of cash, the Company may, in its sole discretion, permit a Participant to elect, in lieu of cash:

 

(a)                                 to receive such Eligible Compensation currently in Shares;

 

(b)                                 to defer such Eligible Compensation in a Cash Account;

 

(c)                                  to defer such Eligible Compensation in a Stock Unit Account; or

 

(d)                                 to select one or more of the preceding payment or deferral methods in accordance with the Applicable Percentage increments set forth in Section 4.2 hereof such that the sum of all such Applicable Percentage increments does not exceed 100%.

 

(2)                                 To the extent that Participant’s Eligible Compensation is designated as payable to the Participant in the form of Common Stock, the Company may, in its sole discretion, permit a Participant to elect, in lieu of Common Stock, to defer all or a portion of such Eligible Compensation in a Stock Unit Account in accordance with the Applicable Percentage increments set forth in Section 4.2 hereof such that the sum of all such Applicable Percentage increments does not exceed 100%.

 

4.2                               PERMITTED AMOUNTS; ELECTIONS. The portions of the Eligible Compensation subject to deferral or payment in Shares shall be limited to increments of 25%, 50%, 75% or 100% (the Applicable Percentage). All elections shall be in writing on forms provided by the Company (and such election forms may, in the discretion of the Company, require that a Participant defer all or a specified portion of such Participant’s Eligible Compensation in accordance with this Section 4). If an election is made under this Section 4 and is not revoked or changed with respect to the following Year by the end of the current Year, the election shall be deemed a continuing one and shall remain in place with respect to compensation for the following Year.

 

SECTION 5  DEFERRAL ACCOUNTS

 

5.1                               CASH ACCOUNT. If an Eligible Director has made an election under Section 4.1(1)(b) to defer the receipt of cash compensation in a Cash Account, the Company shall establish and maintain a Cash Account for the Participant under this Plan, which Account shall be a memorandum account on the books of the Company. A Participant’s Cash Account shall be credited as follows:

 

(a)                                 As of the date the Eligible Compensation would have been otherwise payable, the Company shall credit the Participant’s Cash Account with an amount equal to the Applicable Percentage of the Eligible Compensation.

 

(b)                                 As of the last day of each calendar quarter, each Participant’s Cash Account shall be credited with the Earnings reasonably determined by the Committee to be allocable to such Account.

 

 

5.2                               STOCK UNIT ACCOUNT.

 

(a)                                 Elective Deferrals. If an Eligible Director has made an election under Section 4.1(1)(c) or 4.1(2) to defer receipt of cash compensation or stock compensation in a Stock Unit Account, the Committee shall, as of the last day of each calendar quarter in which the Eligible Compensation was earned and would otherwise be paid, credit the Participant’s Stock Unit Account with a number of Units determined by dividing an amount which is equal to the Applicable Percentage of the Participant’s Eligible Compensation by the Average Fair Market Value of a share of Common Stock as of the Award Date.

 

(b)                                 Limitations on Rights Associated with Units. A Participant’s Stock Unit Account shall be a memorandum account on the books of the Company. The Units credited to a Participant’s Stock Unit Account shall be used solely as a device for the determination of the number of shares of Common Stock to be eventually distributed to the Participant in accordance with this Plan. The Units shall not be treated as property or as a trust fund of any kind. No Participant shall be entitled to any voting or other stockholder rights with respect to Units granted or credited under this Plan. The number of Units credited (and the number of Shares to which the Participant is entitled under this Plan) shall be subject to adjustment in accordance with Section 5.6 and the terms of this Plan.

 

5.3                               DIVIDEND EQUIVALENT CREDITS TO STOCK UNIT ACCOUNT. As of the end of each quarter, a Participant’s Stock Unit Account shall be credited with additional Units in an amount equal to the Dividend Equivalent representing dividends paid during the quarter on a number of shares equal to the aggregate number of Stock Units in the Participant’s Stock Unit Account as of the end of the preceding quarter divided by the Average Fair Market Value of a share of Common Stock as of the applicable crediting date.

 

5.4                               IMMEDIATE VESTING AND ACCELERATED CREDITING.

 

(a)                                 Units and Other Amounts Vest Immediately. All Units or other amounts credited to one or more of a Participant’s Accounts shall be at all times fully vested and not subject to a risk of forfeiture.

 

(b)                                 Acceleration of Crediting of Accounts. In the event of a Change in Control of the Company, or in the event that a Participant ceases to serve as a director of the Company, the crediting of amounts to a Participant’s Cash Account, if applicable, and the crediting of Units to a Participant’s Stock Unit Account, if applicable, shall be accelerated to the date of the Change in Control or termination of service. In such case, the amount or number of Units credited for the quarter in which the Change in Control or termination of services occurs shall be prorated based on the number of days of service during the applicable quarter, and the Award Date shall be deemed to be the date of the Change in Control or termination of service, as applicable.

 

 

5.5                               DISTRIBUTION OF CASH OR SHARES.

 

(a)                                 Time and Manner of Distribution of Accounts. Except as otherwise provided herein, the cash or Shares payable under this Plan in respect of Cash Accounts or Stock Unit Accounts, respectively, shall be distributed to the Participant (or, in the event of his or her death, the Participant’s Beneficiary) at such time and in such manner as elected by the Participant and set forth in the Participant’s election form. Other than in the event of a distribution in connection with a Change in Control which shall be paid to the Participant in the form of a lump sum distribution, in the sole discretion of the Company (as set forth in the form of election form provided by the Company), a Participant may elect distributions in one of the following two forms: (i) a lump sum distribution, or (ii) annual installments not to exceed ten (10) such annual installments. Each annual installment shall be equal to the value of the Account being distributed multiplied by a fraction, the numerator of which is one (1) and the denominator of which is the number of installments remaining to be paid. In the event that a Participant fails to make an election, then distribution shall be made in the form of a lump sum. Each Account, less any applicable withholding taxes, shall be distributed commencing the earliest of (x) the date specified in the Participant’s election form as described above, (y) the first day of the month immediately following the date of the Participant’s termination of service, or as soon as administratively practicable thereafter or (z) the first day of the month immediately following a Change in Control.

 

(b)                                 Small Distributions. Notwithstanding the foregoing, if after a termination of service the balance remaining in a Participant’s Cash Account is less than $10,000 or, if the aggregate fair market value of the Units remaining in the Participant’s Stock Unit Account on the date of the termination of service is less than $10,000, then such remaining balances shall be distributed in a lump sum.

 

(c)                                  Election to Further Defer Distribution of Cash Accounts or Stock Unit Accounts. A Participant may, with the approval of the Administrator, elect to further defer the commencement of any distribution to be made with respect to amounts credited under any Cash or Stock Unit Account by filing a new written election with the Committee on a form approved by the Committee; provided, however, that (1) no such election shall be effective until twelve (12) months after such election is filed with the Committee, (2) no such new election shall be effective with respect to any Account after benefits with respect to the Account shall have commenced, and (3) such election must provide that the first payment with respect to such election must be deferred for at least five (5) years from the date such payment would otherwise have been made.

 

(d)                                 Form of Distribution of Cash Accounts or Stock Unit Accounts. Stock Units credited to a Participant’s Stock Unit Account shall be distributed in an equivalent whole number of Shares of the Company’s Common Stock. Any fractional share interests shall be accumulated and paid in cash with the last distribution. All amounts credited to a Participant’s Cash Account shall be distributed in cash.

 

5.6                               ADJUSTMENTS IN CASE OF CHANGES IN COMMON STOCK. If there shall occur any change in the outstanding shares of the Company’s Common Stock by reason of any stock dividend, stock split, recapitalization, merger, consolidation, combination or other reorganization, exchange of shares, sale of all or substantially all of

 

 

the assets of the Company, split-up, split-off, spin-off, extraordinary redemption, liquidation or similar corporate change or change in capitalization or any distribution to holders of the Company’s Common Stock (other than cash dividends and cash distributions), the Committee shall make such proportionate and equitable adjustments consistent with the effect of such event on stockholders generally (but without duplication of benefits if Dividend Equivalents are credited), as the Committee determines to be necessary or appropriate, in the number, kind and/or character of shares of Common Stock or other securities, property and/or rights contemplated hereunder, including any appropriate adjustments to the market prices used in the determination of the number of Shares and Units, and in rights in respect of Stock Unit Accounts credited under this Plan so as to preserve the benefits intended.

 

SECTION 6  ADMINISTRATION

 

6.1                               THE ADMINISTRATOR. The Administrator of this Plan shall be the Board as a whole or a Committee as appointed from time to time by the Board to serve as administrator of this Plan. The participating members of any Committee so acting shall include, as to decisions in respect of participants who are subject to Section 16 of the Exchange Act, only those members who are Non-Employee Directors (as defined in Rule 16b-3 promulgated under the Exchange Act (Rule 16b-3)). Members of the Committee shall not receive any additional compensation for administration of this Plan.

 

6.2                               COMMITTEE ACTION. A member of the Committee shall not vote upon any matter which relates solely to himself or herself as a Participant in this Plan. Action of the Committee with respect to the administration of this Plan shall be taken pursuant to a majority vote or (assuming compliance with Section 6.1) by unanimous written consent of its members.

 

6.3                               RIGHTS AND DUTIES; DELEGATION AND RELIANCE; DECISIONS BINDING. Subject to the limitations of this Plan, the Committee shall be charged with the general administration of this Plan and the responsibility for carrying out its provisions, and shall have powers necessary to accomplish those purposes, including, but not by way of limitation, the following:

 

(1)                                 To construe and interpret this Plan;

 

(2)                                 To resolve any questions concerning the amount of benefits payable to a Participant (except that no member of the Committee shall participate in a decision relating solely to his or her own benefits);

 

(3)                                 To make all other determinations required by this Plan;

 

(4)                                 To maintain all the necessary records for the administration of this Plan; and

 

(5)                                 To make and publish forms, rules and procedures for the administration of this Plan.

 

 

The determination of the Committee made in good faith as to any disputed question or controversy and the Committee’s determination of benefits payable to Participants, including decisions as to adjustments under Section 5.6, shall be conclusive and binding for all purposes of this Plan. In performing its duties, the Committee shall be entitled to rely on information, opinions, reports or statements prepared or presented by: (i) officers or employees of the Company whom the Committee believes to be reliable and competent as to such matters; and (ii) counsel (who may be employees of the Company), independent accountants and other persons as to matters which the Committee believes to be within such persons’ professional or expert competence.

 

The Committee shall be fully protected with respect to any action taken or omitted by it in good faith pursuant to the advice of such persons. The Committee may delegate ministerial, bookkeeping and other non-discretionary functions to individuals who are officers or employees of the Company.

 

SECTION 7  PLAN CHANGES AND TERMINATION

 

7.1                               AMENDMENTS. The Board shall have the right to amend this Plan in whole or in part from time to time or may at any time suspend or terminate this Plan (provided such amendment, suspension or termination complies with requirements under Code Section 409A); provided, however, that no amendment or termination shall cancel or otherwise adversely affect in any way, without his or her written consent, any Participant’s rights with respect to then outstanding Accounts or Dividend Equivalent credits thereon so long as the Account is outstanding). Any amendments authorized hereby shall be stated in an instrument in writing, and all Participants shall be bound by upon receipt of notice the amendment.

 

7.2                               TERM. It is the current expectation of the Company that this Plan shall continue indefinitely, but continuance of this Plan is not assumed as a contractual obligation of the Company. If the Board of Directors decides to discontinue or terminate this Plan, it shall notify the Committee and Participants in this Plan of its action in writing, and this Plan shall be terminated at the time set forth on the notice. All Participants shall be bound thereby. Notwithstanding anything to the contrary, this Plan shall automatically terminate upon a Change in Control.  No benefits shall accrue in respect of Eligible Compensation earned after a discontinuance or termination of this Plan.

 

SECTION 8  MISCELLANEOUS

 

8.1                               UNFUNDED PLAN AND LIMITATION ON PARTICIPANTS’ RIGHTS. Participants shall have the rights only if general unsecured creditors of the Company with respect to amounts credited and benefits payable, if any, on their Cash Account, and rights no greater than the right to receive the Common Stock (or equivalent value as a general unsecured creditor) with respect to Stock Units or Share Accounts. The Plan constitutes a mere promise by the Company to make distributions in the future. It is intended that this Plan shall constitute an “unfunded” plan for tax purposes. Participation in this Plan shall not give any person the right to serve as a member of the Board or any

 

 

rights or interests other than as herein provided. Participants shall not be entitled to receive actual dividends or to vote Shares until after delivery of a certificate representing the Shares.

 

8.2                               BENEFICIARIES.

 

(a)                                 Beneficiary Designation. Upon forms provided by and subject to conditions imposed by the Company, each Participant may designate in writing the Beneficiary or Beneficiaries (as defined in Section 8.2(b)) whom such Participant desires to receive any amounts payable under this Plan after his or her death. The Company and the Committee may rely on the Participant’s designation of a Beneficiary or Beneficiaries last filed in accordance with the terms of this Plan.

 

(b)                                 Definition of Beneficiary. A Participant’s “Beneficiary” or “Beneficiaries” shall be the person, persons, trust or trusts (or similar entity) designated by the Participant or, in the absence of a designation, entitled by will or the laws of descent and distribution to receive the Participant’s benefits under this Plan in the event of the Participant’s death, and shall mean the Participant’s executor or administrator if no other Beneficiary is identified and able to act under the circumstances.

 

8.3                               BENEFITS NOT TRANSFERABLE; OBLIGATIONS BINDING UPON SUCCESSORS. Benefits of a Participant under this Plan shall not be assignable or transferable and any purported transfer, assignment, pledge or other encumbrance or attachment of any payments or benefits under this Plan, or any interest therein, other than by operation of law or pursuant to Section 8.2, shall not be permitted or recognized. Shares deliverable under this Plan may be subject to restrictions on transfer under applicable securities laws, unless the Shares are duly registered prior to issuance. Obligations of the Company under this Plan shall be binding upon successors of the Company.

 

8.4                               GOVERNING LAW; SEVERABILTY. The validity of this Plan or any of its provisions shall be construed, administered and governed in all respects under the laws of the State of Florida. If any provision of this Plan shall be held by a court of competent jurisdiction to be invalid or unenforceable, the remaining provisions hereof shall continue to be fully effective.

 

8.5                               COMPLIANCE WITH LAWS. This Plan and the offer, issuance and delivery of shares of Common Stock and/or the payment of money through the deferral of compensation under this Plan are subject to compliance with all applicable federal and state laws, rules and regulations (including but not limited to state and federal securities law) and to such approvals by any listing, agency or any regulatory or governmental authority as may, in the opinion of counsel for the Company, be necessary or advisable in connection therewith. Any securities delivered under this Plan shall be subject to prior registration or such restrictions as the Company may deem necessary or desirable to assure compliance with all applicable legal requirements, and the person acquiring such securities shall, if requested by the Company, provide such assurances and representations to the Company as it may reasonably request to assure such compliance.

 

 

8.6                               PLAN CONSTRUCTION. This Plan is intended to comply with the requirements of Code Section 409A of the Internal Revenue Code and the regulations and other guidance issued thereunder, as in effect from time to time. To the extent a provision of the Plan is contrary to or fails to address the requirements of Code Section 409A, the Plan shall be construed and administered as necessary to comply with such requirements until this Plan is appropriately amended to comply with such requirements.  A termination of service shall not be deemed to have occurred for purposes of any provision of this Plan providing for the payment of any amounts upon or following a termination of service unless such termination is also a “separation from service” within the meaning of Code Section 409A of the Internal Revenue Code and the regulations and other guidance issued thereunder and, for purposes of any such provision of this Plan, references to a “termination,” “termination of service” or like terms shall mean “separation from service.”  For purposes of Code Section 409A of the Internal Revenue Code and the regulations and other guidance issued thereunder, a Participant’s right to receive any installment payments pursuant to this Plan shall be treated as a right to receive a series of separate and distinct payments.

 

It is the intent of the Company that transactions pursuant to this Plan satisfy and be interpreted in a manner that satisfies the applicable conditions for exemption under Rule 16b-3 so that to the extent elections are timely made, elective deferrals (including the crediting of Units and Dividend Equivalents and the distribution of Shares hereunder) will be entitled to the benefits of Rule 16b-3 or other exemptive rules under Section 16 of the Exchange Act and will not be subjected to avoidable liability thereunder. The Committee may, subject to Sections 8.5 hereof, permit elections by Eligible Directors that would not qualify for exemption under Section 16(b) of the Exchange Act, so long as the availability of any exemption thereunder for other Participants under this Plan is not compromised.

 

8.7                               HEADINGS NOT PART OF PLAN. Headings and subheadings in this Plan are inserted for reference only and are not to be considered in the construction of the provisions hereof.

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