Document:

SEC Exhibit

C&J ENERGY SERVICES, LTD.  
2016 SENIOR EXECUTIVE INCENTIVE PLAN
1.Purpose.  This C&J Energy Services, Ltd. (the “Company”) 2016 Senior Executive Incentive Plan (the “Plan”) is designed to align the interests of the Company and eligible senior executives of the Company and its subsidiaries.
2.Adoption of the Plan.  The Company, intending to be legally bound, hereby adopts the Plan effective as of May 2, 2016 (the “Effective Date”).  The Plan shall be in effect from the Effective Date and shall continue until December 31, 2016 (the “Term”). The expiration of the Term shall not in any event reduce or adversely affect any amounts due to any Participant hereunder.
3.General.  The compensation provided under the Plan is intended to be in addition to all other compensation payable to Participants under any employment agreement or incentive plan or program in effect with the Company or its direct or indirect subsidiaries.
4.Definitions.  For purposes of this Plan:
(a)    “Board” means the Company’s Board of Directors.
(b)    “Committee” means the Compensation Committee of the Board.
(c)    “Company Group” means the Company and its direct and indirect subsidiaries.
(d)    “Participant” shall have the meaning ascribed thereto in Section 5 hereof.
(e)    “Performance Goals” means the Performance Metric (as defined below) goals set forth on Schedule A, as follows: (i) Quarterly Threshold Performance Goals, (ii) Quarterly Target Performance Goals, (iii) Quarterly Maximum Performance Goals, (iv) Cumulative Threshold Performance Goals, (v) Cumulative Target Performance Goals and (vi) Cumulative Maximum Performance Goals.  
(f)    “Performance Metrics” means the performance metrics used to measure the Company’s performance under the Plan as set forth on Schedule A.  
(g)    “Quarter” means each of the following periods: January 1, 2016 through March 31, 2016 (the “First Quarter”), April 1, 2016 through June 30, 2016 (“Second Quarter”), July 1, 2016 through September 30, 2016 (“Third Quarter”), and October 1, 2016 through December 31, 2016 (“Fourth Quarter”). 
(h)    “Quarterly Performance Incentive” shall mean, in the case of any Participant, the incentive payable to such Participant under the Plan for the applicable Quarter.  
(i)    “Quarterly Performance Incentive Amount” shall mean, in the case of any Participant, the amount of the Quarterly Performance Incentive for such Participant as determined by the Committee; provided that in no event may the Quarterly Performance Incentive Amount for the Second Quarter or the Third Quarter exceed the Target Performance Incentive Amount for such quarter.  
5.Eligible Participants.  Each person designated by the Committee from time to time shall be a Participant under the Plan and eligible to receive a Quarterly Performance Incentive with respect to each Quarter; provided, that any person designated by the Committee to to be a Participant under the Plan may not also participate in the Company’s 2016 Key Employee Incentive Plan. 
6.Term of Participation.  
(a)    Subject to the provisions of this Plan, each Participant shall earn a Quarterly Performance Incentive as of the end of the Second, Third and Fourth Quarter, equal to all or a portion of the Quarterly Performance Incentive Amount, depending upon the extent to which the Performance Goals set forth in Schedule A have been achieved for such Quarter.  Subject to the provisions of the Plan and any award agreement granted hereunder, each Participant shall also receive a Quarterly Performance Incentive in respect of the First Quarter equal to the target Performance Incentive Amount based on the Company’s prior performance during the First Quarter, payable no later than May 15, 2016; provided that, such Quarterly Performance Incentive remains subject to repayment by the Participant (i) upon the termination of the Participant’s employment by the Company for Cause or by the Participant without Good Reason (in each case, as defined in a Participant’s award agreement) prior to June 30, 2016 as set forth in the Participant’s award agreement, or (ii) in the event the Participant fails to execute a release of claims against the Company, or the release does not become effective, in each case, by May 30.
(b)    In addition to being measured on a Quarterly basis, the Performance Goal for each Performance Metric shall be measured cumulatively from April 1, 2016 through the end of each of the Third and Fourth Quarters.  A “catch-up” payment will be made if the Company exceeds the Quarterly Target Performance Goal for the Third Quarter and meets or exceeds the Quarterly Threshold Performance Goal for the Fourth Quarter and less than 100% of the Cumulative Quarterly Performance Incentive Amount for such Quarter has been earned. 
		
	(i)
	Third Quarter Catch-Up:  A Participant shall earn, in addition to any Quarterly Performance Incentive payable for the Third Quarter pursuant to Section 6(a) above, an amount equal to (i) the aggregate Quarterly Performance Incentive Amount payable based on achievement, as applicable, of the Cumulative Threshold Performance Goal or Cumulative Target Performance Goal as of the end of the Third Quarter, minus (ii) the Quarterly Performance Incentive Amount actually paid for the Second Quarter, if any, and payable for the Third Quarter pursuant to Section 6(a) above.

		
	(ii)
	Fourth Quarter Catch-Up:  A Participant shall earn, in addition to any Quarterly Performance Incentive payable for the Fourth Quarter pursuant to Section 6(a) above, an amount equal to (i) the aggregate Quarterly Performance Incentive Amount payable based on achievement, as applicable, of the Cumulative Threshold Performance Goal, Cumulative Target Performance Goal or Cumulative Maximum Performance Goal as of the end of the Fourth Quarter, minus (ii) the Quarterly Performance Incentive Amount actually paid for the Second and Third Quarters, if any, and payable for the Fourth Quarter pursuant to Section 6(a) above. 

Schedule B hereto contains examples of the application of this Section 6(b). 
    
(c)    If the Term ends after the commencement, and before the end, of a Quarter, each Participant who is then employed by the Company shall earn a prorated amount of the Quarterly Performance Incentive for the Quarter in which the Term ends (based on the portion of the Quarter that has elapsed as of the last day of the Term), and the Participant shall not be eligible to earn a Quarterly Performance Incentive following the Term.  
(d)    Any Quarterly Performance Incentive required to be made under this Plan shall be paid on a fully-vested basis by the Company within 30 days after the end of the applicable Quarter.  
(e)    In order to earn a Quarterly Performance Incentive for any Quarter, a Participant must remain employed by the Company Group through the date on which the Quarterly Performance Incentive for the applicable Quarter is paid.  A Participant whose employment with the Company Group terminates for any reason prior to the date on which the Quarterly Performance Incentive for the applicable Quarter is paid shall forfeit the right to any Quarterly Performance Incentive for that Quarter.
7.Performance Goals.  Promptly after the end of each Quarter (but in any event within 30 days of the end of the Quarter), the Committee shall certify the degree to which the applicable Performance Goals have been achieved and the amount payable to each Participant hereunder. 
8.Plan Administration.  This Plan shall be administered by the Committee.  The Committee is given full authority and discretion within the limits of this Plan to establish such administrative measures as may be necessary to administer and attain the objectives of this Plan and may delegate the authority to administer the Plan to an officer of the Company.  The Committee (or its delegate, as applicable) shall have full power and authority to construe and interpret this Plan and any interpretation by the Committee shall be binding on all Participants and shall be accorded the maximum deference permitted by law.
(a)    All rights and interests of Participants under this Plan shall be non-assignable and nontransferable, and otherwise not subject to pledge or encumbrance, whether voluntary or involuntary, other than by will or by the laws of descent and distribution.  In the event of any sale, transfer or other disposition of all or substantially all of the Company’s assets or business, whether by merger, stock sale, consolidation or otherwise, the Company may assign this Plan.
(b)    Any payment to a Participant in accordance with the provisions of this Plan shall, to the extent thereof, be in full satisfaction of all claims against the Company Group, and the Company may require Participant, as a condition precedent to such payment, to execute a receipt and release to such effect.
(c)    Payment of amounts due under the Plan shall be provided to Participant in the same manner as Participant receives his or her regular paycheck or by mail at the last known address of Participant in the possession of the Company, at the discretion of Committee.  The Company will deduct all applicable taxes and any other withholdings required to be withheld with respect to the payment of any award pursuant to this Plan.
(d)    The Company shall not be required to establish any special or separate fund or to make any other segregation of assets to ensure the payment of any award provided for hereunder.  Quarterly Performance Incentive payments shall not be considered as extraordinary, special incentive compensation, and it will not be included as “earnings,” “wages,” “salary,” or “compensation” in any pension, welfare, life insurance, or other employee benefit plan or arrangement of the Company Group.
(e)    The Company, in its sole discretion, shall have the right to modify, supplement, suspend or terminate this Plan at any time; provided that in no event shall any amendment or termination adversely affect the rights of Participants regarding any Quarterly Performance Incentive for a Quarter that has commenced as of the date of such action without the prior written consent of the affected Participants.  Subject to the foregoing, the Plan shall terminate upon the satisfaction of all obligations of the Company or its successor entities hereunder.
(f)    Nothing contained in this Plan shall in any way affect the right and power of the Company to discharge any Participant or otherwise terminate his or her employment at any time or for any reason or to change the terms of his or her employment in any manner.
(g)    Except as otherwise provided under this Plan, any expense incurred in administering this Plan shall be borne by the Company.
(h)    Captions preceding the sections hereof are inserted solely as a matter of convenience and in no way define or limit the scope or intent of any provision hereof.
(i)    The administration of the Plan shall be governed by the laws of the State of Texas, without regard to the conflict of law principles of any state.  Any persons or corporations who now are or shall subsequently become parties to the Plan shall be deemed to consent to this provision.
(j)    The Plan is intended to either comply with, or be exempt from, the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (“Code Section 409A”).  To the extent that the Plan is not exempt from the requirements of Code Section 409A, the Plan is intended to comply with the requirements of Code Section 409A and shall be limited, construed and interpreted in accordance with such intent.  Notwithstanding the foregoing, in no event whatsoever shall the Company be liable for any additional tax, interest, income inclusion or other penalty that may be imposed on a Participant by Code Section 409A or for damages for failing to comply with Code Section 409A.
*     *     *     *     *SEC Exhibit

_________________, 2016
[Name]
Re:    Quarterly Performance Incentive Opportunity
Dear ________________:
This letter will confirm that you are eligible to participate in the C&J Energy Services, Ltd. (the “Company”) 2016 Senior Executive Incentive Plan (the “Plan”).  Capitalized terms in this letter (this “Participation Agreement”) not herein defined shall have the meaning set forth in the Plan.
General Description.  The Plan is a quarterly performance incentive plan that permits you and other eligible participants to earn and be paid a cash incentive (the “Quarterly Performance Incentive”).  The term of the Plan begins January 1, 2016 and ends when terminated by the Company, subject to the additional terms set forth in the Plan.  Your participation in the Plan is limited to a maximum of four fiscal quarters, and you will be eligible to participate in the Plan in the following fiscal quarters (each, an “Eligible Quarter”): 
	
				
	Eligible Quarter:
	2Q2016
	3Q2016
	4Q2016

	Time of Payment:
	July, 2016
	October, 2016
	January, 2017

Quarterly Performance Incentive.  Your Quarterly Performance Incentive is $[●].  You will earn a Quarterly Performance Incentive if and to the extent that (i) you are employed by the Company or its subsidiaries through the date on which the Quarterly Performance Incentive for the applicable Quarter is paid and (ii) the applicable Performance Goals established by the Committee for the applicable Quarter are achieved (which Performance Goals will be communicated to you promptly after they are established).  In the event that your employment with the Company Group is terminated (for any reason) prior to the date on which the Quarterly Performance Incentive for the applicable Quarter is paid, you will forfeit your right to receive any portion of your Quarterly Performance Incentive for such Quarter.
First Quarter Quarterly Performance Incentive.  Notwithstanding the foregoing, you will be paid a Quarterly Performance Incentive in the amount of $[●] in recognition of your services to the Company during the First Quarter, which will be paid to you no later than May 15, 2016; provided you remain an employee of the Company on such date (such Incentive, the “First Quarterly Incentive”). The First Quarterly Incentive, net of any required withholding taxes, shall remain subject to repayment in the event that either of the following events occurs:
(a) the Company terminates your employment for Cause or you terminate your employment without Good Reason (in each case, as such terms are defined in your Employment Agreement with the Company) prior to June 30, 2016; or

(b) you fail to execute a release of claims against the Company, or the release does not become effective, in each case, by June 10, 2016.     
Administration.  The Plan and this Participation Agreement shall be administered by the Committee.  All calculations and determinations made by the Committee with respect to this Participation Agreement and your Quarterly Performance Incentive opportunity will be final and binding on you and the Company.  In the event of a conflict between the terms of this Participation Agreement and the Plan, the Plan shall control in all respects. 
We are pleased to be able to offer this Quarterly Performance Incentive opportunity to you and truly appreciate your dedication and commitment to the Company and its affiliates.  If you have further questions about this plan please contact your HR leadership.  We are excited about the future and look forward to our success together. 
A signature page follows this letter. 

    
    

	
			
	 
	 
	Very turly yours,

	 
	 
	C&J ENERGY SERVICES LTD.

	 
	 
	 

	 
	 
	Name:____________________

	 
	 
	Title:____________________

	 
	 
	 

	ACCEPTED BY:
	 
	 

	____________________
	 
	 

	 
	 
	 

	[Name]
	 
	 

Signature Page to Participation Agreement

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