Document:

Exhibit

WEX INC. SEVERANCE PAY PLAN
FOR OFFICERS

Original Effective Date:    February 22, 2005

Amended and Restated September 25, 2015

ARTICLE I - INTRODUCTION

WEX Inc. and WEX Bank (referred to collectively herein as the “Company”) hereby amend and restate the WEX Inc. Severance Pay Plan for Officers (the “Plan”), generally effective as of September 25, 2015, to provide severance benefits to certain employees of the Company and its subsidiaries and affiliates who suffer a loss of employment under the terms and conditions set forth in the Plan. The Plan replaces and supersedes (i) any and all severance plans, policies and/or practices of the Company and each of its U.S. subsidiaries and affiliates, whether written or unwritten, in effect for covered employees prior to September 25, 2015 and (ii) any and all severance plans, policies and or practices of any U.S. business or entity acquired by the Company effective upon the consummation of any such acquisition, in the sole discretion of the Company. The Plan may not be amended or changed except in accordance with the provisions set forth below and is to be administered in the sole and absolute discretion of the Company.

ARTICLE II - DEFINITIONS AND INTERPRETATIONS

The following definitions and interpretations of important terms apply to the Plan.

(a)Agreement. The Agreement and General Release provided by the Company to an Eligible Employee as determined in the sole and absolute discretion of the Company in connection with his or her termination of employment with the Company, which if executed by the Eligible Employee (and not timely revoked), will acknowledge his or her termination of employment with the Company and release the Company from liability for any and all claims. By signing the Agreement and General Release, an Employee waives all rights he or she may have under state and federal employment statutes and all common law causes of action related to his or her employment and termination thereof.

(b)Base Pay. For purposes hereof, Base Pay shall mean an employee’s annual base salary or wages from the Company. Base Pay shall be determined as reflected on the Company’s payroll records, and shall not include bonuses, overtime pay, shift premiums, commissions, employer contributions for benefits, incentive or deferred compensation or other additional compensation. For purposes hereof, an Eligible Employee's Base Pay shall include any salary reduction contributions made on his or her behalf to any plan of the Company under section 125, 132(f)(4) or 401(k) of the Internal Revenue Code of 1986, as amended (“Code”). One week of Base Pay shall mean an employee’s annual Base Pay divided by fifty-two (52).

(c)Cause. Termination for cause shall mean termination as a result of any of the following: (a) misappropriation or improper use or disclosure of any confidential or proprietary information of the Company; (b) failure to comply with any contractual obligations to the Company;
(c)solicitation for hire away from the Company any current Company employees absent the Company's consent; or (d) taking any action which the Company, in its sole discretion, deems to have been inimical or detrimental to the interests of the Company.

- 1 -

(d)Company.  WEX Inc., WEX Bank, FleetOne, LLC and Evolution1, LLC and/or other subsidiaries and affiliates as determined by the Plan Administrator.

		
	(e)
	Amended and Restated Effective Date.   September 25, 2015

(f)Eligible Employee. Any employee of the Company who: (i) is classified by the Company as an active, full-time employee of the Company and who is internally designated as Chief Executive Officer (“CEO”), Executive Vice President (“EVP”), Senior Vice President (“SVP”), or Vice President (“VP”) (the CEO, EVPs, SVPs and VPs are individually referred to herein as “Officer,” and collectively as “Officers”), (ii) is not compensated solely by commission or bonus, and (iii) is involuntarily terminated from employment for one of the reasons set forth in Article III, Section A of the Plan. Notwithstanding the foregoing, an Eligible Employee shall not include any individual (i) classified as an independent contractor by the Company, (ii) being paid by or through an employee leasing company or other third party agency, (iii) any other person classified by the Company as a leased employee, during the period the individual is so paid or classified even if such individual is later retroactively reclassified as a common-law employee of the Company or a subsidiary or an affiliate for federal employment tax purposes (or other non-Plan purposes) during all or any part of such period pursuant to applicable law or otherwise.

(g)Participant. An Eligible Employee who meets all the requirements set forth in Article III of the Plan. An individual shall cease being a Participant once payment of all severance pay and other benefits due to such individual under the Plan has been completed (or upon the death of the Participant, if earlier) and no person shall have any further rights under the Plan with respect to such former Participant.

		
	(h)
	Plan Administrator. The Plan Administrator shall be SVP, Human Resources.

(i)Taxation. The Participant acknowledges and agrees that the Company may directly or indirectly withhold from any payments under this Plan all federal, state, city or other taxes that will be required pursuant to any law or governmental regulation. Anything in this Plan to the contrary notwithstanding, the terms of this Plan shall be interpreted and applied in a manner consistent with the requirements of Section 409A (“Section 409A”) of the Code and the Treasury Regulations (“Regulations”) so as not to subject Participant to the payment of any tax or interest which may be imposed under such section, and the Company shall have no right to accelerate or make any payment under this Plan to the extent such action would subject the Participant to the payment of any tax or interest under such section. If all or a portion of the benefits and payments provided under this Agreement constitute taxable income to Participant for any taxable year that is prior to the taxable year in which such payments and/or benefits are to be paid to the Participant, as a result of the Plan’s failure to comply with the requirements of Section 409A, the applicable payment or benefit shall be paid immediately to the Participant to the extent such payment or benefit is required to be included in income.

ARTICLE III - ELIGIBILITY

		
	A.
	WHO IS ELIGIBLE?

If you meet the criteria to be determined an Eligible Employee as that term is defined in Article II (f) above, you shall become eligible for the severance pay described in Article IV of the Plan (i.e., you will become a “Participant”) by meeting the requirements set forth below:

(a)you are involuntarily terminated for one of the following reasons:

		
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	a reduction in the Company's workforce;

		
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	elimination or discontinuation of your job or position, provided that you are not offered a comparable position either with the Company, or with a separate entity or organization that was party to a sale, spin-off, or management buyout transaction, or other divesture, that resulted in the elimination of your job or position with the Company. Comparability shall be determined in the sole and absolute discretion of the Plan Administrator; or

		
	•
	other circumstances as the Plan Administrator, in its sole discretion, deems appropriate for the payment of severance;

(b)you deliver a signed, dated and notarized Agreement to the individual whose signature appears on the cover letter accompanying the Plan and the Agreement by no later than the date set forth in the Agreement; provided, however, that the timing of such release shall be in compliance with Section 409A and shall not cause an impermissible delay of payment, and the time for you to revoke such Agreement (if any) as specified in the Agreement has expired; and

(c)the Company has not determined that you, either prior or subsequent to your termination of employment, have (a) misappropriated or improperly used or disclosed any confidential or proprietary information of the Company; (b) failed to comply with any contractual obligations to the Company; (c) solicited for hire away from the Company, any current Company employees absent the Company's consent; or (d) taken any action which the Company, in its sole discretion, deems to have been inimical or detrimental to the interests of the Company.

If you do not satisfy all of the above requirements, you shall not be considered a Participant, and you shall not be entitled to commence or continue to receive any benefits under the Plan. Additionally, you shall not become a Participant, and shall not become entitled to benefits while you continue to be employed by the Company.

		
	B.
	WHO IS NOT ELIGIBLE?

You shall not be eligible for severance pay under this Plan if your employment is terminated for any reason other than set forth in paragraph A, including, but not limited to:

		
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	retirement;

		
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	voluntary termination;

		
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	termination by the Company for cause;

		
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	elimination or discontinuation of your job or position, provided that you are offered a comparable position with the Company or its subsidiaries or affiliates.  Comparability shall be determined in the sole and absolute discretion of the Plan Administrator;

		
	•
	elimination or discontinuation of your job or position in connection with a sale, spin-off, management buyout or other divesture, provided that your employment is continued or reinstated by the entity or organization that continues the business operations of the Company in which you were employed without an extended break, or you are hired by or offered employment with that entity or organization without an extended break.

No employee of any subsidiary or affiliate of the Company outside of those subsidiary(ies)/affiliate(s) defined as the Company by Article II(d) of this Plan shall be eligible for severance pay under this Plan unless provided for by separate written agreement.

In addition, if you have executed a separate employment agreement with the Company which expressly provides for severance pay, you shall not be eligible for benefits under this Plan, unless this Plan provides for greater benefits (as determined by the Plan Administrator). For the avoidance of doubt, in no case may you receive benefits under this Plan and your employment agreement.  No employee of any subsidiary or affiliate of the Company outside of those subsidiary(ies)/affiliate(s) defined as the Company by Article II (d) of this Plan shall be eligible for severance pay under this Plan unless provided for by separate written agreement.

ARTICLE IV - SEVERANCE PAY

		
	A.
	SCHEDULE OF BENEFITS

If you become a Participant, you will be eligible to receive the following benefits under the Plan:

If you are an Officer of the Company and are designated by the Plan  Administrator as Chief Executive Officer (“CEO”), then (i) if you have less than six (6) months employment service with the Company as CEO, you will receive twenty-six (26) weeks of Base Pay; and (ii) if you have been actively employed with the Company as CEO for a minimum of six

(6) months, you will receive fifty-two (52) weeks of Base Pay.

If you are an Officer of the Company and are designated by the Plan Administrator as Senior Vice President or Executive Vice President (“SVP”) or (“EVP”), then (i)

if you have less than six (6) months of employment service with the Company as SVP or EVP, you will receive thirteen (13) weeks of Base Pay; and (ii) if you have been actively employed with the Company as SVP or EVP for a minimum of six (6) months, you will receive twenty-six
(26) weeks of Base Pay.

If you are an Officer of the Company and are designated by the Plan Administrator as Vice President (“VP”) then (i) if you have less than six (6) months of employment service with the Company as VP, you will receive six (6) weeks of Base Pay; and
(ii)if you have been actively employed with the Company as VP for a minimum of six (6) months, you will receive thirteen (13) weeks of Base Pay.

Notwithstanding the foregoing, if the amount of severance pay that you would have received if calculated pursuant to the most favorable formula set forth in the WEX Inc. Severance Pay Plan for Non-Officer Employees (assuming that you were an eligible participant of such plan) is greater than the amount of severance pay calculated hereunder, then you will receive hereunder, upon eligibility for severance pay hereunder, such higher amount.

Notwithstanding any provision of this Plan to the contrary, the Plan Administrator, in its sole and absolute discretion and based on such criteria as the Plan Administrator deems relevant, may vary the severance benefits under this Plan. In no event, however, will a Participant receive more than fifty-two (52) weeks of Base Pay. In addition, in no event will any employee be entitled to receive severance pay under this Plan in addition to severance pay provided for under a separate employment agreement or from any other source.

		
	B.
	HOW AND WHEN BENEFITS WILL BE PAID

Severance pay benefits are payable at the discretion of the Company and may be paid to you in a lump sum payment, in equal installments not less frequently than once per month over a twelve (12) month period, or a combination of lump sum and equal installments not less frequently than once per month over a twelve (12) month period, subject to applicable federal, state and local tax deductions and withholding.

Amounts payable under Article IV, Section A, following termination of employment, other than those expressly payable on a deferred basis, will be paid in the payroll period next following the payroll period in which termination of employment occurs except as otherwise provided in this Article IV, Section B. Payment of any amount by reason of Participant’s termination of employment shall be made no later than the last day of the Participant’s second taxable year following the Participant’s taxable year in which the termination occurs.

Short-Term Deferral Exemption. It is intended that payments made under this Plan due to a Participant’s termination of employment that are not otherwise subject to Section 409A which are paid on or before the fifteenth (15th) day of the third (3rd) month following the end of the Participant’s taxable year in which his or her termination of employment occurs shall be exempt from compliance with Section 409A pursuant to the exemption for short-term deferrals set forth in Section 1.409A-1(b)(4) of the Regulations.

Separation Pay Exemption.  It is intended that payments made under this Plan due to a Participant’s involuntary termination that are not otherwise subject to Section 409A which do not exceed two times the lesser of (a) the Participant’s annualized compensation (determined in accordance with the Regulations) or (b) the maximum amount that may be taken into account under Section 401(a)(17) of the Code ($265,000 for 2015) shall be exempt from compliance with Section 409A pursuant to the exemption for separation pay set forth in Section 1.409A-1(b)(9) of the Regulations.

Six-Month Delay for Specified Employees. Anything in this Plan to the contrary notwithstanding, payments to be made under this Plan upon termination of Participant’s employment which are subject to Section 409A (“409A Payments”) shall be delayed for six (6) months following such termination of employment if Participant is a Specified Employee as defined below on the date of termination of employment. Any 409A Payment due within such six-month period shall be delayed to the end of such six-month period. In addition, the following rules apply:

i.The Company will adjust the 409A Payments to reflect the deferred payment date by multiplying the payment or reimbursement by the product of the six-month CMT Treasury Bill annualized yield rate as published by the U.S. Treasury for the date on which such payment or reimbursement would have been made but for the delay multiplied by a fraction, the numerator of which is the number of days by which such payment or reimbursement was delayed and the denominator of which is 365.

ii.The Company will make the adjusted 409A Payments at the beginning of the seventh (7th) month following Participant’s termination of employment. Notwithstanding the foregoing, if calculation of the amounts payable by any payment date specified in this subsection is not administratively practicable due to events beyond the control of the Participant (or the Participant’s beneficiary or estate) and for reasons that are commercially reasonable, payment will be made as soon as administratively practicable in compliance with Section 409A and the Regulations thereunder. In the event of Participant’s death during such six-month period, payment will be made in the payroll period next following the payroll period in which Participant’s death occurs.

iii.“Specified Employee.” For purposes of this Plan, a “Specified Employee” shall mean an employee of the Company who satisfies the requirements for being designated a “key employee” under Section 416(i)(1)(A)(i), (ii) or (iii) of the Code without regard to Section 416(i)(5) of the Code at any time during a calendar year, in which case such employee shall be considered a Specified Employee for the twelve-month period beginning on the first (1st) day of the fourth (4th) month immediately following the end of such calendar year. Notwithstanding the foregoing, all employees who are nonresident aliens during an entire calendar year are excluded for purposes of determining which employees meet the 

requirements of Section 416(i)(1)(A)(i), (ii) or (iii) of the Code without regard to Section 416(i)(5) of the Code for such calendar year. The term “nonresident alien” as used herein shall have the meaning set forth in Regulations Section 1.409A-1(j). In the event of any corporate spinoff or merger, the determination of which employees meet the requirements of Section 416(i)(1)(A)(i), (ii) or (iii) of the Code without regard to Section 416(i)(5) of the

Code for any calendar year shall be determined in accordance with Regulations Section 1.409A-1(i)(6).

Except at the sole discretion of the Plan Administrator, you shall not be eligible after your date of termination for continued coverage under the Company's medical/dental plans (except to the extent you elect to continue such coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA")).

ARTICLE V - GENERAL PROVISIONS OF THE PLAN

(a)Termination of Your Coverage. Coverage under this Plan ends when you are no longer considered a Participant.

(b)Re-employment.  If you are re-employed by the Company after severance has been paid to you, you will have to make arrangements, prior to being rehired, to return any severance pay which you received in excess of one week’s Base Pay plus the amount of your weekly Base Pay multiplied by the number of weeks during the period of your separation. If, after being re-employed, your employment with the Company is terminated for a reason set forth Article III, Section A, you shall receive the severance pay calculated based upon your rehire date, plus the severance pay which was refunded by you to the Company upon your re-employment or the severance pay calculated before your rehire date which was not paid to you because you became re-employed with the Company.

(c)No Additional Rights Created. Neither the establishment of this Plan, nor any modification thereof, nor the payment of any benefits hereunder, shall be construed as giving to any Participant, Eligible Employee (or any beneficiary of either), or other person any legal or equitable right against the Company or any officer, director or employee thereof; and in no event shall the terms and conditions of employment by the Company of any Eligible Employee be modified or in any way affected by this Plan. There is no promise of employment of any kind by the Company contained in this Plan. Regardless of what this Plan provides, the Company remains free to change wages and all other working conditions without notice or agreement. The Company also continues to have the absolute right to terminate your employment with or without cause.

(d)Records.  The records of the Company with respect to employment history, Base Salary, Years of Service, absences, and all other relevant matters shall be conclusive for all purposes of this Plan.

(e)Construction.  The respective terms and provisions of the Plan shall be construed, whenever possible, to be in conformity with the requirements of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or any subsequent laws or amendments thereto. To the extent not in conflict with the preceding sentence or another 

provision in the Plan, the construction and administration of the Plan shall be in accordance with the laws of Maine (without reference to its conflicts of law provisions).

(f)Severability.  Should any provisions of the Plan be deemed or held to be unlawful or invalid for any reason, such fact shall not adversely affect the other provisions of the Plan unless such determination shall render impossible or impracticable the functioning of the Plan, and in such case, an appropriate provision or provisions shall be adopted so that the Plan may continue to function properly.

(g)Unfunded Plan.  The Company shall pay for benefits under the Plan out of its general assets.  No Participant or any other person shall have any interest whatsoever in any specific asset of the Company.  To the extent that any person acquires a right to receive payments under this Plan, such right shall not be secured by any assets of the Company. The obligations of the Company may be funded through contributions to a trust or otherwise, but the obligations of the Company are not required to be funded under this Plan unless required by law.

(h)Nontransferability.  In no event shall the Company make any payment under this Plan to any assignee or creditor of a Participant, except as otherwise required by law. Prior to the time of a payment hereunder, a Participant shall have no rights by way of anticipation or otherwise to assign or otherwise dispose of any interest under this Plan, nor shall rights be assigned or transferred by operation of law.

(i)Incompetency.  In the event that the Plan Administrator finds that a Participant is unable to care for his or her affairs because of illness or accident, then benefits payable hereunder, unless claim has been made therefor by a duly appointed guardian, committee, or other legal representative, may be paid in such manner as the Plan Administrator shall determine, and the application thereof shall be a complete discharge of all liability for any payments or benefits to which such Participant (or designated beneficiary) was or would have been otherwise entitled under this Plan.

(j)Welfare Plan. The Company intends that this Plan constitute a “welfare plan” under ERISA and any ambiguities in this Plan shall be construed to effect that intent.

(k)Termination, Amendment and Modification.  Notwithstanding anything in this Plan to the contrary, the Company expressly reserves the right, at any time, for any reason, without limitation, and in its sole and absolute discretion, to terminate, amend or modify the Plan and any or all of the benefits provided thereunder, either in whole or in part, whether as to all persons covered thereby or as to one or more groups thereof. The termination, amendment or modification of the Plan shall be effected by a document in writing.

(l)Exclusive Benefit. A Participant who receives severance benefits under this Plan shall not be eligible to receive severance benefits under the WEX Inc. Severance Pay Plan for Non-Officers.

ARTICLE VI - OTHER IMPORTANT INFORMATION

(a)Claim Procedure.

How to File a Claim.  If you are a Participant in the Plan, you will automatically receive the benefits set forth under Article IV of the Plan. If you feel you have not been provided with all benefits to which you are entitled under the Plan, you may file a written claim with the Plan Administrator with respect to your rights to receive benefits from the Plan. If you wish to make a claim for payment of benefits under the Plan, a claim must be filed by contacting the Human Resources Department at the Company’s headquarters in South Portland, Maine within ninety (90) days of the date you received notification from the Company regarding the Company’s provision of benefits to you under the Plan. You may be required to provide additional information.  After your claim has been processed, you will be notified in writing if any benefits are denied in whole or in part, or if any additional information is required by the Plan Administrator.  You will receive this written notification within ninety (90) days after it is filed. Under special circumstances, the Plan Administrator may require an additional period of not more than ninety (90) days to review your claim. If this occurs, you will be notified in writing as to the length of the extension, the reason for the extension, and any other information needed in order to process your claim. If you are not notified within the 90-day (or 180-day, if so extended) period, you may consider your claim to be denied.

How to Appeal a Claim.  If your claim is denied, in whole or in part, you will be notified in writing of the specific reason(s) for the denial, the exact plan provision(s) on which the decision was based, what additional material or information is relevant to your case, and what procedure you should follow to get your claim reviewed again. If you do not agree with the reason why your claim was denied in whole or in part, you then have sixty (60) days to appeal the decision to the Plan Administrator.

Your appeal must be submitted in writing. You may request to review pertinent documents, and you may submit a written statement of issues and comments. You must state why you believe the claim should not have been denied and submit any data, questions or comments you think are appropriate.

Your appeal will be reviewed by the Company, and a decision will be made within sixty (60) days after the appeal is received. Under special circumstances, the Plan Administrator may require an additional period of not more than sixty (60) days to review your appeal. If this occurs, you will be notified in writing as to the length of the extension, not to exceed one hundred twenty (120) days from the day on which your appeal was received.

If your appeal is denied, in whole or in part, you will be notified in writing of the specific reason(s) for the denial and the exact plan provision(s) on which the decision was based. The decision on your appeal will be final and binding on all parties and persons affected thereby. If you are not notified within the 60-day (or 120-day, if so extended) period, you may consider your appeal as denied.

(b)Plan Interpretation and Benefit Determination.  The Plan is administered and operated by the Plan Administrator, who has the exclusive discretionary authority and power

determine questions of fact and law arising under the Plan, to direct disbursements pursuant to the Plan and to exercise all other powers specified herein or which may be implied from the provisions hereof.  The Plan Administrator may adopt such rules for the conduct of the administration of the Plan as it may deem appropriate. All interpretations and determinations of the Plan Administrator shall be final and binding upon all parties and persons affected thereby. The Plan Administrator may appoint one or more individuals and delegate such of its powers and duties as it deems desirable to any such individual(s), in which case every reference herein made to the Plan Administrator shall be deemed to mean or include the appointed individual(s) as to matters within their jurisdiction.

(c)Your Rights Under ERISA. The following is a statement of your rights under Federal law as required by the U.S. Department of Labor:

As a participant in this Plan, you are entitled to certain rights and protections under ERISA. ERISA provides that all Plan participants shall be entitled to:

		
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	Examine, without charge, at the Plan Administrator's office and at other specified locations, all Plan documents and copies of all documents filed by the Plan with the U.S.  Department of Labor, such as detailed annual reports and Plan descriptions.

		
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	Obtain copies of all Plan documents and other Plan information upon written request to the Plan Administrator.  The Plan Administrator may make a reasonable charge for the copies.

		
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	Receive a summary of the latest annual financial report of the Plan. The Plan Administrator is required by law to furnish each participant with a copy of such summary.

In addition to creating rights for Plan participants, ERISA imposes duties upon the people who are responsible for the operation of the employee benefit Plan. The people who operate your Plan, called "fiduciaries" of the Plan, have a duty to do so prudently and in the interest of you and other Plan participants and beneficiaries.  The named fiduciary is WEX Inc.
It is illegal for anyone to prevent you from obtaining a benefit or exercising your rights under ERISA by firing you or discriminating against you in any way.

If your claim for a benefit is denied in whole or in part, you must receive a written explanation of the reason for the denial. You have the right to a review and reconsideration of a denial of benefits under the Plan.

Under ERISA, there are steps you can take to enforce the above rights. For instance, if you request materials from the Plan and do not receive them within thirty (30) days, 

you may file suit in a federal court.  In such a case, the court may require the Plan Administrator to provide the materials and pay you up to $110 a day until you receive the requested materials, unless the materials were not sent because of reasons beyond the control of the Plan Administrator.

If you have a claim for benefits which is denied or ignored, in whole or in part, you may file suit in a state or Federal court. If you believe that Plan fiduciaries misused the Plan's money, or that you have been discriminated against for asserting your rights, you may seek assistance from the U.S. Department of Labor, or you may file suit in a federal court. The named fiduciary is WEX Inc.

If you file a suit, the court will decide who should pay court costs and legal fees.  If you are successful, the court may order the person you have sued to pay these costs and fees. If you lose, the court may order you to pay these costs and fees, for example, if the court finds that your claim is frivolous.

If you have questions about your Plan, you should contact the Plan Administrator. If you have any questions about this statement or about your rights under ERISA, you should contact the nearest Area office of the U.S. Labor-Management Services Administration, Department of Labor, listed in your telephone directory.

(d)Plan Document.  This document shall constitute both the plan document and summary plan description and shall be distributed to all Eligible Employees in this form.

		
	(e)
	Other Important Facts.

OFFICIAL NAME OF THE PLAN:    WEX Inc. Severance Pay Plan for Officers

SPONSOR:    WEX Inc.
97 Darling Avenue
South Portland, Maine 04106
PLAN NUMBER:    516

TYPE OF PLAN:    Employee Welfare Severance Benefit Plan TYPE OF ADMINISTRATION:    Employer Administered
		
	PLAN ADMINISTRATOR:
	SVP, Human Resources WEX Inc.

97 Darling Avenue
South Portland, Maine 04106 (207) 773-8171

ORIGINAL EFFECTIVE DATE:    February 22, 2005

		
	RECORDS
	The Plan Administrator keeps records of the Plan and is responsible for the administration of the Plan. The Plan Administrator will also answer any questions you may have about the Plan.

AGENT FOR SERVICE    General Counsel
OF LEGAL PROCESS:    WEX Inc.
97 Darling Avenue
South Portland, Maine 04106 (207) 773-8171lei_ex101.htm

Exhibit 10.1

THIS NOTE, AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THIS NOTE (THE “SECURITIES”) HAVE BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY AND MAY NOT BE TRANSFERRED UNTIL (i) A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT” OR THE “SECURITIES ACT”) SHALL HAVE BECOME EFFECTIVE WITH RESPECT THERETO OR (ii) RECEIPT BY THE COMPANY OF AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY TO THE EFFECT THAT REGISTRATION UNDER THE ACT IS NOT REQUIRED IN CONNECTION WITH SUCH PROPOSED TRANSFER NOR IS IN VIOLATION OF ANY APPLICABLE STATE SECURITIES LAWS. THIS LEGEND SHALL BE ENDORSED UPON ANY NOTE ISSUED IN EXCHANGE FOR THIS NOTE AND ANY SECURITIES ISSUABLE UPON CONVERSION OF THIS NOTE (EXCEPT AS OTHERWISE PROVIDED BELOW).

 

FORM OF CONVERTIBLE PROMISSORY NOTE

 

	
$200,000.00

	
September 29, 2015 to be Effective September 28, 2015 

	
Note # 1

	  

 

FOR VALUE RECEIVED, Lucas Energy, Inc., a Nevada corporation (the “Company”), hereby promises to pay to the order of Silver Star Oil Company, and/or permitted assigns (the “Holder”), the aggregate principal amount of Two Hundred Thousand and 00/100 Dollars ($200,000.00) (“Principal”), together with interest on the unpaid principal amount hereof, upon the terms and conditions hereinafter set forth.

 

	
1.

	
Note Amount. This Convertible Promissory Note (this “Note”, “Promissory Note” or “Agreement”) evidences amounts payable by the Company to the Holder in connection with an Advance made pursuant to that certain Non-Revolving Line of Credit Agreement dated on or around August 30, 2015, but effective August 28, 2015, by and between the Company and the Holder (the “Line of Credit”). Certain capitalized terms used herein, but not otherwise defined shall have the meanings given to such terms in the Line of Credit and this Note shall be subject in all cases to the terms and conditions of the Line of Credit.

	
 

	
 

	
 

	
2.

	
Payment Terms. The Company promises to pay to Holder the balance of Principal, together with accrued and unpaid interest (which shall accrue until the Maturity Date) on October 1, 2016 (the “Maturity Date”), unless this Note is earlier prepaid as herein provided or earlier converted into Common Stock (as hereinafter defined) of the Company pursuant to Sections 4 hereof. All payments hereunder shall be made in lawful money of the United States of America. Payment shall be credited first to the accrued interest then due and payable and the remainder to Principal.

	
 

	
 

	
 

	
3.

	
Interest. Interest on the outstanding portion of Principal of this Note shall accrue at a rate of six percent (6%) per annum. All past-due principal and interest (which failure to pay such amounts shall be defined herein as an “Event of Default”) shall bear interest at the rate of fifteen percent (15%) per annum until paid in full (the “Default Rate”). All computations of interest shall be made on the basis of a 360-day year for actual days elapsed.

	
 

	
a.

	
Notwithstanding any provision in this Note, the total liability for payments of interest and payments in the nature of interest, including all charges, fees, exactions, or other sums which may at any time be deemed to be interest, shall not exceed the limit imposed by the usury laws of the State of Texas or the applicable laws of the United States of America, whichever shall be higher (the “Maximum Rate”).

	
 

	
b.

	
In the event the total liability for payments of interest and payments in the nature of interest, including, without limitation, all charges, fees, exactions or other sums which may at any time be deemed to be interest, which for any month or other interest payment period exceeds the Maximum Rate, all sums in excess of those lawfully collectible as interest for the period in question (and without further agreement or notice by, among or to the Holder the undersigned) shall be applied to the reduction of the principal balance, with the same force and effect as though the undersigned had specifically designated such excess sums to be so applied to the reduction of the principal balance and the Holder had agreed to accept such sums as a premium-free prepayment of principal; provided, however, that the Holder may, at any time and from time to time, elect, by notice in writing to the undersigned, to waive, reduce or limit the collection of any sums in excess of those lawfully collectible as interest rather than accept such sums as a prepayment of the principal balance. The undersigned does not intend or expect to pay nor does the Holder intend or expect to charge, accept or collect any interest under this Note greater than the Maximum Rate.

 

	
 

	
c.

	
If any payment of principal or interest on this Note shall become due on a Saturday, Sunday or any other day on which national banks are not open for business, such payment shall be made on the next succeeding Business Day. “Business Day” means a day other than (i) a Saturday, (ii) a Sunday or (iii) a day on which commercial banks in Houston, Texas, are authorized or required to be closed for business.

 

	
4.

	
Holder’s Option to Convert this Note.

	
 

 

	
 

	
a.

	
At any time prior to the payment in full by the Company of this Note, the Holder shall have the option to convert the unpaid balance (Principal and accrued and unpaid interest, in each case subject to Section 4(l) and 4(m)) on this Note (or any portion thereof) into shares of Common Stock (the “Shares” and the “Common Stock”) of the Company (the “Conversion Option”) at the Conversion Price (each a “Conversion”). The “Conversion Price” shall equal $1.50 per Share;

 

  

1

  

 

	
 

	
 

	
 

	
 

	
b.

	
In order to exercise this Conversion Option, the Holder shall surrender this Promissory Note to the Company, accompanied by written notice of its intentions to exercise this Conversion Option, which notice shall set forth the amount of this Promissory Note to be converted, and the Shares due, which shall be in the form of Exhibit A, attached hereto (“Notice of Conversion”). The date that the Company receives the Notice of Conversion shall be defined as the “Conversion Date.” Within ten (10) Business Days of the Company’s receipt of the Notice of Conversion and this Note, the Company shall deliver or cause to be delivered to the Holder, written confirmation that the Shares have been issued in the name of the Holder (the “Share Delivery Deadline”). Notwithstanding anything to the contrary set forth in this Section 4, following conversion of any portion of this Note in accordance with the terms hereof, the Holder shall not be required to physically surrender this Note to the Company unless (A) the full amount of the Note is being converted (in which event this Note shall be delivered to the Company following conversion thereof) or (B) the Holder has provided the Company with prior written notice (which notice may be included in a Notice of Conversion) requesting reissuance of this Note upon physical surrender of this Note. The Holder and the Company shall maintain records showing the principal and interest converted and/or paid and/or adjusted (as the case may be) and the dates of such conversions and/or payments and/or adjustments (as the case may be) or shall use such other method, reasonably satisfactory to the Holder and the Company, so as not to require physical surrender of this Note upon conversion;

	
 

	
 

	
 

	
 

	
c.

	
If for any reason (including the operation of the adjustment provisions set forth in this Note), the Conversion Price on any date of Conversion of this Note shall not be lawful and adequate consideration for the issuance of the relevant Shares, then the Company shall take such steps as are necessary (including the amendment of its certificate of incorporation so as to reduce the par value of the Common Stock) to cause such Conversion Price to be adequate and lawful consideration on the date the payment thereof is due, but if the Company shall fail to take such steps, then the Company acknowledges that the Holder shall have been damaged by the Company in an amount equal to an amount, which, when added to the total Conversion Price for the relevant Shares, would equal lawful and adequate consideration for the issuance of such Shares, and the Company irrevocably agrees that if the Holder shall then forgive the right to recover such damages from the Company, such forgiveness shall constitute, and Company shall accept such forgiveness as, additional lawful consideration for the issuance of the relevant Shares;

	
 

	
 

	
 

	
 

	
d.

	
The Company shall at all times take any and all additional actions as are necessary to maintain the required authority to issue the Shares to the Holder, in the event the Holder exercises its rights under the Conversion Option;

	
 

	
 

	
 

	
 

	
e.

	
Payment to Company prior to Holder’s delivery of a Notice of Conversion shall terminate Holder’s option to convert;

	  	  	  
	  	
f.

	
Conversion calculations pursuant to this Section 4, shall be rounded to the nearest whole share of Common Stock, and no fractional shares shall be issuable by the Company upon conversion of this Note. Conversion of this Note in full shall be deemed payment in full of this Note and this Note shall thereupon be cancelled;

	  	  	  
	  	
g.

	
If the Company at any time or from time to time on or after the effective date of the issuance of this Note (the “Original Issuance Date”) effects a subdivision of its outstanding Common Stock, the Conversion Price then in effect immediately before that subdivision shall be proportionately decreased, and conversely, if the Company at any time or from time to time on or after the Original Issuance Date combines its outstanding shares of Common Stock into a smaller number of shares, the Conversion Price then in effect immediately before the combination shall be proportionately increased;

	  	  	  
	  	
h.

	
All Shares of Common Stock which may be issued upon Conversion of this Note will, upon issuance by the Company in accordance with the terms of this Note, be validly issued, free from all taxes and liens with respect to the issuance thereof (other than those created by the holders), free from all pre-emptive or similar rights and be fully paid and non-assessable;

	  	  	  
	  	
i.

	
On the date of any Conversion, all rights of any Holder with respect to the amount of this Note converted, will terminate, except only for the rights of any such Holder to receive certificates (if applicable) for the number of Shares of Common Stock which this Note has been Converted;

	  	  	  
	  	
j.

	
Unless the Shares are eligible to be issued as free trading shares pursuant to the requirements of Rule 144 or otherwise, which shall be determined by the Company in its reasonable discretion, prior to the issuance date of such Shares, such Shares shall be issued as restricted shares of Common Stock; and

	  	  	  
	  	
k.

	
The Company shall not be required to pay any tax allocated or attributed to Holder which may be payable in respect to any transfer involved in the issue and delivery of shares of Common Stock upon Conversion in a name other than that in which the shares of the Note so converted were registered, and no such issue or delivery shall be made unless and until the person requesting such issue or delivery has paid to the Company the amount of any such tax, or has established, to the satisfaction of the Company, that such tax has been paid. The Company shall withhold from any payment due whatsoever in connection with the Note any and all required withholdings and/or taxes the Company, in its sole discretion deems reasonable or necessary, absent an opinion from Holder’s accountant or legal counsel, acceptable to the Company in its sole determination, that such withholdings and/or taxes are not required to be withheld by the Company.

 

  

2

  

 

	  	  	  
	  	
1.

	
Notwithstanding anything herein to the contrary, the maximum number of shares of Common Stock to be issued in connection with the Conversion of this Note, and any other Notes issued in connection with the Line of Credit (“Other Notes”) shall not (i) exceed 19.9% of the outstanding shares of Common Stock immediately prior to the date of the Line of Credit, (ii) exceed 19.9% of the combined voting power of the then outstanding voting securities of the Company immediately prior to the date of the Line of Credit, in each of subsections (i) and (ii) before the issuance of the Common Stock upon conversion of this Note or the Other Notes, or (iii) otherwise exceed such number of shares of Common Stock that would violate applicable listing rules of the NYSE MKT in the event the Company’s shareholders do not approve the issuance of the Common Stock upon the conversion of this Note or the Other Notes, in each of (i) through (iii), only to the extent required by applicable NYSE MKT rules and guidance (the “Share Cap”). In the event the number of shares of Common Stock to be issued upon conversion of this Note or the Other Notes exceeds the Share Cap, then this Note and the Other Notes, or applicable portions thereof shall cease being convertible, and the Company shall instead repay such Note and Other Notes (or portions thereof) in cash, or if required, the Company shall first obtain the Stockholder Approval (as defined in the Line of Credit).

	  	  	  

 

	
5.

	
Redemption. This Note may be redeemed by the Company by payment of the entire Principal and interest outstanding under this Note in cash to Holder.

 

	
 

	
a.

	
This Note may be prepaid in whole or in part at any time without penalty provided that the Company shall provide the Holder a minimum of thirty (30) days prior written notice before the date of the Company’s planned prepayment.

	
 

	
 

	
 

	
 

	
b.

	
Any partial prepayment shall be applied first to any accrued interest and then to any principal Loan amount outstanding.

 

 

	
6.

	
Events of Default. If an Event of Default (as defined herein or below) occurs (unless all Events of Default have been cured or waived by Holder), Holder may, by written notice to the Company, declare the principal amount then outstanding of, and the accrued interest and all other amounts payable on, this Note to be immediately due and payable. The following events shall constitute events of default (“Events of Default”) under this Note, and/or any other Events of Default defined elsewhere in this Note shall occur:

 

(a)     the Company shall fail to pay, when and as due, the Principal or interest payable hereunder (or under any other outstanding Convertible Note issued by the Company and held by Holder); or

 

(b)     If there shall exist final judgments against the Company aggregating in excess of One Hundred Thousand Dollars ($100,000) and if any one of such judgments shall have been outstanding for any period of forty-five (45) days or more from the date of its entry and shall not have been discharged in full, released or stayed pending appeal; or

 

(c)     the Company shall have breached in any respect any term, condition, warrant, representation or covenant in this Note or the Line of Credit, and, with respect to breaches capable of being cured, such breach shall not have been cured within fifteen (15) days following the receipt of written notice of such breach by the Holder to the Company; or

 

(d)     a Change of Control shall have occurred without the prior written consent of the Holder; or

 

(e)     the Company fails to meet any deadlines or requirements set forth herein; or

 

(f)     the Company shall fail to comply with the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), at any time the Company is subject to the Exchange Act; or

 

(g)    the Company shall cease to be subject to the reporting requirements of the Exchange Act; or

 

(h)    the Company shall take or fail to take steps which cause the Company’s securities to be ineligible for sale pursuant to Rule 144; or

 

(i)     the Company shall: (i) make an assignment for the benefit of creditors, file a petition in bankruptcy, petition or apply to any tribunal for the appointment of a custodian, receiver or a trustee for it or a substantial portion of its assets; (ii) commence any proceeding under any bankruptcy, reorganization, arrangement, readjustment of debt, dissolution or liquidation or statute of any jurisdiction, whether now or hereafter in effect; (iii) have filed against it any such petition or application in which an order for relief is entered or which remains undismissed for a period of ninety (90) days or more; (iv) indicate its consent to, approval of or acquiescence in any such petition, application, proceeding or order for relief or the appointment of a custodian, receiver or trustee for it or a substantial portion of its assets; or (v) suffer any such custodianship, receivership or trusteeship to continue undischarged for a period of ninety (90) days or more; or

 

(j)     the Company shall take any action authorizing, or in furtherance of, any of the foregoing; or

 

(k)    the Company shall be in material default of any of its debt obligations which separately or in aggregate have a value in default of more than $50,000, and such default shall not have been cured within thirty (30) days following the receipt by the Company of a notice of default in connection therewith by the applicable debt holder(s).

 

In case any one or more Events of Default shall occur and be continuing, Holder may proceed to protect and enforce its rights by an action at law, suit in equity or other appropriate proceeding, whether for the specific performance of any agreement contained herein or for an injunction against a violation of any of the terms hereof, or in aid of the exercise of any power granted hereby or thereby or by law or otherwise. In case of a default in the payment of any principal of or premium, if any, or interest on this Note, the Company will pay to Holder such further amount as shall be sufficient to cover the reasonable cost and expenses of collection, including, without limitation, reasonable attorneys’ fees, expenses and disbursements. No course of dealing and no delay on the part of Holder in exercising any right, power or remedy shall operate as a waiver thereof or otherwise prejudice Holder’s rights, powers or remedies. No right, power or remedy conferred by this Note upon Holder shall be exclusive of any other right, power or remedy referred to herein or therein or now or hereafter available at law, in equity, by statute or otherwise.

 

  

3

  

 

	
7.

	
Certain Waivers by the Company. Except as expressly provided otherwise in this Note, the Company and every endorser or guarantor, if any, of this Note waive presentment, demand, notice, protest and all other demands and notices in connection with the delivery, acceptance, performance, default or enforcement of this Note, and assent to any extension or postponement of the time of payment or any other indulgence, to any substitution, exchange or release of collateral available to Holder, if any, and to the addition or release of any other party or person primarily or secondarily liable.

	
8.

	
Assignment by Holder. If and whenever this Note shall be assigned and transferred, or negotiated, including transfers to substitute or successor trustees, in each case subject to applicable law and an exemption from registration for such transfer, which shall be reasonably approved, and not unreasonably delayed or conditioned by the Company. Notwithstanding the above, the Holder may assign any of its rights under this Note (subject where applicable to federal securities laws), to any Person (including, but not limited to Affiliates or related parties of the Holder), with written notice to the Company and the Company shall have no ability to restrict or condition such assignment (subject where applicable to compliance with applicable federal securities laws).

	
 

	
 

	
9.

	
Amendment. This Note may not be changed orally, but only by an agreement in writing, signed by the party against whom enforcement of any waiver, change, modification or discharge is sought.

 

	
10.

	
Costs and Fees. Anything else in this Note to the contrary notwithstanding, in any action arising out of this Agreement, the prevailing party shall be entitled to collect from the non-prevailing party all of its attorneys’ fees. For the purposes of this Note, the party who receives or is awarded a substantial portion of the damages or claims sought in any proceeding shall be deemed the “prevailing” party and attorneys’ fees shall mean the reasonable fees charged by an attorney or a law firm for legal services and the services of any legal assistants, and costs of litigation, including, but not limited to, fees and costs at trial and appellate levels.

	
 

	
 

	
11.

	
Governing Law. It is the intention of the parties hereto that the terms and provisions of this Note are to be construed in accordance with and governed by the laws of the State of Texas, except as such laws may be preempted by any federal law controlling the rate of interest which may be charged on account of this Note.

 

	
12.

	
No Third Party Benefit. The provisions and covenants set forth in this Agreement are made solely for the benefit of the parties to this Agreement and are not for the benefit of any other person, except for Frank & McNear, LLC, and no other person shall have any right to enforce these provisions and covenants against any party to this Agreement.

	
 

	
 

	
13.

	
Jurisdiction, Venue and Jury Trial Waiver. The parties hereby consent and agree that, in any actions predicated upon this Note, venue is properly laid in Texas and that the Circuit Court in and for Houston, Texas, shall have full subject matter and personal jurisdiction over the parties to determine all issues arising out of or in connection with the execution and enforcement of this Note.

	
 

	
 

	
14.

	
Interpretation. The term “Company” as used herein in every instance shall include the Company’s successors, legal representatives and assigns, including all subsequent grantees, either voluntarily by act of the Company or involuntarily by operation of law and shall denote the singular and/or plural and the masculine and/or feminine and natural and/or artificial persons, whenever and wherever the contexts so requires or properly applies. The term “Holder” as used herein in every instance shall include the Holder’s successors, legal representatives and assigns, as well as all subsequent assignees, endorsees and holders of this Note (subject to the provisions of this Note providing for transfers and assignments by Holder), either voluntarily by act of the parties or involuntarily by operation of law. Captions and paragraph headings in this Note are for convenience only and shall not affect its interpretation. In this Agreement words importing the singular number include the plural and vice versa; words importing the masculine gender include the feminine and neuter genders and visa versa. The word “person” includes an individual, body corporate, partnership, trustee or trust or unincorporated association, executor, administrator or legal representative.

	  	  
	
15.

	
WAIVER OF JURY TRIAL. THE COMPANY AND HOLDER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE TO TRIAL BY JURY IN RESPECT TO ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE AND ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS, (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF EITHER PARTY. THE COMPANY ACKNOWLEDGES THAT THIS WAIVER OF JURY TRIAL IS A MATERIAL INDUCEMENT TO THE HOLDER IN EXTENDING CREDIT TO THE COMPANY, THAT THE HOLDER WOULD NOT HAVE EXTENDED SUCH CREDIT WITHOUT THIS JURY TRIAL WAIVER, AND THAT THE COMPANY HAS BEEN REPRESENTED BY AN ATTORNEY OR HAS HAD AN OPPORTUNITY TO CONSULT WITH AN ATTORNEY IN CONNECTION WITH THIS JURY TRIAL WAIVER AND UNDERSTANDS THE LEGAL EFFECT OF THIS WAIVER.

	
16.

	
Entire Agreement. This Agreement and the Line of Credit constitutes the sole and only agreement of the parties hereto and supersedes any prior understanding or written or oral agreements between the parties respecting the subject matter hereof.

	
17.

	
Effect of Facsimile and Photocopied Signatures. This Agreement may be executed in several counterparts, each of which is an original. It shall not be necessary in making proof of this Agreement or any counterpart hereof to produce or account for any of the other counterparts. A copy of this Agreement signed by one Party and faxed or scanned and emailed to another Party (as a PDF or similar image file) shall be deemed to have been executed and delivered by the signing Party as though an original. A photocopy or PDF of this Agreement shall be effective as an original for all purposes.

 

[Remainder of page left intentionally blank. Signature page follows.]

 

  

4

  

 

 IN WITNESS WHEREOF, the Company has caused this Convertible Promissory Note to be executed and delivered by a duly authorized officer as of the date first above written, to be effective as of the effective date set forth above.

 

	
 

	
LUCAS ENERGY, INC.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
By: /s/ Anthony C. Schnur

	
 

	
 

	
Anthony C. Schnur

	
 

	 	Chief Executive Officer	 

 

 

  

5

  

 

EXHIBIT A

Conversion Election Form

 

____________, 20__

Lucas Energy, Inc.

Re:      Conversion of Promissory Note

Gentlemen:

You are hereby notified that, pursuant to, and upon the terms and conditions of that certain Convertible Promissory Note ([Note #1) of Lucas Energy, Inc. (the “Company”), in the initial principal amount of $200,000 (as increased from time to time, the “Note”), held by us, we hereby elect to exercise our Conversion Option (as such term in defined in the Note), in connection with $__________ of the amount currently owed under the Note (including $___________ of accrued interest), effective as of the date of this writing, which amount will convert into ________________ shares of the Company’s Common Stock (the “Conversion”), based on the Conversion Price (as defined and described in the Note). In connection with the Conversion, we hereby re-certify, re-confirm and re-warrant the Representations as set forth in that certain Non-Revolving Line of Credit Agreement dated on or around August 30, 2015, and effective August 28, 2015, by and between the Company and Silver Star Oil Company and further confirm and acknowledge that conversion will not result in us exceeding the Beneficial Ownership Percentage set forth in the Note.

Please issue certificate(s) for the applicable shares of the Company’s Common Stock issuable upon the Conversion, in the name of the person provided below.

	  	
Very truly yours,

	  	  
	  	  
	  	
___________________________

	  	
Name:

	  	  
	  	
If on behalf of Entity:

	  	  
	  	
Entity Name:______________

	  	  
	  	
Signatory’s Position with Entity:

_____________________________

Please issue certificate(s) for Common Stock as follows:

______________________________________________

Name

______________________________________________

Address

______________________________________________

Social Security No./EIN of Shareholder

Please send the certificate(s) evidencing the Common Stock to:

Attn:___________________________________________

Address:________________________________________

 

6

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