Document:

exv4w6

 

    Exhibit 4.6

 

 

    SUPERIOR
    WELL SERVICES, INC.

    

 

    AMENDED
    AND RESTATED INCENTIVE COMPENSATION PLAN

 

 

    TABLE OF
    CONTENTS

 

	 	 	 	 	 
	
 
	
 
	
    Page
	
 

	 

	

    I. PURPOSE AND HISTORY

	
 
	
 
	
    1
	
 

	

    II. DEFINITIONS

	
 
	
 
	
    1
	
 

	

    III. EFFECTIVE DATE AND DURATION OF THE PLAN

	
 
	
 
	
    3
	
 

	

    IV. ADMINISTRATION

	
 
	
 
	
    3
	
 

	

    (a) Composition of Committee

	
 
	
 
	
    3
	
 

	

    (b) Powers

	
 
	
 
	
    4
	
 

	

    (c) Additional Powers

	
 
	
 
	
    4
	
 

	

    V. SHARES SUBJECT TO THE PLAN; AWARD LIMITS; GRANT OF AWARDS

	
 
	
 
	
    4
	
 

	

    (a) Shares Subject to the Plan and Award Limits

	
 
	
 
	
    4
	
 

	

    (b) Grant of Awards

	
 
	
 
	
    5
	
 

	

    (c) Stock Offered

	
 
	
 
	
    5
	
 

	

    VI. ELIGIBILITY

	
 
	
 
	
    5
	
 

	

    VII. STOCK OPTIONS

	
 
	
 
	
    5
	
 

	

    (a) Option Period

	
 
	
 
	
    5
	
 

	

    (b) Limitations on Exercise of Option

	
 
	
 
	
    5
	
 

	

    (c) Special Limitations on Incentive Stock Options

	
 
	
 
	
    5
	
 

	

    (d) Option Agreement

	
 
	
 
	
    5
	
 

	

    (e) Option Price and Payment

	
 
	
 
	
    6
	
 

	

    (f) Restrictions on Repricing of Options

	
 
	
 
	
    6
	
 

	

    (g) Stockholder Rights and Privileges

	
 
	
 
	
    6
	
 

	

    (h) Options and Rights in Substitution for Options Granted by
    Other Employers

	
 
	
 
	
    6
	
 

	

    VIII. RESTRICTED STOCK AWARDS

	
 
	
 
	
    6
	
 

	

    (a) Forfeiture Restrictions To Be Established by the Committee

	
 
	
 
	
    6
	
 

	

    (b) Other Terms and Conditions

	
 
	
 
	
    7
	
 

	

    (c) Payment for Restricted Stock

	
 
	
 
	
    7
	
 

	

    (d) Committee’s Discretion to Accelerate Vesting of
    Restricted Stock Awards

	
 
	
 
	
    7
	
 

	

    (e) Restricted Stock Agreements

	
 
	
 
	
    7
	
 

	

    IX. PERFORMANCE AWARDS AND ANNUAL INCENTIVE AWARDS

	
 
	
 
	
    7
	
 

	

    (a) Performance Conditions

	
 
	
 
	
    7
	
 

	

    (b) Performance Awards

	
 
	
 
	
    7
	
 

	

    (c) Annual Incentive Awards

	
 
	
 
	
    9
	
 

	

    (d) Awards Criteria

	
 
	
 
	
    10
	
 

	

    (e) Termination of Award

	
 
	
 
	
    10
	
 

	

    (f) Performance Award and Annual Incentive Award Agreements

	
 
	
 
	
    10
	
 

	

    (g) Written Determinations

	
 
	
 
	
    10
	
 

	

    (h) Status of Paragraph IX(b) and Paragraph IX(c)
    Awards under Section 162(m) of the Code

	
 
	
 
	
    10
	
 

	

    X. PHANTOM STOCK AWARDS

	
 
	
 
	
    11
	
 

	

    (a) Phantom Stock Awards

	
 
	
 
	
    11
	
 

	

    (b) Award Period

	
 
	
 
	
    11
	
 

	

    (c) Awards Criteria

	
 
	
 
	
    11
	
 

	

    (d) Payment

	
 
	
 
	
    11
	
 

	

    (e) Termination of Award

	
 
	
 
	
    11
	
 

	

    (f) Phantom Stock Award Agreements

	
 
	
 
	
    11
	
 

    

    i

 

	 	 	 	 	 
	
 
	
 
	
    Page
	
 

	 

	

    XI. BONUS STOCK AWARDS

	
 
	
 
	
    11
	
 

	

    XII. RECAPITALIZATION OR REORGANIZATION

	
 
	
 
	
    12
	
 

	

    (a) No Effect on Right or Power

	
 
	
 
	
    12
	
 

	

    (b) Subdivision or Consolidation of Shares; Stock Dividends

	
 
	
 
	
    12
	
 

	

    (c) Recapitalizations and Corporate Changes

	
 
	
 
	
    12
	
 

	

    (d) Change of Control Value

	
 
	
 
	
    13
	
 

	

    (e) Other Changes in the Common Stock

	
 
	
 
	
    13
	
 

	

    (f) Stockholder Action

	
 
	
 
	
    13
	
 

	

    (g) No Adjustments unless Otherwise Provided

	
 
	
 
	
    13
	
 

	

    XIII. AMENDMENT AND TERMINATION OF THE PLAN

	
 
	
 
	
    14
	
 

	

    XIV. MISCELLANEOUS

	
 
	
 
	
    14
	
 

	

    (a) No Right To An Award

	
 
	
 
	
    14
	
 

	

    (b) No Employment/Membership Rights Conferred

	
 
	
 
	
    14
	
 

	

    (c) Payment Terms Applicable to All Awards

	
 
	
 
	
    14
	
 

	

    (d) Other Laws; Withholding

	
 
	
 
	
    14
	
 

	

    (e) No Restriction on Corporate Action

	
 
	
 
	
    14
	
 

	

    (f) Restrictions on Transfer

	
 
	
 
	
    15
	
 

	

    (g) Governing Law

	
 
	
 
	
    15
	
 

    ii

 

 

    SUPERIOR
    WELL SERVICES, INC.

    AMENDED AND RESTATED INCENTIVE COMPENSATION PLAN

 

    I.
    PURPOSE AND HISTORY

 

    The purpose of this Superior Well Services, Inc. Amended and
    Restated Incentive Compensation Plan is to provide a means
    through which SUPERIOR WELL SERVICES, INC., a Delaware
    corporation (the “Company”), and its
    Affiliates may attract able persons to serve as Directors or
    Consultants or to enter the employ of the Company and its
    Affiliates and to provide a means whereby those individuals upon
    whom the responsibilities of the successful administration and
    management of the Company and its Affiliates rest, and whose
    present and potential contributions to the Company and its
    Affiliates are of importance, can acquire and maintain stock
    ownership, thereby strengthening their concern for the welfare
    of the Company and its Affiliates. A further purpose of this
    plan is to provide such individuals with additional incentive
    and reward opportunities designed to enhance the profitable
    growth of the Company and its Affiliates. Accordingly, this plan
    provides for granting Incentive Stock Options, options that do
    not constitute Incentive Stock Options, Restricted Stock Awards,
    Performance Awards, Annual Incentive Awards, Phantom Stock
    Awards, Bonus Stock Awards, or any combination of the foregoing,
    as is best suited to the circumstances of the particular
    employee, Consultant, or Director as provided herein.

 

    This plan was initially approved by the Company’s
    stockholders on July 27, 2005 in connection with it’s
    initial public offering as the “Superior Well Services,
    Inc. 2005 Stock Incentive Plan.” This plan is now being
    amended and restated to: (a) include the requisite
    provisions for compliance with section 162(m) of the Code,
    (b) include an additional award element to the plan in the
    form of annual cash bonuses, and (c) re-title the plan as
    the Superior Well Services, Inc. Amended and Restated Incentive
    Compensation Plan (the “Plan”). The
    amendment and restatement of this Plan is not, however, intended
    to affect the terms of any Award granted prior to the effective
    date of this Plan without the prior written consent of the
    affected Participant(s).

 

    II.
    DEFINITIONS

 

    The following definitions shall be applicable throughout the
    Plan unless specifically modified by any paragraph:

 

    (a) “Affiliate” means any corporation,
    partnership, limited liability company or partnership,
    association, trust or other organization which, directly or
    indirectly, controls, is controlled by, or is under common
    control with, the Company. For purposes of the preceding
    sentence, “control” (including, with correlative
    meanings, the terms “controlled by” and “under
    common control with”), as used with respect to any entity
    or organization, shall mean the possession, directly or
    indirectly, of the power (i) to vote more than 50% of the
    securities having ordinary voting power for the election of
    directors of the controlled entity or organization, or
    (ii) to direct or cause the direction of the management and
    policies of the controlled entity or organization, whether
    through the ownership of voting securities or by contract or
    otherwise.

 

    (b) “Annual Incentive Award” means a
    conditional right granted to a Participant under
    Paragraph IX of the Plan hereof to receive a cash payment,
    Common Stock or other Award, as determined by the Committee,
    after the end of a specified year; Annual Incentive Awards may
    be designed as “performance-based compensation” for
    purposes of section 162(m) of the Code, at the
    Committee’s discretion.

 

    (c) “Annual Incentive Award Agreement”
    means a written agreement between the Company and a Participant
    with respect to an Annual Incentive Award.

 

    (d) “Award” means, individually or
    collectively, any Option, Restricted Stock Award, Performance
    Award, Annual Incentive Award, Phantom Stock Award, or Bonus
    Stock Award.

 

    (e) “Board” means the Board of Directors
    of the Company.

 

    (f) “Bonus Stock Award” means an Award
    granted under Paragraph XI of the Plan.

    

    1

 

    (g) “Code” means the Internal Revenue Code
    of 1986, as amended. Reference in the Plan to any section of the
    Code shall be deemed to include any amendments or successor
    provisions to such section and any regulations under such
    section.

 

    (h) “Committee” means a committee of the
    Board that is selected by the Board as provided in
    Paragraph IV(a).

 

    (i) “Common Stock” means the common stock,
    par value $0.01 per share, of the Company, or any security into
    which such common stock may be changed by reason of any
    transaction or event of the type described in Paragraph XII.

 

    (j) “Company” means Superior Well
    Services, Inc., a Delaware corporation.

 

    (k) “Consultant” means any person who is
    not an employee or a Director and who is providing advisory or
    consulting services to the Company or any Affiliate.

 

    (l) “Corporate Change” shall have the
    meaning assigned to such term in Paragraph XII(c) of the
    Plan.

 

    (m) “Covered Employee” shall have the
    meaning given to such term within section 162(m) of the
    Code and the regulations thereunder (including Treasury
    Regulation § 1.162-27 and successor regulations
    thereto); provided, however, that as the Committee cannot
    determine with certainty whether a given Participant will be a
    Covered Employee with respect to a fiscal year that has not yet
    been completed, the term Covered Employee as used herein shall
    mean only a person designated by the Committee, at the time of
    grant of Performance Awards or an Annual Incentive Award, who is
    likely to be a Covered Employee with respect to that fiscal year.

 

    (n) “Director” means an individual who is
    a member of the Board.

 

    (o) An “employee” means any person
    (including a Director) in an employment relationship with the
    Company or any Affiliate.

 

    (p) “Executive Officer” shall mean an
    executive officer of the Company that is subject to
    section 16 of the 1934 Act.

 

    (q) “Fair Market Value” means, as of any
    specified date, the mean of the high and low sales prices of the
    Common Stock (i) reported by the National Market System of
    NASDAQ on that date or (ii) if the Common Stock is listed
    on a national stock exchange, reported on the stock exchange
    composite tape on that date (or such other reporting service
    approved by the Committee); or, in either case, if no prices are
    reported on that date, on the last preceding date on which such
    prices of the Common Stock are so reported. If the Common Stock
    is traded over the counter at the time a determination of its
    fair market value is required to be made hereunder, its fair
    market value shall be deemed to be equal to the average between
    the reported high and low or closing bid and asked prices of
    Common Stock on the most recent date on which Common Stock was
    publicly traded. In the event Common Stock is not publicly
    traded at the time a determination of its value is required to
    be made hereunder, the determination of its fair market value
    shall be made by the Committee in such manner as it deems
    appropriate. Notwithstanding the foregoing, the Fair Market
    Value of a share of Common Stock on the date of an initial
    public offering of Common Stock shall be the offering price
    under such initial public offering.

 

    (r) “Incentive Stock Option” means an
    incentive stock option within the meaning of section 422 of
    the Code

 

    (s) “1934 Act” means the Securities
    Exchange Act of 1934, as amended.

 

    (t) “Option” means an Award granted under
    Paragraph VII of the Plan and includes both Incentive Stock
    Options to purchase Common Stock and Options that do not
    constitute Incentive Stock Options to purchase Common Stock.

 

    (u) “Option Agreement” means a written
    agreement between the Company and a Participant with respect to
    an Option.

 

    (v) “Participant” means an employee,
    Consultant, or Director who has been granted an Award.

    

    2

 

    (w) “Performance Award” means an Award
    granted under Paragraph IX of the Plan.

 

    (x) “Performance Award Agreement” means a
    written agreement between the Company and a Participant with
    respect to a Performance Award.

 

    (y) “Phantom Stock Award” means an Award
    granted under Paragraph X of the Plan.

 

    (z) “Phantom Stock Award Agreement” means
    a written agreement between the Company and a Participant with
    respect to a Phantom Stock Award.

 

    (aa) “Plan” means this Superior Well
    Services, Inc. Amended and Restated Incentive Compensation Plan,
    as amended from time to time.

 

    (bb) “Qualified Member” means a member of
    the Committee who is a “nonemployee Director” within
    the meaning of
    Rule 16b-3(b)(3)
    and an “outside director” within the meaning of
    Treasury
    Regulation 1.162-27
    under section 162(m) of the Code.

 

    (cc) “Restricted Stock Agreement” means a
    written agreement between the Company and a Participant with
    respect to a Restricted Stock Award.

 

    (dd) “Restricted Stock Award” means an
    Award granted under Paragraph VIII of the Plan.

 

    (ee) “Rule 16b-3”
    means SEC
    Rule 16b-3
    promulgated under the 1934 Act, as such may be amended from
    time to time, and any successor rule, regulation or statute
    fulfilling the same or a similar function.

 

    (ff) “Stock Appreciation Right” means a
    right to acquire, upon exercise of the right, Common Stock
    and/or, in the sole discretion of the Committee, cash having an
    aggregate value equal to the then excess of the Fair Market
    Value of the shares with respect to which the right is exercised
    over the exercise price therefor.

 

    III.
    EFFECTIVE DATE AND DURATION OF THE PLAN

 

    The Plan was originally effective as of July 27, 2005. This
    amendment and restatement of the Plan shall become effective
    upon the date of its adoption by the Board. No further Awards
    may be granted under the Plan after 10 years from the date
    of the Plan’s original effective date, meaning that no
    further Awards will be granted pursuant to the Plan following
    July 27, 2015. Though no Awards may be granted past this
    date, the Plan shall remain in effect until all Options granted
    under the Plan have been exercised or expired, all Restricted
    Stock Awards granted under the Plan have vested or been
    forfeited, and all Performance Awards, Annual Incentive Awards,
    Phantom Stock Awards, and Bonus Stock Awards have been satisfied
    or expired.

 

    IV.
    ADMINISTRATION

 

    (a) Composition of Committee.  The
    Plan shall be administered by a committee of, and appointed by,
    the Board. In the absence of the Board’s appointment of a
    Committee to administer the Plan, the Board shall serve as the
    Committee, in which case references herein to the
    “Committee” shall be deemed to include references to
    the “Board.” At any time that a member of a Committee
    is not a Qualified Member, any action of the applicable
    Committee relating to an Award granted or to be granted to a
    Participant who is then an Executive Officer, or relating to an
    Award intended by the Committee to qualify as
    “performance-based compensation” within the meaning of
    section 162(m) of the Code and regulations thereunder, may
    be taken either (i) by a subcommittee, designated by the
    Committee, composed solely of two or more Qualified Members, or
    (ii) by the Committee but with each such member who is not
    a Qualified Member abstaining or recusing himself or herself
    from such action; provided, however, that, upon such abstention
    or recusal, the Committee remains composed solely of two or more
    Qualified Members. Such action, authorized by such a
    subcommittee or by the Committee upon the abstention or recusal
    of such non-Qualified Member(s), shall be the action of the
    Committee for purposes of this Plan. Any action of the Committee
    shall be final, conclusive and binding on all persons, including
    the Company, its Affiliates, stockholders, Participants,
    beneficiaries, and permitted transferees under the Plan or other
    persons claiming rights from or through a Participant. The
    express grant of any specific power to the Committee, and the
    taking of any action by the Committee, shall not be construed as
    limiting any power or authority of the Committee. The

    

    3

 

    Committee may delegate to officers or managers of the Company or
    any of its Affiliates, or committees thereof, the authority,
    subject to such terms as the Committee shall determine, to
    perform such functions, including administrative functions, as
    the Committee may determine, to the extent that such delegation
    will not result in the loss of an exemption under
    Rule 16b-3(d)(1)
    for Awards granted to Executive Officers and will not cause
    Awards intended to qualify as “performance-based
    compensation” under section 162(m) of the Code to fail
    to so qualify. The Committee may appoint agents to assist it in
    administering the Plan.

 

    (b) Powers.  Subject to the express
    provisions of the Plan and
    Rule 16b-3,
    the Committee shall have the authority, in its sole and absolute
    discretion, to (i) adopt, amend, and rescind administrative
    and interpretive rules and regulations relating to the Plan;
    (ii) determine the eligible persons to whom, and the time
    or times at which, Awards shall be granted; (iii) determine
    the amount of cash and the number of shares of Common Stock, or
    any combination thereof, that shall be the subject of each
    Award; (iv) determine the terms and provisions of each
    Award agreement (which need not be identical), including
    provisions defining or otherwise relating to (A) the term
    and the period or periods and extent of exercisability of the
    Options, (B) the extent to which the transferability of
    shares of Common Stock issued or transferred pursuant to any
    Award is restricted, (C) except as otherwise provided
    herein, the effect of termination of employment, or the service
    relationship with the Company, of a Participant on the Award,
    and (D) the effect of approved leaves of absence
    (consistent with any applicable regulations of the Internal
    Revenue Service); (v) accelerate the time of exercisability
    of any Award that has been granted; (vi) construe the
    respective Award agreements and the Plan; (vii) make
    determinations of the Fair Market Value of the Common Stock
    pursuant to the Plan; (viii) delegate its duties under the
    Plan to such agents as it may appoint from time to time,
    provided that the Committee may not delegate its duties with
    respect to making Awards to individuals subject to
    section 162(m) of the Code, or otherwise with respect to
    Awards granted to Executive Officers; (ix) subject to the
    restrictions contained within the Plan, terminate, modify or
    amend the Plan, and (x) make all other determinations,
    perform all other acts, and exercise all other powers and
    authority necessary or advisable for administering the Plan,
    including the delegation of those ministerial acts and
    responsibilities as the Committee deems appropriate. In making
    such determinations, the Committee shall take into account the
    nature of the services rendered by the respective employees,
    Consultants, or Directors, their present and potential
    contribution to the Company’s success, and such other
    factors as the Committee in its sole discretion shall deem
    relevant.

 

    (c) Additional Powers.  The
    Committee shall have such additional powers as are delegated to
    it by the other provisions of the Plan. Subject to the express
    provisions of the Plan, this shall include the power to construe
    the Plan and the respective agreements executed hereunder, to
    prescribe rules and regulations relating to the Plan, and to
    determine the terms, restrictions and provisions of the
    agreement relating to each Award, including such terms,
    restrictions and provisions as shall be requisite in the
    judgment of the Committee to cause designated Options to qualify
    as Incentive Stock Options, and to make all other determinations
    necessary or advisable for administering the Plan. Subject to
    Rule 16b-3
    and section 162(m) of the Code, the Committee may correct
    any defect, supply any omission, or reconcile any inconsistency
    in the Plan, in any Award, or in any Award agreement in the
    manner and to the extent it deems necessary or desirable to
    carry the Plan into effect, and the Committee shall be the sole
    and final judge of that necessity or desirability. The
    determinations of the Committee on the matters referred to in
    this Paragraph IV shall be conclusive.

 

    V.
    SHARES SUBJECT TO THE PLAN; AWARD LIMITS; GRANT OF
    AWARDS

 

    (a) Shares Subject to the Plan and Award
    Limits.  Subject to adjustment in the same
    manner as provided in Paragraph XII with respect to shares
    of Common Stock subject to Options then outstanding, the
    aggregate number of shares of Common Stock that may be issued
    under the Plan, and the aggregate maximum number of shares of
    Common Stock that may be issued under the Plan through Incentive
    Stock Options, shall not exceed 2,700,000 shares. Shares
    shall be deemed to have been issued under the Plan only to the
    extent actually issued and delivered pursuant to an Award. To
    the extent that an Award lapses or the rights of its holder
    terminate, any shares of Common Stock subject to such Award
    shall again be available for the grant of an Award under the
    Plan. In addition, shares issued under the Plan and forfeited
    back to the Plan, shares surrendered in payment of the exercise
    price or purchase price of an Award, and shares withheld for
    payment of applicable employment taxes
    and/or
    withholding obligations associated with an Award shall again be
    available for the grant of an Award under the Plan.
    Notwithstanding any provision in the Plan to the contrary, the
    maximum number of shares of Common Stock that

    

    4

 

    may be subject to Options, Restricted Stock Awards and
    Performance Awards or Annual Incentive Awards denominated in
    shares of Common Stock granted to any one individual during the
    term of the Plan may not exceed 270,000 shares of Common
    Stock, and the maximum amount of compensation that may be paid
    under all Performance Awards or Annual Incentive Awards
    denominated in cash (including the Fair Market Value of any
    shares of Common Stock paid in satisfaction of such Performance
    Awards or Annual Incentive Awards) granted to any one individual
    during any calendar year may not exceed $3.5 million.

 

    (b) Grant of Awards.  The Committee
    may from time to time grant Awards to one or more employees,
    Consultants, or Directors determined by it to be eligible for
    participation in the Plan in accordance with the terms of the
    Plan.

 

    (c) Stock Offered.  Subject to the
    limitations set forth in Paragraph V(a), the stock to be
    offered pursuant to the grant of an Award may be authorized but
    unissued Common Stock or Common Stock previously issued and
    outstanding and reacquired by the Company. Any of such shares
    which remain unissued and which are not subject to outstanding
    Awards at the termination of the Plan shall cease to be subject
    to the Plan but, until termination of the Plan, the Company
    shall at all times make available a sufficient number of shares
    to meet the requirements of the Plan.

 

    VI.
    ELIGIBILITY

 

    Awards may be granted only to persons who, at the time of grant,
    are employees, Consultants, or Directors. An Award may be
    granted on more than one occasion to the same person, and,
    subject to the limitations set forth in the Plan, such Award may
    include an Incentive Stock Option, an Option that is not an
    Incentive Stock Option, a Restricted Stock Award, a Performance
    Award, an Annual Incentive Award, a Phantom Stock Award, a Bonus
    Stock Award, or any combination thereof.

 

    VII.
    STOCK OPTIONS

 

    (a) Option Period.  The term of
    each Option shall be as specified by the Committee at the date
    of grant, but in no event shall an Option be exercisable after
    the expiration of 10 years from the date of grant.

 

    (b) Limitations on Exercise of
    Option.  An Option shall be exercisable in
    whole or in such installments and at such times as determined by
    the Committee.

 

    (c) Special Limitations on Incentive Stock
    Options.  An Incentive Stock Option may be
    granted only to an individual who is employed by the Company or
    any parent or subsidiary corporation (as defined in
    section 424 of the Code) at the time the Option is granted.
    To the extent that the aggregate fair market value (determined
    at the time the respective Incentive Stock Option is granted) of
    stock with respect to which Incentive Stock Options are
    exercisable for the first time by an individual during any
    calendar year under all incentive stock option plans of the
    Company and its parent and subsidiary corporations exceeds
    $100,000, such Incentive Stock Options shall be treated as
    Options which do not constitute Incentive Stock Options. The
    Committee shall determine, in accordance with applicable
    provisions of the Code, Treasury Regulations and other
    administrative pronouncements, which of a Participant’s
    Incentive Stock Options will not constitute Incentive Stock
    Options because of such limitation and shall notify the
    Participant of such determination as soon as practicable after
    such determination. No Incentive Stock Option shall be granted
    to an individual if, at the time the Option is granted, such
    individual owns stock possessing more than 10% of the total
    combined voting power of all classes of stock of the Company or
    of its parent or subsidiary corporation, within the meaning of
    section 422(b)(6) of the Code, unless (i) at the time
    such Option is granted the option price is at least 110% of the
    Fair Market Value of the Common Stock subject to the Option and
    (ii) such Option by its terms is not exercisable after the
    expiration of five years from the date of grant. An Incentive
    Stock Option shall not be transferable otherwise than by will or
    the laws of descent and distribution, and shall be exercisable
    during the Participant’s lifetime only by such Participant
    or the Participant’s guardian or legal representative.

 

    (d) Option Agreement.  Each Option
    shall be evidenced by an Option Agreement in such form and
    containing such provisions not inconsistent with the provisions
    of the Plan as the Committee from time to time

    

    5

 

    shall approve, including, without limitation, provisions to
    qualify an Incentive Stock Option under section 422 of the
    Code. Each Option Agreement shall specify the effect of
    termination of (i) employment, (ii) the consulting or
    advisory relationship, or (iii) membership on the Board, as
    applicable, on the exercisability of the Option. An Option
    Agreement may provide for the payment of the option price, in
    whole or in part, by the delivery of a number of shares of
    Common Stock (plus cash if necessary) having a Fair Market Value
    equal to such option price. Moreover, an Option Agreement may
    provide for a “cashless exercise” of the Option by
    establishing procedures satisfactory to the Committee with
    respect thereto. Further, an Option Agreement may provide, on
    such terms and conditions as the Committee in its sole
    discretion may prescribe, for the grant of a Stock Appreciation
    Right in connection with the grant of an Option and, in such
    case, the exercise of the Stock Appreciation Right shall result
    in the surrender of the right to purchase a number of shares
    under the Option equal to the number of shares with respect to
    which the Stock Appreciation Right is exercised (and vice
    versa). In the case of any Stock Appreciation Right that is
    granted in connection with an Incentive Stock Option, such right
    shall be exercisable only when the Fair Market Value of the
    Common Stock exceeds the price specified therefor in the Option
    or the portion thereof to be surrendered. The terms and
    conditions of the respective Option Agreements need not be
    identical. Subject to the consent of the Participant, the
    Committee may, in its sole discretion, amend an outstanding
    Option Agreement from time to time in any manner that is not
    inconsistent with the provisions of the Plan (including, without
    limitation, an amendment that accelerates the time at which the
    Option, or a portion thereof, may be exercisable).

 

    (e) Option Price and Payment.  The
    price at which a share of Common Stock may be purchased upon
    exercise of an Option shall be determined by the Committee but,
    subject to adjustment as provided in Paragraph XII such
    purchase price shall not be less than the Fair Market Value of a
    share of Common Stock on the date such Option is granted. The
    Option or portion thereof may be exercised by delivery of an
    irrevocable notice of exercise to the Company, as specified by
    the Committee. The purchase price of the Option or portion
    thereof shall be paid in full in the manner prescribed by the
    Committee. Separate stock certificates shall be issued by the
    Company for those shares acquired pursuant to the exercise of an
    Incentive Stock Option and for those shares acquired pursuant to
    the exercise of any Option that does not constitute an Incentive
    Stock Option.

 

    (f) Restrictions on Repricing of
    Options.  Except as provided in
    Paragraph XII, the Committee may not, without approval of
    the stockholders of the Company, amend any outstanding Option
    Agreement to lower the option price (or cancel and replace any
    outstanding Option Agreement with Option Agreements having a
    lower option price).

 

    (g) Stockholder Rights and
    Privileges.  The Participant shall be entitled
    to all the privileges and rights of a stockholder only with
    respect to such shares of Common Stock as have been purchased
    under the Option and for which certificates of stock have been
    registered in the Participant’s name.

 

    (h) Options and Rights in Substitution for Options
    Granted by Other Employers.  Options and Stock
    Appreciation Rights may be granted under the Plan from time to
    time in substitution for options and such rights held by
    individuals providing services to corporations or other entities
    who become employees, Consultants, or Directors as a result of a
    merger or consolidation or other business transaction with the
    Company or any Affiliate.

 

    VIII.
    RESTRICTED STOCK AWARDS

 

    (a) Forfeiture Restrictions To Be Established by the
    Committee.  Shares of Common Stock that are
    the subject of a Restricted Stock Award shall be subject to
    restrictions on disposition by the Participant and an obligation
    of the Participant to forfeit and surrender the shares to the
    Company under certain circumstances (the “Forfeiture
    Restrictions”). The Forfeiture Restrictions shall
    be determined by the Committee in its sole discretion, and the
    Committee may provide that the Forfeiture Restrictions shall
    lapse upon the attainment of one or more performance measures
    established by the Committee. In the event that the Committee
    determines to subject the Restricted Stock to performance
    measures in order to create a “performance-based
    compensation” award as defined in section 162(m) of
    the Code, the performance conditions will be composed of and
    comply with the provisions of Paragraph IX of this Plan.
    Where the Restricted Stock is not intended to be
    “performance-based compensation” under
    section 162(m) of the Code, any performance measures may be
    determined by the Committee in its sole

    

    6

 

    discretion. Each Restricted Stock Award may have different
    Forfeiture Restrictions, in the discretion of the Committee.

 

    (b) Other Terms and
    Conditions.  Common Stock awarded pursuant to
    a Restricted Stock Award shall be represented by a stock
    certificate registered in the name of the Participant. Unless
    provided otherwise in a Restricted Stock Agreement, the
    Participant shall have the right to receive dividends with
    respect to Common Stock subject to a Restricted Stock Award, to
    vote Common Stock subject thereto and to enjoy all other
    stockholder rights, except that (i) the Participant shall
    not be entitled to delivery of the stock certificate until the
    Forfeiture Restrictions have expired, (ii) the Company
    shall retain custody of the stock until the Forfeiture
    Restrictions have expired, (iii) the Participant may not
    sell, transfer, pledge, exchange, hypothecate or otherwise
    dispose of the stock until the Forfeiture Restrictions have
    expired, and (iv) a breach of the terms and conditions
    established by the Committee pursuant to the Restricted Stock
    Agreement shall cause a forfeiture of the Restricted Stock
    Award. At the time of such Award, the Committee may, in its sole
    discretion, prescribe additional terms, conditions or
    restrictions relating to Restricted Stock Awards, including, but
    not limited to, rules pertaining to the termination of
    employment or service as a Consultant or Director (by
    retirement, disability, death or otherwise, such terms of which
    shall be defined in the applicable Award agreement) of a
    Participant prior to expiration of the Forfeitures Restrictions.
    Such additional terms, conditions or restrictions shall be set
    forth in a Restricted Stock Agreement made in conjunction with
    the Award.

 

    (c) Payment for Restricted
    Stock.  The Committee shall determine the
    amount and form of any payment for Common Stock received
    pursuant to a Restricted Stock Award, provided that in the
    absence of such a determination, a Participant shall not be
    required to make any payment for Common Stock received pursuant
    to a Restricted Stock Award, except to the extent otherwise
    required by law.

 

    (d) Committee’s Discretion to Accelerate Vesting
    of Restricted Stock Awards.  The Committee
    may, in its discretion and as of a date determined by the
    Committee, fully vest any or all Common Stock awarded to a
    Participant pursuant to a Restricted Stock Award and, upon such
    vesting, all restrictions applicable to such Restricted Stock
    Award shall terminate as of such date. Any action by the
    Committee pursuant to this Subparagraph may vary among
    individual Participants and may vary among the Restricted Stock
    Awards held by any individual Participant. Notwithstanding the
    preceding provisions of this Subparagraph, the Committee may not
    take any action described in this Subparagraph with respect to a
    Restricted Stock Award that has been granted to a Covered
    Employee if such Award has been designed to meet the exception
    for performance-based compensation under section 162(m) of
    the Code.

 

    (e) Restricted Stock
    Agreements.  At the time any Award is made
    under this Paragraph VIII, the Company and the Participant
    shall enter into a Restricted Stock Agreement setting forth each
    of the matters contemplated hereby and such other matters as the
    Committee may determine to be appropriate. The terms and
    provisions of the respective Restricted Stock Agreements need
    not be identical. Subject to the consent of the Participant and
    the restriction set forth in the last sentence of Subparagraph
    (d) above, the Committee may, in its sole discretion, amend
    an outstanding Restricted Stock Agreement from time to time in
    any manner that is not inconsistent with the provisions of the
    Plan.

 

    IX.
    PERFORMANCE AWARDS AND ANNUAL INCENTIVE AWARDS

 

    (a) Performance Conditions.  The
    right of a Participant to exercise or receive a grant or
    settlement of any Award, and the timing thereof, may be subject
    to such performance conditions as may be specified by the
    Committee. The Committee may use such business criteria and
    other measures of performance as it may deem appropriate in
    establishing any performance conditions, and may exercise its
    discretion to reduce or increase the amounts payable under any
    Award subject to performance conditions, except as limited under
    Paragraphs IX(b) and IX(c) hereof in the case of a
    Performance Award or Annual Incentive Award intended to qualify
    under section 162(m) of the Code.

 

    (b) Performance Awards.  If the
    Committee determines that a Performance Award to be granted to
    an eligible person who is designated by the Committee as likely
    to be a Covered Employee should qualify as
    “performance-based compensation” for purposes of
    section 162(m) of the Code, the grant, exercise
    and/or
    settlement of such

    

    7

 

    Performance Award will be contingent upon achievement of
    pre-established performance goals and other terms set forth in
    this Paragraph IX(b). The Committee may not exercise
    discretion to increase the amounts payable under any Performance
    Award subject to performance conditions for Awards intended to
    qualify as “performance-based compensation” to a
    Covered Employee. For all Performance Awards granted to an
    eligible person who is not designated by the Committee as likely
    to be a Covered Employee, the grant, exercise
    and/or
    settlement of such a Performance Award may also be contingent
    upon the achievement of pre-established performance goals and
    other terms set forth in this Paragraph IX(b) or on any
    such other performance goals and terms determined appropriate by
    the Committee for the applicable performance period or eligible
    person.

 

    (i) Performance Goals
    Generally.  The performance goals for
    Performance Awards shall consist of one or more business
    criteria or individual performance criteria and a targeted level
    or levels of performance with respect to each of such criteria,
    as specified by the Committee consistent with this
    Paragraph IX(b). Performance goals shall be objective and
    shall otherwise meet the requirements of section 162(m) of
    the Code and regulations thereunder (including Treasury
    Regulation § 1.162-27 and successor regulations
    thereto), including the requirement that the level or levels of
    performance targeted by the Committee result in the achievement
    of performance goals being “substantially uncertain”
    at the time the Committee actually establishes the performance
    goal or goals for grants to all eligible persons who are
    designated by the Committee as likely to be Covered Employees.
    The Committee may determine that such Performance Awards shall
    be granted, exercised,
    and/or
    settled upon achievement of any one performance goal or that two
    or more of the performance goals must be achieved as a condition
    to grant, exercise
    and/or
    settlement of such Performance Awards. Performance goals may
    differ for Performance Awards granted to any one Participant or
    to different Participants.

 

    (ii) Business and Individual Performance
    Criteria.

 

    A. Business Criteria.  One or more of the
    following business criteria for the Company, on a consolidated
    basis,
    and/or for
    specified subsidiaries or business or geographical units of the
    Company, shall be used by the Committee in establishing
    performance goals for such Performance Awards: (1) earnings
    per share; (2) increase in revenues; (3) increase in
    cash flow; (4) return on invested capital; (5) return
    on equity; (6) change in the fair market value of our
    stock; (7) debt reduction; (8) operating margin;
    (9) net income; (10) pretax earnings before interest,
    depreciation and amortization; (11) pretax earnings;
    (12) any of the above goals determined on an absolute or
    relative basis or as compared to the performance of a published
    or special index deemed applicable by the Committee including,
    but not limited to, the Standard & Poor’s 500
    Stock Index or a group of comparable companies. The business
    criteria shall be subject to adjustment for changes in
    accounting standards required by the Financial Accounting
    Standards Board after the goal is established, and, to the
    extent provided for in any Award agreement, shall be subject to
    adjustment for specified significant extraordinary items or
    events, or nonrecurring transactions or events. In this regard,
    business criteria based on the price of our Common Stock shall
    be proportionately adjusted for any changes in the price due to
    a stock split, recapitalization or similar corporate
    transaction. One or more of the foregoing business criteria
    shall also be exclusively used in establishing performance goals
    for Annual Incentive Awards granted to a Covered Employee under
    Paragraph IX(c) hereof.

 

    B. Individual Criteria.  The grant,
    exercise
    and/or
    settlement of Performance Awards may also be contingent upon
    individual performance goals established by the Committee. If
    required for compliance with section 162(m) of the Code,
    such criteria shall be approved by the Company’s
    stockholders.

 

    (iii) Performance Period; Timing for Establishing
    Performance Awards.  Achievement of
    performance goals in respect of Performance Awards shall be
    measured over a performance period of up to ten years, as
    specified by the Committee. Performance goals shall be
    established no later than the earliest of the following to
    occur: (A) 90 days after the beginning of any
    performance period applicable to such Performance Awards,
    (B) the last date that would constitute less than 25% of
    the performance period applicable to such Performance Awards, or
    (C) at such other date as may be required or permitted for
    “performance-based compensation” under
    section 162(m) of the Code.

    

    8

 

    (iv) Performance Award Pool.  The
    Committee may, at its discretion, establish a Performance Award
    pool(s), which shall be an unfunded pool, for purposes of
    measuring performance of the Company in connection with
    Performance Awards associated with any given performance period.
    The amount of such Performance Award pool shall be based upon
    the achievement of a performance goal or goals based on one or
    more of the criteria set forth in Paragraph IX(b)(2) hereof
    for eligible persons who are designated by the Committee as
    likely to be a Covered Employee, or based upon performance
    goal(s) as determined by the Committee for all other eligible
    persons, during the given performance period as specified by the
    Committee in accordance with Paragraph IX(b)(3) hereof. The
    Committee may specify the amount of the Performance Award
    pool(s) as a percentage of any of such criteria, a percentage
    thereof in excess of a threshold amount, or as another amount
    which need not bear a strictly mathematical relationship to such
    criteria.

 

    (v) Payment of Performance
    Awards.  After the end of each designated
    performance period, the Committee shall determine the amount, if
    any, of (A) the applicable Performance Award pool, and the
    maximum amount of the potential Performance Award payable to
    each Participant in the Performance Award pool, or (B) the
    amount of the potential Performance Award otherwise payable to
    each Participant. Settlement of such Performance Awards shall be
    in cash, Common Stock, other Awards or other property, in the
    discretion of the Committee. The Committee may, in its
    discretion, reduce the amount of a settlement otherwise to be
    made in connection with such Performance Awards, but may not
    exercise discretion to increase any such amount payable to a
    Covered Employee in respect of a Performance Award subject to
    this Paragraph IX(b). The Committee shall specify the
    circumstances in which such Performance Awards shall be paid or
    forfeited in the event of termination of employment by the
    Participant prior to the end of a performance period or
    settlement of Performance Awards.

 

    (c) Annual Incentive Awards.  If
    the Committee determines that an Annual Incentive Award to be
    granted to an eligible person who is designated by the Committee
    as likely to be a Covered Employee should qualify as
    “performance-based compensation” for purposes of
    section 162(m) of the Code, the grant, exercise
    and/or
    settlement of such Annual Incentive Award shall be contingent
    upon achievement of pre-established performance goals and other
    terms set forth in this Paragraph IX(c). The Committee may
    not exercise discretion to increase the amounts payable under
    any Annual Incentive Award subject to performance conditions for
    Awards intended to qualify as “performance-based
    compensation” to a Covered Employee. For all Annual
    Incentive Awards granted to an eligible person who is not
    designated by the Committee as likely to be a Covered Employee,
    the grant, exercise
    and/or
    settlement of such an Annual Incentive Award may also be
    contingent upon the achievement of pre-established performance
    goals and other terms set forth in this Paragraph IX(c) or
    on any such other performance goals and terms determined
    appropriate by the Committee for the applicable performance
    period or eligible person.

 

    (i) Potential Annual Incentive
    Awards.  Not later than the end of the
    90th day of each applicable year, or at such other date as
    may be required or permitted in the case of Awards intended to
    be “performance-based compensation” under
    section 162(m) of the Code such as the last date that would
    constitute less than 25% of the applicable performance period
    year, the Committee shall determine the eligible persons who
    will potentially receive Annual Incentive Awards, and the
    amounts potentially payable thereunder, for that fiscal year,
    either out of an Annual Incentive Award pool established by such
    date under Paragraph IX (c)(i) hereof or as individual
    Annual Incentive Awards. The amount potentially payable, with
    respect to Annual Incentive Awards, shall be based upon the
    achievement of a performance goal or goals based on one or more
    of the business criteria set forth in Paragraph IX(b)(ii)
    hereof for eligible persons who are designated by the Committee
    as likely to be a Covered Employee, or based upon performance
    goal(s) as determined by the Committee for all other eligible
    persons, in the given performance year, as specified by the
    Committee.

 

    (ii) Annual Incentive Award
    Pool.  The Committee may, at its discretion,
    establish an Annual Incentive Award pool(s), which shall be an
    unfunded pool, for purposes of measuring performance of the
    Company in connection with Annual Incentive Awards for any given
    performance year. The amount of any Annual Incentive Award pool
    shall be based upon the achievement of a performance goal or
    goals based on one or more of the business criteria set forth in
    Paragraph IX(b)(ii) hereof for eligible persons who are
    designated by the Committee as likely to be a Covered Employee,
    or based upon performance goal(s) as determined by the Committee
    for all other eligible persons, during the given performance
    period, as specified by the Committee

    

    9

 

    in accordance with Paragraph IX(b)(iii) hereof. The
    Committee may specify the amount of the Annual Incentive Award
    pool as a percentage of any of such business criteria, a
    percentage thereof in excess of a threshold amount, or as
    another amount which need not bear a strictly mathematical
    relationship to such business criteria.

 

    (iii) Payment of Annual Incentive
    Awards.  After the end of each applicable
    year, the Committee shall determine the amount, if any, of
    (A) the applicable Annual Incentive Award pool, and the
    maximum amount of the potential Annual Incentive Award payable
    to each Participant in the Annual Incentive Award pool, or
    (B) the amount of the potential Annual Incentive Award
    otherwise payable to each Participant. The Committee may, in its
    discretion, determine that the amount payable to any Participant
    as a final Annual Incentive Award shall be reduced from the
    amount of his or her potential Annual Incentive Award, including
    a determination to make no final Award whatsoever, but may not
    exercise discretion to increase any such amount in the case of
    an Annual Incentive Award intended to qualify under
    section 162(m) of the Code. The Committee shall specify the
    circumstances in which an Annual Incentive Award shall be paid
    or forfeited in the event of termination of employment by the
    Participant prior to the end of the applicable year or
    settlement of such Annual Incentive Award.

 

    (d) Awards Criteria.  In
    determining the value of the settlement or payment of
    Performance Awards and Annual Incentive Awards, the Committee
    shall take into account a Participant’s responsibility
    level, performance, potential, other Awards, and such other
    considerations as it deems appropriate. The Committee, in its
    sole discretion, may provide for a reduction in the value of a
    Participant’s Performance Award or Annual Incentive Award
    during the applicable performance period.

 

    (e) Termination of Award.  A
    Performance Award or an Annual Incentive Award shall terminate
    if the Participant does not remain continuously in the employ of
    the Company and its Affiliates or does not continue to perform
    services as a Consultant or a Director for the Company and its
    Affiliates at all times during the applicable performance
    period, except as may be determined by the Committee subject to
    the restrictions of section 162(m) of the Code.

 

    (f) Performance Award and Annual Incentive Award
    Agreements.  At the time any Award is made
    under this Paragraph IX, the Company and the Participant
    shall enter into an Award Agreement setting forth each of the
    matters contemplated hereby, and such additional matters as the
    Committee may determine to be appropriate. The terms and
    provisions of the respective Performance Award Agreements, or
    the respective Annual Incentive Award Agreements, need not be
    identical.

 

    (g) Written Determinations.  All
    determinations by the Committee as to the establishment of
    performance goals, the amount of any Performance Award pool or
    potential individual Performance Awards, the achievement of
    performance goals relating to and final settlement of
    Performance Awards under Paragraph IX(b), the amount of any
    Annual Incentive Award pool or potential individual Annual
    Incentive Awards, the achievement of performance goals relating
    to and final settlement of Annual Incentive Awards under
    Paragraph IX(c) shall be made in writing in the case of any
    Award intended to qualify under section 162(m) of the Code.
    Notwithstanding the allowance in Paragraph IV of this Plan
    regarding delegation of duties or administration, the applicable
    Committee may not delegate any responsibilities described in
    this Paragraph IX(g) relating to such Performance Awards or
    Annual Incentive Awards.

 

    (h) Status of Paragraph IX(b) and
    Paragraph IX(c) Awards under Section 162(m) of the
    Code.  It is the intent of the Company that
    Performance Awards and Annual Incentive Awards under
    Paragraph IX(b) and Paragraph IX(c) hereof granted to
    persons who are designated by the Committee as likely to be
    Covered Employees shall, if so designated by the Committee,
    constitute “performance-based compensation” within the
    meaning of section 162(m) of the Code and regulations
    thereunder. Accordingly, the terms of Paragraph IX, as well
    as the definitions of Covered Employee and other terms used
    therein, shall be interpreted in a manner consistent with
    section 162(m) of the Code and regulations thereunder for
    all eligible persons designated by the Committee as likely to be
    Covered Employees. If any provision of this Plan as in effect on
    the date of adoption of any agreements relating to Performance
    Awards or Annual Incentive Awards that are designated as
    intended to comply with section 162(m) of the Code does not
    comply or is inconsistent with the requirements of
    section 162(m) of the Code

    

    10

 

    or regulations thereunder, such provision shall be construed or
    deemed amended to the extent necessary to conform to such
    requirements.

 

    X.
    PHANTOM STOCK AWARDS

 

    (a) Phantom Stock Awards.  Phantom
    Stock Awards are rights to receive shares of Common Stock (or
    the Fair Market Value thereof), or rights to receive an amount
    equal to any appreciation or increase in the Fair Market Value
    of Common Stock over a specified period of time, which vest over
    a period of time as established by the Committee, without
    satisfaction of any performance criteria or objectives. The
    Committee may, in its discretion, require payment or other
    conditions of the Participant respecting any Phantom Stock
    Award. A Phantom Stock Award may include, without limitation, a
    Stock Appreciation Right that is granted independently of an
    Option.

 

    (b) Award Period.  The Committee
    shall establish, with respect to and at the time of each Phantom
    Stock Award, a period over which the Award shall vest with
    respect to the Participant.

 

    (c) Awards Criteria.  In
    determining the value of Phantom Stock Awards, the Committee
    shall take into account a Participant’s responsibility
    level, performance, potential, other Awards, and such other
    considerations as it deems appropriate.

 

    (d) Payment.  Following the end of
    the vesting period for a Phantom Stock Award (or at such other
    time as the applicable Phantom Stock Award Agreement may
    provide), the holder of a Phantom Stock Award shall be entitled
    to receive payment of an amount, not exceeding the maximum value
    of the Phantom Stock Award, based on the then vested value of
    the Award. Payment of a Phantom Stock Award may be made in cash,
    Common Stock, or a combination thereof as determined by the
    Committee. Payment shall be made in a lump sum or in
    installments as prescribed by the Committee. Any payment to be
    made in cash shall be based on the Fair Market Value of the
    Common Stock on the payment date or such other date as may be
    specified by the Committee in the Phantom Stock Award Agreement.
    Cash dividend equivalents may be paid during or after the
    vesting period with respect to a Phantom Stock Award, as
    determined by the Committee.

 

    (e) Termination of Award.  A
    Phantom Stock Award shall terminate if the Participant does not
    remain continuously in the employ of the Company and its
    Affiliates or does not continue to perform services as a
    Consultant or a Director for the Company and its Affiliates at
    all times during the applicable vesting period, except as may be
    otherwise determined by the Committee.

 

    (f) Phantom Stock Award
    Agreements.  At the time any Award is made
    under this Paragraph X, the Company and the Participant
    shall enter into a Phantom Stock Award Agreement setting forth
    each of the matters contemplated hereby, and such additional
    matters as the Committee may determine to be appropriate. The
    terms and provisions of the respective Phantom Stock Award
    Agreements need not be identical.

 

    XI. BONUS
    STOCK AWARDS

 

    Each Bonus Stock Award granted to a Participant shall constitute
    a transfer of unrestricted Common Stock on such terms and
    conditions as the Committee shall determine. Bonus Stock Awards
    shall be made in shares of Common Stock and need not be subject
    to performance criteria or objectives or to forfeiture. The
    purchase price, if any, for Common Stock issued in connection
    with a Bonus Stock Award shall be determined by the Committee in
    its sole discretion. Bonus Stock Awards may be utilized to grant
    Common Stock in lieu of obligations to pay cash or deliver other
    property under this Plan or under other plans or compensatory
    arrangements, provided that, in the case of Executive Officers,
    the amount of such grants remains within the discretion of the
    Committee to the extent necessary to ensure that acquisitions of
    Stock or other Awards are exempt from liability under
    Rule 16b-3.
    In the case of any grant of Common Stock to an officer of the
    Company or any of its Affiliates in lieu of salary or other cash
    compensation, the number of shares granted in place of such
    compensation shall be reasonable, as determined by the Committee.

    

    11

 

    XII.
    RECAPITALIZATION OR REORGANIZATION

 

    (a) No Effect on Right or
    Power.  The existence of the Plan and the
    Awards granted hereunder shall not affect in any way the right
    or power of the Board or the stockholders of the Company to make
    or authorize any adjustment, recapitalization, reorganization or
    other change in the Company’s or any Affiliate’s
    capital structure or its business, any merger or consolidation
    of the Company or any Affiliate, any issue of debt or equity
    securities ahead of or affecting Common Stock or the rights
    thereof, the dissolution or liquidation of the Company or any
    Affiliate or any sale, lease, exchange or other disposition of
    all or any part of its assets or business or any other corporate
    act or proceeding.

 

    (b) Subdivision or Consolidation of Shares; Stock
    Dividends.  The shares with respect to which
    Awards may be granted are shares of Common Stock as presently
    constituted, but if, and whenever, prior to the expiration of an
    Award theretofore granted, the Company shall effect a
    subdivision or consolidation of shares of Common Stock or the
    payment of a stock dividend on Common Stock without receipt of
    consideration by the Company, the number of shares of Common
    Stock with respect to which such Award may thereafter be
    exercised or satisfied, as applicable (i) in the event of
    an increase in the number of outstanding shares shall be
    proportionately increased, and the purchase price per share
    shall be proportionately reduced, and (ii) in the event of
    a reduction in the number of outstanding shares shall be
    proportionately reduced, and the purchase price per share shall
    be proportionately increased. Any fractional share resulting
    from such adjustment shall be rounded up to the next whole share.

 

    (c) Recapitalizations and Corporate
    Changes.  If the Company recapitalizes,
    reclassifies its capital stock, or otherwise changes its capital
    structure (a “recapitalization”), the
    number and class of shares of Common Stock covered by an Award
    theretofore granted shall be adjusted so that such Award shall
    thereafter cover the number and class of shares of stock and
    securities to which the Participant would have been entitled
    pursuant to the terms of the recapitalization if, immediately
    prior to the recapitalization, the Participant had been the
    holder of record of the number of shares of Common Stock then
    covered by such Award. If (i) the Company shall not be the
    surviving entity in any merger or consolidation (or survives
    only as a subsidiary of an entity), (ii) the Company sells,
    leases or exchanges or agrees to sell, lease or exchange all or
    substantially all of its assets to any other person or entity,
    (iii) the Company is to be dissolved and liquidated,
    (iv) any person or entity, including a “group” as
    contemplated by Section 13(d)(3) of the 1934 Act,
    acquires or gains ownership or control (including, without
    limitation, power to vote) of more than 50% of the outstanding
    shares of the Company’s voting stock (based upon voting
    power), or (v) as a result of or in connection with a
    contested election of Directors, the persons who were Directors
    of the Company before such election shall cease to constitute a
    majority of the Board (each such event is referred to herein as
    a “Corporate Change”), no later than
    (A) 10 days after the approval by the stockholders of
    the Company of such merger, consolidation, reorganization, sale,
    lease or exchange of assets or dissolution or such election of
    Directors or (B) 30 days after a Corporate Change of
    the type described in clause (iv), the Committee, acting in its
    sole discretion without the consent or approval of any
    Participant, shall effect one or more of the following
    alternatives, which alternatives may vary among individual
    Participants and which may vary among Options held by any
    individual Participant: (1) accelerate the time at which
    Options then outstanding may be exercised so that such Options
    may be exercised in full for a limited period of time on or
    before a specified date (before or after such Corporate Change)
    fixed by the Committee, after which specified date all
    unexercised Options and all rights of Participants thereunder
    shall terminate, (2) require the mandatory surrender to the
    Company by selected Participants of some or all of the
    outstanding Options held by such Participants (irrespective of
    whether such Options are then exercisable under the provisions
    of the Plan) as of a date, before or after such Corporate
    Change, specified by the Committee, in which event the Committee
    shall thereupon cancel such Options and the Company shall pay
    (or cause to be paid) to each Participant an amount of cash per
    share equal to the excess, if any, of the amount calculated in
    Subparagraph (d) below (the “Change of Control
    Value”) of the shares subject to such Option over
    the exercise price(s) under such Options for such shares, or
    (3) make such adjustments to Options then outstanding as
    the Committee deems appropriate to reflect such Corporate Change
    (provided, however, that the Committee may determine in its sole
    discretion that no adjustment is necessary to Options then
    outstanding), including, without limitation, adjusting an Option
    to provide that the number and class of shares of Common Stock
    covered by such Option shall be adjusted so that such Option
    shall thereafter cover securities of the surviving or acquiring
    corporation or other property (including, without limitation,
    cash) as determined by the Committee in its sole discretion.

    

    12

 

    (d) Change of Control Value.  For
    the purposes of clause (2) in Subparagraph (c) above,
    the “Change of Control Value” shall equal the amount
    determined in clause (i), (ii) or (iii), whichever is
    applicable, as follows: (i) the per share price offered to
    stockholders of the Company in any such merger, consolidation,
    sale of assets or dissolution transaction, (ii) the price
    per share offered to stockholders of the Company in any tender
    offer or exchange offer whereby a Corporate Change takes place,
    or (iii) if such Corporate Change occurs other than
    pursuant to a tender or exchange offer, the fair market value
    per share of the shares into which such Options being
    surrendered are exercisable, as determined by the Committee as
    of the date determined by the Committee to be the date of
    cancellation and surrender of such Options. In the event that
    the consideration offered to stockholders of the Company in any
    transaction described in this Subparagraph (d) or
    Subparagraph (c) above consists of anything other than
    cash, the Committee shall determine the fair cash equivalent of
    the portion of the consideration offered which is other than
    cash.

 

    (e) Other Changes in the Common
    Stock.  In the event of changes in the
    outstanding Common Stock by reason of recapitalizations,
    reorganizations, mergers, consolidations, combinations,
    split-ups,
    split-offs, spin-offs, exchanges or other relevant changes in
    capitalization or distributions to the holders of Common Stock
    occurring after the date of the grant of any Award and not
    otherwise provided for by this Paragraph XII such Award and
    any agreement evidencing such Award shall be subject to
    adjustment by the Committee at its sole discretion as to the
    number and price of shares of Common Stock or other
    consideration subject to such Award. In the event of any such
    change in the outstanding Common Stock or distribution to the
    holders of Common Stock, or upon the occurrence of any other
    event described in this Paragraph XII the aggregate number
    of shares available under the Plan, the aggregate number of
    shares that may be issued under the Plan through Incentive Stock
    Options, and the maximum number of shares that may be subject to
    Awards granted to any one individual may be appropriately
    adjusted to the extent, if any, determined by the Committee,
    whose determination shall be conclusive. Notwithstanding the
    foregoing, except as otherwise provided by the Committee, upon
    the occurrence of a Corporate Change, the Committee, acting in
    its sole discretion without the consent or approval of any
    Participant, may require the mandatory surrender to the Company
    by selected Participants of some or all of the outstanding
    Performance Awards, Annual Incentive Awards and Phantom Stock
    Awards as of a date, before or after such Corporate Change,
    specified by the Committee, in which event the Committee shall
    thereupon cancel such Performance Awards, Annual Incentive
    Awards and Phantom Stock Awards and the Company shall pay (or
    cause to be paid) to each Participant an amount of cash equal to
    the maximum value (which maximum value may be determined, if
    applicable and in the discretion of the Committee, based on the
    then Fair Market Value of the Common Stock) of such Performance
    Award, Annual Incentive Awards or Phantom Stock Award which, in
    the event the applicable performance or vesting period set forth
    in such Performance Award, Annual Incentive Award or Phantom
    Stock Award has not been completed, shall be multiplied by a
    fraction, the numerator of which is the number of days during
    the period beginning on the first day of the applicable
    performance or vesting period and ending on the date of the
    surrender, and the denominator of which is the aggregate number
    of days in the applicable performance or vesting period;
    provided, however, that the Committee will not take any such
    action with regard to Performance Awards and Annual Incentive
    Awards that are intended to be “performance-based
    compensation” under section 162(m) of the Code that
    would cause such Awards to fail to comply with
    section 162(m) of the Code and the regulations thereunder.

 

    (f) Stockholder Action.  Any
    adjustment provided for in the above Subparagraphs of this
    Paragraph XII shall be subject to any required stockholder
    action.

 

    (g) No Adjustments unless Otherwise
    Provided.  Except as hereinbefore expressly
    provided, the issuance by the Company of shares of stock of any
    class or securities convertible into shares of stock of any
    class, for cash, property, labor or services, upon direct sale,
    upon the exercise of rights or warrants to subscribe therefor,
    or upon conversion of shares or obligations of the Company
    convertible into such shares or other securities, and in any
    case whether or not for fair value, shall not affect, and no
    adjustment by reason thereof shall be made with respect to, the
    number of shares of Common Stock subject to Awards theretofore
    granted or the purchase price per share, if applicable.

    

    13

 

    XIII.
    AMENDMENT AND TERMINATION OF THE PLAN

 

    The Board in its discretion may terminate the Plan at any time
    with respect to any shares of Common Stock for which Awards have
    not theretofore been granted. The Board shall have the right to
    alter or amend the Plan or any part thereof from time to time;
    provided that no change in the Plan may be made that would
    impair the rights of a Participant with respect to an Award
    theretofore granted without the consent of the Participant, and
    provided, further, that the Board may not, without approval of
    the stockholders of the Company, (a) amend the Plan to
    increase the maximum aggregate number of shares that may be
    issued under the Plan, increase the maximum number of shares
    that may be issued under the Plan through Incentive Stock
    Options or change the class of individuals eligible to receive
    Awards under the Plan, or (b) amend or delete
    Paragraph VII(f).

 

    This amendment and restatement of the Plan is not intended to
    affect the material terms of any Award granted prior to the
    effective date of this amended and restated Plan without the
    prior written consent of the affected Participant.

 

    XIV.
    MISCELLANEOUS

 

    (a) No Right To An Award.  Neither
    the approval of the Plan nor any action of the Board or of the
    Committee shall be deemed to give any individual any right to be
    granted an Option, a right to a Restricted Stock Award, a right
    to a Performance Award or Annual Incentive Award, a right to a
    Phantom Stock Award, a right to a Bonus Stock Award, or any
    other rights hereunder except as may be evidenced by an Award
    agreement duly executed on behalf of the Company, and then only
    to the extent and on the terms and conditions expressly set
    forth therein. The Plan shall be unfunded. The Company shall not
    be required to establish any special or separate fund or to make
    any other segregation of funds or assets to assure the
    performance of its obligations under any Award.

 

    (b) No Employment/Membership Rights
    Conferred.  Nothing contained in the Plan
    shall (i) confer upon any employee or Consultant any right
    with respect to continuation of employment or of a consulting or
    advisory relationship with the Company or any Affiliate or
    (ii) interfere in any way with the right of the Company or
    any Affiliate to terminate his or her employment or consulting
    or advisory relationship at any time. Nothing contained in the
    Plan shall confer upon any Director any right with respect to
    continuation of membership on the Board.

 

    (c) Payment Terms Applicable to All
    Awards.  Subject to the terms of this Plan and
    any applicable Award agreement, payments to be made by the
    Company or any of its Affiliates upon the exercise of an Option
    or other Award or settlement of an Award may be made in such
    forms as the Committee shall determine, including without
    limitation cash, Common Stock, other Awards or other property,
    and may be made in a single payment or transfer, in
    installments. Except as otherwise provided herein, the
    settlement of any Award may be accelerated, and cash paid in
    lieu of Common Stock in connection with such settlement, in the
    discretion of the Committee or upon occurrence of one or more
    specified events (in addition to a Corporate Change).
    Installments may be required by the Committee (subject to
    Paragraph XIII of this Plan) or permitted at the election
    of the Participant on terms and conditions established by the
    Committee and in compliance with the rules of section 409A
    of the Code and all regulations promulgated thereunder. Payments
    may include, without limitation, provisions for the payment or
    crediting of reasonable interest on installment payments. This
    Plan shall not constitute an “employee benefit plan”
    for purposes of section 3(3) of the Employee Retirement
    Income Security Act of 1974, as amended.

 

    (d) Other Laws; Withholding.  The
    Company shall not be obligated to issue any Common Stock
    pursuant to any Award granted under the Plan at any time when
    the shares covered by such Award have not been registered under
    the Securities Act of 1933, as amended, and such other state and
    federal laws, rules and regulations as the Company or the
    Committee deems applicable and, in the opinion of legal counsel
    for the Company, there is no exemption from the registration
    requirements of such laws, rules and regulations available for
    the issuance and sale of such shares. No fractional shares of
    Common Stock shall be delivered, nor shall any cash in lieu of
    fractional shares be paid. The Company shall have the right to
    deduct in connection with all Awards any taxes required by law
    to be withheld and to require any payments required to enable it
    to satisfy its withholding obligations.

 

    (e) No Restriction on Corporate
    Action.  Nothing contained in the Plan shall
    be construed to prevent the Company or any Affiliate from taking
    any action which is deemed by the Company or such Affiliate to
    be appropriate or in its best interest, whether or not such
    action would have an adverse effect on the Plan or any Award

    

    14

 

    made under the Plan. No Participant, beneficiary or other person
    shall have any claim against the Company or any Affiliate as a
    result of any such action.

 

    (f) Restrictions on Transfer.  An
    Award (other than an Incentive Stock Option, which shall be
    subject to the transfer restrictions set forth in
    Paragraph VII(c)) shall not be transferable otherwise than
    (i) by will or the laws of descent and distribution,
    (ii) pursuant to a qualified domestic relations order as
    defined by the Code or Title I of the Employee Retirement
    Income Security Act of 1974, as amended, or the rules
    thereunder, or (iii) with the consent of the Committee.

 

    (g) Governing Law.  The Plan shall
    be governed by, and construed in accordance with, the laws of
    the State of Delaware, without regard to conflicts of laws
    principles thereof.

    

    15exv10w26

Exhibit 10.26

SPECIFIC TERMS IN THIS AGREEMENT HAVE BEEN REDACTED BECAUSE

CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE

REDACTED MATERIAL HAS BEEN SEPARATELY FILED WITH THE SECURITIES

AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE

APPROPRIATE PLACE WITH THREE ASTERISKS (***).

AMENDMENT NO. 1 TO

AMENDED AND RESTATED SUPPLY AGREEMENT

     This Amendment No. 1 (this “Amendment”) is entered into effective this 1st day of January,
2010, to that certain Amended and Restated Sand Purchase Agreement (the “Agreement”) entered into
effective as of November 25, 2008, by and between SUPERIOR WELL SERVICES, INC., a Delaware
corporation, as “Buyer”, and PREFERRED ROCKS USS, INC., a Delaware corporation, as “Seller”.

     In consideration of the experience of the parties to date of dealing under the Agreement, and
in consideration of changed economic conditions since the making of the Agreement, and in further
consideration of the mutual interests of Buyer and Seller to effect a more rewarding business
relationship going forward, and for other good and valuable consideration, and intending to be
legally bound hereby, it is hereby AGREED by Buyer and Seller that said Agreement is hereby AMENDED
as follows:

          1. The definition of “Annual Target Amount” in Section 1(a) is amended to delete the phrase
“300,000 Tons of Sand” and replace it with “360,000 Tons of Sand.”

          2. The definition of “Plants” in Section 1(d) is amended to read in its entirety as follows:
“those certain mines and processing facilities throughout the United States owned or leased by
Seller or one of its affiliates.”

          3. The definition of “Sand” in Section 1(f) is amended to read in its entirety as follows:
“all those types of fracturing or “frac” silica sands produced and/or sold by Seller as listed in
Section 2(a) and as further described in the Specifications.” A new “Exhibit B” to the Agreement
with current Specifications is attached hereto and replaces the current Exhibit B to the Agreement
in its entirety.

          4. Section 2 Purchase and Sale; Payments by Buyer is deleted in its entirety and replaced with
the following:

          (a) Purchase and Sale of Sand. Seller shall make available for purchase by Buyer and
Buyer shall purchase from Seller, subject to those general Terms and Conditions set forth in
Exhibit “C” attached hereto, the following Sand products (each a “Product”) from Seller in
bulk packaging, F. O. B. Seller’s plants:

Product A: OTTAWA WHITETM 20/40 from Seller’s Ottawa, IL Plant

Product B: OTTAWA WHITETM 30/50 from Seller’s Ottawa, IL Plant

Product C: OTTAWA WHITETM 30/70 from Seller’s Ottawa, IL Plant

Product D OTTAWA WHITETM 40/70 from Seller’s Ottawa, IL Plant

Product E: USM100 FRAC from Seller’s Mill Creek, OK Plant

Product F: SHALE FRACTM USM65 from Seller’s Pacific, MO Plant

 

 

SPECIFIC TERMS IN THIS AGREEMENT HAVE BEEN REDACTED BECAUSE

CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE

REDACTED MATERIAL HAS BEEN SEPARATELY FILED WITH THE SECURITIES

AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE

APPROPRIATE PLACE WITH THREE ASTERISKS (***).

Product G: SHALE FRACTM COL20/40 from Seller’s Columbia, SC Plant

Product H: SHALE FRACTM COL16/30 from Seller’s Columbia, SC Plant

Product I: SHALE FRACTM COL12/20 from Seller’s Columbia, SC Plant

Product J: SHALE FRACTM L55 from Seller’s Dubberly, LA Plant

Product K: SHALE FRACTM NS20 from Seller’s Jackson, TN Plant

Product L: as-yet unnamed 40/70 frac sand from Seller’s Pacific, MO Plant

Product M: USM100 FRAC from Seller’s Ottawa, IL Plant

          (b) Pricing. The following shall be the base purchase price per Ton of Sand (the
“Purchase Price”) effective as of January 1. 2010:

For Products A, B, C and D: (***) if shipped to East of Mississippi River

For Products A, B, C and D: (***)if shipped to West of Mississippi River

For Product E: (***)

For Product F: (***)

For Product G: (***)

For Product H: (***)

For Product I: (***)

For Products J and K: (***)

For Product L: (***)

For Product M: (***)

The above Purchase Prices shall remain in effect through March 31, 2010. Effective April 1, 2010,
the above Purchase Price shall act as base pricing, subject to the application of the following two
price adjustment mechanisms (with a third price adjustment mechanism, the Inflation Adjustment,
being applicable as of January 1, 2011):

          1. Dryer Fuel Cost Surcharge—Intended to offset the cost of natural gas used in the
processing of Sand, this surcharge will adjust price on a quarterly basis, commencing with
shipments of Sand under this Agreement on April 1, 2010 and thereafter, when the average of the
prior quarter’s NYMEX monthly natural gas closings exceed (***) per MMBTU. The Purchase Price of
Sand (all Products, A through M) will increase $.25 per Ton for every $1.00 per MMBTU increase
above (***) per MMBTU in the average of the three monthly close amounts for the prior quarter’s
NYMEX natural gas closings. The calculation will be prorated, e.g., if the NYMEX three monthly
closings for a prior quarter averages (***) per MIVIBTU, the dryer fuel cost surcharge will be
(***) per Ton for the following quarter. For the avoidance of doubt, this surcharge may increase or
decrease from quarter to quarter but such surcharge shall never be less than zero.

2

 

SPECIFIC TERMS IN THIS AGREEMENT HAVE BEEN REDACTED BECAUSE

CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE

REDACTED MATERIAL HAS BEEN SEPARATELY FILED WITH THE SECURITIES

AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE

APPROPRIATE PLACE WITH THREE ASTERISKS (***).

          2. Market Conditions Surcharge—Intended to reflect movements in the natural gas
market and markets generally, this surcharge will adjust price on a quarterly basis, commencing
with shipments of Sand under this Agreement on April 1, 2010 and thereafter, when the average of
the prior quarter’s NYMEX monthly natural gas closings exceed (***) per MMBTU. The Purchase Price
of Sand (all Products, A through L) will increase $.75 per Ton for every $1.00 per MMBTU increase
above (***) per MMBTU in the average of the three monthly close amounts for the prior quarter’s
NYMEX natural gas closings. The calculation will be prorated, e.g., if the NYMEX three month
closings for a prior quarter averages (***) per MMBTU, the surcharge will be (***) per Ton for the
following quarter. For the avoidance of doubt, this surcharge may increase or decrease from quarter
to quarter but such surcharge shall never be less than zero.

          3. Inflation Adjustment—Intended to reflect movements in the Producer Price Index,
the price of Sand (all Products, A through M), commencing with shipments of Sand under this
Agreement on January 1, 2011 and thereafter, shall be the Purchase Price as effective on the date
of this Amendment as set forth in Section 2(b) above (for the avoidance of doubt, the use of the
term “Purchase Price” with respect to any adjustments to such Purchase Price as described in this
Section 2(b)(3) shall be without including the effects of any of the surcharges to Purchase Price
described in subsection 1 and 2 above), increased by the percentage increase of the November 2010
value of the Producer Price Index for non-metallic mineral mining & quarrying (“PPI”), as published
by the United States Department of Commerce, Bureau of Labor Statistics, over that of the November
2009 value (not an average over the preceding twelve month period—see an example of such a
calculation shown following the PPI chart below). The price of product (all Products, A through L)
effective each January 1 thereafter shall be the prior year’s adjusted Purchase Price (for the
avoidance of doubt, without including the effects of any of the surcharges described in subsection
1 and 2 above) increased by the percentage increase in the PPI for non-metallic mineral mining &
quarrying, as published by the United States Department of Commerce, Bureau of Labor Statistics,
comparing such PPI of the November thirteen months prior to such January 1st date of adjustment to
the November next preceding such January 1st date of adjustment.

For the avoidance of doubt, there will be no price increase in any year in which there is no
increase in such year-to-year November PPI index, and in the next subsequent year, the base
November PPI to be used shall be the November PPI in the last year in which there was an increase
in such November PPI as compared to the prior year. (Example: November 2008 PPI is 229.3. November
2009 PPI is 240.0. November 2010 PPI is 238.5. November 2011 PPI is 253.2.
There would be no increase for PPI in 2011. In 2012, the increase would be based upon the
comparison of November 2011 (253.2) and November 2009 (240.0).)

Notwithstanding the foregoing, the variance in the Purchase Price pursuant to the PPI based
adjustment shall not exceed 6% per year. In the event that the calculation of the PPI based
adjustment done pursuant to this section 2(b)(3) exceeds 6% in any year, then the adjustment to the
Purchase Price for the such year shall be limited to 6%, and the Supplier shall carry over the
excess of the adjustment to be used in subsequent years as applicable.

3

 

SPECIFIC TERMS IN THIS AGREEMENT HAVE BEEN REDACTED BECAUSE

CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE

REDACTED MATERIAL HAS BEEN SEPARATELY FILED WITH THE SECURITIES

AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE

APPROPRIATE PLACE WITH THREE ASTERISKS (***).

By way of example only: (1) The adjustment to the Purchase Price for 2011 is (a) the Purchase Price
on December 31, 2010, plus (b) the percentage increase (if any) in the November 2010 PPI compared
to the November 2009 PPI; (2) the adjustment to the Purchase Price for 2012 is (a) the Purchase
Price on December 31, 2011, plus (b) the percentage increase (if any) in the November 2011 PPI
compared to the November 2010 PM; (3) with regard to the 6% limitation on the PPI adjustment to the
Purchase Price and the carryover, if the November 2010 PPI is 13% greater than the November 2009
PPI, then the Purchase Price for 2011 increases 6%, and the Supplier shall carry over 7% for use in
subsequent years if the PPI increase as described in this Section is less than 6% in any such year
(until the carryover amount is fully used); (4) if the November 2011 PPI is 2% greater than the
November 2010 PPI, then the Purchase Price for 2012 increases 6% (2% plus 4% of carryover), and the
future carryover is now reduced to 3%.

4

 

SPECIFIC TERMS IN THIS AGREEMENT HAVE BEEN REDACTED BECAUSE

CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE

REDACTED MATERIAL HAS BEEN SEPARATELY FILED WITH THE SECURITIES

AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE

APPROPRIATE PLACE WITH THREE ASTERISKS (***).

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Year	 	Jan	 	Feb	 	Mar	 	Apr	 	May	 	Jun	 	Jul	 	Aug	 	Sep	 	Oct	 	Nov	 	Dec	 	Annual
	1999

	 	 	133.0	 	 	 	133.5	 	 	 	133.6	 	 	 	133.8	 	 	 	133.8	 	 	 	134.2	 	 	 	134.2	 	 	 	134.2	 	 	 	134.3	 	 	 	134.4	 	 	 	134.4	 	 	 	134.4	 	 	 	134.0	 
	2000

	 	 	135.0	 	 	 	135.3	 	 	 	135.7	 	 	 	136.7	 	 	 	137.2	 	 	 	137.2	 	 	 	137.6	 	 	 	137.8	 	 	 	138.0	 	 	 	138.0	 	 	 	138.0	 	 	 	138.1	 	 	 	137.0	 
	2001

	 	 	139.1	 	 	 	139.9	 	 	 	140.4	 	 	 	140.8	 	 	 	140.8	 	 	 	141.3	 	 	 	141.5	 	 	 	141.4	 	 	 	141.5	 	 	 	141.8	 	 	 	141.6	 	 	 	141.5	 	 	 	141.0	 
	2002

	 	 	142.5	 	 	 	143.4	 	 	 	143.5	 	 	 	143.4	 	 	 	143.6	 	 	 	143.7	 	 	 	143.7	 	 	 	143.5	 	 	 	143.5	 	 	 	143.7	 	 	 	143.8	 	 	 	144.2	 	 	 	143.5	 
	2003

	 	 	144.9	 	 	 	145.4	 	 	 	145.9	 	 	 	146.3	 	 	 	146.4	 	 	 	146.6	 	 	 	146.7	 	 	 	146.8	 	 	 	146.8	 	 	 	147.1	 	 	 	147.2	 	 	 	147.0	 	 	 	146.4	 
	2004

	 	 	148.7	 	 	 	149.0	 	 	 	149.3	 	 	 	150.3	 	 	 	150.7	 	 	 	151.1	 	 	 	151.7	 	 	 	151.9	 	 	 	152.3	 	 	 	152.5	 	 	 	153.0	 	 	 	153.9	 	 	 	151.2	 
	2005

	 	 	157.2	 	 	 	158.0	 	 	 	158.9	 	 	 	159.9	 	 	 	160.8	 	 	 	161.5	 	 	 	162.7	 	 	 	162.6	 	 	 	163.2	 	 	 	163.3	 	 	 	164.4	 	 	 	163.7	 	 	 	161.3	 
	2006

	 	 	170.5	 	 	 	170.5	 	 	 	173.5	 	 	 	176.8	 	 	 	176.0	 	 	 	174.8	 	 	 	177.7	 	 	 	177.8	 	 	 	177.5	 	 	 	179.4	 	 	 	178.2	 	 	 	178.9	 	 	 	176.0	 
	2007

	 	 	184.8	 	 	 	186.3	 	 	 	188.1	 	 	 	189.4	 	 	 	190.0	 	 	 	189.6	 	 	 	193.0	 	 	 	193.4	 	 	 	193.4	 	 	 	193.4	 	 	 	195.0	 	 	 	197.3	 	 	 	191.1	 
	2008

	 	 	202.6	 	 	 	205.6	 	 	 	206.3	 	 	 	210.1	 	 	 	211.6	 	 	 	214.4	 	 	 	218.7	 	 	 	225.4	 	 	 	226.7	 	 	 	227.7	 	 	 	229.3	 	 	 	232.7	 	 	 	217.6	 
	2009

	 	 	232.6	 	 	 	236.4	(P)	 	 	235.6	(P)	 	 	235.4	(P)	 	 	234.1	(P)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

P: Preliminary. All indexes are subject to revision four months after original publication

Example of Inflation Adjustment calculation:

PPI for November, 2007: 195.0; PPI for November, 2008: 229.3

Difference between the two PPIs: 229.3 less 195M = 34.3

Percentage increase represented by difference in PPI: 34.3 / 195.0 = 17.589%

Thus effective January 1, 2009, pricing for all Products would increase by 17.6%

Note: The 17.6% increase would be capped at 6% as described above and the remainder would carry over

          (c) Minimum Tonnage:

(i) FOR THE REMAINDER OF CALENDAR YEAR 2009:

     There are no minimum Tonnage requirements for the remainder of 2009.

5

 

SPECIFIC TERMS IN THIS AGREEMENT HAVE BEEN REDACTED BECAUSE

CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE

REDACTED MATERIAL HAS BEEN SEPARATELY FILED WITH THE SECURITIES

AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE

APPROPRIATE PLACE WITH THREE ASTERISKS (***).

(ii) FOR CALENDAR YEARS 2010 and 2011:

     Buyer shall purchase, at the minimum, the Annual Target Amount of Sand (360,000 Tons) from
Seller during each of calendar years 2010 and 2011. Such annual minimum Tonnage purchase
obligation, based upon Buyer’s reasonable projections as to need and upon Seller’s reasonable
projections as to production capability, shall be allocated among Seller’s Products as follows:

Product A: (***), comprised of (***) shipped east of the Mississippi River, and (***)shipped to west of the Mississippi River

Product B: (***)

Product C: (***)

Product D: (***)

Product E: (***)

Product F: (***)

Product G: (***)

Product H: (***)

Product I: (***)

Product L: (***)

Product M: (***)

     Notwithstanding the foregoing, Buyer shall not be strictly held to the above-stated allocation
of Products comprising the annual minimum Tonnage purchase obligation, and Buyer may satisfy its
annual minimum Tonnage purchase obligation by purchasing more of one Product and less of another
Product, so long as consideration is given to Seller’s production capabilities. Buyer may also
purchase more of a specific Product than the minimum Tonnage required, and in excess of the annual
minimum Tonnage obligation and at those prices as provided under this Agreement, so long as Seller
is able to have such Product available.

     Notwithstanding anything in this Agreement to the contrary, in the event that Buyer places an
order for a Product and Seller is not able to fill or to fully fill such order, any shortfall in
Seller delivery of Tonnage from such order shall, at the discretion of Buyer, be deducted from any
minimum Tonnage requirements under this Agreement.

(iii) FOR CALENDAR YEARS SUBSEQUENT TO 2011

     The minimum Tonnage requirements applicable to calendar year 2011, as described in Section
2(c)(ii) above, shall continue in full force and effect for calendar years subsequent to 2011 so
long as the parties operate under this Agreement as amended, subject to adjustment as a
result of good faith negotiation between the parties based upon changed market conditions
and/or production capabilities.

     (d) Buyer Deferral of Tonnage:

6

 

SPECIFIC TERMS IN THIS AGREEMENT HAVE BEEN REDACTED BECAUSE

CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE

REDACTED MATERIAL HAS BEEN SEPARATELY FILED WITH THE SECURITIES

AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE

APPROPRIATE PLACE WITH THREE ASTERISKS (***).

          (i) Requests for Deferral of Amounts. For any calendar year (up to two calendar
years), Buyer shall have the option to defer Buyer’s minimum Tonnage purchase obligation in an
amount not to exceed, for each option exercise, the Maximum Amount (as hereinafter defined). Buyer
shall exercise such option to defer by giving notice to Seller at least sixty (60) days prior to
the earliest date on which the making by Seller of Sand available for delivery may be affected by
the exercise of such option. The notice given with respect to each option exercise shall state (A)
the amount of Sand with respect to which Buyer is deferring, (B) the type of Sand subject to such
deferral and the Plant from which such Sand was expected to be sourced, and (C) any other
information relevant to such option exercise.

          (ii) Maximum Amount. As used herein, “Maximum Amount” means an amount of Sand equal to
thirty-five percent (35%) of the Annual Target Amount, pro rata on a grade-by-grade basis.

          (iii) Catch-Up. Notwithstanding anything herein to the contrary, Buyer shall be
obligated to purchase all amounts deferred pursuant to this Section 2(d). Buyer may request to
purchase Sand previously deferred in accordance with this Section 2(c) at any time during the Term
by delivering a purchase order to Seller pursuant to Section 3(a)(ii), and otherwise in accordance
with this Agreement, and subject in all cases to availability of the applicable Sand. If Buyer has
not purchased all amounts of Sand deferred pursuant to this Section 2(d) at the end of the Term,
Buyer shall have the right to extend the Term for up to one (1) additional year solely for the
purpose of purchasing any such Sand, at the Purchase Price in effect, at the time of such purchase;
provided that Buyer must provide Seller written notice of any such election to extend
(which shall specify the length of such extension, not to exceed one (1) year) no later than one
hundred eighty (180) days before the end of the Term.

          (iv) Application of Additional Amounts. If and to the extent that Buyer purchases Sand
from Seller in addition to the amounts Buyer is required to purchase pursuant to this Agreement
(“Additional Amounts”), in all cases subject to availability, and Buyer subsequently exercises an
option to defer pursuant to this Section 2(c), Buyer may elect to satisfy its obligation to
purchase and pay for any such amounts of Sand deferred pursuant to this Section 2(d) by applying
such Additional Amounts, to the extent comparable in grade and volume to the Sand so deferred, in
lieu of purchasing or paying for such deferred amounts pursuant to Section 2(d)(iii).

     (e) Further General Provisions Regarding Purchase and Sale:

          (i) Seller shall at all times be contractually obligated to supply Buyer with the Annual
Target Amount of Sand and minimum Tonnage of Product required to be purchased by Buyer on an annual
basis under this Agreement, as amended. Product shall be ordered and delivered on a monthly basis,
with the ability of either party to reasonably deviate, pursuant to that schedule attached hereto
as “Exhibit A”. Buyer covenants and agrees to pay Seller for Seller’s Sand in accordance with the
provisions of Sections 2 and 4 of this Agreement. Seller shall have the right to source Sand from
any from any of its Plants, or from any other source, so

7

 

SPECIFIC TERMS IN THIS AGREEMENT HAVE BEEN REDACTED BECAUSE

CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE

REDACTED MATERIAL HAS BEEN SEPARATELY FILED WITH THE SECURITIES

AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE

APPROPRIATE PLACE WITH THREE ASTERISKS (***).

long as the Sand provided to Buyer is comparable in quality, is within specification, and is
comparable to the transportation cost to Buyer from the Seller’s Plant designated in the schedule
appearing above in Section 2(a) from which such Sand was to be supplied.”

     5. Each of Section 3(c) and Section 6 is amended to delete the reference to “Section
2(b)(fii)(1)” and replace them with “Section 2(b).”

     6. Section 4(a) is amended to read in its entirety as follows: “The Purchase Price per Ton for
the Sand is set forth in Section 2(b) of this Agreement.”

     7. Section 4(a)(i), Cash Payment, is amended by adding the following new sentence at
the end of such subsection: “Notwithstanding the Note on its face providing for interest at the
rate of ten percent (10%) per annum, Seller shall pay interest at the rate of six percent (6%) per
annum upon the unpaid principal of the Note, effective as of the date of this Amendment.”

     8. Section 4(b), Fuel Surcharge, is hereby deleted in its entirety.

     9. The last sentence of Section 5(b), Renewal Option, and all of Section 5(c),
Limited Purpose Extension, are hereby deleted in their entirety.

     10. Section 9, Notices, is hereby amended by deleting Preferred Unlimited, Inc. in
Conshohocken, PA as a notice recipient for any notices whatsoever under the Agreement.

     11. Exhibit “A” of the Agreement is hereby deleted and replaced with Exhibit “A” attached
hereto and Exhibit “E” of the Agreement is hereby deleted.

8

 

SPECIFIC TERMS IN THIS AGREEMENT HAVE BEEN REDACTED BECAUSE

CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE

REDACTED MATERIAL HAS BEEN SEPARATELY FILED WITH THE SECURITIES

AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE

APPROPRIATE PLACE WITH THREE ASTERISKS (***).

     OTHERWISE, ALL TERMS AND PROVISIONS OF SAID AGREEMENT SHALL REMAIN IN FULL FORCE AND EFFECT.

	 	 	 	 	 
	PREFERRED ROCKS USS, INC.

 	 
	By:  	/s/ John A. Ulizio
 	 
	 	John A. Ulizio, President & C.E.O. 	 
	 

Date signed: January 14, 2010

	 	 	 	 	 
	SUPERIOR WELL SERVICES, INC.

 	 
	By:  	/s/ David E. Wallace
 	 
	 	David E. Wallace, President & C.E.O. 	 
	 	 	 	 

Date signed: January 14, 2010

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