1. | No Right to Continued Employee Status or Consultant Service |
2. | Coordination with Employment Agreement |
3. | Vesting; Forfeiture; Effect of Termination of Service |
Vesting Date | Cumulative Vested Percentage |
4. | Restrictions on Transfer |
5. | Settlement |
6. | Prohibited Activities |
(a) | Prohibition against Certain Activities. The Grantee agrees that the Grantee will not at any time: (x) disclose or furnish to any other Person or use for the Grantee’s own or any other Person’s account any Confidential Information (other than in the course of the Grantee’s service to the Company or any other member of the Company Group, if the Grantee is an Employee, Director or Consultant of or to the Company or any other member of the Company Group) except for Permitted Disclosures (a “Prohibited Disclosure or Use”), or (y) commit a breach of the provisions of Section 4 (a “Prohibited Transfer”), or (z) make any statement that is intended to become public, or that should reasonably be expected to become public, and that criticizes, disparages or is derogatory about, or which injures the reputation of, the Company Group or any employee, officer, director, or agent of any member of the Company Group (a “Prohibited Disparagement”). |
(b) | Non-Competition and Non-Solicitation. In addition, the Grantee agrees that the Grantee will not during the period of the Grantee’s Business Relationship or within two (2) years following the Grantee’s Termination (the “Restricted Period”): (y) engage in any Prohibited Solicitation or (z) engage in any Competitive Activity. |
(c) | Exception Within Certain States. Notwithstanding the restrictions contained in Section 6(b), within those areas of the State of Oklahoma that are within the Restricted Area (the “Oklahoma Restricted Area”), the restrictions in Section 6(b) shall not apply after the Termination Date; provided, however, that at no point during the Restricted Period shall the Grantee: (x) within the Oklahoma Restricted Area, solicit goods, services or a combination of goods and services from any established customer of the Company, or another member of the Company Group for which the Grantee had performed services or (y) directly or indirectly, solicit or contact with a view to the engagement or employment of, any person who is an officer or employee of the Company (or any other member of the Company Group by which the Grantee had been employed), or otherwise directly or indirectly interfere with or raid the employees of any member of the Company Group. Further, within those areas of the States of California or North Dakota that are within the Restricted Area, the restrictions contained in Section 6(b) shall not apply following the Termination Date, and during the portion of the Restricted Period that follows the Termination Date, Section 6(b) shall be applied within the States of California and North Dakota only to prohibit the Grantee from, directly or indirectly, soliciting or contacting with a view to the engagement or employment of, any person who is an officer or employee of the Company (or any other member of the Company Group by which the Grantee had been employed), or otherwise directly or indirectly interfering with or raiding the employees of any member of the Company Group. |
(d) | Return of Property. Upon the Grantee’s Termination for any reason and upon request by any member of the Company Group, the Grantee shall promptly deliver to the requesting entity all materials, documents and other property of the Company or any other member of the Company Group, including originals and copies of all documents and records (both paper and electronic), computer hardware and software programs, computer files (and all other electronically stored information), media, equipment and other materials containing any Confidential Information, any summaries, extracts or derivative works thereof, or any other materials that reflect, contain or are derived from Confidential Information. |
(e) | Right to Cancellation and Recovery. The Grantee understands and agrees that the Company has granted this Award to the Grantee to reward the Grantee for the Grantee’s future efforts and loyalty to the Company Group by giving the Grantee the opportunity to participate in the potential future appreciation of the Company. Accordingly, if (v) the Grantee engages in any Prohibited Disclosure or Use or breaches or violates the Grantee’s obligations relating to the non-disclosure or non-use of confidential or proprietary information under any Restrictive Agreement to which the Grantee is a party, or (w) the Grantee engages in any Prohibited Disparagement or breaches or violates the Grantee’s obligations relating to non-disparagement under any Restrictive Agreement to which the Grantee is a party, or (x) the Grantee engages in any Prohibited Transfer, or (y) the Grantee is Terminated for Cause, or (z) the Grantee violates Section 6 hereof, (collectively items (v) – (z), “Prohibited Actions”) then, subject to Section 6(e)(iii) below, in addition to any other rights and remedies available to the Company, the Company shall be entitled, at its option, exercisable by written notice (the date of such notice, the “Forfeiture Notice Date”) to take any the following actions: |
(i) | The Company may terminate this Award and immediately cancel the installments for which the Transfer Restrictions have not yet lapsed; and |
(ii) | If such Prohibited Action occurs during the Restricted Period, the Company may recover from the Grantee, and the Grantee shall pay to the Company, with respect to any installments on which the Transfer Restrictions lapsed during the period of two (2) years prior to the earlier of the occurrence of the Prohibited Action or the Termination Date the following: an amount equal to the cash payment made to the Grantee in respect of any such installment. If the Grantee does not pay such amount over to the Company within twenty (20) days of demand, such amount shall thereafter bear interest at the maximum rate permitted by law and the Grantee shall be liable for all of the Company’s costs of collection, including but not limited to, reasonable legal fees. |
(iii) | Notwithstanding anything to the contrary, in the event that a Change in Control has occurred and the Grantee is Terminated without Cause within the twelve (12) months following the Change in Control such that as a result of such termination, the Grantee is no longer in any Business Relationship with any member of the Company Group, the Company may take the actions set forth in Sections 6(e)(i) and (ii) only if the Grantee engages in any Prohibited Disclosure or Use or breaches or violates the Grantee’s obligations relating to the non-disclosure or non-use of confidential or proprietary information under any Restrictive Agreement to which the Grantee is a party. |
(f) | Other Remedies. The Grantee specifically acknowledges and agrees that the remedy at law for any breach of this Section 6 will be inadequate and that the Company and each other member of the Company Group, in addition to any other relief available to it, shall be entitled to seek specific performance and injunctive relief as remedies for such breach or any threatened breach without the necessity of proving actual damage or posting any bond whatsoever. Such remedies shall not be deemed the exclusive remedies for a breach of any terms under this Section 6 but shall be in addition to all remedies available at law or in equity to the Company and the other members of the Company Group, including the recovery of damages from the Grantee and the Grantee’s agents involved in such breach. |
(g) | Certain Definitions. For purposes of this Agreement, the following terms shall have the meaning set forth below: |
(i) | “Business Relationship” shall mean service to the Company or any other member of the Company Group, or a corporation or parent or subsidiary of such member of the Company Group assuming or substituting a new Award for this Award, in the capacity of an Employee, Director or Consultant, as applicable. Without limiting the scope of the preceding sentence, it is expressly provided that the Grantee’s Business Relationship shall be considered to have Terminated at the time of the termination of the “Subsidiary” or “Affiliate” status under the Plan of the entity or other organization that employs the Grantee or to which the Grantee provides services as a Consultant. Any question as to whether and when there has been a Termination of the Grantee’s Business Relationship, and the cause of such Termination, shall be determined by the Committee and its determination shall be final. |
(ii) | “Cause” shall mean the Grantee’s (A) willful and continued failure to substantially perform, without proper legal justification (and not due to Disability), his or her duties and responsibilities required under the Employment Agreement or under any other written agreement between the Grantee and the Company or any other member of the Company Group, or otherwise reasonably required by the Board to be undertaken; (B) any material breach of the Employment Agreement or any other written agreement between the Grantee and the Company or any other member of the Company Group (including this Agreement); (C) any material violation of any law applicable to the workplace or employment relationship or material failure to abide by lawful and material instructions, policies, codes of conduct, or workplace rules established by any member of the Company Group and applicable to the Grantee; (D) any conduct in connection with such Grantee’s performance of his or her duties or services to the Company or any other member of the Company Group that is (x) unlawful or grossly negligent and has a material adverse effect on any member of the Company Group or its business, or (y) fraudulent or dishonest and results, or is intended to result, in personal gain or enrichment at the material expense of any member of the Company Group; or (E) commission of, or indictment, conviction, admission, or plea of guilty or nolo contendere for or to, a charge of any felony (or state law equivalent) or any crime involving moral turpitude; provided that, in the case of any Grantee who, as of the date of determination, is party to an effective written services, severance or employment agreement with the Company or any other member of the Company Group, “Cause” shall have the meaning, if any, specified in such agreement. |
(iii) | “Change in Control” shall mean the occurrence of any of the following events after the Date of Grant: |
A. | any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), other than a Permitted Holder, acquires “beneficial ownership” (within the meaning of Rule 13d-3 under the Exchange Act) of securities of the Company representing more than fifty percent (50%) of the combined voting power of the Company’s then outstanding securities; provided, however, that if the Company engages in a merger or consolidation in which the Company or surviving entity in such merger or consolidation becomes a subsidiary of another entity, then references to the Company’s then outstanding securities shall be deemed to refer to the outstanding securities of such parent entity; |
B. | a change in the composition of the Board such that the “Continuing Directors” cease for any reason, other than due to ordinary course retirement, death, disability, term limit or any director refreshment or similar policy, to constitute at least seventy percent (70%) of the Board. The “Continuing Directors” shall mean those members of the Board who either: (x) were directors on the Date of Grant; or (y) were subsequently elected by, or on the nomination or recommendation of, at least a three-quarters (3/4) majority (consisting of at least four (4) directors) of the Board who were or become Continuing Directors; |
C. | the consummation of a merger, reorganization or consolidation of the Company with any corporation, including without limitation, a reverse or forward triangular merger, where the Company’s shareholders immediately prior to such transaction own less than a majority of the voting securities of the surviving or resulting corporation or entity after the transaction; |
D. | the consummation of a transaction that implements in whole or in part a resolution of the Company’s shareholders authorizing a complete liquidation or dissolution of the Company; or |
E. | the sale or disposition (other than a pledge or similar encumbrance) by the Company of all or substantially all of the assets of the Company, other than to a Permitted Holder or Permitted Holders; |
(iv) | “Company Business” shall mean (A) any business in which any member of the Company Group is engaged during the term of the Grantee’s Business Relationship and for which the Grantee has (or has had) responsibilities or about which the Grantee obtained Confidential Information; provided, however, the definition of “Company Business” shall not include any business in which the Company Group no longer engages or no longer has any plans to engage in as of the Termination Date; and (B) any other business in which any member of the Company Group has undertaken material steps to engage within the twelve (12) month period prior to the Termination Date, so long as the Grantee had material responsibility for, or Confidential Information about, such anticipated business. Without limiting the foregoing, the definition of “Company Business” shall be deemed to include the businesses of well construction and intervention services (including cementing and coiled tubing services), well completion services (including hydraulic fracturing and related stimulation services, cased-hole wireline, pressure pumping and pump-down, perforating, pressure testing, and logging services), and well support services (including workover, plug and abandonment and other related and specialty rig services, and fluid hauling, storage and disposal services). |
(v) | “Competitive Activity” shall mean carrying on or engaging in the Company Business in the Restricted Area in competition with any member of the Company Group, including carrying on or engaging in any activities in which the Grantee, in the Restricted Area during the Restricted Period, directly or indirectly, (A) owns, manages, operates, controls, or is an officer or director of any Person (other than a member of the Company Group) that engages in the Company Business, or (B) joins, becomes an employee or consultant of, or otherwise connected with any Person (other than a member of the Company Group) that engages in the Company Business in any capacity (with respect to the this clause (B)) in which the Grantee’s duties are the same or similar to those duties performed by the Grantee for any member of the Company Group; provided, however, that, notwithstanding the forgoing, the Grantee or any of his or her affiliates may own (x) less than five percent (5%) of any equity security registered under the Exchange Act in any entity engaged in the Company Business, provided that neither the Grantee nor his or her affiliates has the power, directly or indirectly, to control or direct the management or affairs of any such corporation and is not involved in the management of such corporation and (y) those equity investments owned by the Grantee as of the date of this Agreement as previously disclosed in writing by the Grantee to and agreed by the Company. |
(vi) | “Confidential Information” shall mean all trade secrets and other confidential, proprietary, or non-public information in any form (tangible or intangible) that relates to the Company, or any other member of the Company Group, including all: (A) proprietary computer software or databases; (B) non-public lists of customers, prospects, candidates, and employees; employee applications; skills inventory sheets and similar summaries of employee qualifications; customer ordering habits, billing rates, buying preferences, and short term needs; sales reports and analysis; (C) employee reports and analysis; customer job orders and profit margin data; businesses processes, methods of operation and sales techniques; (D) statistical information, financial information that is not publicly available; (E) specially negotiated terms and pricing with vendors and customers; (F) research and development, business projects, strategic business plans and other strategic information and strategies, and products and solution services offered to customers; (G) intellectual property of any member of the Company Group and all summaries, extracts, or derivative works thereof; and (H) all other information that gives any member of the Company Group a competitive advantage by virtue of not being known by its competitors. Moreover, “Confidential Information” includes confidential information of the Company Group’s suppliers, licensors, licensees, customers or other third parties that have supplied such information to a member of the Company Group, subject to a duty on the part of such member of the Company Group to maintain the confidentiality of such information. |
(vii) | “Disability” shall mean a physical or mental impairment that renders the Grantee incapable of performing the Grantee’s essential duties pursuant to the Business Relationship (after accounting for reasonable accommodation, if applicable and required by applicable law) for a period in excess of six (6) months during any consecutive twelve (12) month period; provided that, in the case of any Grantee who, as of the date of determination, is party to an effective written services, severance or employment agreement with the Company or any other member of the Company Group, “Disability” shall have the meaning, if any, specified in such agreement. |
(viii) | “Good Reason” shall mean the Grantee’s resignation from the Business Relationship within one hundred twenty (120) days of the initial occurrence of any one of the following events (without the Grantee’s consent): (A) any material reduction in the Grantee’s authority, duties or responsibilities, including the Grantee’s removal from the position and title with the Company specified in the Employment Agreement, in each instance other than (x) by reason of the Grantee’s Disability or (y) as a result of any member of the Company Group’s actions arising from or following any allegation that: (1) the Grantee’s conduct has caused (or could reasonably be expected to cause) material damage to any member of the Company Group, or (2) the Grantee has committed an act or omission that constitutes Cause; (B) a reduction in the Grantee’s then-effective base salary (other than in connection with an immaterial reduction that applies to all similarly situated executives or that occurs as a result of, or following an allegation that, (x) Grantee’s conduct has caused (or could reasonably be expected to cause) material damage to any member of the Company Group or (y) the Grantee committed an act or omission that constitutes Cause; provided that, if the Grantee, as of the date of determination, is party to the Employment Agreement or another effective services, severance or employment agreement with the Company or any other member of the Company Group, “Good Reason” shall have the meaning, if any, specified in such agreement. |
(ix) | “Permitted Disclosures” shall mean the disclosure of Confidential Information (A) made with the prior written consent by the Board, (B) required to be made by law or legal process, (C) in a good faith report of possible violations of applicable law to any governmental agency or entity, (D) that is protected under the whistleblower provisions of applicable law, or (E) otherwise permitted as set forth in Section 7 below. |
(x) | “Prohibited Solicitation” shall mean, on the Grantee’s own behalf or on behalf of any other Person, soliciting, raiding, enticing or inducing, directly or indirectly, any employee of the Company or any other Person who is under contract with the Company (or other member of the Company Group) to (A) terminate such Person’s employment by, or contractual relationship with, such member of the Company Group, (B) refrain from extending or renewing the same contract (upon the same or new terms), (C) refrain from rendering services to or for any member of the Company Group, or (D) become employed by or enter into a service relationship with a competitor of any member of the Company Group. |
(xi) | “Restricted Area” shall mean: (A) during the portion of the Restricted Period prior to the Termination Date, the world; and (B) during the portion of the Restricted Period that occurs following the Termination Date, those geographic areas specified on Exhibit A, and any additional areas in which any member of the Company Group has taken material steps as of the Termination Date, with the Grantee’s assistance, in preparation of conducting the Company Business. |
(xii) | “Restrictive Agreement” shall mean any agreement between any member of the Company Group and the Grantee that contains non-competition, non-solicitation, non-hire, non-disparagement, return-of-property or confidentiality restrictions applicable to the Grantee. |
(xiii) | “Termination Date” shall mean the date on which the Grantee’s Business Relationship terminates for any reason. |
7. | Permitted Disclosures |
(a) | nothing herein shall prevent the Grantee from making a good faith report of possible violations of applicable law to any governmental agency or entity or making disclosures that are protected under the whistleblower provisions of applicable law, and the Grantee shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is: (i) made (A) in confidence to a federal, state or local government official, either directly or indirectly, or to an attorney, and (B) solely for the purpose of reporting or investigating a suspected violation of law; (ii) made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal; or (iii) protected under the whistleblower provisions of applicable law; |
(b) | in the event the Grantee files a lawsuit for retaliation by the Company or any other member of the Company Group for the Grantee’s reporting of a suspected violation of law, the Grantee may (i) disclose a trade secret to the Grantee’s attorney and (ii) use the trade secret information in the court proceeding related to such lawsuit, in each case, if the Grantee (A) files any document containing such trade secret under seal; and (B) does not otherwise disclose such trade secret, except pursuant to court order; and |
(c) | nothing herein or any other agreement between the Grantee and the Company or any other member of the Company Group shall prevent the Grantee from lawfully, and without obtaining prior authorization from any member of the Company Group: (i) initiating communications directly with, cooperating with, providing information to, causing information to be provided to, or otherwise assisting in an investigation by the U.S. Securities and Exchange Commission (the “SEC”) or any other governmental or regulatory agency, entity, or official(s) (collectively, “Governmental Authorities”) regarding a possible violation of any law; (ii) responding to any inquiry or legal process directed to an employee individually from any Governmental Authority; (iii) testifying, participating or otherwise assisting in an action or proceeding by any Governmental Authorities relating to a possible violation of law, including providing documents or other confidential information to Governmental Authorities; or (iv) receiving an award for information provided to the SEC or any other Governmental Authority. This Agreement shall not be construed or applied to require the Grantee to obtain prior authorization from any member of the Company Group before engaging in any of the foregoing conduct referenced in this Section 7, or to notify the Company or any other member of the Company Group of having engaged in any such conduct. |
8. | Taxation |
9. | Notices |
10. | Agreement Subject to Plan; Dispute Resolution Program; Applicable Law |
11. | Headings and Capitalized Terms |
12. | Severability and Reformation |
13. | Binding Effect |
14. | Entire Agreement |
15. | Waiver |