SMART SAND, INC. (SND) Files An 8-K Entry into a Material Definitive Agreement

Item1.01

On November9, 2016 (the Closing Date), Smart Sand, Inc.
(the Company, we, us, our and similar
terms) completed its initial public offering (the
Offering) of 11,700,000 shares of the Companys common
stock, $0.001 par value (the Common Stock), at a price to
the public of $11.00 per share ($10.34 per share, net of the
underwriting discount) to a Registration Statement on Form S-1,
as amended (File No.333-213692) (the Registration
Statement), initially filed by the Company with the U.S.
Securities and Exchange Commission (the Commission) on
September19, 2016 to the Securities Act of 1933, as amended (the
Securities Act). The material provisions of the Offering
are described in the prospectus, dated November3, 2016 (the
Prospectus), filed by the Company with the Commission on
November7, 2016 to Rule 424(b)(4) under the Securities Act. The
Company granted the underwriters an option for a period of 30
days to purchase up to an additional 877,500 shares of Common
Stock at the initial offering price, and the selling stockholders
described in the Prospectus granted the underwriters an option
for a period of 30 days to purchase up to an aggregate additional
877,500 shares of Common Stock at the initial offering price.

Registration Rights Agreement

On the Closing Date, we entered into a registration rights
agreement (the Registration Rights Agreement) with certain
stockholders (the Registration Rights Holders). to the
Registration Rights Agreement, we may be required to register
under the Securities Act shares of Common Stock owned by the
Registration Rights Holders (the Registrable Securities)
upon their request in certain circumstances.

Demand Registration Rights. At any time, following the
expiration of the 180-day lockup period described in the
Prospectus, certain Demand Holders (as defined in the
Registration Rights Agreement) will have the right to require us
by written notice to register their Registrable Securities. We
will be obligated to effect two demand registrations on a
long-form registration statement in any twelve-month period and
an unlimited number of demand registrations on a short-form
registration statement, including shelf registrations; provided
that we will not be obligated to file more than one registration
statement in response to a demand registration within 90 days
after the effective date of any registration statement filed by
us in response to a demand registration. Upon written request of
any of the Demand Holders, we will retain underwriters and
facilitate an underwritten offering to dispose of Registrable
Securities having a market price of at least $20.0 million held
individually by a Demand Holder, or collectively by the Demand
Holders.

Piggy-back Registration Rights. If, at any time, we
propose to register an offering of our securities (subject to
certain exceptions) for our own account or for the account of any
stockholder other than the Registration Rights Holders, then we
must give notice to the Registration Rights Holders holding at
least $0.1 million in shares of our Common Stock to allow them to
include a specified number of Registrable Securities in that
registration statement.

Conditions and Limitations; Expenses. The registration
rights are subject to certain conditions and limitations,
including the right of the underwriters to limit the number of
Registrable Securities to be included in a registration and our
right to delay or withdraw a registration statement under certain
circumstances. We will generally pay all registration expenses in
connection with our obligations under the Registration Rights
Agreement, regardless of whether a registration statement is
filed or becomes effective. The obligations to register
Registrable Securities under the Registration Rights Agreement
will terminate when no Registrable Securities remain outstanding.
Registrable Securities will cease to be covered by the
Registration Rights Agreement when they have (i)been sold to an
effective registration statement under the Securities Act,
(ii)been sold in a transaction exempt from registration under the
Securities Act (including transactions to Rule 144 under the
Securities Act), (iii)are held by the Company or one of its
subsidiaries; (iv)at the time such Registrable Security has been
sold in a private transaction in which the transferors rights
under the Registration Rights Agreement are not assigned to the
transferee of such securities; or (v)are sold in a private
transaction in which the transferors rights under the
Registration Rights Agreement are assigned to the transferee and
such transferee is not an affiliate of the Company, two years
following the transfer of such Registrable Security to such
transferee.

The foregoing description of the Registration Rights Agreement is
not complete and is qualified in its entirety by reference to the
full text of the Registration Rights Agreement, which is filed as
Exhibit 4.1 to this Current Report on Form 8-K and is
incorporated into this Item1.01 by reference.

Stockholders Agreement

On the Closing Date, we entered into a stockholders agreement
(the Stockholders Agreement) with Clearlake Capital
Partners II (Master), L.P. (Clearlake) and Keystone
Cranberry, LLC (the entity through which our Chief Executive
Officer beneficially owns substantially all of his shares of our
Common Stock, and, together with Clearlake, the Principal
Stockholders) that provides each Principal Stockholder
certain rights to designate nominees for election to our board of
directors. The Stockholders Agreement provides that, for so long
as a Principal Stockholder beneficially owns at least 30% of our
Common Stock then outstanding, it will be entitled to designate
three directors; for so long as a Principal Stockholder
beneficially owns at least 20% of our Common Stock then
outstanding, it will be entitled to designate two directors; and
for so long as a Principal Stockholder beneficially owns at least
10% of our Common Stock then outstanding, it will be entitled to
designate one director.

A Principal Stockholder will be entitled to designate the
replacement for any of their board designees whose board service
terminates prior to the end of the directors term regardless of
their beneficial ownership at such time. Each Principal
Stockholder will also have the right, but not the obligation, to
designate at least one of their nominees as a member to each of
the committees of our board of directors for so long as they are
allowed to designate at least one director, subject to compliance
with applicable law and stock exchange rules.

For so long as such Principal Stockholder holds at least 20% of
our outstanding Common Stock, we and our subsidiaries will not
effect any transaction or series of related transactions
involving a change of control of the Company (or enter into an
agreement to take such action) without the approval of such
Principal Stockholder.

Additionally, for so long as such Principal Stockholder has one
of its designees serving on our board of directors, we and our
subsidiaries will not take the following actions (or enter into
an agreement to take such actions) without the approval of such
Principal Stockholder:

The rights and obligations of each Principal Stockholder under
the Stockholders Agreement will be several and not joint, and no
Principal Stockholder will be responsible in any way for the
performance of the rights and obligations of any other Principal
Stockholder under the Stockholders Agreement.

The foregoing description of the Stockholders Agreement is not
complete and is qualified in its entirety by reference to the
full text of the Stockholders Agreement, which is filed as
Exhibit 4.2 to this Current Report on Form 8-K and is
incorporated into this Item1.01 by reference.

Indemnification Agreements

On the Closing Date, we entered into indemnification agreements
(the Indemnification Agreements) with each of our
directors and officers. Each Indemnification Agreement provides,
among other things, for indemnification to the fullest extent
permitted by law and our Second Amended and Restated Bylaws (as
defined below) against any and all expenses, judgments, fines,
penalties and amounts paid in settlement of any claim. The
Indemnification Agreements provide for the advancement or payment
of all expenses to the indemnitee and for the reimbursement to us
if it is found that such indemnitee is not entitled to such
indemnification under applicable law and our Second Amended and
Restated Bylaws.

A copy of the form of Indemnification Agreement was filed as
Exhibit 10.23 to the Registration Statement and is incorporated
herein by reference, and the foregoing description of the
Indemnification Agreements is qualified in its entirety by
reference thereto.

Smart Sand, Inc. 2016 Omnibus Incentive
Plan

The description of the 2016 Plan (as defined below) provided
under Item5.02 of this Current Report on Form8-K is incorporated
into this Item1.01 by reference. A copy of the 2016 Plan is filed
as Exhibit 10.2 to this Current Report on Form 8-K and is
incorporated herein by reference.

2016 Employee Stock Purchase Plan

The description of the 2016 ESPP (as defined below) provided
under Item5.02 of this Current Report on Form8-K is incorporated
into this Item1.01 by reference. A copy of the 2016 ESPP is filed
as Exhibit 10.3 to this Current Report on Form 8-K and is
incorporated herein by reference.

The descriptions of the Registration Rights Agreement and the
Stockholders Agreement contained in Item1.01 are incorporated
into this Item3.03 by reference.

Smart Sand, Inc. 2016 Omnibus Incentive
Plan

In connection with the Offering, we adopted and our stockholders
approved the Smart Sand, Inc. 2016 Omnibus Incentive Plan (the
2016 Plan), under which we may grant cash and equity-based
incentive awards to eligible service providers in order to
attract, retain and motivate the persons who make important
contributions to the Company. The material terms of the 2016 Plan
are summarized below.

Eligibility and Administration. Our employees,
consultants and directors, and employees and consultants of our
subsidiaries, are eligible to receive awards under the 2016 Plan.
The 2016 Plan is administered by the compensation committee of
the board of directors, which may delegate its duties and
responsibilities to one or more officers, agents or advisors as
provided in the 2016 Plan (referred to collectively as the plan
administrator below), subject to the limitations imposed under
the 2016 Plan, Section16 of the Securities Exchange Act of 1934,
stock exchange rules and other applicable laws, or a
sub-committee thereof or any other committee designated by the
board of directors. The plan administrator has the authority to
take all actions and make all determinations under the 2016 Plan,
to interpret the 2016 Plan and award agreements and to adopt,
amend and repeal rules for the administration of the 2016 Plan as
it deems advisable. The plan administrator also has the authority
to determine which eligible service providers receive awards,
grant awards and set the terms and conditions of all awards under
the 2016 Plan, including any vesting and vesting acceleration
provisions, subject to the conditions and limitations in the 2016
Plan.

Shares Available for Awards. The aggregate number of
shares of our Common Stock that will initially be available for
issuance under the 2016 Plan is equal to the sum of (i)3,911,456
shares and (ii)any shares of Common Stock which as of the
effective date of the 2016 Plan are subject to awards granted
under the 2012 Equity Incentive Plan (the 2012 Plan) that
are forfeited, expire or otherwise terminate without the issuance
of shares. No more than 3,911,456 shares of Common Stock may be
issued under the 2016 Plan upon the exercise of incentive stock
options.

If an award under the 2016 Plan or the 2012 Plan expires, lapses
or is terminated, exchanged for cash, canceled without having
been fully exercised or forfeited, any unused shares subject to
the award will, as applicable, become or again be available for
new grants under the 2016 Plan. Any shares of Common Stock
repurchased on the open market using the proceeds from the
exercise of an award under the 2016 Plan will not increase the
number of shares available under the 2016 Plan.

In addition, the maximum aggregate grant date fair value, as
determined in accordance with the Financial Accounting Standards
Board ASC Topic 718 (or any successor thereto), of awards granted
to any non-employee director for services as a director to the
2016 Plan during any fiscal year may not exceed $600,000 (or, in
the fiscal year of any directors initial service, $1,000,000).
The plan administrator may, however, make exceptions to such
limit on director compensation in extraordinary circumstances,
subject to the limitations in the 2016 Plan.

Awards. The 2016 Plan provides for the grant of stock
options, including incentive stock options, or ISOs, and
nonqualified stock options, or NSOs, stock appreciation rights,
or SARs, restricted stock, dividend equivalents, restricted stock
units, or RSUs, performance awards, performance cash awards and
other stock or cash based awards. Certain awards under the 2016
Plan may constitute or provide for payment of nonqualified
deferred compensation under Section409A of the Internal Revenue
Code of 1986, as amended (the Code). All awards under the
2016 Plan will be set forth in award agreements, which will
detail the terms and conditions of awards, which may include any
applicable vesting and payment terms and post-termination
exercise limitations.

Performance Measures. The plan administrator may select
performance measures for an award to establish performance goals
for a performance period. Performance measures under the 2016
Plan may include, but are not limited to, the following: net
earnings (either before or after one or more of the following:
interest, taxes, depreciation, depletion and/or accretion,
amortization, non-cash equity-based compensation expense, gain or
loss on sale of assets, financing costs, development costs,
non-cash charges, unusual or nonrecurring charges and gain or
loss on extinguishment of debt); gross or net sales or revenue or
sales or revenue growth; net income (either before or after
taxes); adjusted net income; operating earnings or profit; cash
flow (including, but not limited to, operating cash flow and free
cash flow); return on assets; return on capital; return on
stockholders equity; total stockholder return; return on sales;
gross or net profit or operating margin; costs (including, but
not limited to, production costs); funds from operations;
expenses; working capital; earnings per share; adjusted earnings
per share; price per share; regulatory body approval for
commercialization of a product; implementation or completion of
critical projects; market share; economic value; debt levels or
reduction; sales-related goals; comparisons with other stock
market indices; operating efficiency; financing and other capital
raising transactions; recruiting and maintaining personnel;
year-end cash; customer service; and marketing initiatives, any
of which may be measured either in absolute terms or on a per
share, per ton, per product, per customer/prospect, per employee,
or any other similar basis or as compared to any incremental
increase or decrease. Such performance goals also may be based
solely by reference to the companys performance or the
performance of a subsidiary, division, business segment or
business unit of the company or a subsidiary, or based upon
performance relative to performance of other companies or upon
comparisons of any of the indicators of performance relative to
performance of other companies. When determining performance
goals, the plan administrator may provide for the inclusion or
exclusion of the impact of an event or occurrence which the plan
administrator determines should appropriately be included or
excluded, including, without limitation, non-recurring charges or
events, acquisitions or divestitures, changes in the corporate or
capital structure, events unrelated to the business or outside of
the control of management, foreign exchange considerations, and
legal, regulatory, tax or accounting changes.

Certain Transactions. In the event of a change in
control in which outstanding awards under the 2016 Plan are not
assumed or substituted, then prior to the change in control
(i)all outstanding options and SARs will become immediately
exercisable in full and will terminate upon consummation of the
change in control; (ii)all restrictions and vesting requirements
applicable to any award based solely on the continued service of
the participant will terminate; and (c)all awards, the vesting or
payment of which are based on performance goals, will vest as
though such performance goals were achieved at target.
Notwithstanding the foregoing, in connection with a change in
control, the plan administrator may determine that outstanding
stock-based awards granted under the 2016 Plan, whether or not
exercisable or vested, will be canceled and terminated in
exchange for a cash payment (or the delivery of shares, other
securities or a combination of cash, shares and securities) equal
to the difference, if any, between the consideration to be
received by company stockholders in respect of a share of Common
Stock in connection with such change in control and the purchase
price per share, if any, under the award, multiplied by the
number of shares of Common Stock subject to such award. In
addition, in the event of certain non-reciprocal transactions
with our stockholders, the plan administrator will make equitable
adjustments to the 2016 Plan and outstanding awards as it deems
appropriate to reflect the transaction.

Plan Amendment and Termination. Our board of directors
may terminate the 2016 Plan at any time and the plan
administrator may amend the 2016 Plan at any time; however, no
amendment, other than an amendment that increases the number of
shares available under the 2016 Plan, may adversely affect an
award outstanding under the 2016 Plan without the consent of the
affected participant, and stockholder approval will be obtained
for any amendment to the extent necessary to comply with
applicable laws. Further, the plan administrator cannot, without

the approval of our stockholders, amend any outstanding stock
option or SAR to reduce its price per share. The 2016 Plan will
remain in effect until the day before the tenth anniversary of
the date it was initially approved by our board of directors,
unless earlier terminated by our board of directors. No awards
may be granted under the 2016 Plan after its termination.

Foreign Participants, Claw-Back Provisions, Transferability
and Participant Payments. The plan administrator may modify
awards granted to participants who are foreign nationals or
employed outside the United States or establish subplans or
procedures to address differences in laws, rules, regulations or
customs of such foreign jurisdictions. All awards will be subject
to any company claw-back policy as set forth in such claw-back
policy or the applicable award agreement. Except as expressly
provided in the 2016 Plan or in an award agreement, awards under
the 2016 Plan are generally non-transferrable, except by will or
the laws of descent and distribution and are generally
exercisable only by the participant. With regard to exercise
price obligations arising in connection with the exercise of
options under the 2016 Plan, such amounts must be paid in cash
(including check, bank draft or money order), except that the
plan administrator may allow such payments to be made by tender
of a broker exercise notice, tender of previously acquired shares
of our Common Stock, net exercise, a combination of such methods
or any other method approved by the plan administrator. With
regard to tax withholding obligations arising in connection with
awards under the 2016 Plan, the plan administrator may permit or
require such withholding obligations to be satisfied through the
withholding of shares underlying an award, tender of previously
acquired shares, delivery of a broker exercise notice, or a
combination of such methods.

The foregoing description of the 2016 Plan is not complete and is
qualified in its entirety by reference to the full text of the
2016 Plan, which is filed as Exhibit 10.2 to this Current Report
on Form 8-K and is incorporated into this Item5.02 by reference.

2016 Employee Stock Purchase Plan

In connection with the Offering, we adopted and our stockholders
approved the 2016 Employee Stock Purchase Plan (the 2016
ESPP). The material terms of the 2016 ESPP are summarized
below.

Shares available for Awards; Administration. A total of
3,911,456 shares of our Common Stock are initially reserved for
issuance under the 2016 ESPP and no more than 3,911,456 shares of
our Common Stock may be issued on each purchase date under the
2016 ESPP. The number of shares available for issuance under the
2016 ESPP is subject to adjustment in certain events, as
described below.

The compensation committee of our board of directors, or a
subcommittee thereof, has authority to interpret the terms of the
2016 ESPP and determine the eligibility of participants. The
compensation committee may delegate its duties, power and
authority under the 2016 ESPP to any officers of the Company in
accordance with the terms of the 2016 ESPP.

Eligibility. Our employees are eligible to participate
in the 2016 ESPP if they are customarily employed by us or a
participating subsidiary for more than 20 hours per week and more
than five months in any calendar year. However, an employee may
not be granted rights to purchase stock under our 2016 ESPP if
such employee, immediately after the grant, would own (directly
or through attribution) stock possessing 5% or more of the total
combined voting power or value of all classes of our common or
other class of stock.

Grant of Rights. The 2016 ESPP is intended to qualify
under Section423 of the Code and stock will be offered under the
2016 ESPP during offering periods. The length of the offering
periods under the 2016 ESPP will be determined by the plan
administrator and may be up to 27 months long. Employee payroll
deductions will be used to purchase shares on each purchase date
during an offering period. The purchase dates for each offering
period will be the final trading day in the offering period.
Offering periods under the 2016 ESPP are initially intended to
continue for six months and will commence on January1 and July1
of each year, except that the first offering period under the
2016 ESPP will commence and terminate when determined by the plan
administrator. The plan administrator may, in its discretion,
modify the terms of future offering periods.

The 2016 ESPP permits participants to purchase Common Stock
through payroll deductions of up to 20% of their eligible
compensation, which includes a participants gross base
compensation for services to us, including

commissions that are included in regular compensation, amounts
that would have constituted compensation but for a participants
election to defer or reduce compensation to any deferred
compensation, cafeteria, capital accumulation or any other
similar plan of the company, and overtime and shift premiums, but
excluding all other amounts such as amounts attributable to
stock-based, cash-based and other incentive compensation and
bonuses. The plan administrator will establish a maximum number
of shares that may be purchased by a participant during any
offering period, which, in the absence of a contrary designation,
will be 1,000 shares. In addition, no employee will be permitted
to accrue the right to purchase stock under the 2016 ESPP at a
rate in excess of $25,000 worth of shares during any calendar
year during which such a purchase right is outstanding (based on
the fair market value per share of our Common Stock as of the
first day of the offering period).

On the first trading day of each offering period, each
participant will automatically be granted an option to purchase
shares of our Common Stock. The option will expire at the end of
the applicable offering period, and will be exercised at that
time to the extent of the payroll deductions accumulated during
the offering period. The purchase price of the shares, in the
absence of a contrary designation, will be 85% of the lower of
the fair market value of our Common Stock on the first trading
day of the offering period or on the purchase date, which will be
the final trading day of the offering period. Participants may
voluntarily end their participation in the 2016 ESPP at any time
prior to the end of the applicable offering period, and will be
paid their accrued payroll deductions that have not yet been used
to purchase shares of Common Stock. Participation ends
automatically upon a participants termination of employment.

A participant may not transfer rights granted under the 2016 ESPP
other than by will or the laws of descent and distribution.

Certain Transactions. In the event of certain
non-reciprocal transactions or events affecting our Common Stock
known as equity restructurings, the plan administrator will make
equitable adjustments to the 2016 ESPP and outstanding rights. In
the event of a merger or sale of all or substantially all of the
assets of the Company, each outstanding option will be assumed or
substituted by the successor corporation. In the event that the
successor corporation does not assume or substitute for
outstanding options, or in the event of a dissolution or
liquidation of the company, the offering period then in progress
will be shortened by setting a new exercise date immediately
prior to the effective date of such transaction.

Plan Amendment. The board of directors may amend,
suspend or terminate the 2016 ESPP at any time. However,
stockholder approval of any amendment to the 2016 ESPP will be
obtained for any amendment to the extent necessary to comply with
applicable laws.

The foregoing description of the 2016 ESPP is not complete and is
qualified in its entirety by reference to the full text of the
2016 ESPP, which is filed as Exhibit 10.3 to this Current Report
on Form 8-K and is incorporated into this item 5.02 by reference.

Second Amended and Restated Certificate of
Incorporation

On the Closing Date, the Second Amended and Restated Certificate
of Incorporation of the Company became effective (the Second
Amended and Restated Certificate of Incorporation) and, among
other things:

The foregoing description of the Second Amended and Restated
Certificate of Incorporation is not complete and is qualified in
its entirety by reference to the full text of the Second Amended
and Restated Certificate of Incorporation, which is filed as
Exhibit 3.1 to this Current Report on Form 8-K and is
incorporated into this item 5.03 by reference.

Second Amended and Restated Bylaws

On the Closing Date, the Companys bylaws were amended and
restated (as amended and restated, the Second Amended and
Restated Bylaws) to, among other things:

The foregoing description of the Second Amended and Restated
Bylaws is not complete and is qualified in its entirety by
reference to the full text of the Second Amended and Restated
Bylaws, which are filed as Exhibit 3.2 to this Current Report on
Form 8-K and incorporated into this item 5.03 by reference.

(d)Exhibits

About SMART SAND, INC. (SND)