Exhibit 10.3

KEY ENERGY SERVICES, INC.

2016 EQUITY AND CASH INCENTIVE PLAN

PERFORMANCE-BASED

RESTRICTED STOCK UNIT AWARD AGREEMENT

THIS PERFORMANCE-BASED RESTRICTED STOCK UNIT AWARD AGREEMENT, including the
Appendix attached hereto (this “Agreement”), dated as of [•] (the “Date of
Grant”), is made by and between Key Energy Services, Inc., a Delaware
corporation (the “Company”), and [•] (the “Participant”).

R E C I T A L S:

WHEREAS, Awards of Restricted Stock Units intended to qualify as Performance
Compensation Awards (“Performance-Based Restricted Stock Units”), may be granted
pursuant to the Key Energy Services, Inc. 2016 Equity and Cash Incentive Plan
(the “Plan”);

[WHEREAS, in [December 2016] [January 2017] the Participant received equity
awards pursuant to a Performance-based/Time-vested Option Award Agreement and a
Performance-based/Time-vested Restricted Stock Unit Agreement (together, the
“Prior Awards”);

WHEREAS, the Company has determined that the first tranche of the Prior Awards
that is scheduled to vest during [December 2017] [and January 2018] shall be
allowed to vest, if at all, pursuant to the terms and conditions of the original
award agreements (the “December Vesting Awards”);

WHEREAS, the Company has determined that the Participant be given an election to
continue to hold the Prior Awards that do not become vested with the December
Vesting Awards, or to forfeit all rights to the Prior Awards other than the
December Vesting Awards and receive this new award of Performance-Based
Restricted Stock Units;

WHEREAS, the Participant has elected to forfeit all rights pursuant to the Prior
Awards other than the December Vesting Awards and to receive the
Performance-Based Restricted Stock Units granted pursuant to this Agreement (the
“Participant Election”);

WHEREAS, by making the Participant Election the Participant has agreed that the
vesting and settlement of the December Vesting Awards was in full satisfaction
of the Prior Awards;]

WHEREAS, the Administrator has determined that it is in the best interests of
the Company and its stockholders to grant the Performance-Based Restricted Stock
Units (the “Performance-Based Restricted Stock Unit Award”) provided for herein
pursuant to the terms of the Plan and subject to the further terms and
conditions set forth herein; and

WHEREAS, the Participant desires to accept the Performance-Based Restricted
Stock Unit Award made pursuant to this Agreement and agrees to abide by the
restricts that accompany this Agreement, including those set forth in Appendix A
hereto.

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NOW, THEREFORE, in consideration of the [Participant Election and the mutual
covenants hereinafter set forth, the parties hereto agree as follows:

 

1. Grant of Performance-Based Restricted Stock Units. The Company hereby grants
to the Participant the Performance-Based Restricted Stock Unit Award consisting
of [•] Performance-Based Restricted Stock Units. The number of Performance-Based
Restricted Stock Units that the Participant will actually earn will be
determined as set forth in Section 3 hereof.

 

2. Incorporation by Reference. The provisions of the Plan are incorporated
herein by reference. Except as otherwise expressly set forth herein, this
Agreement shall be construed in accordance with the provisions of the Plan and
any capitalized terms not otherwise defined in this Agreement shall have the
definitions set forth in the Plan. The Administrator shall have the authority to
interpret and construe the Plan and this Agreement and to make any and all
determinations thereunder, and its decision shall be binding and conclusive upon
the Participant and his or her legal representative in respect of any questions
arising under the Plan or this Agreement.

 

3. Vesting of Performance-Based Restricted Stock Units. Subject to (i) the
Participant’s Continued Service through the last day of the 2020 Performance
Period (as defined below) and (ii) compliance with the terms and conditions of
this Agreement (including without limitation, the restrictive covenants set
forth in Appendix A), the Performance-Based Restricted Stock Units shall be
earned and vested following the end of the 2020 Performance Period (as defined
below). One-third of the target number of Performance-based Restricted Stock
Units granted in Section 1 will be assigned to each individual Performance
Period, with the actual number of Performance-Based Restricted Stock Units in
each tranche that will become earned and vested during that Performance Period
to be determined based on the Company’s level of adjusted non-capitalized EBITDA
(as defined below) generated (the “Performance Goal”) during the applicable
performance periods set forth below (each a “Performance Period”). As used
herein, “EBITDA” means Company adjusted non-capitalized earnings before
interest, taxes, depreciation and amortization.

 

  (a) Performance Periods.

 

Fiscal Year

   EBITDA Threshold
($M)
(0.5x Payout)      EBITDA Target
($M)
(1.0x Payout)      EBITDA Stretch
($M)
(1.5x Payout)      EBITDA Maximum
($M)
(2.0x Payout)  

2018

   $ 32.8      $ 41.0      $ 51.3      $ 61.5  

2019

   $ 64.0      $ 80.0      $ 100.0      $ 120.0  

2020

   $ 80.0      $ 100.0      $ 125.0      $ 150.0  

 

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  (b) Certification. Following completion of each Performance Period, the
Administrator shall review and certify in writing the level of performance
achieved with respect to the Performance Goal for such Performance Period. In
the event that EBITDA performance was reached in between any of the levels set
forth in Section 3(a), the number of Performance-Based Restricted Stock Units
that will be deemed earned and vested for that tranche will be interpolated on a
linear basis. At the end of the 2020 Performance Period, the Administrator shall
review the number of Performance-Based Restricted Stock Units in each tranche
that were deemed to have been earned and vested to determine the aggregate
number of Performance-based Restricted Stock Units that have become earned and
vested pursuant to this Agreement.

 

4. Settlement.

 

  (a) Amount. The Company will deliver one share of Common Stock for each vested
Performance-Based Restricted Stock Unit, less any withholding (as permitted
pursuant to the Plan and Section 7 hereof). The value of any fractional
Performance-Based Restricted Stock Unit shall be rounded down at the time shares
of Common Stock are issued. No fractional shares of Common Stock, nor the cash
value of any fractional shares of Common Stock, will be issuable or payable
pursuant to this Agreement. The value of shares of Common Stock shall not bear
any interest owing to the passage of time. Neither this Section 4 nor any action
taken in accordance with this Section 4 shall be construed to create a trust or
a funded or secured obligation of any kind.

 

  (b) Timing. Delivery in respect of the vested Performance-Based Restricted
Stock Units will be made as soon as administratively practicable following
completion of the certification required by Section 3(b) above with respect to
the 2020 Performance Period, and in any event within sixty (60) days following
the end of the 2020 Performance Period. Such delivery shall be subject to the
Participant’s continued compliance with the restrictive covenants set forth in
Appendix A.

 

5. Termination of Continuous Service. Subject to Section 6(b), or as may
otherwise be determined by the Board in its discretion, all unvested
Performance-Based Restricted Stock Units shall be forfeited upon termination of
the Participant’s Continuous Service for any reason.

 

6. Change of Control.

 

  (a) Notwithstanding Section 3, the Board may, in its sole discretion,
accelerate the vesting of the Performance-Based Restricted Stock Units in
connection with a Change of Control (as defined below).

 

  (b) Notwithstanding anything to the contrary in this Agreement, if the
Participant’s Continuous Service is terminated (i) by the Company other than due
to a Termination for Cause (as defined below) or (ii) by the Participant due to
a Termination for Good Reason (as defined below), in each case within twelve
(12) months following a Change of Control, the Board may determine, in its sole
discretion, to accelerate the vesting of any unvested Performance-Based
Restricted Stock Units, which determination shall be made prior to the Change of
Control, and if accelerated, shall be settled in accordance with Section 4.

 

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  (c) “Change of Control” means:

 

  (i) the consummation of a merger, consolidation, statutory share exchange or
similar form of corporate transaction or event (a “Business Combination”)
involving the Company, which results in: (A) the holders of the Company’s voting
securities immediately prior to the Business Combination no longer holding at
least 60% of the total voting power of (x) the entity resulting from such
Business Combination (the “Surviving Entity”) or (y) if applicable, the parent
company that directly or indirectly has beneficial ownership of at least 95% of
the voting power and (B) Platinum Equity Advisors, LLC and its affiliates no
longer holding the ability to elect, directly or indirectly, (x) a majority of
the members and (y) members holding a majority of the voting power, in each
case, of the board of directors of the parent (or, if there is no parent, the
Surviving Entity);

 

  (ii) the consummation of a sale of all or substantially all of the Company’s
assets (other than to an affiliate of Platinum Equity Advisors, LLC); or

 

  (iii) the stockholders of the Company approve a plan of complete dissolution
or liquidation of the Company.

Notwithstanding the foregoing, a “Change of Control” shall not include any
Chapter 11 bankruptcy proceeding except as otherwise provided in the joint
prepackaged plan of reorganization of the Company and its debtor affiliates
filed on October 24, 2016 (the “Bankruptcy Plan”) and any supplement to the
Bankruptcy Plan incorporated prior to confirmation of the Bankruptcy Plan; and
provided, further, none of (a) the facts or circumstances giving rise to the
commencement of, or occurring in connection with, any case filed for the Company
or its debtor affiliates under Chapter 11 of the bankruptcy code, (b) the
issuance of shares of common stock of the Company reorganized pursuant to the
Bankruptcy Plan, or (c) implementation or consummation of any other transaction
pursuant to the Bankruptcy Plan shall constitute a “Change of Control.”

 

  (d) “Termination for Cause” means termination of the Participant’s employment
by the Company (or any of its subsidiaries) by reason of the Participant’s
(i) gross negligence in the performance of his or her duties, (ii) willful
failure to perform his or her duties (other than such failure resulting from the
Participant’s incapacity due to physical or mental illness) that the Participant
fails to remedy to the reasonable satisfaction of the Company within thirty
(30) days after written notice is delivered by the Company to the Participant
that sets the basis of the Participant’s failure to perform his or her duties,
(iii) willful engagement in conduct which is, or can reasonably be expected to
be, materially injurious to the Company or its subsidiaries (monetarily or
otherwise) or (iv) conviction of, or plea of guilty or no contest to, a
misdemeanor involving moral turpitude or any felony.

 

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  (e) “Termination for Good Reason” means a resignation of employment with the
Company (or its subsidiaries) following the occurrence of any of the following:

 

  (i) a material diminution in the Participant’s base salary (except in
conjunction with an across-the-board base salary reduction that affects
similarly situated employees of the Company), authority, duties or
responsibilities from those in effect immediately prior to the date a Change of
Control occurs;

 

  (ii) a move of more than fifty (50) miles in the geographic location at which
the Participant must perform services from the location at which the Participant
was required to perform services immediately prior to the date a Change of
Control occurs; or

 

  (iii) any other action or inaction by the Company that constitutes a material
breach of the Plan or this Agreement within one (1) year following a Change of
Control.

In order for a resignation to be considered a Termination for Good Reason under
this Agreement, (w) the event giving rise to Good Reason must have occurred
without the Participant’s consent, (x) the Participant must provide notice
to the Company of the existence of one of the above events within thirty
(30) days of the initial existence of such condition, (y) the Company must be
provided thirty (30) days from the date of the Participant’s notice to remedy
that condition (the “Cure Period”), and (z) the condition must not have been
remedied by the Company during the Cure Period.

 

7. Tax Withholding. The Company shall have the right to withhold from any
delivery of Common Stock due under the Plan and this Agreement in accordance
with and pursuant to Section 10.6 of the Plan.

 

8. No Rights as Stockholder. The Participant shall have no rights as a
stockholder with respect to the shares of Common Stock underlying the
Performance-Based Restricted Stock Units, nor shall the Participant have any
rights to Dividend Equivalents with respect to the Performance-Based Restricted
Stock Units, unless and until the Participant has become the record holder of
such shares.

 

9. Restrictive Covenants. The provisions of the attached Appendix A, which are
deemed to be part of this Agreement as if fully set forth herein, shall apply to
the Participant. By accepting this Agreement, the Participant agrees to be bound
by, and promises to abide by, such provisions. The Participant further
acknowledges and agrees that the restrictive covenants contained in Appendix A
are reasonable and enforceable in all respects.

 

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10. Detrimental Activity.

 

  (a) Upon delivery of Common Stock in respect of vested Performance-Based
Restricted Stock Units, the Participant shall certify in a manner acceptable to
the Company that the Participant has not engaged in any Detrimental Activity (as
defined below).

 

  (b) The Administrator may cancel, rescind, suspend, withhold or otherwise
limit or restrict this Performance-Based Restricted Stock Unit Award, in whole
or in part, at any time if the Participant engages in any Detrimental Activity.

 

  (c) In the event a Participant engages in Detrimental Activity after delivery
of Common Stock in respect of vested Performance-Based Restricted Stock Units
and during any period for which any restrictive covenant prohibiting such
activity is applicable to the Participant, such delivery may be rescinded within
one (1) year after the Participant engages in such Detrimental Activity. In the
event of any such rescission, the Participant shall pay to the Company the
amount of any gain realized or payment received as a result of the delivery, in
such manner and on such terms and conditions as may be required by the Company.
The Company shall be entitled to set-off against the amount of any such gain any
amount owed to the Participant by the Company, subject to compliance with
Section 409A of the Code, if applicable.

 

  (d) “Detrimental Activity” means (i) any violation of the terms of any written
agreement (including this Agreement, an Award Agreement, employment agreement or
other agreement) with the Company or any of its Affiliates relating to covenants
with respect to non-disclosure, confidentiality, intellectual property, work
product, inventions assignment, privacy, exclusivity, non-competition,
non-solicitation or non-disparagement; (ii) breach of the Company’s Code of
Business Conduct; (iii) activity that is discovered to be grounds for or results
in the Participant’s Termination for Cause; (iv) the conviction of, or guilty
plea entered by, the Participant for any felony or a crime involving moral
turpitude whether or not connected with the Company or its Affiliates; or
(v) the commission of any other act involving willful malfeasance or material
fiduciary breach with respect to the Company or any of its Affiliates.

 

11. Compliance with Laws, Regulations and Company Policies. The grant and
payment of the Performance-Based Restricted Stock Units shall be subject to
compliance by the Company and the Participant with all applicable requirements
of state and federal laws and regulatory agencies and with all applicable
requirements of any stock exchange on which the Common Stock may be listed at
the time of such issuance or transfer, if applicable. This Performance-Based
Restricted Stock Unit Award shall also be subject to any applicable clawback or
recoupment policies, share trading and stock ownership policies of the Company,
and other policies that may be implemented by the Board from time to time.

 

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12. Section 409A. Any amounts payable with respect to the Performance-Based
Restricted Stock Units are intended to be exempt from Section 409A of the Code
in reliance on the short-term deferral exemption set forth in the final
regulations issued thereunder. If any amounts payable with respect to the
Performance-Based Restricted Stock Units are determined to be subject to
Section 409A of the Code, such payments may only be made under this Agreement
upon an event and in a manner permitted by Section 409A of the Code. All
payments to be made upon a termination of employment may only be made upon a
“separation from service” under Section 409A of the Code. For purposes of
Section 409A of the Code, each payment shall be treated as a separate payment.
In no event may the Participant, directly or indirectly, designate the calendar
year in which the payments under this Agreement will be made. Notwithstanding
anything in this Agreement to the contrary, if the Participant is a “specified
employee” as defined by Section 409A of the Code, then if and to the extent
required by Section 409A of the Code, any payment with respect to the
Performance-Based Restricted Stock Units upon a separation from service will not
be made be made before the date that is six (6) months after the Participant
separates from service or such earlier date permitted by Section 409A of the
Code.

 

13. No Right to Continuous Service. Nothing herein alters the at-will nature of
the Participant’s employment with the Company or any of its subsidiaries.
Nothing in this Agreement shall be deemed by implication or otherwise to impose
any limitation on any right of the Company or any of its Affiliates to terminate
the Participant’s Continuous Service at any time.

 

14. Notices. All notices, demands and other communications provided for or
permitted hereunder shall be made in writing and shall be by registered or
certified first class mail, return receipt requested, facsimile transmission,
courier service or personal delivery:

If to the Company:

Key Energy Services, Inc.

1301 McKinney Street, Suite 1800

Houston, Texas 77010

Facsimile: 713-651-4559

Attention: General Counsel

If to the Participant:

At the address on file with the Company

All such notices, demands and other communications shall be deemed to have been
duly given when delivered by hand, if personally delivered; when delivered by
courier, if delivered by commercial courier service; five (5) business days
after being deposited in the mail, postage prepaid, if mailed; and when receipt
is mechanically acknowledged, if telecopied.

 

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15. Bound by Plan. By accepting this Agreement, the Participant acknowledges
that he or she has received a copy of the Plan and has had an opportunity to
review the Plan and agrees to be bound by all of the terms and provisions of the
Plan.

 

16. Beneficiary. The Participant may file with the Administrator a written
designation of a beneficiary on such form as may be prescribed by the
Administrator and may, from time to time, amend or revoke such designation. If
no designated beneficiary survives the Participant, the legal representative of
the Participant’s estate shall be deemed to be the Participant’s beneficiary.

 

17. Successors. The terms of this Agreement shall be binding upon and inure to
the benefit of the Company, its successors and assigns, and on the Participant
and the Participant’s executors, administrators, heirs, and successors.

 

18. Amendment of Performance-Based Restricted Stock Unit Award. Subject to
Section 19 of this Agreement and subject to the terms of the Plan, the
Administrator at any time and from time to time may amend the terms of this
Performance-Based Restricted Stock Unit Award; provided, however, that the
Participant’s rights under this Performance-Based Restricted Stock Unit Award
shall not be impaired by any such amendment unless the Company requests the
Participant’s consent and the Participant consents in writing, or except as
otherwise permitted under the Plan.

 

19. Adjustment Upon Changes in Capitalization. The shares of Common Stock
underlying the Performance-Based Restricted Stock Units [and the Performance
Goal] may be adjusted as provided in the Plan including, without limitation,
Section 11 and Section 2.37 of the Plan. The Participant, by accepting this
Agreement, irrevocably and unconditionally consents and agrees to any such
adjustments as may be made at any time hereafter.

 

20. Governing Law and Venue. The provisions of this Agreement shall be construed
and enforced in accordance with the laws and decisions of the State of Delaware,
without regard to such state’s conflict of law principles. Any dispute or
conflict between the parties shall be brought in a state or federal court
located in Wilmington, Delaware. The parties hereto submit to jurisdiction and
venue in Wilmington, Delaware and all objections to such venue and jurisdiction
are hereby waived.

 

21. Severability. If any provision of this Agreement or any part of any
provision of this Agreement is determined to be unenforceable for any reason
whatsoever, it shall be severable from the rest of the Agreement and shall not
invalidate or affect the other portions or parts of this Agreement, which shall
remain in full force and effect. Furthermore, each covenant contained in this
Agreement shall stand independently and be enforceable without regard to any
other covenants or to any other provisions of this Agreement.

 

22. Waiver. The waiver by the Company of a breach of any provision contained in
this Agreement shall not operate or be construed as a waiver of any subsequent
breach or as a waiver of any other provisions of this Agreement.

 

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23. Headings. The headings of the Sections hereof are provided for convenience
only and are not to serve as a basis for interpretation or construction, and
shall not constitute a part of this Agreement.

 

24. Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall constitute an original and all of which together shall
constitute one instrument. Delivery of an executed counterpart of this Agreement
by facsimile or portable document format (.pdf) attachment to electronic mail
shall be effective as delivery of a manually executed counterpart of this
Agreement.

 

25. No Liability for Good Faith Determinations. The Company and the members of
the Board shall not be liable for any act, omission or determination taken or
made in good faith with respect to this Agreement or the Performance-Based
Restricted Stock Units granted hereunder.

 

26. Consent to Electronic Delivery; Electronic Signature. In lieu of receiving
documents in paper format, the Participant agrees, to the fullest extent
permitted by law, to accept electronic delivery of any documents that the
Company may be required to deliver (including, but not limited to, prospectuses,
prospectus supplements, grant or award notifications and agreements, account
statements, annual and quarterly reports and all other forms of communications)
in connection with this and any other award made or offered by the Company.
Electronic delivery may be via a Company electronic mail system or by reference
to a location on a Company intranet to which the Participant has access. The
Participant hereby consents to any and all procedures the Company has
established or may establish for an electronic signature system for delivery and
acceptance of any such documents that the Company may be required to deliver,
and agrees that his or her electronic signature is the same as, and shall have
the same force and effect as, his or her manual signature.

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the Company has caused its duly authorized officer to
execute this Agreement effective as of the Date of Grant set forth above.

 

KEY ENERGY SERVICES, INC. By:  

/s/ Scott P. Miller

Name:   Scott P. Miller Title:   Senior Vice President, Operations Services and
Chief Administrative Officer

The Participant (a) acknowledges receipt of the Plan incorporated herein,
(b) confirms that the prospectus for the Plan has been made available to the
Participant, (c) acknowledges that he or she has read this Agreement, the Plan
and the Plan prospectus and understands the terms and conditions of them,
(d) accepts the Performance-Based Restricted Stock Unit Award, (e) agrees to be
bound by, and comply with, the terms of the Plan and this Agreement, including
the restrictive covenants contained in Appendix A, and (f) agrees that all
decisions and determinations of the Administrator with respect to the
Performance-Based Restricted Stock Unit Award shall be final and binding on the
Participant and any other person having or claiming an interest under the
Performance-Based Restricted Stock Unit Award.

The Participant named below hereby accepts the terms of this Agreement and the
Plan.

 

 

 

 

[NAME]

[ADDRESS]

 

EMPLOYEE ID NUMBER: [•]

Signature Page

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APPENDIX A

PROTECTION OF INFORMATION; NON-COMPETITION; NON-SOLICITATION

1. Non-Disclosure of Confidential Information. In the course of the
Participant’s employment with the Company or any of the Company’s direct or
indirect subsidiaries (collectively, “subsidiaries” or each a “subsidiary”), and
the performance of the Participant’s duties on behalf of the Company or any of
its subsidiaries, the Participant will be provided with, and will have access to
Confidential Information (as defined below). In consideration, and as a
condition, of the Participant’s receipt of and access to Confidential
Information, and as a condition of the Company’s entry into this Agreement, the
Participant, both during the course of the Participant’s employment with the
Company or any of its subsidiaries and thereafter, shall not disclose any
Confidential Information to any person or entity and shall not use any
Confidential Information except for the benefit of the Company or its
subsidiaries or with the express written consent of the Chief Executive Officer
or the General Counsel of the Company. The Participant shall follow all Company
policies and protocols regarding the security of all documents and other
material containing Confidential Information (regardless of the medium on which
such Confidential Information is stored). This Section 1 shall apply to all
Confidential Information, whether known or later to become known to the
Participant during the period that the Participant is employed or affiliated
with the Company or any of its subsidiaries.

2. Permitted Disclosures. Notwithstanding the foregoing, or any other provision
of this Agreement or the Plan:

 

  a. the Participant 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 Participant files a lawsuit for retaliation by the Company
or any of its subsidiaries for the Participant’s reporting of a suspected
violation of law, the Participant may (i) disclose a trade secret to the
Participant’s attorney and (ii) use the trade secret information in the court
proceeding related to such lawsuit, in each case, if the Participant (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 shall prevent the Participant from lawfully, and without obtaining prior
authorization from the Company or any of its subsidiaries, (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

 

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  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. Neither
the Plan nor this Agreement (nor any other agreement between the Participant and
the Company or a subsidiary of the Company) shall be construed or applied to
require the Participant to obtain prior authorization from the Company or any of
its subsidiaries before engaging in any of the foregoing conduct referenced in
this Section 2, or to notify the Company or any of its subsidiaries of having
engaged in any such conduct.

3. Definition of Confidential Information. As used herein, “Confidential
Information” means all non-public or proprietary information of, or related to,
the Company or any of its subsidiaries, including, without limitation, all
designs, ideas, concepts, improvements, product developments, discoveries and
inventions, whether patentable or not, that (i) are acquired by or disclosed to
the Participant during the period that the Participant is or has been employed
or affiliated with the Company or any of its subsidiaries (whether acquired or
disclosed during business hours or otherwise and whether acquired or disclosed
on the Company’s premises or otherwise) or (ii) relate to the businesses or
properties, products or services of the Company or any of its subsidiaries
(including all such information relating to technical information, including
engineering and scientific research, development, methodology, devices and
processes; formulas and chemical compositions; blueprints, designs and drawings;
financial information, budgets, projections and results; business and marketing
plans, strategies, and programs; employee and contractor lists and records;
business methods, and operating and production procedures; pricing, sales data,
prospect and customer lists and information; supplier and vendor lists and
information; terms of commercial contracts, as well as all such information
relating to corporate opportunities, operations, future plans, methods of doing
business, business plans, strategies for developing business and market share,
research, financial and sales data, pricing terms, evaluations, opinions,
interpretations, acquisition prospects, the identity of customers or acquisition
targets or their requirements, the identity of key contacts within customers’
organizations or within the organization of acquisition prospects, or marketing
and merchandising techniques, prospective names and marks). Moreover, all
documents, presentations, drawings, memoranda, notes, records, files,
correspondence, manuals, models, specifications, computer programs, e-mail,
voice mail, electronic databases, maps, data, models and all other writings or
materials of any type including or embodying any Confidential Information shall
be the sole and exclusive property of the Company or any of its subsidiaries and
is subject to the same restrictions on disclosure applicable to all Confidential
Information as set forth above. Confidential Information does not include any
information that is or becomes generally available to the public other than as a
result of a disclosure or wrongful act of the Participant or any of the
Participant’s agents.

4. Non-Competition; Non-Solicitation.

 

  a.

In granting the Restricted Stock Unit Award to the Participant, the Company
provides the Participant a further incentive to build the Company’s goodwill and
links the Participant’s interests to the Company’s long-term business interests.
As an inducement for the Company to grant the Restricted Stock Unit Award and
enter into this Agreement, and in order to protect the Confidential Information,
and the Company’s and its

 

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  subsidiaries goodwill, the Participant voluntarily agrees to the covenants set
forth in this Section 4(a). The Participant agrees and acknowledges that the
limitations and restrictions set forth herein, including the geographical and
temporal restrictions on certain activities, are reasonable in all respects and
not oppressive and are material and substantial part of the Company’s
willingness to enter into this Agreement, and are intended and necessary to
protect the Company’s and its subsidiaries’ Confidential Information, goodwill,
and substantial and legitimate business interests.

 

  b. The Participant agrees that during the Prohibited Period, the Participant
shall not, without prior written approval of the Company, directly or
indirectly, for the Participant, or on behalf of or in conjunction with any
other person or entity of whatever nature:

 

  i. engage in or carry on within the Market Area in competition with the
Company or any of its subsidiaries in any aspect of the Business, which
prohibition shall prevent the Participant from directly or indirectly:
(A) owning, managing, operating, becoming an officer or director of any person
or entity engaged in, or planning to engage in, the Business in the Market Area
in competition, or anticipated competition, with the Company or any of its
subsidiaries, or (B) in the Market Area, joining, becoming employee or
consultant of, or otherwise being affiliated with any person or entity engaged
in, or planning to engage in, the Business in the Market Area in competition, or
anticipated competition, with the Company or any of its subsidiaries (in each
case, with respect to this clause (B), in any capacity in which the
Participant’s duties are the same or similar to those performed for the Company
or any of its subsidiaries);

 

  ii. appropriate any Business Opportunity of, or relating to, the Company or
any of its subsidiaries located in the Market Area;

 

  iii. within the Market Area, solicit, canvass, approach, encourage, entice or
induce any customer or supplier of the Company or any of its subsidiaries with
whom or which the Participant had contact in the last 24 months of his or her
employment with the Company or its subsidiaries or about whom or which the
Participant obtained Confidential Information to cease or lessen such customer’s
or supplier’s business with the Company or any of its subsidiaries in the
Business; or

 

  iv. solicit, canvass, approach, encourage, entice or induce any employee or
contractor of the Company or any of its subsidiaries to terminate his, her or
its employment or engagement therewith, excluding general advertisements and
solicitations not targeted at the employees or contractors of the Company or its
subsidiaries.

 

  v.

Notwithstanding the above-referenced limitations in Sections 4(b)(i), 4(b)(ii)
and 4(b)(iii), such limitations shall not apply following the termination of the
Participant’s employment with the Company and (as applicable) any of its
subsidiaries in those portions of the Market Area located within the State of
Oklahoma. Instead, the Participant agrees that, during the portion of the
Prohibited Period that occurs after the Participant is no longer employed by the
Company or any of its subsidiaries, the restrictions on the Participant’s
activities

 

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  within those portions of the Market Area located within the State of Oklahoma
(in addition to those restrictions set forth in Sections 1 and 4(b)(iv) herein)
shall be as follows: the Participant will not directly or indirectly solicit the
sale of goods, services, or a combination of goods and services from the
established customers of the Company or of any of its subsidiaries.

 

  c. For purposes of this Section 4, the following terms shall have the
following meanings:

 

  i. “Business” means the business and operations that are the same or similar
to those performed by the Company or any of its subsidiaries and for which the
Participant obtained Confidential Information or had direct or indirect
responsibilities during the period of the Participant’s employment with the
Company or any of its subsidiaries, which business and operations include (if
Participant obtained Confidential Information or had direct or indirect
responsibilities with respect to such business and operations on behalf of the
Company or any of its subsidiaries during the period of his or her employment):
rig-based and coiled tubing-based well maintenance and workover services, well
completion and recompletion services, fluid management services, and fishing and
rental services.

 

  ii. “Business Opportunity” shall mean any commercial, investment or other
business opportunity relating to the Business.

 

  iii. “Market Area” means: (a) each county in which the Participant was based
or performed material services on behalf of the Company or any of its
subsidiaries; and (b) each of the following basins and oil and gas shale plays:
Bakken, Barnett, Denver-Julesberg, Eagle Ford, Fayetteville, Granite Wash,
Haynesville, Marcellus, Mississippi Lime, Niobrara, Permian, Powder River,
SCOOP, STACK, Tuscaloosa, Williston, and Woodford; provided, however, a basin or
play shall not be included within the Market Area if: (1) the Participant had no
direct or indirect responsibilities with respect to such basin or play during
the last 24 months of the Participant’s employment or engagement with the
Company or any of its subsidiaries, or (2) the Participant obtained no
Confidential Information with respect the Company’s or any of its subsidiaries’
Business in such basin or play.

 

  iv. “Prohibited Period” shall mean the period during which the Participant is
employed by the Company or any of its subsidiaries and continuing for a period
of twelve (12) months following the date that the Participant is no longer
employed by the Company or any of its subsidiaries.

5. Return of Confidential Information. Upon the termination of the Participant’s
employment with the Company or any of its subsidiaries, and at any other time
upon request of the Company, the Participant shall promptly surrender and
deliver to the Company all documents (including electronically stored
information) and all copies thereof and all other materials of any nature
containing or pertaining to all Confidential Information (including any
Company-issued computer, mobile devise or other equipment) in the Participant’s
possession, custody or control and the Participant shall not retain any such
document or other materials or property.

 

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6. Specific Performance. Because of the difficulty of measuring economic losses
to the Company and its subsidiaries as a result of a breach of the foregoing
covenants, and because of the immediate and irreparable damage that would be
caused to the Company and its subsidiaries for which it would have no other
adequate remedy, the Participant agrees that the Company and each of its
subsidiaries shall be entitled to enforce the foregoing covenants, in the event
of a breach, by injunctions and restraining orders and that such enforcement
shall not be the Company’s or its subsidiaries’ exclusive remedy for a breach
but instead shall be in addition to all other rights and remedies available to
the Company and its subsidiaries, at law and equity.

7. Severability. The covenants in this Appendix A to the Agreement are severable
and separate, and the unenforceability of any specific covenant (or any portion
thereof) shall not affect the provisions of any other covenant (or portion
thereof). Moreover, in the event any arbitrator or court of competent
jurisdiction shall determine that the scope, time or territorial restrictions
set forth are unreasonable, then it is the intention of the Participant and the
Company that such restrictions be enforced to the fullest extent which the
arbitrator deems reasonable and this Agreement shall thereby be reformed.

8. Third-Party Beneficiaries. Each of the Company’s subsidiaries that is not a
signatory hereto shall be a third-party beneficiary of the Participant’s
representations, covenants and obligations set forth in this Appendix A and
shall be entitled to enforce such representations, covenants and obligations as
if a party hereto.

 

v