Exhibit 10.1
COMPLETE PRODUCTION SERVICES, INC.
MANAGEMENT INCENTIVE PLAN GUIDELINES
SENIOR MANAGEMENT
PURPOSE
The Plan is intended to provide incentive compensation awards to participants
based on their contribution to the achievement of the total company performance
goal in addition to their performance against established operating unit goals
and objectives.
COMPENSATION COMMITTEE OF THE BOARD
The Compensation Committee of the Board of Directors has overall authority to
approve the design of the Plan and establish the performance objectives of the
Plan in conjunction with the Board’s approval of the annual financial plan. The
Committee can approve any extraordinary financial gains or losses for inclusion
or exclusion in calculating awards. The Committee also approves award levels for
the Chief Executive Officer and the other members of senior management and
maintains the authority to adjust performance goals and levels for this group in
case of divestiture, merger, acquisition, or other unforeseen and unusual events
measurably impacting operating results. The Compensation Committee of the Board
may terminate and, from time to time, amend any provisions of the Plan and has
the authority to terminate the Plan at any time during the Plan Year for any
reason. Participants will receive a pro rata percentage of any incentive award
based on financial results as of the date of the Plan termination, as determined
by the Compensation Committee. Final awards for the CEO and other members of
senior management are subject to approval of the Compensation Committee.
LIMITATIONS OF RIGHTS
Nothing contained in this Plan shall be construed to give any participant of the
Company any right to any allocations other than at the sole discretion of the
Compensation Committee, or its designee, or to limit in any way the right of the
Company to terminate a participant’s employment at any time, or be evidence of
any agreement or understanding, expressed or implied, that any person will be
employed in any particular position or at any particular rate of remuneration.
All questions relating to the interpretation and administration of the Plan
shall be resolved by the Compensation Committee, or its designee, whose decision
shall be binding upon all employees.
Nothing in this Plan shall supersede any rights granted to a participant under a
separate employment agreement or other similar arrangement with the Company.

 

--------------------------------------------------------------------------------

 

COMPLETE PRODUCTION SERVICES, INC.
MANAGEMENT INCENTIVE PLAN GUIDELINES
SENIOR MANAGEMENT
PARTICIPANTS MUST BE EMPLOYED ON THE DATE THE AWARDS ARE PAID OUT IN ORDER TO BE
ELIGIBLE TO RECEIVE AN AWARD.
No employee has an inherent right to be selected for participation in the Plan
or to continue as a participant except at the discretion of the Compensation
Committee, or its designee.
If the employment of the participant is terminated by the employee or by the
Company prior to the completion of the performance period for any reason except
disability, death, retirement, reduction-in-force, or change of control, any
rights to any incentive award will be forfeited. In the event of termination due
to disability, death, retirement, or reduction-in-force (which occurs during the
fourth quarter of the plan year), a participant may receive a pro-rated award.
An incentive award may not be paid or may be reduced if a participant is not
actively at work for extended period of time during the plan year at the
discretion of the CEO.
OPERATION OF THE PLAN
The four levels of performance objectives – Entry (E), Expected Value (EV), Over
Achievement (OA), and Stretch (S) — are established using the annual financial
plan. The Expected Value (EV) performance objective is generally the “Plan”. The
Entry level is the minimum level of performance for which the Plan will make an
award. Stretch (S) is the highest level of performance that will be rewarded by
the Plan.
PERFORMANCE MEASURES
The performance measures will be earnings before interest, taxes, depreciation
and amortization (EBITDA). Awards may be split and weighted based on the level
of responsibility and degree of impact that the individual has upon the goals.
The failure to meet certain non-quantitative performance measures, such as
individual performance objectives, may reduce the amount of award as determined
by the CEO.
For the CEO and other corporate members of senior management, 100% of the award
will be based on the EBITDA results of Complete Production Services, Inc. For
the Division Presidents, 25% of the award opportunity will be based on the
EBITDA results of Complete Production Services, Inc. and 75% of the award
opportunity will be based on Division EBITDA results.
Each participant will receive a letter, which states the specific criteria
he/she will be measured on during the performance period. The CEO, with the
approval of the Compensation Committee, establishes the performance criteria and
final performance results used to determine award amounts.

 

--------------------------------------------------------------------------------

 

COMPLETE PRODUCTION SERVICES, INC.
MANAGEMENT INCENTIVE PLAN GUIDELINES
SENIOR MANAGEMENT
INCENTIVE AWARD OPPORTUNITIES
Performance is divided into four award opportunity levels — Entry, Expected
Value, Over Achievement and Stretch. The target incentive amount is earned when
the Expected Value (100%) of each component is reached. Entry level payout of
10% of the EV for each component is triggered when the Entry level for the
performance measure is reached. For Over Achievement payout of 150% to occur,
the results must meet the over achievement goal of the financial measure.
Stretch results or greater will earn a payout of two times the payout
opportunity at EV. Results falling between the stated thresholds of E, EV, OA
and S will result in interpolated payout.
PERFORMANCE PERIOD
The Plan’s performance period will be January 1st through December 31st.
INCENTIVE AWARD CALCULATION AND PAYMENTS
Incentive awards will be computed and paid out within 90 days after year-end.
Incentive Award percentages will be rounded to the nearest 0.5%. Payment for the
full amount of the award earned after required minimum tax withholding will be
made by check by the end of March. For the purpose of this Plan, base salary is
defined as the participant’s base monthly salary as of December 3lst of the plan
year times 12 months.