Exhibit 10.3

[KEY ENERGY LETTERHEAD]

February 4, 2019

Robert James Saltiel

11756 Cawdor Way

Houston, Texas 77024

Re: Long Term Incentive Cash Award

Dear Rob Saltiel:

Key Energy Services, Inc., a Delaware corporation (the “Company”) considers your
continued service and dedication to the Company essential to our success. To
reward you for your continued service with the Company, the Company is pleased
to provide you (“you” or “Employee”) with a long term incentive award, as
described in this letter agreement.

In recognition of your valued service with the Company, the Company is providing
you a long term incentive cash award (the “LTI Cash Award”), in the amount of
$1,000,000, less all applicable withholdings and deductions withheld from the
amount by the Company as required by law subject to the satisfaction of the
terms and conditions of this letter agreement. Your LTI Cash Award will vest 40%
on February 4, 2020 and 60% on February 4, 2021 (each, a “Vesting Date”).

Section 1. Eligibility Criteria

You will be eligible to receive this LTI Cash Award if all of the following
criteria are satisfied:

 

  1.

Except as set forth in Section 2, you are continually employed by the Company
from the date of this letter agreement through and including each applicable
Vesting Date. The Company will have the sole discretion to determine whether any
leave of absence before February 4, 2021 constitutes a forfeiture of any
unvested portion of the LTI Cash Award.

 

  2.

You have not given notice of your intent to resign from employment on or before
the applicable Vesting Date.

Section 2. Termination of Employment

In the event of a termination of your employment by the Company without Cause
(as defined in your employment agreement with the Company dated August 17, 2018
and amended February 4, 2019 (the “Employment Agreement”)) or by you for Good
Reason (as defined below), any unvested portion of your LTI Cash Award will vest
in full and the date of such termination will be the Vesting Date for such
portion. In the event that your employment with the Company terminates for any
other reason prior to February 4, 2021, the unvested portion of your LTI Cash
Award will terminate and be forfeited.

“Good Reason” means any of the following events without your consent:

 

  1.

a material diminution in your 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 currently in
effect;

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

  2.

a move of more than fifty (50) miles in the geographic location at which you
must perform services from the location at which you are currently required to
perform services; or

 

  3.

any other action or inaction by the Company that constitutes a material breach
of the Employment Agreement.

In order for a termination to be considered a termination for Good Reason,
(a) you must provide notice to the Company of the existence of one of the above
events within ninety (90) days of the initial existence of such condition,
(b) the Company must be provided thirty (30) days from the date of such notice
to remedy that condition, and (c) the condition must not have been remedied by
the Company during such cure period.

Section 3. Payment of LTI Cash Award

If you are eligible to receive any vested portion of the LTI Cash Award pursuant
to Section 1 or Section 2, such vested portion of the LTI Cash Award will be
paid to you in one lump sum cash payment on the first regularly scheduled pay
date after the applicable Vesting Date, but in no event later than thirty
(30) days following such Vesting Date.

Section 4. Miscellaneous Terms

Your employment remains at-will, meaning that you or the Company may terminate
the employment relationship at any time, with or without cause.

The Company shall oversee all aspects of the administration of the LTI Cash
Award and this letter agreement. The Company shall have complete control and
authority to determine your rights with respect to the LTI Cash Award or the
rights of any other person having or claiming to have any interest to the LTI
Cash Award through you. The Company shall have complete discretion to interpret
the provisions of this letter agreement and to decide all matters under this
letter agreement, including, without limitation, the right to modify a vesting
or forfeiture schedule applicable to the LTI Cash Award. Such interpretation and
decision shall be final, conclusive and binding on you and any person claiming
under or through you, in the absence of clear and convincing evidence that the
Company acted arbitrarily and capriciously. When making a determination or
calculation, the Company shall be entitled to rely on information furnished by
you or any Company representative. The Company may correct any defect, supply
any omission, or reconcile any inconsistency in this letter agreement in the
manner and to the extent it deems necessary or desirable to carry out the intent
of this letter agreement, and the Company shall be the sole and final judge of
that necessity or desirability.

The LTI Cash Award is intended to be a short-term deferral exempt from
Section 409A of the Internal Revenue Code of 1986, as amended, and shall be
interpreted consistent with this intention. All rights under this letter
agreement shall at all times be entirely unfunded and no provision shall at any
time be made with respect to segregating any assets of the Company for payment
of any amounts due hereunder.

This letter agreement contains all of the understandings and representations
between the Company and you relating to the LTI Cash Award and supersedes all
prior and contemporaneous understandings, discussions, agreements,
representations and warranties, both written and oral, with respect to any LTI
Cash Award; provided, however, that this letter agreement shall not prevent the
Company from entering into subsequent agreements with you that could modify or
amend this letter agreement.

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

Any payment of cash under this letter agreement to you, or to your legal
representative, heir, legatee or distributee, in accordance with the provisions
hereof, shall, to the extent thereof, be in full satisfaction of all claims of
such persons hereunder. The Company may require you or your legal
representative, heir, legatee or distributee, as a condition precedent to such
payment, to execute a release and receipt therefor in such form as it shall
determine.

As partial consideration for the granting of the LTI Cash Award, you hereby
agree to keep confidential all information and knowledge, except that which has
been disclosed in any public filings required by law, that you have relating to
the terms and conditions of this letter agreement; provided, however, that such
information may be disclosed as required by law and may be given in confidence
to your spouse and tax and financial advisors.

This letter agreement, for all purposes, shall be construed in accordance with
the laws of Texas without regard to conflicts-of-law principles.

The provisions this letter agreement shall bind and inure to the benefit of the
Company and the successors and assigns of the Company. All references to the
“Company” within this letter agreement shall refer to the Company and any such
successor or assignee of the Company.

If this letter agreement accurately sets forth our understandings and agreements
with respect to the subject matter hereof, please execute this letter agreement
in the space provided below and send a fully executed copy of this letter
agreement to Katherine Hargis in the enclosed confidential envelope no later
than February 21, 2019. The remaining copy is for your files. If Katherine
Hargis does not receive a signed copy of this letter agreement on or before
February 21, 2019, the terms of this letter agreement will expire and neither
Company nor any of its subsidiaries or affiliates will have any obligations
hereunder. Should you have any questions, please call Katherine Hargis at (713)
651-4446. We look forward to your continued employment with us.

 

Very truly yours, KEY ENERGY SERVICES, INC.

By:  

 

Bryan Kelln

Director

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

Agreed to and accepted:

 

 

Rob Saltiel

February     , 2019

 

cc Julie Gonzales