Exhibit 10.2






Exhibit 10.2




KEY ENERGY SERVICES, INC.




2009 EQUITY AND CASH INCENTIVE PLAN




NONQUALIFIED STOCK OPTION AGREEMENT




THIS NONQUALIFIED STOCK OPTION AGREEMENT (this “Agreement”), dated as of                     
(the “Date of Grant”), is made by and between Key Energy Services, Inc., a Maryland
corporation (the “Company”), and                      (the “Participant”).



R E C I T A L S:




WHEREAS, the Company has adopted the Key Energy Services, Inc. 2009 Equity and Cash Incentive
Plan (the “Plan”), pursuant to which options may be granted to purchase shares of the
Company’s Common Stock; and



WHEREAS, the committee of the Board of Directors of the Company responsible for administering
the Plan (the “Committee”) has determined that it is in the best interests of the Company
and its stockholders to grant to the Participant a Nonstatutory Stock Option to purchase the number
of shares of the Company’s Common Stock set forth herein.



NOW THEREFORE, for and in consideration of the premises and the covenants of the parties
contained in this Agreement, and for other good and valuable consideration, the receipt of which is
hereby acknowledged, the parties hereto, for themselves, their successors and assigns, hereby agree
as follows:



1. Grant of Option.



The Company hereby grants to the Participant on the Date of Grant an option (the
“Option”) to purchase                      shares of Common Stock (such shares of Common Stock, the
“Option Shares”) on the terms and conditions set forth in this Agreement and as otherwise
provided in the Plan. The Option is not intended to qualify as an incentive stock option within
the meaning of Section 422 of the Code.



2. Incorporation by Reference, Etc.



The provisions of the Plan are hereby 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 Committee shall have final authority to interpret and
construe the Plan and this Agreement and to make any and all determinations under them, 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. In the event of any conflict
or inconsistency between the terms of this Agreement and the terms of the Plan, the terms of the
Plan shall govern and control.


 


 









 





3. Terms and Conditions.



(a) Vesting. Subject to the Participant’s continued service with the Company and its
Affiliates on each applicable vesting date, the Option shall vest and become exercisable with
respect to                      of the Option Shares on each of the                      anniversaries of the Date of Grant.



(b) Exercise Price. The price at which the Participant shall be entitled to purchase
the Option Shares upon the exercise of all or any portion of the Option shall be $                     per Option
Share.



(c) Expiration Date. The Option shall expire at the end of the period commencing on
the Date of Grant and ending at 11:59 p.m. Central Time on the day preceding the tenth anniversary
of the Date of Grant (the “Expiration Date”).



(d) Exercisability of the Option. The Option may be exercised only by written notice
in accordance with the option exercise form approved by the Company, which notice shall either be
delivered in person, by mail or by electronic means and shall be accompanied by payment therefor.



(e) Payment of Exercise Price. The exercise price of the Option Shares shall be paid,
to the extent permitted by applicable statutes and regulations, either (a) in cash or by certified
or bank check at the time the Option is exercised or (b) in the discretion of the Committee, upon
such terms as the Committee shall approve, the exercise price may be paid: (i) by delivery to the
Company of other Common Stock, duly endorsed for transfer to the Company, with a Fair Market Value
on the date of delivery equal to the exercise price (or portion thereof) due for the number of
shares being acquired, or by means of attestation whereby the Participant identifies for delivery
specific shares of Common Stock that have a Fair Market Value on the date of attestation equal to
the exercise price (or portion thereof) and receives a number of shares of Common Stock equal to
the difference between the number of shares thereby purchased and the number of identified
attestation shares of Common Stock; (ii) a “cashless” exercise program established with a broker;
(iii) by reduction in the number of shares of Common Stock otherwise deliverable upon exercise of
such Option with a Fair Market Value equal to the aggregate exercise price at the time of exercise,
or (iv) in any other form of legal consideration that may be acceptable to the Committee.



(f) Effect of Termination of Continuous Service on the Option.



(i) Death. If the Participant’s Continuous Service terminates as a result of the
Participant’s death, then the Option may be exercised (to the extent that the Participant was
entitled to exercise the Option as of the date of death) by the Participant’s estate, by a person
who acquired the right to exercise the Option by bequest or inheritance or by a person designated
to exercise the Option upon the Participant’s death, but only within such period of time ending on
the earlier of (a) the date twelve (12) months following the date of death or (b) the Expiration
Date.



(ii) Disability. If the Participant’s Continuous Service terminates as a result of
the Participant’s Disability, the Participant may exercise the Option (to
the extent that the Participant was entitled to exercise the Option as of the date of
termination), but only within such period of time ending on the earlier of (a) the date twelve (12)
months following such termination or (b) the Expiration Date.


 


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(iii) Retirement. If the Participant’s Continuous Service terminates as a result of
Retirement, the Participant may exercise the Option (to the extent that the Participant was
entitled to exercise the Option as of the date of termination), but only within such period of time
ending on the earlier of (a) the date twelve (12) months following such termination or (b) the
Expiration Date.



(iv) Termination For Cause. If the Participant’s Continuous Service terminates for
Cause, both the unvested and the vested portions of the Option shall be forfeited and expire on the
date of such termination.



(v) All Other Terminations. Except as is otherwise specifically provided herein, if
the Participant’s Continuous Service is terminated for any reason other than those described in
clauses (i) through (iv) of this Section 3(f), the Participant may exercise
the Option (to the extent that the Participant was entitled to exercise the Option as of the date
of termination), but only within such period of time ending of the earlier of (a) the date three
(3) months following the termination of the Participant’s Continuous Service or (b) the Expiration
Date.



(g) Change in Control.



(i) Accelerated Vesting. In the event of a Change of Control, notwithstanding any
provision of the Plan or any provision of this Agreement to the contrary, and either in or not in
combination with another event such as a termination of the Participant’s Continuous Service by the
Company without Cause, the Option shall become immediately exercisable with respect to 100% of the
Option Shares and, to the extent practicable, such acceleration of exercisability shall occur in a
manner and at a time which allows the Participant the ability to participate in the Change in
Control transaction with respect to the Common Stock subject to this Agreement.



(ii) Discretionary Cashout. In addition, in the event of a Change in Control, the
Committee may, in its discretion and upon at least ten (10) days’ advance notice to the
Participant, cancel any outstanding Option, and pay to the Participant, in cash or stock, or any
combination thereof, the value of such Option based upon the price per share of Common Stock
received or to be received by other stockholders of the Company in the event.



(h) Adjustments. In the event of changes in the outstanding Common Stock or in the
capital structure of the Company after the Date of Grant, the Option will be adjusted or
substituted in accordance with Section 11 of the Plan to preserve the economic intent of the Award.



(i) Compliance with Legal Requirements. The granting and exercise of the Option, and
any other obligations of the Company under this Agreement shall be subject to all applicable
federal and state laws, rules and regulations and to such approvals by any regulatory or
governmental agency as may be required. The Committee, in its sole discretion,
may postpone the issuance or delivery of Option Shares as the Committee may consider
appropriate and may require the Participant to make such representations and furnish such
information as it may consider appropriate in connection with the issuance or delivery of Option
Shares in compliance with applicable laws, rules and regulations.


 


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(j) Transferability. The Option shall not be transferable by the Participant other
than by will or the laws of descent and distribution.



(k) Rights as Stockholder. The Participant shall not be deemed for any purpose to be
the owner of any shares of Common Stock subject to this Option unless, until and to the extent that
(i) this Option shall have been exercised pursuant to its terms; (ii) the Company shall have issued
and delivered to the Participant the Option Shares; and (iii) the Participant’s name shall have
been entered as a stockholder of record with respect to such Option Shares on the books of the
Company.



(l) Withholding Obligations. The Committee in its sole discretion may permit the
Participant to satisfy any federal, state or local tax withholding obligation relating to the
exercise or acquisition of Common Stock pursuant to this Agreement by any of the following means
(in addition to the Company’s right to withhold from any compensation paid to the Participant by
the Company) or by a combination of such means: (i) tendering a cash payment; (ii) authorizing the
Company to withhold shares of Common Stock from the shares of Common Stock otherwise issuable to
the Participant as a result of the exercise or acquisition of Common Stock under this Agreement;
provided, however, that no shares of Common Stock are withheld with a value
exceeding the minimum amount of tax required to be withheld by law; or (iii) delivering to the
Company previously owned and unencumbered shares of Common Stock of the Company.



4. Cancellation and Rescission of Option for Detrimental Activity. Upon exercise of
the Option, the Participant shall certify in a manner acceptable to the Company that the
Participant has not engaged in any Detrimental Activity. The Committee may cancel, rescind,
suspend, withhold or otherwise limit or restrict any unexpired or unpaid portion of the Option if
the Participant engages in any Detrimental Activity. If the Participant engages in Detrimental
Activity after exercise of the Option, during any period for which any restrictive covenant
prohibiting such activity applies, such exercise may be rescinded within one (1) year thereafter
and the Participant will be required to pay to the Company the amount of any gain realized as a
result of the exercise, 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.


 


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5. Miscellaneous.



(a) 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, telecopier, courier service or personal delivery or by such other electronic
means as may be approved by the Company:




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 Participant’s last known 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.



(b) Severability. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision of this Agreement,
and each other provision of this Agreement shall be severable and enforceable to the extent
permitted by law.



(c) No Rights to Continue Service. Nothing contained in this Agreement shall be
construed as giving the Participant any right to be retained, in any position, as an employee,
consultant or director of the Company or its Affiliates nor shall it interfere with or restrict in
any way the right of the Company or its Affiliates, which right is hereby expressly reserved, to
remove, terminate or discharge the Participant at any time for any reason whatsoever.



(d) Bound by Plan. By signing 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 the terms and provisions of the Plan.



(e) Successors. The terms of this Agreement shall be binding upon and inure to the
benefit of the Company and its successors and assigns, and of the Participant and the
beneficiaries, executors, administrators, heirs and successors of the Participant.



(f) Entire Agreement. This Agreement and the Plan contain the entire agreement and
understandings of the parties hereto with respect to the subject matter contained herein and
supersede all prior communications, representations and negotiations in respect thereto. No
change, modification or waiver of any provision of this Agreement shall be valid unless the same be
in writing and signed by the parties hereto.


 


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(g) Governing Law. This Agreement shall be construed and interpreted in accordance
with the laws of the State of Maryland without regard to principles of conflicts of law thereof, or
principals of conflicts of laws of any other jurisdiction that could cause the application of the
laws of any jurisdiction other than the State of Maryland.



(h) Amendment/Termination of Plan. The Board may amend or terminate the Plan at any
time. However, except as otherwise provided in the Plan, no amendment shall be effective without
stockholder approval to the extent stockholder approval is necessary to satisfy any applicable law
or securities exchange listing requirement.



(i) Amendment of Award. The Committee may amend the terms of this Agreement;
provided, that, the Committee may not effect any amendment which would otherwise
constitute an impairment of the Participant’s rights under this Award unless (i) the Company
requests the Participant’s consent and (ii) the Participant consents in writing.



(j) 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.



(k) Signature in Counterparts. This Agreement may be signed in counterparts, each of
which shall be an original, with the same effect as if the signatures thereto and hereto were upon
the same instrument.



[Remainder of page intentionally left blank; signature page to follow]



 


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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day first
written above.




	 	 	 	 	 	 	 	 	 
	 	 	KEY ENERGY SERVICES, INC.	 	 
	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name: 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 










[Signature Page to Nonqualified Stock Option Agreement]





 


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