exhibit10_1-2009adopt.htm


    Exhibit
10.1

    


    


    NATURAL
GAS SERVICES GROUP, INC.

    2009
RESTRICTED STOCK/UNIT PLAN

     

    1.            Purposes of the
Plan.  The purpose of this 2009 Restricted Stock/Unit Plan is
to promote the success of Natural Gas Services Group, Inc. (the “Company”) by
providing additional incentives to attract, motivate, retain and reward
qualified and competent Employees, Officers and independent Directors of the
Company upon whose efforts and judgment the success of the Company is largely
dependent, through the encouragement of stock ownership in the Company by such
individuals.

     

    2.            Definitions.  The
following definitions shall apply as used herein and in the individual Award
Agreements except as defined otherwise in an individual Award
Agreement.  In the event a term is separately defined in an individual
Award Agreement, such definition shall supercede the definition contained in
this Section 2.

     

    (a)           “Administrator”
means the Compensation Committee of the Board.

     

    (b)           “Applicable
Laws” means the legal requirements relating to the Plan and the Awards under
applicable provisions of federal securities laws, state corporate and securities
laws, the Code, the rules and listing requirements of any established stock
exchange or national market system on which the Common Stock is traded, and the
rules of any non-U.S. jurisdiction applicable to Awards granted to residents
thereof.

     

    (c)           “Award”
means the grant of Restricted Stock or Restricted Stock Units under the
Plan.

     

    (d)           “Award
Agreement” means the written Restricted Stock Agreement or the Restricted Stock
Unit Agreement evidencing the grant of an Award setting forth the terms and
conditions of such Award executed by the Company and the Participant, including
any amendments thereto.

     

    (e)           “Board”
means the Board of Directors of the Company.

     

    (f)           “Cause”
means (i) a material act of theft, misappropriation or conversion of corporate
funds committed by the Participant or (ii) the Participant’s demonstrably
willful, deliberate and continued failure to follow reasonable directives of the
Board or the Chief Executive Officer of the Company which are within the
Participant’s ability to perform.  Notwithstanding the foregoing, for
the 24-month period following a Change in Control, the Participant shall not be
deemed to have been terminated for Cause unless and until: (x) there shall have
been delivered to the Participant a copy of a resolution duly adopted by the
Board in good faith at a meeting of the Board called and held for such purpose
(after reasonable notice to the Participant and an opportunity for the
Participant, together with his or her counsel, to be heard before the Board),
finding that the Participant was guilty of conduct set forth above and
specifying the particulars thereof in reasonable detail; and (y) if the
Participant contests such finding (or a conclusion that he or she has failed to
timely cure the performance in response thereto), the arbitrator, by final
determination in an arbitration proceeding pursuant to Section 17, below, has
concluded that the Participant’s conduct met the standard for termination for
Cause above and that the Board’s conduct met the standards of good faith and
satisfied the procedural and substantive conditions of this Section 2(f)
(collectively, the “Necessary Findings”).  The Participant’s costs of
the arbitration shall be advanced by the Company and shall be repaid to the
Company if the arbitrator makes the Necessary Findings.

      

    (g)           “Change
in Control Event” means any of the
following:

     

    (i)         The
dissolution or liquidation of the Company, other than in the context of a
transaction that does not constitute a Change in Control Event under clause (ii)
below.

     

    (ii)                    A
merger, consolidation, or other reorganization, with or into, or the sale of all
or substantially all of the Company’s business and/or assets as an entirety to,
one or more entities that are not Subsidiaries or other affiliates (a “Business
Combination”), unless (A) as a result of the Business Combination at least 50%
of the outstanding securities voting generally in the election of directors of
the surviving or resulting


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    

     

     

    entity or
a Parent thereof (the “Successor Entity”) immediately after the reorganization
are, or will be, owned, directly or indirectly, by shareholders of the Company
immediately before the Business Combination; and (B) at least 50% of the members
of the board of directors of the entity resulting from the Business Combination
were members of the Board at the time of the execution of the initial agreement
or of the action of the Board approving the Business Combination.  The
shareholders before and after the Business Combination shall be determined on
the presumptions that (x) there is no change in the record ownership of the
Company’s securities from the record date for such approval until the
consummation of the Business Combination; and (y) record owners of securities of
the Company hold no securities of the other parties to such
reorganization.

     

    (iii)                    Any
“person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act),
other than an Excluded Person, becomes the beneficial owner (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of securities of the
Company representing more than 50% of the combined voting power of the Company’s
then outstanding securities entitled to then vote generally in the election of
Directors of the Company, other than as a result of (A) an acquisition directly
from the Company, (B) an acquisition by the Company, (C) an acquisition by any
employee benefit plan (or related trust) sponsored or maintained by the Company
or a Successor Entity, or an acquisition by any entity pursuant to a transaction
which is expressly excluded under clause (ii) above.

     

    (iv)                    During
any period not longer than twelve consecutive months, individuals who at the
beginning of such period constituted the Board cease to constitute at least a
majority thereof, unless the election, or the nomination for election by the
Company’s shareholders, of each new Board member was approved by a vote of at
least three-quarters of the Board members then still in office who were Board
members at the beginning of such period (including for these purposes, new
members whose election or nomination was so approved), but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a person other than the Board.

    


    (h)           “Code”
means the Internal Revenue Code of 1986, as amended.

     

    (i)           “Committee”
means the Compensation Committee of the Board. The Committee shall be appointed
by the Board and shall consist of two or more outside, disinterested members of
the Board. The Committee, in the judgment of the Board, shall be qualified to
administer the Plan as contemplated by (i) Rule 16b-3 of the Exchange
Act (or any successor rule), (ii) Section 162(m) of the Code and the
regulations thereunder (or any successor Section and regulations), and
(iii) any rules and regulations of a stock exchange on which the Common
Stock is traded. Any member of the Committee who does not satisfy the
qualifications set out in the preceding sentence may recuse himself or herself
from any vote or other action taken by the Committee. The Board may, at any time
and in its complete discretion, remove any member of the Committee and may fill
any vacancy in the Committee.

     

    (j)           “Common
Stock” means the common stock of the Company.

     

    (k)           “Company”
means Natural Gas Services Group, Inc., a Colorado corporation, or any
successor entity that adopts the Plan in connection with a Change in
Control.

     

              (l)           
“Continuous Service” means that your employment relationship is not interrupted
or terminated by you, the Company or any Related Entity. Your employment
relationship will not be considered interrupted in the case of: (i) any
leave of absence approved in accordance with the Company’s written personnel
policies, including sick leave, family leave, military leave or any other
personal leave; or (ii) transfers between locations of the Company or
between the Company and any Related Entity or successor; provided, however,
that, unless otherwise provided in the Company’s written personnel policies, in
this Agreement or under Applicable Laws, rules or regulations or unless the
Committee has otherwise expressly provided for different treatment with respect
to this Agreement, (x) no such leave may exceed ninety (90) days, and
(y) any vesting shall cease on the ninety-first (91 st)
consecutive date of any leave of absence during which your employment
relationship is deemed to continue and will not recommence until such date, if
any, upon which you resume service with the Company, Related Entity or
successor. If you resume such service in accordance with the terms of the
Company’s military leave policy, upon resumption of service you will be given
vesting credit for the full duration of your leave of 

     

     

    
      
        
        

      

      
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    absence.
Continuous employment will be deemed interrupted and terminated for an Employee
if the Participant’s weekly work hours change from full time to part time.
Part-time status for the purpose of vesting continuation will be determined in
accordance with policies adopted by the Company from time to time.”

     

    (m)           “Covered
Employee” means an Employee who is a “covered employee” under
Section 162(m)(3) of the Code.

     

    (n)           “Director”
means a non-Employee member of the Board or the board of directors of any
Related Entity.

     

    (o)           “Disability” means
any physical or mental impairment which qualifies an Employee for disability
benefits under any applicable long-term disability plan maintained by the
Company, provided the definition of disability applied under such disability
insurance plan complies with the requirements of Treasury Regulation Section
1.409A-3(i)(4)(i) or, if no such plan is in place or applies or if the
definition of “disability” under such disability insurance plan does not comply
with the requirements of Treasury Regulation Section 1.409A-3(i)(4)(i), any
physical or mental impairment which would be determined to be totally disabled
by the Social Security Administration or the Railroad Retirement Board. If
the Company or the Related Entity to which the Participant provides service does
not have a long-term disability plan in place, “Disability” means that a
Participant is unable to engage in any substantial gainful activity by reason of
any medically determinable physical or mental impairment that can be expected to
result in death or can be expected to last for a continuous period of not less
than twelve months.

     

    (p)           “Employee”
means any person, including an Officer or member of the Board of the Company or
the board of directors of a Related Entity, who is in the employ of the Company
or any Related Entity, subject to the control and direction of the Company or
any Related Entity as to both the work to be performed and the manner and method
of performance.  The payment of a director’s fee by the Company or a
Related Entity shall not be sufficient to constitute “employment” by the
Company.

     

    (q)           “Exchange
Act” means the Securities Exchange Act of 1934, as amended.

     

    (r)           “Excluded
Person” means (i) any person described in and satisfying the conditions of Rule
13d-1(b)(1) under the Exchange Act, (ii) the Company or (iii) an employee
benefit plan (or related trust) sponsored or maintained by the Company or the
Successor Entity.

     

    (s)           “Maximum
Aggregate Number of Shares” to be issued under the Plan means the total number
of Shares which may be issued pursuant to all Awards of Restricted Stock and
Restricted Stock Units under the Plan which is 300,000 Shares.  The
Shares to be issued pursuant to Awards may be authorized, but unissued, or
reacquired Shares.

    


    (t)           “Officer”
means a person who is an officer of the Company or a Related Entity within the
meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.

     

    (u)           “Parent”
means a “parent corporation,” whether now or hereafter existing, as defined in
Section 424(e) of the Code.

     

    (v)           “Participant”
means an Employee or Director who receives an Award under the Plan.

     

    (w)           “Performance-Based
Compensation” means compensation qualifying as “performance-based compensation”
under Section 162(m) of the Code.

     

    (x)           “Plan”
means this 2009 Restricted Stock/Unit Plan.

     

    (y)           “Related
Entity” means any Parent or Subsidiary of the Company.


    
      
         


      

      
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    (z)           “Restricted
Stock” means Shares issued under the Plan to the Participant for such
consideration, if any, and subject to such restrictions on transfer, rights of
first refusal, repurchase provisions, forfeiture provisions, and other terms and
conditions as established by the Administrator.

    


    (aa)           “Restricted
Stock Units” or “Units” means an Award which may be earned in whole or in part
upon the passage of time or the attainment of performance criteria established
by the Administrator and which may be settled for Shares or other securities or
a combination of Shares or other securities as established by the
Administrator.

     

    (bb)           “Retirement”
means:

     

    (i)           with
respect to Employees, termination of an Employee’s employment in accordance with
the Company’s retirement policies, as in effect from time to time, if on the
date of such termination (A) the Employee is at least 55 years old and
his or her Continued Service has extended for at least five years, and
(B) the number of full years in the Employee’s age and his or her number of
full years of Continued Service total at least 65. By way of illustration, if an
Employee terminates his or her employment in accordance with the Company’s
retirement policies on his or her 63rd birthday after six years of Continued
Service, the Employee’s total would be 69 and his or her termination would be
treated as a Retirement; if the Employee’s Continued Service had extended for
only four years, his or her total would be 67 but the termination would not be
treated as a Retirement since he or she would not have met the minimum of five
years of Continued Service.

     

    (ii)           with
respect to non-Employee Directors, termination of membership on the Company’s
Board of Directors at the expiration of the Director’s term of office (unless
the Director is then elected for another term of office), or under such other
circumstances as the Board may determine to constitute retirement.

     

    (cc)           “Rule 16b-3”
means Rule 16b-3 promulgated under the Exchange Act or any successor
thereto.

    


    (dd)           “Share”
means a share of the Common Stock.

    


    (ee)           “Specified
Employee” means an Employee defined in Treasury Regulation Section
1.409A-1(i).

     

    (ff)           “Subsidiary”
means a “subsidiary corporation,” whether now or hereafter existing, as defined
in Section 424(f) of the Code.

    


    (hh)           “Term”
means the ten (10) year period following the approval of the Plan by the
Company’s shareholders.

     

    3.            Shares Subject to the
Plan.

     

    (a)           Subject
to the provisions of Section 9 below, the
maximum aggregate number of Shares which may be issued pursuant to all Awards of
Restricted Stock and Restricted Stock Units is 300,000 Shares.  The
Shares to be issued pursuant to Awards may be authorized, but unissued, or
reacquired Common Stock.

     

    (b)           Shares
that actually have been issued under the Plan pursuant to an Award shall not be
returned to the Plan and shall not become available for future issuance under
the Plan and shall be deemed to have been issued for purposes of determining the
Maximum Aggregate Number of Shares, except (i) any Shares covered by an Award
(or portion of an Award) which are forfeited, canceled or expired (whether
voluntarily or involuntarily) shall be deemed not to have been issued for
purposes of determining the maximum aggregate number of Shares which may be
issued under the Plan and (ii)   during the ten (10) year period
following approval of the Plan by the Company’s shareholders and to the extent
not prohibited by Applicable Law, any Shares covered by an Award, which are
surrendered in satisfaction of tax withholding obligations incident to the
vesting of an Award, shall be deemed not to have been issued for purposes of
determining the maximum number of Shares which may be issued under the Plan,
unless otherwise determined by the Administrator.


    
      
         


      

      
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    4.           Administration of the
Plan.

     

    (a)           Plan
Administrator.  The Plan shall be administered by the
Committee.

     

    (b)           Powers of the
Administrator.  Subject to Applicable Laws and the provisions
of the Plan (including any other powers given to the Administrator hereunder),
and except as otherwise provided by the Board, the Administrator shall have the
authority, in its discretion:

     

    (i)           to
select the Employees and Directors to whom Awards may be granted from time to
time hereunder;

     

    (ii)           to
determine whether and to what extent Awards are granted hereunder;

     

    (iii)           to
determine the number of Shares or Restricted Stock Units to be covered by each
Award granted hereunder;

     

    (iv)           to
approve forms of Award Agreements for use under the Plan;

     

    (v)           
to determine the terms and conditions of any Award granted
hereunder;

     

    (vi)           to
amend the terms of any outstanding Award granted under the Plan, provided that
any amendment that would adversely affect the Participant’s rights under an
outstanding Award or which would subject the Participant to the tax and other
negative impacts of Section 409A shall not be made without the Participant’s
written consent;

     

    (vii)           to
construe and interpret the terms of the Plan and Awards, including without
limitation, any Award or Award Agreement, granted pursuant to the   Plan; and

     

    (viii)          to
take such other action, not inconsistent with the terms of the Plan, as the
Administrator deems appropriate.

     

    (c)           Interpretation of
Plan.  The Committee
shall have full power and authority to administer and interpret the Plan and to
adopt or establish such rules, regulations, agreements, guidelines, procedures
and instruments, which are not contrary to the terms of the Plan and which, in
its opinion, may be necessary or advisable for the administration and operation
of the Plan. The Committee’s interpretations of the Plan, and all actions taken
and determinations made by the Committee pursuant to the powers vested in it
hereunder, shall be conclusive and binding on all parties concerned, including
the Company, its stockholders and any Participant.

    


    (d)           Indemnification. 
In addition to such other rights of indemnification as they may have as members
of the Board or as Officers or Employees of the Company or a Related Entity,
members of the Board and any Officers or Employees of the Company or a Related
Entity to whom authority to act for the Board, the Administrator or the Company
is delegated shall be defended and indemnified by the Company to the extent
permitted by law on an after-tax basis against all reasonable expenses,
including attorneys’ fees, actually and necessarily incurred in connection with
the defense of any claim, investigation, action, suit or proceeding, or in
connection with any appeal therein, to which they or any of them may be a party
by reason of any action taken or failure to act under or in connection with the
Plan, or any Award granted hereunder, and against all amounts paid by them in
settlement thereof (provided such settlement is approved by the Company) or paid
by them in satisfaction of a judgment in any such claim, investigation, action,
suit or proceeding, except in relation to matters as to which it shall be
adjudged in such claim, investigation, action, suit or proceeding that such
person is liable for gross negligence, bad faith or intentional misconduct;
provided, however, that within thirty (30) days after the institution of such
claim, investigation, action, suit or proceeding, such person shall offer to the
Company, in writing, the opportunity at the Company’s expense to defend the
same.

    


    5.           Eligibility.  Awards
may be granted to full-time, permanent Employees and Directors.  An
Employee or Director who has been granted an Award may, if otherwise eligible,
be granted additional


    
      
         


      

      
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    Awards.  Notwithstanding,
non-employee Directors shall not be eligible for an award of a Restricted Stock
Unit.

     

    6.            Terms and Conditions of
Awards.

     

    (a)           Designation of
Award.  Each Award shall be designated in the Award
Agreement.

     

    (b)           Conditions of
Award.  Subject to the terms of the Plan, the Administrator
shall determine the provisions, terms and conditions of each Award including,
but not limited to, the Award vesting schedule (if any), resale restrictions
applicable to the Shares issued pursuant to Awards, forfeiture provisions and
satisfaction of any performance criteria. 

     

    (e)           Individual Limit for
Restricted Stock and Restricted Stock Units.  For awards of
Restricted Stock and Restricted Stock Units that are intended to be
Performance-Based Compensation, the maximum number of Shares with respect to
which such Awards may be granted to any Participant in any calendar year shall
be 25,000 Shares.  The foregoing limitation shall be adjusted
proportionately in connection with any change in the Company’s capitalization
pursuant to Section 9 below.

     

    (f)           No
Transferability of
Awards.  Awards may not be sold, pledged, assigned, transferred
or disposed of in any manner.  Any attempted sale, pledge, assignment,
transfer or disposal shall be null and void.

     

    (g)           Date of Grant of
Award.  The date of grant of an Award shall for all purposes be
the date on which the Administrator approves the grant of such
Award.

     

    7.            Taxes.  No
Shares shall be delivered under the Plan to any Participant or other person
until such Participant or other person has made arrangements acceptable to the
Administrator for the satisfaction of any federal, state, local or non-U.S.
income and employment tax withholding obligations, including, without
limitation, obligations incident to the receipt of Shares.  Upon
the issuance of Shares, the Company shall withhold or collect from
Participant an amount sufficient to satisfy such tax obligations, including, but
not limited to, by surrender of Shares covered by the Award sufficient to
satisfy the minimum applicable tax withholding obligations incident to the
vesting of an Award.  Participant shall in all instances be liable for
any personal taxes related to any Award and/or vesting of an Award, whether said
taxes have been withheld by the Company or not.

     

    8.            Conditions Upon Issuance of
Shares.

     

    (a)           If
at any time the Administrator determines that the delivery of Shares pursuant to
an Award is or may be unlawful under or contrary to Applicable Laws, the vesting
of an Award or to otherwise receive Shares pursuant to the terms of an Award
shall be suspended until the Administrator determines that such delivery is
lawful and shall be further subject to the approval of counsel for the Company
with respect to such compliance.  

    


    (b)           The
Company shall have no obligation to effect any registration or qualification of
the Shares under federal or state laws.

     

    (c)           As
a condition to the exercise or issuance of an Award, the Company may require the
person exercising or receiving such Award to represent and warrant at the time
of issuance that the Shares are being purchased only for investment and without
any present intention to sell or distribute such Shares if, in the opinion of
counsel for the Company, such a representation is required by any Applicable
Laws.

     

    9.            Adjustments Upon Changes in
Capitalization.  In the event of a subdivision of the
outstanding Stock, a declaration of a dividend payable in Shares, a combination
or consolidation of the outstanding Stock into a lesser number of Shares, a
reclassification, or any other increase or decrease in the number of issued
shares of Stock effected without receipt of consideration by the Company,
proportionate adjustments shall automatically be made in each of (i) the number
of Shares available for future grants under Section 3(a), (ii) the number of
Shares covered by

    each
outstanding Award and (iii) the maximum number of Shares with respect to which
Awards may be granted to any Participant in any calendar year


    
      
         


      

      
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    10.            Change in
Control.  Except as provided otherwise in an individual Award
Agreement, in the event of a Change in Control, each unvested portion of any
Award which, at the time, is outstanding under the Plan automatically (i)
shall become fully vested and be released from any repurchase, forfeiture
or transfer restrictions and (ii) with respect to unvested Restricted Stock
Units, shall vest and be converted into Shares, immediately prior to the
date of such Change in Control.

    


    11.            Effective Date and Term of
Plan.  The Plan shall become effective upon its adoption by the
Board.  It shall continue in effect for a term of ten (10) years
unless sooner terminated.  Continuance of the Plan shall be subject to
approval by the shareholders of the Company.  Such shareholder
approval shall be obtained in the degree and manner required under Applicable
Laws.  Awards may be granted under the Plan upon its becoming
effective, but any Award granted before shareholder approval is obtained shall
be rescinded if shareholders fail to approve the Plan at the next shareholder
meeting that occurs after the Plan is adopted by the Board.

     

    12.            Amendment, Suspension or
Termination of the Plan.

     

    (a)           The
Board may at any time amend, suspend or terminate the Plan for any reason;
provided, however, that:

    


    (i)           no
such amendment, suspension or termination of the Plan may be implemented if such
amendment, suspension or termination causes any Award granted prior to such
amendment, suspension or termination to be subject to the tax and penalty
provisions of Section 409A of the Code without the explicit approval of the
Participants impacted by such amendment, suspension or termination;
and

    


    (ii)           no
such amendment shall be made without the approval of the Company’s shareholders
to the extent such approval is required by Applicable Laws;

     

    (b)           No
Award may be granted during any suspension of the Plan or after termination of
the Plan.

     

    (c)           No
suspension or termination of the Plan shall adversely affect any rights under
Awards already granted to a Participant.

     

    13.            Reservation of
Shares.

     

    (a)           The
Company, during the term of the Plan, will at all times reserve and keep
available such number of Shares as shall be sufficient to satisfy the
requirements of the Plan.

     

    (b)           The
inability of the Company to obtain authority from any regulatory body having
jurisdiction, which authority is deemed by the Company’s counsel to be necessary
to the lawful issuance and sale of any Shares hereunder, shall relieve the
Company of any liability in respect of the failure to issue or sell such Shares
as to which such requisite authority shall not have been obtained.

     

    14.            No Effect on Terms of
Employment.  The Plan shall not confer upon any Participant any
right with respect to the Participant’s Continuous Service, nor shall it
interfere in any way with his or her right or the right of the Company or any
Related Entity to terminate the Participant’s Continuous Service at any time,
with or without Cause, and with or without notice.  The ability of the
Company or any Related Entity to terminate the employment of a Participant who
is employed at will is in no way affected by its determination that the
Participant’s Continuous Service has been terminated for Cause for the purposes
of the Plan.

    


    15.            No Effect on Retirement and
Other Benefit Plans.  Except as specifically provided in a
retirement or other benefit plan of the Company or a Related Entity, Awards
shall not be deemed compensation for purposes of computing benefits or
contributions under any retirement plan of the Company or a Related Entity, and
shall not affect any benefits under any other benefit plan of any kind or any
benefit plan subsequently instituted under which

    the
availability or amount of benefits is related to level of
compensation.  The Plan is not a “Retirement Plan” or “Welfare Plan”
under the Employee Retirement Income Security Act of 1974, as
amended.


    
      
         


      

      
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    16.            Construction.  Captions
and titles contained herein are for convenience only and shall not affect the
meaning or interpretation of any provision of the Plan.  Except when
otherwise indicated by the context, the singular shall include the plural and
the plural shall include the singular.  Use of the term “or” is not
intended to be exclusive, unless the context clearly requires
otherwise.

     

    17.            Arbitration and
Litigation.

     

    (a)           Any
dispute, controversy or claim arising out of or in respect to this Plan (or its
validity, interpretation or enforcement) or the subject matter hereof must be
submitted to and settled by arbitration conducted before a single arbitrator
(chosen from a list of arbitrators provided by the American Arbitration
Association with each party hereto taking alternate strikes and the remaining
arbitrator hearing the dispute).  The arbitration will be conducted in
Midland, Texas, or the then current location of the Company’s headquarters, in
accordance with the then current rules of the American Arbitration Association
or its successor.  The arbitration of such issues, including the
determination of any amount of damages suffered, will be final and binding upon
the parties to the maximum extent permitted by law.  The arbitrator in
such action will not be authorized to change or modify any provision of the
Plan.  Judgment upon the award rendered by the arbitrator may be
entered by any court having jurisdiction thereof.  The arbitrator will
award reasonable legal fees and expenses (including arbitration costs) to the
prevailing party upon application therefor.  The parties consent to
the venue and jurisdiction of the state court or federal district court where
the Company’s headquarters are then located for all purposes in connection with
arbitration, including the entry of judgment of any award.

     

    (b)           Except
as may be necessary to enter judgment upon the award or to the extent required
by applicable law, all claims, defenses and proceedings (including, without
limiting the generality of the foregoing, the existence of the controversy and
the fact that there is an arbitration proceeding) shall be treated in a
confidential manner by the arbitrator, the parties and their counsel, and each
of their agents and employees, and all others acting on behalf or in concert
with them.  Without limiting the generality of the foregoing, no one
shall divulge to any third party or person not directly involved in the
arbitration, the contents of the pleadings, papers, orders, hearings, trials, or
awards in the arbitration, except as may be necessary to enter judgment upon an
award as required by applicable law.  Any court proceedings relating
to the arbitration hereunder, including, without limiting the generality of the
foregoing, to prevent or compel arbitration to perform, correct, vacate or
otherwise enforce an arbitration award, shall be filed under seal with the
court, to the extent permitted by law.  Violation of the aforesaid
confidentiality shall result in the forfeiture of any resulting
award.

     

    IN
WITNESS WHEREOF, the Board of Directors of the Company approved this Natural Gas
Services Group, Inc. 2009 Restricted Stock/Unit Plan on the 15th day of
April 2009 and the Company has executed this Plan Document effective the 16th
day of June 2009.

     

     

    

      
        	 
      	
                NATURAL
      GAS SERVICES GROUP, INC.

              
	 
      	 
      
	 
      	 
      
	
                By:

              	
                /s/
      Stephen C. Taylor

              	 
      
	 
      	
                Stephen
      C. Taylor, President and
CEO

              


      




    
      
         


      

      
        8

        
          

        

      

      
         


      

    


    


    NATURAL
GAS SERVICES GROUP, INC.

    


    2009
RESTRICTED STOCK/UNIT PLAN

    


    RESTRICTED
STOCK AGREEMENT

    


    NOTICE OF AWARD OF
RESTRICTED STOCK

     

    


    Award # RS                    

    


     

    
      	
              Participant’s
      Name and Address:

            	 
      
	 
      	 
      
	 
      	 
      


    

    


    Natural
Gas Services Group, Inc. (the “Company”) hereby grants you,
                                        
(the “Participant”), the number of shares of restricted stock indicated below
(the “Restricted Stock” or “Restricted Shares”) under the Company’s 2009
Restricted Stock/Unit Plan (the “Plan”). The date of this Agreement is                                        (the
“Grant Date”). Subject to the provisions of this Agreement and of the Plan, the
principal features of this Restricted Stock award are as follows:

    


    Number of Shares of
Restricted Stock:

    


    _________.

    


    Vesting
Schedule:

    


    Thirty-three
percent (33%) of the shares of Restricted Stock shall vest on each of the first
three anniversaries of the date hereof (each a “Vesting Date” and collectively,
the “Vesting Dates”), subject to Participant’s Continued Service through each
such date and the terms of this Agreement and the Plan.

    


    Your signature below indicates your
agreement and understanding that this Award is subject to all of the terms and
conditions contained in the Plan and this Restricted Stock Agreement (the
“Agreement”), which includes this Notice of Award of Restricted Stock and the
Terms and Conditions of Restricted Stock Award.  PLEASE BE SURE TO READ ALL OF THIS
AGREEMENT AND THE PLAN, WHICH CONTAINS THE SPECIFIC TERMS AND CONDITIONS OF THIS
RESTRICTED STOCK AWARD.


    
      
         


      

      
        9

        
          

        

      

      
         


      

    


     

          

     

    


    


    Award
Number: RS-__________

     

    NATURAL
GAS SERVICES GROUP, INC.

    2009
RESTRICTED STOCK/UNIT PLAN

    


    TERMS
AND CONDITIONS OF RESTRICTED STOCK AWARD

     

          
1.          Award of Restricted
Stock.  Natural Gas Services Group, Inc., a Colorado
corporation (the “Company”), hereby issues to the Participant under the Natural
Gas Services Group, Inc. 2009 Restricted Stock/Unit Plan, as amended from time
to time (the “Plan”), an award (the “Award”) of the number of shares of
restricted stock (the “Restricted Shares”) set forth in this Restricted Stock
Agreement (the “Agreement”), which consists of the attached Notice of Award of
Restricted Stock (the “Notice”) and these Terms and Conditions of Restricted
Stock Award.  Unless otherwise provided herein, the terms in this
Agreement shall have the same meaning as those defined in the Plan.

    


    2.           Vesting
Schedule.

    


    (a) Except as
otherwise provided in this Agreement or in the Plan, the shares of Restricted
Stock awarded by this Agreement are scheduled to vest in accordance with the
vesting schedule set forth in the Notice.  Shares of Restricted Stock
scheduled to vest on a Vesting Date will vest only if the Participant remains in
Continued Service through such Vesting Date.  Should the Participant’s
Continued Service end at any time (the “Termination Date”), any unvested
Restricted Stock will be immediately cancelled; provided, however, that if
termination of Continued Service is the result of the Participant’s death,
Disability or Retirement, then any unvested Restricted Stock that would have
vested by their terms within twelve (12) months after the Termination Date
had the Participant remained in Continued Service will be deemed to be vested on
the Termination Date.  In addition, the Board of Directors may, in its
discretion, vest any unvested Restricted Stock upon termination of Continued
Service.

    


    (b) All
unvested Restricted Stock which is not vested on the Termination Date pursuant
to the provisions of paragraph 2(a) held by the Participant shall be deemed
forfeited and reconveyed to the Company.  Participant hereby appoints
the Company, or any escrow agent the Company may appoint, with full power of
substitution, as Participant’s true and lawful attorney-in-fact with irrevocable
power and authority in Participant’s name and behalf to take any action an
execute all documents and instruments, including without limitation, stock
powers which may be necessary to transfer the stock certificate or certificates
evidencing such unvested Restricted Shares to the Company upon the forfeiture of
such shares.  Participant will receive no payment for forfeited shares
of unvested Restricted Stock.

     

          
3.          Delivery of Restricted
Stock; Stockholder Rights.  The unvested shares of Restricted
Stock set forth in the Notice portion of this Agreement will be issued and
delivered to a book entry account maintained by the Company’s transfer
agent.  Thereafter, subject to the forfeiture provisions referenced in
this Agreement, Participant shall be entitled to the rights and privileges of a
stockholder of the Company in respect to such shares of Restricted Stock,
including the right to vote and receive dividends (subject to applicable tax
withholding obligations) during the vesting period on the same basis as all
other issued and outstanding shares of Company common stock.

     

          
4 .          Taxes.

     

    (a)          Tax
Liability.  The Participant is ultimately liable and
responsible for all taxes owed by the Participant in connection with the Award,
regardless of any action the Company or any Related Entity takes with respect to
any tax withholding obligations that arise in connection with the
Award.  Neither the Company nor any Related Entity makes any
representation or undertaking regarding the treatment of any tax withholding in
connection with the grant or vesting of the Award or the subsequent sale of
vested Restricted Stock issuable

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

     pursuant
to the Award.  The Company does not commit and is under no obligation
to structure the Award to reduce or eliminate the Participant’s tax
liability.

     

    (b)         Payment of Withholding
Taxes.  No stock certificates will be released to the
Participant unless the Participant has made acceptable arrangements to pay any
withholding taxes that may be due as a result of this award or the vesting of
shares of Restricted Stock.  The Company, in its sole discretion and
pursuant to such procedures as it may specify from time to time, may permit you
to satisfy such tax withholding obligation, in whole or in part (without
limitation) by (i) paying cash, (ii) electing to have the Company withhold
otherwise then deliverable vested shares of Restricted Stock having a fair
market value equal to the minimum amount required to be withheld, and
(iii) delivering to the Company of vested and owned shares of our common
stock having a fair market value equal to the amount required to be withheld or
(iv) through any other lawful manner.

    


    The
Company shall withhold from any dividends paid during the restricted period only
the amounts the Company is required to withhold to satisfy any applicable tax
withholding requirements with respect to such dividends based on minimum
statutory withholding rates for federal and state tax purposes, including any
payroll taxes.

    


    The
Participant agrees to indemnify and hold the Company harmless from any losses,
costs, damages, or expenses relating to inadequate
withholding.  Accordingly, the Participant agrees to pay to the
Company or any Related Entity as soon as practicable, including through
additional payroll withholding, any amount of the tax withholding obligation
that is not satisfied by the withholding methods described
above.  Notwithstanding the foregoing, the Company or a Related Entity
also may satisfy any tax withholding obligation by offsetting any amounts
(including, but not limited to, salary, bonus, and severance payments) payable
to the Participant by the Company and/or a Related Entity.

    


    (c)         Consequences of 83(b)
Election.  The provisions of paragraph 5(b) will not apply
if the Participant chooses to make the election under Section 83(b) of the
Internal Revenue Code Section (see paragraph 6 of this
Agreement.)  Upon such an election, the Participant shall remit to the
company in cash any and all taxes which the Company may be required to withhold
with respect to such election.

    


        5.           Section 83(b) Election for
Shares.  Participant understands that under Section 83(a)
of the Internal Revenue Code (the “Code”), the excess of the fair market value
of the Restricted Shares on the date the forfeiture restrictions lapse over the
purchase price, if any, paid for such Restricted Shares will be taxed, on the
date such forfeiture restrictions lapse, as ordinary income subject to payroll
and withholding tax and tax reporting, as applicable. For this purpose, the term
“forfeiture restrictions” means the right of the Company to receive back any
unvested Restricted Shares upon termination of your employment with the Company
or any Related Entity.  You understand that you may elect under
Section 83(b) of the Code (an “83(b) Election”) to be taxed at the time the
Restricted Shares are awarded, rather than when and as the Restricted Shares
cease to be subject to the forfeiture restrictions.  An 83(b)
Election  must be filed with the Internal Revenue Service within 30 days from the
Date of Award as set forth above in the Notice.

    


    Participant
understands that (a) he or she will not be entitled to a deduction for any
ordinary income previously recognized as a result of the 83(b) Election if the
Restricted Shares are subsequently forfeited to the Company and (b) the
83(b) Election may cause Participant to recognize more ordinary income than he
or she would have otherwise recognized if the value of the Restricted Shares
subsequently declines.

    


    THE FORM
FOR MAKING AN 83(b) ELECTION MAY BE OBTAINED FROM THE INTERNAL REVENUE SERVICE
OR A TAX PROFESSIONAL.  YOU UNDERSTAND THAT FAILURE TO FILE SUCH AN
ELECTION WITHIN THE 30-DAY PERIOD MAY RESULT IN THE RECOGNITION OF ORDINARY
INCOME BY YOU AS THE FORFEITURE RESTRICTIONS LAPSE.  You further
understand that an additional copy of such election form should be filed with
your federal income tax return for the calendar year in which the date of this
Award falls. You acknowledge that the foregoing is only a summary of the federal
income tax laws that apply to the purchase of the Restricted Shares under this
Award and does not purport to be complete.


    
      
         


      

      
        11

        
          

        

      

      
         


      

    


    


    


    YOU
FURTHER ACKNOWLEDGE THAT THE COMPANY HAS DIRECTED YOU TO SEEK INDEPENDENT ADVICE
REGARDING THE APPLICABLE PROVISIONS OF THE CODE AND THE INCOME TAX LAWS OF ANY
MUNICIPALITY OR STATE IN WHICH YOU MAY RESIDE.

    


    You agree
to deliver to the Company a copy of the 83(b) Election if you choose to make
such an election.

    


    INDEPENDENT
TAX ADVICE.  Participant acknowledges that determining the actual tax
consequences of receiving or disposing of the Restricted Shares may be
complicated. These tax consequences will depend, in part, on Participant’s
specific situation and may also depend on the resolution of currently uncertain
tax law and other variables not within the control of the Company. Participant
is aware that he or she should consult a competent and independent tax advisor
for a full understanding of the specific tax consequences of receiving or
disposing of the Restricted Shares. Prior to executing this Award, Participant
has either consulted with a competent tax advisor independent of the Company or
Related Entity to obtain tax advice concerning the Restricted Shares in light of
Participant’s specific situation or has had the opportunity to consult with such
a tax advisor but chose not to do so.

    


    6.           No Effect on Employment or
Service.  The Participant’s employment with the Company or any
Related Entity is on an at-will basis only, subject to the provisions of
applicable law. Accordingly, subject to any written, express employment contract
with the Participant, nothing in this Agreement or the Plan shall confer upon
the Participant any right to continue to be employed by the Company or any
Related Entity or shall interfere with, or restrict in any way, the rights of
the Company or the employing Related Entity, which are hereby expressly
reserved, to terminate the employment of the Participant at any time for any
reason whatsoever, with or without good cause.  Such reservation of
rights can be modified only in an express written contract executed by a duly
authorized officer of the Company or Related Entity employing the
Participant.

    


    7.           Address for
Notices.  Any notice to be given to the Company under the terms
of this Agreement shall be addressed to the Company, in care of Earl R. Wait,
Vice President -- Accounting at the Company’s headquarters, 508 West Wall
Street, Suite 550, Midland, Texas 79701, or at such other address as the
Company may hereafter designate in writing.

         

    8.           Award is Not
Transferable.  This grant and the rights and privileges
conferred hereby shall not be transferred, assigned, pledged or hypothecated in
any way (whether by operation of law or otherwise) and shall not be subject to
sale under execution, attachment or similar process.  Upon any attempt
to transfer, assign, pledge, hypothecate or otherwise dispose of this grant, or
of any right or privilege conferred hereby, or upon any attempted sale under any
execution, attachment or similar process, this grant and the rights and
privileges conferred hereby immediately shall become null and void.

    


    9.           Restrictions on Sale of
Securities.  The Restricted Shares awarded under this Agreement
will be registered under the federal securities laws and will be freely tradable
upon receipt unless the Participant is an “affiliate” under rules of the
Securities and Exchange Commission (“SEC”), in which case the shares will be
subject to the volume and manner of sale provisions of Rule 144 of the
SEC.  However, the Participant’s subsequent sale of the shares
received upon the vesting of Restricted Stock will be subject to any market
blackout-period that may be imposed by the Company and must comply with the
Company’s insider trading policies and any other applicable securities
laws.

    


    10.         Binding
Agreement.  This Agreement shall be binding upon and inure to
the benefit of the heirs, legatees, legal representatives, successors and
assigns of the parties hereto.

    


    11.         Conditions for Issuance of
Stock.  The Company shall not be required to transfer on its
books or list in street name with a brokerage company or otherwise issue any
certificate or certificates for Restricted Shares hereunder prior to fulfillment
of all the following conditions: (a) the admission of such Restricted
Shares to listing on all stock exchanges on which such class of stock is then
listed; and (b) the completion of any registration or other qualification
of such Restricted Shares under any state or federal law or under the rulings or
regulations of the

     

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

     

    Securities
and Exchange Commission or any other governmental regulatory body, which the
Committee shall, in its absolute discretion, deem necessary or advisable; and
(c) the obtaining of any approval or other clearance from any state or
federal governmental agency, which the Committee shall, in its absolute
discretion, determine to be necessary or advisable.

    


    12.         Plan
Governs.  This Agreement is subject to all terms and provisions
of the Plan.  In the event of a conflict between one or more
provisions of this Agreement and one or more provisions of the Plan, the
provisions of the Plan shall govern. Capitalized terms used and not defined in
this Agreement shall have the meaning set forth in the Plan.

    


    13.         Committee
Authority.  The Committee shall have the power to interpret the
Plan and this Agreement and to adopt such rules for the administration,
interpretation and application of the Plan as are consistent therewith and to
interpret or revoke any such rules (including, but not limited to, the
determination of whether or not any shares of Restricted Stock have
vested.)  All actions taken and all interpretations and determinations
made by the Committee shall be final and binding upon the Participant, the
Company and all other persons, and shall be given the maximum deference
permitted by law.  No member of the Committee shall be personally
liable for any action, determination or interpretation made in good faith with
respect to the Plan or this Agreement.

    


    14.         Captions.  Captions
provided herein are for convenience only and are not to serve as a basis for
interpretation or construction of this Agreement.

    


    15.         Agreement
Severable.  In the event that any provision in this Agreement
shall be held invalid or unenforceable, such provision shall be severable from,
and such invalidity or unenforceability shall not be construed to have any
effect on, the remaining provisions of this Agreement.

    


    16.        
Entire
Agreement.  This Agreement and the Plan constitutes the entire
understanding of the parties on the subjects covered.  The Participant
expressly warrants that he or she is not executing this Agreement in reliance on
any promises, representations or inducements other than those contained herein
and in the Plan.

    


    17.        
Modifications to the
Agreement.  This Agreement and the Plan constitute the entire
understanding of the parties on the subjects covered.  The Participant
expressly warrants that he or she is not accepting this Agreement in reliance on
any promises, representations or inducements other than those contained herein
and the Plan.  Modifications to this Agreement can be made only in an
express written contract executed by the Participant and a duly authorized
officer of the Company.

    


    18.        
Amendment, Suspension
or Termination of the Plan. By accepting this award, the Participant
expressly warrants that he or she has received an award under the Plan, and has
received, read and understood a description of the Plan. The Participant
understands that the Plan is discretionary in nature and may be modified,
suspended or terminated by the Company at any time.

    


    19.        
Governing
Law.  This award of Restricted Stock shall be governed by, and
construed in accordance with, the laws of the State of Colorado, without regard
to its conflict of law provisions.

     


    
      
         


      

      
        13

        
          

        

      

      
         


      

    

     

     

    IN
WITNESS WHEREOF, the Company and the Participant have executed this Agreement,
and agree that the Award is to be governed by the terms and conditions of this
Agreement and the Plan.

    
      	 
      	
              Natural
      Gas Services Group, Inc.,

              a
      Colorado corporation

            
	 
      	 
      
	 
      	
              By:
      _______________________________

            
	 
      	 
      
	 
      	
              Title:
      ______________________________

            


    

    


     THE
PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE SHARES SHALL VEST, IF AT ALL, ONLY
DURING THE PERIOD OF THE PARTICIPANT’S CONTINUOUS SERVICE (NOT THROUGH THE ACT
OF BEING GRANTED THIS AWARD OR ACQUIRING SHARES HEREUNDER).  THE
PARTICIPANT FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS NOTICE, THE
AGREEMENT NOR THE PLAN SHALL CONFER UPON THE PARTICIPANT ANY RIGHT WITH RESPECT
TO CONTINUATION OF THE PARTICIPANT’S CONTINUOUS SERVICE.

     

    Participant
Acknowledges and Agrees:

     

    The
Participant acknowledges receipt of a copy of the Plan and represents that he or
she is familiar with the terms and provisions thereof, and hereby accepts the
Award subject to all of the terms and provisions hereof and
thereof.  The Participant has reviewed this Agreement and the
Plan in their entirety, has had an opportunity to obtain the advice of counsel
prior to executing this Agreement and fully understands all provisions of this
Agreement and the Plan.  

     

    The
Participant further acknowledges that, from time to time, the Company may be in
a “blackout period” and/or subject to applicable federal securities laws that
could subject the Participant to liability for engaging in any transaction
involving the sale of the Company’s vested Restricted Shares.  The
Participant further acknowledges and agrees that, prior to the sale of any
vested Restricted Shares acquired under this Award, it is the Participant’s
responsibility to determine whether or not such sale of such shares will subject
the Participant to liability under insider trading rules or other applicable
federal securities laws.

     

    By
signing below (or by providing an electronic signature) and accepting the grant
of the Award, the Participant: (i) consents to access electronic copies (instead
of receiving paper copies) of this Notice, the Agreement, the Plan and the Plan
prospectus (collectively, the “Plan Documents”) via the Company’s intranet; (ii)
represents that the Participant has access to the Company’s intranet; (iii)
acknowledges receipt of electronic copies, or that the Participant is already in
possession of paper copies of the Plan Documents; and (iv) acknowledges that the
Participant is familiar with and accepts the Award subject to the terms and
provisions of the Plan Documents.

     

    The Participant hereby agrees that all questions of interpretation
and administration relating to this Agreement and the Plan shall be resolved by
the Committee (acting as the Administrator under the Plan) in accordance with
Section 13 of the Agreement.  The Participant further agrees to the
arbitration and venue selection provisions in Section 17 of the
Plan.  The Participant further agrees to notify the Company upon any
change in his or her residence address indicated in this Agreement.

     

    
      	
              Date:

            	 
      	 
      	 
      
	 
      	
              Participant’s
      Signature

            
	 
      	 
      
	 
      	 
      
	 
      	
              Participant’
      Printed Name

            
	 
      	 
      
	 
      	 
      
	 
      	
              Address

            
	 
      	 
      
	 
      	 
      
	 
      	
              City,
      State & Zip

            


    

     

    

      
        
           


        

        
          14

          
            

          

        

        
           


        

      



    


    


    2009
RESTRICTED STOCK/UNIT PLAN

    RESTRICTED
STOCK UNIT AGREEMENT

    


    NOTICE OF AWARD OF
RESTRICTED STOCK UNITS

    


    


    Award # RSU-                    

     

    
      	
              Participant’s
      Name and Address:

            	 
      
	 
      	 
      
	 
      	 
      


    

    


    


    Natural
Gas Services Group, Inc. (the “Company”) hereby grants you,
                                        
(the “Participant”), the number of restricted stock units indicated below (the
“Restricted Stock Units”) under the Company’s 2009 Restricted Stock/Unit Plan
(the “Plan”). The date of this Agreement is                                        (the
“Grant Date”). Subject to the provisions of this Agreement and of the Plan, the
principal features of this Restricted Stock Unit award are as
follows:

    


    Target Number of Restricted
Stock Units:

    


    _________.

    


    Vesting
Schedule:

    


    Thirty-three
percent (33%) of the Restricted Stock Units shall vest on each of the first
three anniversaries of the date hereof (each a “Vesting Date” and collectively,
the “Vesting Dates”), subject to Participant’s Continued Service through each
such date and the terms of this Agreement and the Plan.

    


    Your signature below indicates your
agreement and understanding that this Award is subject to all of the terms and
conditions contained in the Plan and this Restricted Stock Unit Agreement (the
“Agreement”), which includes this Notice of Award of Restricted Stock Units and
the Terms and Conditions of Restricted Stock Units Award.  PLEASE BE SURE TO READ ALL OF THIS
AGREEMENT AND THE PLAN, WHICH CONTAINS THE SPECIFIC TERMS AND CONDITIONS OF THIS
RESTRICTED STOCK UNIT AWARD.


    
      
         


      

      
        15

        
          

        

      

      
         


      

    


    Award
Number: RSU-__________

    


    


    NATURAL
GAS SERVICES GROUP, INC.

    2009
RESTRICTED STOCK/UNIT PLAN

    


     

    AGREEMENT

    TERMS
AND CONDITIONS OF RESTRICTED STOCK UNITS AWARD

    


    1. Award or Restricted Stock
Units.  Natural Gas Services Group, Inc., a Colorado
corporation (the “Company”), hereby issues to the Participant under the Natural
Gas Services Group, Inc. 2009 Restricted Stock/Unit Plan, as amended from time
to time (the “Plan”), an award (the “Award”) of the number of restricted stock
units (the “Restricted Stock Units”) set forth in this Restricted Stock Unit
Agreement (the “Agreement”), which consists of the attached Notice of Award of
Restricted Stock Units (the “Notice”) and these Terms and Conditions of
Restricted Stock Award.  Unless otherwise provided herein, the terms
in this Agreement shall have the same meaning as those defined in the
Plan.

    


    2. Company’s Obligation to
Pay.  Each Restricted Stock Unit represents one (1) share of
the Company’s Common Stock (a “Share”).  Upon the vesting of each
Restricted Stock Unit, the Company will issue to the Participant one Share to
the Participant.  Unless and until the vesting of the Restricted Stock
Units as set forth in paragraph 3, below, the Participant shall have no right to
the issuance of any Share underlying the unvested Restricted Stock
Unit.  Prior to the vesting of the Restricted Stock Units and the
issuance of the Shares for vested Restricted Stock Units, the Restricted Stock
Unit will represent an unfunded and unsecured obligation of the
Company.

    


    3. Vesting
Schedule.  Except as otherwise provided in this Agreement or in
the Plan, the Restricted Stock Units awarded by this Agreement are scheduled to
vest in accordance with the Vesting Schedule set forth in the
Notice.  Restricted Stock Units scheduled to vest on a Vesting Date
will vest only if the Participant remains in Continued Service through the
Vesting Date.  Should the Participant’s Continued Service end at any
time (the “Termination Date”), any unvested Restricted Stock Units will be
immediately cancelled;
provided, however, that if termination of Continued Service results from
the Participant’s death, Disability or Retirement, then any unvested Restricted
Stock Units that would have vested by their terms within twelve (12) months
from the Termination Date had the Participant remained in Continued Service will
be deemed vested on the Termination Date (the “Acceleration”).

    


    4. Share Issuances after
Vesting of RSUs.

    


    (a)           Upon
the vesting of Restricted Stock Units, the Shares underlying such vested
Restricted Stock Units shall be issued to the Participant (or, in the event of
the Participant’s death, to his or her estate) as soon as practicable following
the Vesting Date, subject to the provisions of paragraph 7, below, but in no
event later than two (2) months and fifteen (15) days after the Vesting
Date.

    


    (b)           If,
in connection with an Acceleration of the vesting of Restricted Stock Units as
set forth in section 3 above, the Shares underlying vested Restricted Stock
Units are inadvertently not issued within the two and one-half months period
specified in section 4(a) above and the Participant
is a Specified Employee on the Termination Date, then any Shares to be issued to
the Participant as a result of the Acceleration shall not be issued to the
Participant until six (6) months and one (1) day following the Termination Date
(the “Cooling Period”), unless, (i) the Participant’s Continuous Service be
terminated as a result of the Participant’s death or (ii) if the Participant
dies during the Cooling Period, then the Shares to be issued to the Participant
as a result of the Acceleration shall be issued to the Participant’s Estate no
later than two (2) months and fifteen (15) days after the date of the
Participant’s death, subject to paragraph 7, below.


    
      
         


      

      
        16

        
          

        

      

      
         


      

    


    


    


    5.   Forfeiture.  Notwithstanding
any contrary provision of this Agreement, the balance of the Restricted Stock
Units that have not vested pursuant to paragraph 3 as of the Termination Date
will be forfeited and automatically transferred to and reacquired by the Company
at no cost to the Company. The Participant shall not be entitled to a refund of
any amounts paid for such forfeited Restricted Stock Units.

     

           
6.  
Death of
Participant.  Any distribution or delivery to be made to the
Participant under this Agreement will, if the Participant is then deceased, be
made to the administrator or executor of the Participant’s estate (or such other
person to whom the Restricted Stock Units are transferred pursuant to the
Participant’s will or in accordance with the laws of descent and distribution).
Any such transferee must furnish the Company (a) written notice of his or
her status as a transferee, (b) evidence satisfactory to the Company to
establish the validity of the transfer of these Restricted Stock Units and
compliance with any laws or regulations pertaining to such transfer, and
(c) written acceptance of the terms and conditions of this Restricted Stock
Unit grant as set forth in this Agreement.

     

        7. Taxes

     

    (a)           Tax
Liability.  The Participant is ultimately liable and
responsible for all taxes owed by the Participant in connection with the Award,
regardless of any action the Company or any Related Entity takes with respect to
any tax withholding obligations that arise in connection with the
Award.  Neither the Company nor any Related Entity makes any
representation or undertaking regarding the treatment of any tax withholding in
connection with the grant or vesting of the Award or the subsequent sale of
Shares issuable pursuant to the Award.  The Company does not commit
and is under no obligation to structure the Award to reduce or eliminate the
Participant’s tax liability.

     

    (b)           Payment of Withholding
Taxes.   No stock certificates will be released to the
Participant unless the Participant has made acceptable arrangements to pay any
withholding taxes that may be due as a result of this award or the vesting of
Restricted Stock Units.  The Company, in its sole discretion and
pursuant to such procedures as it may specify from time to time, may permit you
to satisfy such tax withholding obligation, in whole or in part (without
limitation) by (i) paying cash, (ii) electing to have the Company withhold
otherwise then deliverable vested shares of Restricted Stock Units having a fair
market value equal to the minimum amount required to be withheld, and
(iii) delivering to the Company of vested and owned shares of our common
stock having a fair market value equal to the amount required to be withheld or
(iv) through any other lawful manner.

    


      
(c)           Indemnification;
Offset.  The Participant agrees to indemnify and hold the
Company harmless from any losses, costs, damages, or expenses relating to
inadequate withholding.  Accordingly, the Participant agrees to pay to
the Company or any Related Entity as soon as practicable, including through
additional payroll withholding, any amount of the tax withholding obligation
that is not satisfied by the withholding methods described
above.  Notwithstanding the foregoing, the Company or a Related Entity
also may satisfy any tax withholding obligation by offsetting any amounts
(including, but not limited to, salary, bonus, and severance payments) payable
to the Participant by the Company and/or a Related Entity.

    


    8.   Rights as
Stockholder.  The Participant shall not have any of the rights
or privileges of a stockholder of the Company in respect of any Shares
deliverable upon the vesting of Restricted Stock Units hereunder unless and
until certificates representing such Shares (which may be in book entry form)
shall have been issued, recorded on the records of the Company or its transfer
agents or registrars, and delivered to the Participant (including through
electronic delivery to a brokerage account).  After such issuance,
recordation and delivery, the Participant will have all the rights of a
stockholder of the Company with respect to voting such Shares and receipt of
dividends and distributions on such Shares.

    


    9.   No Effect on Employment or
Service.  The Participant’s employment with the Company and any
Related Entity is on an at-will basis only, subject to the provisions of
applicable law. Accordingly, subject to any written, express employment contract
with the Participant, nothing in this Agreement or the Plan shall confer upon
the Participant any right to continue to be employed by the Company or Related
Entity or shall interfere with or restrict in any way the rights of the Company
or the employing Related Entity, which are hereby expressly reserved, to
terminate the employment of the Participant at any time for any reason
whatsoever, with or without good cause.  

     

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

     

    Such
reservation of rights can be modified only in an express written contract
executed by a duly authorized officer of the Company or Related Entity employing
the Participant.

    


    10.   Address for
Notices.  Any notice to be given to the Company under the terms
of this Agreement shall be addressed to the Company, in care of Earl R. Wait,
Vice President -- Accounting at the Company’s headquarters, 508 West Wall
Street, Suite 550, Midland, Texas 79701, or at such other address as the
Company may hereafter designate in writing.

    


    11.   Award is Not
Transferable.  This Award and the rights and privileges
conferred hereby shall not be transferred, assigned, pledged or hypothecated in
any way (whether by operation of law or otherwise) and shall not be subject to
sale under execution, attachment or similar process.  Upon any attempt
to transfer, assign, pledge, hypothecate or otherwise dispose of this grant, or
of any right or privilege conferred hereby, or upon any attempted sale under any
execution, attachment or similar process, this Award and the rights and
privileges conferred hereby immediately shall become null and void.

    


    12.   Restrictions on Sale of
Securities.  The Shares issued as payment for vested Restricted
Stock Units awarded under this Agreement will be registered under the federal
securities laws and will be freely tradable upon receipt. However, the
Participant’s subsequent sale of the Shares will be subject to any market
blackout-period that may be imposed by the Company and must comply with the
Company’s insider trading policies, and any other applicable securities
laws.

    


    13.   Binding
Agreement.  This Agreement shall be binding upon and inure to
the benefit of the heirs, legatees, legal representatives, successors and
assigns of the parties hereto.

    


    14.   Conditions for Issuance of
Stock.  The shares of stock deliverable to the Participant may
be either previously authorized but unissued shares or issued shares which have
been reacquired by the Company.  The Company shall not be required to
transfer on its books or list in street name with a brokerage company or
otherwise issue any certificate or certificates for Shares hereunder prior to
fulfillment of all the following conditions: (a) the admission of such
Shares to listing on all stock exchanges on which such class of stock is then
listed; and (b) the completion of any registration or other qualification
of such Shares under any state or federal law or under the rulings or
regulations of the Securities and Exchange Commission or any other governmental
regulatory body, which the Committee shall, in its absolute discretion, deem
necessary or advisable; and (c) the obtaining of any approval or other
clearance from any state or federal governmental agency, which the Committee
shall, in its absolute discretion, determine to be necessary or advisable; and
(d) the lapse of such reasonable period of time following the date of
vesting of the Restricted Stock Units as the Committee may establish from time
to time for reasons of administrative convenience.

    


    15.   Plan
Governs.  This Agreement is subject to all terms and provisions
of the Plan.  In the event of a conflict between one or more
provisions of this Agreement and one or more provisions of the Plan, the
provisions of the Plan shall govern. Capitalized terms used and not defined in
this Agreement shall have the meaning set forth in the Plan.

    


    16.   Committee
Authority.  The Committee shall have the power to interpret the
Plan and this Agreement and to adopt such rules for the administration,
interpretation and application of the Plan as are consistent therewith and to
interpret or revoke any such rules (including, but not limited to, the
determination of whether or not any Restricted Stock Units have
vested.  All actions taken and all interpretations and determinations
made by the Committee shall be final and binding upon the Participant, the
Company and all other persons, and shall be given the maximum deference
permitted by law.  No member of the Committee shall be personally
liable for any action, determination or interpretation made in good faith with
respect to the Plan or this Agreement.

    


    17.   Captions.  Captions
provided herein are for convenience only and are not to serve as a basis for
interpretation or construction of this Agreement.

    


    18.   Agreement
Severable.  In the event that any provision in this Agreement
shall be held invalid or unenforceable, such provision shall be severable from,
and such invalidity or unenforceability shall not be construed to have any
effect on, the remaining provisions of this Agreement.


    
      
         


      

      
        18

        
          

        

      

      
         


      

    


    


    


    19.   Entire
Agreement.  This Agreement constitutes the entire understanding
of the parties on the subjects covered.  The Participant expressly
warrants that he or she is not executing this Agreement in reliance on any
promises, representations or inducements other than those contained herein and
in the Plan.

    


    20.   Modifications to the
Agreement.   This Agreement and the Plan constitute the
entire understanding of the parties on the subjects covered.  The
Participant expressly warrants that he or she is not accepting this Agreement in
reliance on any promises, representations or inducements other than those
contained herein and the Plan.  Modifications to this Agreement can be
made only in an express written contract executed by the Participant and a duly
authorized officer of the Company.

    


    21.   Amendment, Suspension or
Termination of the Plan. By accepting this award, the Participant
expressly warrants that he or she has received an award under the Plan, and has
received, read and understood a description of the Plan. The Participant
understands that the Plan is discretionary in nature and may be modified,
suspended or terminated by the Company at any time.

    


    22.   Governing
Law.  This grant of Restricted Stock Units shall be governed
by, and construed in accordance with, the laws of the State of Colorado, without
regard to its conflict of law provisions.

     

     

    


    IN
WITNESS WHEREOF, the Company and the Participant have executed this Agreement
and agree that the Award is to be governed by the terms and conditions of this
Agreement and the Plan.

    


    


    
      	 
      	
              Natural
      Gas Services Group, Inc.,

              a
      Colorado corporation

            
	 
      	 
      
	 
      	
              By:

            	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
              Title:

            	 
      	 
      


    


    
      
         


      

      
        19

        
          

        

      

      
         


      

    


    THE
PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE SHARES SHALL VEST, IF AT ALL, ONLY
DURING THE PERIOD OF THE PARTICIPANT’S CONTINUOUS SERVICE (NOT THROUGH THE ACT
OF BEING GRANTED THIS AWARD OR ACQUIRING SHARES HEREUNDER).  THE
PARTICIPANT FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS NOTICE, THE
AGREEMENT NOR THE PLAN SHALL CONFER UPON THE PARTICIPANT ANY RIGHT WITH RESPECT
TO CONTINUATION OF THE PARTICIPANT’S CONTINUOUS SERVICE.

     

    Participant
Acknowledges and Agrees:

     

    The
Participant acknowledges receipt of a copy of the Plan and the Agreement and
represents that he or she is familiar with the terms and provisions thereof, and
hereby accepts the Award subject to all of the terms and provisions hereof and
thereof.  The Participant has reviewed this Notice, the
Agreement and the Plan in their entirety, has had an opportunity to obtain
the advice of counsel prior to executing this Notice and fully understands all
provisions of this Notice, the Agreement and the Plan.  

     

    The
Participant further acknowledges that, from time to time, the Company may be in
a “blackout period” and/or subject to applicable federal securities laws that
could subject the Participant to liability for engaging in any transaction
involving the sale of the Company’s Shares.  The Participant further
acknowledges and agrees that, prior to the sale of any Shares acquired under
this Award, it is the Participant’s responsibility to determine whether or not
such sale of Shares will subject the Participant to liability under insider
trading rules or other applicable federal securities laws.

     

    By
signing below (or by providing an electronic signature) and accepting the grant
of the Award, the Participant: (i) consents to access electronic copies (instead
of receiving paper copies) of this Notice, the Agreement, the Plan and the Plan
prospectus (collectively, the “Plan Documents”) via the Company’s intranet; (ii)
represents that the Participant has access to the Company’s intranet; (iii)
acknowledges receipt of electronic copies, or that the Participant is already in
possession of paper copies of the Plan Documents; and (iv) acknowledges that the
Participant is familiar with and accepts the Award subject to the terms and
provisions of the Plan Documents.

     

    The
Participant hereby agrees that all questions of interpretation and
administration relating to this Agreement and the Plan shall be resolved by the
Committee (acting as the Administrator under the Plan) in accordance with
Section 16 of the Agreement.  The Participant further agrees to the
arbitration and venue selection provisions in Section 17 of the
Plan.  The Participant further agrees to notify the Company upon any
change in his or her residence address indicated in this Notice.

    


    
      	
              Date:

            	 
      	 
      	 
      
	 
      	
              Participant’s
      Signature

            
	 
      	 
      
	 
      	 
      
	 
      	
              Participant’
      Printed Name

            
	 
      	 
      
	 
      	 
      
	 
      	
              Address

            
	 
      	 
      
	 
      	 
      
	 
      	
              City,
      State & Zip

            


    

    



    
      
         


      

      
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