Document:

exv10w1

 

Exhibit 10.1

EXECUTIVE AGREEMENT

     This Executive Agreement (this “Agreement”) is made effective as of the Effective Date between
Complete Production Services, Inc., a Delaware corporation and its subsidiaries (collectively, the
“Company”) and                      (“Executive”).

WHEREAS, the Company currently employs Executive; and

WHEREAS, the Company believes it to be in the best interests of its stockholders to attract, retain
and motivate key officers and to ensure continuity of management, and that this will further those
interests; and

WHEREAS, the Company recognizes that the possibility of a Change of Control of the Company may
result in the departure of key executives to the detriment of the Company and its stockholders.

     In consideration of Executive’s continued employment as an executive officer with the Company
and for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and Executive agree as follows:

	1.	 	Term of Agreement

	 	A.	 	This Agreement shall be for an initial term that continues in effect, through
the second anniversary of the Effective Date. The term of this Agreement shall
automatically be extended for one or more additional terms of one (1) year, as of each
anniversary date of the Effective Date that occurs while this Agreement is in effect.
The term of Agreement, however, may be terminated by written notice of termination of
this Agreement provided to Executive, and in the event any such termination notice is
delivered to Executive then, notwithstanding the preceding sentence concerning
automatic renewals, the term of this Agreement shall be deemed terminated effective as
of December 31 of the second full calendar year following the date on which such notice
of termination of the Agreement is delivered to Executive.
	 
	 	B.	 	Notwithstanding the foregoing, the term of this Agreement shall terminate upon
the expiration of the “Severance Payout Period” or the “Change of Control Payout
Period,” as applicable, subject to all rights and benefits hereunder having been paid
and satisfied in full.

	2.	 	Certain Definitions

	 	A.	 	“Bonus” “Bonus” shall mean the greater of (i) Target EV for the year
of the Date of Termination, or (iii) the highest annual bonus paid during any of the
three full fiscal years preceding the Date of Termination.
	 
	 	B.	 	“Cause” “Cause” shall mean:

 

 

	 	(i)	 	Executive’s conviction of a felony involving moral turpitude,
dishonesty or a breach of trust as regards the Company;
	 
	 	(ii)	 	Executive’s commission of any act of theft, fraud, embezzlement
or misappropriation against the Company that is materially injurious to it
regardless of whether a criminal conviction is obtained;
	 
	 	(iii)	 	Executive’s willful and continued failure to devote
substantially all of his business time to the Company’s business affairs
(excluding failures due to illness, incapacity, vacations, incidental civic
activities and incidental personal time), which failure is not remedied within
a reasonable time after written demand is delivered by the Company, which
demand specifically identifies the manner in which the Company believes that
Executive has failed to devote substantially all of his business time to the
Company’s business affairs;
	 
	 	(iv)	 	Executive’s unauthorized disclosure of confidential information
of the Company that is materially injurious to the Company; or
	 
	 	(v)	 	Executive’s knowing or willful material violation of federal or
state securities laws, as determined in good faith by the Company’s Board of
Directors.

     For purposes of this definition, no act, or failure to act, on Executive’s part shall be
deemed “willful” unless done, or omitted to be done, by Executive not in good faith and without
reasonable belief that Executive’s action or omission was in the best interest of the Company.

	 	C.	 	“Change of Control” of the Company will occur for purposes of this
Agreement if:

	 	(i)	 	Any person or group of persons is or becomes the “beneficial
owner” (as defined in Rule 13d-3 under the Securities Exchange Act of 1934),
directly or indirectly, of securities in the Company representing 20% or more
of the combined voting power of the Company’s outstanding securities;
	 
	 	(ii)	 	A change in the majority of the membership of the Board
occurs without approval by two-thirds of the Directors who are Continuing
Directors. For these purposes, Continuing Directors are persons who (i) were
Directors on the Effective Date or (ii) are new Directors whose election was
approved by two-thirds of the members of the Board who were Directors on the
Effective Date (“Approved Directors”), or (iii) are new Directors whose
election was approved by two-thirds of the members of the Board who were
Directors on the Effective Date or are subsequently Approved Directors;

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	 	(iii)	 	The Company is merged, consolidated or combined with another
corporation or entity, including without limitation, a reverse or forward
triangular merger, and the Company’s stockholders prior to such transaction
own less than 55% of the outstanding voting securities of the surviving or
resulting corporation or entity after the transaction;
	 
	 	(iv)	 	A tender offer or exchange offer is made and consummated by a
person or group of persons other than the Company for the ownership of 20% or
more of the Company’s voting securities; or
	 
	 	(v)	 	There is a disposition, transfer, sale or exchange of all or
substantially all of the Company’s assets, or stockholder approval of a plan
of liquidation or dissolution of the Company.

	 	D.	 	“Change of Control Payout Period” shall mean the period of [two
(2)]1 [two and a half (2.5)]2 years following the Date of
Termination of Executive, which termination is covered by Section 5 hereof.
	 
	 	E.	 	“Date of Termination” shall mean the date specified in the Notice of
Termination relating to termination of Executive’s employment with the Company;
provided that such date shall not be less than 20 days nor more than 45 days following:
(i) involuntary termination, not for Cause, pursuant to Section 4 or 5 hereof, or (ii)
the date within the Protective Period that Executive voluntarily terminates his
employment for Good Reason so governed by Section 5 hereof, and provided further that
such termination qualifies as a “separation from service” within the meaning given to
it under Section 409A(a)(2)(A)(i) of the Internal Revenue Code of 1986, as amended (the
“Code”), and any Treasury Regulations or other guidance issued thereunder.
	 
	 	F.	 	“Effective Date” shall mean November 13, 2006.
	 
	 	G.	 	“Executive” shall mean the executive of the Company who is a party to
this Agreement and in the event of the Executive’s death after a “qualifying”
termination pursuant to Section 4 hereof or a Change of Control pursuant to Section 5
hereof, then the term “Executive” shall include his estate.
	 
	 	H.	 	“Good Reason” shall mean:

	 	(i)	 	a failure to re-elect or appoint the Executive to any corporate
office or directorship held at the time of the Change of Control or a material
reduction in Executive’s authority, duties or responsibilities (including
status, offices, titles and reporting requirements) or if Executive is assigned
duties or responsibilities inconsistent in any material respect

 

			
	1	 	For Messrs. Boyd, Burke, Weisgarber, Bayardo and Ms. Flato
	 
	2	 	For Messrs. Mayer, Maroney, Nibling, and Moore

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	 	 	 	from those of Executive at the time of the relevant Change of Control all on
the basis of which Executive makes a good faith determination that the terms
of his employment have been detrimentally and materially affected;
	 
	 	(ii)	 	a material reduction of Executive’s compensation, benefits or
perquisites, including annual base salary, annual bonus, intermediate or
long-term cash or equity incentive opportunities or plans from those in effect
prior to the Change of Control;
	 
	 	(iii)	 	the Company fails to obtain a written agreement satisfactory
to Executive from any successor or assigns of the Company to assume and perform
this Agreement as provided in Section 10 hereof; or
	 
	 	(v)	 	the Company requires Executive to be based at any office
located more than fifty (50) miles from the Company’s current offices without
Executive’s consent.

	 	I.	 	“Notice of Termination” shall mean a written notice delivered to the
other party indicating the specific termination provision in this Agreement relied upon
for termination of Executive’s employment and shall set forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination of Executive’s
employment under the provision so indicated. Any purported termination by either party
other than pursuant to a Notice of Termination shall not be effective. 
	 
	 	J.	 	“Option Plans” shall mean the Company’s stock option plans, incentive
plans, equity participation plans, or other similar plans, and any stock option
agreements or other equity award agreements used in connection therewith.
	 
	 	K.	 	“Protective Period” shall mean the period that commences six months
prior to and ends two years following the effective date of a Change of Control.
	 
	 	L.	 	“Severance Payout Period” shall mean the period of [sixteen (16)
months]3 [twenty (20) months]4 following the Date of Termination
of Executive, which termination is covered by Section 4 hereof.
	 
	 	M.	 	“Target EV” shall mean the amount payable to Executive, which is
expressed as a percentage of Executive’s Termination Base Salary, as a bonus or
incentive payment to Executive under the Company’s annual bonus or incentive program
presuming that the Company and individual performed at target under all applicable
performance criteria and objectives.
	 
	 	N.	 	“Termination Base Salary” shall mean Executive’s base salary at the
rate in effect at the time the Notice of Termination is given or, for purposes of a
Change of

 

			
	3	 	For Messrs. Boyd, Burke, Weisgarber, Bayardo
and Ms. Flato
	 
	4	 	For Messrs. Mayer, Maroney, Nibling, and
Moore

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	 	 	 	Control, if a greater amount, Executive’s base salary at the rate in effect
immediately prior to the Change of Control.

	3.	 	Termination for Cause. The Company may terminate Executive for Cause at any time, including
following a Change of Control, upon written notice to the Executive.
	 
	4.	 	Standard Severance Plan. If Executive is terminated involuntarily (i.e., without the consent of
Executive) by the Company for any reason other than for Cause (and such termination is not pursuant
to a Change of Control) the Executive shall receive the following compensation and benefits from
the Company:

	 	A.	 	The Company shall pay to Executive when otherwise due Executive’s Termination
Base Salary through the Date of Termination.
	 
	 	B.	 	Effective as of the Date of Termination, the Company shall pay to Executive
an amount equal to [1.33]5 [1.67]6 times the sum of Executive’s
Termination Base Salary plus Bonus, payable in a lump sum within thirty days following
such Date of Termination.
	 
	 	C.	 	Effective as of the Date of Termination and in consideration of service
through the Date of Termination, the Company shall pay to Executive a bonus for the
year in which the Date of Termination occurred in an amount determined in good faith
by the Company’s Board of Directors in accordance with the performance criteria
established under the Company’s incentive plan and the Company’s actual performance
relative to such criteria for such year though the Date of Termination, which amount,
however, shall not be less than Target EV, and shall be pro-rated through and
including the Date of Termination (on the basis of a 365 day year), payable in a lump
sum within thirty days following such Date of Termination.
	 
	 	D.	 	Notwithstanding any provisions to the contrary in any of the Option Plans,
(i) all outstanding unvested stock options of Executive shall be and become fully
vested and exercisable as to all shares of stock covered thereby, and (ii) all
outstanding shares of restricted stock, restricted stock units, performance shares and
performance units of Executive shall be and become 100% vested and all restrictions
thereon shall lapse, in each case as of the Date of Termination. 7
	 
	 	E.	 	For all options granted after the Effective Date, Executive (or in the event
of his death, his estate) shall be entitled to exercise his vested options until 12
months following the Date of Termination Notwithstanding the provisions of this
Section E, no option may be exercised at any time past the term of such option.

 

			
	5	 	For Messrs. Boyd, Burke, Weisgarber, Bayardo
and Ms. Flato
	 
	6	 	For Messrs. Mayer, Maroney, Nibling, and
Moore
	 
	7	 	For Messrs. Mayer, Maroney, Nibling, and
Moore

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	 	F.	 	The Company shall provide Executive with additional benefits described in
Section 6 hereof.

	5.	 	Change of Control Severance Plan. In the event that during the Protective Period either (a)
Executive voluntarily terminates employment for Good Reason or (b) the Company terminates
Executive’s employment other than for Cause, the Executive shall receive the following
compensation and benefits from the Company:

	 	A.	 	The Company shall pay to Executive when otherwise due Termination Base Salary
through the Date of Termination.
	 
	 	B.	 	Effective as of the Date of Termination, the Company shall pay to Executive an
amount equal to [two]8 [two and a half]9 times the sum of
Executive’s Termination Base Salary plus Bonus, payable in a lump sum within thirty
days following such Date of Termination.
	 
	 	C.	 	Effective as of the Date of Termination and in consideration of service through
the Date of Termination, the Company shall pay to Executive a bonus for the year in
which the Date of Termination occurred in an amount determined in good faith by the
Company’s Board of Directors in accordance with the performance criteria established
under the Company’s incentive plan and the Company’s performance relative to such
criteria for such year though the Date of Termination, which amount, however, shall not
be less than Target EV and shall be pro-rated through and including the Date of
Termination (on the basis of a 365 day year), payable in a lump sum within thirty days
following such Date of Termination.
	 
	 	D.	 	Effective as of the Date of Termination, the Company shall pay to executive an
amount equal to [two]10 [two and a half]11 times the amount the
Company would be required to contribute on Executive’s behalf under all qualified
pension, nonqualified pension, profit sharing, 401(k), deferred compensation and
supplemental plans based on Executive’s Termination Base Salary and the applicable
maximum Company contribution percentages in effect as of the Date of Termination,
payable in a lump sum within thirty days following such Date of Termination.
	 
	 	E.	 	Effective as of the Date of Termination, Executive shall become and be fully
vested in Executive’s accrued benefits under all qualified pension, nonqualified
pension, profit sharing, 401(k), deferred compensation and supplemental plans
maintained by the Company for Executive’s benefit, except to that the extent the
acceleration of vesting of such benefits would violate any applicable law or require
the Company to accelerate the vesting of the accrued benefits of all participants in
such plan or plans, in which case the Company shall pay Executive

 

			
	8	 	For Messrs. Boyd, Burke, Weisgarber, Bayardo
and Ms. Flato
	 
	9	 	For Messrs. Mayer, Maroney, Nibling, and
Moore
	 
	10	 	For Messrs. Boyd, Burke, Weisgarber,
Bayardo and Ms. Flato
	 
	11	 	For Messrs. Mayer, Maroney, Nibling, and
Moore

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	 	 	 	a lump sum payment, within 30 days following the Date of Termination, in an amount
equal to the present value of such unvested accrued benefits. In addition, if such
a lump sum payment is payable, the Company shall make an additional gross-up payment
to Executive in an amount such that the net amount of the lump sum payment and such
additional gross-up payment retained by Executive, after the calculation and
deduction of all federal, state and local income tax and employment tax (including
any interest or penalties imposed with respect to such taxes) on such lump sum
payment and additional gross-up payment, and taking into account any lost or reduced
tax deductions on account of such gross-up payment, shall be equal to such lump sum
payment. Such additional gross-up payment shall be made in a lump sum payment within
30 days following the Date of Termination.
	 
	 	F.	 	For all options granted after the Effective Date, Executive (or in the event of
his death, his estate) shall be entitled to exercise his vested options until 12 months
following the Date of Termination. Notwithstanding the provisions of this Section F,
no option may be exercised at any time past the term of such option.
	 
	 	G.	 	The Company shall provide Executive with additional benefits described in
Section 6 hereof.

	6.	 	Additional Benefits.

	 	A.	 	Health, Dental, Disability and Life Insurance and Benefits. Throughout
the term of the Severance Payout Period for a termination of Executive’s employment
covered by Section 4, or of the Change of Control Payout Period for a termination of
Executive’s employment covered by Section 5, the Company shall provide Executive and
Executive’s eligible family members, based on the cost sharing arrangement in effect
between Executive (or persons of similar position) and the Company on the Date of
Termination, with medical and dental health benefits and disability and life insurance
coverage and benefits at least equal to those in effect for Executive or persons of
similar position on the Date of Termination or, if more favorable to Executive, as in
effect generally at any time during such Severance Payout Period or Change of Control
Payout Period, as applicable. Notwithstanding the foregoing, if Executive becomes
re-employed and is eligible to receive medical, dental and disability benefits under
such successor employer’s plans, the Company’s obligations under this Section 6A shall
be reduced to the extent comparable benefits are actually received by Executive during
the Severance Payout Period or Change of Control Payout Period, as applicable, and any
such benefits actually received by Executive shall be promptly reported by Executive to
the Company. For the sake of clarity, Executive shall be entitled to all of the
insurance and benefits provided by this Section 6A, and such benefits shall not be
mitigated, in the event that as of the Date of Termination or at any time during the
Severance Payout Period or Change of Control Payout Period, as applicable, Executive is
receiving medical, dental, health, disability or life benefits or insurance through the
plans or obligations of a former employer.

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	 	 	 	In the event Executive is ineligible under the terms of the Company’s benefit plans
or programs to be so covered as required by this Section 6A, the Company shall
provide Executive with substantially equivalent coverage through other sources or
will provide Executive with a lump sum payment in such amount that, after all taxes
on that amount, shall be equal to the cost to Executive of providing Executive such
benefit coverage. The lump sum shall be determined on a present value basis using
the interest rate provided in Section 1274(b)(2)(B) of the Internal Revenue Code of
1986, as amended (the “Code”) on the Date of Termination. In addition, if such a
lump sum payment is payable, the Company shall make an additional gross-up payment
to Executive in an amount such that the net amount of the lump sums payment and such
additional gross-up payment retained by Executive, after the calculation and
deduction of all federal, state and local income tax and employment tax (including
any interest or penalties imposed with respect to such taxes) on such lump sum
payment and additional gross-up payment, and taking into account any lost or reduced
tax deductions on account of such gross-up payment, shall be equal to such lump sum
payment. Such additional gross-up payment shall be made in a lump sum payment
within 30 days following the Date of Termination.

	 	B.	 	Automobile Allowance. The Company shall provide Executive with a lump
sum payment, in lieu of an automobile allowance, equal to the monthly car allowance in
effect on the date of the Date of Termination, multiplied by the number of months
comprising the Severance Payout Period or Change of Control Payout Period, as
applicable. Such lump sum payment shall be made within 30 days following the Date of
Termination.

	7.	 	Accelerated Vesting of Certain Equity Awards Upon a Change of Control.
	 
	 	 	Notwithstanding any provisions to the contrary in any of the Option Plans, upon a Change of
Control (i) all outstanding unvested stock options of Executive shall be and become fully
vested and exercisable as to all shares of stock covered thereby, and (ii) all outstanding
shares of restricted stock, restricted stock units, performance shares and performance units
of Executive shall be and become 100% vested and all restrictions thereon shall lapse, in
each case as of the Change of Control.
	 
	8.	 	Excise Taxes and Gross-Up Payments.12

	 	A.	 	If any payment or benefit received or to be received by Executive in connection
with a change in control of the Company or termination of Executive’s employment
(whether payable pursuant to the terms of this Agreement, a stock option plan or any
other plan or arrangement with the Company) (the “Total Payments”) will be subject to
the excise tax imposed by Section 4999 of the Code, (the “Excise Tax”), then Executive
shall be entitled to receive from the Company an additional payment (the “Gross-Up
Payment”) in an amount such

 

			
	12	 	For Messrs. Mayer, Maroney, Nibling, and
Moore.

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	 	 	 	that the net amount of the Total Payments and the Gross-Up Payment retained by
Executive after the calculation and deduction of all Excise Taxes (including any
interest or penalties imposed with respect to such taxes) on the Total Payments and
all federal, state and local income tax, employment tax and Excise Tax (including
any interest or penalties imposed with respect to such taxes) on the Gross-Up
Payments provided for in this Section 8, and taking into account any lost or reduced
tax deductions on account of the Gross-Up Payments, shall be equal to the Total
Payments.
	 
	 	B.	 	All determinations required to be made under this Section 8, including whether
and when the Gross-Up Payments are required and the amount of such Gross-Up Payments,
and the assumptions to be utilized in arriving at such determinations (consistent with
the provisions of the Section 8), shall be made by the Company’s independent certified
public accountants (the “Accountants”). The Accountants shall provide Executive and
the Company with detailed supporting calculations with respect to such Gross-Up
Payments within fifteen (15) business days of the receipt of notice from Executive or
the Company that Executive has received or will receive a Total Payments. In the event
that the Accountants are also serving as accountant or auditor for the individual,
entity or group effecting the Change of Control, Executive shall appoint another
nationally recognized public accounting firm to make the determinations required
hereunder (which accounting firm shall then be referred to as the Accountants
hereunder). All fees and expenses of the Accountants shall be borne solely by the
Company. All determinations by the Accountants shall be binding upon the Company and
Executive.
	 
	 	C.	 	For the purposes of determining whether any of the Total Payments will be
subject to the Excise Tax and the amount of such Excise Tax, such Total Payments will
be treated as “parachute payments” within the meaning of Section 280G of the Code, and
all “parachute payments” in excess of the “base amount” (as defined under Section
280G(b)(3) of the Code) shall be treated as subject to the Excise Tax, unless and
except to the extent that in the opinion of the Accountants such payment (in whole or
in part) either do not constitute “parachute payments” or represent reasonable
compensation for services actually rendered (within the meaning of Section 280G(b)(4)
of the Code) in excess of the “base amount” or such “parachute payments” are otherwise
not subject to such Excise Tax. For purposes of determining the amount of the Gross-Up
Payments, Executive shall be deemed to pay federal income taxes at the highest
applicable marginal rate of federal income taxation for the calendar year in which the
Gross-Up Payments are to be made and to pay any applicable state and local income taxes
at the highest applicable marginal rate of taxation for the calendar year in which the
Gross-Up Payments are to be made, net of the maximum reduction in federal income taxes
that could be obtained from the deduction of such state or local taxes if paid if such
year (determined without regard to limitations on deductions based upon the amount of
Executive’s adjusted gross income); and to have otherwise allowable deductions for
federal, state and local income tax

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	 	 	 	purposes at least equal to those disallowed because of the inclusion of the Gross-Up
Payments in Executive’s adjusted gross income.
	 
	 	D.	 	To the extent practicable, any Gross-Up Payments shall be paid by the Company
at the time Executive is entitled to receive the Total Payments and in no event will
any Gross-Up Payments be paid later than thirty (30) days after the receipt by
Executive of the Accountant’s determination. As a result of uncertainty in the
application of Section 4999 of the Code at the time of the initial determination by the
Accountants hereunder, it is possible that the Gross-Up Payments made will have been an
amount less than the Company should have paid pursuant to this Section 8 (the
“Underpayment”). In the event that the Company exhausts its remedies pursuant to
Section 8 and Executive is required to make a payment of any Excise Tax, the
Underpayment shall be promptly paid by the Company to or for Executive’s benefit.
	 
	 	E.	 	Executive shall notify the Company in writing of any claim by the Internal
Revenue Service that, if successful, would require the payment by the Company of the
Gross-Up Payments. Such notification shall be given as soon as practicable after
Executive is informed in writing of such claim and shall apprise the Company of the
nature of such claim and the date on which such claim is requested to be paid.
Executive shall not pay such claim prior to the expiration of the thirty (30) day
period following the date on which Executive gives such notice to the Company (or such
shorter period ending on the date that any payment of taxes, interest and/or penalties
with respect to such claim is due). If the Corporation notifies Executive in writing
prior to the expiration of such thirty (30) day period that it desires to contest such
claim, Executive shall:

	 	(i)	 	give the Company any information reasonably requested by the
Company relating to such claim
	 
	 	(ii)	 	take such action in connection with contesting such claim as
the Company shall reasonably request in writing from time to time, including,
without limitation, accepting legal representation with respect to such claim
by an attorney reasonably selected by the Company;
	 
	 	(iii)	 	cooperate with the Company in good faith in order to
effectively contest such claim; and
	 
	 	(iv)	 	permit the Company to participate in any proceedings relating
to such claims; provided, however, that the Company shall bear and pay directly
all costs and expenses (including additional interest and penalties) incurred
in connection with such contest and shall indemnify Executive for, advance
expenses to Executive for, defend Executive against and hold Executive harmless
from, on an after-tax basis, any Excise Tax or income tax (including interest
and penalties with respect thereto) imposed as a result of such representation
and payment of all related costs and

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	 		 	 expenses. Without limiting the foregoing provisions of this Section 8, the
Company shall control all proceedings taken in connection with such contest
and, at its sole option, may pursue or forego any and all administrative
appeals, proceedings, hearings and conferences with the taxing authority in
respect of such claim and may, at its sole option, either direct Executive
to pay the tax claimed and sue for a refund or contest the claim in any
permissible manner, and Executive agrees to prosecute such contest to a
determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs Executive to pay
such claim and sue for a refund, the Company shall advance the amount of
such payment to Executive, on an interest-free basis, and shall indemnify
Executive for, advance expenses to Executive for, defend Executive against
and hold Executive harmless from, on an after-tax basis, any Excise Tax or
income tax (including interest or penalties with respect thereto) imposed
with respect to such advance or with respect to any imputed income with
respect to such advance (including as a result of any forgiveness by the
Company of such advance); provided, further, that any extension of the
statute of limitations relating to the payment of taxes for the taxable year
of Executive with respect to which such contested amount is claimed to be
due is limited solely to such contested amount. Furthermore, the Company’s
control of the contest shall be limited to issues with respect to which a
Gross-Up Payments would be payable hereunder and Executive shall be entitled
to settle or contest, as the case may be, any other issue raised by the
Internal Revenue Service or any other taxing authority.

	 	F.	 	The Gross-Up Payments shall be paid to Executive during Executive’s
employment, or following the termination of Executive’s employment, as determined
under the foregoing provisions; provided, however, such benefits and payments shall
be paid not later than fifteenth day of the third month following the later of the
end of the taxable year of Executive in which Executive’s Date of Termination occurs,
or the end of the taxable year of the Company (or any successor thereto) in which
such Executive’s Date of Termination occurs.

	9.	 	Mitigation.
	 
	 	 	Executive shall not be required to mitigate the amount of any payment provided for in this
Agreement by seeking other employment or otherwise nor, except as provided in Section 6A,
shall the amount of any payment or benefit provided for in this Agreement be reduced by any
compensation earned or benefit received by Executive as the result of employment by another
employer or self-employment, by retirement benefits, by offset against any amount claimed to
be owed by Executive to the Company or otherwise.
	 
	10.	 	Successor Agreement.

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	 	 	The Company will require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or assets of the
Company to expressly assume this Agreement and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform if no succession
had taken place. All references herein to the Company shall include the Successor entity.
Failure of the successor entity to so assume shall constitute a breach of this Agreement and
entitle Executive to the benefits hereunder as if triggered by a termination not for good
cause.
	 
	11.	 	Indemnity.
	 
	 	 	In any situation where under applicable law the Company has the power to indemnify, advance
expenses to and defend Executive in respect of any judgements, fines, settlements, loss,
cost or expense (including attorneys fees) of any nature related to or arising out of
Executive’s activities as an agent, employee, officer or director of the Company or in any
other capacity on behalf of or at the request of the Company, then the Company shall
promptly on written request, indemnify Executive, advance expenses (including attorney’s
fees) to Executive and defend Executive to the fullest extent permitted by applicable law,
including but not limited to making such findings and determinations and taking any and all
such actions as the Company may, under applicable law, be permitted to have the discretion
to take so as to effectuate such indemnification, advancement or defense. Such agreement by
the Company shall not be deemed to impair any other obligation of the Company respecting
Executive’s indemnification or defense otherwise arising out of this or any other agreement
or promise of the Company under any statute.
	 
	12.	 	Notice.
	 
	 	 	For the purpose of this Agreement, notices and all other communications provided for in this
Agreement shall be in writing and delivered by United States certified or registered mail
(return receipt requested, postage prepaid) or by courier guaranteeing overnight delivery or
by hand delivery (with signed receipt required), addressed to the respective addresses set
forth below, and such notice or communication shall be deemed to have been duly given two
days after deposit in the mail, one day after deposit with such overnight carrier or upon
delivery with hand delivery. The addresses set forth below may be changed by a writing in
accordance herewith.

	 	 	 	 	 
	 

	 	The Company:
	 	Executive:
	 
	 	 	 	 
	 

	 	Complete Production Services, Inc.
	 	                                      
;  
	 

	 	11700 Old Katy Road, Suite 300
	 	                                      
;  
	 

	 	Houston, Texas 77079
	 	                                      
;  
	 

	 	Attn: Chief Executive Officer	 	 
	 

	 	with a copy to General Counsel	 	 

	13.	 	Dispute Resolution.

12

 

	 	 	If any dispute arises out of this Agreement, the “complaining party” shall give the “other
party” written notice of such dispute. The other party shall have ten (10) business days to
resolve the dispute to the complaining party’s satisfaction. If the dispute is not resolved
by the end of such period, the complaining party may by written notice (the “Notice”) demand
arbitration of the dispute as set out below, and each party hereto expressly agrees to
submit to, and be bound by, such arbitration.

	 	A.	 	The Company will, within ten (10) business days of the Notice, appoint a single
arbitrator. The arbitrator will set the rules and timing of the arbitration, but will
generally follow the rules of the American Arbitration Association and this Agreement
where same are applicable and shall provide for written fact findings.
	 
	 	B.	 	The arbitration hearing will in no event take place more than ninety (90) days
after the appointment of the arbitrator.
	 
	 	C.	 	The arbitration will take place in Houston, Texas unless otherwise unanimously
agreed to by the parties.
	 
	 	D.	 	The results of the arbitration and the decision of the arbitrators will be
final and binding on the parties and each party agrees and acknowledges that these
results shall be enforceable in a court of law.

	14.	 	Governing Law.
	 
	 	 	This Agreement will be governed by and construed in accordance with the internal substantive
laws, and not the choice of law rules, of the State of Texas.

	15.	 	Compliance With Internal Revenue Code Section 409A.

	 	A.	 	Notwithstanding anything herein to the contrary, all lump sum payments and
gross up payments to be made pursuant to this Agreement shall be paid not later than
the fifteenth day of the third month following the later of the end of the taxable year
of Executive in which Executive’s Date of Termination occurs, or the end of the taxable
year of the Company (or any successor thereto) in which such Date of Termination
occurs.
	 
	 	B.	 	This Agreement is not intended to provide for any deferral of compensation
subject to Code Section 409A and, accordingly, the benefits provided pursuant to this
Agreement are intended to be paid not later than the later of: (i) the fifteenth day
of the third month following Executive’s first taxable year in which such benefit is no
longer subject to a substantial risk of forfeiture, and (ii) the fifteenth day of the
third month following the first taxable year of the Company in which such benefit is no
longer subject to a substantial risk of forfeiture, as determined in accordance with
Code Section 409A and any Treasury Regulations and other

13

 

	 	 	 	guidance issued thereunder. The date determined under this subsection is referred
to as the “Short-Term Deferral Date.”
	 
	 	C.	 	Notwithstanding anything to the contrary herein, in the event that any benefits
provided pursuant to this Agreement are not actually or constructively received by the
Executive on or before the Short-Term Deferral Date, to the extent such benefit
constitutes a deferral of compensation subject to Code Section 409A, then: (i) subject
to clause (ii), such benefit shall be paid upon Executive’s separation from service
within the meaning of Section 409A(a)(2)(A)(i) of the Code, and any other Treasury
Regulations and other guidance thereunder (“Separation from Service”) with respect to
the Company and its affiliates, and (ii) if Executive is a “specified employee,” as
defined in Code Section 409A(a)(2)(B)(i), with respect to the Company and its
affiliates, such benefit shall be paid upon the date which is six months after the date
of Executive’s Separation from Service (or, if earlier, the date of Executive’s death).
In the event that any benefit provided for in this Agreement is subject to this
subsection, such benefit shall be paid on the sixtieth day following the payment date
determined under this subsection, and shall be made subject to the requirements of
Sections 4 and 5, as applicable.

	16.	 	Non-Disparage, Non-Compete and Non-Solicitation Covenants; General Release.

	 	A.	 	Non-Disparage. As an additional inducement for the Company to enter
into this Agreement, Executive agrees that Executive shall refrain throughout the
term of this Agreement, and throughout the Severance Payout Period or the Change of
Control Payout Period, as applicable, from publishing any oral or written statements
about Company, any of its affiliates or any of Company’s or such affiliates’
directors, officers, employees, consultants, agents or representatives that (a) are
slanderous, libelous or defamatory, (b) disclose private information about or
confidential information of Company, any of its affiliates or any of Company’s or any
such affiliates’ business affairs, directors, officers, employees, consultants,
agents or representatives, or (c) place Company, any of its affiliates, or any of
Company’s or any such affiliates’ directors, officers, employees, consultants, agents
or representatives in a false light before the public. A violation or threatened
violation of this prohibition may be enjoined by the courts. The rights afforded
Company and its affiliates under this provision are in addition to any and all rights
and remedies otherwise afforded by law.
	 
	 	B.	 	Non-Solicitation. As an additional inducement for the Company to
enter into this Agreement, Executive agrees that throughout the Severance Payout
Period or the Change of Control Payout Period, as applicable, Executive shall not,
directly or indirectly knowingly induce any person in the employment of the Company
to (A) terminate such employment, or (B) accept employment, or enter into any
consulting arrangement, with anyone other than the Company.

14

 

	 	C.	 	Non-Competition. As an inducement for the Company to enter into
this Agreement, Executive agrees throughout the Severance Payout Period or the Change
of Control Payout Period, as applicable, Executive shall not, anywhere in the world,
directly or indirectly (i) engage without the prior express written consent of the
Company, in any business or activity, whether as an employee, consultant, partner,
principal, agent, representative, stockholder (except as a holder of less than 2% of
the combined voting power of the outstanding stock of a publicly held company) or in
any other individual, corporate or representative capacity, or render any services or
provide any advice to any business, activity, person or entity, if Executive knows or
reasonably should know that such business, activity, service, person or entity,
directly or indirectly, competes in any material manner with the Business, or (ii)
meaningfully assist, help or otherwise support, without the prior express written
consent of the Company, any person, business, corporation, partnership or other
entity or activity, whether as an employee, consultant, partner, principal, agent,
representative, stockholder (other than in the capacity as a stockholder of less than
2% of the combined voting power of the outstanding shares of stock of a publicly held
company) or in any other individual, corporate or representative capacity, to create,
commence or otherwise initiate, or to develop, enhance or otherwise further, any
business or activity if Executive knows or reasonably should know that such business
or activity, directly or indirectly competes in any material manner with the
Business. For purposes of this Section 16(C), the term “Business” shall refer to the
business of the Company as presently conducted or as conducted on the Date of
Termination.
	 
	 	D.	 	General Release. As an additional inducement for the Company to
enter into this Agreement, and as a condition to payment and provision of benefits
under this Agreement to Executive or Executive’s estate, Executive agrees that
Executive (or Executive’s trust or estate, as applicable) shall execute and deliver
and not revoke within any revocation period required by law, a general release of
claims in favor of the Company and its employees, directors, agents and affiliates in
a form acceptable to the Company in its sole and absolute discretion.
	 
	 	E.	 	Reasonable Restrictions. Executive acknowledges that these
restrictions shall not prevent or unduly restrict Executive from practicing his
profession, or cause him economic hardship. Executive represents that he (i) is
familiar with the foregoing covenants not to compete and not to solicit, and (ii) is
fully aware of his obligations hereunder, including, without limitation, the
reasonableness of the length of time, scope and geographic coverage of these
covenants.

	17.	 	Cooperation
	 
	 	 	During Executive’s employment with the Company and thereafter, Executive agrees to cooperate
with the Company and its agents, accountants and attorneys concerning any matter with which
Executive was involved during his employment. Such cooperation shall include, but not be
limited to, providing information to, meeting with and reviewing

15

 

	 	 	documents provided by the Company and its agents, accountants and attorneys during normal
business hours or other mutually agreeable hours upon reasonable notice and to make himself
available for depositions and hearings, if necessary and upon reasonable notice. If
Executive’s cooperation is required after the termination of Executive’s employment, the
Company shall reimburse Executive for any reasonable out of pocket expenses incurred in
performing his obligations hereunder.

	18.	 	Entire Agreement; No Oral Modifications.

     This Agreement sets forth the entire agreement of the parties hereto in respect of the subject
matter contained herein and supersedes all prior agreements, promises, covenants, arrangements,
communications, representations or warranties, whether oral or written, by any officer, employee or
representative of any party hereto in respect of the subject matter contained herein. No provision
of this Agreement may be modified, waived or discharged unless such waiver, modification or
discharge is agreed to in writing and signed by Executive and such officer as may be designated by
the Board. No waiver by either party hereto at any time of any breach by the other party hereto of
or compliance with, any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at
any prior or subsequent time.

16

 

     IN WITNESS WHEREOF, the Company and the Executive have executed this Agreement to be effective
the date first above written.

	 	 	 	 	 	 	 
	EXECUTIVE	 	 	 	COMPLETE PRODUCTION SERVICES, INC.,

a Delaware corporation
	 
	 	 	 	 	 	 
	 

	 	 	 	By	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	Joseph C. Winkler
	 

	 	 	 	 	 	Chief Executive Officer
	 
	 	 	 	 	 	 
	 

	 	 	 	And	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	James F. Maroney, III
	 

	 	 	 	 	 	Vice President, Secretary and General Counsel

17exv10w2

 

Exhibit 10.2

AMENDMENT TO

EMPLOYMENT AGREEMENT

     This Amendment to Employment Agreement (this “Amendment”) is made effective as of March 21,
2007 between Complete Production Services, Inc., a Delaware corporation and its subsidiaries
(collectively the “Company”) and Joseph C. Winkler (the “Executive”).

     WHEREAS, Complete Energy Services, Inc., a Delaware corporation (“Complete Energy”), and
Executive have entered into that certain Employment Agreement effective as of June 20, 2005 (the
“Agreement”);

     WHEREAS, on September 12, 2005, Complete Energy entered into a combination with the Company
and I.E. Miller Services, Inc., a Delaware corporation, pursuant to which the Company was the
surviving entity and assumed the Agreement; and

     WHEREAS, the Company and Executive desire to amend the Agreement in certain respects.

     In consideration of Executive’s continued employment as an executive officer with the Company
and for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and Executive agree to amend the Agreement as follows:

     All references to the Company in the Agreement shall include references to any successor
corporation.

	 	 	1. Section 1.1 of the Agreement is hereby amended to read in its entirety as follows:
	 
	 	 	“Average Annual Bonus” shall mean the greater of (i) Target EV for the year of the Date of
Termination, or (iii) the highest annual bonus paid during any of the three full fiscal
years preceding the Date of Termination.
	 
	 	 	2. Section 1.7 of the Agreement is hereby amended to read in its entirety as follows:
	 
	 	 	“Date of Termination” shall mean the date specified in the Notice of Termination relating
to termination of Executive’s employment with the Company; provided that such date shall
not be less than 20 days nor more than 45 days following: (i) involuntary termination, not
for Cause, pursuant to Section 7.2 or 7.3 hereof, or (ii) the date within the Protective
Period that Executive voluntarily terminates his employment for Good Reason so governed by
Section 7.3 hereof, and provided further that such termination qualifies as a “separation
from service” within the meaning given to it under Section 409A(a)(2)(A)(i) of the
Internal Revenue Code of 1986, as amended (the “Code”), and any Treasury
Regulations or other guidance issued thereunder.
	 
	3.	 	Section 1.11 of the Agreement is hereby amended to read in its entirety as follows:

 

 

	 	 	“Protective Period” shall mean the period that commences six months prior to and ends two
years following the effective date of a Change of Control.
	 
	4.	 	Section 1.14 is hereby added to the Agreement and shall read in its entirety as follows:
	 
	 	 	“Target EV” shall mean the amount payable to Executive, which is expressed as a percentage
of Executive’s Termination Base Salary, as a bonus or incentive payment to Executive under
the Company’s annual bonus or incentive program presuming that the Company and individual
performed at target under all applicable performance criteria and objectives.
	 
	5.	 	Section 3.1 of the Agreement is hereby amended to read in its entirety as follows:
	 
	 	 	Term. This Agreement shall be for an initial term that continues in effect
through the third anniversary of the Effective Date. The term of this Agreement shall
automatically be extended for one or more additional terms of one (1) year, as of each
anniversary date of the Effective Date that occurs while this Agreement is in effect. The
term of Agreement, however, may be terminated by written notice of termination of this
Agreement provided to Executive, and in the event any such termination notice is delivered
to Executive then, notwithstanding the preceding sentence concerning automatic renewals,
the term of this Agreement shall be deemed terminated effective as of December 31 of the
third full calendar year following the date on which such notice of termination of the
Agreement is delivered to Executive.
	 
	6.	 	Section 7.1 of the Agreement is hereby amended to read in its entirety as follows:
	 
	 	 	Certain Terminations.  If Executive’s employment hereunder shall terminate for any
reasons except those described in Sections 7.2 and 7.3 hereof, then all compensation and
all benefits to Executive hereunder shall continue to be provided until the date of such
termination of employment and such compensation and benefits shall terminate
contemporaneously with such termination of employment.
	 
	7.	 	Section 7.2(b) of the Agreement is hereby amended to read in its entirety as follows:
	 
	 	 	Company shall pay to Executive a bonus for the year in which the Date of Termination
occurred in an amount determined in good faith by the Board in accordance with the
performance criteria established pursuant to Section 4.2 hereof and based on Company’s
performance relative to such criteria for such year through the Date of Termination, which
amount, however, shall not be less than the Target EV and shall be pro-rated through and
including the Date of Termination (based on the ratio of the number of days Executive was
employed by Company during such year to 365), payable in a lump-sum within 30 days
following such Date of Termination.
	 
	8.	 	Section 7.3(b) of the Agreement is hereby amended to read in its entirety as follows:
	 
	 	 	Company shall pay to Executive a bonus for the year in which the Date of Termination
occurred in an amount determined in good faith by the Board in accordance with the

2

 

	 	 	performance criteria established pursuant to Section 4.2 hereof and based on Company’s
performance relative to such criteria for such year through the Date of Termination, which
amount, however, shall not be less than the Target EV and shall be pro-rated through and
including the Date of Termination (based on the ratio of the number of days Executive was
employed by Company during such year to 365), payable in a lump-sum within 30 days
following such Date of Termination.
	 
	9.	 	Section 7.3(i) is hereby added to the Agreement and shall read in its entirety as follows:
	 
	 	 	Effective as of the Date of Termination, the Company shall pay to Executive an amount equal
to three times the amount the Company would be required to contribute on Executive’s behalf
under all qualified pension, nonqualified pension, profit sharing, 401(k), deferred
compensation and supplemental plans based on Executive’s Termination Base Salary and the
applicable maximum Company contribution percentages in effect as of the Date of Termination,
payable in a lump sum within 30 days following such Date of Termination.
	 
	10.	 	Section 7.4(a) of the Agreement is hereby amended to add the following at the end thereof:
	 
	 	 	Such additional gross-up payment shall be made in a lump sum payment within 30 days
following the Date of Termination. For the sake of clarity, Executive shall be entitled to
all of the insurance and benefits provided by this Section 7.4(a), and such benefits shall
not be mitigated, in the event that as of the Date of Termination or at any time during the
Severance Payout Period or Change of Control Payout Period, as applicable, Executive is
receiving medical, dental, health, disability or life benefits or insurance through the
plans or obligations of a former employer. In the event Executive is so covered by the
plans or obligations of a former employer, the cost sharing arrangement applicable under
Section 7.4(a) shall be the cost sharing arrangement applicable to similarly situated
executives.
	 
	11.	 	Section 7.4(b) of the Agreement is hereby amended to read in its entirety as follows:
	 
	 	 	The Company shall provide Executive with a lump sum payment, in lieu of outplacement
services, equal to 15% of Executive’s Termination Base Salary. Such lump sum payment
shall be made within 30 days following the Date of Termination.
	 
	12.	 	Section 7.4(c) of the Agreement is hereby amended to read in its entirety as follows:
	 
	 	 	The Company shall provide Executive with a lump sum payment, in lieu of an automobile
allowance, equal to the monthly car allowance in effect on the date of the Date of
Termination, multiplied by the number of months comprising the Severance Payout Period or
Change of Control Payout Period, as applicable. Such lump sum payment shall be made within
30 days following the Date of Termination.

3

 

13.    Article VII of the Agreement is hereby amended to delete Sections 7.3(d) and 7.3(f) and add new
Section 7.7 in their place as follows:

	 	 	Notwithstanding any provisions to the contrary in any of the Company’s stock option plans,
incentive plans and agreements, upon a Change of Control (i) all outstanding unvested stock
options of Executive shall be and become fully vested and exercisable as to all shares of
stock covered thereby, and (ii) all outstanding shares of restricted stock, restricted stock
units, performance shares and performance units (including those under any stock match
program) of Executive shall be and become 100% vested and all restrictions thereon shall
lapse, in each case as of the Change of Control.

14.   The definition of “Prohibited Period” in Section 8.1 of the Agreement is hereby amended to
read in its entirety as follows:

	 	 	“Prohibited Period” means the period during which Executive is employed by Company
hereunder and throughout the term of the Change of Control Payout Period for a termination
of Executive’s employment covered by Section 7.3 hereof, or throughout the term of the
Severance Payout Period for a termination of Executive’s employment covered by Section 7.2
hereof. Notwithstanding the foregoing, the Prohibited Period shall immediately terminate
(a) on the date of Executive’s termination of employment with Company if such termination
is for the reason encompassed in Section 3.2(a)(i) hereof or (b) on the date Company
breaches its obligations under either Section 7.2 or 7.3 hereof (if and as applicable) (it
being understood and agreed, however, that Executive shall continue to be entitled to
receive all consideration required to be paid under Section 7.2 or 7.3 hereof (if and as
applicable)).
	 
	15.	 	Section 9.1 of the Agreement is hereby amended to read in its entirety as follows:

	 	A.	 	Excise Taxes and Gross-up Payments. If any payment or benefit received or to be
received by Executive in connection with a change in control of the Company or
termination of Executive’s employment (whether payable pursuant to the terms of this
Agreement, a stock option plan or any other plan or arrangement with the Company) (the
“Total Payments”) will be subject to the excise tax imposed by Section 4999 of the
Code, (the “Excise Tax”), then Executive shall be entitled to receive from the Company
an additional payment (the “Gross-Up Payment”) in an amount such that the net amount of
the Total Payments and the Gross-Up Payment retained by Executive after the calculation
and deduction of all Excise Taxes (including any interest or penalties imposed with
respect to such taxes) on the Total Payments and all federal, state and local income
tax, employment tax and Excise Tax (including any interest or penalties imposed with
respect to such taxes) on the Gross-Up Payments provided for in this Section 9.1, and
taking into account any lost or reduced tax deductions on account of the Gross-Up
Payments, shall be equal to the Total Payments.

4

 

	 	B.	 	All determinations required to be made under this Section 9.1, including
whether and when the Gross-Up Payments are required and the amount of such Gross-Up
Payments, and the assumptions to be utilized in arriving at such determinations
(consistent with the provisions of the Section 9.1), shall be made by the Company’s
independent certified public accountants (the “Accountants”). The Accountants shall
provide Executive and the Company with detailed supporting calculations with respect to
such Gross-Up Payments within fifteen (15) business days of the receipt of notice from
Executive or the Company that Executive has received or will receive a Total Payments.
In the event that the Accountants are also serving as accountant or auditor for the
individual, entity or group effecting the Change of Control, Executive shall appoint
another nationally recognized public accounting firm to make the determinations
required hereunder (which accounting firm shall then be referred to as the Accountants
hereunder). All fees and expenses of the Accountants shall be borne solely by the
Company. All determinations by the Accountants shall be binding upon the Company and
Executive.
	 
	 	C.	 	For the purposes of determining whether any of the Total Payments will be
subject to the Excise Tax and the amount of such Excise Tax, such Total Payments will
be treated as “parachute payments” within the meaning of Section 280G of the Code, and
all “parachute payments” in excess of the “base amount” (as defined under Section
280G(b)(3) of the Code) shall be treated as subject to the Excise Tax, unless and
except to the extent that in the opinion of the Accountants such payment (in whole or
in part) either do not constitute “parachute payments” or represent reasonable
compensation for services actually rendered (within the meaning of Section 280G(b)(4)
of the Code) in excess of the “base amount” or such “parachute payments” are otherwise
not subject to such Excise Tax. For purposes of determining the amount of the Gross-Up
Payments, Executive shall be deemed to pay federal income taxes at the highest
applicable marginal rate of federal income taxation for the calendar year in which the
Gross-Up Payments are to be made and to pay any applicable state and local income taxes
at the highest applicable marginal rate of taxation for the calendar year in which the
Gross-Up Payments are to be made, net of the maximum reduction in federal income taxes
that could be obtained from the deduction of such state or local taxes if paid if such
year (determined without regard to limitations on deductions based upon the amount of
Executive’s adjusted gross income); and to have otherwise allowable deductions for
federal, state and local income tax purposes at least equal to those disallowed because
of the inclusion of the Gross-Up Payments in Executive’s adjusted gross income.
	 
	 	D.	 	To the extent practicable, any Gross-Up Payments shall be paid by the Company
at the time Executive is entitled to receive the Total Payments and in no event will
any Gross-Up Payments be paid later than thirty (30) days after the receipt by
Executive of the Accountant’s determination. As a result of uncertainty in the
application of Section 4999 of the Code at the time of the initial determination by the
Accountants hereunder, it is possible that the Gross-Up Payments made will

5

 

	 	 	 	have been an amount less than the Company should have paid pursuant to this Section
9.1 (the “Underpayment”). In the event that the Company exhausts its remedies
pursuant to Section 9.1 and Executive is required to make a payment of any Excise
Tax, the Underpayment shall be promptly paid by the Company to or for Executive’s
benefit.
	 
	 	E.	 	Executive shall notify the Company in writing of any claim by the Internal
Revenue Service that, if successful, would require the payment by the Company of the
Gross-Up Payments. Such notification shall be given as soon as practicable after
Executive is informed in writing of such claim and shall apprise the Company of the
nature of such claim and the date on which such claim is requested to be paid.
Executive shall not pay such claim prior to the expiration of the thirty (30) day
period following the date on which Executive gives such notice to the Company (or such
shorter period ending on the date that any payment of taxes, interest and/or penalties
with respect to such claim is due). If the Corporation notifies Executive in writing
prior to the expiration of such thirty (30) day period that it desires to contest such
claim, Executive shall:

	 	(i)	 	give the Company any information reasonably requested by the
Company relating to such claim
	 
	 	(ii)	 	take such action in connection with contesting such claim as
the Company shall reasonably request in writing from time to time, including,
without limitation, accepting legal representation with respect to such claim
by an attorney reasonably selected by the Company;
	 
	 	(iii)	 	cooperate with the Company in good faith in order to
effectively contest such claim; and
	 
	 	(iv)	 	permit the Company to participate in any proceedings relating
to such claims; provided, however, that the Company shall bear and pay directly
all costs and expenses (including additional interest and penalties) incurred
in connection with such contest and shall indemnify Executive for, advance
expenses to Executive for, defend Executive against and hold Executive harmless
from, on an after-tax basis, any Excise Tax or income tax (including interest
and penalties with respect thereto) imposed as a result of such representation
and payment of all related costs and expenses. Without limiting the foregoing
provisions of this Section 9.1, the Company shall control all proceedings taken
in connection with such contest and, at its sole option, may pursue or forego
any and all administrative appeals, proceedings, hearings and conferences with
the taxing authority in respect of such claim and may, at its sole option,
either direct Executive to pay the tax claimed and sue for a refund or contest
the claim in any permissible manner, and Executive agrees to prosecute such
contest to a determination before any administrative tribunal, in a court of
initial jurisdiction and in one or more appellate courts, as the Company

6

 

	 	 	 	shall determine; provided, however, that if the Company directs Executive to
pay such claim and sue for a refund, the Company shall advance the amount of
such payment to Executive, on an interest-free basis, and shall indemnify
Executive for, advance expenses to Executive for, defend Executive against
and hold Executive harmless from, on an after-tax basis, any Excise Tax or
income tax (including interest or penalties with respect thereto) imposed
with respect to such advance or with respect to any imputed income with
respect to such advance (including as a result of any forgiveness by the
Company of such advance); provided, further, that any extension of the
statute of limitations relating to the payment of taxes for the taxable year
of Executive with respect to which such contested amount is claimed to be
due is limited solely to such contested amount. Furthermore, the Company’s
control of the contest shall be limited to issues with respect to which a
Gross-Up Payments would be payable hereunder and Executive shall be entitled
to settle or contest, as the case may be, any other issue raised by the
Internal Revenue Service or any other taxing authority.

	 	F.	 	The Gross-Up Payments shall be paid to Executive during Executive’s
employment, or following the termination of Executive’s employment, as determined
under the foregoing provisions; provided, however, such benefits and payments shall
be paid not later than fifteenth day of the third month following the later of the
end of the taxable year of Executive in which Executive’s Date of Termination occurs,
or the end of the taxable year of the Company (or any successor thereto) in which
such Executive’s Date of Termination occurs.

	16.	 	Section 11.17 of the Agreement, entitled “Compliance With Internal Revenue Code Section 409A.”
is hereby added to the Agreement to read in its entirety as follows:

	 	11.17.	 	Compliance With Internal Revenue Code Section 409A.
	 
	 	A.	 	Notwithstanding anything herein to the contrary, all lump sum payments and
gross up payments to be made pursuant to this Agreement shall be paid not later than
the fifteenth day of the third month following the later of the end of the taxable year
of Executive in which Executive’s Date of Termination occurs, or the end of the taxable
year of the Company (or any successor thereto) in which such Date of Termination
occurs.
	 
	 	B.	 	This Agreement is not intended to provide for any deferral of compensation
subject to Code Section 409A and, accordingly, the benefits provided pursuant to this
Agreement are intended to be paid not later than the later of: (i) the fifteenth day
of the third month following Executive’s first taxable year in which such benefit is no
longer subject to a substantial risk of forfeiture, and (ii) the fifteenth day of the
third month following the first taxable year of the Company in which such benefit is no
longer subject to a substantial risk of forfeiture, as determined in accordance with
Code Section 409A and any Treasury Regulations and other

7

 

	 	 	 	guidance issued thereunder. The date determined under this subsection is referred
to as the “Short-Term Deferral Date.”
	 
	 	C.	 	Notwithstanding anything to the contrary herein, in the event that any benefits
provided pursuant to this Agreement are not actually or constructively received by the
Executive on or before the Short-Term Deferral Date, to the extent such benefit
constitutes a deferral of compensation subject to Code Section 409A, then: (i) subject
to clause (ii), such benefit shall be paid upon Executive’s separation from service
within the meaning of Section 409A(a)(2)(A)(i) of the Code, and any other Treasury
Regulations and other guidance thereunder (“Separation from Service”) with respect to
the Company and its affiliates, and (ii) if Executive is a “specified employee,” as
defined in Code Section 409A(a)(2)(B)(i), with respect to the Company and its
affiliates, such benefit shall be paid upon the date which is six months after the date
of Executive’s Separation from Service (or, if earlier, the date of Executive’s death).
In the event that any benefit provided for in this Agreement is subject to this
subsection, such benefit shall be paid on the sixtieth day following the payment date
determined under this subsection, and shall be made subject to the requirements of
Sections 7.2 and 7.3, as applicable.

17.   The Agreement shall remain in force and effect in accordance with the terms and conditions
thereof, as amended by this Amendment.

     IN WITNESS WHEREOF, the Company and the Executive have executed this Amendment to the
Agreement to be effective the date first above written.

	 	 	 	 	 	 	 
	EXECUTIVE	 	 	 	COMPLETE PRODUCTION SERVICES, INC.,

a Delaware corporation
	 
	 	 	 	 	 	 
	 

/s/ Joseph C. Winkler	 	 	 	By	 	/s/ Kenneth L. Nibling 
	 

	 	 	 	 	 	 
	Joseph C. Winkler

	 	 	 	 	 	Kenneth L. Nibling
	Chairman and Chief Executive Officer

	 	 	 	 	 	Vice President – Human Resources and Administration
	 
	 	 	 	 	 	 
	 

	 	 	 	And	 	/s/ James F. Maroney, III 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	James F. Maroney, III
	 

	 	 	 	 	 	Vice President, Secretary and General Counsel

8

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